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Zimbabwe devalues, redenominates currency

From Reuters, 31 July

Zimbabwe redenominates sliding currency

Harare - Zimbabwe's central bank said on Monday it had decided to knock
three zeros off all banknotes to help consumers deal with hyperinflation of
nearly 1,200 percent -- the highest inflation rate in the world. "Our
currency is in trouble. Our people are experiencing incredible hardships and
inconveniences associated with too many zeros," central bank governor Gideon
Gono said. "All monetary values ... have been re-based by striking out three
zeroes," he said in a televised monetary policy review. Economists said the
step did not amount to a revaluation but was aimed at making it easier for
consumers to handle increasingly unwieldy wads of banknotes as inflation
soars. "Our understanding is that it ... just means that you ignore the last
three zeros on notes so it isn't a revaluation. Prices will adjust but
nothing will change in real terms," said one analyst who wished to remain
anonymous. "You will pay exactly the same for goods so it won't change
inflation, it will just make it easier to calculate prices and people were
running our of banknotes." Gono said the change to new currency
denominations would take effect on August 1, 2006 and Zimbabweans had to
phase out old banknotes within three weeks. Zimbabwe's sliding dollar has
been officially devalued several times over the past few years but is still
selling at more than four times the official rate of $1=$Z101,195 on an
illegal parallel market - which dwarfs the official market. The southern
African country's economy -- once the breadbasket of the region - has shrunk
by more than a third during the past eight years of recession, while
unemployment is estimated at between 70 and 80 percent.


From Reuters, 31 July

Zimbabwe devalues currency 60 pct

Harare - Zimbabwe's central bank devalued its dollar by 60 percent on Monday
after announcing it had decided to knock three zeros off all banknotes to
help consumers deal with hyperinflation of nearly 1,200 percent. "With
immediate effect the interbank exchange rate has been adjusted to the
trading level, after the removal of the three zeroes ... to 250 Zimbabwe
dollars to 1 U.S. dollar," central bank Gideon Gono said in a televised
address. Based on the currency's old official exchange rate of $1=$Z101,195
after knocking off three zeros the new rate amounts to a 60 percent
devaluation, based on IMF methods.


From Reuters, 31 July

Zimbabwe slashes interest rates to 300 pct

Harare - Zimbabwe's central bank governor Gideon Gono slashed the country's
main lending rate by 550 percentage points to 300 percent on Monday as part
of efforts to kick-start its ailing economy. Gono announced the step in a
televised monetary policy review in which he devalued the Zimbabwe dollar's
official exchange rate by 60 percent and redenominated the currency to help
consumers deal with hyperinflation of almost 1,200 percent. "It has also
become necessary that we fine tune the levels of accommodation rates so as
to balance the virtues of anti-inflation demand management and the .-
continued flow of credit to the productive sectors of the economy," Gono
said. The central bank's secured accommodation rate is also known as its
bank rate, which it uses when lending money to commercial banks.


Sent: Monday, July 31, 2006 10:13 PM
Subject: New Zimbabwe Dollar

Dear Sir/Madam

As you are all probably aware the Reserve Bank are introducing many new
measures from 1st August 2006 (tomorrow) and the minister of finance has
introduced new tax bans to be implemented from 1st September, 2006

The first change is that the old Zimbabwe dollar is to be replaced with new
Zimbabwe Bearer notes from tomorrow - Z$1000 of the old money will now be $1
of the new money. There will be new notes from 1 cent to $100 000 -
equivalent to: from $10 to $1m of the old (existing ) money.

You have to change all your existing cash within 21 days - by 21st August ,
2006 - you are only allowed to change up to $100m as an individual and $750
m as a company unless you can give valid reasons otherwise- otherwies the
money will be worthless

I am not sure what is going to happen to cheques in the post that arrive
after today - are they at the old rate or the new? - if anyone knows please
let me know

The minister of finance also announced new tax measures and tax bands to be
introduced from 1st September - these will already have to be revised in
view of the new Z$

We as the payroll authors group intend seeing Zimra officials over the next
couple of days to verify exactly how they want to implement these new
measures and I will send out another email advising you accordingly

There will obviously be a new version of the payroll software out later this
week once I have verified things with ZImra


Mike Garden
Managing Director

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Harare deploys youth militia at border posts

Zim Online

Tue 1 August 2006

      HARARE - President Robert Mugabe's government on Monday began
deploying its controversial youth militia at Zimbabwe's border posts as part
of a clampdown on travellers it accuses of siphoning huge amounts of cash
outside the country.

      The youths, derisively referred to by Zimbabweans as "green bombers"
because of their cruelty and high-handedness when dealing with civilians,
are accused by churches and human rights groups of hunting down, beating and
torturing opposition supporters as punishment for not backing Mugabe's

      Reserve Bank of Zimbabwe (RBZ) governor Gideon Gono, who was
presenting mid-year monetary policy review, told the nation that youths
would be deployed at the country's more than six border posts by lunch time
yesterday. They will work together with the police and exchange control
officials, Gono said.

      "By lunchtime the Zimbabwe Republic Police, youths and exchange
control officials will be stationed at border posts. All these (border
posts) will be well manned," said Gono, who also revealed that of the $43
trillion dollars in circulation the RBZ could only account for between $10
and $15 trillion.

      The rest "is doing some work outside the country" said a visibly
exasperated Gono.

      Zimbabwe's exchange control laws prohibit people from taking more than
five million dollars outside the country. But the government says "economic
saboteurs" have illegally stashed trillions of dollars in neighbouring
countries where they use it for speculative purposes or to finance deals on
the illegal black-market for foreign currency.

      Gono, who announced a raft of other drastic measures meant to shore up
the country's collapsing economy, said anyone caught trying to repatriate
back to Zimbabwe local currency amounting to more than five million dollars
would be prosecuted.

      He said: "Any excesses of $5 million in old bearer notes (a temporary
currency introduced in 2003 after cash shortages) will be forfeited, with
holders being prosecuted for breach of Exchange Control Regulations and
Anti-money Laundering Laws, through illegal export of currency in the first

      An estimated three million Zimbabweans or a quarter of the country's
12 million people live and work outside the country after fleeing home
because of worsening economic hardships and political violence.

      A vast majority of the exiles do not change their hard cash on the
official market where Gono controls the exchange rate. They opt to sell
foreign currency on the black-market which is found in the country and among
Zimbabwean immigrants in neighbouring countries.

      The black-market - the only sure source of hard cash in Zimbabwe -
offers better returns with the American dollar trading at anything above
Z$300 000 per unit. Gono yesterday adjusted the official exchange rate to
one greenback per Z$250 000, which translates to Z$250 after the central
bank chief knocked off three zeros on all denominations.

      Before the latest adjustment, the official exchange rate had remained
fixed at one United States dollar to Z$101 195 for several months.

      Thousands of Zimbabwean women who travel to neighbouring countries
especially South Africa and Botswana to buy basic commodities in short
supply at home also take out huge amounts of Zimbabwe dollars to these
countries which they use to buy foreign currency from black-market dealers.

      But placing youth militia - who have a reputation of brutal tactics -
at the country's border posts could deliver the knock-out punch to
Zimbabwe's tourism sector, already facing viability problems as visitors
shun the country because of its reputation of human rights abuses, political
violence and lawlessness. - ZimOnline

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Central bank reforms not enough

Zim Online

Tue 1 August 2006

      HARARE - A raft of measures announced by the Reserve Bank of Zimbabwe
(RBZ) yesterday will not resolve the country's six-year economic crisis and
at best could only restore a modicum of viability to exporters such as gold
miners, analysts told ZimOnline.

      They described the measures, contained in a mid-year monetary policy
review presented to the nation by RBZ governor Gideon Gono, as "cosmetic"
and skirting the root causes of an economic crisis that the World Bank says
is the worst in the world outside a war zone.

      Consultant economist John Robertson said despite the various
concessions given to exporters and gold miners, a drastic currency
devaluation as well as the reduction of interest rates, Gono's measures
barely scratched the surface.

      The governor - specifically tasked by President Robert Mugabe to turn
around an economy that has haemorrhaged since 2000 - overlooked the real
issues, Robertson said.

      "He overlooked the problems of scarcities, lack of job creation and
restoring confidence which are critical issues in the fight to rebuild the
economy," noted Robertson.

      Zimbabwe's inflation remains the highest in the world at 1 184.6
percent in June. The rate is expected to go up in July on the back of
increases averaging more than 50 percent in the prices of bread, public
transport fares and electricity tariffs during the past four weeks.

      University of Zimbabwe business school lecturer Anthony Hawkins said
the devaluation of the Zimbabwe dollar was inadequate.

      The central bank effected a pseudo-devaluation of the Zimbabwe dollar
by 60 percent after knocking three zeros off all banknotes.

      "With immediate effect the interbank exchange rate has been adjusted
to the trading level, after the removal of the three zeroes ... to 250
Zimbabwe dollars to 1 US dollar," Gono announced in a televised address.

      Previously the official exchange rate was Z$101 195 to one United
States dollar, which was a fraction of the rate on the illegal but thriving
foreign currency black-market where the American unit fetched upwards of
Z$300 000.

      "The devaluation was inadequate and knocking off the zeroes will
create more confusion without solving the problem of inflation," said

      Bulawayo-based economic commentator Eric Bloch concurred: "Knocking
off of the three zeroes will have no effect on economic reconstruction
although I want to believe most of the other measures are a fair attempt at
restoring viability of some sectors."

      The analysts however agreed that the move allowing gold producers and
other exporters to retain 75 percent of their hard currency earnings will go
some way in restoring viability in these vital sectors.

      "There were also the positive steps by the governor to bring down
interest rates, act on money supply growth and remove subsidies which will
be beneficial to the economy," said Bloch, who is an economic adviser to

      Lending rates were reduced from 850 percent to 300 percent, while gold
companies are now allowed to retain 75 percent in gold proceeds without time
restrictions in their foreign currency accounts (FCAs) from the previous 40
percent. Other exporters will now retain 75 percent of their earnings in
FCAs, from the current 70 percent.

      The gold support price has been abandoned, and miners will receive
international price at "the ruling market exchange rate". Farmers will no
longer access subsidised fuel.

      Robertson, however, warned that the move to allow exporters to retain
a large chunk of their earnings without time restrictions could help hamper
the foreign currency parallel market rate by starving that market of funds.

      "This means that less money will be available for sale on the parallel
market where we could soon witness rates dropping," said Robertson.

       Under what he termed "Project Sunrise", Gono announced the
introduction of a "new family" of bearer cheques that were issued by the RBZ
as a temporary form of currency after Zimbabwe ran out of bank notes in

      The central bank chief gave Zimbabweans until 21 August to dispose of
old cheques in their possession. The project will also see the
re-introduction of coins, to replace some lower denomination notes.

      People with huge sums of bearer cheques to dispose off will be
required to produce proof of source of the money where the funds involved
are in excess of $100 million for individuals and $5 billion for companies.

      Where such proof is not available, the funds will be confiscated and
deposited into an "anti-laundering bond" for two years at zero interest

      To curtail money laundering and parallel foreign exchange activities,
Gono limited daily cash withdrawal to $100 000 for individuals and $750 000
for companies.

      The central bank will with immediate effect monitor all payments by
banks of more than $1 million.

      The project will also include the introduction of "border patrols"
involving the Zimbabwe Revenue Authority, Zimbabwe Republic Police and
"youths" to investigate the "illegal" export and import of local currency.

      Gono estimates that there is more than Z$33 trillion outside the
country in what he termed "mini-central banks".

      Under the new measures, anyone caught with currency in excess of $5
million will be prosecuted.

      Hyperinflation is one of many severe symptoms of Zimbabwe's economic
crisis that has also spawned shortages of fuel, electricity, essential
medicines, hard cash and just about every basic survival commodity.

      The main opposition Movement for Democratic Change party and Western
governments blame the crisis on repression and wrong policies by Mugabe such
as his seizure of productive farms from whites for redistribution to
landless blacks.

      The farm seizures destabilised the mainstay agricultural sector and
caused severe food shortages after the government failed to give black
villagers resettled on former white farms skills training and inputs support
to maintain production.

      But Mugabe, who has ruled Zimbabwe since the country's independence
from Britain in 1980, denies mismanaging the country and says its problems
are because of economic sabotage by Western governments opposed to his
seizure of white land. - ZimOnline

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Khuluma! Zimbabwean refugees told

Zim Online

Tue 1 August 2006

      JOHANNESBURG - Zimbabwean refugees and asylum seekers who are staying
in South Africa have been urged to learn local languages to help them
integrate into local communities and fight off xenophobia.

      The call was made by the Zimbabwe Pastors Forum president Steven
Chiadzwa at a meeting of civic groups in Johannesburg last weekend organised
by the Civic Dialogues Africa to foster dialogue among African communities.

      Chiadzwa said refugee communities should learn to speak local
languages to help them integrate into local communities.

      Chiadzwa said: "In my experience in dealing with the issues of
xenophobia, Zimbabweans must humble themselves and learn South African
languages and cultures.

      "To some extent, it's an insult to answer someone in English when they
greet you in Zulu, Shangaan, Xhosa or Venda.

      "I have been working as a missionary in a number of nations for many
years. One of the most effective ways to be incorporated into African
societies or communities is to learn their culture and language."

      Last weekend's meeting was designed to explore ways on how to end
xenophobia between South African police and department of home affairs
officials and Zimbabwean asylum seekers and refugees.

      Zimbabwean refugee communities in South Africa have often accused the
government and South African media of promoting xenophobia by portraying
Zimbabweans in a negative light. - ZimOnline

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Displaced families, security guards join hands to loot building equipment

Zim Online

Tue 1 August 2006

      HARARE - Victims of last year's government clean-up exercise who are
staying at Hopley Farm in Harare last weekend went on the rampage looting
food and some building equipment after security guards manning the camp
downed their tools over unpaid salaries.

      At least 300 families are staying at the farm after the Zimbabwean
government demolished their houses and backyard shacks during a
controversial clean-up campaign that left at least 700 000 people without

      Last Saturday, the displaced families and striking security guards who
were manning the camp, joined hands to strip the holding camp of building
materials which included bags of cement, window and door frames as well as
bags of maize-meal.

      "It was a free-for-all because there was no security at all, even at
the main entrance. We suspect that some of the guards were also involved in
the looting," one of the residents told ZimOnline yesterday.

      Acting provincial social welfare officer for Harare, Ezekiel Mpande,
who is in charge of Hopley Farm, confirmed the looting.

      "I can confirm that we lost property worth billions of dollars but for
further details you should get in touch with the secretariat responsible for
Operation Garikayi. They are the ones who can fully comment on the matter,"
said Mpande.

      Last year, the Zimbabwe government said it was constructing thousands
of houses across the country to house victims of the housing demolition

      But very few houses have been completed so far with most of the
families at Hopley Farm and other holding camps still to be allocated new
houses built under the ambitious reconstruction exercise dubbed Operation
Garikayi. - ZimOnline

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Mugabe's Chosen Mediator Criticised

Institute for War and Peace Reporting

Widespread disappointment at the appointment of a man seen as an ally of
President Mugabe instead of a planned intervention by the United Nations.

By Joseph Magariro in Harare (AR No. 72, 31-Jul-06)

Disappointment, despair and helplessness sum up the way many ordinary
Zimbabweans feel following a decision by United Nations Secretary-General
Kofi Annan to abandon efforts to mediate in their country's ever-deepening
political, economic and social crisis.

There is little confidence here that the mediation effort Zimbabwean
president Robert Mugabe has promoted as an alternative - using former
Tanzanian president Benjamin Mkapa, seen as a political ally - will yield
any results.

Although Annan's mission had been widely supported by the international
community, he withdrew from it after meeting President Mugabe at the July
summit of the African Union in Gambia. There Mugabe told the UN's top man
that he was not needed, and that Mkapa would do the job instead.

Asked whether he still planned to visit Zimbabwe, Annan replied, "You don't
have two mediators."

Mugabe suggested that the UN chief abandoned his mediation role because, as
an African, he would not wish to be tarnished by being seen to be influenced
by or aligned with the British government. Annan immediately denied this
assertion, saying Mugabe's appointment of Mkapa as mediator meant his own
diplomatic initiative was dead in the water.

The prospect of intervention by Annan had been the last ray of hope for many
Zimbabweans, who thought he might have been able, against the odds, to push
Mugabe to the negotiating table to forge a new constitution in which
democratic rights would be ensured and constructive international relations
restored. They also hoped that Annan's presence would make the international
community more engaged in addressing the disaster facing Zimbabwe.

South African president Thabo Mbeki, who has in the past been criticised for
taking a softly-softly attitude towards his northern neighbour, said the UN
mediation effort was the key to resolving Zimbabwe's crisis and that Annan
could help improve the country's relations with the West.

Less optimism surrounds Mkapa's involvement. As a friend and political ally
of Mugabe, his impartiality is questioned by many in Zimbabwe. In addition,
although Annan stepped aside because Mkapa was already engaged for the task,
the two mediation efforts are in reality quite different in nature.

Mkapa, who was voted out of office in Tanzania in November 2005, last year
described his Zimbabwean counterpart as a "champion of democracy". While he
was still president, his was one of the few voices who endorsed the 2002 and
2005 elections in Zimbabwe as free and fair.

In a letter to Mugabe last year, Mkapa said, "You have been firm [in]
defending the inalienable right of the people of your country to free,
democratic and sovereign governance. Your firmness was good for all of

Giving one of his last speeches before stepping down as head of state, Mkapa
shocked delegates at the World Economic Forum Africa Summit in Cape Town by
describing Mugabe as "one of the last upstanding Africans".

He proceeded to praise Mugabe's notorious Operation Murambatsvina ("drive
out the rubbish), in which the homes of more than 700,000 of the urban poor
were destroyed by security forces last year, in what officials said was a
redevelopment project but critics decried as a campaign to displace
potential opposition voters.

It was these mass demolitions that impelled Annan to dispatch Anna
Tibaijuka, a senior UN official of Tanzanian origin, to visit Zimbabwe as
his special envoy.

Tibaijuka lambasted the destruction as inhuman, saying that it had affected
2.4 million people directly or indirectly, and that Mugabe had shown
"indifference to human suffering". She also said the resulting humanitarian
crisis meant the campaign represented a violation of international human
rights laws.

Mkapa is likely to pursue a line favourable to the Zimbabwean leader,
according to Brian Raftopoulos, who heads the Institute of Justice and
Reconciliation in Cape Town but was until recently professor of politics at
the University of Zimbabwe.

"Mkapa is an ally of Mugabe. He will not be an effective mediator, but the
messenger of Mugabe internationally," said Raftopoulos.

Political analysts in Zimbabwe say the focus of Mkapa's mediation is all
wrong. Like Mugabe himself, he sees Zimbabwe's problems as rooted in a
bilateral dispute between Mugabe's government and former colonial power,

The Zimbabwean leader has consistently said that his country's troubles stem
from his long-standing dispute with British prime minister Tony Blair, who
he alleges has used international pressure to punish him and sabotage the
country's economy because of the land reform programme in 2000, in which
nearly 5,000 farms were confiscated from their white owners.

"Our economy is under siege," Mugabe said in a recent interview with
Zimbabwean journalists. "And this is because of the actions of our enemies,
led by Britain, who have imposed sanctions on us."

Britain and other western countries say the sanctions, including travel and
banking restrictions, are purely individual and are aimed at Zimbabwe's
political and military leaders, not the country as a whole.

And 26 years after Zimbabwe became independent, many argue that the colonial
past is largely irrelevant and that the problems Zimbabwe now faces are

Britain's new ambassador to Zimbabwe, Andrew Pocock, poured cold water on
the view that the fundamental problem is London's relationship with Mugabe.

"The substance of the problem is not, as the government of Zimbabwe
contends, a bilateral difference with the United Kingdom," said Pocock. "It
is rather, as the European Union, United States and many others in the
international community have made clear, a problem between the government of
Zimbabwe and its people. At its heart is the way Zimbabwe is governed..
Zimbabwe's problems are mounting. They stem from bad policy."

Pocock said Mugabe's decision to block the Annan visit meant the country had
lost an opportunity to build bridges with the international community.

"He [Annan] sought to help the government of Zimbabwe make reforms that the
country desperately needs to arrest its deepening decline," he said.

Gillian Dare, first secretary at the British embassy in Harare, confirmed
that it would be meaningless for Mkapa to try to mediate between the two
countries. "This is not a bilateral dispute, so no mediation is required
between Britain and Zimbabwe," she said. "No one will be able to help unless
President Mugabe's policy evolves in different and sustainable directions."

The view that the causes of the crisis lie in the government's own policies
is shared by many observers.

Jonathan Moyo, formerly Mugabe's information minister but now an independent
member of parliament, is dismissive of attempts tp blame outsiders. "African
leaders with this mendacious nationalistic outlook always blame their former
colonial powers for every major ill in their national politics or economy
while accepting no responsibility whatsoever for their own policies or lack
of," Moyo wrote in the Zimbabe Independent earlier this month.

"The mediation by Mkapa is bound to fail if it is guided by Mugabe's claim
that the crisis is mainly due to a bilateral dispute with Britain. One thing
for sure is that as soon as Mkapa gets down to work, he will discover that
the real critical issue is not about an alleged bilateral dispute, but about
failure of governance, policies and leadership since [independence in]

The United States and France have issued statements saying Mugabe's attempts
at rapprochement with Britain will count for nothing unless it is preceded
by dialogue within the country.

Tendai Biti, secretary-general of the opposition Movement for Democratic
Change, says the mandate given to Mkapa is ambiguous, when what is needed is
an impartial arbitrator with a well-defined mandate chosen by all parties to
the negotiations.

"Mkapa thinks like ZANU-PF," said Biti, referring to the ruling party in

Ordinary Zimbabweans have little confidence that Mkapa's intervention will
make a difference.

"What can Mkapa do?" asked Simba Chawasarira, a Harare resident who
struggles to keep his family of three children going on 20 million
Zimbabwean dollars (200 US dollars) a month. "He is already biased, and we
don't want to hear about Britain on this issue - where does Britain come
into our problems? So if Mkapa is going to focus on improving relations with
Britain and not help resolve the internal political crisis, what is the
point of having him?"

Chawasarira said he and many of his friends had placed all their hopes in a
mediation effort led by the UN chief.

"I was so disappointed when I heard that he was no longer coming," he said.
"There is no longer any hope of the crisis being resolved soon. I can see
Mugabe going to 2010, and I just don't want to imagine where we will be, and
how we will survive another four years."

Joseph Magariro is a pseudonym used by an IWPR contributor in Zimbabwe.

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Mugabe fries small fish as a warning to ambitious grafters

Mail and Guardian

      Godwin Gandu

      31 July 2006 07:14

            About an hour before President Robert Mugabe addressed the sixth
session of Parliament on Tuesday morning his Deputy Information Minister,
Bright Matonga, was already in police cells facing corruption charges.

            Around noon Mugabe spoke about corruption. "Another regrettable
development is the incidence of cases of corruption," he told both lower and
upper house members in Parliament. "Government will not hesitate to invoke
the full force of the law against those perpetrating this vice, regardless
of their social status and political affiliation," he went on.

            A senior police officer told the Mail & Guardian that Matonga's
former local government boss, Ignatius Chombo, could be locked up on the
same charges, but they were "waiting for instructions".

            Until this week's arrest Mugabe has rarely acted on crucial
information implicating his Cabinet ministers in shady deals. Addressing his
ruling Zanu-PF party central committee meeting two weeks back Mugabe said he
was aware that ministers were involved in illicit gold-smuggling activities.
No names were mentioned and there is no "known investigation going on".

            "We have the names of the big fish, but we need instructions
first," the senior office said. "The National Economic Conduct Inspectorate
provided us with the names and we know the president was provided the
information through the Attorney General, but certain political decisions
have to be made first before we act."

            For now it's the small fish being fried. "Mugabe is in a
dilemma. He will be left with no one in his Cabinet or politburo should he
act on every information he gets," says Professor Eldred Masunungure of the
University of Zimbabwe political science department. "There is a degree to
which he can go, there are obvious political limitations, he will pick the
small fish and that will serve as a deterrent to the bigger fish."

            But Mugabe was charging like two bulls at the Central Committee
meeting. "Cases of members wanting to enrich themselves are increasing in
number. You are not being fair ... some people are just being crookish,"
Mugabe said, threatening that he would be "cleansing" his Central Committee.

            But party insiders and senior police officers concur that Mugabe
had all the information earlier, but took time to act. "Some were
reprimanded - his close confidants," the insider told the M&G. Among them
were multiple farm owners and gold and foreign currency dealers in "his
politburo and Cabinet".

            "Maybe Mugabe feels that bringing some of his old comrades
before the courts will leave them with no honour and dignity," says
Masunungure. "Those that are likely to go are small fish."

            Even Zanu-PF-aligned liberation war veterans' association
national chairperson Jabulani Sibanda is fuming. "It's like he [Mugabe] has
been away for a long time and only discovered corruption today," he said.

            The M&G is reliably informed that Mugabe is aware of corrupt
activities - involving Local Government Minister Ignatius Chombo and Deputy
Minister Matonga - within the Ministry of Local Government in which tenders
for the supply of buses were manipulated. So far only Matonga, who was CEO
of the Zimbabwe United Passenger Company before he became a deputy minister,
has been charged.

            But what is irking his senior party members, particularly
Secretary for Information Dr Nathan Shamuyarira, and Vice-Presidents Joseph
Msika and Joyce Mujuru, is that no serious action was being taken.

            "They have become accustomed to Mugabe firing warning shots, but
deep down they know he won't act and nobody will resign," the insider said.

            Sibanda told the M&G that, as an association, the war veterans
"expected to hear results not rhetoric. The people of Zimbabwe elected
Mugabe to oversee that everybody complies with the rule of law," he said.

            Deputy Trade Minister Phineas Chihota forced a Harare woman,
Sarudzayi Nhundu, to sell her house in Harare's posh Borrowdale suburb at
below market value rates and, in return, Chihota promised to use his
influence to issue her with sugar, fuel import and export licences.

            Mugabe revealed the scandal two weeks ago at a Zanu-PF central
committee meeting, but a week down the line Chihota still has his job.

            There is another hot potato Mugabe wouldn't want to touch: seven
of his top government officials, including ministers, were recently exposed
by the M&G for looting farming equipment at prime horticultural concern
Kondozi in the eastern Manicaland province and are still to be charged.

            But it was the same old story, according to the insider. "Mugabe
was fully briefed by Mujuru, he expressed concern, but hasn't acted."

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How now Gono's political ambitions; Monday cold be Gideon's day

      By Bill Saidi

      TODAY, 31 July, Gideon Gono presents his quarterly monetary review
policy. It follows another quarterly review, last week, this one a fiscal
one, by Herbert Murerwa, the Minister of Finance.

      Murerwa, seen previously as Gono's nemesis, has apparently reconciled
himself to play second fiddle to the Governor of the Reserve Bank of

      Some might say what has happened is that the two have buried the
hatchet and decided, presumably for the good of a country confronting its
greatest economic crisis since 1980, to confine their snide remarks about
each other's shortcomings to private gatherings.

      Others believe firmly that Gono has outsmarted Murerwa, although both
men have scored zilch in making any impact on the economy which is now
described as not only sick but terminally so.

      Murerwa's brief is the fiscus, which deals with the public revenue.
The Minister of Finance in Zimbabwe, previously dealt with monetary matters
as well, although that is the brief of the governor of the central bank.
Before 2000, when the bottom fell out of the Zimbabwe dollar after the
bloody, chaotic farm invasions, the governor of the central bank worked more
directly under the Minister of Finance than Gono does today.

      Gono was given more authority than any other central bank governor
since independence.

      Certainly, his predecessor, Leonard Tsumba, did not stage these
monetary review circuses which Gono has raised to an event worthy of banner

      It is acknowledged that Tsumba fell out with President Robert Mugabe
around the same time that his Minister of Finance, Simba Makoni, did too.

      They both clung tenaciously to a proposal to devalue the Zimdollar,
which had been teetering on the brink of collapse since 1997, after the
notorious Black Friday - the event which will forever be remembered as he
day  Mugabe surrendered to the excessive demands for compensation from the
war veterans.
      Mugabe scolded the two men and their supporters   as "saboteurs", in a
public display of personal pique which many saw as heralding his
increasingly autocratic handling of the country's economic affairs.
      Incidentally, apart from the RBZ governor and the finance minister,
there is also the Minister of Economic Planning. All three have distinct job
descriptions. Yet it is instructive to remember that there was once only one
ministry dealing with all three.

      It is amazing that the three "money people" are dealing with the
finances of a country in deep, deep trouble.
      So, instead of reducing public expenditure by cutting down on its
bloated bureaucracy, the government has continued its much-criticized
policy of maintaining a constantly ballooning civil service.
      Gono himself has criticized the size of the government, but after a
while - and perhaps a few choice words of political advice  from Mugabe - he
has toned down his comments on this ticklish subject.
      Last week, it was for Gono that Mugabe reserved his compliments.
"Leave Gono alone," he said.

      He had not one word of criticism for the RBZ governor, although even
Gono's most ardent supporters have quite often commented on how utterly
futile his tactics have been in tackling the economic crisis created by this
government's stubborn political and economic policies of confrontation.
      The twin enemies of inflation and corruption are still running free
and wild across the country, in spite of all the efforts by Gono, to curb
      Today, Gono will probably present a rehashed version of the quarterly
review speeches he has delivered since he got the big job. There will be
little change - unless he bites the bullet and decides to tackle the
currency crisis head-on, which could translate into a head-on clash with The

      He can only make an impact on the crisis if he devalues the dollar in
real terms. In the past, he has skirted the problem by making cosmetic
changes here and there, never actually announcing that from such-and-such
date the value of the Zimdollar against the greenback, for instance, would
be Z$850 000=US$1 - that is likely to be the situation on the parallel
market  in a few days' time.
      The current rate of Z$101 000=US$1 has played havoc with the economy.
It is generally acknowledged that this is Mugabe's pet project, anchored on
some vague personal pride, likened to the government's reluctance to let the
private sector take over completely the running of the disastrously-managed
Air Zimbabwe.

      If Gono doesn't act, then we can all begin to speculate actively on
his likely political ambitions. Mugabe's public defence of the RBZ governor
led some people to immediately speculate that he had   accepted to be
recruited into the inner circle of Zanu PF.
      What they expected in the next few days or weeks was his appointment
to either the party's politburo or the central committee. Others, claiming
an even more intimate knowledge of Mugabe's thought processes, predicted he
would soon be named into the Cabinet.

      Would he replace Murerwa or Rugare Gumbo, the Minister of Economic
Planning and an old Zanu PF war-horse? Or would a new super ministry be
created for him?
      While some might conclude that Gono's goose would then be cooked
thoroughly with this appointment, others believe he would be on his way,

      Even before his stature was elevated to its present stratospheric
level, Gono had been Mugabe's confidante for a while, traveling with the
president to far-away places to look and often beg  for  fuel, credit, maize
and wheat and other commodities which Zimbabwe, short of foreign currency
and almost everything else except self-congratulatory  politics, searched
for far and wide.

      Gono has kept faith with Mugabe's policies of not bending to the whims
of the international financial institutions. At the start of his new role as
Mugabe's super-economic trouble-shooter, he sounded as if he would,
nonetheless,  be amenable to a settlement of the crisis Zimbabwe had induced
between itself and the International Monetary Fund and the World Bank.
      Both Bretton Woods groups liked the positive sounds of reconciliation
Gono made in the early days of his job. Later, they too detected a strident
tone which convinced them he was using his "master's voice".

      All bets were off and the stalemate remains to this day, although
there are fresh reports of a likely settlement before the end of the year.

      What price would Gono pay if he defied Mugabe and proposed a
devaluation of the Zimdollar? He would pay the same price that Tsumba and
Makoni paid. There is no doubt about that. Mugabe has not indicated, in any
recent public statements, that his position on the devaluation has changed
one whit.

      Yet his desperation has been evident. His speech at the opening of
Parliament was filled with more doom-and-gloom than usual. Inevitably, like
the perennially optimistic dictator that he is, he tried to strike a
positive note, repeating, in different words, his earlier declaration that
"we shall soldier on".

      The interpretation by many commentators that he virtually conceded
defeat could be based on wishful thinking. If it turns out to be an accurate
reading of Mugabe's mood, then we can see Gono, for the first time, perhaps,
delivering a review bristling with real hope, laced with the absolutely
necessary apology to the people that both he and the president had been
treading a path leading to an abyss.

      What would be the catalyst? Would it be the real likelihood of an
uprising of sorts, perhaps forged through the unity of the opposition
parties, announced last week?

      Zanu PF has always held great contempt for the people of Zimbabwe to
rise up against its brutal reign - until the Zimbabwe Congress of Trade
Unions-organised stayaways of the late  1990s.

      Since then, nobody in the hierarchy of Zanu PF, the defence forces or
the Central Intelligence Organization (CIO) has any illusions about the
likelihood of ordinary people marching in protest against the terrifying
rise in the cost of living.

      Reports that Mugabe has been warned of this danger have persisted for
many months. His closest supporters may have persuaded him to dismiss these
warnings as idle speculation. But some of them must surely have reminded him
that he is the only one left, among the leaders of the three territories
which formed the federation of Rhodesia and Nyasaland , who remains in power
after more than 20 years in the saddle.

      President Kenneth Kaunda of Zambia was voted out of power after 27
years. Next year, Mugabe will have chalked up 27 years of uninterrupted
control of Zimbabwe. He must be aware that the law of averages is stacked
against him.

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Bill for monitoring e-mail and mobile phone calls submitted to parliament

Reporters Without Borders
Press release

31 July 2006


Bill for monitoring e-mail and mobile phone calls submitted to parliament

Reporters Without Borders condemned the Interception of Communications Bill that was submitted on 26 July to the Zimbabwean parliament. It would allow the authorities to intercept and read e-mail messages and listen to mobile phone calls without needing to get permission from a judge.

"We deplore this new proposed law, which would clearly violate every citizen's privacy, the freedom of expression and opinion, and the right of journalists to protect the confidentiality of their sources," the press freedom organisation said.

"Although not on the front line of the fight against terrorism, the regime is clearly using this as a pretext for silencing its critics in the press and political opposition, and we therefore call on the parliamentary legal committee, parliamentarians in general and, if it gets that far, the supreme court, to reject the bill," Reporters Without Borders added.

The parliamentary legal committee is currently examining the bill to determine if it conforms to the constitution. If approved, it will be go before the entire parliament.

Bureau Afrique / Africa desk
Reporters sans frontières / Reporters Without Borders
5, rue Geoffroy-Marie
75009 Paris, France
Tel : (33) 1 44 83 84 84
Fax : (33) 1 45 23 11 51
Email : /
Web :

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Land Bill Presented In House

The Herald (Harare)

July 31, 2006
Posted to the web July 31, 2006


THE Gazetted Land Bill which seeks to make certain provisions that are
consequential to the enactment of section 16B of the Constitution and repeal
the Rural Land Occupiers (Protection from Eviction) Act has been presented
in the House of Assembly.

The draft legislation was presented in the House last week on Wednesday and
was referred to the Parliamentary Legal Committee for consideration on
whether its provisions are in line with the Constitution.

The proposed Bill was necessitated by the enactment of section 16B of the
Constitution by the Constitution of Zimbabwe Amendment (No 17) Act that
enforce those provisions of the Land Act that were concerned with
compensation for improvements on agricultural land acquired for resettlement

The status of certain other provisions relating to such land was left
undetermined and it was felt desirable to re-enact such provisions or make
new provisions in the Bill.

Under the Bill, Gazetted Land is defined as agricultural land whose
compulsory acquisition is specifically provided for in section 16B of the
Constitution, which covers a broader spectrum of agricultural land.

Clause 3 of the proposed law makes it an offence to occupy land without
lawful authority after it has been gazetted in accordance with the

For the avoidance of doubt, the Bill makes it clear that compensation for
improvements to the gazetted land effected before acquisition shall be dealt
with in accordance with the provisions of the Land Acquisition Act.

Clause 5 serves to enforce all proceedings, whether administrative, civil or
criminal, that were commenced under the Land Acquisition Act before its
amendment by the proposed legislation.

Any offer letter issued on or before the fixed date that is not withdrawn by
the acquiring authority will be validated.

The Rural Land Occupiers (Protection from Eviction) Act is being repealed
since its provisions have become redundant because they do not apply to
State land.

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Cross-Border Traders Enjoy New Lease Of Life

The Herald (Harare)

July 29, 2006
Posted to the web July 31, 2006

Brenna Chigonga

THEY roll in luxurious posh cars, live modest lifestyles in magnificent
leafy low density villas furnished with state-of-the-art furniture and
hi-tech electrical gadgets.

They enjoy an expensive taste of designer clothing, flaunt top of the range
mobile phones and other ostentatious goods synonymous with the Western
opulent classes.

They are regular patrons in some of the country's five star hotels and
restaurants and this is the emerging breed of cross border traders that has
turned out to become the country's current nouveau rich class.

From its inception in the 80's, its slump in the 90's and its boom in the
new millennium, cross-border trading has not been an ordinary and
unappreciable economic activity despite having more than two million
dependants. Since the opening of the nation's frontiers in 1980 after more
than 15 years of crippling sanctions imposed on the Rhodesia regime,
hundreds of Zimbabweans mainly women and unemployed men, earned a living
through buying and selling various wares in the Sadc region.

Until recently, the term "vakadzi vekujubheki" had been synonymous with poor
illiterate women mostly widows who had to make ends meet through buying and
selling in the Sadc region.

With sweat trickling down their cheeks, groups of women carrying heavy bags
trudged towards the Zimbabwean border post across the Limpopo River Bridge
on their way back to Zimbabwe.

After the taxis that plied the short distance between the two border posts
were banned, the women were forced to carry their heavy loads on their
heads. In most instances, they were relegated to "open air offices," leaving
the air-conditioned offices to the rich who preferred travelling by luxury
coaches. Vending beyond the Zimbabwean borders has never been a stroll in
the park as the vendors had to contend with their xenophobic customers and
the hostility of police officers and other immigration officials.

Their only concern was to make enough money to send their children to school
and put enough food on their family tables.

However, that picture has greatly changed over the years, as the business of
selling reed baskets, table clothes, doilies and other crotchets is no
longer thriving.

Instead, most of the cross-border traders are now carrying out
multi-billion-dollar business ventures not only in the Sadc region.

Of late, they have expanded their horizons to areas as far as Europe and
Asia. They are now importing various products and services ranging from
fuel, television sets, decoders, clothes, mobile phones and luxurious
vehicles which they sell on the local market at inflated prices, creating
instant billionaires and trillionaires. They have now turned out to be
suppliers and owners of most chain stores and upmarket furniture stores
flourishing in the capital, talk of Homegate, Alcatraz, Gulf complex and a
wide range of other indigenously owned shops that are sprouting in the

"I started by selling crotchets and sculptures in Durban but it was after
these products had flooded this resort town that I started buying United
States dollars on the parallel market in Zambia to import electrical gadgets
from Dubai.

"I managed to buy quite a number of satellite dishes and decoders for resale
before turning to television sets and gold scales early this year," said one
businessman who refused to be named.

"It is from this business that I managed to raise money to buy cars from
China for resale on the local market. I actually go to China and pay for all
the travelling expenses. I collect the cars from Durban before reselling
them on either the local market or in South Africa where they have a ready
market," he added. A recent survey carried out in Dubai revealed that cross
border traders and shoppers travelling to that country are spending millions
of dollars in foreign currency every week to import "trinkets" for resale in
the country.

The figure even amounts to billions of dollars in foreign currency when
including those traders who travel to South Africa, Botswana, London and
other destinations. Some professionals have taken to shun their formal jobs
to take refuge in cross border trading. Another female engineer who also
spoke on condition of anonymity said she has been travelling to Mauritius
and Dubai to get clothes and shoes, which she supplies, a local boutique.I
have been supplying a local boutique with clothes and other fashion
accessories that I import from Dubai and Mauritius.

"Despite some travelling hassles that we sometimes incur along the way, the
job is well paying if all goes well, I might need to take it full time as
soon as I get enough capital," she said.

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Zimbabweans Annoy Botswana MPs

Mmegi, Botswana

      By Bame Piet
      Staff Writer
      7/31/2006 4:17:10 PM (GMT +2)

      Member of Parliament for Tswapong South Oreeditse Molebatsi has made
public his displeasure and discomfort with Zimbabweans including their
government. He told Parliament that Zimbabweans, are not good neighbours and
Botswana should stop any relations with the country if it wants to excel in
economic growth.

      He was debating a motion by MP for Palapye Boyce Sebetela that calls
on Parliament to request government to develop and implement a national
citizen contractors' skill/capacity rating system to guide procurement
preference schemes. He started by hitting hard at government for appointing
foreigners to senior positions at the expense of Batswana. He accused the
Ministry of Finance of employing more expatriates while Batswana with
similar qualifications are roaming the streets. He cited a case in which
Batswana were trained at a university in Uganda, but when they came back
they were made subordinates of their Ugandan classmates. Molebatsi said
there are many foreigners employed at the Accountant General's office while
qualified Batswana are unemployed. He said that this is a disadvantage
because foreigners take money to their countries of origin because there is
no law or policy that stops them from doing so.

      Molebatsi said currently there are 1,719 expatriates employed in the
civil service, 582 in parastatals and 15,316 in the private sector. He said
many hold jobs that Batswana can do. He said the 1989 Statute Instrument
allowed foreigners to work in Botswana without any conditions. He produced
the document in Parliament and waved it for everyone to see saying: "The
main problem is in this paper". The Minister of Labour and Home Affairs,
Moeng Pheto nearly subjected himself to embarrassment when he wanted the MP
to read the contents of the document saying it is an old one. Molebatsi
wanted the minister to explain why he had not reviewed and amended the
document if he knows that it is old and not suitable for use in modern

      He said even Bank of Botswana (BoB), Botswana Power Corporation (BPC)
and Botswana Railways (BR) are using the document to deny Batswana
employment opportunities. He said BoB has renewed employment contract for
the expatriate senior security officer while there are Batswana who are
qualified to do the job. "This country is lucky that Duncan Mlazie
(Assistant Minister of Finance) is not Minister of Presidential Affairs and
Public Administration otherwise he was going to employ a foreigner to be
commander of Botswana Defence Force as long as he had a PhD," he warned. The
heated MP said that the security officer is paid huge sums of money that
could be given to locals.

      MP for Shoshong Duke Lefhoko concurred with Molebatsi that Zimbabweans
are not friendly to Botswana. He cited the recent outbreak of Foot and Mouth
Disease in Bobirwa, which was suspected to originate from Zimbabwe but the
Zimbabweans declined to cooperate with Botswana to control the outbreak. He
added that the Zimbabwean government is prosecuting two journalists from
state-owned Botswana television after arresting them in 'no man's land'
between the two countries. He accused Botswana Railways of employing another
Zimbabwean who is messing up things. He said the messes have resulted in
2,000 Batswana losing jobs that were given to Zimbabweans. He warned
Botswana to be careful of Zimbabweans. He said that ministries of Finance
and that of Labour and Home Affairs are incompetent.

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