Bankers Say Zimbabwe Drew Foreign Currency From Corporate
Accounts to Pay Debt By Peta Thornycroft Harare
02 September 2005
Zimbabwe's central bank took foreign currency
from the accounts of private corporations to pay some of its debt to the
International Monetary Fund, which has threatened to expel Zimbabwe for
failure to pay down its debt.
Central Bank Governor Gideon Gono says
Zimbabwe's repayment of $120 million, less than half its debt to the IMF,
was drawn from exporters and others with foreign currency
This week, many exporters say, they found their foreign
currency accounts empty. They say they use that money to import spare parts
and components for manufacture.
Officials from two foreign-owned
banks in Zimbabwe, who insisted on anonymity, confirmed that the Central
Bank drew on the foreign currency accounts.
An IMF team has been in
Zimbabwe, holding consultations with representatives of both the public and
In a week, Zimbabwe will find out whether it will be
allowed to remain a member of the IMF, or if it will be expelled. Even if it
has paid a substantial part of its $295 million debt, the IMF will have to
decide whether Zimbabwe is prepared to implement many reforms it has
promised, but so far failed to carry out.
South Africa has offered
Zimbabwe a loan to pay off its IMF debt, but on condition that Harare carry
out political and economic reforms. Zimbabwe Justice Minister Patrick
Chinamasa told parliament this week that Zimbabwe would never accept any
Veteran economist John Robertson said Friday the
Zimbabwe government is reckless not to accept the South African loan, as the
economy nose-dives. He says inflation is on track to reach 1,000 percent by
the end of the year.
The value of the Zimbabwe dollar on the black
market, where most trading takes place, slumped by a further 20 percent this
week. And, supermarkets hiked prices again on Thursday.
Khumalo, a member of the executive of the Zimbabwe Congress of Trade Unions,
says further job losses can be expected if exporters lack the foreign
currency to keep the productive sector supplied with imports.
Zimbabwe starves productive sector to pay IMF Sat 3
HARARE - President Robert Mugabe's diversion of
US$120 million to settle an International Monetary Fund (IMF) debt will
exacerbate foreign currency shortages for Zimbabwe 's weakened productive
sector, economic and business analysts said on Friday.
worsen the plight of Zimbabwe 's hard cash-starved industrial and commercial
sector was the fact that while Harare 's surprise payment to the IMF may
save it from expulsion it would however remain suspended and unable to
access benefits from the Bretton Woods institution.
"We still owe
the IMF close to US$160 million and this means even if we may not be
expelled, we still remain suspended," said Zimbabwe National Chamber of
Commerce (ZNCC) president Luxon Zembe.
He added: "It (payment to
IMF) has exacerbated the shortage of foreign currency for the productive
sector because this is a shifting of resources . . . resources have been
taken from other critical sectors to (pay the IMF)."
Zembe said five big companies that are members of the ZNCC had already told
the organisation that they would have to shut down in a few months time
unless they were able to urgently access foreign currency.
rate of companies selling off has shot up by 50 percent . . . things are
pretty bad. We need a serious injection of support .. otherwise no matter
how much we celebrate (continued) IMF membership, we can lose these gains,"
The IMF board was widely expected to recommend Zimbabwe
's expulsion at its meeting on September 9 but is now expected not to impose
the ultimate punishment after it received the part payment from Harare .
Zimbabwe 's debt to the IMF now stands at US$174 million.
Expulsion from the Fund would have hastened the total collapse of Zimbabwe's
crisis-sapped economy. Other multilateral institutions, development agencies
and donors would have cut whatever little aid is still trickling to Harare
once it was expelled. Creditors would also have moved in to attach the
southern African nation's assets.
Hard cash-strapped Harare said it
raised the money to pay the IMF from its own resources, a claim hotly
disputed by economic analysts, who insist Mugabe's government must have
raised part of the money from a loan received from "somewhere" and made up
the remainder by raiding corporate forex accounts.
Zimbabwe 's Ministry of Finance this week told ZimOnline China provided a
huge chunk of the money Harare used to pay the IMF.
source of the money, independent economist John Robertson said giving it to
the IMF meant starving local producers of foreign currency who need hard
cash to import raw materials, machinery and spare parts. He said this would
ultimately worsen Zimbabwe 's hard cash crisis.
"This is just diverting foreign currency from exporters to the IMF at an
enormous cost. We are starving local producers of hard currency and this is
exacerbating the problem."
Fuel, food, essential medical drugs,
electricity, water treatment chemicals for cities and just about every other
basic survival commodity is in short supply in Zimbabwe because there is no
hard cash to pay foreign suppliers. - ZimOnline
Lawyers to appeal to African Commission over constitutional
changes Sat 3 September 2005
HARARE - Zimbabwean human rights
lawyers on Friday said they were preparing to appeal to the African
Commission on Human and People's Rights (ACHPR) over government
constitutional amendments that will nationalise agricultural land and
curtail civil rights.
Zimbabwe Lawyers for Human Rights official
Otto Saki said: "We will be taking the matter to the African Commission. We
are in the process of preparing the heads of argument. Our greatest concern
is that the constitutional amendments take away the duties of the courts,
violates property rights and empowers the government to take away
President Robert Mugabe's ruling ZANU PF party this
week used its absolute control of Parliament to force through a raft of
constitutional amendments that will bar landowners from appealing to courts
against the seizure of their land by the state, while courts will be banned
from entertaining such appeals.
The Constitutional Amendment
Bill will empower the government to seize passports of its critics to bar
them from travelling abroad. The Bill, that now awaits Mugabe's signature
before becoming effective law, also creates a 65-member Senate that the
veteran Zimbabwean leader has said he wants to use to appease disgruntled
ZANU PF allies by appointing them to the upper chamber.
Zimbabwean human rights groups, the official opposition Movement for
Democratic Change and the United States have criticised the amendments
saying they erode further civic rights and liberties in Zimbabwe
But it is highly unlikely that Zimbabwe , which has ignored a
scathing report on its poor human rights record officially released by the
commission earlier this year, would heed whatever the continental rights
watchdog shall say about the controversial constitutional legislation. -
Harare pushes for extradition of fugitive ZANU PF
businessman Sat 3 September 2005
HARARE - Zimbabwe authorities
are planning to ask South Africa to hand over a former top official of
President Robert Mugabe's ruling ZANU PF party and one of the country's
richest businessmen, James Makamba who absconded trial for allegedly
violating exchange rules, ZimOnline learnt last night.
Harare had begun a "process for the extradition of Makamba", convicted last
year of illegally dealing in foreign currency and was on remand on other
charges of breaching the Foreign Exchange Control Act that had been dropped
last year but were renewed after the state successfully appealed to the
He is holed up in South Africa from where he was
quoted by Zimbabwean newspapers saying he was conducting business for his
Telecel mobile phone company and that he would return to face the law in
Harare once he finished his dealings.
But Makamba, who was once
a member of ZANU PF's key central committee as well as its chairman in its
stronghold Mashonaland Central province, was not at court on Wednesday this
week when his name was called out. The court immediately issued a warrant
for his arrest.
Police spokesman Wayne Bvudzijena
last night vowed they would leave no stone unturned to bring back the
fugitive businessman to trial. But he would not confirm whether the law
enforcement agency would seek his extradition from South Africa
"We are pursuing all necessary means to bring him (Makamba) back to Zimbabwe
from wherever he is," Bvudzijena said adding that the police would issue a
statement on the matter on Monday.
Makamba's lawyer George
Chikumbirike refused to discuss the matter when contacted last night. He
said: "I would not want to comment on anything regarding Makamba until after
Zimbabwe and South Africa do not have an extradition
treaty but the two neighbours regularly exchange prisoners and other
Although Makamba was last year convicted on his own plea of
guilty to six counts of illegally dealing in foreign currency amounting to
US$133 000, ZANU PF insiders insisted he was targeted by the police more
because of suspicion by President Robert Mugabe that he was having an affair
with his young wife, Grace.
Both Makamba and Mugabe's office
have never commented on the suggestions the businessman, who is related to
second Vice-President Joyce Mujuru, was being persecuted because of
suspicions he may have had an affair with the President's wife.
Apart from Telecel, which is Zimbabwe 's third largest cell phone network,
Makamba owns several businesses including supermarket chains and farms. -
Zimbabwe mortuaries 'piled high with corpses' September
02 2005 at 10:49AM
Harare - Corpses are piling up at town hospitals
in Zimbabwe because families do not have the fuel available to collect the
bodies for burial, a newspaper reported on Friday.
privately-run newspaper said scores of bodies had not been collected from
provincial hospitals in Bindura, Marondera and Masvingo, among
At least 51 corpses are lying in the mortuary at Masvingo
Provincial Hospital in southern Zimbabwe, despite the fact it is only
supposed to hold a maximum of 17 bodies, the paper said.
situation has worsened recently due to the fuel crisis. Relatives of the
deceased are finding it difficult to collect bodies because many vehicles
are grounded due to fuel shortages," the hospital's administrator Vitalis
Zimbabwe is in the grip of its worst fuel crisis
ever. Almost all fuel stations have run dry, and only motorists with access
to foreign currency are allowed to purchase fuel coupons at five stations
still serving the precious commodity.
In rural areas, long
lines of dusty cars sit outside fuel stations for days, waiting for a
possible fuel delivery.
President Robert Mugabe's government blames
the shortage - and similar shortages of electrical power - on a lack of
Shonhai said part of the blame also lay in the
slow pace with which the authorities are carrying out paupers'
Zimbabwe's hospitals are being stretched to the limit by
HIV and Aids, which kills at least 2 000 people a week. - Sapa-dpa
September 1, 2005 Posted to the web September 2,
Nic Dawes And Godwin Gandu
Merchant Bank (RMB) has emerged as a key player in a potential South African
loan to Zimbabwe. The bank was reluctant to provide details but its head of
project finance, Peter Gent, told the Mail & Guardian: "Our involvement
in such a transaction -- to the extent that we get involved -- would be as a
facilitator in what is essentially a government-to-government
Pressed on whether RMB would lend its own money and the nature of
its facilitating role, he said: "Obviously there is a reality about the
credit- worthiness of the counterparty."
It is not clear why a
merchant bank would be involved, unless the South African government is
trying to avoid recourse to its own budget. It could do so by providing
security for a commercial facility arranged by RMB, which would be unlikely
to lend money to a serial defaulter like Zimbabwe in the absence of firm
guarantees. Several meetings have taken place between officials of the
Zimbabwe government and RMB with a view to arranging finance for food and
fuel, ZimOnline reported on Thursday.
Zimbabwe, on Wednesday, made a
payment of $120-million toward its $294-million loan arrears with the
International Monetary Fund (IMF), a spokesperson for the fund
Reserve Bank Governor Gideon Gono told the local press that
"exporters funds" and "free funds holders" had bailed the country out. Other
reports suggested that an assistance package from China had topped up what
the government had scrounged in the local forex market.
payment has raised questions about the prospects of the proposed
$500-million loan package from South Africa, the first tranche of which was
set to go toward the arrears.
An IMF team spent 10 days in Harare
investigating the situation ahead of a board meeting on September 9 that may
decide to impose "compulsory withdrawal" on Zimbabwe.
resident for South Africa, Vivek Arora, accompanied the delegation. The
presence of Arora may have indicated the fund's concern over progress on the
South African loan, which appears to have stalled over Zimbabwean resistance
to the tough conditions attached to it.
"It's not normal for an IMF
assessment team to have, as a member of its delegation, another of its
representatives from another country, unless there is [a] sticking [point]
on a relevant issue," an economist who met the delegation told the
And it is unclear whether the payment alone will be enough to
prevent the IMF from taking action.
"We can still be expelled, there
is still that risk. We have only minimised it, not eliminated it," economic
consultant Eric Bloch said. "On the other hand, the IMF can recognise this
commitment on the part of Zimbabwe to repay."
Gono also indicated
that despite the payment there would be ongoing negotiations with South
Mugabe's flexi Constitution
On Tuesday Zanu-PF pushed
through Parliament constitutional amendments designed to deny travel visas
to government critics, remove legal recourse to protect property rights and
reintroduce the Senate. The latest changes are the 17th time Zimbabwe has
tampered with its Constiution since independence in 1980. The Lancaster
House Constitution, crafted in 1979, stated that the Bill of Rights was not
to be tampered with for 10 years. The key changes are:
seats reserved for whites in Parliament (Act 15 of 1987) The Lancaster House
Constitution provided that the white minority would have 20 guaranteed seats
in Parliament for five years to have their economic and political interests
Creation of the Executive Presidency (Act 23 of 1987) It did
away with the ceremonial president and created an executive president.
Robert Mugabe, the then prime minister, became head of government with
executive powers and privileges that included immunity from prosecution for
offences committed during his term of office.
Introduction of the
unicameral Parliament (Act 31 of 1989) The two-chamber legislature of the
Senate (upper house) and Parliament (lower house) was dropped. The new
Parliament allowed for 150 MPs, 20 appointed by the president, and 10 seats
were reserved for chiefs.
Introduction of the Office of the Attorney
General (Act 4 of 1993) The attorney general assumed the role as chief legal
adviser and sat in on Cabinet meetings.
Creation of second
vice-president (Act 15 of 1990)
In 1987 Zanu-PF and PF-Zapu signed a
unity accord. The second vice-president was created to accommodate Joshua
Nkomo, the then leader of PF-Zapu. The amendment was designed to unite the
two major ethnic groups (Shona and Ndebele) and ensure equal representation
in the presidium.
Bestowment of powers to compulsorily acquire land
without the obligation to compensate (Act No. 5 of 2 000) This provision was
further amended by the changes that were pushed through Parliament this week
denying legal recourse to aggrieved farm owners.
Zimbabweans in United States Mobilize to Help Fellow Emigres By
Ndimyake Mwakalyelye Washington 02 September
Leaders of the Zimbabwean diaspora in the United States say
they have mobilized to help the Zimbabwean émigrés whose lives have been
upset by hurricane Katrina.
In Dallas, the president of the
Association of Zimbabweans Based Abroad, Dumhapi Mema, said that as of late
Thursday he had been contacted by about a half dozen Zimbabweans who had
reached Texas from New Orleans or other stricken areas.
Mr. Mema says
some of these people are reluctant to ask for help because their immigration
status is irregular.
His organization has asked churches and other
Zimbabweans in the area to help them by providing housing and donating money
for food and clothing.
In Washington, Zimbabwe's ambassador to the United
States, Dr. Simbi Mubako, says the embassy has been contacted by a number of
Zimbabweans in dire straits.
Dr. Mubako told reporter Ndimyake
Mwakalyele of VOA's Studio 7 for Zimbabwe that his heart goes out to all the
2, 2005 Posted to the web September 2, 2005
has started to clear the backlog of passengers to London which accumulated
after one of its planes failed to take off from London over the
The airline's spokesperson Mr David Mwenga yesterday told
The Herald that the national airliner is expected to be back to its normal
In an interview, Mr Mwenga said the plane that had been
grounded in London arrived in Zimbabwe on Wednesday afternoon and
immediately started flying passengers to their destinations. Some of the
passengers had been flown in other carriers and the airline was working flat
out to clear the backlog.
"What we are clearing are the passengers we
could not accommodate on that flight and on other carriers. We still have an
overflow of the passengers whom we failed to accommodate on the flight and
other carriers. Most of them are gone and the plane will be back on schedule
"We normally operate the London flight on Friday and the
flight takes off at 10:10 am. What we are clearing are the passengers we
could not carry on the flight and on other carriers," Mr Mwenga
On suggestions that the airliner could have lost a substantial
amount of money in the process of engaging other airliners, Mr Mwenga said
they were not worried about the monetary gains but the welfare of their
"Our main concern are the passengers. The airfare written on
the ticket is the same fare we negotiate with other carriers. That is very
normal and standard and in most cases other airlines do not reject the
"What we want is for the same passengers to come back again. We
have gained the trust of those passengers because we have managed to take
them to their destinations in time," said Mr Mwenga.
The first compulsory sale of a white-owned farm
concluded in Namibia this week, bringing fresh impetus to the government's
land-reform programme and raising concerns among white farmers of
Zimbabwean-style land seizures.
"Yes, our lawyer received
a cheque for N$3,7-million, which will be paid to us as soon as the transfer
is finalised," Hilde Renate Wiese, the owner of Ongombo West, a 4 006ha farm
50km east of Windhoek, said on Friday.
The Wiese family, of
German descent, have farmed Ongombo since 1904. They have requested three
months to gather their belongings and move to the city.
"We have cried far too long now. We are embittered, but we have no choice
and we have to make the best of it," said Wiese.
become of the 12 farm workers and their 60-odd dependants, she does not
"We have to pay them for the years they worked for us,
that is law. But where they will go, I don't know," she
"It is ironic that the people who are supposed to
benefit from land reform now sit on the street as well," she
In May last year, the Namibian government served the
first letters requesting farmers to offer their farms for sale. So far, only
two have offered to sell. Namibia is home to an estimated 4 500 mostly white
The first compulsory sale has raised
concerns among farmers that Namibia is facing Zimbabwe-style farm invasions.
But the Namibian government has repeatedly emphasised that it will conduct
land reform within the parameters of the law.
Constitution provides for an equitable distribution of land, but rules that
such deals must involve a willing buyer and a willing seller as well as
payment of fair compensation for the land.
The president of
the Namibia Agricultural Union representing about half of all commercial
farmers, Raimar von Hase, also believes comparisons to Zimbabwe are
"There is absolutely no indication that there
are developments here which can remotely be compared to what happened in
Zimbabwe," he said in an interview.
He is, however,
worried about labour disputes becoming the basis for compulsory
"Ongombo West came into the public limelight due to a
labour dispute and now it is the first farm to be forcibly purchased," he
said. "This could look like revenge."
government intends purchasing 4,8-million hectares of land in the next five
years to resettle 240 000 previously disadvantaged
Since independence in 1990, the former German
colony and South African-administered territory has registered the
resettlement of 37 000 people. -- Sapa-DPA
An International Monetary Fund (IMF) team gave no
hints on Zimbabwe's future today as it left the cash-strapped African
country, which coughed up $120 million this week to try to avoid expulsion
from the fund.
The team arrived in Zimbabwe two weeks ago, as the
IMF prepared for a Sept. 9 board meeting to discuss expelling Zimbabwe over
a total of $295 million in unpaid arrears.
last-minute payment left analysts wondering how the government had got the
money when the country was facing an acute shortage of foreign currency. The
IMF mission said nothing on the subject of expulsion. A member of the team
said that the fund would issue a statement from Washington after concluding
its mission, but would not say when.
The IMF said in a separate
statement that its team had reviewed Harare's economic developments and
prospects, and was preparing a report for the IMF Executive
Herbert Murerwa, Zimbabwe's finance minister says the
government would only comment further after the IMF statement. "As far as we
are concerned we have given enough details on the payment. We will now wait
to hear from the IMF," he said.
The central bank says the $120
million payment came from export earnings, inflows from expatriate
Zimbabweans and locals working for foreign-owned organisations, who are paid
in foreign currency. But analysts were sceptical, noting that Zimbabwe has
experienced severe shortages of foreign currency that have already caused an
acute fuel crisis.
"It is very probable that we have acquired new
debt from somewhere, most likely China, because there are no signs that we
have that kind of money to pay the IMF," Harare consultant economist John
A source in President Robert Mugabe's ruling
Zanu(PF) party this week said the IMF payment was partly covered by money
from China, which Mugabe has courted as his relations with the West
deteriorate. Mugabe's relations with Western countries have soured over his
seizure of white-owned farms for the landless black majority, as well
allegations of human rights abuses and vote rigging.
worst economic crisis since independence in 1980 has seen food and fuel
shortages, inflation soar to three digits and the jobless rate rise above 70
Zimbabwe finally clears donated food for distribution
Karimakwenda 02 September 2005
The tonnes of food
donated by The South African Council of Churches (SACC) to help victims of
operation Murambatsvina were finally cleared by Zimbabwean authorities on
Friday, a month after the package was put together for the desperate
Speaking for the churches, Ron Steele confirmed the
final duty-free permits had been granted and the trucks would be leaving
Johannesburg for Zimbabwe. Blankets that were released from a bonded
warehouse in Harare earlier this week are already being distributed by
Christian Care, the local NGO working with the SACC and Zimbabwe's Council
The month delay was caused by the Zimbabwe side
which first demanded certificates showing the maize was not genetically
modified, then insisted on charging duty on the donated goods even though it
was the Zimbabwe government that created the crisis. Despite all the
difficulties, the SACC said they are still willing to help. They are meeting
on Monday to decide the next
South Africa's deputy President, Phumzile
Mlambo-Ngcuka on Wednesday backed off her assertion that her country could
learn from Zimbabwe's land reform process.
She instead said
South Africa should avoid the problems that had occurred north of the
The deputy President had been under fire over the past
week for saying that Zimbabwe's land reform process, which saw white owned
farms grabbed without compensation, was a process from which South Africa
During her maiden question time session in
Parliament, Mlambo-Ngcuka moved to repair the damage her remarks had caused,
but this has not stopped Zimbabweans in that country from describing her as
Godfrey Phiri, head of the advocacy for Justice and
reconciliation in Johannesburg said the deputy President was too new in her
job to give a correct political analysis on Zimbabwe.
has since realised that her utterances were not accepted by the general
population in this country, said
Desperate Zimbabweans to march to SA Home Affairs Office
Karimakwenda 02 September 2005
Tired of having
no access to legal status and of abuse at the hands of the police,
Zimbabweans in Johannesburg plan to march to the Home Affairs office
building and present a petition with their grievances.
of the Action Support Group have organised this march for Wednesday,
September 7th, starting at Berea Park. They invite exiles from other African
countries who are having the same problems to join them in the park at 9:00
in the morning.
Our correspondent Gift, himself a member of the
Action Support Group, said the march is intended to highlight the
desperation that Zimbabweans are feeling because they have no access to
legal papers. The Home Affairs office shut down the processing centre that
was in Johannesburg back in April and the Pretoria office takes only 5
Zimbabweans a day.
To make the situation worse, those who have
asylum letters sometimes lose them to South African policemen who tear them
up saying there is no war in Zimbabwe. The Action Support Group is
petitioning Home Affairs to clarify this issue with the
Finally, the group is asking for better conditions at
The Lindela Detention Centre. Gift spent 7 days there last week after being
arrested, and as he reported on Thursday, the place is filthy, the food is
terrible and the guards are very abusive. The group believes the clinic at
Lindela may be manned by unskilled workers.
is to begin promptly at 9:00 A.M. and organisers urge participants to come
Zim public servants scolded 02/09/2005 10:20 -
Johannesburg - Zimbabwean vice-president Joice Mujuru has
scolded civil servants who put personal farming errands before government
business, Zimbabwe's Herald Online reported on Friday.
It said she
told public servants on Thursday to choose between serving the state or
"Some of you get into the office for a few minutes before
going to your farms, leaving behind files of your work unattended," Mujuru
Mujuru was speaking at a one-day workshop held in Harare for senior
She branded as sabotage, activities by those
who spend more time at their farms at the expense of their full-time
"It's more than the corruption that is in this
country. It's mixed with sabotage and everything. There is an "I-don't-care"
attitude in this country," said Mujuru.
She underscored the need for
Zimbabweans to have a common purpose of concentrating on matters that
benefit the nation.
Civil servants were expected to lead by example but
some of them were corrupt, she said.
The government expected civil
servants to diligently transform broad policy pronouncements into programmes
"The times of seamless discussion of policies that yields no
tangible results for the ordinary man and woman are now over. Our watchword
and, indeed, our battle, is action, action and action," Mujuru