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EU split looms over summit invitations to Mugabe regime

Julian Borger, diplomatic editor
Friday February 2, 2007
The Guardian

A new split is developing within the EU over sanctions on the Zimbabwean
government, with both France and Portugal considering summit invitations to
President Robert Mugabe that would weaken the diplomatic isolation of his
regime that Britain is trying to maintain.
European officials said there is an agreement in principle to continue
five-year-old EU travel sanctions against senior Zimbabwean officials, and a
formal decision is due to be announced on February 20. However, loopholes in
those sanctions could allow France and Portugal to invite Mr Mugabe or his
aides to summits in Europe, undermining British efforts to keep the
Zimbabwean leader under pressure for human rights abuses.

A French official said yesterday he could not confirm whether President
Jacques Chirac had invited Mr Mugabe to a France-Africa summit in Cannes on
February 14. "The invitations are still being sent. The list will be
published only later."
Portugal is also hoping to invite Mr Mugabe to Lisbon for an EU-Africa
summit in November. Both Lisbon and Paris are concerned that if he is
excluded, other governments from the region, particularly South Africa,
might boycott the meetings. Neither France nor Portugal has so far applied
for exemptions to the sanctions regime to issue invitations on the grounds
that the meetings they are planning will address human rights issues. But
British officials and human rights groups have argued that Zimbabwean
participation in such high-profile events would make sanctions all but

The Harare government has denounced the sanctions as illegal. Nathan
Shamuyarira, a spokesman for the ruling Zanu-PF party, said recently:
"Britain is pursuing a colonial practice, repression of other nations, and I
hope other countries will not be dragged in its sinister agendas."

Any watering down of the sanctions regime would accentuate differences
between the EU and the Commonwealth, which indefinitely suspended Zimbabwe's
membership in 2003, prompting President Mugabe's complete withdrawal.

Donald McKinnon, the Commonwealth secretary-general, told the Guardian
yesterday: "If the EU was to change its stance totally, you're virtually
accepting the nature of the government in Zimbabwe, which I think would be

The group Action for Southern Africa is to protest outside the French
embassy in London today over France's refusal so far to pledge not to invite
Mr Mugabe.

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Mugabe's guards in open rebellion

New Zimbabwe

By Staff Reporter
Last updated: 02/02/2007 08:44:34
TWENTY-THREE soldiers attached to the Presidential Guard Unit have
been arrested and detained after they sprayed President Robert Mugabe's
State House official residency with bullets on Monday night ahead of his
arrival from Ethiopia where he had gone to attend an African Union meeting.

The soldiers, all of them graduates from the Border Gezi National Youth
Service, were disarmed and arrested swiftly by commandos from One Commando
Barracks without putting a fight.

The Presidential Guard is a unit responsible for guarding the President.

Disgruntlement in the army ranks has been increasing since last year when
they were forced to exist on a diet of beans only.

The have been calling for salaries equivalent to those of Central
Intelligence Organisation (CIO) operatives, arguing that their job is more
important as they have to protect the Head of State.

Last year, some soldiers were resorting to armed robberies to raise money to
sustain their families due to poor pay.

As unrest and discontent continues to mount in the Zimbabwean military, 50
soldiers from Inkomo Barracks, another Presidential Guard Unit, shot dead 30
horses before fleeing with their guns on Monday.

New's sources said the arrested soldiers were likely to face
death by firing squad this week as the Mugabe regime moves to instill fear
in the military.

A New source who works at State House said: "The soldiers had
been discussing about their poor salaries and working conditions when one of
them started peppering Zimbabwe House with bullets before being joined by
his fellow soldiers."

They are being kept at one of the military barracks in Harare under very
tight security.

At Inkomo Barracks, the soldiers shot dead the horses which were in the
stables and disappeared with an assortment of AK 47 assault and FN rifles.

President Mugabe delayed his departure from Ethiopia after his aides
informed him about disturbances at State House, sources said.

A government minister said officials arrived at the airport at 6 PM to meet
Mugabe, whose arrival was scheduled for 7 PM, but were shocked to see him
arriving well after midnight.

The minister said: "A delegation of Cabinet ministers and senior Zanu PF
officials was at the Harare International Airport to meet the President but
he arrived after midnight."

One of the President's aides told New that Mugabe did not go to
State House but proceeded to his new Chinese-built £5 million palacial home
in Borrowdale where he has been holed up.

All soldiers at the Presidential Guard Unit have been disarmed and their
duties frozen while the riot police has taken over guard duties at State
House to stop any further uprising, military sources said.

Discontent in the military appears to have been fueled by a Zimbabwe Defence
Forces notice circulated to all military commanders that only soldiers above
35 years of age would be eligible for promotion, triggering mass desertions
from the army.

We asked Defence Minister Sydney Sekeramayi to comment. "It is my policy not
to talk to the media," he said by telephone from his home.

Mugabe, 83 this month, has been in power for 27 years. A combination of an
unprecedented economic collapse and growing opposition within his ruling
Zanu PF party presents the clearest threat to his rule.

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New notes out

Zim Independent

Shakeman Mugari

THE Reserve Bank of Zimbabwe (RBZ) will introduce a new currency to
replace the current bearer cheques any time soon as part of the Sunrise
Project Part Two, the Zimbabwe Independent can reveal.

The new currency was due to be unveiled at RBZ governor Gideon Gono's
monetary policy review held on Wednesday but the announcement was withheld
at the last minute after serious policy considerations.

Yesterday Gono confirmed that the currency change was coming soon but
could not give further details.

"It's coming soon, as for the features that you are talking about I
shall not comment because of security issues," said Gono. "It will be very
soon so people must not keep a lot of cash because we are not going back on
the currency change."

But government sources said Gono could have been bluffing as the
currency was still far from being introuduced.

"This could be a ploy to pre-empt those hoarding cash which is used
for blackmarket activities. Gono is playing mind games here," a source said.

Government sources yesterday said the Zanu PF politburo on Wednesday
approved the introduction of the new currency and what is left now is for
the government through the Ministry of Finance to come up with a Statutory
Instrument declaring the new currency.

The Independent was the first paper to reveal in July last year that
Gono would slash three zeros from the currency. He later introduced a new
family of bearer cheques in August as part of the Sunrise Project.

Gono stated in his address on Wednesday that the new currency was
imminent but did not read out the relevant section (Pages 87-88) during the

"Reflecting this high state of preparedness, I am pleased to unveil to
the nation the sample designs of this imminent roll-out under which all the
current bearer cheques will be replaced by genuine currency, complete with
internationally acclaimed safety features, with convenient characteristics
for the visually impaired stakeholders," stated Gono.

Investigations reveal that the new currency, designed and printed by a
German company, Giesecke & Devrient (G&D) was approved by Gono between June
and October last year. G&D prints currencies for 100 countries in the world
including the euro.

The new currency was delivered to Zimbabwe in October and was supposed
to be unveiled on Wednesday.

Sources said the notes could not be introduced last year due to a
number of technical issues chief among them the need to back the new
currency with hard currency or gold. A source said the central bank has
since September been building foreign currency stocks in preparation for the
introduction of the new currency.

The sources said the central bank was also building up stocks of the
new notes which should be introduced throughout the country in a space of 24

Sources said the imminent currency change is the main reason why Gono
did not devalue the Zimbabwean dollar as was widely expected by the market
when he presented his ninth monetary policy review statement since taking up
his post in December 2003.

The biggest bill under the new currency dispensation is a $1 000 note
while the smallest is a $1 note.

The largest under the current regime of notes is a $100 000 bearer's
cheque while the smallest has a face value of one cent.

The decision not to introduce the new currency as initially scheduled
was taken after consideration of International Monetary Fund (IMF) advice
which said any new currency will not halt the economic collapse until the
macroeconomic situation has been stabilised. The IMF's Article IV
Consultation Mission which visited the country in December advised that
there was need for a "package of mutually reinforcing policies to stabilise
the economy" before any further policy decisions in the pipeline are

The IMF mission said the policy changes which include the removal of
price distortions through removal of subsidies, curbing the RBZ's
quasi-fiscal operations and reduction of money supply would help reduce

The sources said Gono was hoping that the economy will stabilise
sufficiently in the next five months for him to introduce the currency.

Confidential documents in the possession of this paper which are
classified as "Top Secret" show that there will be seven denominations with
$1 being the smallest and $1 000 the highest value. The documents show that
the notes were approved by Gono between June and October last year. The one
and 10 dollar notes were approved by Gono on July 6. The five dollar note
was approved on June 30 while the $20 note was signed off on July 20. The
$100 and $500 notes were approved in September while the $1 000 note was
endorsed by Gono on October 27.

The $1 note has the image of the Victoria Falls and a buffalo while
the $5 note shows the Kariba Dam wall and an elephant. The $10 note portrays
agricultural activity and grain silos while the $20 note has a portrait of a
mine site and a mine with a jack hammer.

The $100 note has a picture of the botanic gardens and the Great
Zimbabwe conical tower while the $500 note has a portrait of a dairy farm.

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Mujuru camp boycotts monetary policy review

Zim Independent

ACTING President Joice Mujuru and her political allies appear to have
boycotted Reserve Bank governor Gideon Gono's monetary policy statement on
Wednesday in a move which confirmed the growing power struggle over
President Robert Mugabe's succession ahead of the expiry of his tenure in 13

Mujuru was conspicuous by her absence on Wednesday. Her influential
husband retired army commander General Solomon Mujuru, who heads a major
ruling Zanu PF faction pushing for his wife's promotion, was not present
either. The Mujurus' key ally in government, Finance minister Herbert
Murerwa, was also missing from the line-up.

Mashonaland East provincial governor Ray Kaukonde, another main Mujuru
ally, was also absent.

Gono on Wednesday complained about the intensifying infighting within
government over Mugabe's job and what he called sabotage of his programme.

"Political maturity also imposes a responsibility on those
participating in that field to refrain from scorched-earth strategies where
well-meaning turnaround programmes are booby-trapped simply for the purpose
of scoring perceived political goals, all in the name of succession
manoeuvrings," Gono said.

He added: "The whirlwind of rumour, needless hatred, scorched-earth
strategies, political jockeying, and the blame game, particularly in 2006,
created a generally undesirable air of mistrust."

Mujuru's office said yesterday that the vice-president did not attend
the presentation because of a Zanu PF politburo meeting on the same day.

"She had other commitments," Mujuru's secretary said. "Remember she is
the acting president. She was preparing for the politburo meeting."

The politburo meeting started at 12:30pm on Wednesday, about 30
minutes after Gono finished his delivery. A number of senior Zanu PF
politburo members such as Emmerson Mnangagwa, Nathan Shamuyarira, Sydney
Sekeramayi, Ignatius Chombo, Obert Mpofu, and Sikhanyiso Ndlovu, attended
the monetary policy review statement. They went to the politburo afterwards.

A senior politburo member said members of the Mujuru faction asked
their colleagues sarcastically before the politburo meeting started "how was
the monetary policy statement?"

A senior Ministry of Finance official said Murerwa did not attend
because he was on leave.

A person who answered Kaukonde's cellphone yesterday said the governor
did not attend Gono's presentation because he was busy.

Mujuru and Gono - together with Mnangagwa - are widely seen as the
frontrunners to succeed Mugabe who is now under pressure to quit.

The Mujuru camp's failure to attend Gono's event is said to have
intensified the succession battle, especially after fresh reports last month
that Mugabe wanted to continue until 2010 as ceremonial president, while
Gono becomes prime minister after March 2008. This is said to have angered
the Mujuru camp. Mujuru's group attempted to block Mugabe's 2010 election
proposal by openly refusing to endorse it in Harare and Mashonaland East

Zanu PF's watershed conference in Goromonzi in December failed to
endorse the proposal after it became clear delegates were opposed to it
despite an initial claim that eight provinces had supported the proposal.
The revolt against the party leadership also led to a failure by the
conference to come up with any other resolutions.

The Mujuru faction is understood to be mobilising MPs to block the
plan in parliament although Mugabe is said to be prepared for a compromise.
Failing that he will take radical measures to sideline those opposed to him.

The Zanu PF politburo met on Wednesday in a bid to defuse rising
political tension over the divisive issue ahead of a crucial central
committee meeting in March.

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Govt obduracy a hurdle to social contract deal - ZCTU

Zim Independent

Ray Matikinye

ZIMBABWE Congress of Trade Unions (ZCTU) president, Lovemore Matombo,
doubts whether a social contract mooted by the Reserve Bank Governor Gideon
Gono in his monetary policy statement could get off the ground because of
government intransigence.

"Gono is calling from the wilderness because no one will listen to
him," Matombo said on Tuesday in reaction to Gono's policy statement.

"The government does not believe in social dialogue, neither does it
believe in consultations."

Matombo said the major hurdle in getting the social contract on stream
is the ruling class who fear being deprived of their affluent lifestyle
based on corrupt dealings.

"If you effect a social contract, you are depriving them of their
lifestyle of self-enrichment through corruption," Matombo said.

He said the ZCTU has tried again and again to engage government on the
need of a social contract but has failed on the basis that such social
dialogue, as has happened in other countries, means they must forgo
opportunities that arise out of them being politicians.

Gono on Wednesday proposed a social contract involving labour,
business, trade unions and civic organisations to tackle an economy that has
been in recession for the past seven years.

In his monetary policy statement, he said the economy could be put
back on track by "a package of holistic and complementary policies
accompanied by a credible sequence of programme implementation backed by
undivided social, business, labour and political commitment".

But Matombo said the government had dragged its feet on the Kadoma
Declaration drafted in 2001 which calls for far-reaching political, social
and economic reforms to reduce the world's perception of Zimbabwe as a
high-risk country.

The Kadoma Declaration noted that the country's problems should be
addressed in their totality for it to move forward.

Government has avoided endorsing it up to now, largely because it
calls for radical reform, especially within the government itself.

Employers, labour and government agreed that they must address
Zimbabwe's country risk factor and improve its image in order to achieve any
meaningful turnaround.

The ZCTU was keen to see the declaration signed at the beginning of
2003 but government developed cold feet, blaming the country's economic ills
on the West and the opposition.

"We have tried again and again to get them back to the Tripartite
Negotiating Forum but we have failed," Matombo said.

"We are going to strike specifically to drag them back to the TNF and
have given them up to February 23 to respond," Matombo said.

He said the he hoped the statement by Gono represented a change of
heart on the part of government.

"In fact, we would want the RBZ governor to pressure government into a
social dialogue with stakeholders because transparency is the only way out
of the economic crisis that we are facing," Matombo said.

He said the strike will coincide with the union's call for government
to abandon the proposed national health scheme to be introduced by NSSA in
July this year.

MDC faction leader Arthur Mutambara said Gono's presentation had a
tacit but unexplored acknowledgement that the Zimbabwean economic crisis is
essentially political. "There is also an admission that this meltdown has
been financially beneficial to Zanu PF leaders and their surrogates,"

He said the social contract depended on solid political will, total
buy-in, inclusive ownership, acceptance of the problems, honesty of
participants, and moral suasion.

"There must be a legitimate government in power, not a regime that is
a product of disputed elections. A regime that brutalises labour leaders,
civic society leaders, business leaders, and political activists, has no
capacity to facilitate the requisite discourse.

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Health scheme a very crucial animal - NSSA

Zim Independent

NSSA's proposed National Health Insurance Scheme has caused an uproar
in the labour market with accusations that its compulsory nature indicates
that it is a form of tax. Workers have also complained about NSSA's meagre
payouts. They have accused the authority of corruption and extravagance.
Shakeman Mugari spoke to acting general manager, Amod Takawira, about these
and other issues.

Mugari: The National Social Security Authority (NSSA) pension scheme
is supposed to provide a safety net yet on retirement beneficiaries get $12
900 a month - money that is not enough to buy 10 loaves of bread. What
safety net is NSSA providing?

Takawira: It remains a safety net despite the amount of the payouts on
retirement. The problem with people in this country is that they don't
understand what they talk about. Take for instance a farm worker who earns
$8 000 per month and NSSA is paying him $12 900 per month upon retirement.
You must remember that the worker is paying 3% of his salary.

Mugari: You are obviously taking the worst case scenario which clearly
reflects positively on NSSA because it's replacing more than 100% of the
worker's salary at retirement. How about a teacher, a nurse or other
qualified employees?

Takawira: People forget that one's pension is a function of their
years of contribution, insurable earnings ceiling and the percentage of the
contribution. Those are the things we use to calculate one's payout. We
cannot invent a new method of calculation so that the worker gets more. No.

Mugari: Then what is the necessity of having a pension that can't even
cover your minimum needs? I mean . it can't pay rent, feed or clothe you.

Takawira: Yes, it is necessary. People are not supposed to live on a
pension, that's why it's called a safety net. Zimbabweans have to learn to
save their monies and invest in other occupational pensions to cover the
shortfall. You have to top it up with savings and occupational pension so
that you cover for the shortfall from NSSA. Even I as the general manager of
NSSA, cannot survive on a NSSA pension.

Mugari: So you are saying people should not bank on the NSSA pension
because it cannot cover their basic needs at the time of retirement?

Takawira: What I'm saying is that people must just work in order to
have a comfortable life upon retirement. We would love to pay as much as we
can but the economy is not performing. Pensions in other countries like the
United Kingdom and the US are doing well because the economies are
performing. We cannot have the same effectiveness because the economy is not

Mugari: But still workers believe that they are getting a raw deal
from NSSA.

Takawira: That is why Zimbabweans die a few years after retirement.
They rely too much on the NSSA pension. They "kick the bucket" because they
did not have a fall-back financial position except for the NSSA pension.

Mugari: Whose idea was it to introduce the National Health Insurance
Scheme? Was it government or a NSSA board initiative?

Takawira: It was the party-Zanu PF-when they were still in the war in
Mozambique. They passed the resolution that at Independence they would
introduce a scheme which includes a pension for employees, housing and
health. I think that resolution was passed soon after Independence.

Mugari: And it took them 14 years to introduce a pension scheme and
another decade to come up with the National Health Insurance Scheme?

Takawira: That was because there was a lot of disagreement and
self-interest. There were consultations since 1982 and the law was passed in

Mugari: But why does it have to be mandatory for every worker to
contribute when most of them have their own medical schemes that offer
superior services to the NSSA one?

Takawira: That is the problem, we operate in cocoons. Why do people
have to worry about that when every decent and progressive country in the
world has got the same scheme where everyone contributes? Even George Bush
and Tony Blair contribute to their own national health schemes.

Mugari: Well, people are worried because they say this is some form of
tax government is introducing to help it fund the collapsing health sector.

Takawira: It's not a tax. The bottom line is that we just have to do
it. Good things start when things are hard. In the UK, workers started the
schemes for themselves during the Industrial Revolution.

Mugari: But you haven't answered the question. Why does it have to be

Takawira: Because people are dying. People are going to witch-doctors.
International trends show that you have to take from the poor to give to the

Mugari: But how will it work when the doctors are always on strike and
the hospitals don't have essential medicines?

Takawira: It works in difficult and good times. The doctors are not
only complaining about salaries. They want drugs. NSSA will give the
hospitals the drugs. We will pay the hospitals in advance for them to buy
medicines and equipment.

Mugari: You call it a national scheme but it does not include the
unemployed and pensioners.

Takawira: It's not possible for them to benefit when they stop

Mugari: Some people say they will challenge the scheme in court
because it's forcing them to contribute towards something they will not
benefit from ...

Takawira: Let them try. They tried to challenge the NSSA pension
scheme and lost. They will lose again. The government or the party were not
dreaming when they started this thing. They will not be allowed to hold the
country to ransom. They will not win. They should not daydream. They must
not be blinkered. This is not Borrowdale. This is a national scheme and they
better realise that they cannot stop it.

Mugari: There have been complaints about the recent purchase of
top-of-the-range vehicles by the authority at a time when pensioners are
getting meagre payouts.

Takawira: We have to give our senior managers cars so that we can
retain them. It's the standard that after some time a company phases out old
cars and buys a new fleet.

Mugari: You mean more than 70 posh cars?

Takawira: That was because we have not been getting vehicles for the
past four or five years because we were not getting the foreign currency. We
finally managed to get it this year so we have replaced the old fleet.

Mugari: How far have you gone with the housing scheme?

Takawira: Since 2000 we have been buying land for future development.
We now have land for housing in Harare, Rusape, Mutare, Masvingo, Kwekwe,
Chegutu, Chinhoyi and Karoi. We have more than 500 stands in each of these
towns. We are in the process of buying land in Bulawayo, Gweru and Bindura.

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Settlers have nothing to show for their 'land hunger'

Zim Independent

Augustine Mukaro recently in Macheke

BARELY a kilometre east of Nhowe Mission in Murehwa South lies what
remains of Arizona Farm, one of the most successful tobacco-producing farms
in the country before government launched its disastrous Third Chimurenga in

The farm was owned by David Stephens who was shot dead at Murehwa
police station by war veterans on Independence Day, 2000.

World-class tobacco curing facilities are falling apart with no one
taking care of the multibillion-dollar investment. The new farmers who are
engaged in zero tillage are unlikely to produce enough tobacco to warrant
the use of such facilities.

The farmhouse, resembling a shell from a ravaged war zone, stands out
on top of a rocky outcrop, all window panes gone and paint peeling off as a
result of seven years of neglect.

Part of the farmhouse has been turned into a shebeen. The rest has
been divided into a barber shop, a carpentry shop and a cobbler's shop.

The cobbler was previously repairing shoes under a tree at Nhowe
Mission with school pupils as his main clients.

"This was the only place we could occupy since it was not being used,"
the cobbler said. "We have been operating from here since 2002 and we are
still serving the same customers."

The shebeen queen who identified herself as Marian Shangwe said her
bottle store had become very popular with teachers from the school since
there was no other beer outlet nearby.

"All teachers come to drink from here," Shangwe said. "Nhowe as an
institution owned by the Church of Christ does not allow the sale of beer
from their premises so teachers have nowhere to go."

The farm compound, one of the few commissioned by the Commercial
Farmers Union (CFU) and recommended as a model to be replicated throughout
the country, is burnt down and deserted.

Everything looks run down and vandalised.

There is no running water in the compound after the Lister water
engine broke down two years ago. At least there is still electricity.

The dereliction at Arizona Farm makes any right-minded person question
whether the people who abducted and murdered Stephens in 2000 were driven by
a hunger for land or simply inspired by greed and racial hatred. Over and
above all, did they really desire land for farming?

Stephens was the first of 12 white farmers to be murdered in the
often-violent land-grabbing orgy that engulfed the country seven years ago.
He was abducted from Murehwa police station where he had gone to report a
disturbance at his farm and shot at point blank range in the presence of the

People in Macheke area know who killed Stephens but the police have
never questioned the man. The police say they are investigating.

After the gruesome murder of Stephens, his wife Maria was forced off
the farm. She moved into a temporary home given to her by Swedish diplomats
in Harare's Greendale before relocating to Sweden.

Ironically, just days before he was killed, Stephens had applied to
emigrate to Australia in frustration after he realised it was futile to try
and change the way the land redistribution was being carried out in

Stephens was one of more than 70 commercial white farmers driven out
of the Machecke/Virginia area at the inception of the land reform programme.
Only seven now remain but with their farm sizes drastically reduced to a
point where one of them was allowed to plant a mere five hectares of

A drive through the expansive Macheke area a fortnight ago left one
wondering whether the people who were allocated the farms seized from white
commercial farmers really needed the land to till. The situation on the
ground does not show a particular interest.

The vast stretches of land that would have been described as seas of
tobacco this time of the year have been reduced to a wasteland of small
patches of maize crop.

The almost collapsing pole-and-dagga huts along Settlers' Road and the
stunted maize suggest that the new farmers were dumped on farmland without
the necessary equipment, knowledge or financial backing to prepare them to
take over from the fleeing whites.

The farmers are failing to utilise the land in the same manner as the
previous owners.

Most of the farmers said they had no resources such as draught power
or fertiliser. In fact they have no other means of survival and often depend
on food handouts from humanitarian organisations.

But not only the farms and farmhouses have been targets of vandalism
or neglect but also facilities that had been put up and maintained from
farmers' contributions.

Virginia Country Club is an eyesore with the thatching coming off. It
has not been used or maintained in the past seven years. The golf course and
a soccer pitch have been turned into grazing land while the clinic is an
empty shell. Poor peasants mill around selling wild fruit in the scorching

The seven remaining white farmers in Macheke still shine as beacons of
successful commercial agriculture although on a drastically reduced scale.

One of the farmers said he was still farming so that the new farmers
could see how it should be done.

"I have been squeezed to about 20% of what I used to do," he said. "I
still feel there is need to soldier on despite the prevailing uncertainty.
But we have not made any new investments for the past five years. We have
got until March to wind up and leave but we will stay."

He said he had applied for a lease but government had not yet

The havoc in the Macheke area is a microcosm of a national tragedy
after a noble cause went horribly wrong.

The agriculture parliamentary portfolio committee in the run-up to the
2006/7 season conceded that this could be the worst in the history of the
country judging from the levels of preparedness and inputs availability.

"The information you have given us simply shows that there is no
season," committee chairman Walter Mzembi was quoted as saying just before
the start of the season last year.

The CFU during the same time warned: "This coming season's production
prospects are the worst since Independence due to inputs shortages and the
lack of a strong message to allow all farmers to produce with confidence."

The Zimbabwe Farmers' Union complained that the funds advanced by the
government for cropping were not reaching their intended beneficiaries.

They also blamed government for failing to provide the inputs on time.

Analysts said production was being hampered by legislative changes and
continued farm invasions that were creating uncertainty for investors to
expand their businesses.

"Nationally, agricultural output has predictably declined further
relegating government efforts to a national joke," one agricultural expert

"The major constraint to increased productivity is the uncertainty of
tenure in the agricultural sector where farmers are evicted on a daily
basis. Continued acquisition notices, disruptions, acts of violence on farms
and lack of land-based collateral are some of the problems farmers face."

Farming experts said continued amendments to the Land Acquisition Act
contributed to the confusion in the agricultural sector. The amendments,
experts say, including the removal of court jurisdiction, will scare away
investors in the agro-processing industry and the agro-forestry sectors that
are capital-intensive.

"It is alarming to note that the Gazetted Land (Consequential
Provisions) Act, was passed," one expert said.

"The Act repeals the Rural Land Occupiers (Protection from Eviction)
Act and prohibits the contest of all land gazetted for acquisition since
2000 in court.

"If the objective of the authorities, by introducing such draconian
legislation, is to get agriculture back to work they are wrong. It is likely
to increase the conflict of ownership on the land and reduce investment in

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Zim must limit presidential terms through constitution - Swedish envoy

Zim Independent

ZIMBABWEANS should work towards putting in place constitutional
guarantees to limit the term of the president, a European Union (EU)
ambassador said this week.

Swedish envoy to Zimbabwe Sten Rylander on Tuesday said it was
imperative for Zimbabweans to come up with a defined term for the president,
as the harmonisation of the presidential and parliamentary proposal mooted
at Zanu PF's conference in Goromonzi last year would not solve the problem.

Rylander was speaking at a ceremony to hand over 600 000 Swedish
kroners (about US$800 000) to the Southern African Development Community
Parliamentary Forum (Sadc-PF) by the Swedish International Development
Agency (Sida).

Rylander said whether or not presidential elections go ahead in 13
months' time when President Mugabe's mandate expires or in 2010, there was
no guarantee that the presidential term limit would be decisively dealt

"It's yet to be seen whether the election will be in 2008 or 2010,"
said Rylander. "But it's no guarantee that if you harmonise the elections to
2010 the issue of a time limit to the presidential term would be solved."

The current Lancaster House constitution, which has undergone 17 major
amendments since Independence in 1980, does not limit presidential terms.
This has prompted civic organisations such as the National Constitutional
Assembly (NCA) to lobby for a new constitution which explicitly states the
number of terms a president can serve.

"As diplomats we are in the country to watch what is going on and have
to leave Zimbabweans to decide their own destiny," Rylander said.

He said although there was a new regime in Stockholm, Sweden's foreign
policy on Zimbabwe was still focused on building bridges. He said they
expected a smooth transition of power and succession to Mugabe thus paving
way for the restoration of economic and political stability.

"I hope that there will be a good succession (to Mugabe) and political
transition that will bring the situation in Zimbabwe back to normal as soon
as possible." - Staff Writer

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Chanetsa tells chinese to tell it like it is

Zim Independent

Itai Mushekwe

FORMER Mashonaland West governor Peter Chanetsa this week brewed a
shocker by clashing with a visiting Chinese tourism delegation comprising
travel agents and media personnel in Harare.

The delegation flew into the country last week and was on an
assessment tour of the country's resort facilities and packages that was
facilitated by the Zimbabwe Tourism Authority (ZTA) and national airline Air

Chanetsa stunned the stakeholders during a press conference with a
candid interjection asking the delegation not to be diplomatic and say
"things as they are". Cecilia Chen, a business manager with the Citic
International Travel Company, was presenting a report on the team's
fact-finding visit to Zimbabwe when Chanetsa interjected.

"When one's jacket is torn at the back, and if noone tells you, how
will you be able to know? So please don't be diplomatic. Just tell us what
you saw so that we can receive you properly."

Chanetsa's candid comment betrayed confusion in government's
much-touted "Look East" policy whose ineffectiveness was there for all to

The visiting Chinese displayed their lack of knowledge of Zimbabwe at
a time when government has declared the Asian economy as its major partner
in reviving the ailing tourism sector.

In giving the delegation's report, Chen contradicted government's
claims of having made significant inroads into the Chinese market, which ZTA
says is now the leading Asian source market.

"Before we came here, most of us did not have a clear image of your
country," said Chen.

"However, following our visit, we now have a clear image."

Chen said the delegation had been impressed by the "security in the
country" together with the people whom she described as being "really nice
and friendly".

But the delegation ruffled Chanetsa's feathers when it claimed that
the Chinese back home were clueless about Zimbabwe's tourism attractions.
They said there was need to set up a publicity and marketing strategy on the
part of government so as to educate and raise awareness about Zimbabwe to
the Chinese clientele.

"We have conducted several workshops in Hong Kong, Shanghai and
Beijing," replied Chanetsa.

"We also have a very effective tourism attaché there, so I don't
understand what you mean when you say you don't have enough information on

The delegation said there was an urgent need for government to upgrade
some hotels and improve hygienic standards in resort areas.

Another concern raised was the country's skewed tourist pricing
regime, which they said was replete with distortions.

On Wednesday, Reserve Bank governor Gideon Gono decried price
distortions in the tourism sector saying as a country Zimbabwe was pricing
itself out of the tourist market through internal price distortions.

"Using an example of a 750ml bottle of mineral water, costing $2 800.
Conversion of this at the official exchange rate of $250 to US$1 yields an
effective hard currency price of US$11,2 which is way too expensive compared
to the regional and international price of the same product at around US$2,"
Gono noted during his monetary review policy statement.

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Gono u-turns on MTAs

Zim Independent

Paul Nyakazeya

IN a major policy u-turn, central bank governor Gideon Gono on
Wednesday introduced new measures allowing money transfer agencies (MTAs) to
dispense hard currency to recipients.

The new policy reverses his 2004 decision which compelled recipients
of foreign currency through money transfer agencies to receive the
equivalent in local currency.

"In order to promote the free flow of foreign exchange in the economy,
with immediate effect, recipients of transfers from the diaspora can be paid
their free funds in foreign exchange without limitations," said Gono.

Gono said the decision was made to encourage relatives abroad, whom he
said were shunning the "safe, legal authorised dealers to transact through
the (in)formal system".

In order to further strengthen the operation of MTAs, an association
of money transfer agencies will be formed during the first quarter of the
year, governed by a binding code of ethics and operations. Those who breach
the code risked expulsion from the association and eventual closure of the

Gono's decision, observers say, could reduce the rate at which the
dollar is falling on the parallel market.

Analysts told the Zimbabwe Independent that Gono's decision could stem
the free-falling of the local currency on the parallel market in the
long-term if the central bank stops the current practice of monitoring how
individuals and companies converted their hard currency into local currency.

Economic commentator John Robertson said foreign currency inflows
would not improve unless demand meets supply.

"There is a very huge foreign currency deficit for parallel market
rates to fall to levels that are anticipated by the authorities."

A bank executive yesterday said government should re-license more
money transfer agencies.

"If people gain confidence in the system, parallel market rates will
fall," the executive said.

"The decision not to devalue the dollar might complement this move if
there are no sinister motives by the bank authorities who have been
unpredictable since Gono's appointment."

Dealers however said the move by the governor could fuel the parallel

"It is a Catch 22 situation. If inflows increase remarkably, rates on
the (parallel) market will fall. But if inflows remain depressed rates will
firm. No one in their right senses will change their hard currency at the
fixed exchange rate," a dealer told the Independent.

In a bid to get control over funds being transferred from the
diaspora, Gono last year outlawed 16 private money transfer operators.

He has since re-licensed seven MTAs. The closure led to a decline in
foreign currency inflows on the official market.

Gono accused foreign and local agencies of "non-performance and
deviant behaviour" that was fuelling the black market.

Most exiled Zimbabweans prefer to use channels that allow their
relatives and friends in Zimbabwe to cash transfers in foreign exchange,
which gives them a much greater value on the parallel market. An estimated
3,5 million Zimbabweans are living abroad, mostly in South Africa, the US
and Britain.

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Tekere sues Herald, Sunday Mail, Chihuri

Zim Independent

Itai Mushekwe

MAVERICK liberation war veteran and former ruling party
secretary-general, Edgar Tekere, has hit back at President Mugabe accusing
him of treating party members as personal assets.

This followed President Mugabe's assertions last weekend that Tekere's
"brains are not there any more".

President Mugabe was responding to Tekere's book, A Lifetime of
Struggle, released last month in which he revealed that he invited Mugabe to
take up the Zanu PF leadership. Mugabe has however said he personally chose
Tekere to travel with him to Mozambique.

Tekere told the Zimbabwe Independent on Wednesday from his Mutare home
that the ruling party had been shaken to its foundations because his book
had exposed the truth.

"Ndavafumura. Vataurirwa idi. Ndizvo zvavasingadi," ("I have exposed
them. I have told them the truth and they don't like it.").

"They have always been making trouble for me because I stand by the
truth and as you know the truth hurts."

Tekere said Mugabe had no reason to like him and had been angered by
his autobiography at a time he was fervently fighting intra-party divisions
over his plans to become life-president.

"Ikozvino anehondo yekufira pachigaro, saka anogondifarira sei
achinyepa kuti ndiye akandisarudza kuti tiende Mozambique?" ("Right now he
has a personal war to die in office as president, so how can he like me
while lying that he selected me to go to Mozambique with him?")

"He wants to pocket me. And that's the problem with Mugabe, he wants
to pocket people like they're his personal assets. That's why you hear him
calling me all sorts of things. Zvino ini handizvidi ("I don't like it.")

"It is Mugabe himself who is proving himself a liar."

Tekere also said he was suing Police Commissioner, Augustine Chihuri,
the Sunday Mail and the Herald for injuring his persona.

Through his lawyers Joseph Mandizha of Mandizha & Co, Tekere is suing
the Sunday Mail, which published a damning article on January 14 dismissing
him as a mental case who had distorted the history of the liberation
struggle in his book.

"The defamation suit against Chihuri arises from comments he made in
the Herald, which were very defamatory," said Tekere.

"I am at the preliminary stage of the suit but we haven't done the
intensive interviews," Tekere said .

Chihuri blasted Tekere's book in heavy political vitriol rubbishing
his claims of having been instrumental in elevating Mugabe to power.

Chihuri, a member of the Zanu general staff at the time, said Tekere
was an alcoholic of "roughish" character who also suffered from mental
instability, therefore his account of the liberation struggle was not

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Timid policy stuns markets

Zim Independent

Dumisani Ndlela

CENTRAL bank governor Gideon Gono stunned a highly expectant market on
Wednesday after presenting a timid monetary policy statement that threw away
everything in a move interpreted as suggesting growing hostility between him
and his principals.

"There was nothing on action," a dejected bank executive told
businessdigest. "This seems to suggest that he is admitting that monetary
policy can not achieve a turn-around without the necessary support from
fiscal policy."

Gono, who has faced a barrage of criticism from ruling party
stalwarts, has been largely blamed for failing to revive a faltering
economy, but critics say it has been mainly a profligate state and
speculative tendencies by ruling party bigwigs that had weighed down Gono's
efforts to turnaround the economy.

Gono, who had become well-known for his boldness, with a radical
approach that had characterised what had become an unorthodox monetary
policy regime under his governorship, washed his hands of the country's
controversial economic reforms, instead committing them to government and
stakeholders under a yet-to-be signed social contract that yesterday
received backing from the business community but received only lukewarm
support from labour and the opposition.

He said while his quasi-fiscal operations, which he said had helped
prevent the collapse of the agricultural sector and industrial operations in
the country, had been blamed for stoking inflationary fires, the reality was
that "startling contradictions and distortions currently prevailing in the
economy" were "the major mill-stone around the economy, requiring head-on
attention before we look at the central bank as the source of our hardships.

"Time has thus come that the truth and facts be allowed to speak for
themselves in the interest of building a credible policy intervention that
will meaningfully deliver Zimbabwe out of the current difficult
circumstances," Gono said.

He said price distortions in the country were "the real mill-stone
around our economy", a veiled rebuke to government policies that have
allowed multiple prices for basic commodities.

"As a nation, we have put our heads together and accept the fact that
the current situation where the GMB (Grain Marketing Board) is buying maize
from farmers at $52 500/tonne, whilst selling the same to millers at a mere
$600/tonne. (This) is not sustainable by any standard," Gono said.

He also mentioned the pricing of fuel, sold at $330 per litre for
diesel to farmers when the market price is at over $4 000 per litre, as
"discouraging our farmers from engaging in agriculture itself, as many are
now finding it more profitable and less problematic to simply trade the fuel
on the parallel market instead of production".

"These anomalies can not be allowed to persist if the economy is to
ride out of the current crisis," Gono said.

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Industry captains support Gono

Zim Independent

Shame Makoshori

CAPTAINS of industry yesterday rallied behind Reserve Bank governor
Gideon Gono's monetary policy statement, saying an all-inclusive social
contract involving all stakeholders in reviving the country's frail economy
had their backing.

But analysts warned the suggestion for a social contract, while
laudable, was unlikely to find favour from the labour movement which has
previously clashed with government over policy issues.

"The government does not believe in social dialogue, neither does it
believe in consultations," charged Zimbabwe Congress of Trade Unions
president, Lovemore Matombo.

Gono on Wednesday said the country's economic recovery would not
succeed without implementation of a social contract.

"We are now working from one paper," Mara Hativagone, president of the
Zimbabwe National Chamber of Commerce (ZNCC), said.

Speaking at a press briefing at which she was flanked by Confederation
of Zimbabwe Industries (CZI) president Callisto Jokonya, Hativagone said
Gono's monetary policy marked a paradigm shift in that there was now
acknowledgement of the role of stakeholders in the economic revival project.

In a statement jointly signed by the presidents of the CZI and ZNCC,
Jokonya and Hativagone said Gono had taken "on board the majority of the
recommendations and inputs from the private sector, in particular the urgent
need for the implementation of a home-grown holistic economic turnaround
programme involving all stakeholders".

"We're totally behind the statement. We feel that the governor has
fully highlighted the concerns of industry," said Jonkonya.

The opposition gave a cue that it would not support the proposed
social contract.

Tendai Biti, MDC secretary for economic affairs, said: "To suggest,
for instance, a social contract under a situation of hyperinflation is
unscientific and unrealistic.

"A political solution will pave way for a sustainable programme of
reconstruction, economic transformation and stabilisation. At the core of
this reconstruction must be the understanding that this country has
experienced 10 years of economic decline, a shrinkage that is unmatched even
in countries that have engaged in full-scale wars," said Biti.

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Gold production slumps 21%

Zim Independent

Shame Makoshori

ZIMBABWE'S annual gold production slumped 21% last year to a paltry 11
tonnes, from an output of 14 tonnes recorded for the prior year, according
to figures released by Reserve Bank of Zimbabwe governor Gideon Gono on

The decline is in line with projections made by independent analysts
who blame poor policies and a fixed exchange rate.

Erratic payments to gold miners by RBZ subsidiary, Fidelity Printers
and Refineries, which has reneged on a commitment to pay gold producers in
foreign currency, has also been blamed for the slump in output.

Statistics from the Chamber of Mines indicates that the 2005 gold
production amounting to 4 023kg was 52% down on the prior year's production
of 21 330kg.

Gono, who refused to heed calls from the sector for a devaluation of
the local currency, did not acknowledge payment problems to miners as part
of the reason for the decline in annual production.

The official line has been that miners have been pillaging the country
of huge amounts of gold smuggled into South Africa.

Gono said the decline in gold output was a result of ageing equipment,
reduced exploration and mine development and the illegal trading and
smuggling of gold.

Gold miners have said failure by Fidelity had resulted in their
failure to import critical spare parts and capital equipment to repair or
replace antiquated machinery currently used on mines.

Earlier this week, gold miners told besinessdigest that most gold
mines had been forced to scale down production because of the erratic
payments from the RBZ.

The unreliable payments had resulted in failure to procure spares.

They warned of a further decline in output this year if the exchange
rate regime did not change.

Gono kept the exchange rate fixed at $250 to the US dollar.

Chamber of Mines chief executive officer David Murangari last week
told businessdigest that the industry was experiencing payment problems from

Businessdigest reported in November that the RBZ, through its
subsidiary Fidelity, had failed to pay gold producers US$9 million and Z$610
million for gold delivered between September 7 and November 2.

The Chamber of Mines had voiced its concern over the development,
saying in a letter to the central bank the move could result in the closure
of gold mines.

"The silence that prevails in such difficult times does nothing to
build confidence in policy announcements and we strongly suggest that the
authorities provide the industry with some explanation of the challenges
being faced by the RBZ (in making payments to gold producers)," the chamber
wrote in a letter to the RBZ dated November 15. Businessdigest understands
that the central bank has not yet responded to the letter.

The gold output has declined consistently since reaching a high of 29
tonnes per annum in 1999.

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Dairy farmers stop milk production

Zim Independent

Pindai Dube

DAIRY farmers have stopped milk production in protest over
government-imposed price controls, businessdigest established this week.

The protest has resulted in a country-wide shortage of milk and dairy

The government, which has imposed price controls on most basic food
commodities, has pegged the price of milk at $1 050 per litre, a price dairy
farmer say falls far short of meeting production costs even without ensuring

"We have stopped milk production until the government heeds our call
to leave market forces to determine the price," said Ezra Ndlovu, an
executive board member of the National Association of Dairy Farmers (NADF).

"Input and production costs are very high and therefore we can't
operate in such an environment with continued interference," said Ndlovu.

Dairy farmers are demanding a review of milk prices from the current
price to at least $3 000 per litre.

They also insist that government should have nothing to do with the
pricing of dairy products as they are no subsidising farmers in the running
of dairy farms.

The Minister of Industry and International Trade, Obert Mpofu, was not
available for comment.

A probe on the supply level conducted by businessdigest indicated that
supermarkets in most major cities and towns were experiencing a shortage of
milk because they were not receiving supplies from producers.

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Zim dollar firms marginally

Zim Independent

Paul Nyakazeya

THE Zimbabwe dollar gained marginally yesterday on the parallel market
after initially running riot Wednesday on news the Reserve Bank of Zimbabwe
(RBZ) had refused to devalue the beleaguered currency.

The exchange rate on the parallel market receded to $4 800 to the
greenback after touching $5 200 to the US unit on Wednesday afternoon trade
soon after RBZ governor Gideon Gono's monetary policy statement in the

Gono kept the US dollar fixed at $250 to the greenback on the official
market, saying

He had devalued the local unit to $250/US$ in July last year after the
rate had been kept at $101 to the greenback since the beginning of the year.

There had been strong sentiment that Gono would devalue the local unit
to between $750 and $1200 against the US dollar.

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Govt's dithering on EPOs suicidal - mining experts

Zim Independent

Paul Nyakazeya

PRESIDENT Robert Mugabe's refusal to sign Exclusive Prospecting Orders
(EPOs) will hamper growth and further reduce foreign currency inflows into
the country, analysts and mining experts said.

They said Mugabe's decision would damage the mining sector, one of the
few sectors still accounting for the few receipts trickling into the foreign
currency market and accounting for 4% of the country's gross domestic

International and local investors have over the past two years been
scouring for fresh mining concessions in the country, particularly those
with platinum, gold and diamond deposits.

Some established investors were also renewing their EPOs for
concessions that they already hold.

EPOs are rights allocated to miners to explore possible mineral

The exploration stage is the initial stage of any mining activity,
although a more expensive process of feasibility study always follows when a
concession is established to be holding meaningful mineral deposits.

In 2003, 12 EPOs were either granted or renewed, with over 20 having
been issued in 2004.

The EPOs apply to minerals such as gold, silver, platinum, palladium
and many other metals.

Businessdigest understands that no fresh EPOs were granted in 2005 and
2006, throwing many potential investors into a quagmire of sorts.

Other mining companies have lost EPOs held over certain concessions
after government had alleged these had been held for speculative purposes.

Last year, the Minister of Mines and Mining Development revoked 13
exclusive mining prospecting rights for three companies, including giants
Rio Tinto and Anglo American.

The move was taken after central bank governor, Gideon Gono, urged the
government to take action against under-utilised mining rights and claims.

Gono had alleged that the mining sector continued to under-perform
because of "under-utilisation of some mining rights, where potential
investors keep mining claims for years without tangible operational plans".

"What is not appreciated is that the time between exploration and
actual investment takes anything between five to 10 years," a mining expert
told businessdigest.

He said Rio Tinto, for example, had started exploration for diamonds
in Zimbabwe in the early 1980s, but only commenced mining operations after

"Exploration which discovered all the platinum deposits in Zimbabwe
commenced in the early 1970s, but production has only taken off recently.
Exploration on the Hunters Road nickel deposits commenced in the 1980s, but
up to now no production has taken place there," the expert said.

Independent economic consultant, John Robertson, said the decision not
to sign Exclusive Prospecting Orders would not only result in lack of
investment, but mine closures.

"The delay in signing Exclusive Prospecting Orders will cut back on
investment in the country. Investors will eventually look elsewhere if they
realise that operations and decisions in the country are more political than
for the good of the economy," said Robertson.

Finance minister Herbert Murerwa said during presentation of his
budget proposals for 2007 that lack of extensive recapitalisation at
existing mines and investment in new mining exploration programmes had
remained a major constraint to the growth of the sector.

"This has been compounded by disruptions to power supplies, coupled
with rising mining production costs which affect viability. The spiralling
cost of capital items, due to inflation, is being exacerbated by the rising
parallel market exchange rates at which most imported items are priced,"
Murerwa said.

Murerwa said the sector was being plagued by mineral leakages,
especially that of gold and diamonds.

A government-proposed amendment to the country's minerals laws is due
to be tabled in parliament soon, and is envisaged to give historically
disadvantaged persons and government a 51% stake in foreign and
privately-owned mines.

A mining executive who spoke on condition of anonymity said Mugabe's
government was "shooting itself in the foot" as the decision not to sign
EPOs would negatively affect mining output and investment in future.

"The mining industry is a capital-intensive industry and takes a long
time before any profits can be realised. Most of the capital required in
this industry is foreign currency which is not readily available in the
country," the executive said.

Zimbabwe's mining industry has been contracting over the last six

The gold sector has been - affected the most, with production having
fallen from a high of 29 tonnes per annum at its peak to the current 12
tonnes produced last year.

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Forex shortage cripples livestock breeders

Zim Independent

Pindai Dube

A SHORTAGE of dipping chemicals has crippled the livestock breeding
industry in the country, with market players saying the foreign currency
crisis had hampered the import of the chemicals.

The situation has become so dire that many farmers in the cattle
breeding industry were losing a large number of beasts due to diseases that
could easily be eliminated with dipping.

Businessdigest this week gathered that Chemplex Chemicals, the major
chemical supplier to the Department of Veterinary Services, was not
importing amitraz, a dipping chemical that is commonly used by cattle
ranchers to treat animals, because of foreign currency shortages.

The little that the company often manages to secure is not enough to
meet demand, industry players said.

The situation has seen most farmers countrywide dipping their beasts
once in three months, instead of weekly.

Department of Veterinary Services director, Stuart Hargreaves,
confirmed that there was a critical shortage of amitraz as their supplier,
Chemplex Chemicals, had no foreign currency to import the chemical.

"There is a critical shortage of amitraz as our major supplier,
Chemplex Chemicals, is currently having problems accessing foreign currency
to import the chemical," Hargreaves said.

"Currently, cattle dippings are not being carried out regularly
countrywide because of this problem," he said.

Hargreaves said they were looking forward to an improvement of the

Chemplex Chemicals marketing officer, Mike Ncube, confirmed that there
was a shortage of amitraz due to foreign currency unavailability.

He refused to give more details, referring businessdigest to company
management who were not immediately available for comment.

"There is a shortage of amitraz due to foreign currency unavailability
and that is all I can say to you. For more details, talk to senior
management," Ncube said.

Livestock breeding farmers said the current rains had resulted in
beasts having tick-borne diseases and other diseases like heatwater,
redwater and gall sickness.

The Veterinary Services Department has in the past said they had no
alternative for chemicals, as the country is facing foreign currency
shortages that hinder imports of chemicals.

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Zimbabweans taxed to poverty

Zim Independent

Dumisani Ndlela

EVERY working Zimbabwean has one major problem with pay day - a raft
of deductions depleting inadequate incomes.

But two deductions have turned out to be a major bother: pay as you
earn (PAYE) and payment towards a compulsory pension scheme proposed by the
National Social Security Authority (NSSA).

Now, NSSA, which has been accused of failing to properly manage the
compulsory pension scheme, and has come under attack from both labour and
business for paying pensioners a pittance - barely enough for a bus fare to
even make the initial claim - from the retirement fund, is within the cusp
of introducing another compulsory levy on long-suffering workers: a national
health insurance policy that will be charged at double the pension scheme.

For those who might be unfamiliar with what a Zimbabwean worker's
payslip looks like, here is a sample: there is a double deduction for
pension, one to the normal pension scheme chosen for employees by the
employer, and another to NSSA; medical aid deductions to a medical aid
society of the employee's choice; and the PAYE deductions.

With the introduction of the national health insurance scheme by NSSA,
workers will be liable to double deductions for medical aid.

The effect of the NSSA deductions, even without the new compulsory
medical insurance policy, makes Zimbabweans part of the league of the most
heavily taxed citizens in the world, among them the four high-tax Nordic
countries - Sweden, Norway, Denmark and Finland. The difference with Nordic
states is that their system offers comprehensive safety nets for all ages
including pensioners.

Last year, PAYE tax collections were projected to have reached $80
billion, nearly 30% of total revenue, against a target of about $40 billion.

Finance minister Herbert Murerwa indicated that PAYE would now exceed
35% for incomes higher than a determined threshold.

Because of the inflationary environment in which employers have been
forced to regularly review salaries and wages, many employees are likely to
fall into the tax band compelling them to pay income tax in excess of 35%.

In his budget proposals for this year, Murerwa indicated that the
positive performance of PAYE reflected the award of higher than anticipated
salary and wage settlements in both the private and public sectors last

After PAYE deductions, workers are forced to pay more tax on groceries
and other basic commodities, and the Value Added Tax (VAT) levels have
increased with hyperinflation-induced daily price increases on the market.

VAT also performed spectacularly well last year, with collections
amounting to $61,5 billion, or 27,5% of total revenue, at the time of
Murerwa's budget presentation late last year, against a target of $49,2

VAT on local sales amounted to $42,3 billion, and that on imports to
$18,3 billion. "Improved VAT collections were attributed to price increases
of goods and services, as a result of the current hyperinflationary
environment, and were also complemented by the August 2006 movement in the
official exchange rate used in valuation of imports. VAT collections are
expected to end the year at $100 billion," Murerwa said.

Yet there is very little to show for the country's high tax regime in
terms of benefits to citizens.

According to a study conducted by the Canadian Centre for Policy
Alternatives (CCPA) late last year, people who live in countries with higher
taxes enjoy lower rates of poverty, have more equal income distribution,
more economic security for workers and can expect to live longer.

The study's authors, professors Neil Brooks and Thaddeus Hwong,
suggested that tax cuts could be "disastrous for the well-being of a nation's

Yet Zimbabwe's disaster has been its high tax regime which has left
citizens wallowing in poverty, with no social and economic security, and an
uneven income distribution.

The CCPA study, which compared the four Nordic countries with six-low
tax Anglo-American countries - the UK, US, Canada, Ireland, Australia and
New Zealand - suggested that the four Nordic countries scored better than
the lower-taxed countries on most of the 50 indicators measured in the

These inlude:

* Rate of poverty, equality of income distribution, and economic
security for workers;

* GDP per capita;

* Rate of household saving and net national saving;

* Innovation, including percentage of GDP spent on research and

* Growth competitiveness as ranked by the World Economic Forum;

* Rates of secondary school and university completion;

* Rate of drug use; and,

* Leisure time.

The more lower taxed countries came out on top in seven of the 50
indicators, including their sense of freedom, their suicide rates and the
number of people reporting they are very happy.

Countries with higher tax revenues include Norway (41,9%), France
(43,4%) and Finland (46,2%). Sweden tops the list at 50,5%.

Sweden and many other developed countries have a comprehensive social
security system subsidised by taxpayers. The benefits in Sweden include free
hospitalisation and medical facilities, education at all levels, including
research, unemployment pay and pensions for all citizens, and their budget
also includes substantial provision for support to families who are
financially vulnerable.

Britain, one of the low-tax countries, has a comprehensive social
welfare system created through social reforms undertaken 60 years ago when
government drew up plans for a welfare state.

The National Insurance Act (1946) led to a raft of legislation
offering a social safety net to Britons. "Cradle to grave" protection was
born, that, despite rigorous and often controversial reform, still exists

"In Zimbabwe, people are getting nothing back for their taxes," says
independent economic consultant, John Robertson. "In the Nordic countries,
the people get massive delivery of services back to them for their taxes."

NSSA, highly acclaimed when it was established in the 1990s, has
failed to offer any social protection to the country's beleaguered
workforce. Experts say NSSA should have led a vigorous campaign for social
reforms in the country using the vast funds taken away from workers through
its compulsory scheme.

In South Africa, the social pension scheme has reduced older people's
poverty by 94% and that of the population as a whole by 12,5%. In Zimbabwe
NSSA has grown fatter while the population is looking distinctly thinner!

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Economics, not politics, should save Zimbabwe

Zim Independent

By A Special Correspondent

ZIMBABWE has the distinction of having the highest inflation and the
fastest declining economy in the world.

The country used to be the breadbasket of the Sadc region and was a
promising nation ready to take off in 1996 and yet today, in 2007, the
country is on its knees, has experienced serious capital flight (both
financial and intellectual), has an unemployment rate of over 80% and has
arguably the most pessimistic economic outlook in the world.

Why has a glorious revolution turned into a basketcase? What can be
learnt from similar cases worldwide and can the current pathetic situation
be changed by the existing leadership?

The problem in Zimbabwe is that since the mid-90s, cabinet decisions
have been made on the basis of politics and not economics. The ruling party
has been preoccupied with remaining in power through making political
decisions which have not been in the best interests of the country.

The irony of the situation is that a ruling party can remain in power
more easily by making good economic management decisions rather than by
making political decisions which are not compatible with good economic

Take the decision to award war veterans the gratuities they got paid
in late 1996. While veterans of the war of liberation deserved some form of
reward for their sacrifices, the decision should have been to create some
business ventures which would have created employment for them rather than
to pay them cash, which in most cases was spent recklessly and therefore did
not contribute to economic development at all.

Had the money been used to create some ventures from where the war
veterans would have received some income, then the war veterans themselves
would have had long-term income, rather than the quick benefit most of them
got. It must be remembered that most of them were not investment-savvy and
were never going to make brilliant investment decisions anywhere.

The president had enough clout with the war veterans that any
suggestion from him on the way forward would have been accepted. He needed
to put together the best investment minds in the country to come up with a
long-term solution which would have recognised the role played by the war
veterans without compromising the dream or revolution for which they had
sacrificed their lives for.

In fact the sum paid out was huge, and could have easily bought a
reasonable chunk of the Zimbabwe Stock Exchange at the time. An investment
vehicle for the war veterans could have been created to handle their
collective gratuities and had that been done and managed properly, today,
this vehicle could have been one of the richest and most influential in the

A golden opportunity was lost for short-term gain. Today most of the
war veterans are probably worse off than they were in 1996 and cannot even
account for the money they got as gratuities.

While it is a fact that one of the reasons the war of liberation was
fought was for the equitable distribution of land, there can be no argument
that the intention was never to reduce the country to a basket case as has
happened in the last few years. The redistribution of the land was a
necessity, but did it have to be done in a way which virtually destroyed the
economy of the country? This is another typical example of political ends
being put before economic sense.

Were there no other economically and politically sensible ways of
carrying out this important task? The truth of the matter is the ruling
party was at the point where they could have lost power; they therefore
chose a politically expedient route rather than a route which would have
safeguarded the economic integrity of the country.

Depriving the white commercial farmers of the land and subdividing it
into economically unviable units in some cases was never going to make
economic sense. The argument always given is that rural farmers were
producing the bulk of the food crops before the onset of the land
redistribution exercise, so the dissipation of the commercial farmers was
going to have minimal impact on the economic wellbeing of the country.

Commercial farming played a critical role especially in the cash crops
which earned the nation valuable foreign currency. In addition, the
commercial farmers also produced a sizeable maize crop, which cannot be

One can argue that commercial agriculture before the land
redistribution exercise had more in common with the industrialised world
than the rest of the agriculture industry in Zimbabwe. It must be borne in
mind that no industrialised country is dependent on agriculture for the
growth of its economy.

The title system in the farming areas has been changed dramatically
and it has become difficult for farmers to obtain credit from banks. The
recently instituted 99-year lease system is a step in the right direction,
but what must be borne in mind is that the integrity of the property rights
system in the country has been tampered with and it will take time for
lenders of finance to gain confidence in the system.

Worldwide, it has been demonstrated that wherever property rights are
not respected, there will be no substantial economic growth. Even in China
and Malaysia, our so-called friends, property rights are respected.

In Zimbabwe, the government chose to compromise the system of property
rights for political ends. Again this is an example of political ends
justifying the means.

Politicians sometimes argue that in Africa, as long as the people have
enough food, they will be happy and there will be no need for them to change
the government. This argument is not necessarily true; the rural folk want a
better life and are tired of toiling in the fields for a subsistence living.
These folks want to educate their children, they want to live comfortably
and be able to save for their retirement.

The question is: do Zimbabweans want to remain peasant farmers or do
they want to become something else better? Can't we as a nation aspire for
more than just wanting the majority of our people to be just small time

The issue of the exchange rate is one example where politics has
totally clouded rational thinking. Prior to 2003, the Reserve Bank largely
ignored the parallel market, although there was a fixed official rate at
which exporters had to sell currency to the government. Exporters were
viable and were expanding their businesses. In fact during that year, the
parallel rate rose and then came down as more export capacity was brought on

From 2004, there was a serious clampdown on parallel market dealings,
with the official exchange rate kept at economically insensible levels.
Exporters made huge losses and went out of business. Forex became scarce and
the parallel rate started running at incredible rates.

The argument from those charged with directing policy was that if the
exchange rate was left to the market, goods and services would be beyond the
reach of many. This argument lacks logic and can never be justified in any

With the shortage of forex on the official market, manufacturers of
goods and services have had to rely on the parallel market for their
imported inputs and have factored the parallel rate in the prices of their
goods and services, so the ordinary people are already bearing the parallel

Even the RBZ bought forex on the market at parallel rates to meet some
of its requirements, particularly but not limited to the recent payment of
arrears to the International Monetary Fund (IMF). The RBZ has continued to
buy currency on the market and it is no secret that it has been approaching
exporters for forex and offering rates which are well in excess of the
official rate.

So who is benefiting from the controlled exchange rate? It's certainly
not the ordinary people who have voted (or not voted) the government into
power. It is a few individuals who are benefiting from this economically
foolish decision to hold the exchange rate at unrealistic levels.

Some well-connected individuals and companies have been able to access
the forex and even after they have accessed it, they have gone ahead and
charged for their goods and services as if they obtained the money from the
parallel market. In fact they do better than this as they work on the basis
of what they think the parallel rate would be by the time their goods and
services are sold and paid for.

Take for instance the recently imported farm equipment that included
tractors and combine harvesters. The beneficiaries must have paid for them
at the official exchange rate of $250:US$1 when the market rate was already
well in excess of $2 500:US$1. If one is not well-connected I doubt if they
received a tractor or a combine harvester.

Would a person accessing such benefits be in a position to make the
right economic decision when he is benefiting from the irrational system

The right economic decision remains letting the market determine the
exchange rate at which exporters are paid for their forex. As more companies
and people enter the export market, more forex is generated and the rate
will stabilise over time. The prices of goods and services will not
necessarily go up as the parallel rate already reflects the supply and
demand situation on the ground.

In fact, it can be argued that the rate is moving rapidly because it
is being determined in opaque circumstances; if exporters and importers are
left to determine the rate on their own, in a transparent way without fear,
then the rate would not march forward so rapidly.

There is always the argument that public institutions like hospitals
still need to access cheap forex to meet their drug and equipment
requirements as their services are also accessed by the poorest of the poor.

On the surface, this argument makes a lot of sense but in reality it's
a political statement without merit.

If economic activity picks up in the country and more local and
foreign investors invest new capital, more jobs will be generated and the
unemployment rate will come down. The government will collect more taxes and
will have enough money to subsidise the very poor when they access services
such as medical attention at public institutions.

The pricing of electricity is another example where one can see that
those charged with running our country have really lost their direction. How
on earth do you allow a vital part of the economy like Zesa to incur such
huge losses and have its infrastructure totally collapse like we have
witnessed in Zimbabwe?

For years industry has been warning the government that the country
would experience a huge shortage of power unless tariffs were raised to
economic levels which allowed for equipment replacement and expansion in
line with demand forecasts.

The government chose to ignore the advice and continued to force Zesa
management to charge uneconomic tariffs for political considerations
ignoring the old adage that "a cheap energy policy is a no energy policy".
One wonders whether the people making such "economically foolish" decisions
are not the true "enemies of the state".

The pricing of fuel is a further perplexing example of political if
not self interest driving decisions. Who exactly is benefiting from $350 per
litre fuel? Are the ordinary people of Zimbabwe benefiting from this fuel?

Industry is contributing 7,5% of its export earnings to the Energy
Stabilisation Fund but is not getting any fuel from the National Oil Company
of Zimbabwe. Obviously someone else is benefiting from this fuel, and if one
digs deep, it might turn out to be the very people who are making the
decision who are the main beneficiaries.

What Zimbabwe needs today is a government which will put the welfare
of Zimbabwe ahead of political considerations.

It must be accepted that Zimbabwe needs help from outsiders, namely
the IMF, World Bank, the European Union, the United Kingdom and the US. We
need to look East, West, South and North for help. We need to make the hard
political decisions; we need to swallow some strong bitter medicine if we
are to get ourselves out of the rat hole we have put ourselves into.

RBZ governor Gideon Gono can issue as many monetary policy statements
as he wishes, but as long as there is no political will to make the tough
decisions, it will amount to nothing. Failure is the only option open to
Gono as long as there is no political will to make the difficult but correct

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Extensive research could have helped ZBC on fees

Zim Independent

By Sekuru Gonzo Batorava

THE ZBC listeners' licence fees have caused a lot of havoc and
unnecessary pandemonium among the ever-suffering, poor Zimbabwean public.

We are the poorest people on earth and our "one and only broadcaster"
has added yet more suffering.

I had a feeling that our so-called "legitimate" government would feel
pity for its people, but alas, this has turned out to be the opposite.

Come to think of it: a farm labourer (call them by this name because
they really work hard on farms owned by Zanu PF chefs) earns between $5 000
and $7 000 a month and is asked to pay $50 000 for a radio listeners'
licence - once off payment - not in installments.

What he is asked to pay is almost what he gets over a year as his
wages. If that farm labourer is lucky enough to own a TV set, then he should
fork out $150 000. Those fortunate enough to own cars are also in for a rude

For that radio, which they rarely or only listen to when they are
driving, they should pay $200 000 for a listener's licence.

I use public transport every day to and from work and I have never
listened to Radio Zimbabwe or Spot FM, but musical cassettes only.

If ever you get into a car where the driver will be listening to any
of our four stations, it will be Hondo Yeminda (propaganda) blasting your
ears for which you have to fork out $200 000 listeners' licence fees.

This government of "ours" never ceases to amaze me.

Sometimes one is forced to think that they use batteries when
thinking. As soon as the battery is flat they cease to think straight till
it is recharged - if it is rechargeable at all.

If the ZBC ever thought they would rake in trillions of dollars, they
are fooling themselves as people are determined not to pay these exorbitant

They should carry out extensive market research to gather what
listeners and viewers want to hear or see on their not-so-easy-to-get

Last year's exercise was a flop and the ZBC should have taken heed and
carried out extensive market research. Most people have joined video clubs
because they are fed up with Zanu PF bigwigs appearing on their screens
day-in and day-out and the lies.

God is no fool, all this will come to pass some day.

I am hurt by the numerous wrongs that Zanu PF robbers, thieves, thugs,
plunderers and propagandists have done to us.

* Sekuru Gonzo Batorava is a pseudonym of a writer from Chitungwiza.

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Solution lies in political change

Zim Independent


IT was a different Gideon Gono we saw on national television on
Wednesday morning. Unlike on previous occasions, the Reserve Bank governor
was noticeably less ebullient during his monetary policy statement
presentation this week.

His call for "unity of purpose" in confronting the nation's myriad
problems was the groan of a desperate, anguished technocrat. For the first
time Gono admitted the country was at a crossroads, warning "unless us as
Zimbabweans do something about our situation on our own . the current
economic difficulties will deepen to irreversible levels".

He said 2007 should be the "turning point" in the nation's efforts to
reverse a relentless slide which started 10 years ago. Without naming names,
Gono noted: "We currently observe latent political tensions .arising from
the economic hardships people are experiencing across the board. Such
disunity and distrust between us does not augur well for an economy seeking
to turn around and take off."

We will deal with the second issue first - the need for a political
settlement. To say the political tension in the country is latent is a gross
understatement by Gono. This country has been crying out for political
change for a long time, more so since the crisis of legitimacy created by
President Mugabe's disputed re-election in 2002.

That problem has been compounded by the Zanu PF government's titanic
failure to turn the land into the economy since the launch of the Third
Chimurenga in 2000 as an empowerment tool for the poor. The precipitous
economic decline that Gono laments reflects the utter failure of that
political decision to undercut the settler economy, which was firmly
underpinned by agriculture, without first planning a substitute.

This has created opportunities for other political formations who
think they can put things right. The tension arises from Zanu PF treating
this legitimate claim to political office as criminal activity inspired by
foreign forces. The Movement for Democratic Change which President Mugabe
loves to demonise as a creature of the British is a product of his failed
policies and has captured a huge constituency among the country's urban
poor. It cannot be wished away without fully addressing the poverty stalking
the nation.

Gono might be challenging ordinary Zimbabweans to take the destiny of
their country into their own hands before the crisis reaches "irreversible
levels". This is a task which the MDC has failed to accomplish for various
reasons, among them an irresolute leadership and brutal state repression.

This failure has turned the opposition into cynical opportunists who
instead of ruing Gono's policy setbacks as a national tragedy, celebrate
them as if, in a perverted way, they signified a positive achievement of
democratic forces towards political change. This has been most evident with
inflation figures where every missed target is greeted with schadenfreude.
It is Zanu PF, or government or Gono who has failed, not the nation.

Gono's call for collective action also arises from a realisation that
neither Zanu PF nor the MDC has a solution on its own. He pointed out in his
statement that no single political grouping could "single-handedly drive our
political agenda and achieve the desired results".

Nowhere is this more self-evident than in opposition forces banking on
a mass exodus of senior Zanu PF officials to join the MDC in opposing Mugabe's
bid to extend his term of office to 2010. Strangely, this pious appeal is
not directed at the underclass in both parties who should vote for freedom
in next year's presidential election but at the same people who have been
crafting policies which have pushed the country to the brink, the same
spineless politicians who couldn't tell Mugabe in Goromonzi that his time
was up.

It calls for a very inspirational and visionary leader in the
opposition for a senior Zanu PF member to turn his back on the luxuries,
security and opportunities found under Mugabe's wings. There is none at the

Gono pointed out: "Our people are crying for holistic solutions and
not halfhearted efforts or piece-meal programmes; they are crying for action
and not just talk or endless meetings ..."

The statement speaks to both parties and each one knows what its
limitations are. While Gono's monetary policy statement was a huge let down
for those looking for quick-fix "solutions" in the form of interest rates
and a currency devaluation, it has the merit of appealing to the national
interest in both Zanu PF and the MDC. For in the end the real solution lies
in significant political change and a new leadership which has the courage
to tackle the "distortions" in the economy and in politics.


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A legacy of bankrupt leadership

Zim Independent

Candid Comment

AS Zanu PF pulls out all stops with preparations for President Robert
Mugabe's 83rd birthday, the question on everyone's mind is: Can Mugabe
bequeath the so-called "born frees" a legacy that offers a future of hope
and prosperity?

This year's theme for the annual event that is modelled on North
Korean-style worship of the "Great Leader" is "Youth empowerment for a
prosperous and peaceful Zimbabwe".

It sounds incongruous and discordant.

The Zanu PF Secretary for Youth Affairs, Absolom Sikhosana, is under
the illusion that the theme is "going to inspire youths to work harder for
the country".

Sikhosana says it is noble for the youths to emulate the lifestyle and
sacrifice Mugabe has made for the country.

Mugabe, who turns 83 on February 21, has presided over a nation
initially offering hope with excellent prospects of a bright future for its
citizens since he took the reins from Britain 27 years ago.

His uninterrupted rule, notwithstanding commendable achievements in
the early years, has gradually lost its purpose. Now, few doubt he retains
power for its own sake.

There is commonplace deterioration in living standards owing to an
unprecedented economic recession over the past decade, more specifically in
the last seven years since the start of the so-called Third Chimurenga.

The land invasions destroyed the productive agricultural sector and in
turn undermined the manufacturing sector. Instead of being empowered,
resettled peasants were impoverished.

What is there to emulate in a leader whose misrule has spawned a
flight of human capital, essential for national development, into the

The host countries have taken advantage of high skills and work ethic
among thousands of emigrés to develop their own economies.

Not least have been the Nigerians in Kwara State, neighbouring Zambia
and Mozambique who embraced dispossessed white farmers.

The disastrous consequences of decades of misrule have created a new
generation cultured in an ambition to run away from their country to escape
poverty if they want to make a living and lay a foundation for a bright
future for their children.

Mugabe has reinvented "taking the gap" as an attractive option for
young adults who are convinced that he has no chance of finding a solution
to their joblessness and lack of opportunities.

There is little to admire in a leader who has driven highly-skilled
and enterprising Zimbabweans into neighbouring countries where they have
excelled in their ventures.

Mugabe can do little to absolve himself of blame for creating a
desperate generation of people born over the past 27 years.

He once confessed that his government's seizure of white-owned farms
had benefited fewer than 10% of black Zimbabweans who were promised new
futures as commercial landowners.

The relative handful of winners was disproportionately drawn from
Mugabe's senior ranks, with cabinet ministers, army generals and judges all
helping themselves to land.

There is little for the youths - who can no longer complete their
education because of high fees - to emulate. There is also little they can
emulate from a leader who has presided over a health delivery system that
collapsed under his nose. Neither is there anything to emulate from a leader
who has turned their parents into daily scroungers and subsistence traders
hardly able to bring home the bacon.

One of the dominant facts of the Zimbabwean life during the latter
part of Mugabe rule has been the decay in governance. The country barely
functions as cabinet ministers spend most of the working week on their

And the youths will have to learn to emulate such a feat?

What they could find extremely difficult to emulate though, in order
to be in the same league with Mugabe, is masking the lust for power as an
ultimate form of nationalism.

Youths have to learn also to emulate fixing their eyes on the past and
refuse to notice changes going on around them.

But first, they have to go through the Herbert Chitepo School of
Ideology because the person whose life they have to emulate does not believe
they are patriotic enough, or of the right ideology to emulate him.

It is a sad commentary on his bankrupt leadership that the youths of
this country need to be instructed in what to think because right now they
don't like what they see!

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No masterstroke from 'your governor'

Zim Independent

Editor's Memo

By Vincent Kahiya

THOSE who expected miracle cures and magical feats from Reserve Bank
governor Gideon Gono in his monetary policy statement delivered on Wednesday
should have been grossly disappointed.

There was no such master stroke from "your governor". There were no
shocks this time around, neither was there an immediate solution to the
major problems like inflation, money supply growth, foreign currency
scarcity and so on. The governor chose to stick to convention, proposing a
raft of measures that have in the past been thrown on the table but largely
ignored or implemented half-heartedly.

Between taking intermittent sips of water, the governor complained
about distortions in the economy which had resulted in huge agricultural
subsidies and differential pricing in commodities, especially fuel. Going
forward, he proposed a social contract of all stakeholders to right the

He envisages a "package of holistic and complementary policies,
accompanied by a credible sequence of programme implementation, backed by
undivided social, business, labour and political commitment at al levels."

The simple translation to this mouthful is that Zimbabwe should revive
the Tripartite Negotiating Forum framework or its successor, the National
Economic Consultative Forum in which the United Nations Development
Programme poured vast amounts of resources in the hope of fostering national
dialogue. This has been a monumental failure dating back to 2001 when the
social partners under TNF - government, labour and capital came up with the
Kadoma Declaration.

The declaration came after a realisation that it was necessary to
address the totality of the macroeconomic problems including the country
risk factor in order to turn around the country's economy. The government
did not sign the declaration.

Gono should understand that the quest for a social contract is an
uphill task as long as the Zanu PF government continues to attach a criminal
tag to the other two partners.

The government has not disguised its hatred of the Zimbabwe Congress
of Trade Unions, whose leaders were bludgeoned by the police last year. The
beating up of the leaders received endorsement from the highest office
despite the illegality of the police action.

The Public Order and Security Act remains government's most expedient
weapon to emasculate and criminalise labour. Government would rather talk to
a conveniently pliant Zimbabwe Federation of Trade Unions which it helped to
establish. One leg of the tripod is already grossly compromised here.

The other leg has also fallen foul of the establishment. Employers
have been at the receiving end. They have been accused of profiteering,
hoarding of commodities and aligning themselves with the opposition. Senior
managers from manufacturing and retail firms have been arrested for raising
prices of commodities. In the eyes of government they are saboteurs.

Parastatals and other quasi-government bodies live a charmed life in
which they are allowed to raise tariffs with impunity. ZBH is one such body.
It raised tariffs to levels where a television licence for its single
humdrum channel and radio licence are now more expensive than an annual
subscription to a full DStv bouquet. Just do the calculations using the
official rate. Gono forgot to mention this distortion. Then there are other

Gono proposes as part of his planned wage freeze - something akin to
swear words to workers already on strike or clamouring for more money. He
expects government to reduce its appetite for luxuries and benefits such as
preferential exchange and interest rates. Talk of a bartender preaching
abstinence to a drunk. Business is expected to narrow margins, endure
temporary loss of export competitiveness
and market growth. In this inflationary environment?

It still however makes sense to achieve national consensus but the
objective at the end of the day should not be determined by President Mugabe
and his praise-singers but by all the partners. The partnership should never
be one to achieve political entrenchment but national progress. Labour and
employers will understandably resist any attempt to be coerced to
rubberstamp failure.

A new deal entails a paradigm shift in how Zanu PF perceives the
crisis. The crisis has deepened because of Mugabe's preoccupation with the
politics of regime-change. There is need for a complementary political
settlement to the social contract. That cannot be achieved as long as the
political space is dominated by one hopelessly lost party.

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Mudede a strange fellow who won't learn

Zim Independent


THE registrar-general, Tobaiwa Mudede, is a strange fellow. Despite
losing a string of court cases on citizenship against Zimbabweans he doesn't
like, he believes the courts will one day favour him with a positive

A 2005 case against lawyer Joseph Sibanda should have taught him that
he was fighting a lost cause. But he is obviously not one to be frustrated
by lawyers who probably don't understand what appears to be a political

In that case Mudede wanted to deny Sibanda a passport because both of
his parents were born in Malawi although he was born in Zimbabwe. He said
Sibanda must first renounce his Malawian citizenship before he could get a
Zimbabwe passport.

Bulawayo High Court judge Tedius Karwi ruled that Sibanda was a
citizen by birth.

Mudede apparently didn't read that judgement, or if he did, he didn't
want it to get in the way of his crusade against "unpatriotic" Zimbabweans.
Last year he went for Trevor Ncube, whose mother is Zimbabwean while his
father was born in Zambia. When Ncube submitted his passport for renewal, he
was told he was no longer a Zimbabwean citizen. Mudede said Ncube had not
renounced his Zambian citizenship in 2001 as required by law.

Ncube took the case to court and Mudede lost once again after High
Court judge Justice Chinembiri Bhunu last week ruled that there was no legal
basis to strip Ncube of his nationality as he was a Zimbabwean by birth. So
what is Mudede going to do now?

He has now lost three cases involving this paper and its publisher
trying to defend the indefensible. It should not be part of his job
description to pursue state vendettas against individuals or newspapers.
Instead he should concentrate on running an efficient passport office and
credible voters' roll, something he seems unable to do. If he had been
subject to a performance contract in the private sector he wouldn't have
lasted more than five minutes.

How does he explain the current embargo on the issuing of passports
and what is he doing to address the situation?

We liked the picture on the front page of the Herald on Saturday. It
focused on National Security minister Didymus Mutasa and Harare metropolitan
governor David Karimanzira at the ground breaking ceremony for a housing
project for senior civil servants at Gletwyn Farm near Chishawasha.

The picture had the incongruity of amateur actors forced on stage.
Mutasa put on a dustcoat which looked crisply clean and pressed to fit the
occasion. There was Karimanzira ramrod straight, resplendent in a black
suit, a spotted tie, polished black shoes, spectacles in place - and then a
shovel on his shoulder.

It makes a caricature of sincerity.

We wish to welcome old new town clerk Tendai Mahachi to Town House.
Welcome to Cholera City Sir.

Mahachi told the Herald last week that the greatest asset he was
bringing to the post of town clerk was his "tenacity" as a leader "who can
crack the whip". We are keenly waiting to hear the sound of the whip. So far
there has been none and cholera is spreading.

But there was more that was revealing in the interview. Mahachi said
little had been done to implement the "turnaround strategy" he helped craft
as far back as 2004. He said the strategy was in "jeopardy" and needed to be

We shall judge you by your own words Sir. At least you won't blame
anyone for proposing a turnaround strategy that doesn't work.

Many in the South African media will feel indebted to Judge Leslie
Weinkove of the Cape High Court who, in a R250 000 defamation case brought
by writer Ronald Suresh Roberts against the Sunday Times, established the
following benchmark which will hopefully become part of regional case law.

The Sunday Times had correctly argued, Justice Weinkove ruled, that
"Roberts is a public figure who on the evidence has been engaged in robust
public discord, including harsh venomous criticism of other public figures.
He has publicly attacked Nadine Gordimer, William Gumede, Judge Raymond Leon
and others, and in doing so, has set a standard which legitimately
constitutes an invitation to be used in judging him."

Any harm done to his reputation was self-inflicted, the judge said.

Let us remember that when self-important officials, who regularly
attack civil society and the independent press, are tempted to try their
luck in court.

We were interested recently to note the comments of Retired Col
Tshinga Dube who, when not manufacturing arms of war, heads the Matabeleland
Development Foundation. He said in an interview with the Sunday News two
weeks ago that it was better known as the MDF. Which is hardly the case
because nobody has actually heard if it!

People shouldn't just sit back and be cry-babies, the colonel said,
but should form development committees.

Which is all very well when there is investment coming into the
country but not so easy when there isn't.

Is this a government that encourages investment? He wasn't asked. And
when asked what he had achieved in the past three years since he became
chairman, he said he had done "quite a bit to keep the fire burning".

He didn't say what fire that was. Then he remembered that he had
helped draw up a strategic plan. But that seemed to be it. Before he took
over, the whole organisation had "gone to the doldrums".

What interests us about this interview, which follows an opinion piece
in the Financial Gazette, is what explains this sudden bout of energy?

Dube was asked about the fate of the Development Trust of Zimbabwe
which had seen the abandonment of tomato processing equipment at Arda's Balu
Estate and the Ekusileni Medical Centre that failed to open its doors.

"They tried, that much I know," was the response. But they need strong
leadership. Then of course there's the economy.

"These projects are not unique in that they have not pulled up very
well... As you know, there has been a great economic decline from the late
1990s up to now. Even many companies have closed down."

So there you have it: We tried but we failed. Meanwhile, we wonder how
ZDI is doing?

Zimpost has hiked charges by over 100% with effect from last week,
Business Herald reports. This comes hard on the heels of a hike in October,
we are told.

What would be the fate of a private-sector company hiking its prices
like this? A spell in prison for its managers no doubt! And you can bet your
bottom dollar that the Consumer Council of Zimbabwe will remain mute over
this latest state-inspired boost to inflation. No wonder post offices are

But the most outrageous news comes from ZBC TV which has announced
that TV licence fees have gone up from $650 to $150 000 and radio licence
fees from $200 to $50 000. As Olley Maruma pointed out in a letter to the
editor of the Herald, this represents a severe assault on the public's right
to information, even if that information is of rather dubious value.

Certainly ordinary Zimbabweans won't be able to afford these fees that
are more than many people's wages. In any case, DStv offers better value for

What the Zimpost and ZBC hikes reveal is a state utterly indifferent
to the hardships of its citizens and meanwhile making a significant
contribution to the inflationary surge which in turn erodes their incomes.

Muckraker's attention was drawn last week to full-page adverts in the
Herald praising India as "the largest and fastest-growing free market
democracy in the world". This was to mark India's 58th Republic Day

The ads were accompanied by commentators in the Herald saying India
supported Zimbabwe's "economic turnaround".

India's economic growth over the past 10 years has indeed been
impressive. Part of the reason for that is that the country has abandoned
the rigid state controls that characterised economic policy in the four
decades after independence. Like China, India has opened up its economy to
investment. In other words, it has adopted reforms that Zimbabwe continues
to reject.

But Indian society continues to reflect widespread discrimination on
the basis of caste and biting poverty for the majority of its citizens.
Meanwhile, its government pursues vastly expensive nuclear and armaments

At the same time India continues to indulge in the redundant mantras
of Afro-Asian solidarity without doing much to assist civil societies and
democratic reform in the African countries with which it has close

In Zimbabwe, India has assisted in the fields of telecommunications,
power and transport. But it has said nothing about policies that discourage
investment and growth. To be fair, it is doubtful that India has actually
said it supports Zimbabwe's economic "turnaround", as reported, when no such
thing exists. And if it is backing Zimbabwe at the IMF, it has yet to tell
us what balance-of-payments support can do for this country when it refuses
to address macroeconomic distortions.

India needs to focus on policies in Africa that support investment,
stability and growth. And if India boasts of being the world's largest
democracy it needs to do something about cultivating democracy beyond its

On a parting note Muckraker was interested to note that the ads billed
Prime Minister Dr Manmohan Singh as "His Excellency". We know that title is
applied to India's president. But surely not to the prime minister?

Finally, let's remind those in authority to stop this nonsense about
Zimbabwe's detractors "tarnishing the image" of the country abroad.

The arrest and detention of eight church leaders, including Ecumenical
Support Services head Jonah Gokovah and blind pastor Ancelimo Magaya, has
done more damage to Zimbabwe's standing than anything Morgan Tsvangirai
might have said.

The church leaders were arrested in Kadoma by riot policemen equipped
with AK-47s, sjamboks and teargas, it was reported, in front of 400
worshippers. They were subsequently detained at Rimuka police station and
Kadoma Central.

Reports of their arrest and detention were carried around the world.
They were in Kadoma to establish a chapter of Christian Alliance, a
non-violent advocacy association.

Their arrest was a violation of their right to freedom of assembly and
worship. Next time you read in the Sunday Mail about plots to discredit
Zimbabwe ahead of the EU's sanctions review, remember this episode - an
entirely self-inflicted wound.

Click here or ALT-T to return to TOP

Zinwa must be stopped

Zim Independent

By Eric Bloch

GOVERNMENT'S determination to control anything and everything knows no
bounds. Its arrogant belief that it is omnipotent is overwhelming, in the

Were it to be government's deliberate intent to achieve the total and
absolute destruction of Zimbabwe in almost all respects, it could strategise
to do so no more effectively than to formulate the very cataclysmic policies
which it not only persists in pursuing, but does so with ever greater

The Zimbabwean economy, such as still remains, is indisputably one of
the most regulated in the world, and the bevy of excessive regulation is one
of the most pronounced reasons for its appallingly distressed state.

Government dogmatically persists in imposing price controls, allegedly
in order to protect the inflation-oppressed, poverty-stricken populace.

In practice, these controls only worsen the lot of the population as a
whole and of the impoverished in particular.

Commerce and industry cannot survive on the spuriously unrealistic
price ceilings that government recurrently places on milk, sugar, bread,
flour, maize-meal, beef, and much else.

As a result, invariably those commodities are not available, other
than from black market sources at markedly higher prices than those
prescribed by government, and usually at prices that are considerably
greater than if determined by free market forces in an economic environment
of adequacy of supply.

This has been long-drawn to the attention of government, but
dogmatically ignored.

Presumably, the disregard is because of the entrenched government
conviction that it knows best, and that none can in any way run the economy,
other than itself.

Of course, another motivation is possibly that so many as are enriched
by black market operations are within, or close to government.

To an excessive extent, government controls the economy, albeit
ineptly and catastrophically, through a myriad of parastatals, most of which
are accorded the protection of being total monopolies (in contrast to the
private sector which is restricted from monopolistic operations by
legislation, administered by the Competitions and Monopolies Commission).

Government repeatedly talks of privatisation of parastatals, but it is
naught but talk, to the extent that it continues to acquire further
commercial interests, the latest being Olivine Indusries.

Virtually all of Zimbabwe's mineral wealth can only be marketed
through the Minerals Marketing Corporation of Zimbabwe, which is yet another

The Cold Storage Company is vested with exclusivity of export of beef.

The Grain Marketing Board not only has a virtual monopoly on the
purchase and sale of grains, but now plans to diversify into milling, and
possibly bakery operations.

No independent television or broadcast services exist, or are
permitted to exist whilst those from abroad are increasing jammed!

Whilst reasonable labour legislation is essential, to prevent unjust
labour exploitation and to protect the health, welfare and safety of
workers, Zimbabwe's labour legislation is so intense that government,
through its Ministry of Labour, wields almost total control.

It does so counterproductively, for the controls are so excessive that
there is a growing reluctance to employ labour beyond absolute, unavoidable
need. As a result, the magnitude of unemployment is greatly exacerbated.

More recently, government has amply demonstrated its control- mania by
its specious issue of the so-called 99-year agricultural leases. In reality,
government can so readily terminate the leases that they offer no security
of tenure.

Moreover, despite governmental protestations to the contrary, the
leases have no collateral value, and therefore do not facilitate enough to
be able to produce any crops, and the farmers are not only restricted on
where many of their commodities may be marketed, but also by predetermined,
unrealistically low producer prices determined by government.

However, these are not the only areas of governmental controls as
impact negatively upon the economy and render it evermore distraught. It
wields vast controls over the local authorities, who are accorded minimal

Almost all that the local authorities may do are subject to the
controls of the Ministry of Local Government, including approval of budgets.
Those approvals are invariably untenably long withheld, afflicting the local
authorities with devastating cash-flow constraints, most of which are
grievously worsened by endless governmental tardiness in settling
indebtednesses to the local authorities.

The ministry has wielded total control, for a prolonged period of
time, over the city of Harare, having suspended the democratically-elected
council and replaced it with a commission of government-favoured appointees.
That commission has endured far beyond its statutory term. Now government
has determined to intensify its gridlock on the city of Bulawayo.

Unilaterally, devoid of any good and sound grounds, the Zimbabwe
National Water Authority (Zinwa) has determined to take over the city's
water operations - nay, correction! to steal those operations for it does
not even intend to pay for them. The Minister of Water Resources and
Infrastructural Development, Engineer Munacho Mutezo, has announced that
"the government has made a decision to give the Bulawayo water supply to

Not only is there not a single credible reason for such an action,
other than to deprive the city's local authority of a major revenue source,
and thereby emasculate its operations but there is also no valid ground to
vest Zinwa with the authority to operate Bulawayo's water and sewer
reticulation systems. Zinwa has a deplorable record of performance.

At this very time, the Environment and Management Agency (Ema), which
is a department of the Ministry of Environment and Tourism, is reportedly
investigating possible action against Zinwa for the discharge of 200 million
litres of raw sewerage into Lake Chivero - Harare's principal water
resource - via the Mukuvisi and Marimba Rivers.

That is not the only instance of alleged Zinwa mismanagement. The
Nyamandlovu Aquifer has, for more than a decade, not only provided
agriculture in the Nyamandlovu area with much water, but has been a critical
source of back-up supply to the city of Bulawayo. Zinwa apparently failed to
maintain the aquifer network adequately, allowing the infrastructure to fall
into great disrepair, with most pumps and other equipment vandalised by
squatters and illegal farm invaders.

In view of that failure, and Zinwa's recurrent lack of finance, the
city of Bulawayo provided Zinwa with $500 million to repair and replace

Of approximately 50 boreholes, only about 12 were rehabilitated. Zinwa
had proposed to lease 39 boreholes to the city of Bulawayo, but at the
present time, notwithstanding the financial assistance accorded to Zinwa by
the city, only two boreholes are currently functional!

If Zinwa cannot manage the water and sewage systems of Harare, cannot
maintain effectively the Nyamandhlovu Aquifer network, and is renowned for
its mismanagement of water delivery at Victoria Falls, how is it possible to
have any credible expectation of effectively managing Bulawayo's water

And, even in the very unlikely event that it could, why should it? In
exceptionally trying circumstances of climatically constrained water
availability, of cash-flow constraints beyond the city's control, it has
striven vigorously to assure the maximum possible availability of water fit
for human consumption. There can be no realistic expectation that Zinwa can
do better! Furthermore, the city of Bulawayo has, over the decades, invested
trillions of dollars of residents' monies into developing its waterworks and
resources. Why should Zinwa acquire them without fair payment? Is that not
tantamount to theft?

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Zim Independent Letters

Moyo's utterances smack of sour grapes
WHILE it is a bit rich for Jonathan Moyo to label other people
President Mugabe's propagandists, it is ironic that just over a year ago he
was aiding and abetting the same regime that he now sees fit to criticise.

It smacks of sour grapes.

He goes on to say: "Tekere ... one of Zimbabwe's leading freedom
fighters to whom we owe our national Independence ...".

Zimbabwe's Independence is hollow. We were much better off by a
million miles during the Smith regime, freedom-wise and economically. People
are sicker, poorer and less free than during the colonial era.

No wonder Labour politician Herbert Morrison once warned: "To give the
colonies their Independence would be like giving a child a latch-key, a bank
account and a shotgun."

Nationalists like Mugabe, Tekere and company, have shepherded the
long-suffering people into abject penury. They were mere paupers who had
reached a dead end in their teaching careers who decided on a money-making
venture in politics.

Independence has been the world's messiest experiment in cultural and
political change. People in this European construct are more divided than
ever before between the nouveau riche and a powerless majority.

Why everyone in Zimbabwe seems to glorify the so-called armed struggle
is beyond comprehension.

There exists an unwritten rule which excludes those who did not
participate from having a say.

Everything is dictated by semi-illiterates like Sheba Gava aka Vitalis
Zvinavashe, Augustine Chihuri and Rex Nhongo aka Solomon Mujuru.

Tonderayi Chinengundu,


How about an Operation Dzidzo for students?
THE government has "declared" it criminal for one to be educated by
increasing fees at tertiary institutions and reneging on its obligation to
give loans to students around the country, a move viewed by many
level-headed students as a direct attempt to make tertiary education a
preserve for the rich.

The move will affect a lot of students negatively as there will be an
unprecedented percentage of dropouts as a result of the new fees structure.

The new policy bears testimony to what government has repeatedly said
through various ministers; that education is not a right but a privilege to
be enjoyed by a few in the elite circle.

According to the United Nations Education Scientific and Cultural
Organisation, education is a fundamental right which every person is
entitled to, and cannot be negotiated or compromised.

Education can thus be availed to its intended beneficiaries if the
state obligations under existing instruments are incorporated into the
national legal system, their implementation ensured effectively, and the
right to education in its various dimensions is incorporated into the
constitution and legislation of the country.

Currently, the constitution does not guarantee the right to education
and government is under no obligation to provide the service.

Reserve Bank governor Gideon Gono has publicly trivialised delivery of
higher education through various actions.

He has capacitated the new farmer through a multi-million dollar loan
facility through the Agribank input scheme financed by the central bank even
though the new farmer does not have collateral.

Why doesn't the governor, who claims to be the most sincere man left
in Zimbabwe, cultivate faith in students in tertiary institutions and fund
them under Operation Dzidzo?

The government has previously set up a Warriors Fund-raising Committee
to raise funds for the Warriors to go to Egypt at the expense of over 12 000
"Academic Warriors" at the University of Zimbabwe whose needs should be
prioritised more than the Warriors.

The government has thus trivialised education by prioritising football
ahead of capacitating the future of Zimbabwe.

Tineyi Mukwewa,

UZ Student Executive

Council president.


      Probe CBZ's source of forex
       IT is now widely known that CBZ Holdings Ltd has now acquired
the 100% "A" class shares previously held by Andrew Weir for a considerable
£3 000 000(+/-$1 500 000 000 at the official rate and +/-$30 000 000 000 at
the market rate).

      The story here is not the size of the transaction but the source
of the foreign currency used to purchase these shares.

      I am disappointed that a newspaper such as yours, with an
excellent reputation for investigative journalism, missed the story.

      Was this money obtained from the Reserve Bank of Zimbabwe,
presumably at the official rate? If not, what was the source of the foreign

      Was it the parallel market? If so, the CBZ should be prosecuted
as all other financial institutions were, since 2003.

      If the source of the funds was the RBZ, we would all be grateful
if you could investigate whether the governor is still a shareholder in the
CBZ and if so, find out if he declared his interest.

      I am disappointed that exchange control authorities would
sanction such a transaction which does not add any value to the GDP of

      That foreign currency could have been allocated to purchase
drugs for our hospitals or allocated to manufacturers to keep Zimbabweans in

      Can you please get your investigative team to unravel this
puzzle? I smell a big rat.





            The bright side of high licence fees
            ACCORDING to notices put up in the post offices in
Bulawayo, the new radio and TV licence fees are out of this world.

            Could someone tell me if I misunderstood what I read! A
radio licence was $20 (revalued), but is now $50 000 - a whopping 2 500
times the old fee.

            A TV licence went up from $650 to $150 000, 231 times the
old price, while a car radio licence fee rose from $600 to $200 000.

            Those increases amount to respectively 249 900%, 23 000%
and 33 200%. In other words, they bear absolutely no resemblance to the
official inflation rate of approximately 1 280%.

            If I pay for a radio, TV as well as a car radio licence, I
would have to pay a total of $400 000, or more than $1 000 per day!

            If you convert the new fees into US dollars via the
official bank rate of $250:US$1, we will have to fork out US$200 for a radio
licence, US$600 for a TV licence and US$800 for a car radio licence!

            Nowhere in the world would a national broadcaster charge
such exorbitant fees.

            And nowhere in the world would members of the public be
prepared to part with such amounts for that matter. But that's the reality
in Zimbabwe as the majority do not have access to foreign currency.

            Has the ZBC been given permission to use the parallel
exchange rate when setting their licence fees? By whom? - Gono?

            One definite advantage though is that the statistics for
car radio thefts will decrease dramatically because before the thieves can
lay their hands on them, many will have been removed from the vehicles by
their legitimate owners.

            I never imagined I would be spared ZBC propaganda because
of failure to afford licence fees.

            Silent Night,


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