The ZIMBABWE Situation
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Rangarirai Mberi Senior Business Reporter
IMF demands source of funds
THE visiting International Monetary Fund (IMF) team has renewed its demands
for Zimbabwe to reveal the source of its loan repayments, clashed with
officials over new exchange controls and demanded an end to farm invasions.

This comes as it emerged yesterday that Zimbabwe paid US$5 million interest
charges on Tuesday, and pledged yesterday to clear the outstanding US$10
million arrears before early March ahead of the IMF's board meeting. The
latest payment brings to US $202 million the amount Zimbabwe has so far paid
to the fund.
Impeccable sources close to the discussions yesterday said that the IMF,
which has been haggling with Zimbabwe over a number of policy issues, said
if Zimbabwe cleared the remaining US$10 million before the March meeting, it
would not be expelled from the institution.
The sources said on Monday this week the IMF team asked for evidence to
prove that the US$120 million the Reserve Bank of Zimbabwe (RBZ) paid last
September was in the bank's books, and insisted on seeing signed facility
contracts and the electronic transfers printouts.
The IMF mission requested confirmatory correspondence from banks whose
clients the central bank says had offered free funds to Zimbabwe. The RBZ
told the team that exporters had in return had the equivalent of their
foreign currency contributions invested in treasury bills, and allowed to
keep higher Foreign Currency Account limits past the statutory time frame.
The IMF also demanded a copy of Zimbabwe's Exchange Control Act, details of
the RBZ's offshore bankers and clarification on assertions by fugitive
businessman Mutumwa Mawere that the RBZ seized his money to pay off the IMF.
It is however reliably understood that the RBZ "satisfactorily proved that
there was no single dollar that came from the sale of asbestos from SMM
Holdings as claimed by Mawere".
IMF executive director Peter Ngumbullu, in a January 20 letter to Finance
Minister Herbert Murerwa, had said the IMF was looking to "bring this issue
(of the source of funds) to closure and focus on more important policy
Yesterday, the team met Murerwa, central bank governor Gideon Gono, Economic
Development Minister Rugare Gumbo and other top government officials.
At that meeting, government officials agreed to end all new farm occupations
and respect property rights in order to restore investor confidence, speed
up civil service reform and transfer the cost of the RBZ's quasi-fiscal
operations to the budget after the IMF expressed concerns that "fiscal
imbalances have not been reflected in their numbers largely because a lot of
budgetary burdens have been shoul-dered by the RBZ following
To Page 23
its intervention in support of agriculture, parastatals and local
The IMF, in that same meeting, asked the central bank to, among other
things, reduce money supply growth, maintain positive interest rates as well
as fully liberalise the exchange rate. However, Murerwa said yesterday that
Zimbabwe was "a country in transition", and that some control was still
"The volume-based exchange rate system has been introduced as a necessary
transitory step to balance the virtues of exporter viability, and minimise
the inevitable downsides of cost-push effects of exchange rate
depreciations, especially when unaccompanied by commensurate foreign
exchange inflows," Murerwa said.
Gono last week announced new measures that will keep the currency within a
tight band by only allowing movement based on actual volumes traded. Critics
charge that this is essentially pegging the currency.
The IMF's Ngumbullu, in his letter, said Zimbabwe's inflation remained the
IMF's major worry. Earlier, a new working paper authorised for distribution
by Sharmini Coorey, chief of the IMF mission to Harare, had suggested that
Zimbabwe's measurement of inflation might be incorrect.
The paper, titled "Suppressed Inflation and Money Demand in Zimbabwe", casts
doubt on the slowdown in inflation seen in 2004, suggesting there could
"mismeasurement" of inflation.
However, IMF officials insist the paper is only meant for debate and does
not represent the views of the fund.
Earlier this week, the IMF had met the heads of state-owned enterprises,
into which the RBZ sank $3.4 trillion last year in a bid to end years of
losses at the companies. But power utility ZESA Holdings still turned in a
scandalous $8 trillion loss, while fuel importer National Oil Company of
Zimbabwe made its own $1 trillion loss.
Government yesterday agreed to cut spending on parastatals.

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Yet another tobacco failure


Kumbirai Mafunda Senior Business Reporter

ZIMBABWE is projected to harvest between 50 million and 55 million kgs of
tobacco when sales of the country's erstwhile top hard currency earner begin
in April - its tiniest crop since independence.

Officials in the tobacco industry said Zimbabwe's large-scale and
small-scale producers had put 45 000 hectares under both the irrigated and
dry land crop, which would result in a 31.8 percent plunge from last year's
harvest of 73.4 million kgs.
They said the industry had faced a lot of complexities during the cropping
season and would produce a sixth straight tiny output, in yet another
vicious kick in the teeth of Zimbabwe's increasingly troubled government.
They said the problems included erratic supply of critical inputs such as
fertiliser, chemicals and fuel caused by a six-year-old hard currency crisis
hounding the southern African country.
"Major shortages of agricultural inputs such as fuel, fertiliser and
chemicals will impact negatively on national production of most crops. Given
these constraints, tobacco production is likely to decline in the coming
season," Tobacco Sales Limited (TSL) said in a market report last week.
The officials said newly resettled farmers, who form the bulk of tobacco
growers, had been the hardest hit by the erratic supply and shortage of
"The state of preparedness was slightly worse than the previous season,"
said Rodney Ambrose, chief executive officer of the Zimbabwe Tobacco
Association, the country's major tobacco growers' body, which came up with
the preliminary projection figures.
"They (the farmers) didn't have fuel for tillage," he added.
Apart from the inputs shortage, there was not much irrigated crop due to low
levels of water in most dams during 2005 as a result of a drought that
affected the southern African region.
"The recent rains are encouraging but agricultural production, in particular
tobacco volumes, is likely to decline further in 2006 because of shortages
of inputs," packaging company Hunyani said in its financial results released
last week.
Critics have attributed Zimbabwe's reduced tobacco yield to the effects of
the seizure of white-owned farms by the government ostensibly for
redistribution to landless blacks.
The say since ruling ZANU PF party loyalists and former liberation war
fighters embarked on unsystematic land seizures in 2000, tobacco has lost
the glory associated with it six years ago.
At its peak in 2000, a record 237 million kgs of the golden leaf was
produced in Zimbabwe, raking in US$400 million.
But earnings have been falling since then, plunging to US$137 million in
2004 and US$118 million last year.
In addition to input shortages, growers say they are facing difficulties
accessing coal supplies to cure their small crop.
Ambrose confirmed that the majority of the new farmers had resorted to using
firewood for curing.
With Zimbabwe's six-year-old foreign currency crisis inreasingly choking its
frail economy, the harvest of the golden leaf in April - a crucial earner of
hard cash - was expected to bring relief to President Robert Mugabe's
The government, without balance of payments support from the International
Monetary Fund and other global lenders because of differences over policy
and governance issues, is battling to import grain, fuel and essential
medical drugs.
But with the drastic drop in tobacco output, Zimbabwe could experience an
acceleration in of its economic meltdown, with merchants are reportedly
shifting their attention to nascent regional tobacco-growing countries such
as Zambia, Malawi and Tanzania, which are taking steps to boost their

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New RBZ rules set to shake financial sector


Rangarirai Mberi Senior Business Reporter

NEW rules governing the operations of primary dealers could deal a fresh
blow to the financial services sector, which had received a clean bill of
health from the central bank and other global lenders.

Central bank governor Gideon Gono last week announced new regulations that
will compel dealers to subscribe a portion of their deposits to low yielding
government paper, or face the threat of being de-licensed as primary
The new regulations are an attempt by the Reserve Bank of Zimbabwe (RBZ) to
force support for government and central bank long-term paper, which has
been shunned by the market due to the increasingly weak inflation outlook.
According to Gono, despite the primary dealership role having been broadened
beyond discount houses eight years ago, "the primary market for government
securities and central bank instruments has remained largely
under-subscribed, while the secondary market has remained shallow and
"A number of existing primary dealers do not participate in all government
or central bank tenders, resulting in under-subscription of tenders and
tender results that do not correctly reflect the dictates of market
Registered financial institutions, which have previously automatically
qualified to play as primary dealers, will now have to apply for specific
primary dealership licences from central bank by mid-March, in time for the
launch of the new system on April 1.
Analysts say potential harm to bank bottom lines would likely be suffered as
a result of a requirement that the dealers sink a determined portion of
their deposits into tenders announced by the RBZ. The primary tender quotas
shall be based on each institution's liabilities to the public as at the
previous month.
"The RBZ will advise each primary dealer of its tender quota at the
beginning of each month, which will stay fixed until reviewed at the
beginning of the following month," Gono said.
"Compliance with the stipulated quotas will be assessed on a daily basis,
and institutions that fail to satisfy their quota by close of each business
day may be allocated the shortfall of their requirement, at the weighted
average of the last tender of that day."
For instance, a bank that has total liabilities of $4.5 trillion will have
to take a massive 19 percent of that into government scrip.
The central bank sees the market's continued reluctance to take up long-term
state paper as a threat to Finance Minister Herbert Murerwa's plans to
restructure government debt. In his budget statement last December, Murerwa
said securities of less than one year accounted for 93 percent of state
debt, while medium to long-term paper accounted for only seven percent.
Government anticipates having long term paper accounting for 60 percent of
its debt, he said.
But the new rules have raised fears on the market that banks will be stuck
with paper with yields much lower than inflation. Although Gono is bearish
on inflation over this quarter, he still sees prices slowing over the
remainder of the year. This means he could issue paper with rates based on
his expectations of double-digit inflation by next year - a forecast not
shared by many.

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Jongwe Printers machines put on auction over debt


Rangarirai Mberi Senior Business Reporter
Not so fast, says chairman Shamuyarira
ZANU PF'S publishing house, Jongwe Printers, has had its two printing
machines put up for auction over a $300 million debt owed to Print
Originators (PO).

But Nathan Shamuyarira, who is chairman of Jongwe Printing and Publishing
and ZANU PF's information and publicity secretary, said the ruling party's
company would not allow PO to seize any of its assets.

This is despite PO having a court order to have the machines attached by the
messenger of court.
"We will not allow them to take anything. They will be paid. Don't be
excited," Shamuyarira said.
Jongwe Printers, publisher of ZANU PF's Voice weekly, owes PO $316 021
213.15 in unpaid printing bills from 2004.

In June last year, High Court Judge Lawrence Kudya ordered the ZANU PF
company to pay the outstanding amount, including interest as from January
15 - the date of a final demand PO made on Jongwe - and the costs of the

Earlier, on March 15, Jongwe had proposed an alternative scheme that would
have allowed it to pay $10 million a month towards settling the debt, saying
it was at that time in a working capital crunch and seeking additional

"We advise that we have neither failed nor refused to pay the amount owing
but we have experienced a transient shortage of working capital due to a
major recapitalisation exercise which we embarked upon earlier. Print
Originators is fully aware of this exercise," Jongwe said in court papers
filed last year.

However, PO rejected Jongwe's offer, resulting in it finally obtaining a
final writ on Jongwe from the court.

This week, Jongwe's two printing machines were to be auctioned. The value of
the two machines, said to have been acquired recently from Germany, could
not immediately be established.

Jongwe Printers last year received two loans worth a total $17.5 billion
from the Reserve Bank of Zimbabwe's Productive Sector Facility to buy a
printing press, but reports said the company had blundered and spent the
money on machines that could only print school exercise books.

This had reportedly led to the dismissal of managing director Tawanda

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Fuel prices go haywire in Bulawayo, Gwanda


Charles Rukuni Bureau Chief
Petrol sells for $150 000 per litre
BULAWAYO - Fuel prices in Bulawayo and surrounding areas have gone haywire.
Petrol is selling for anything between $150 000 and $160 000 per litre in
Bulawayo, while in Gwanda it goes for $220 000 per litre.

It is not clear why the price has suddenly shot up because the towns are
very close to the major sources, South Africa and Botswana. Bulawayo is only
120 km from Botswana.
The prices rocketed soon after central bank governor Gideon Gono's monetary
policy statement last week indicating that people were probably taking
advantage of the situation to raise prices after realising that government
had no solution to the nearly year-long crisis.
The price of petrol is still officially pegged at $22 800 per litre, a price
which Gono said was unrealistic.
The National Oil Company of Zimbabwe (NOCZIM) had incurred losses of over $1
Gono said this would "ultimately be funded by all Zimbabweans through costly
printing of money to balance the fiscus".
He also said that there was critical need to realign the fuel price to curb
the black market as only a selected few had access to this "cheap" fuel.
". . . The current arrangements in the fuel sector, under which a privileged
few access fuel at subsidised prices is fermenting immense leakages, where
recipients of the subsidised fuel are tempted to make quick gains through
the disposal of same in parallel markets . . ." Gono said.
Ironically while the government insists on selling fuel at unrealistic
prices, NOCZIM is failing to provide fuel to selected service stations that
sell it in foreign currency at US$1 a litre.
It is now cheaper to buy the fuel in foreign currency as the US dollar is
currently selling for $130 000 on the parallel market. The pound is going
for $200 000 while the pula is pegged at $30 000 and the rand at $26 000.
The US dollar was trading at $99 201.58, the pound at $177 223.62, the pula
at $18 763.98 and the rand at $16 586.12 on the interbank market on Tuesday,
a clear indication that there was a high demand for the pula and rand.

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The rise and rise of Mutasa


Kumbirai Mafunda Senior Business Reporter

STATE Security Minister and ZANU PF secretary for administration, Didymus
Mutasa is fast consolidating his position as President Robert Mugabe's most
trusted and powerful Cabinet minister.

Mutasa has achieved a feat that has never been pulled off by any of
President Mugabe's trusted lieutenants since independence from Britain in
1980 by simultaneously assuming charge of three Cabinet portfolios.

This is thanks to his recent appointment as Home Affairs Minister since the
beginning of January, albeit in an acting capacity, in the absence of Kembo
Mohadi, who is on leave.

Mutasa, who at one point was ruled out of ZANU PF's vexatious succession
jigsaw after his involvement in political skirmishes in his Makoni North
constituency, is at present superintending the Lands, Land Reform and
Resettlement, Home Affairs and State Security portfolios.

He also supervises strategic grain imports and food distribution and chairs
the powerful Joint Operation Command (JOC), comprising the top hierarchy of
the country's uniformed forces and the spy agency.

When approached last week to comment on his seemingly burgeoning
responsibilities, Mutasa, one of the most quotable politicians in
government, chuckled saying: "Kana kudai akaita six hazvina problem. (Even
if I had six portfolios there would be no problem). So far I have been
executing my ministerial roles satisfactorily."
Analysts noted this week that Mutasa's assumption of three cabinet posts
when President Mugabe has unlimited options to choose from his 31 cabinet
ministers adds fresh dimensions to the succession conundrum within the
ruling party.
Mutasa, who many thought was in the twilight of his political career,
emerged from the obscure anti-corruption ministry to his current powerful
position and has openly stated his ambitions for the vice presidency.
"If anyone proffered my name for that position, I would first thank that
person and readily accept the offer," he was quoted as saying in the
government controlled Herald about three years ago.

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Minister demands $1.4 bln in forex


Njabulo Ncube Chief Political Reporter

ABIGAIL Damasane, the deputy Women's Affairs Minister is demanding US$14
309.50 (Z$1.4 billion) from the state-run export promotion agency ZimTrade
as payment for her participation at an exhibition held in Germany six years

A non-constituency Member of Parliament, Damasane has taken up the matter
with the agency's principals - the Ministry of Industry and International
Trade - which has ordered ZimTrade to settle the claim in full.
The bill has caused anxious moments for the ZimTrade board that has had to
put on hold a number of national projects due to inadequate funding from the
fiscus and exporters, who are struggling as a result of the economic
Sources said the ZimTrade board members were keeping their fingers crossed,
hoping the presidium, which censured Matabelelend North Governor Thokozani
Mathuthu last month for her extravagant stay at a Bulawayo hotel, might also
come to the rescue of the export promotion agency.
Documents at hand indicate that Damasane, who worked for the Education
Ministry prior to her appointment as a non-constituency MP last year, was
part of a government team that took turns to man the country's pavilion
during the Hanover Expo in 2000. The exhibition ran from June 1 to October
ZimTrade, tasked by the government to organise and coordinate the country's
participation at the expo, provided per diems for the officers on duty at
the pavilion.
As a cultural officer, Damasane was responsible for organising and managing
Zimbabwe's cultural programme during the expo and spent 86 days on the job
at an approved government rate of US$285 a day.

Due to insufficient funds, ZimTrade could not foot Damasane's bill in full.
It only paid her US$75 per day, leaving an outstanding balance of US$14 310,
a figure she has been demanding since her return from Germany.
Retired colonel Christian Katsande, the Secretary in the Ministry of
Industry and International Trade, has since ordered the ZimTrade board to
make good the entire payment claimed by the deputy minister.
Katsande's directive came after a bilateral trade relation official in the
ministry vouched for Damasane and pleaded her case in a three-page letter to
the secretary on December 19 2005.
"The full amount due to her was US$24 510 for both accommodation and
subsistence. ZimTrade paid a total of US$3 375 directly to the German Expo
authorities for apartment accommodation occupied by Honourable Damasane
during the period she was in Hanover.
"Thus the balance due to Hon Damasane was US$21 135 and she was only paid
US$6 825. Therefore, the final outstanding figure due to Hon Damasane is
indeed US$14 310. At the prevailing rate of Z$26 000 to the US$, this
translates to Z$372 060 000.
"It should, however, be noted that not only Hon Damasane was affected.
Officials from other ministries and departments were also affected. It is
not clear what was agreed upon between the individual officers and the
authorities in their ministries/departments," reads part of the letter the
bilateral trade relations officer wrote to Katsande last month.
In a letter dated January 18 2006, Katsande directed the ZimTrade board
chaired by Daniel Chigaru to deal with the issue urgently as it had taken
too long to resolve.
The ZimTrade board, which was appointed last year, is now in a quandary over
the long drawn issue it inherited from previous boards amid indications that
the trade promotion body's finances were in a precarious position.
"Although this matter has been outstanding for some time now, it is
appropriately the board's remit to deal with it conclusively," said
"Your board is therefore requested to consider this case and decide
accordingly. I have also attached a copy of the submission from Hon
Damasane, for more details. I have also been made to understand that, in
fact, other officials who participated in this national project were equally
prejudiced, with some having received their dues."

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Mutare commission seeks to borrow $90 billion


Staff Reporter

MUTARE - The commission running the affairs of this eastern border city,
eager to turn around its fortunes, has applied for powers to borrow $90
billion to undertake major capital projects.

The commission, appointed by the government last month, wants to complete
three major projects in the city. The chairman of the commission, Kenneth
Saruchera, said they intend to borrow $40 billion from the Reserve Bank of
Zimbabwe to complete the construction of the Christmas Pass to Sakubva water
Another $50 billion is needed from central government's Public Sector
Investment Programme funds to complete the construction of a reservoir
pipeline and a reservoir in Chikanga high-density suburb.
"We want to change the face of Mutare and bring back its lost glamour,"
Saruchera said. "But for us to achieve this we need the full support of all
In addition to completing the three capital projects, the commission also
needs another $40 billion from the central bank to improve the water
distribution systems and buying gadgets such as water meters.
Since the Saruchera-led commission took over the running of the city, the
council's revenue collection base has improved from $600 million a day to $2
billion daily. Saruchera attributed this to effective systems that the
commission has introduced.
Saruchera said his commission was courting the National Social Security
Authority (NSSA) to undertake massive housing schemes in Fernhill and
He said his commission has installed 300 light bulbs around the city to
ensure residents are safe from criminals.
He said the commission has also introduced a hotline to enable residents to
communicate with council officials. But of concern to Saruchera is the fact
that 85 percent of the council expenditure budget is gobbled up by salaries
and wages for its workers.
"This is unacceptable," Saruchera said, "We have to bring the wage and
salary bill to about 40 percent so that we channel resources to service
delivery and infrastructural improvements."

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RBZ loses ground to speculators?


Rangarirai Mberi Senior Business Reporter

THE Reserve Bank of Zimbabwe (RBZ) would never admit it, but it now appears
to have conceded some ground in its long running turf-war with Zimbabwe's
vicious army of speculators, accused of fuelling the inflation scourge.

Take those currency speculators, for instance. Ahead of RBZ governor Gideon
Gono's statement, they pounded the Zimbabwe dollar to $120 000 against the
US dollar, before sending the local unit to new depths as soon as he was
through with his statement.
Then consider the stock market speculator. Last Tuesday, the stock market
behaved as if to challenge the central bank governor, rising 3.11 percent to
rest a shade below 40 million points just hours before he was due to make
his policy statement. A day later, the Zimbabwe Stock Exchange (ZSE) beat
that 40 million mark for the first time with a 14.2 percent sprint in a
broad rally.
Previously, Gono would have hit somebody with a rate hike for that sort of
cheek. But last week, he appeared for the first time to soften his
aggressive rate stance, suggesting that although he would continue to wield
the rate hike, he would only use it sparingly.
He said: "On an ongoing basis, the bank's accommodation rates will be
revised, consistent with levels deemed to be appropriate, based on projected
inflation profiles, at the same time minimising the adverse effects of the
interest rate instrument to the productive sectors."
In the past he never hesitated to use harsh policy instruments and threats
to whip speculators into line. But last week, all he could do was appeal to
their morality and plead with them to "do the right thing" and to "return to
He can now only sit back and hope that the risky black market and the stock
exchange itself will deliver their own bitter lessons to the carefree
punters who will buy anything at any price - as long as they figure it will
beat inflation.
Only a few see the possibility of the stock market suddenly hitting a deep
trough, or the frail Zimdollar suddenly finding some mysterious source of
energy. And it has showed in the manner the markets have been treating Gono's
The RBZ boss, who has been focused on fighting inflation from the day he set
foot at Number 80 Samora Machel, the bank's headquarters, last week widened
his shooting target in what analysts said was a tacit admission that the
task at hand required more than interest and exchange rate policies to deal
He said: "The common enemy that we have to confront is, therefore, our lack
of oneness, and the absence of a clear commitment by all to pursue a path
that produces mutual benefits for both the economy and individuals alike."
The last time Gono made a policy statement - October 20 last year - shares
had rammed through 10 million points 24 hours before he was due to speak.
Compare that to previous times, when the approach of a policy statement
would send speculators scurrying for cover.
"It's not that there's some cold war going on between the markets and RBZ.
It's just that players were able to better gauge where inflation was
heading," a top fund manager said, declining to be named. His analysis would
confirm comments by economist James Jowa, who says inflation has now become
self-perpetuating due to downbeat expectations.
The cautious may suggest that something has to give some time, both on the
black market and on the stock market. For instance, the ZSE had by last week
brought home gains of 125 percent since the beginning of 2006 and there will
be suggestions that valuations may have become a bit rich and that some
players may be getting ahead of themselves.
"It is the year in which value investors will make a lot of money while
punters will buy expensive shares and regret the day they put everything
into one basket," analyst Nyasha Chasakara said.
But the fellowship of the feeding trough is quick to make the point - and
they always bring this one up - that nothing else but stocks, fuel or hard
currency looks like ever beating inflation.
Even if Gono had raised the bank rate - really the only arrow left in that
old monetary quiver - critics say it was always unlikely that any rate
increase would have been broad enough to give above-inflation returns and
take some territory back from the speculators, especially now that TB rates
no longer track the bank rate.

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What's ZESA doing to safeguard assets?


EDITOR - I continue to read and hear with concern, the continued vandalism
and plunder by thugs of ZESA infrastructure (transformers and cables).

Sadly this happens at the expense of not only ZESA and the immediate
consumers, but of the whole nation as replacement of this infrastructure
requires foreign currency which could otherwise be used on expansion or to
pay for imported electricity.
However this problem does not seem to be peculiar to ZESA. Other parastatals
like the NRZ and Tel*One face the same problem. The question that I have for
ZESA particularly is: "Other than publicising these acts of vandalism and
appealing to the public to report such cases, what security measures have
you put in place?"
I do not mean to say that you have not made any effort to try to contain
this problem. Obviously you have done something to ensure that the loss of
the infrastructure is minimised. This is why we have lately been reading in
the press James Maridadi's appeals to the public on the need to join hands
in fighting vandalism.
To revisit the issue of a number of parastatals being affected by vandalism
of the same nature, I wish to highlight previous efforts that have been made
in trying to ensure that valuable infrastructure is secured to enable good
service delivery.
At one time, industry and government joined hands to curb vandalism on
infrastructure belonging to these three parastatals. In the same spirit, the
government, at the behest of the foundry sector, later banned the export of
all scrap metal - copper and aluminum included (2004 Mid-Term Fiscal Policy
Review, para 117, pg 23). It generally ensured that instead of exporting
cheap scrap metal - even "clean scrap metal", beneficiation of this scrap by
the local metals foundry sector kept the metal foundry companies in business
while value-addition brought in more foreign currency. It was also meant to
curtail the export of the scrap which seemed to be the pull factor to those
who stole copper and aluminum cables for foreign currency. Effectively, for
the three parastatals, this would minimise losses and ensure service
Without any assessment of these measures put in place, one would not know
how much has been achieved to date. However, the fact is that despite the
efforts, vandalism is still rife and the question that requires an answer is
Clearly, it remains ZESA's challenge to seek even more solutions to the
vandalism problem. One of the reasons why I write this letter is that, after
observing and learning about the cables and transformer vandalism for quite
some time, ZESA may want to consider the following as strategies to solve
this problem:
lAll substations should be under tight security during the night either
through patrols - as there are so many of them - or each one should be
manned. This certainly would come with costs but I don't think the costs
would be more than what ZESA incurs by way of replacements to damaged
lZESA should propose to government that its infrastructure be accorded the
status that warrants national security. This means that its establishments
would be under guard by the army. This, I think, would put an end to the
problem. Besides, I think with our armed forces having no crucial external
engagements at the moment, this would be a worthy national cause.
lAbove all, I think our law should be tightened in order to make it punitive
to vandalise infrastructure for institutions like ZESA, NRZ and Tel*One.

John Chakasikwa

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Crucial TNF talks on tomorrow


Charles Rukuni Bureau Chief

BULAWAYO - Tomorrow is a do-or-die day for Zimbabwe. The Tripartite
Negotiating Forum (TNF), which comprises the government, business and
labour, will hold crucial talks that will determine whether the country
moves forward, remains stagnant or continues on its downward slide.

The three groups will discuss the Kadoma Declaration, a document drafted
five years ago to chart the way forward for the country.
The government has prevaricated on signing the document, which calls for
far-reaching political, social and economic reforms to reduce the world's
perception of Zimbabwe as a high-risk country.
Zimbabwe has been regarded as a pariah state since it embarked on its
controversial land reform. It quit the Commonwealth in unceremonius fashion
and was slapped with smart sanctions by the European Union and the United
The onslaught has seen the country's economy shrink by almost half.
Unemployment has surged to nearly 80 percent. The exchange rate has
plummeted and the local currency, which was stronger than the United States
dollar during the first three years of independence, is now the weakest on
the continent.
Inflation is expected to shoot to 800 percent within the next two to three
months, according to government officials.
The Kadoma Declaration was mooted at a meeting of the TNF's technical team
on Zimbabwe's country risk in August 2001. The team said that the country's
problems should be addressed in their totality for it to move forward.
Central bank governor Gideon Gono expressed the same sentiments when he
presented his fourth quarter monetary policy statement for 2005 last week.
The Kadoma Declaration was reaffirmed at a full meeting of the TNF in
January 2003 but the government has avoided endorsing it up to now, largely
because it calls for radical reform, especially within the government
The partners agreed that they must address Zimbabwe's country risk factor
and improve its image in order to achieve any meaningful turnaround.
They defined country risk factor as the "premium attached by nationals,
residents, foreigners and international bodies on residing in and/or doing
business with a particular country".
The problems that the country was facing needed to be addressed urgently
because the economy was performing poorly. More than three-quarters of the
population was officially classified as poor.
Poverty had led to an increase in crime. It had also resulted in the
widening of the gap between the rich and the poor, making it easier for
corruption to thrive.
Because of the country's poor image, Zimbabweans were regarded as poor
wherever they went and were ill-treated or abused at immigration points in
some countries. They were also discriminated against when trying to go into
business abroad.
The country risk factor had also resulted in lack of patriotism, with some
Zimbabweans having low confidence in their country.
The country itself was unable to supply its people with basic human needs,
leading the population to mistrust any institutional system - opening doors
for a thriving, uncontrollable black market.
The TNF team identified some of the causes of the risk factors as failure by
some government institutions to function effectively. There was also a
discrepancy between policy and action and delays in implementing policy.
There had also been an increase in "irresponsible utterances" by politicians
and lack of political tolerance. This had given rise to political
instability and apprehension among foreign governments.
Though the Zimbabwe Congress of Trade Unions (ZCTU) was keen to see the
declaration signed at the beginning of 2003, the government prevaricated,
blaming the country's economic ills on the West and the opposition. The
economy took a dive and has been on a slide since.
ZCTU president Lovemore Matombo said it appeared that the government was now
ready to talk because it was the one that had initiated discussion of the
Kadoma Declaration on February 3.
He said technical committees had been going through the document before it
is discussed at a full session of the TNF tomorrow.
It was not clear what prompted the government to initiate the talks because
the Kadoma Declaration calls for radical changes within government, which
has over the years tended to act arbitrarily, blaming its failures on either
British Prime Minister Tony Blair or United States President George Bush.
A source who attends both the technical and full TNF meetings said civil
servants were pushing for the talks because they were now desperate.
"They are frustrated. Things are not moving in government. The government
has no money. They want to use the TNF to ensure real progress. They want
the TNF to push real issues," the source said.
The adoption of the Kadoma Declaration could pave the way for a rapid
economic turnaround because this is the "defining moment" in the country's
turnaround programme, as Gono said last week.
He said it was a defining moment in that the country was standing on the
verge of tremendous opportunities which it should take advantage of to break
away from the economic setbacks of the past seven years.
But Gono warned: "Naturally, as with every opportunity, equally true is the
fact that the country is standing on the edge of a cliff which threatens to
irreversibly take us downhill if we do not boldly move forward with speed to
address most of our shortcomings of the past."
The central bank chief said Zimbabwe's worst enemy was its own people
because they lacked oneness and clear commitment to a path that produced
mutual benefits for the country.
"Economic opportunism is now at the heart of everything we seem to be doing
day in, day out," he said.
For the ordinary Zimbabwean, opportunism is evident on every street corner
in the cities, with some people even boasting that they did not come to
"town" to work but to make money.

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The gloves are off . . .


Staff Reporter
Gono calls a spade a spade in monetary policy review
Reserve Bank of Zimbabwe (RBZ) governor Gideon Gono has long pointed at
corruption and inefficiency, mainly in the parastatal sector, as the twin
evils that threatened efforts to extricate the Zimbabwean economy from the

Last week, although certainly not in as many words, he added a third -
While taking the blame for policy inconsistency - citing the five percent
export support incentive that was abolished before becoming fully
operational, failure to ring-fence concessional facilities, which stoked the
flames of inflation through rapid money supply growth and the continued
maintenance of misaligned interest and exchange rates - Gono rapped senior
government officials for not only failing to deal with corruption, but
benefiting from it.
Starting his policy statement with a caveat that now was the time for
"Operation Kutaurirana Chokwadi" (time to tell the truth) and warning that
the country stood "on the edge of a cliff", Gono charged: "If, as a nation,
we do not resolutely stamp out growing corruption, especially among us
people in positions of authority and influence, us the so-called 'chefs', if
we do not stamp out indiscipline in our midst and if we do not appeal to our
conscience as we go about our daily activities as a people, we will soon
discover, too late, that policy formulations, implementation, monitoring and
decisions have been based on self interest, racial overtones, regional and
tribal considerations at the expense of the national good."
The central bank governor, who has been consistent in his appeals for a
meaningful rapprochement with international capital so as to restore
Zimbabwe's balance of payments position, also lamented lack of progress in
that regard.
He noted that no progress had been made with respect to bilateral
investments protection agreements, while disruptions persisted on the farms,
issues which have earned the country pariah status and seen foreign aid and
investment plummeting.
Gono painted a graphic picture of how the central bank had resorted to
seigniorage "in order to survive" in 2005, when key utilities queued up for
cash to finance critical operations.
However, rampant corruption, mismanagement, uneconomic pricing and
entrenched inefficiencies had seen most parastatals posting record losses,
with Energy firms ZESA and National Oil Company of Zimbabwe recording a
combined $9 trillion loss.
Government ministries also joined the queue and received significant amounts
of foreign currency from the Reserve Bank, without paying a penny in local
currency, Gono revealed, adding that this was tantamount to "indirect
printing of money as, in real terms, the Reserve Bank would have funded the
respective entities".
Because the government is seriously underfunded, the RBZ has assumed
responsibility over quasi-fiscal operations with the objective of enhancing
key sectors such as agriculture and broader recovery, drawing criticism,
most notably from the International Monetary Fund.
Gono said the fiscal budget lacked credibility and did not have
comprehensive measures to promote investments, rein in underperformance in
ministries as well as instil good corporate governance in public enterprises
where "political interference, particularly in the appointment of chief
executive officers and other key staff, results in incompetent management
He slammed the government for its widely criticised interference in the
operations of local authorities, citing Harare and Chitungwiza, where
elected mayors have been booted out by Local Government Minister Ignatius
The governor also made stinging allegations of gold smuggling by
"high-profile politicians and senior government officials".
Tendai Biti of the opposition Movement for Democratic Change said Gono's
statements proved that only comprehensive reform would set the country back
on course for economic recovery.
"It has taken the governor three years to agree with us on the need for a
comprehensive, holistic national plan to address the current crisis. No
country can develop without one and this is why we led the way by crafting
our RESTART programme," Biti said, referring to his party's economic

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Tsvangirai files notice of appeal


Njabulo Ncube Chief Political Reporter
The saga continues
EMBATTLED MDC leader Morgan Tsvangirai has filed a notice of appeal to
defend a $100 billion lawsuit instituted against him by the pro-senate
faction led by his deputy Gibson Sibanda.

Tendai Biti, the party's legislator for Harare East, who is representing
Tsvangirai in the matter, told The Financial Gazette this week that the
former trade unionist had "filed a notice of appeal to oppose the action".
"I think it has been about two weeks since we filed the appeal, which we are
going to defend vigorously," said Biti.
The pro-senate faction, understood to be searching for a suitable candidate
to lead the group at its congress next month, was angered by statements
allegedly made by Tsvangirai at a diplomatic briefing. He is alleged to have
said that the leaders of the pro-senate camp were plotting to kill him in
collusion with the ruling ZANU PF.
The pro-senate faction initially filed a $50 billion suit last year but
revised it upwards a few weeks ago. Nicholas Mathonsi, the lawyer for the
pro-senate faction, confirmed to The Financial Gazette that Biti had filed a
notice of appeal to defend Tsvangirai.
"He (Biti) has filed a notice of appeal to defend but has not filed their
plea. I have not pushed the issue because I was still yet to serve them with
summons altering and amending the lawsuit from $50 billion to $100 billion.
I am sure they have now received the new summons," said Mathonsi.
The plaintiffs in the case are vice president Gibson Sibanda,
secretary-general Welshman Ncube, treasurer Fletcher Dulini Ncube, deputy
secretary general Gift Chimanikire and information secretary Paul Themba
Nyathi all of whom the anti-senate camp says had been expelled for allegedly
bringing the name of the party into disrepute.
According to court documents filed at the Bulawayo High Court, the five
former colleagues of Tsvangirai are demanding payment of $20 billion each,
being damages sustained as a result of the publication of the statements.
Meanwhile, the Tsvangirai camp said yesterday preparations to hold their
congress in Harare on 17-19 March 2006 were progressing well.
"There's going to be one MDC congress. If there is any other congress, it
will be of another political party which is not the MDC," said Nelson
Chamisa, the spokesman for the anti-senate faction. "The theme of the
congress is going to centre around renewal and re-birth of the MDC in our
endeavor to deal decisively with the dictatorship of (President) Mugabe,"
said Chamisa.
Chamisa said Tsvangirai was open to any initiative designed to end the rift
within the MDC.
Asked whether the MDC leader had responded to conditions allegedly tabled by
the Matabeleland-based faction he said: "The conditions are political
statements which we think are not committed to a united MDC. The other party
has done nothing since it revealed those conditions. The President has
remained ready and willing to make sure whoever is interested in removing
Mugabe from power is welcome."
The pro-senate factinon said as a condition to reconcile, Tsvangirai should
abide by the party's constitution and accept collective decision-making,
embrace non-violence as a core principle and refuse to use the coercion of
Another condition was that he should consult the party's elected officials
when making decisions and not seek the opinions of a "kitchen cabinet of
unelected officials" and then overrule decisions of the national executive
and announce the decision as a fait accompli.

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$1 billion travellers cheques disappear from Zimbank branch


Felix Njini

CLOSE to US$10 000 in travellers cheques (about $1 billion at the official
exchange rate) vanished from the Zimbabwe Banking Corporation (Zimbank)'s
Jason Moyo branch in Bulawayo only to be cashed in Botswana days later.

Documents in possession of The Financial Gazette show that two travellers
cheques (TCs) worth US$8 500 and US$1 220, which were to be deposited in
favour of Famba Safaris and Burmakano Travel respectively, disappeared
without trace from the branch in September and were later negotiated at
Barclays Bank Botswana's Kasane branch.

A female teller (name supplied) has since been suspended, a move insiders
alleged was meant to protect senior bank officials suspected to be involved
in the fraud.

The insiders said an internal probe had revealed the identity of a Zimbank
and Barclays Bank account holder who allegedly cashed the TCs in Botswana.
They said the Zimbank account holder had agreed to reimburse the bank by the
end of February.
"The beneficiary has accepted that he was given the TCs by an insider and
has agreed to reimburse the bank by end of February," said one source.
Investigations by The Financial Gazette have revealed that many Zimbank
branches have been losing money because of a weak security system.
Minutes of a meeting held on December 29 2004 reveal, for instance, that the
Juliasdale branch of the bank made a loss of $400 million "arising from an
erroneous revaluation of forex (foreign exchange) on hand".

They also show that the Zimbank Beitbridge branch had a case of late
remittance of foreign currency, which was adversely affecting the bank.

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New rules send dollar tumbling


Rangarirai Mberi Senior Business Reporter

THE Zimbabwe dollar took further knocks this week, battered by weakened
confidence on the formal market, where the central bank has introduced fresh
controls that analysts see as a new cap on the currency.

Dealers who had already bid up the United States dollar to $120 000 ahead of
Reserve Bank of Zimbabwe (RBZ) governor Gideon Gono's statement were quoting
the greenback at $160 000 early this week, sending the price of black-market
fuel higher and further dimming prospects of an already unlikely inflation

Trade has boomed on the black market since Gono said last Tuesday that he
would only allow the exchange rate to swing a maximum two percent,
determined by actual volumes traded on the day.
"Gono's strategy was to have some kind of trade-off; 'you (exporters) get
more US into the interbank market and the rate moves'. But I think this has
backfired and there will be some pressure on the RBZ to again make a few
early adjustments," the chief currency dealer of a commercial bank said this

Although Gono says these new measures are intended to halt the "one-way bet"
trend of the previous weighted average trading system, critics say he has
effectively re-introduced the controls he partly ended last October with the
establishment of the interbank trading system.

Although the new measures temporarily saved the Zimbabwe dollar from hitting
a new $100 000 low on the formal market, the controls are unlikely to
successfully defend the currency on the informal market, analysts say.

"The depreciation will now slow down but at the same time the parallel
market will become more active. When controls are put in place, the activity
on the black market picks up. This is exactly what will happen," said Tony
Hawkins, professor of business at the University of Zimbabwe.
The central bank last Thursday devalued the Zimbabwe dollar on the currency
auctions from $26 000 to $30 000, a move that dealers say will have no
effect on the unit.

The auction rate will now apply to 17.5 percent of export proceeds - down
from 30 percent - under new retention arrangements also announced last

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Israeli experts to probe plunder of Zim minerals


Chris Muronzi Staff Reporter

ZIMBABWE'S central bank governor Gideon Gono says the government has hired
experts from Israel to investigate possible plunder of the country's

The bank hopes the Israelis, in conjunction with the local police, would
help curb leakages of the country's mineral wealth, which the central bank
boss says is being siphoned by companies and individuals out of the country.
"With respect to the all-important mining sector, the work underway to
finalise the country's mining laws, including the issue of government and/or
indigenous participation, monitoring of mining activities and output is a
monumental piece of unfinished agenda which, when completed, should drive
our mining sector investments, productivity and earnings to unprecedented
levels with mutual benefits flowing to both the country and investors
áalike," said Gono during his fourth quarter monetary policy review
statement last week.
"It is also imperative that greater surveillance be instituted at the
country's mines so as to curb the growing incidences of smuggling and side
marketing. Government surveillance instruments should, thus, be rigorous,
with each mine submitting detailed reports to the Ministry of Mines, and to
the Reserve Bank for accounting of extractions and exports. To this end, the
Reserve Bank has over the last quarter been investigating this issue with
the assistance of Israeli experts with collaboration from the Zimbabwe
Republic Police," added Gono.
According to Gono, Zimbabwe lost nine tonnes of gold worth US$160 million
last year in leakages, a development which also contributed to the foreign
currency shortages.
Zimbabwe's mineral exports, via the official market, have been declining
over the years owing to what officials believe is an orchestrated plunder by
both small and larger mining corporations.

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Parastatals post $12 trillion loss


Munyaradzi Mugowo and Tinashe Mawerera Own Corresp

LOSS-MAKING parastatals and public utilities, which last year jostled for
concessionary Reserve Bank of Zimbabwe (RBZ) financing to turn around their
operations, posted a combined loss exceeding $12 trillion last year.

In light of the serious bleeding of the fiscus, RBZ governor Gideon Gono
last week called for urgent action to stem the haemorrage at Air Zimbabwe,
the National Railways of Zimbabwe (NRZ), the National Oil Company of
Zimbabwe (NOCZIM), ZISCO and ZESA Holdings (ZESA) after they showed an
unwillingness to implement prescribed restructuring and stabilisation
"The boards and management of parastatals should either shape up or be
honourable enough to ship out. We don't even want to see them coming to the
Reserve Bank any more," Gono said.

ZESA - whose average output capacity has slumped to about 49 percent,
exposing the country to high electricity import costs due to low plant
investment and rehabilitation - made an operating loss estimated at about
Z$8 trillion in December last year.

Statistics show that ZESA sells electricity at a rate of Z$218.08 per
kilowatt-hour produced at an average cost of Z$1.386.20 per kilowatt-hour.
The loss, attributed to sub-economic prices, coupled with high wage costs
accounting for over 55 percent of total revenue, has sunk the public power
utility in foreign debts amounting to about US$330 million.

Despite receiving a Z$666 billion stabilisation loan from the RBZ last year,
ZISCO increased its loss from Z$1.298 trillion in 2004 to about $2.87
trillion cumulatively in the first nine months of 2005 only and the
revenue-cost gap is expected to widen month-on-month.

At an annual average output level of 6 736 tonnes, the iron and steel firm
is still operating below break even output of about 25 000 tonnes, creating
a domestic debt overhang of about $250 billion owed to Hwange Colliery
Company and the NRZ, whose tonnages fell drastically from 12 million tonnes
in 1999 to less than five million tonnes in 2004.
Owing to this exposure and in-house corporate governance loopholes and
porous financial controls, the institution has failed to arrest inexorable
infrastructure decay, which has grounded 4 631 wagons, powered by 66
locomotives, against a market requirement of 8 639.

NOCZIM, whose assets were almost seized last year by Libyan oil company
Tamoil over outstanding arrears, also suffered a loss of not less than Z$1
trillion in 2005.
"Such losses will be repaid by (poor) Zimbabweans through the printing of
money," Gono said.
Air Zimbabwe, the biggest borrower from the Parastatals and Local
Authorities Reorientation Programme (PLARP) that debited it to the tune of
Z$1.2 trillion, 60 percent of which was sunk in overdraft retirement, made
an operating loss of about $317 billion in the first 10 months of 2005.
The airline, whose fleet has dropped 33 percent since 1980, is also making
negative profits of about US$980 00 per month to keep its unviable China and
Dubai routes in which it evidently plunged without prior market research
last year.
This poor financial performance, caused by revenue-cost discrepancies where
70 percent of costs are in US dollars and 60 percent of revenue is in local
dollars, has left the national carrier in a fix, owing foreign and local
creditors US$19.65 million and Z$109 billion, respectively.

Gono insists that without proper corporate governance at parastatals,
proposed turnaround plans through joint ventures and equity investments,
would be a wild goose chase.

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The need for a new paradigm in Zimbabwe!


Letter from America with Ken Mufuka

AN American brother living in Zimbabwe, who loathes everything I write,
poked fun at me in a recent email: "If you Zimbabweans are so clever, why is
your country in such a bad state?" This has been part of my research on
development, and the answer seems to be the need for a new paradigm.

Mrs Victoria Chitepo once jokingly accused Professor Terence Ranger of
making the study of history so attractive that well over half our doctoral
holders are historians - Dr Jokonya, Dr Mudenge, to mention only the most
illustrious ones. The Mukuru himself holds no less than seven degrees.
The true paradigm, embedded in these illustrious minds, as Mrs Chitepo
pointed out is their love of philosophy for its own sake, and a lack of the
practical. Having never ruled over a village before joining the guerrillas,
they came back with lofty ideas, which are nothing but empty sounding
cymbals, signifying nothing.

But there is an African ethos somewhere, which assumes that if you talk
about a problem, then the problem will solve itself.
I give my students Dr Simba Makoni's budget speeches for the sheer joy of
reading the English turn of phrase. Brother Makoni introduced his budget
speech in 2001 with this lofty sentence. "The 2001 budget will be guided by,
based upon, and targeted at realising the provisions of the Millennium
Economic Recovery Programme (Merp) whose objectives are, (1) fiscal
discipline." Did my beloved brother think seriously that government would
veto any unbudgeted expenditures, say the President's unbudgeted weekly
travels abroad? The speech was for style rather than for substance. But that
is not to say that it was a useless speech. Good words, according to Bishop
Tutu are the essence of Ubuntu itself.

Our beloved Vice President Simon Muzenda, when approached by tourism
operators wishing to implement a petrol voucher system for their clients
from abroad, were met with kindness and understanding. "We were just talking
about your problem in the presidium the other day."

The fact that the vice president had talked about their problem was supposed
to be enough to make them sleep well that night. Their hotel mortgages,
however, due on the first day of the month, could not be paid by kind words,
if no tourists showed up.
In order to run any country, one needs a solid middle class which
understands the implications of rising interest rates and the attendant
pitfalls of a depreciating currency.

My beloved brothers in government are so ignorant of the simplest things in
life. They read about German inflation, a woman carrying a wheelbarrow full
of German marks in order to buy groceries. Such people are either
intentionally wicked when they allow the central bank to charge minimum
interest rates of 540 percent, or they are plain childishly na´ve.

Do they know that the great companies like Walmart and K-Mart in the US are
lucky to make a six percent profit on their merchandise? These brothers have
no understanding when they depreciate money by 18 000 percent. If one owed
$100 and the money was devalued by 18 000 times, one would owe $1 800 000.

Apart from their economic ignorance, my brothers are deliciously na´ve. This
naivety, I believe is embedded in the African ethos as well. Look at the
childish naivety in their welcoming the World Bank representatives. The
World Bank does not care about Zimbabweans, or the Zimbabwean veterans. It
wants us to pay our loans to western lenders. Dr Nyerere asked this
question: "Shall we starve our children in order to pay you?" The answer is
YES, STUPID. Look at their naivety in believing that Britain and the US will
come to their aid? The World Bank is an American bank. It is not going to do
anything against US policy - and US policy requires that formerly
white-owned land be returned to its titled owners or there be adequate
Unless there is a new generation of rulers who appreciate the realities of
the modern world, are not na´ve in believing that the western world is out
to save us from ourselves, who understand that if you build a presidential
house in a neighbourhood, one's neighbours too have mortgages to pay.
Whispers of confiscation can squash property values, and thus the life
savings of one's neighbours.

Now you will say: "Ken, but surely these brothers can learn this new
paradigm." I did not learn this new paradigm at school. I learned it by
running a real estate business. The smallest whispers, say, that the police
are hanging around your restaurant looking for drug dealers, can cause a
shutdown of the business, and a man's lifetime savings goes down the drain.

I don't think the brothers have the slightest idea of what they are doing.
My sister had a life insurance for $240 000 for which she contributed for 25
years. When she died, it was not enough to buy her daughter's uniforms. My
nephew, a newspaper editor, had a good pension of $5 000 a month in the year
2000. He cannot buy one banana with it now.

It is the economy stupid! Mr Blair and Mr Bush are laughing their lungs out
till hell freezes over.
These foolish brothers don't understand a thing about economics.

lThis is part of ongoing research on Zimbabwe's Economic Decline. Readers
are welcome to contact Ken Mufuka at

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Deal with the politics



ALL and sundry are unanimous that turning around the country's faltering
economy increasingly appears more and more like a finite game. But they are
also agreed that the economic problem is not as complex as a crossword
puzzle with only half the clues and no black squares!

They - including those who believe that the country's monetary authorities
have done "well" when there was no rule book to look to - are only too aware
of the limitations of the monetary policy if implemented in isolation, no
matter how pragmatic and well-thought-out it might be. The monetary policy
is not the be-all-and-end-all for Zimbabwe's once reassuringly resilient
economy to wiggle out of the awkward scrapes.
In other words, there should be a well-filled pot of ingredients to be
stirred to brew up measures that will move through the enfeebled economy
like an electric jolt. This means there is need for a holistic approach to
the woes besetting Zimbabwe where the monetary policy is complemented by the
fiscal policy and the politics of the country, neither of which is the case
at the moment.
Which is why, as we have stated before, there has been a deafening chorus
for the powers-that-be to look at the other side of the coin - the politics
of the country which is to blame for Zimbabwe's increasing isolation. Now,
this is a hot-button political issue over which those in ZANU PF can get
their knickers in a twist. But still, it is a cold hard fact which cannot be
wished away.
As we said in our comment of July 15, 2004, Zimbabwe has been ostracised for
a long time and it has come out worse off for it. Predictably, Zimbabwe's
delusional politicians, who no one takes seriously anymore, have tried to
make us believe that the country's political and socio-economic life has
remained unshaken even in isolation! But nothing could be further from the
truth. The isolation has caused an unprecedented meltdown with far-reaching
consequences. The erstwhile regional breadbasket has been reduced into a
land of contagion, shunned by international investors. Not only that but the
stagnation and misery in Zimbabwe stands in stark contrast with the other
relatively robust economies in the region.
Metaphorically speaking, no country is an island and the Reserve Bank of
Zimbabwe governor Gideon Gono stated as much in his no-holds-barred monetary
policy statement last week when he said "as Zimbabwe we cannot go it alone
and it is imperative that we seek to work with other international business
partners". Indeed, we couldn't agree with him more when he said a key
requirement for the sustained turnaround of the economy is the restoration
and rebuilding of Zimbabwe's relations with the international community.
How then does Zimbabwe rebuild the burnt bridges to be reintegrated into the
broader community of nations? Among others, it can do this by:
lComing up with a new people-centred constitution that facilitates a strong
but democratic system of government and explicitly defines and precludes all
authoritarian traits and tendencies as well as ensures increased
accountability of the executive power to the legislative power;
lImproving its human rights record, a major point of bitter attacks by the
international community;
lEnsuring further democratisation and expansion of political pluralism where
people are allowed to freely organise on the basis of their political
convictions without politically motivated murders, wanton destruction of
property as well as bullying and intimidation by political attack dogs;
lAllowing freedom of the press where politically confused and voluble
government spin-doctors who do not want to hear any contradiction or
discussion do not seek to guide journalists piercing through self-serving
veils of government secrecy in search of the truth and information for the
greater good - threatening them with political backlash. It should be
remembered that among the most vital concerns in the world today are the
questions of access to information and the right to free expression as a
cornerstone of the efforts to build democracy;
lRespecting Bilateral Investment Protection Agreements (BIPA) to assuage the
general perception that in Zimbabwe agreements are not worth the paper they
are written on. This will enable the country to attract foreign capital for
infrastructural investment - a lifebelt that could turn the tide for the
lAvoiding policy contradictions and timeously meeting the country's debt
obligations so that its credit rating will not again be reduced to junk
Only this way will Zimbabwe, whose needle is well and truly stuck and is
facing a severe crisis of confidence, regain its credibility and prestige as
well as acceptance by a whole raft of its lost friends.

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Morgan is the man


EDITOR - Students of history always try to understand what makes some people
great leaders. Despite the misguided rebellion led by Welshman Ncube and his
cronies, Morgan Tsvangirai has lately reasserted himself as the party's
undisputed leader.

We believe the Ncube gang, because of its gross political miscalculation,
has now been consigned to the dustbin of history and the party's congress in
March will confirm this.
Tsvangirai has the people rallying behind him - from Beitbridge to
Nyamaropa! Why has Tsvangirai been able to mobilise the people to follow
wherever he leads? Why do the people of Zimbabwe look up to him and choose
to believe in him? What has enabled him to go where no ne has gone before
and bring the people of Zimbabwe with him?
Unlike the elitist Ncube gang, Tsvangirai's personal contribution has been
interpreting the situation to the mass of the people. He has been speaking
to the people and inspiring them to do something about it. He is the voice
through whom every Zimbabwean is speaking his own innermost feelings. And he
has not lost touch with the common people.
Tsvangirai is the symbol of hope, a better future and a prosperous new
Zimbabwe despite the howls of protest from ZANU PF and the Ncube gang.

Nelson Chamisa &
Frank Matandirotya

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Urban mess: Where does the buck stop?


EDITOR - On the ZTV programme, Face the Nation, of January 19 I watched
Minister Ignatius Chombo essentially passing the buck for the urban decay
from his ministry to urban councils.

It is my considered opinion that whichever way we look at it, the buck for
the urban decay stops with the Ministry of Local Government, Public Works
and Urban Development.
In the case of Harare the minsiter, as he has done several times before,
cited the growth of Harare's population as the problem. I don't know if it
has ever crossed the minister's mind that population growth is a natural
phenomenon which is largely predictable and easilyplanned for. How can
anyone expect Harare's population to remain stagnant when the rest of the
country's population is growing?
If the ministry had been doing an adequate job in monitoring and supervising
the situation, they should have noticed that Harare City Council was not
adequately planning for the expansion of the population and they should then
have intervened.
Let us accept Harare's population growth has caught the authorities unawares
this time. What are they doing to plan for future growth. Indeed does
anybody know what Harare's projected population for 2010, 2015 and maybe
2020 is? After all population growth projection is the basic information
from which urban planners develop plans.
The minister also mentioned that Harare has been charging sub-economic
tariffs for too long. The blame for that lies squarely on the shoulders of
government, because they are the ones who have been controlling the tariffs.
I hope the minister's admission on this suggests new thinking in government,
thinking that takes into account long term considerations rather than
immediate political benefits as has become traditional in our government's
Minister Chombo also pointed out that infrastructure in Harare is now old
and had reached the end of its lifespan. Rather than blaming the
infrastructure, the minister should be blaming the planners who failed to
make sure that the infrastructure was upgraded in time. Again the buck for
that lack of planning stops squarely in his office, because he has ultimate
responsibility for supervising them. It would be unfair and unrealistic to
expect the minister to personally have the expertise to evaluate the
technical aspects of planning, which is why people in his position regularly
hire technical experts on short-term consultancies and evaluation missions.
Harare is now faced with a situation where they have to spend lots of money
to try and upgrade a large segment of infrastructure in a short space of
time, when that could have been avoided by having well planned upgrading
schedules. That kind of planning is meant to ensure that instead of
requiring massive resources (money, manpower and materials) all at once, the
financial burden can be spread over several years. In other words it would
have been much better to charge ratepayers 15 to 30 percent more from as
long as five years ago than suddenly spring a 1 000 percent increase in
rates on them this year.
Chombo also pointed out that illegal structures are resurfacing in Harare
and many other places. Let me point out that the monitoring of standards is
not a one-off thing to be addressed by a once-in-25-years-operation like
Murambatsvina but an ongoing exercise. Entities like the City of Harare
should train staff like meter readers to be able to identify illegal
structures and activities and report them to their district offices. Once
informed, appropriate experts can then be dispatched to examine each case in
detail and recommend remedial action within the law. The fact that city
authorities often profess not to know what is going on, when the city
council is paying people who walk to each and every house in the city at
least once a month (if we include garbage collectors), points to simple lack
of resourcefulness and innovative thinking by the city authorities.
In cases of activities like illegal vending and setting up of illegal market
stalls, the city should conduct a survey and classify problems areas
according to some monitoring schedule. They could classify them according to
places which need to be monitored on, say, an hourly basis (like Ximex Mall
for example), those which need to be monitored once a day, on a weekly basis
and so on.
However the bottom line to solving this problem is building adequate and
suitably located infrastructure for vending activities. The city needs to
plan and build many more market stalls, encompassing more diversified
vending activities.
At one point Minister Chombo blamed this year's heavy rains for Harare's
current problems. We have had seasons with heavy rains before but did not
face similar problems, so the rains should not be made a scapegoat.
The real problem is the collapse in Harare's works delivery capacity,
resulting in the city's inability to collect garbage on time, repair
infrastructure like parking lot and road surfaces among others.


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