Friday, 19 February 2010 01:18
THE fight for control of the controversial diamond fields in the eastern
part of the country could soon explode into a major open conflict involving
powerful politicians and influential corporate magnates as the battle to
take charge of the precious gemstones intensify.
This revelation by informed official sources comes as government is taking
steps to stop the inquisitive parliamentary portfolio committee on Mines and
Energy chaired by former Mines minister Edward Chindori-Chininga from
proceeding with its oversight duties. Sources said government on Tuesday
indicated at a meeting attended by President Robert Mugabe, the two
vice-presidents, the prime minister and his two deputies and ministers that
the parliamentary committee must be stopped in its tracks because the probe
was creating problems and could open a can of worms.
"The parliamentary committee's oversight work on the Marange diamond claims,
mining and sales issues is likely to come to a close very soon because top
government officials are not happy with its investigations," a source said.
"This might soon cause an explosive confrontation between politicians and
mining tycoons involved in the battle for control of the Chiadzwa diamond
Government, which has an entrenched interest in the issue, is said to be
concerned about the rising tensions over diamonds after recent parliamentary
committee hearings, seizures of diamonds and alleged office break-ins -
moves which indicate stakes were high in the matter.
The fight for the Marange diamonds has escalated after a recent botched
attempt by Mbada Diamond Mining Company to sell 300 000 carats of diamonds
through auction. There is also a battle over the recent seizure by police
of African Consolidated Resources (ACR)'s 129 400 carats of diamonds from
the Reserve Bank offices. Millions of carats of diamonds have been extracted
unlawfully at Chiadzwa since the diamond rush began in 2006.
Government reacted to the proliferation of illegal diamond exploitation in
the area by sending in soldiers who were accused of brutality, including
killings, in the diamond fields.
The parliamentary committee has been summoning people involved in diamond
mining trying to unravel the complex issue of ownership of the diamond
claims and how the companies currently on the ground got there in the first
Those who have appeared before the committee in connection with the recent
failed attempt to auction diamonds include the Zimbabwe Mining Development
Corporation (ZMDC) and Minerals Marketing Corporation of Zimbabwe (MMCZ)
officials and police officers.
The latest problem started when Mbada wanted to auction the controversial
diamonds without the knowledge of the ZMDC, MMCZ, and the Police Minerals
During its hearings the parliamentary committee has raised concern over the
"careless manner" in which government has handled the mining and marketing
of the Chiadzwa diamonds.
ZMDC's Marange Resources last year signed a deal with the New Reclamation
group's subsidiary Grandwell leading to the formation of Mbada, a 50-50
partnership joint-venture. The company is chaired by retired Air
Vice-Marshal Robert Mhlanga.
The fight over diamonds pits the government, which is working with Mbada
against, ACR. It is said senior politicians are involved on both sides of
While Mbada has Mhlanga who is well connected in political circles, ACR is
said to be linked to an influential retired army commander who is well known
to have vast business interests, including diamonds.
Accusations and counter-accusations have been flying between the companies
fighting for control of the diamonds.
The London Stock Exchange-listed ACR has accused Mines minister Obert Mpofu
of being linked to New Reclamation, the South African company involved in
the Marange diamond mining operations. Canadile, a partnership between ZMDC
and South Africa's Core Mining, is also involved in Marange diamond mining.
Mbada and Canadile are said to be mining in a 2000-hectare claim legally
held by ACR which has been fighting intense legal battles to regain control
of its concessions and ownership of the gemstones.
The Supreme Court this week ruled that Mbada and Canadile should stop mining
operations in Marange pending the finalisation of the ownership contest in
court. The court also ruled that ACR diamonds seized from the Reserve Bank
by the police should be returned to the central bank forthwith.
ACR chief executive Andrew Cranswick yesterday said government should
enforce the ruling and drive out "foreign firms acting in contempt of court
orders and stealing Zimbabwe's strategic assets".
Zimbabwe has survived expulsion from the Kimberley Process due to the fight
over the Chiadzwa diamonds. A South African diamond inspector Abbey Chikane
has been seconded to oversee the mining and sale of diamonds in the country
which could degenerate into a conflict unless checked in time.
The army has been accused of engaging in forced labour, torturing and
beating local villagers on the diamond fields of Marange district. The
military was said to have seized control of these diamond fields in eastern
Zimbabwe after killing more than 200 people in Chiadzwa, a previously
peaceful but impoverished part of Marange, in late October 2008. The
government has denied this.
With extensive black market trading, Marange became a zone of lawlessness
and impunity, a microcosm of the broader situation which engulfed the
country before the inclusive government was formed in February 2009.
Diamonds were discovered in Marange in June 2006. By November 2006, however,
a nationwide police operation was launched to clamp down on illegal mining
across the country, including in Marange. Police assumed control of the
diamond fields but, instead of halting illegal mining and trade, they
worsened and exploited the lawlessness on the fields.
When police proved ineffective, the army launched Operation Hakudzokwi (No
Return) in October which left a trail of destruction and murder before
government withdrew the military and allowed mining companies to come in.
Friday, 19 February 2010 01:09
A HIGH Court judge, Ben Hlatshwayo, who reportedly lost a farm to First Lady
Grace Mugabe in 2008, has occupied part of an estate in Mashonaland West
owned by Ariston Holdings, a company listed on the local bourse.
Hlatshwayo has taken over 800 hectares of the 4 500-hectare Kent Estate,
which specialises in roses, poultry and livestock. The area the judge is
occupying has a school and several valuable fixed assets.
Impeccable sources told the Zimbabwe Independent that Hlatshwayo moved onto
the farm late last year and negotiations between Ariston and the judge to
reverse the occupation have yielded nothing.
The judge's occupation of the estate, the sources said, had the backing of a
senior government official after he lost Gwina Farm in Banket, which he had
acquired in December 2002 during the controversial land reform programme, to
the president's wife.
The First Lady reportedly used her firm, Gushungo Holdings, to force
Hlatshwayo off Gwina Farm near Mugabe's rural home.
Hlatshwayo was not reachable for comment last night.
"The judge has occupied the horticultural group's premier plantation with
the help of a senior government official," one of the sources said. "He also
has the backing of other senior government officials who have said the issue
of the judge has been solved after he lost Gwina Farm."
But the occupation comes after Ariston resettled indigenous farmers on part
of the 4 500-hectare farm a few years ago.
Ariston managing director Kumbirai Katsande yesterday declined to comment on
The sources said before Hlatshwayo occupied the estate, he had identified
and failed to occupy two farms in Mashonaland West and a third in
Mashonaland East. Senior politicians in the respective provinces reportedly
blocked him from taking over the farms.
Last year, after being elbowed off Gwina Farm, the former University of
Zimbabwe law lecturer took the case to the High Court and accused Gushungo
Holdings of using political muscle to wrest the property from him.
In court papers, Hlatshwayo reportedly said the "unlawful conduct" by
Gushungo Holdings amounted to spoliation - or taking the farm by force.
It was reported he claimed that the first family was sending emissaries to
the farm and issuing instructions to workers.
Hlatshwayo said there was "clearly no lawful basis for such interference,
which conduct, by its very nature, amounts to spoliation".
Constantine Chimakure / Chris Muronzi
Thursday, 18 February 2010 21:05
PRESIDENT Robert Mugabe finally succumbed to pressure when he agreed that
meetings of the National Security Council (NSC) would from now be held every
month as stipulated in the global political agreement (GPA) and the law that
set up the council. It had been agreed in the GPA by the three principals -
Mugabe and the two leaders of the MDC formations, Morgan Tsvangirai and
Professor Arthur Mutambara - that the meetings of the NSC would be held on
the first Friday of each month.
However, the council had only met twice since the formation of the
all-inclusive government in February last year. The first meeting, where
national state security issues were discussed, was held last June and the
second only two weeks ago.
Mutambara this week confirmed to the Zimbabwe Independent that the
principals had now committed themselves to having NSC meetings every month,
as outlined in the GPA.
"We agreed as principals that we will now be meeting very frequently as per
the stipulations of the GPA, actually we will be meeting every first Friday
of the month," Mutambara said before referring further questions to Mugabe
who chairs the NSC.
The Minister of State in the Prime Minister's Office, Gorden Moyo, said
legally the convening of the NSC meant that the Joint Operations Command no
"The three leaders in the all-inclusive government met under the NSC and
agreed that they have to meet in the first week of every month and legally
that means JOC is no longer in existence," Moyo said.
He however referred all questions to the Office of the President where the
Secretary to the President and Cabinet, Misheck Sibanda, was not available
for a comment.
The dismantling of JOC, a security think-tank that was reportedly behind the
violent presidential run-off poll in 2008 that returned Mugabe to power, is
still an outstanding issue in the negotiations between the three main
Zanu PF has refused to dismantle JOC arguing that it only dealt with
operational issues while the NSC was for policy issues.
More than 200 MDC supporters died during the countdown to the run-off, the
party says, while thousands of others were tortured and injured.
The NSC comprises Mugabe and his two Vice Presidents, Joice Mujuru and John
Nkomo, Tsvangirai and his deputies Mutambara and Thokozani Khupe, Defence
minister Emmerson Mnangagwa, Finance minister Tendai Biti, and Home Affairs
co-ministers Kembo Mohadi and Giles Mutsekwa.
It also includes ex-officio members who include the Chief Secretary to the
President and Cabinet and service chiefs.
Thursday, 18 February 2010 20:36
AFRICAN Consolidated Resources (ACR)'s lawyers have filed a complaint
against a high-ranking police officer over his role in the seizure of
diamonds from the Reserve Bank of Zimbabwe offices. Venturas & Samkange, ACR's
attorneys, say Police Assistant Commissioner Freedom Gumbo's conduct on
February 4 amounted to "contempt of court, abuse of authority and robbery".
In a letter to the Ministry of Home Affairs Venturas & Samukange describe
how Gumbo and police officers pounced on the RBZ offices and seized diamonds
in contempt of a court ruling.
Home Affairs co-minister Giles Mutsekwa yesterday acknowledged receipt of
the letter. He however said the letter should have been directed to the
Ministry of Justice.
He said the letter had since been forwarded to the Justice ministry to look
into the matter.
This comes as the Zimbabwe Mining Development Corporation and Minerals
Marketing Corporation of Zimbabwe (MMCZ) last year appealed to the Supreme
Court against a High Court judgment by Justice Charles Hungwe restoring
rights to the Chiadzwa claim to ACR. Justice Hungwe also noted that any
appeals would not "suspend the operation of the order".
Chief Justice Godfrey Chidyausiku ordered last month that diamonds seized
from ACR and all diamonds mined by Mbada and Canadile, the two companies
mining on the claims, be sent for safekeeping to the RBZ until the ownership
dispute was resolved.
The letter by ACR's lawyers was copied to President Robert Mugabe,
Commissioner-General of the Zimbabwe Republic Police (ZRP) Augustine
Chihuri, and Reserve Bank governor Gideon Gono.
Chief Justice Chidyausiku is said to have handed the order to transport the
diamonds to the deputy sheriff.
On Tuesday, February 2, the deputy sheriff visited MMCZ Offices to examine,
identify and label the diamonds which the Chief Justice had ordered to be
surrendered to the Reserve Bank.
According to the letter, he was not able to complete the process that day
and continued the following day. However, when he finished, it was too late
to transport the precious stones to the RBZ.
The following day, on Thursday, February 4 the deputy sheriff went back to
the MMCZ offices and collected the diamonds that had been sealed in a
But, the letter said, as he was leaving the MMCZ offices, he was confronted
by Mines Minister Obert Mpofu who claimed that the Chief Justice was going
to suspend Justice Hungwe's order.
Mpofu is said to have demanded that the diamonds remain with the MMCZ.
His argument was premised on a letter authored by Nomonde Mazabane, the
Registrar of the Supreme Court.
In the letter, the registrar indicated that Chief Justice Chidyausiku had
advised that his order would suspend the whole of Justice Hungwe's order.
The lawyers said the letter did not say that the whole judgment would be set
aside. In fact it was pointed out that the letter was not an order.
Encouraged by the registrar's letter and his own interpretation, Mpofu is
said to have attempted to stop the transportation.
The letter reads: "The deputy sheriff, quite rightly, stated that he would
disregard the letter as it was not a court order. It is not unusual for a
judge to hand down an order and then hand down his reasons a short while
later. However, it is very unusual for a judge to instruct the registrar to
advise the parties to an application of the effect of the order when he only
intends to hand down his reasons 'shortly'. Such a letter has no legal
effect. It is only the judgment which has legal effect."
Ironically, the registrar sent the letter to the legal practitioners of the
ZMDC and then sent copies, "not only to the other parties to the
application, but also to the legal practitioners of the minister, who was
not a party to the application."
Curiously, according to the ACRs lawyers, the letter from the registrar was
dated February 4, the day the deputy sheriff was removing the diamonds from
"The letter obviously gave the minister (Mpofu) what he wanted - a reason to
threaten the deputy sheriff and officials at the Reserve Bank and frustrate
the execution of the existing order of the Supreme Court.
"The deputy sheriff then took the case with the diamonds to the Reserve Bank
and surrendered them to the officials. While the deputy sheriff was still at
the Reserve Bank, Assistant Commissioner Gumbo came to the Reserve Bank
accompanied by several armed policemen and demanded at the 'order of the
minister' that the diamonds be handed over to him."
Although RBZ officials are said to have been reluctant to release the
diamonds, Gumbo threatened them with arrest.
Only then did the RBZ officials hand over the case containing the diamonds.
Upon receipt Assistant Commissioner Gumbo did not leave a receipt.
"We do not know what he (Gumbo) did with the diamonds. We consider that the
actions of Assistant Commissioner Gumbo were completely unlawful and in
contempt of a court order."
The lawyers argue that Mpofu had no lawful right to "interfere".
The letter adds: "It is bad enough that the Minister of Mines should
personally interfere with the judicial process of implementing an order of
the Supreme Court. However, the position was made worse by the fact that
Assistant Commissioner Gumbo, because he was told by the minister to seize
the diamonds from the deputy sheriff or officials of the Reserve Bank, did
so without any attempt to ascertain that the order of the minister was
lawful. There is no rule of law if police officers blindly carry out an
order given by a minister of state. Police officers should only act when
they are satisfied that the complaint of the minister has a sound legal
The lawyers say that Mpofu's personal intervention aided by a senior officer
of the ZRP is an unlawful act designed to frustrate compliance with an order
of the Supreme Court, and pursuant to such litigation, is hardly likely to
inspire confidence in the ZRP, orders of the court and the rule of law in
"We ask that this matter be investigated and that appropriate action be
taken against Assistant Commissioner Gumbo. We also ask you to confirm that
the Deputy Sheriff will not be obstructed in his duties, particularly in the
enforcement of the provisions of the Order of the Supreme Court in case No
SC 2307 09, and that the necessary instructions are issued to the
Commissioner-General of the ZRP," says the lawyers.
Thursday, 18 February 2010 20:19
THE MDC formation led by Morgan Tsvangirai has resolved to set up an
independent commission to probe corruption among its ministers, legislators
and top leaders. The party's national executive agreed to set up the
commission at a meeting held last Wednesday, at which the party's economic
advisor, Eddie Cross, was summoned after being accused of leaking a story to
the Zimbabwe Independent which named three ministers who were said to be
under investigation for allegedly engaging in corrupt activities.
Party insiders said Cross told the national executive that he had evidence
of corruption involving the three ministers - Energy and Power Development
Minister Elias Mudzuri, co-Home Affairs Minister Giles Mutsekwa and Mines
deputy minister Murisi Zwizwai.
He challenged the party leaders to set up an independent commission to
investigate the allegations of corruption and not to sweep the matter under
One source said: "Initially, people wanted the debate to focus on who the
source of the story was and when the top leadership said it was Eddie Cross,
he was then summoned and he categorically stated that he had evidence
connecting the ministers to corrupt activities.
"He then asked the national executive why they don't want to investigate if
they are serious about dealing with corruption in the party. He challenged
them to institute an independent investigation in the ministers and not just
focus on councillors."
Sources said the meeting then resolved to set up an independent commission,
which would not only focus on the three ministers but would include other
ministers, legislators and top leaders.
Another source said: "The probe should not only target Zwizwai, Mudzuri and
Mutsekwa but should investigate everyone that has engaged in corrupt
activities. For sure there will not be any sacred cows and if done
professionally, the results might be shocking."
MDC-T spokesperson Nelson Chamisa told the Zimbabwe Independent last month
that anyone found to be corrupt would face automatic dismissal from the
Chamisa could not be reached for comment yesterday as he was out of the
country on government business. Party chairperson and also Speaker of House
of Assembly Lovemore Moyo declined to comment.
The Independent broke a story last month in which Mudzuri, Mutsekwa and
Zwizwai were named as having been under investigation by the party for
However, this was denied by Chamisa who said there was no committee set up
to expressly investigate the three, but said a 13-member probe team had been
set up in January to investigate corruption at local government level.
It later emerged that there had been campaigns from within the party to have
at least two of them - Mudzuri and Zwizwai - put on the EU sanctions list
which contains President Robert Mugabe and about 200 other top Zanu PF
Insiders in the MDC-T believed that infighting gave rise to the allegations
that the three were being investigated by the 13-member team led by party
deputy secretary-general Tapiwa Mashakada.
Thursday, 18 February 2010 20:15
NINE soldiers who were acquitted last year on allegations of going on a
rampage in Harare and looting goods from shops, beating up illegal foreign
currency dealers and robbing them of their money, have been discharged from
the Zimbabwe National Army (ZNA). Last year, the soldiers were acquitted by
a court martial because of lack of sufficient evidence linking them to the
However, despite their acquittal a source in the army said they were
cashiered under administrative discharge last December.
The source said: "The soldiers were acquitted in January 2009 because of
lack of evidence but in December the same year they received letters
informing them that their services in the army were no longer needed and
their dismissal was based on administrative charges.
"Dismissal on administrative charges is usually given when one is
incompetent, for instance coming to work late, not following orders or just
not performing well at work. It's surprising as to why all were dismissed at
once. This has raised suspicion that someone really wanted to see them gone
and the administrative reason was just an excuse."
ZNA spokesperson Lieutenant-Colonel Everson Mugwisi did not respond to
questions he asked from the Zimbabwe Independent pertaining to the matter at
the time of going to print last night.
The soldiers allegedly went into Harare's CBD and stole food, clothes and
harassed illegal foreign currency dealers who they blamed for the then
Thursday, 18 February 2010 20:10
A MAJOR power crisis has gripped the country with reports that five of the
six generating units at Hwange Power Station are down. The operational unit
is generating a mere 90MW. Kariba Power Station is generating 745MW and an
additional 200MW are imported from neighbouring countries in the Southern
African Power Pool.
Internal generation and the imports were by Wednesday standing at 1 035MW
against the national daily demand of 2 200 megawatts.
The electricity crisis has worsened the current power rationing with Zesa
switching off customers randomly throughout the country, in some cases for
periods between seven and 12 hours daily.
The situation is unlikely to improve in the near future.
Fullard Gwasira, Zesa spokesperson, confirmed to the Zimbabwe Independent
that the power utility had increased power rationing due to the breakdown at
Hwange Power Station.
"Load-shedding has increased due to depressed electricity generation at
Hwange Power Station where one unit is producing 90MW out of a possible
generation of 480MW," Gwasira said. "Kariba is generating 745MW to augment
electricity imports of 200MW from neighbouring countries in the Southern
African Power Pool."
He added: "There is a mismatch between the national demand of 2 200MW on one
hand and the available electricity of 1 035MW on the other. Coupled with the
fact that three thermal power stations in Harare, Bulawayo and Munyati are
not generating electricity due to a combination of factors, which include
fuel supply and plant challenges, electricity availability is depressed at
Gwasira said it was necessary to have increased load-shedding to ensure that
the available and scarce power is adequately shared by all consumers.
The country, despite the power shortages, is exporting 150MW to Namibia
under a US$40 million deal where Namibian utility NamPower provided capital
for the refurbishment of power units at Hwange Thermal Power Station in
exchange for electricity.
Gwasira however defended the deal saying Zimbabwe would benefit from the
pact in the long run.
"This loan (from the Namibians) is a win-win and can actually be viewed as a
prepayment for power to be delivered at a later date after refurbishment,"
Turning to plans that Zesa has of rectifying the problems at Hwange Power
Station, Gwasira said a lot of money was required to refurbish the units,
but the solution was to replace antiquated equipment.
Apart from refurbishing and replacing antiquated equipment, the power
utility also needed to service auxiliary equipment not covered under the
agreement with the Namibians.
"A lot of money is required, not only to refurbish the generators, but also
the auxiliary equipment associated with the generators," Gwasira explained.
"Under the Namibian deal, only the generators were refurbished, and not the
auxiliary equipment and this has affected the optimal use of the plant."
The government has said it would seek partners to run the three thermal
power stations at Munyati, Bulawayo and in Harare.
The three thermal power stations can generate 500 megawatts if they are
Meanwhile, the Competition and Tariff Commission is probing Zesa over
allegations of abusing its monopoly to charge excessive tariffs.
According to the commission, the investigation would centre on "alleged
abuse of monopoly by Zesa through excessive tariffs, charging electricity
not consumed through estimates in billing and arbitrary cutting of
electricity supplies for domestic and industrial use".
The commission, through its chairman Dumisani Sibanda, has invited written
submissions to do with "any restrictive and unfair business practices within
Zesa on the local market".
The submissions are to be lodged with the commission by next Friday.
Loughty Dube / Nqobile Bhebhe
Thursday, 18 February 2010 20:07
BULAWAYO City Council will next month decommission two of its five dams amid
revelations that the city is left with 14 months supply of water. Water
levels at Inyankuni and Umzingwane dams have dwindled to 10,71% and 15% of
In terms of council by-laws, dams are cut from the supply line once water
levels plunge to 10% capacity.
The decommissioning would leave three dams on the supply line - Insiza, and
Lower and Upper Ncema, which are in the drought-prone Matabeleland South
By Wednesday Lower and Upper Ncema were 72% and 42% full respectively while
Insiza was 78% full.
On Monday, mayor Thaba Moyo told the Zimbabwe Independent that the city's
more than 1,5 million residents should not panic.
"It's not a secret that the city is faced with potential water shortages,"
Moyo said. "We are set to decommission Inyankuni and Umzingwane in March as
the water levels are now too low."
Moyo said council was working on "a stiffer water-rationing regime".
"We are aware of the potential water shortage but at present, management is
working on a stiffer water-rationing regime. Residents should not worry that
they will go for days without water," he said.
Asked on the likely impact on industry, Moyo said it should not be alarmed.
"Pending water shortages should not alarm either residents or industries.
The business community should know that in Bulawayo lies their future for
growth and relocating should not dominate their thoughts," he said.
Bulawayo-based economist Eric Bloch concurred with Moyo that industries
should not be alarmed by pending water shortages as they would "slightly
feel the pinch".
Bloch said industries would not be affected as much as council; "water
rationing would largely target non-industrial use".
"The only danger that industries face in the city is erratic power cuts and
salary friction between labour and employers and not water," he said.
This week, Zesa warned the country of increased power cuts that would see
all parts of the country go for more than seven hours daily without any
Bulawayo has lost its status as the industrial hub of Zimbabwe largely due
to perennial water problems.
Bulawayo needs about 140 000 cubic meters of water daily for both domestic
and industrial consumption but the growing population now outstrips supply
According to a council report in January, residents used 169 790 cubic
metres of water daily.
Thursday, 18 February 2010 19:58
PRESIDENT Robert Mugabe will be blowing out a lot of birthday candles on
Sunday. Actually, 86 colourful little candles. And he will need a good pair
of smoke-free lungs to achieve this. Mugabe's birthday, a key national event
on the calendar, will be marked this year in Bulawayo on February 26 with a
night of music and feasting, according to Zanu PF youth officials.
Already the publicity machine is being oiled with radio and television
advertisements now being broadcast.
Come Sunday, thousands will be congratulating "His Excellency, the
President, Head of State and Government, Commander-In-Chief and first
secretary of Zanu PF" on the event of his birthday and wishing him many
Suddenly parastatals, which are for the better part of the year invisible,
will start showing up on the corporate radar again, showering His Excellency
with flowery birthday messages in newspapers and disappear again until his
The press will be delighted as well; advertising revenue will be flowing in
their thousands. Birthday supplements always follow.
Apart from state enterprises, youths will be lining up at the feeding trough
bussed in from the country's various provinces and literally singing for
For his close lieutenants, it will be an opportune time to curry favours
with the boss.
Traditionally, Mugabe's birthday will see a wholesale slaughter of cattle,
goats, chickens and a host of other edible animals.
The organisers are working hard not to disappoint him either. Letters have
been sent to the corporate world with demands many executives cannot
refuse -- "donations" to the 21st February Movement bash.
According to a letter sent to prospective donors, membership and association
to the movement cuts across political, religious, ethnic, and racial
Zanu-PF Youth Secretary Absolom Sikhosana says the organising committee has
sourced "adequate funds to ensure that this year's edition is a resounding
Sikhosana says 15 000 youths from various provinces are expected to attend.
He said: "We are expecting to host more than 15 000 youths from across the
country and this has necessitated the change of the venue from City Life
hall." Now the event has been moved to a bigger venue, the International
Trade Fair Grounds.
Since 1986, Mugabe's birthday celebrations have been organised by the 21st
February Movement, initially modelled on scouting and aimed at promoting
But the greater good to champion children's rights and welfare has been
forgotten over the years with the organisers pampering the Zimbabwean
Three years ago, businessman Philip Chiyangwa donated US$110 000 for Mugabe's
birthday. Others do so with discretion.
Judging from past occasions, there will be a banquet, a gala dinner, a
concert and a public feast at which dozens of animals are slaughtered.
Last year, the movement spent US$250 000 on his party.
For over a decade companies have been donating generously to the annual
event. The organisers are determined to make a memorable day out of it. An
all-night bash reminiscent of yesteryear galas has been planned reportedly
featuring local and international artists.
Years back, Zimbabweans became accustomed to various night-long bashes to
mark this or that day.
Now after a year without bashes, Zanu-PF it seems still has more to offer.
Mugabe's birthday comes at a time inter-party talks to iron out outstanding
issues of the global political agreement are teetering on the brink of
The sponsors of the power sharing agreement that led to the formation of a
unity government are not happy.
Zimbabwe is facing a food deficit but that is unlikely to be an agenda item
with everyone in Zanu PF attempting to get the party leader a good gift.
According to the World Food Programme, 2,4 million people will need food aid
On the economic front, investors are panic-stricken by plans to seize
foreign-owned businesses. And no one is interested in calming them down. In
fact, Mugabe is talking tough and claims that "49% equity is a hell of a lot
more" than investors should retain.
The Affirmative Action Group, a black empowerment lobby group, is sending
chilling messages to the Nigerian business community bordering on the
Civil servants have been on strike for over a week and the justice system is
failing because of the industrial action.
Despite these problems, Mugabe has recorded an interview with the state
broadcaster where he normally lightens up and cracks a few jokes to an
And the usual guests are already in town. An American citizen with a soft
spot for Mugabe, Coltrane Chimurenga of the December 12 Movement, is already
in the capital. Many others too cannot wait to get to Bulawayo.
Thursday, 18 February 2010 19:50
I WAS shocked to tears by Deputy Prime Minister Arthur Mutambara (pictured
bottom right)'s posturing in a purported interview headlined "Talk of
restrictive measures nonsensical" in the Herald of February 13. I was left
without doubt that, just like Gabriel Chaibva, Mutambara is a Zanu PF
supporter to the core. He should just declare openly his allegiance to Zanu
PF for all of us to know. Nearly all his assertions were pure hogwash, but I
will pick out the worst.
Mutambara told us that our country is under full sanctions. Nothing can be
further from the truth.
The last time this country was under full sanctions was when it was still
Rhodesia during the UDI era of Prime Minister Ian Smith. Smith was under a
blanket UN economic embargo and he survived by trading illegally with
apartheid South Africa.
It should be told that Smith's sanctions were imposed at the behest of the
Americans and the British. The role played by then US Secretary of State
Henry Kissinger and then UK Premier Harold Wilson in ending the UDI should
be held in high esteem in modern day Zimbabwe.
This shows that the US and UK have been consistent against barbaric regimes
wherever they are regardless of skin colour.
Robert Mugabe's sanctions are targeted because Border Timbers can sell all
its wooden doors to the US, Interfresh is exporting its flagship Crush to
the entire EU, and Lake Harvest is exporting its Tilapia to the UK, just to
briefly expose the blatant lie of "full sanctions".
Mutambara complained that when the president of a country is targeted, the
effect is that the country is deemed unsafe. What is the problem with that
when the country is indeed unsafe? Mutambara knows very well the murder of
opposition supporters, farmers and farm workers by thugs aligned to Zanu PF.
I shall not attempt to name victims because they are well known and well
documented. How does one describe the safety of a country where innocent
civilians are abducted in the middle of the night and held incommunicado for
Do I have to mention Jestina Mukoko and Pasco Gwezere among dozens of
The photograph of farmer Ben Freeth's house up in flames that circulated
around the world through the internet is sure evidence of a country run by
the rule of the jungle. What is the problem when a dictator presiding over
such chaos is targeted?
Mutambara is disappointed by how foreign leaders are "naïve, stupid and
undermining us". Is that the language of a serious national leader? What
about the notion of diplomatic language? It reminds me of his master's
desperate, scornful and shameful utterances, such as "Carson is a little
idiot", "Dell must go to hell", and "Bush is the god and Blair the prophet",
to quote just a few. It seems Mutambara needs a serious and thorough
grooming exercise. He needs to be told the effect of foul language in this
digital era where the world has shrunk considerably. As a professor,
Mutambara should know that just one adolescent, overzealous and reckless
comment, markets will react.
Mutambara suggested we should all respect Mugabe because he has
"generational results". Nonetheless, he dismally failed to rollcall all such
results. I shall partially offer help: during Mugabe's reign, our currency
vanished, schools and hospitals shut down permanently, we lost over 4 000
innocent souls to an old and treatable disease called cholera, and in 2008
the whole country had become one big refugee camp surviving on handouts from
the US and EU.
Then we were appraised that by 2015 China would have overtaken "America" as
the biggest economy in the world. Well, such wild and self-serving
projections aside, what is called America in comparative terms to China
anyway? In Davos, Americans worshipped China, we were informed.
However we were not told exactly how the Americans did that but Mutambara
observed Barack Obama and Gordon Brown running like little kids when Chinese
vice premier Dr Lee was presenting.
I saw all delegates seated when I followed it on TV. By the way, the UK is
helping Zimbabwe to the tune of US$100 million this year.
It is the UK's largest assistance ever to this country. How much help are we
going to receive from the Chinese, directly or indirectly, professor?
Without doubt the biggest lie was that Obama recently refused to meet the
Dalai Lama fearing Chinese reprisals. The truth is that that meeting will go
ahead as confirmed by the White House on February 12.
The worst of the frightening assertions was that sometimes democracy and
human rights are not necessary. That statement should surely seal Mutambara's
unsuitability to be a national leader forever. What are the times when
democracy and human rights are "not necessary" professor?
Here is someone who should spearhead the transformation of our society from
a dictatorship to a democracy uttering the opposite of his mandate. No
wonder all reforms stipulated under the global political agreement are
stalled. Mutambara should know that historians are keeping such shameful
utterances for posterity.
Percy Jinga is contactable at firstname.lastname@example.org This e-mail address
Thursday, 18 February 2010 16:55
PRESIDENT Robert Mugabe last December told his party congress that elections
would be held soon. Weeks later, South African President Jacob Zuma said
Harare should “park” outstanding issues of the Global Political Agreement
(GPA) and “proceed” to create a conducive environment for fresh elections.
MDC leader Morgan Tsvangirai has bought into Zuma’s proposal to “park and
proceed” after meeting the South African leader three weeks ago on the
sidelines of the World Economic Forum in Davos Switzerland and was told that
regional leaders were proposing elections as the panacea to the country’s
Tsvangirai said a new constitution should be enacted by October followed by
fresh elections six months later.
Zuma wants the outstanding issues “parked” and a road map to free and fair
elections drawn up.
One source privy to the GPA talks, which have deadlocked, said: “To Zuma and
some regional leaders the only exit point is free and fair elections.
The road map would be anchored on the crafting of a new constitution and the
creation of an environment that will guarantee security of people, freedom
to campaign, media reforms and the democratisation of electoral laws and
While such statements might be met with glee from the international
community and some sections in the region, Zimbabweans do not know whether
to welcome an election as early as April next year or to feel worried.
Memories of the run-up to the June 27 bloody presidential run-off poll are
still fresh in people’s minds and nothing has been done on the ground to
create an environment that allows for a free and fair election so that
people can freely choose their next leader.
Zimbabweans agree generally that the situation has improved under the GPA
compared to the chaotic and violent 2008 and years preceding. They are also
aware that at some point, the inclusive government will have to give way to
a popularly-elected government.
Political analysts this week said Zimbabweans are not ready for an election
in the next 14 months. They also believe that none of the three political
leaders wants the elections in 2011 and were just posturing when they made
An early election, analysts say, would be suicidal for Zanu PF because
Mugabe’s party may never regain absolute power after having lost its
parliamentary majority in March 2008.
Zimbabwe Election Support Network (Zesn) chairperson Tinoziva Bere pointed
out that Mugabe would only call for an election when he feels his party has
a chance of winning and next April might be too soon, especially now when it
is at its most divided since Independence in 1980.
The analysts said talking about an election in 14 months is not enough. The
inclusive government has to guarantee people that there would not be a
repeat of the pre-June 27 period, when more than 200 MDC supporters died,
while thousands others were tortured and injured.
They said there was need for national healing before elections could take
Zesn national director Rindai Chipfunde-Vava said national healing was just
as important as implementing electoral reforms if the country is to have
elections under an environment that allows free participation and freedom of
“There is need to do confidence-building in the people. National healing is
very important so that people appreciate the elections, otherwise people
will still be traumatised and they have not forgotten 2008.
Why should people die during an election?” she said.
The analysts said the inclusive government has to make sure that benchmarks,
such as electoral, media, judiciary, legal and security reforms, are in
place before Zimbabwe can hold a free and fair election.
They said as long as the environment remains skewed in Zanu PF’s favour,
which still controls the army, judiciary, security agents, police and state
media, MDC would have an uphill task to campaign freely and mobilise its
Failure to dismantle the Joint Operations Command (JOC), a security
think-tank that was reportedly behind the bloody presidential run-off poll
that returned Mugabe to power, worsens the situation, the analysts said.
Bere said: “The conditions on the ground show that there have not been
substantial reforms that create an environment for free and fair elections.
No measures have been taken to prevent what happened in 2008. The
perpetrators of violence are still roaming the streets.”
He said as long as there are no security reforms, the chances that there
would be an orgy of violence are high.
“The security sector has to be reformed to ensure that it is independent and
it is reintegrated. If that is not done, statements such as ‘we will not
salute’ anyone except Mugabe will be repeated. It is still the same
characters who don’t accept plurality.”
Programme coordinator of Zimbabwe Lawyers for Human Rights Irene Petras said
the Attorney-General’s office, police and other security services should be
reformed into institutions that are impartial and which do not selectively
apply the law.
She said the service chiefs should be made aware that the people’s choice
should be respected and their operation should not be in violation of the
constitution, which states that they should not be political but should be
able to serve whoever is in office.
Zimbabwe Defence Forces Commander Constantine Chiwenga, Police
Commissioner-General Augustine Chihuri and Commissioner of Prisons Paradzai
Zimondi are on record saying that they would never salute a president other
than Mugabe, least of all one who did not participate in the war of
“Punitive laws still exist and until there are substantial reforms that
ensure that people are free and that create an environment that guarantees
people freedom of expression and association, elections should not be held,”
said Bere. “In addition, election reforms have not been implemented. The
constitution-making process is all over the place and might be implemented
as a formality. Democratisation of the media is still not done. There is
still hate language in state media against the MDC.”
Petras said the inclusive government should ensure that the Zimbabwe
Electoral Commission is professional and transparent and that the role of
the registrar-general should not be what it is today, where there is no
“We need an overhaul of the voters’ roll and we also need to look at the
delimitation. These things need to be addressed first,” she said.
Chipfunde-Vava said rushing into elections without implementing necessary
electoral reforms would lead to disaster.
“If you want to see a difference from elections conducted in 2008, we need
significant reforms to improve the elections environment. The voters’ roll
needs revamping and all this needs to be done before an election is done,”
“First we need a constitution to be done and then we need time to implement
what is in the constitution. The reforms have to be significant –– legal,
institutional and the architecture of the elections. Even the media reforms
have to be done. They are just talking about media reforms but doing nothing
Former United States Ambassador James MacGee in his 2009 ambassador’s review
also believed that elections could only be held if the government creates an
open and free environment with international observers monitoring polling
stations and tabulations.
“In order to create conditions under which free and fair elections can take
place, the legal system will have to be reformed, freedom of the press and
speech will have to be restored, political violence will have to end,” he
said adding that: “Free and fair, supervised elections seem a long way
McGee said there were limited signs that Mugabe and Zanu PF were committed
to fundamental changes to meet the benchmarks for a free and fair election.
Bere said there seems to be no timetable in place for fixing these problems.
“Instead of talking about elections, politicians should be demanding
electoral reforms,” he said.
Bere said international observers could not guarantee or stop political
He said even if they were there, people would still not be allowed to freely
make their choice under these current conditions.
Chipfunde-Vava concurred when she said: “Internationally supervised
elections do not stop violence. I have supervised internationally monitored
elections and these are not enough on their own. They only augment and
supplement the local environment”.
Thursday, 18 February 2010 19:27
YEAR-on-year inflation rose by 2,9 percentage points on the December rate
of -7,7% to - 4,8% in January, the Central Statistical Office (CSO) said
yesterday. From January to December 2009, month-on-month inflation had been
oscillating between -3,1% and 1 percent after government dollarised the
“Year on year inflation rose for the month of January 2010 as measured by
the all-items Consumer Price Index (CPI) stood at -4,8% gaining 2,9
percentage points on the December 2009 rate of -7,7%,” the CSO said.
The month-on-month rate in January was 1,81% gaining 0,3 percentage points
in December 2009 at a rate of -0,68%.
“Non-food substances stood at 0,8%, shedding 0,09 percentage points on the
December 2009 rate of 0,39%,”it added.
Economists however said the inflation outlook for 2010 was expected to
remain stable within the single-digit levels, subject to resolute adherence
to sound macro-economic management measures adding that robust policy
reforms have to be implemented to rid the economy of any inflationary
Zimbabwe went into deflation last year when stable multiple currencies were
introduced. This saw price stabilisation for much of the year.
With the introduction of multiple currencies in February, questions are
being asked if government would be able to live within its means this time
Economist Brains Muchemwa said given the prevailing modus operandi (that is
the dollarisation of the economy), government will be “forced to operate
within budgetary allocations because of lack of control of money supply”.
Corporate lawyer and newspaper columnist Alex Magaisa said history had shown
that government has generally failed to live within its means and Biti’s
staggering task was to inculcate discipline in line ministries.
“The trouble is there is so much that needs to be done and all this requires
resources but there is little by way of resources to do it,” Magaisa said.
“At the moment as a country we are living like hunter-gatherers, living from
hand to mouth and whilst this might permit survival, it does not provide the
facility for development at all.”
Magaisa said too much of the government revenue was being expended on
“survival needs” as opposed to “growth needs”.
Economic consultant Eric Bloch said not only was economic recovery
critically dependent upon government living within its means, but government
had no alternative, “for it neither has any borrowing powers in the current
environment, nor the ability to print money”.
Bloch said government must therefore maximise its means, without resorting
to overly-burdensome taxation (which would deter investment and undermine
economic recovery). It could achieve that maximisation by a variety of
Kingdom Stock Brokers head Witness Chinyama said an improved agricultural
season, increased output in the mining sector and better performance by the
tourism sector would augur well for inflation.
“Our inflation outlook would be determined by increased production, mainly
in the agricultural sector, increased production would heat up the economy
and when it is heated we are likely to experience positive inflation,” said
Thursday, 18 February 2010 19:25
ONE of the country's leading asbestos mines, Shabanie, is on the verge of
collapse after its administrator failed to settle a US$1 million electricity
bill resulting in the disconnection of power, which prompted flooding of the
mine. As a result equipment valued at over US$450 million is reportedly
The mine, currently under the management of Arafas Gwaradzimba of AMG Global
Chartered Accountants, has reportedly failed to pay salaries since last
October's strike which resulted in the near-fatal shooting of three workers.
Mines and Mining Development minister Obert Mpofu told parliament last week
that Shabanie Mine -- at the centre of a protracted ownership wrangle
between government and former owner Mutumwa Mawere -- is facing a host of
"I am aware that the only asbestos mine is having these challenges. You may
also be aware that those companies are being administered by the
administrator or curator and the functions and responsibilities of running
those entities are in the hands of the administrator," Mpofu said.
When asked by Masvingo urban MP Tongai Matutu if he was aware of the plight
of an estimated 3 000 workers who had not been receiving salaries over the
last six months, Mpofu said: "We have no direct responsibility to the
administration that was put in place on those mines."
Sources following developments obtaining at the mine said the decision to
switch off power has submerged equipment worth US$450 million. The sources
added that the underground water had reached the 10th level of the mine
where electricity sub-stations are based.
Mpofu however said the power utility cut power supplies to the mining
company early this month. He said government was planning to repossess the
mines, a decision he claimed would restore operations.
"I know last week their power was disconnected because of challenges in
payment," the minister said.
"We have actually appealed to those responsible for those mines to at least
bring those mines back to where they belong, that is the Ministry of Mines,
so that we can deal with them in a manner that can address the issues."
Sources said the mine failed to settle the energy bill despite being granted
a "grace period" by Zesa to take the equipment underground to the surface.
This, the sources, warned could take six months before the company resumes
Last September, Zesa reportedly disconnected power from Shabanie Mine over
an outstanding bill of about US$4 million dollars. The company was later
reconnected after its management engaged the power utility and promised to
settle the debt once the company was recapitalised.
Shabanie Mine was put under administration in 2004 after the state accused
Mawere of externalising huge sums of foreign currency. Mawere -- a
Zimbabwe-born South African citizen -- is still battling to regain his
business empire expropriated by government. The empire spread from mining to
agriculture, petroleum and media, among other sectors.
The business tycoon is based in South Africa.
Thursday, 18 February 2010 19:22
FINANCE Minister Tendai Biti will today meet the International Monetary Fund
(IMF) to lobby for the restoration of the country’s voting rights and offer
lines of credit. Sources said Biti who left for the Unites States on
Wednesday was confident Zimbabwe’s voting would be restored.
Before he left Biti was quoted saying Zimbabwe had received guarantees of
support from the US –– which is the largest shareholder –– as well as
Britain, France and Germany.
He also said he had got encouraging support from key IMF bureaucrats when he
visited the US last month
The IMF suspended Zimbabwe’s voting rights in June 2003 after the country’s
economy deteriorated and government fell behind on debt repayments.
The multilateral financial institution said the country would only regain
the voting rights as well as financial and technical help if it cleared its
arrears and implemented sound economic policies.
Zimbabwe owes the IMF US$139 million under the Poverty Reduction Growth
Facility –– Exogenous Shock Facility.
Voting rights in the IMF are based on countries’ quotas and the amount of
foreign exchange reserves that they have deposited in the fund. –– Staff
Thursday, 18 February 2010 18:59
DEPOSITORS this week said they were losing confidence in the banking sector
following a spate of frauds and robberies since last year.
Depositors interviewed said they feared that events which occurred between
2003 and 2004 that resulted in the closure of 15 financial institutions as a
result of fraud and failure to practice proper banking could be back to
haunt the sector again.
"We are still sceptical about the local financial sector. Its explains why
many people withdraw all their money once it is deposited in their
accounts," said one depositor.
The Bankers Association of Zimbabwe could not give a position regarding
confidence in the banking sector this week when asked to comment.
"It is going to be difficult to attract a lot of deposits when all this is
happening. The banks are battling to regain our confidence," another
Tobacco farmers this week said they were against the depositing of their
payments in bank accounts as a result of the recent spate of frauds and
The farmers are being paid US$2 000 on the spot for tobacco sold and the
reset is deposited in their bank accounts.
"Why should the government decide how much money to pay us at hand and say
the balance will be deposited in our accounts to promote local banks instead
of tightening their operations to avoid fraud and robberies? What if we lose
our money?" questioned one tobacco farmer.
Reserve Bank governor Gideon Gono is on record suggesting that some banks
are being run in a mafia-style management.
Globally, banks have been accused of causing the credit crisis in 2007 which
eventually plunged the world economy into a recession.
Since then several banks have closed, some were taken over by stronger ones
while others are slowly recuperating under government bailouts.
While local banks have not been directly affected by the credit crisis,
their performance is not impressive as they are failing to offer credit to
business and individuals.
The current loan-to-deposit ratio of 40% is considered low.
As core functions, banks take deposits and lend the money to generate
profits through interest.
Financial institutions make money by skilfully managing the risk of
transforming short term deposits into long-term loans.
"Until the deposits improve and the lender of last resort is restored, many
banks will not be able to increase their loan-to-deposit ratios above 40%.
As such, banks will continue to be viewed as unsupportive to industry, which
may not be entirely true," an analyst said.
Another sad reality is that most banks are technically insolvent with no
paid up capital. Revaluation reserves, which are not distributable, are only
what most banks have as shareholder's funds.
In the event of huge default on their loans such banks will not be able to
absorb the shock because they are already over leveraged. Mindful of this
shortcoming, banks are understandably limiting their loans to manageable
levels with credit being provided only to stronger companies.
According to information gleaned from various financial institutions, most
local banks' internal auditing systems were said to be weak to such an
extent that they can be manipulated, putting depositors money at risk.
Bankers also said fraud can take long to detect or control as it usually
involves senior managers. Robberies are also said to be done with
information from "someone inside."
Some bankers are said to be stealing from suspense accounts, while some
monitor whether accounts are active or dormant so as to abuse them.
"Tempering with suspense accounts has always been practiced in this country
especially during the era of the burning phenomenon. It is now a thorny
issue because we are now dealing with real money (US dollars)," a commercial
bank insider said.
However before dollarisation in 2008 NMBZ Bank lost about US$4 million. A
case of insider fraud also resulted in CFX Bank going insolvent.
Incidents of fraud and robberies that have occurred at Zimbabwean banks
since January last year:
* January 2009: three armed men storm the CBZ Chitungwiza branch and
steal mobile phones from bank staff, but fail to get any cash.
* February 2009: Four armed men among them two policemen hit Kingdom
Bank's Karigamombe Centre branch in central Harare and get away with US$120
000, R48 930, £155, 1800 pula and 10 Australian dollars. Closed circuit
televisions help apprehend the suspects.
* July 2009: A Barclays Bank branch in Bulawayo falls victim when a
six-member gang raided the branch and escaped with US$50 000, R126 000 and
* December 2009: Six armed robbers hit Stanbic Bank's Chegutu branch
making-off with US$266 000 150 000 Rand and 34 690 Pula before escaping in
two getaway cars -- an Isuzu KB twin-cab truck and a Peugeot 406. An
assistant branch manager is shot and injured as the gang of six flees the
scene with boxes containing cash denominated in US dollars, South African
rands and Botswana pulas. Customers who are in the banking hall are also
relieved of their cash, mobile phones and other valuables.
* January 2010: Investigations at FBC Bank unearth a massive US$1
million fraud at its Mutare branch. The bank says it has established that it
has lost US$500 000. Junior workers defrauded the bank in collusion with
senior managers and most of the suspects have since been arrested. The fraud
was discovered when the bank was carrying out month-end reports for January,
and the accounts would not balance. The employees made fictitious deposits
to three accounts they had opened to facilitate the fraud and would withdraw
the money, then deposit it again into the personal accounts of accomplices.
This unique fraud occurrs because both junior and some identified senior
staff were acting in collusion; hence the dual control system was
* February 2010 the Zimbabwe Allied Banking Group (ZABG) is defrauded of
US$140 000, involving one of the bank employees, working in collusion with
some individuals outside the bank.
Thursday, 18 February 2010 18:56
ZIMBABWEAN businesses want Empowerment Minister Saviour Kasukuwere’s powers
curtailed to limit possible corruption, businessdigest has learnt. The
Confederation of Zimbabwe Industries (CZI) and the Chamber of Mines of
Zimbabwe (COMZ), the two main business bodies have sent a paper urging
government to amend at least 13 key points relating to the state’s plans to
compel foreign-owned businesses to “cede” controlling stakes to indigenous
A document seen by this paper reads: “Any law that requires the continuous
involvement of an individual will not be consistent or permanent in its
administration, and is likely to be less credible and leave room for abuse
The business bodies also want the term “ceded” changed to “sell”. Instead, a
“sell” assigns responsibility to the indigenous investors.
The definition of indigenous must include all Zimbabweans, the document
adds, saying it was discriminatory. But Kasukuwere defended the definition
saying it was non-racial arguing the law had only been necessitated by
According to the document, CZI and COMZ want government to set up
empowerment boards representing all sectors of the economy to advise the
main indigenisation board. The regulations provide for a single empowerment
“It is highly unlikely that a single board under the Youth Development,
Indigenisation and Empowerment ministry will be sufficiently knowledgeable
about sector specific dynamics, (which is the domain of various responsible
ministries) and be able to efficiently decide on applications compliance
programmes. Setting up industry focused boards will result in better and
more efficient decisions.”
COMZ said the Indigenisation and Economic Empowerment Regulations of 2010 do
not support economic growth and put off investors.
Rather, government should explore equity and empowerment credits for the
“The regulations as promulgated do not support economic growth and will not
attract investors. A focus on ownership will not necessarily empower people
and in fact does the opposite as 51% of nothing is nothing, “said the
Mines also believe that aiming for controlling stakes is “too ambitious.”
“51% equity shareholding is too ambitious. The regulations must clearly
state that the final percentage is a combination of equity plus credits.
Most countries have done away with the 51% requirement and have come down to
much lower levels.”
The chamber cited the case of United States and Australia. The two countries
used to have a limit of 28% foreign ownership in broadcasting and
telecommunications but have in the last 10 years removed such restrictions.
Nearer home, South Africa’s Black Economic Empowerment is based on 26% local
ownership, the chamber said.
The chamber also wants government to recognise listing on the Zimbabwe Stock
Exchange saying pension funds and asset management companies that represent
a large segment of the population will be the biggest takers of listed
The chamber also urged government to raise the compulsory thresholds of
companies targeted from US$500 000 to US$5 million.
This according to the chamber kills the incentive to grow small businesses
that have potential.
Economist Daniel Ndlela was quoted saying the new indeginisation rules would
create a system of patronage.
He said: “The point here is, let me go back a little bit and say who in fact
are these ‘indigenous Zimbabweans’ that will benefit from this law? The
letter of the law simply says that the people who registered their names
with the minister and there will be an allocation procedure. Definitely this
is patronage, it is a continuation of patronage as we have seen it in
Zimbabwe and that those who will benefit are people in the gravy train in
the patronage system. This letter of the law is quite clear that if you don’t
comply, five years in prison, if you don’t do this, five years in prison.
The issue here from an economist’s point of view is if you want investments
from your own country, existing investments and/or new investments out
there, you are not going to threaten people that come here, invest but if
you don’t comply you are going into prison for five years. From an economist’s
point of view, you’ll not have any investors coming into this country.”
Ndlela added that the spirit of the law did not encourage investment.
He added: “The spirit of the law itself, not the letter of the law, the
spirit of the law itself has a morality element that does not really auger
well with all investments internationally because you really don’t have a
situation where there’s an allocation of your shares via a minister at this
point in time. In other words, from an economic point of view, the existing
investors will lose interest in their businesses. They will run down the
businesses in the five years so that by the five years actually you are
taking on something that is no longer at its best, they are not going to
invest in the five years, during this period and the enterprises that will
be there will be enterprises that are really down. The new investors will
not be persuaded to bring in their technologies, bring in their money here.”
Meanwhile, the main labour union, Zimbabwe Congress of Trade Unions attacked
the empowerment regulations saying the rules had the potential to throw
Zimbabwe into economic anarchy.
“The Zimbabwe Congress of Trade Unions has been following closely
developments in the country over the past weeks with particular concern over
the Indigenisation and Economic Empowerment Regulations.
“We believe this move that is coming under the guise of empowering
‘indigenous’ people has the potential to throw the country into anarchy just
like the chaotic land reform programme did. It is ironic that these
regulations that are anti-investment are taking centre stage when Zimbabwe
is playing host to a tourism and investment indaba,” the main labour union
said in statement this week.
But Mugabe is adamant on the issue saying “49% is hell lot of equity, only
the foolish ones will say so.”
Mzembi on the other hand believes there is no need to pursue empowerment in
the tourism sector saying over 80% of the sector is already in the hands of
He said: “Whilst we are aware of the ongoing debate around the investment
legislation for Zimabwe, we believe all that might actually be required is
further engagement on the part of stakeholders.
We are confident that clarification on certain aspects of the legislation,
explaining areas of apparent contradiction and insensitivity to valid
concerns of some stakeholders, will bring about consensus.
“Happily 80% of the tourism sector is already in indigenous hands and
therefore it has scope for greater external shareholding, as well as other
innovative models that can give comfort to the external investor, than might
be the case in our other sectors. But for us the ability and willingness to
engage is key”.
Thursday, 18 February 2010 18:05
RECOVERY was the buzzword for 2009 across the globe. This was after a
devastating financial crisis which started off in the US in 2007 worsened
into a worldwide economic recession. Many countries are now officially out
of the downturn although renewed fears have resurfaced particularly in the
Greece is the worst affected with concerns that it may default on its debt
if the European Union does not step in to assist. Portugal, Ireland, Italy
and Spain together with Greece form the disreputable PIIGS group of EU
members are facing serious fiscal problems.
Zimbabwe also staged a dramatic comeback in 2009 after the inclusive
government ditched the local dollar for multiple foreign currencies.
On the basis, it must be admitted, of some rather tendentious calculations,
the economy is projected to have grown by 3,7%, the first positive growth
In line with that growth, the stock market also rallied as strong earnings
performance was anticipated. It gained more than 50% in 2009.
Many investment professionals expected that 2010 would be a year when
quality growth companies with good earnings prospects will stand out and
lead the market.
Econet, for one, was expected to be a star performer this year particularly
as the company continues to increase its subscriber’s base. It is no secret
that CBZ and FBC are benefiting from public deposits and could post strong
Zimplow has already paid a dividend signaling that its earnings and cash
flows could be looking good.
Lafarge could also have a compelling story with capacity utilisation above
70% while at lower than US20 cents Aico should be any stock picker’s choice.
These stocks and others with good earnings prospects are expected to be
movers in 2010.
That has not yet happened. Surely, we are barely two months into the year
and also financial statements have not yet started coming out. But even
then, it does not seem like the results will have any significant impact on
So far this year companies with questionable fundamentals have outshone
solid blue chips. This surely has nothing to do with current or projected
company performance but is rather a reflection of the calibre of investors
in the market.
Small investors with a preference for penny stocks have been dominant at a
time foreign buyers who love to buy quality stocks are not active in the
As at February 17 the top performing stock was ZPI with a 50% uplift on the
price of December 31 2009. The only quality stock on the top five list which
also includes Trust, Phoenix and Dairibord is Barclays.
ZPI, like all property companies is grappling with subdued rentals, low
property sales and high void levels as tenants either closed or moved out of
expensive properties to contain costs. It is not clear what business Trust
does currently outside their attempts to get back their assets from ZABG.
For Phoenix it is a question of a business model in the wrong place at the
wrong time. Seriously, who cares about brooms, or brushes when his stomach
Dairibord used to be the leading supplier of liquid milk and milk based
products in the jolly-good old days but not anymore. This is largely because
of the decimation of the dairy industry although internal shortcomings are
also to blame.
Do they sound like stocks that should be on the top of the performance
table? Surely not! The other counters occupying the upper quartile are
Astra, BAT, TSL, NTS, Pioneer, Willdale, CBZ, Dawn and TN with gains in
excess of 15% during the period under review. Fundamentals for all, except
CBZ, and, probably TSL and BAT, are weak.
There is nothing to justify the rally in these stocks particularly when most
ZSE bellwethers are occupying the mid-table.
The likes of Econet, PPC and Delta are trading at their December 31 levels
while Hippo, Seedco and Old Mutual are among the heavily capitalised stocks
with prices lower than they last traded at in 2009. Retail investors are
exploiting the volatility of penny stocks to trade in or out when the prices
are favourable while big caps remain inactive as foreign investors steer
clear of the market.
This situation should not be surprising especially considering all the doses
of negative information dominating the economy.
First was the logjam that hit the inclusive government after Zanu PF refused
to make further concessions during political talks until the MDC-T convinced
the West to drop sanctions.
That demand was spurned and this week the EU extended the sanctions by
another 12 months.
The standoff on this issue was a sure sign of discord amongst politicians
and this unsettled the capital markets.
The gazetting of the regulations on indigenisation by government appears to
have killed off investor interest completely. Ironically, when the
regulations were announced the country was preparing to host an investor’s
conference aimed at luring foreign capital into the country.
The regulations rendered the conference largely useless. A country where
investors are compelled to sell 51% to indigenous partners cannot be a good
Surely any indigenous person who can pay for 51% of a company valued at more
than a million dollars should just start his own business. That way the
economy grows and everyone benefits. Local investment is not a zero sum
Thursday, 18 February 2010 17:25
VISITING Zambia tourism minister Catherine Namugala has advised government
to streamline investment requirements to reduce bureaucratic inertia for
would-be investors. Addressing delegates at the AfricaInvestor Tourism
Investment Summit in the capital this week, Namugala said regional
governments stand to lose in tourism investment and the 2010 FIFA World Cup
in South Africa owing to unnecessary red tape.
AfricaInvestor is an investment communication firm advising governments,
international organisations and businesses on communication strategies for
capital markets and foreign direct investments in Africa.
“As policymakers it is important for us to have stable and democratic
societies so that we have an environment for tourism investment,” Namugala
said. “Our role is to reduce the hassles for investors to do business. I don’t
think they (investors) will be happy to go through a process of 100
licences. Not all the licences are necessary, we have some licences that are
a nuisance for investors…you can amalgamate them or eliminate them.”
Zambia, she added, has since reduced the process of bringing in new
Economic Planning minister Elton Mangoma told the same conference that
government would this June transform the Zimbabwe Investment Authority (ZIA)
into a “one-stop shop”, a move expected to ease investment.
ZIA chief executive officer, Richard Mbaiwa, admitted the existing
investment policy was deterring investors.
“There is a lot of interest in retail and distribution sectors in terms of
establishing malls and retail chains,” Mbaiwa said. “The major challenge
(according to investors) is starting a business. Investors sometimes feel
that there are a lot of procedures.”
He said streamlining the investment exercise could “negate the cumbersome
process of starting a business”.
Despite the formation of an inclusive government which relatively eased
political tension and the adoption of a multicurrency system to control the
erstwhile runaway inflation, a World Bank Doing Business report last year
said Zimbabwe was still one of the worst places to do business in the world.
According to the report for 2009/10 released by the International Finance
Corporation of the World Bank last September, the country has moved to
position 159 in the ease of doing business rankings ahead of only two
Southern African peers — Angola and the Democratic Republic of Congo in the
Currently, a would-be foreign investor requires an Investment Licence issued
by ZIA upon approval of a project proposal submitted to the authority.
This process, according to the investment authority, could take up to three
weeks but the World Bank report contends that it could take 1 426 days to
fully complete the paper work and building exercise of a warehouse compared
to an average of 260 days in other parts of sub-Saharan Africa.
For a country that has been starved off major tourism investment over the
last 10 years, industry players said efforts to increase hotel accommodation
to 15 000 from the current 7 000 in the next five years on the back of a
projected double-digit economic growth could be far-fetched without any
foreign direct investment.
Zimbabwe, according to Africa Sun boss Shingi Munyeza, has not had any
“mainline hotel” since completion of the five-star Kingdom Hotel in Victoria
Falls in 1999. He said hotel accommodation has however increased through
refurbishing peri-urban apartments into budget hotels and lodges.
On funding tourism investments in Zimbabwe, Solomon Asamoah, deputy chief
executive of African Finance Corporation, said the financial institution was
ready to bankroll “right and structured’ projects.
“We believe that there is no shortage of cash for good projects,” he said.
“The challenge is to find the right projects and structures…On long term
(infrastructural) investment, you need some consistency in the environment
before you invest. I have the checkbook in my pocket and I’m waiting for
opportunities to invest in.”
Thursday, 18 February 2010 17:18
WHEN acting Agriculture, Farm Mechanisation and Irrigation Development
Minister Ignatius Chombo officially opened the 2010 tobacco selling season
on Tuesday praising the quality and taste of the Zimbabwean leaf, he must
have forgotten to say tobacco farming was now one of the best paying
professions in the country after all expenses are deducted. "Our foreign and
local buyers should realise that our tobacco is well known for its good
quality and taste, which is unparalleled in comparison to the crop from
other tobacco growing countries such as Brazil and Malawi."
"If it were whisky, it would be equal to the best Scottish whisky that there
is," he quipped.
Tobacco farmers will be smiling all the way to the bank after their payout
was raised to US$2 000 on the stop from US$1 500 which was being paid last
year. The balance would be deposited in the farmers' accounts.
Observers said a repeat of last year when tobacco auction floors outside
premises were turned into flee markets as enterprising businesspeople set up
stalls to lure free spending tobacco farmers who were paid in hard currency
was on the way.
In 2008 farmers spent weeks sleeping in the open hoping to get paid in the
worthless local currency only to be paid using agro-cheques which were not
accepted by shops.
A wide range of electrical gadgets such as generators, televisions, digital
video players and clothing items are slowly finding their way to the auction
floors to be sold to the impulse buying farmers.
The Tobacco Industry and Marketing Board (TIMB) on Tuesday refused to bow to
farmers' demands to have all their money being paid on the spot, arguing
that they wanted to support local banks.
The auction floors are only opened on Tuesdays and Thursdays. TIMB said the
current system of holding two sales per week would be reviewed once
deliveries got to 3 800 bales per day.
However some analysts said the reason was because they wanted to control the
farmers spending spree, which was similar to war veterans when they were
given the then handsome figure of Z$50 000 each in 1997.
"If you look at the quality of tobacco that is on offer here, amounts paid
to farmers and some of the prices that are being offered, we are definitely
heading for a better season this year," Chombo said.
"We might not have discovered oil in the Zambezi, but we have our soil and
unique climate that enable us to grow cash crops such as tobacco which
assist the country in a significant way," he said.
Chombo said the early opening of the marketing season should help farmers,
especially newly resettled ones, to plan for a bigger crop well in advance.
Farmers interviewed however said this year's selling season was opened early
* Tobacco seed beds are done in June, while the selling season
traditionally started in May ending in August a situation which usually
compromised preparations as they always failed to meet deadlines;
* Some farmers are diverse and wanted to concentrate full time on a
single crop. Most tobacco farmers are also into wheat and winter crops;
* Early selling would enable farmers to repay debts as many said they
failed to access loans from banks;
* Those who access loans said an early opening would ensure that they
would escape high interest rates prevailing at banks if they repaid early;
* It is also alleged that some white farmers said they wanted to sell
their crop before being relocated;
* Contract tobacco farmers said early selling would enable them to apply
for new loans on time; and
* Many farmers do not have storage facilities for their tobacco.
Tobacco Growers' Trust president Wilfanos Mashingaidze said the prices on
offer where encouraging adding that he expected them to firm as the selling
A total of 77 million kg of tobacco is expected to have been auctioned by
the end of sales in June.
Prices opened at about US$4 per kg for the best grade which was lower than
the top price of $5,50 per kg that farmers had expected remained largely
When the auction floors opened a total of 288 bales were on offer at the
Tobacco Sales Floors while about 200 bales were laid at the Zimbabwe
Industry Tobacco Auction Centre.
TIMB chief executive Andrew Matibiri said he was optimistic that the target
of 77 000 million kg would be achieved and that the prices on offer and
payments would encourage farmers to grow more "quality crop".
"This is encouraging given that these are just the primings, the lower leaf,
that are coming onto the floors. We hope for better prices as the season
progresses as the upper leaf starts coming in," Matibiri said.
Matibiri said TIMB was also awaiting prices on offer when Brazilian markets
open in the next week or two.
Brazil is the world's largest tobacco grower while in Africa it is Malawi,
whose floors are expected to open inthree months.
Thursday, 18 February 2010 17:12
SHOULD the world bother about Zimbabwe's future? New evidence now points to
the possibility that it shouldn't trouble itself about the country's future,
because Zimbabwe's government, still being run by the party that failed to
win the last election, has decided that the country should not have one.
Having rejected concerns that investment would be discouraged by laws
designed to force non-indigenous investors to give up controlling interests
in local companies that they formed, or helped to create, this government
has now published the regulations that are intended to force the changes of
ownership the politicians want to see take place.
According to the Indigenisation and Economic Empowerment Act, an indigenous
Zimbabwean is "any person who, before April 18 1980, was disadvantaged by
unfair discrimination on the grounds of his or her race, and any descendant
of such person, and includes any company, association, syndicate or
partnership of which indigenous Zimbabweans form the majority of the members
or hold the controlling interest".
The main provisions of the Indigenisation and Economic Empowerment
Regulations are that:
"Every existing business with an asset value of US$500 000 or more, whether
foreign or domestic, has to submit, by April 15, completed official forms
describing the business and showing its plan for ensuring that, within five
years, indigenous Zimbabweans will own at least 51% of the shares.
Failure to submit the forms, after a further 30 days' reminder, will render
the owner of the business, or every director, guilty of an offence and
liable to a fine and/or imprisonment for up to five years.
Plans to restructure or unbundle businesses, plans to merge or demerge
businesses and investment proposals that require an investment licence must
be submitted for approval before being carried out.
Any failure to comply will render the owner of the business, or every
director, guilty of an offence and liable to a fine and/or imprisonment for
up to five years.
Companies requiring supplies of goods and services will be obliged to
procure these from companies controlled by indigenous Zimbabweans that can
offer terms that are no less favourable. Non-compliance will make those
responsible guilty of an offence and liable to a fine and/or imprisonment
for up to five years;
Empowerment assessment ratings are to be supplied by each company once a
year to the minister within 21 days of being advised of the requirement and
failure to comply will render the owner of the business, or every director,
guilty of an offence and liable to a fine and/or imprisonment for up to five
The minister may appoint his own valuator if the valuation figures submitted
are suspect. Persons guilty of claiming they are shareholders, but are found
to be only nominees of actual non-indigenous shareholders, or guilty of
submitting information found to be false, will be guilty of committing an
offence and liable to a fine and/or imprisonment up to five years.
Sectors that are to be reserved for indigenous Zimbabwean investors include
the growing of food and cash crops, the provision of buses, taxies and
car-hire services, retail and wholesale trade, barber shops, hairdressing
and beauty salons, employment agencies, estate agencies, valet services,
grain milling, bakeries, tobacco grading, processing and packing,
advertising agencies, milk processing and the provision of local arts and
crafts as well as the marketing and distribution of these items.
Business owners wishing to identify suitable indigenous partners will be
invited to register their names in a database to be established by the
minister, and the names of indigenous people who wish to become business
partners will also be recorded in the minister's database."
In trying to assemble useful thoughts on the whole package, I am having
great difficulty setting aside the destructive short-sightedness of the
Some people might believe that the methodical nature of the process,
together with the threats of severe penalties for anything other than
complete compliance, must automatically lead to that economic empowerment
that so many have found to be so elusive.
But it won't. Government's principal achievement, if all this happens, will
be the disempowerment of the country's most important productive-sector
They do presently wield influence in the market place and this is mainly
because of their success in producing products that the markets are prepared
In creating acceptable goods or commodities, they also generate jobs, export
revenues, domestic revenues and tax revenues.
To government, however, all this clearly adds up to rather too much
By forcing them to relinquish their majority shareholdings, their power can
be reduced, simply because the government's influence over the new owners of
51% of the shares can quickly be used to change the composition of the
boards of directors of every important company.
The idea is destructive for the two main reasons, that existing investors
will lose interest in their companies; so most of these enterprises will
soon start going downhill, and that new investors will be persuaded to take
their technologies and their money to almost anywhere other than Zimbabwe.
And the idea is short-sighted because economic growth rates will be slowed,
the population will be deprived of the needed improvements and the best
Zimbabwean skills will seek their fortunes elsewhere.
On top of that, access to credit to carry our infrastructural reconstruction
will not be extended while the country so clearly shows the whole world that
it is once again deliberately sabotaging its own ability to service debt.
Zimbabwe has so little money that it desperately needs foreign investment.
Why has government chosen to turn the country into the least attractive
investment destination on Earth?
It can only be to recover its political authority. But while that might make
a few hundred people feel temporarily smug and content, the other 12 million
Zimbabweans will be waking up to what this has cost them and who is really
Robertson is an independent economist.
Thursday, 18 February 2010 16:33
TAFATAONA Mahoso has been waging war against the Law Society of Zimbabwe for
several years now. It is therefore surprising that he can't spell Sternford
Moyo's name correctly. It is not "Stanford". Mahoso was using his tedious
column on Tuesday to attack the Zimbabwe Independent and other publications
for being part of the campaign of "illegal" sanctions and "criminal
defamation against Zimbabwe and Zimbabweans which the MDC formations mounted
on behalf of white Rhodies and their Anglo Saxon sponsors in order to make
the illegal and racist sanctions appear to be justified".
Phew! Apart from anything else he clearly needs an editor.
Mahoso compares the MDC-T's call for a calibrated reduction in sanctions to
a torturer removing the instruments of torture slowly in order to relish the
prolonged suffering of the victims.
Interesting isn't it that Mahoso should invent a case of torture when last
week we carried MDC-T transport manager Pasco Gwezere's very real account of
torture at the hands of state agents. He said at one time they tied his arms
and legs together and put a tow bar beneath his knees and suspended him
between two tables and began to beat him. They called this torture method
When this didn't work, Gwezere said, "they resorted to "the undertaker",
whereby they threw him into a shallow grave and shovelled earth on top of
him. They showed him a report they said they would send to the editor of a
state newspaper which claimed that he had escaped from police custody.
He said the torturers said they would give the statement to the press after
he failed to cooperate and they had killed him.
So here we have Mahoso engaged in fictitious drivel about a defamation
campaign against Zimbabwe involving "slow torture" when he ignores the
well-reported use of torture as a weapon against individuals seen as
opponents of the party he so slavishly supports.
Then Zimbabwean authorities bleat about sanctions when they have sick
apologists for dictatorship like Mahoso writing in their newspapers.
Who is responsible for the chaos in the corridors of power?
At three o'clock on Monday afternoon we got a message from a Mr Nyagumbo in
the president's office inviting our editors to a briefing with the president
on Wednesday. The next day, Tuesday, at 9:15 the briefing was cancelled.
This is the second time this has happened. A press briefing with the
Minister of Media, Information and Publicity was scrapped at the last minute
towards the end of last year.
What is the matter with these people? If a date is made it should be kept.
George Charamba promised the media greater access to the president at a
Unesco workshop last year. But we haven't heard from him since.
Sacked Arda general manager Erickson Mvududu, giving evidence to the
Parliamentary Portfolio Committee on Agriculture last week, opened a can of
worms with his description of how Arda goes about its business.
He said during his 17 months at Arda he witnessed rampant looting of
equipment by influential people and corruption by senior managers.
He said he suspended a manager who had placed his farm workers on Arda's
payroll and was cannibalising the parastatal's tractors by stripping them of
spares to repair his own, the Herald reported.
At one stage Arda had 20 000 head of cattle but this was reduced to 3 000
owing to theft and abuse by senior managers.
"I noted there was some equipment that had not been utilised for five to 10
years," the Herald reported Mvududu as telling the committee, "but was just
there for some people to come and strip.
"You would find that a manager might not be producing at an Arda farm but if
you go to his farm he would be producing."
Could there be anything more emblematic of Zanu PF's corrupt cronyism than
And who was accountable for this shocking state of affairs? The minister,
Joseph Made, will remain safely ensconced in his office because he is the
president's agricultural advisor.
Arda's board chairman Basil Nyabadza had a ready explanation for all this.
It could not be divorced from "illegal Western sanctions", he claimed.
That is the most disgraceful excuse for mismanagement we have heard for a
long time. But it confirms what we know about parastatal bosses and the
sheltered employment Zanu PF affords them.
"Come and feed at this trough," they are told!
Here's another excuse worth noting. AAG president Supa Mandiwanzira attacked
Nestlé last year for failing to indigenise.
"As AAG we cannot accept this continued harassment of the Head of State," he
told the press.
"The First Family is a symbol of economic empowerment and they have taken a
battering simply because of the steps they have taken to empower the
So the First Family has taken a "battering" because they have "taken steps
to empower the majority"? Was it the majority that got empowered Supa? Don't
we recall Zanu PF proclaiming a one man/one farm policy a few years ago?
What happened to that?
Perhaps Supa could tell us.
In an interview with the Herald last Saturday Arthur Mutambara was in
"Zimbabweans must show maturity by giving respect where it is due," he said.
"President Mugabe is a founding father of the nation who was part of the
liberation struggle. He has generational results which you cannot take
Not content with this glowing tribute, the rocket scientist continued to
"You cannot take away 1980 which he brought to Zimbabwe and 1980 will be
celebrated 500 years from now. These are generational results, so is 1776 in
America and 1876 in France.
"You cannot take away President Mugabe's education policies. I am a product
of his education policy."
In that case we are sure Prof Mutambara would not mind "educating" us about
the events of 1876 in France. It was as far as we know a fairly quiet year.
But the educated one might know something we don't.
Now 1789, that was a different matter. So was 1793, 1815, 1830, 1848 and
1870. But 1876? Nothing. Nada Zilch!
We have occasionally in this column drawn attention to Zanu-PF proxy
organisations masquerading as part of civil society. These include outfits
like Martin Dinha's Zimbabwe Lawyers for Justice which was active in the
Sadc Tribunal case, and the Federation of Non-Governmental Organisations.
But more recently a couple of more dubious organisations have appeared on
These are the Zimbabwe Exhumers Association which, it seems, won't let
fallen heroes rest in peace, and the presumably related Zimbabwe
Then this week another one popped up. Youth in Natural Resources Management
made itself known in support of the Indigenisation Act. Its chairman is
Wellington Peyama who was happy to say youths needed to benefit from
Is there no end to this flood of Zanu-PF pawns? And is there an office in
Munhumutapa Building where fictitious outfits are invented to provide
helpful statements for Herald stories?
Muckraker is grateful to the Embassy of the United States for their
Christmas card which arrived on February 10. Is this a record, we asked
ourselves? The capitol is shown covered in snow and we must assume the same
blizzard delayed the reindeer on their journey south. Or perhaps they were
recalled for safety checks.
Thursday, 18 February 2010 16:12
GOVERNMENT (or, to be more specific, the Minister of Indigenisation and
Economic Empowerment, undoubtedly instructed by his political masters) has
enacted a demonic death sentence upon the Zimbabwean economy. In one fell
swoop the positive initiatives of 2009 towards the long-awaited economic
recovery have been nullified.
Instead, a lethal suicide pill has been force-fed into the economy, totally
reversing the significant upturn that has been progressively developing over
the past year.
With callous disregard for the distressed circumstances of more than 80% of
Zimbabwe's poverty-stricken population, the economy has now been set upon
Zimbabwe's people, with the exception of the very few, self-enriched and
usually politically well-connected, have been sentenced to even more
poverty, malnutrition and starvation.
The disastrous act of setting the Zimbabwean economy upon a path of total
collapse was the enactment of Statutory Instrument 21 of 2010, comprising
the Indigenisation and Economic Empowerment (General) Regulations, 2010.
That statutory instrument is as evil, racist and discriminatory and
economically destructive as was the abominable Land Apportionment Act of
1930 - long before Zimbabwe's Independence.
It is as unjust and pernicious as was legislation during the abysmal UDI
era. It is as iniquitous and contrary to the best interests of Zimbabwe and
its people as was the ill-conceived, counter-effective Land Acquisition Act
of two decades ago, devastatingly implemented since the turn of the century.
And yet again it is in blatant conflict with the diverse Bilateral
Investment Promotion and Protection Agreements (Bippas).
For over 50 years this columnist has argued, urged and pressed for dynamic,
positive, vigorous policies to achieve wide-ranging, extensive economic
empowerment for the Zimbabwean people.
But the Zanu PF government has never done so. Instead, it has continuously
espoused a distorted version of the Robin Hood philosophy.
It has unequivocally pursued an intention of expropriating from the
perceived rich, in order to render them poor, so as to enrich a selected few
(generally unduly and unaccountably wealthy), whilst intensifying the
poverty of the majority.
In pursuit of these objectives, and after many years of confrontational
policy statements, parliament and the senate, in late 2007, passed the
Indigenisation and Economic Empowerment Act, 2007.
Constitutionally belatedly, in 2008 the legislation was accorded
presidential assent (coincidentally shortly before the March 2008
parliamentary and presidential election), and was gazetted on March 7 2008.
That legislation was a masterpiece of legislative vagary.
Save for the stated objective that government should "endeavour to secure
that at least 51% of the shares of every public company and any other
business shall be owned by indigenous Zimbabweans", and shall prioritise
sourcing of goods and services by government and the private sector from
such businesses, the legislation to all intents and purposes vested a "blank
cheque" in the hands of the minister.
It empowered him (virtually without limitation) to prescribe and enforce all
such regulations as he deems fit to achieve the prescribed objective. The
minister has now encashed that blank cheque!
Within 45 day of March 1 2010, every business (and not, as misunderstood by
some, only those with assets exceeding US$500 000) is obliged to lodge a
Form of Notification of Extent of Indigenisation, and encompassing an
Indigenisation Implementation Plan (ie by April 14 2010) with the minister,
and any business commenced in the future must do likewise within 60 days of
commencement of business.
That Indigenous Implementation Plan must be such as will result in not less
than 51% of the controlling interests in the business vesting beneficially
in indigenous Zimbabweans, save and except to such extent as the minister
may agree that, for a period of time, a lesser percentage may apply
(primarily determined having to the magnitude of investment, the extent of
associated technology transfer, and the extent of the business's
contribution to the wellbeing of society).
The legislation defines "indigenous Zimbabwean" as being "any person who,
before April 18 1980, was disadvantaged by unfair discrimination on the
grounds of his or her race, and any descendant of such person, and includes
any company, association, syndicate or partnership of which indigenous
Zimbabweans form the majority of the members or hold the controlling
The regulations also reserve, against foreign investment, in favour of
indigenous Zimbabweans, all operations in agriculture (primary production of
food and cash crops), transportation services encompassing passenger buses,
taxis and car hire, retail and wholesale trade, barber shops, hairdressing
and beauty salons, employment agencies, estate agencies, valet services,
grain milling, bakeries, tobacco grading and packaging, advertising
agencies, milk processing, and provision of local arts and craft, and
marketing and distribution thereof.
The immediate results of the Machiavellian enactment of the regulations was
disastrous, bringing to an instantaneous halt Zimbabwe's economic recovery,
and knocking a very solid nail in the coffin of critical foreign direct
investment and domestic investment.
It closed potential access to essential lines of credit to restore substance
to the money market, recapitalise commerce and industry, and rehabilitate
It has fuelled the abrupt loss of all confidence within the business
community, which is a prerequisite for economic wellbeing and growth, and
has once again destroyed prospects of reconciliation and positive and
constructive interaction with the international community. Once again,
Zimbabwe demonstrates complete contempt for Bippas.
No investors, providers of technology-transfer and of access to their
markets, can realistically be expected to subjugate themselves to being
junior partners, devoid of authority in the investment ventures.
With such an expectation in the hands of government, the markedly increased
interest in investment that has progressively been developing has now been
Already, within less than a fortnight of the gazetting of the economic death
sentence, investors who had planned on hundreds of millions of dollars of
investment, and upon employment creation for considerable numbers, have
peremptorily withdrawn, and now seek opportunities elsewhere.
Concurrently, innumerable established enterprises are now seriously
contemplating closure of their businesses, and disposal of the underlying
assets. Instead of employment creation, Zimbabwe now faces considerably
Zimbabwe is now confronted with imminent economic contraction. That which
government has done oblivious to consequences, is more catastrophic than the
Haitian earthquakes, the New Orleans hurricanes and typhoons, the tsunamis
that devastated several Far East countries, and other natural devastating
Zimbabwe will soon rank as the world's most impoverished country, in worse
circumstances than Darfur!
Although past track record is not suggestive that government will do so, if
it genuinely cares for Zimbabwe, instead of itself, it will repeal the
regulations, providing convincing assurances of non-recurrence thereof, and
will work rapidly to achieve genuine, beneficial, economic empowerment.
Thursday, 18 February 2010 15:55
AFTER reading Jonathan Moyo's article (Sunday Mail, February 14) one feels
compelled to conclude that the professor is apparently objective only when
bitter. To conclude any other way would be a clear disregard of Moyo's
No doubt, Moyo's exposition of the politburo in its current form and the
limitations thereof provides one with an unprecedented damning indictment of
Zanu PF by one of its very own cadres, the kind of which came only from
Joshua Nkomo before the unity accord.
What ramifications there are to follow, if any, are not of consequence for
What Moyo has sought to do, and has done successfully, is explain to Zanu PF
that indeed times are changing and that the party had better correspondingly
change with them.
Perhaps this is one amongst the many early signs of the coming of democracy
to Zimbabwe for not only was Moyo's article made available through internet
sites, it was, in fact, first published in the Sunday Mail - one of the very
few articles critical of President Robert Mugabe to have emanated from the
state mouthpiece in a very long time.
Whatever speculation there was about the internal troubles of Zanu PF, Moyo
puts them to rest in his article when he brazenly explains that factionalism
has become the order of the day in that party.
Apart from Mugabe superficially denouncing factionalism and downplaying its
extent, no other person to my recollection had been on record until Sunday
confirming that factionalism existed, let alone on the scale portrayed by
All this while we were made to believe that factionalism was a term unique
only to the MDC and that Zanu PF did not need to be reminded of the truism
that anything anywhere was better off united than divided.
In my opinion, unless something is done and done with the expedition it
requires, that Zanu PF will soon be history is a foregone conclusion.
I am not sure how Mugabe must feel right now but there can be nothing worse
than facing fierce opposition not only from without but also from within.
Yet there is a general disinclination within his party to do things the
It is becoming increasingly clear that just as Mugabe has instilled
sustained fear in the ordinary man and woman on the street he has also done
the same with those around him who might occasionally find it instructive to
question the status quo.
Instead of owing it to the people to salvage whatever there is left of
Zimbabwe and work to better what could otherwise have been a worse
situation, Mugabe continues to exhibit stunning detachment from the welfare
of the nation.
What we seem to get a lot of these days is the unashamed compulsion to have
sanctions targeted at otherwise unforgivable individuals relaxed.
What is worse the relaxation of those sanctions is made a prerequisite for
any concession aimed at making Zimbabwe self-sufficient, democratic, safe
and God fearing.
By maintaining such a ludicrous stance, what Zanu PF is effectively saying
is: provided those sanctions abroad remain in place, we, back home, will
likewise keep our sanctions on the people of Zimbabwe in place.
Zanu PF must be told without equivocation that the destiny of the majority
of Zimbabweans is not and cannot be inextricably linked to that of the evil
few in our midst. Everyone knows that power corrupts but let it not corrupt
even the conscience for there is nothing more left of any human being if
their conscience is gone.
The indigenisation legislation is a preposterous measure, and one that
should not even be considered a possibility in circumstances such as ours.
South Africa, for instance, can afford to enact and implement the Black
Economic Empowerment Act (BEE) but not even they would encourage BEE to have
sweeping consequences of the type contemplated by Indigenisation minister
Saviour Kasukuwere. The Act is some kind of a joke and must be loathed for
what it is: a dry joke! Hazvisekesi.
I am not sure what policies the global political agreement has come up with
but whatever they are I am certain this type of legislation is discernibly
against the policy framework relevant to the Zimbabwe of today and should,
accordingly, be set aside in sync with the country's present needs.
If there is one thing that is most remarkable about the people of Zimbabwe
it is that they are an enduring lot.
Meanwhile Mugabe remains the unpopular, beleaguered, indifferent despot who
caused and continues to cause his own people's suffering of frightening
proportions. From Gukurahundi to Murambatsvina to the June 27 2008 polls, he
has often resorted to methods that served him well in the past: violence and
In the circumstances, it is mischievous and rather presumptuous of Moyo to
conclude that every Zimbabwean, knowingly or unknowingly, is Zanu PF at
heart. If anything, there is now more reason to conclude that every
Zimbabwean, and I mean every Zimbabwean, consciously or otherwise is
Psychology Maziwisa is the interim president of the Union for Sustainable
Thursday, 18 February 2010 19:44
THE much-awaited appointment of a new Zanu PF politburo has come and gone -
full of sound and fury signifying nothing. It was another squandered
opportunity, following the recent uneventful congress, for renewal and
change by a party struggling for survival in the increasingly shifting
The politburo appointments announced last week proved to be nothing more
than old wine in new bottles.
Instead of taking the chance to inject new blood into his sclerotic party,
President Robert Mugabe further sapped the floundering organisation via the
His hidebound appointments retained the old guard wholesale, while clinging
like a leech to the past.
As a result the reform-minded and modernising wing of the party was left
seething. Mugabe's appointments confirmed Zanu PF's status as a political
museum frozen in times gone by.
It is difficult to see how eventually Zanu PF would avoid the fate of Unip
in Zambia, MCP in Malawi and Kanu in Kenya.
The party has failed to learn anything from Mozambique, Namibia and
Tanzania. South Africa and Botswana also offer useful examples for Zanu PF
albeit in a different way.
This view is now widely held in Zanu PF, mainly by the disgruntled Young
Turks, including Jonathan Moyo who voiced his withering criticism on the
issue earlier this week, and enlightened members of the party.
Party members and analysts also strongly share this view. They believe
Mugabe will go down with Zanu PF.
At a time when Mugabe needed to pluck up enough courage to bite the bullet
of change and bring in cutting edge and enterprising cadres to steer the
sinking ship through the turbulent political waters, and reinvent the party
in the process, the veteran leader stuck with his diehards who actually
presided over the Zanu PF's defeat by the MDC in 2008.
Assisted by his clueless subordinates in the presidium, Mugabe threw more
aging and tired faces into the fray.
He made no attempt whatsoever to address the party's simmering succession
crisis and signal a new political direction to ensure renewal and survival.
Mugabe made no effort even to protect what remains of his chequered legacy.
Although there is so much talk about possible elections, more realistically
in 2013, Mugabe and his subordinates failed to assemble a new efficient
electoral machinery to prepare the party for the polls without banking on
violence and brutality.
Ultimately Mugabe only succeeded in fast-tracking Zanu PF towards
disintegration and collapse, a fate that looks increasingly inevitable with
each passing major event.
Instead of renewing the party to capture the imagination of the dynamic
youths who are in the majority and their votes and also show the world he is
changing his ways, Mugabe dug in and refused to adapt to the changed and
This gritty resistance to change was clearly reflected in the rationale and
strategy behind the appointments.
Like most unpopular leaders who have overstayed their welcome in power and
live in persistent fear of removal, Mugabe chose to surround himself with
deadwood and set the party down a blind alley.
At the expense of youth and talent, old horses like Rugare Gumbo and Cain
Mathema were retrieved from the woods and charged with the responsibility of
revamping a dysfunctional department of information and publicity as
secretary and deputy secretary respectively.
They would have to ensure the overhaul and modernisation of their party's
information infrastructure and system, as well as its communication
approach, to keep in touch in this Age of the Internet.
They will also have to deal with complex cyberspace challenges facing the
Of course, this would be difficult for them. Not least because their
critical skills for the job are history and factional loyalties.
A cursory check of the politburo line-up reveals compelling anecdotes.
The politburo members were mainly selected more for factional allegiances
and blind loyalties to the Dear Leader than their abilities.
When former African liberation movements took power elsewhere, their
governments were often driven by militaristic mindsets, categorising people
as winners and losers and operating along the lines of command and
Such trends are evident in Zanu PF. Democratic discourse in search of the
common good is frowned upon and detested.
The winners' and losers' paradigm in this case is particularly evident in
the key appointments to the department of commissariat of Webster Shamu and
Ephraim Masawi, who are members of the Mujuru faction.
While most members of the Mujuru faction were retained and promoted to the
feeding trough, those in the Emmerson Mnangagwa camp were either frozen out
or left parked in insignificant positions. Newly elected vice-president John
Nkomo also got his own cronies into the politburo.
In the end, the politburo was largely stuffed with Mugabe, Mujuru, Mnangagwa
and Nkomo adherents, among other hangers-on. Although elites and their
cliques gained, the party was the main loser and could be the last casualty.
Thursday, 18 February 2010 19:41
ZIMBABWE has scored consistently poorly in surveys that determine the
business environment in the country.
Last year the country ranked lowly in the highly acclaimed 2010 Index of
The Index of Economic Freedom ranks countries according to criteria that
assess a country's economic openness, trade and the efficiency of domestic
regulators, freedom from corruption, property rights and the rule of law.
Zimbabwe was ranked 178 out of 179 countries assessed in the report compiled
by the Washington-based Heritage Foundation and the Wall Street Journal. The
report was released last month.
In 2008, Zimbabwe was in the same position.
Official explanation for Zimbabwe's dismal performance has always been that
Western-imposed sanctions have impacted negatively on the country's business
environment. But this is drawing a red herring across the track.
The Africa Consolidated Resources (ACR) saga puts this point across very
The London Stock Exchange-listed company secured a claim at the Marange
diamond fields in 2005 amidst great optimism.
Only in November last year chief executive officer Andrew Cranswick told the
World Gold Conference in Johannesburg: "Zimbabwe is one of those
mineral-rich countries that cannot be ignored any longer.There are still
some cowboys operating on the ground. However, (President Robert) Mugabe and
(Prime Minister Morgan) Tsvangirai recently stood up and said that mineral
rights in the country had never been threatened, and that this would be
maintained and respected going forward. it is important to note that
Zimbabwe is a vector that is moving in the right direction with a delta of
years of potential production still in the ground, ready to be discovered
But in his address Cranswick was not without a feeling of foreboding. Over
and above the threats posed by the "cowboys", he said: "Zimbabwe is going
through an evolutionary process of change that will, unfortunately, not
happen overnight, but the country is moving in the right direction. Just
like the roads in the country, this journey will also be filled with
Indeed the "potholes" have been many and deep; only a year after securing
the Marange claim ACR was kicked out by the Zimbabwe Mining Development
Corporation (ZMDC) and the military took over during their bloody crackdown
on illegal diamond panners. But it also turned out that more than just
getting rid of the illegal panners, the soldiers were joined by government
officials and police in plundering the gems for their own enrichment.
In September last year after a three-year battle ACR won in the High Court
its legal battle against the government. The judgment by Justice Charles
Hungwe was viewed as a landmark; it was hoped it would allow the inclusive
government to demonstrate to the world its preparedness to abide by the laws
of the country and court judgments.
But the government appealed the High Court decision and while the appeal was
still before the country's highest court the Ministry of Mines and Mining
Development cancelled ACR's licence on Monday this week.
Not only was the cancellation illegal because the issue was sub judice but
it flew in the face of a Supreme Court judgment by Chief Justice Godfrey
Chidyausiku on January 25 that determined that the diamonds the ZMDC had
mined from Marange belonged to ACR and should be delivered to the Reserve
Bank for safekeeping.
Chief Justice Chidyausiku in that determination averred that the ownership
of the diamond fields had not been finalised.
The 129 000 carats of diamonds were delivered to, but later removed from the
Reserve Bank on the spurious argument that a letter written by the Registrar
of the Supreme Court had meant that the January 25 order had been reversed.
Needless to say three days after the cancellation of the ACR licence
Chidyausiku was understandably angry with government over the latest
development. He said the removal of the diamonds from the central bank was
unlawful and contemptuous of the highest court in the land.
The flip-flops in the ACR saga betray sinister stratagems in the whole
process in which the Marange diamonds have been handled.
The recent hearings in the House of Assembly in which the Portfolio
Committee on Mines and Energy interrogated the awarding of tenders to two
little-known companies, one of which specialises in collecting scrap metal,
raised eyebrows about the probity of those entrusted to manage the process.
The whole process reeks of corruption.
To clean it up the award of licences to Mbada Diamonds and Canadile must be
investigated by an independent commission and if it was corruptly done those
with dirty hands must be exposed.
In the meantime Justice Hungwe's judgment in which he validated the ACR
claim should be respected. It is vital that the ownership of the diamond
fields be finalised in the best interests of the country; and quickly too.
Thursday, 18 February 2010 16:20
I HAVE been following the discourse around the recent promulgation of the
indigenisation regulations and I am disappointed by the collective paralysis
that seems to afflict the nation in policy formulation. To say the least,
the debate surrounding the regulations is emblematic of this paralysis as
contestations for or against the new policy to dilute foreign shareholding
in business have failed to resonate with national aspirations to fight
poverty and ensure food on the table.
The debate has revealed the paucity of constructive debate on key national
issues. In Zimbabwe, policy issues are debated on the basis of us and them.
It is black against white. It is left versus right.
It is the MDC against Zanu PF. It is irrationality fighting pointlessness.
The nature of debate has ensured that we do not get solutions quickly enough
because of the tendency to argue from transfixed positions. We have become a
nation motivated by outstanding issues.
There are two very distinct schools of thought in the indigenisation debate:
companies will be grabbed and given to well-connected cronies, and the
other: black empowerment is crucial to correct a historical wrong.
The debate goes something like: Giving companies to blacks will result in
destruction of capital. Look at what happened on the farms... The refrain on
the flipside plays like: We cannot continue to allow Anglo-Saxons to lay
claim to our heritage. We won our Independence through the barrel of a gun.
Predictably, political protagonists in the lame inclusive government have
appointed themselves gaffers for the two feuding corners. They will
determine the course and direction of this debate. I know exactly where it
is destined; somewhere in a chest of drawers marked "Outstanding Issues".
This does not however stop the stronger arm of Zanu PF from implementing the
We have seen this before. The regulations will be implemented in a contested
environment where political rivalry will be ratcheted up to either prove a
point or to sabotage the process altogether.
Evidence of this damaging competition is already evident. Prime Minister
Morgan Tsvangirai has come out to say that the regulations were promulgated
without his input and are therefore null and void.
His opponents in Zanu PF contend that the PM is playing truant and should
not sabotage government efforts. There is no middle ground.
I want to submit that all this is unnecessary and in fact detached from the
basic needs of poor peasants and millions of unemployed youths.
Arguments that have been put forward by Supa Mandiwanzira's Affirmative
Action Group and big business have missed the whole concept of empowering
Zimbabweans in order for them to regain their dignity as a people.
For 30 years, we have existed under a political culture that has
disempowered the people even though there have been noises along the way of
empowerment and wealth distribution.
We have a whole generation of youths who have subsisted on alms from donors.
There are business people and farmers whose wealth or success can be easily
traced back to patronage projects of yesteryear.
Impoverished rural folks queuing at a feeding centre think that they are
being empowered by donors, so is the chef admiring tractors provided under
the mechanisation programme and a banana crop stolen from a deposed farmer.
The fat new farmer chef and the emaciated villager labouring under a 20kg
bag of USAid-donated grain cannot claim to be empowered.
They have become subservient to systems that stunt their ability to
contemplate alternative ways of existing and generating a belief in their
own abilities to have some role in enacting change.
The debate on the indigenisation policies should assume a broader dimension
to tackle the critical questions of what empowerment means and how to
empower an impoverished and previously oppressed majority.
The debate should be both informative and have broader conceptual relevance
instead of the narrow fight about shareholding quotas in companies.
I have been to village dares where poor peasants bake under the afternoon
sun being told how a chef has been empowered through a tractor donated by
At the dare, women will dance their pelvises loose in celebrating the
"empowerment" and then go back home to face their hungry children.
I dread seeing the same script being enacted at national level when the
nation will be asked to celebrate acquisition of 51% in a big bank by fat
farmer chefs when more than half the population is surviving on less than a
dollar a day per individual.
Basic empowerment is ensuring people can benefit from what they have.
Economist Daniel Ndlela summed up our situation this way in a panel
discussion on SW Radio: "DRC has minerals, 100% are indigenous but there's
no activity taking place in some of those minerals.
You can equally convert Zimbabwe into 100% title and nothing takes place.
What is good for Zimbabwe? Is it for people to sit to play God and say I own
100% of Zimbabwe but I don't have the means, or I own 100% of the car but I
don't have fuel? Their car may be worth US$100 000 but if you don't have one
litre of fuel, the car won't move."
We need broader public discussion on the nature of economic empowerment so
that there is strategic input from the perspective of poor and working
What we want to pass as economic empowerment is essentially the
accommodation of the elite. It's about changing the characters in the
existing system and leaving intact the entire system itself, a system that
reproduces inequality in our country and generates nothing.