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Debt Trap Proposal Divides Govt

Thursday, 04 February 2010 20:03

GOVERNMENT is divided over Finance minister Tendai Biti's proposal to put
Zimbabwe in the realm of the Highly Indebted Poor Countries (HIPC), as
Zimbabwe battles to extricate itself from a huge debt trap.

The new war of attrition is the latest round pitting Reserve Bank governor
Gideon Gono who is opposing the debt relief plan and the Finance chief whose
proposal is under consideration by the unity government.

Zimbabwe has a US$5,7 billion external debt

Addressing delegates at a Debt Repayment Workshop yesterday in the capital,
Biti maintained that HIPC was the best option for government because the
other options did not offer Zimbabwe a "holistic and viable approach to its
debt and arrears problem".

Biti produced a comprehensive document on debt and arrears clearance which
is under government discussion.

In his document, the treasury proposed four debt and arrears clearance
options which include mortgaging mineral resources to clear the growing
debt; servicing through internal revenue inflows; Paris Club
debt-rescheduling; and the HIPC option for consideration by cabinet.

Biti has proposed that Zimbabwe should adopt HIPC status because it has some
advantages which could reduce the country's debt burden by 90% after full
delivery of debt relief.

The Finance minister argued that the debt relief programme was based on the
experiences of 35 countries for which packages have already been approved
leading to debt servicing declining by 2,5% of GDP between 1999 and 2007.

Informed sources told the Zimbabwe Independent that Zanu PF ministers were
opposing the plan because it would turn Zimbabwe into "a desperate basket
case". They said HIPC would worsen the current situation in the long term
and should be blocked in cabinet.

Woman's Affairs, Gender and Community Development minister, Olivia Muchena
who made a presentation at the same conference differed with Biti saying
HIPC would not yield much in Zimbabwe due to economic sanctions imposed on
the country. The United States introduced the Zimbabwe Democracy and
Economic Recovery Act in 2001 which Zanu PF spokesmen blame for the
ballooning debt.

"Fundamentally we cannot ignore the existence of sanctions that are
prohibiting us (Zimbabweans) from doing business. Against such a background,
what is required (to be considered for (HIPC) will not work," Muchena said.

Zimbabwe's  former ambassador to China and Zanu PF strategist, Christopher
Mutsvangwa, said government should implement "home-grown instances of
resources for dollars" in its bid to clear the debt.
He suggested that Zimbabwe could mortgage its relatively vast mineral
resources. The country has the world's third largest platinum reserves after
South Africa and Russia.

Said Mutsvangwa: "The country suffers from no inherent incapacity that would
require outside management of its resources for it to get out of the debt
trap which was exogenously induced."

In a clear attack on Biti he said: "With these endowments and capacity, I am
at a loss as to how any self-respecting Zimbabwean could ever think of
surrendering the salvation of his country to any foreigner, no matter his
professed intentions to assist."

Adopting HIPC Mutsvangwa said could result in the "disastrous  consequences"
that followed the IMF-prescribed economic structural adjustment programme of
the 1990s.

Zimbabwe currently needs up to US$10 billion for economic recovery.

It is officially estimated the country needs US$45 billion over the next 10
years to recover to 1997 gross domestic product levels.

Despite the simmering tension between the two political parties over the
issue, the Confederation of Zimbabwe Industries president Kumbirai Katsande
and Economic and Planning minister Elton Mangoma contended that HIPC was the
best option for the debt-ridden government.

Paul Nyakazeya/ Bernard Mpofu

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Tsvangirai Rejects Mugabe Directive

Thursday, 04 February 2010 20:01

PRIME Minister Morgan Tsvangirai has rejected a circular emanating from
President Robert Mugabe's office directing ministers to report to his two
vice-presidents -- Joice Mujuru and John Nkomo -- instead of to him as
cracks in the shaky inclusive government continue to widen.

Tendai Biti, who is Finance minister, MDC-T party secretary-general and a
lawyer, yesterday dismissed the circular as illegal and a wilful breach of
the September 2008 Global Political Agreement (GPA) that gave birth to the
unity government last February.The circular written on January 25 by the
Chief Secretary to the President and Cabinet, Misheck Sibanda, in the
possession of the Zimbabwe Independent, implied that cabinet ministers
should stop reporting to Tsvangirai and be answerable to Mujuru and Nkomo

It was copied to all cabinet ministers and permanent secretaries.

The Independent is reliably informed that Tsvangirai's office, through
permanent secretary Ian Makone, has since written a counter circular to
ministers and heads of ministries telling them to ignore Sibanda's
communication and continue reporting to the premier.

Biti yesterday said Sibanda's circular was "unconstitutional and unlawful,
thus null and void".

"No one has powers to rewrite the GPA," Biti told the Independent yesterday
before leaving for Zambia on government business. "The GPA defines the
powers and the functions of the president and the prime minister very
clearly. It would be unconstitutional, unlawful to have such a circular
because it would be null and void."

Under the GPA, executive authority of the inclusive government is shared
between Mugabe, Tsvangirai and cabinet.  This is captured in Constitutional
Amendment No 19.

While Mugabe is head of state and government, Tsvangirai is given a wide
range of powers including the responsibility of overseeing formulation and
implementation of government policies by cabinet; ensuring that ministers
develop appropriate implementation plans; and in this regard the ministers
must report to the premier on all issues relating to putting into effect
such policies and plans.

Sources said the MDC saw Sibanda's circular as an attempt to usurp
Tsvangirai's powers.

In the controversial circular, Sibanda said he was directed to inform
ministers and permanent secretaries that Mujuru and Nkomo would assist
Mugabe in the "supervision and management of the administration of
government business just as the Honourable Prime Minister is assisted by
Deputy Prime Ministers".

Sibanda said Mujuru would continue to be responsible for the "general
supervision" of social, agriculture and infrastructural ministries.

He said Mujuru's particular focus would be on overseeing implementation of
programmes to enhance productivity in the agriculture sector, ensure
consistent activation of the indigenisation and empowerment programme,
including women's empowerment and gender equity programmes, and overseeing
the coordinated and optimal functioning of the country's strategic public

"In addition, Hon Vice President Mujuru will continue to chair the Cabinet
Committee on Honours and Awards, the Cabinet Committee on State Occasions
and National Monuments, and Cabinet Committee on Parastatals," reads the
four-page Sibanda circular.

Mugabe wants Nkomo to be responsible for economic ministries -- Finance,
Economic Planning, Small and Medium Enterprises and Cooperative Development,
Mines, Industry, Energy, Regional Integration, and Environment and Natural
Resources Management.

Nkomo according to the circular, should supervise the implementation of the
land reform programme and ensure policy consistency, the effective
resolution of the issue of bilateral investment promotion and protection
agreements, and the implementation of land-based policies on conservancies.

"To enhance this supervisory role, the vice president will continue to chair
the Cabinet Committee on Rural Resettlement and Development," wrote the
chief secretary.

Nkomo was also mandated to supervise the implementation of policies ensuring
preservation of the environment, overseeing the development of sport and
recreation, and providing oversight of developments in the local government

"To ensure effective supervision of their areas of administration of
government business, the Honourable Vice Presidents will each be assisted by
a Minister of State and by a team of officials headed by a permanent
secretary," Sibanda wrote. "Members are thus requested to take note

The fight to control government between Mugabe and Tsvangirai erupted ahead
of the resumption on Monday of talks between Mugabe's Zanu PF and the two
MDC formations aimed at resolving outstanding issues of the GPA.

The negotiations have been limping on with little success. The MDC-T wants
the talks to be declared a deadlock and the issue referred to Sadc - the
guarantors of the GPA.

But Zanu PF resolved it would not concede more ground on the outstanding
issues until sanctions are lifted.

The MDC-T this week expressed frustration at Zanu PF's intransigence in
fully consummating the GPA.
Biti said Zanu PF had become more obdurate since its congress last month.

"In the last four weeks, following the Zanu PF congress, we have seen an
acceleration of destruction and insanity on the part of the former ruling
party, he said. "We have seen an increase in the decibels of destabilisation
and recklessness. This has been manifested in unlawful farm invasions,
disobedience of lawful court orders, (and) vitriol against the president of
the MDC."

Constantine Chimakure

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Jockeying for Politburo Posts Reaches Fever Pitch

Thursday, 04 February 2010 19:44

LOBBYING and manoeuvring for positions within Zanu PF intensified this week
ahead of President Robert Mugabe's appointment of new politburo members who
will direct party programmes for the next five years.

Mugabe is expected to announce new politburo members at the party's central
committee meeting next week. The outgoing politburo met yesterday for the
last time after its first meeting of the year last week. The central
committee postponed its meeting last week as Mugabe was travelling to the
African Union summit in Addis Ababa.

Inside sources said jockeying for politburo posts escalated this week and
the tightest race was now for the position of party political commissar. The
position of commissar in Zanu PF is a senior post and whoever is appointed
to it rises in the party hierarchy. The secretary of the commissariat in
Zanu PF ranks only just below that of the presidium, which includes party
leader, two deputies and the chairman, and the secretary for administration.

The commissar is also highly influential because of his responsibility to
organise the party to ensure stability and cohesion from its cell levels
right up to the top structures.

Sources said those fighting it out for the powerful position include
Nicholas Goche, Webster Shamu, Rugare Gumbo and a retired senior army
officer who is understood to be active in the party behind the scenes. The
sources said Saviour Kasukuwere who was initially linked to the position has
shifted focus to that of security or youth instead.

Goche was said to be leading the pack because he acted in that capacity for
sometime a few years ago. Shamu is said to be also strong due to his
liberation struggle credentials as a party mobiliser, while Gumbo is a
veteran of the anti-colonial struggle and has decades of experience in the
politics of mobilisation.

The army officer is said to be a prominent "political fixer" for Zanu PF and
contributed to its disputed victories since 2000 which were reportedly
engineered by the military. Sources said army commanders propping up Zanu PF
behind the scenes wanted the retired officer to take over.

They said the fight was also fierce for the position of secretary for
information and publicity as Nathan Shamuyarira, who is reportedly unwell,
is clinging to his post despite pressure on him from inside to relinquish
the post to Jonathan Moyo who returned to the party recently. Moyo received
loud applause at the party's congress last month upon his return.

However, sources said Moyo was also facing resistance from the party's old
guard who want him to be excluded or returned in a junior position as either
deputy secretary for information or the commissariat. Other senior party
officials such as Ephraim Masawi, currently Shamuyarira's deputy, also want
the position of party spokesman.

Mugabe is next week expected to appoint a new politburo for his Zanu PF
party in a move that might see the introduction of new members.

The communist-era politburo comprises 49 members and acts as the secretariat
of the central committee between congresses.

The move might see the introduction of new members and give clues to the
political direction Zanu PF wants to take in the aftermath of its congress
in December.

The Zanu PF congress made crucial resolutions that pre-empted the ongoing
political negotiations between the party and MDC formations, while
threatening the survival of the inclusive government in the process.

Mugabe and the three members of the party's presidium, Joice Mujuru, John
Nkomo and Simon Khaya Moyo, met last week on Tuesday ahead of Wednesday's
politburo meeting to discuss various party issues including the forthcoming
appointments. All four members of the presidium have their own choices for
people who must go in and they had been consulting to come up with a final

Zanu PF's Soviet-styled politburo, whose full name is the political bureau,
has 49 members who include the party leader, two deputies, a chairman, 19
heads of department and their 19 deputies, as well as 10 committee members.
Mugabe appoints the politburo although there have been muted calls for them
to be elected. The politburo's main function is to act as the administrative
organ of the 245-member central committee which was expected to meet today
but had its first session of the year postponed.

Sources said Mugabe was likely to make a series of new politburo
appointments -- including at least 10 changes to fill vacancies left by
those who quit the politburo or who died -- and other planned replacements
to rejuvenate his ageing team dominated largely by deadwood.

Those who quit Zanu PF and the politburo citing the party's leadership and
policy failures include Dumiso Dabengwa and Simba Makoni. Thenjiwe Lesabe
has also reportedly left or is considering leaving. Several former PF Zapu
senior members, some of whom are in the politburo, could be replaced because
of their doubtful political loyalties and claims that they were sympathising
with Dabengwa.

Other politburo members have died and will be replaced next week. These
include vice-president Joseph Msika, General Vitalis Zvinavashe, Air Marshal
Josiah Tungamirai, Ruth Chinamano, Richard Hove and Elliot Manyika who was
the party's political commissar. The replacement of Manyika has been a
talking point in Zanu PF as several officials are battling out for the post.

Zanu PF officials jostle to be in the politburo so as to go up in the
pecking order and gain political influence for party and individual gain.

Dumisani Muleya

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MDC Transport Manager Finally Set Free

Thursday, 04 February 2010 19:42

MOVEMENT for Democratic Change (MDC) transport manager, Pasco Gwezere who
was arrested last year on allegations of stealing guns from an army
barracks, has been removed from further remand by a Harare magistrate.
Gwezere was allegedly abducted from his Mufakose home in October last year
by security agents and was held incommunicado at Marimba Police Station for
two weeks on charges of breaking into Pomona Barracks and stealing arms of
war. He was later transferred to Harare Central Police Station where he was
formally charged.

Harare Magistrate Gloria Takundwa this week removed Gwezere from remand
after the state failed to provide a trial date.

Human rights lawyer Alec Muchadehama of Mbidzo, Muchadehama & Makoni Legal
Practitioners represented the MDC official.

In granting Gwezere's refusal of further remand application, Takundwa said
the state could proceed with the case by way of summons whenever they were
ready to put the matter to trial.

Muchadehama told journalists outside the courtroom that the ruling meant
that Gwezere was finally a free man.

"They now have to proceed by way of summons. The magistrate granted our
application on the basis that the state could not give us a trial date,"
said Muchadehama.

Gwezere had been out on US$500 bail. He was being accused of conniving with
army officers and deserters to steal 20 AK 47 rifles and a shotgun from
Pomona Barracks. One of his co-accused has already been convicted and jailed
while several are facing a court martial for the same offence.

Gwezere's lawyers claimed last year that he had been abducted by military
intelligence officers, Central Intelligence Organisation operatives,
detectives from the Police Law and Order section and  Police Internal
Security Intelligence.

   Feluna Nleya

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Govt Fights Against Chiadzwa ‘blood diamonds’ Tag

Thursday, 04 February 2010 19:42

GOVERNMENT is fighting the “blood diamonds” tag associated with the gems
mined from the controversial Chiadzwa fields over the past three years, a
government official told a parliamentary portfolio committee this week.
Head of marketing at the Minerals Marketing Corporation of Zimbabwe (MMCZ),
the sole marketing and selling agent of all minerals produced in the
country, Masimba Chandavengerwa told the committee on Mines and Energy that
the Kimberley Process had “smuggled in” the issue of human rights abuses at
the fields in order to label the gems  “bloody”.

“From the discussions we have had with Kimberley Process (KP) people, their
argument is that our diamonds are leaving this country illegally and even
used to fuel wars outside our borders,” Chandavengerwa said. “Another
dimension they are bringing in is the issue of human rights which is not
there in the charter, the Kimberley Process charter, but they want to
smuggle it in so that even if we say they are not “blood diamonds” they
would say: But we have seen people beaten and there is the army and human
rights abuses, which is something that we are fighting because it is not as
per the original charter.”

He said the KP had no problems with what is going on at other diamond mining
firms in the country, except for Chiadzwa.

“They are happy with the goings on at Murowa; they are also happy with the
goings on at River Ranch but they are not very happy with what is happening
at the Chiadzwa fields,” he explained.
Chandavengerwa said the KP had also complained about diamond selling points
in Mozambique and buyers they are seeing there from the Democratic Republic
of Congo (DRC), Lebanon and other countries that are in war situations.

“According to them, although officially we are not at war here, our diamonds
are not being used to fuel any war in the country, but because they are
getting out of the country in their numbers into neighbouring countries and
then finding their way into conflict zones, so they think they are still
blood diamonds,” added Chandavengerwa.

The government last month moved swiftly to stop a planned sale of 300 000
carats of diamonds by Mbada Diamonds because of the absence of a KP monitor
to oversee the sale and exports of any gems from the Chiadzwa diamond
fields. The mining firm had also failed to inform relevant government
departments, including the MMCZ.

Under a set of measures made in November last year and meant to bring
Zimbabwe’s controversial diamond industry in line with KP standards, the
diamond watchdog must monitor production and sales of diamonds from Chiadzwa
where the army has been accused of rights abuses against civilians.
But Chandavengerwa told the committee that the government had failed to
agree with KP over a suitable monitor to assess diamonds from Chiadzwa.

“We had agreed on a Nambian monitor, but there are various CVs that are
available to be looked at. The KP wanted to send a monitor from De Beers,
and someone else from Europe, maybe Belgium, but the government wants an
African monitor or someone from the region,” he said.

International rights groups have been pushing for a world ban on Zimbabwe
diamonds until Harare acts to ensure mining at Chiadzwa is in full
compliance with KP standards.

The World Diamond Council has warned that it will push for Zimbabwe’s
suspension from the Kimberley Process Certification Scheme if the monitor is
not appointed soon.

Valentine Maponga

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Copac Lodges Complaint Against ‘biased’ State Media

Thursday, 04 February 2010 19:39

THE Constitutional Parliamentary Committee (Copac)’s sub-committee on
information and publicity has lodged a complaint with Media, Information and
Publicity minister Webster Shamu regarding alleged biased state-controlled
media coverage of the constitution-making process.

The process is saddled by political and financial hitches that have seen its
intended outreach programme to gather people’s views put on ice.

Chairperson of the Copac sub-committee Jessie Majome in the company of
co-chairpersons of the constitution-making process –– Paul Mangwana, Douglas
Mwonzora and Believe Gaule (standing in for MDC-M’s Edward Mkhosi) –– last
week met Shamu to lodge the complaint.

The meeting took place at a time when the constitution-making has stalled
after the management committee disowned a financial agreement signed by
Parliamentary and Constitutional Affairs minister Eric Matinenga and the
United Nations Development Programme (UNDP) and ordered a new one to be

The state media then reported that the UNDP had pulled out funding of the
entire process.

It however emerged later that the reports were false as the UNDP had not
pulled out of the process.

The state broadcaster, ZTV and state-controlled newspapers in the Zimpapers
stable, the Herald, the Sunday Mail, the Chronicle and the Sunday News, are
alleged to be on an offensive to discredit the constitution-making process.

Majome this week confirmed to the Zimbabwe Independent that her committee
had raised concerns with Shamu over the partisan manner in which the
state-controlled media was covering issues pertaining to the crafting of a
new supreme law.

She said the three co-chairpersons of Copac were in agreement that the
state-controlled media was biased towards Zanu PF.

Majome said: “We raised concerns of the failure by the state media to cover
the constitution-making process in a fair and balanced manner. We were
concerned with the biased coverage where the Zanu PF ministers and officials
were the only ones covered and that is of serious concern to us as Article
six of the Global Political Agreement (GPA) stipulates that there should be
a conducive environment for the writing of the constitution and the state
media is not creating that conducive environment.”

The constitution-making process has been facing serious problems as Zanu PF
has been throwing spanners in the work of Copac.

Zanu PF is currently undertaking a parallel process where they are drilling
villagers and feeding them with talking points from the Kariba draft

Sources who attended the closed meeting however said while Shamu accepted
that the reportage in the state-controlled media needed to be improved, he
also accused the private media of bias in favour of the MDC formations.

The sources said Shamu said the coverage of the constitution-making process
by both the state and the private media was not serving national interests
and said he was making arrangements to meet editors from the two sides.

Zanu PF and the MDC factions have been singing from different hymn sheets on
the process. Zanu PF has been arguing that the Kariba Draft be used as the
only reference document in crafting a new constitution, but the MDC
formations are adamant that a people-driven process was ideal.

The crafting of a new constitution is part of the requirements of a
September 2008 power-sharing deal between President Mugabe, Prime Minister
Morgan Tsvangirai and Deputy Prime Minister Arthur Mutambara that gave birth
to the all inclusive government last February.

Once a new constitution has been crafted by the three parties, the
power-sharing government is expected to call fresh parliamentary,
presidential and local government elections.

Loughty Dube

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‘We need a sustainable telecoms policy’

Thursday, 04 February 2010 19:34

TELECEL Zimbabwe has appointed a new managing director following the
resignation of Rex Chibesa. The telecommunications company, currently second
in terms of its subscriber base, is targeting a million subscribers by year
end. Business reporter, Bernard Mpofu, spoke to new Telecel managing
director Aimable Mpore on what he brings to the company. The new boss,
however, declined to comment on the status of Telecel’s operating licence
after Potraz revoked it a few years ago. The company lodged an appeal with
the High Court. Mpore referred questions on the matter to Telecel
shareholders. Below are the excerpts of the interview.

Mpofu: Who is Aimable Mpore?

Mpore: I am a Canadian by citizenship, born in the Democratic Republic of
Congo. My parents are from Rwanda. Before I came here, I was CEO of MTN Cote
d’Ivoire and prior to that I was CEO of Uganda Telecom — a mobile and fixed
data network. At the time of inception of Telecel International, I was in
DRC as commercial director then acting-managing director in 1998. I
eventually left DRC when the war broke out. I have a bachelor of commerce
degree and an MBA from Sherbrooke University in Canada.

Mpofu: Why did you leave MTN?

Mpore: I left Cote d’Ivoire because the company had some issues with the

Mpofu: Why did you keep a low profile since your appointment as Telecel
Zimbabwe managing director?
Mpore: When I came here three months ago, I was chief operating officer. I
was then appointed MD a month ago. So there was no noise about that.

Mpofu: Telecel is now the second largest network in terms of subscriber
base. Do you feel that this should be credited to you?

Mpore: I’m not here to get credit for that growth. I came here whilst the
strategic drive to grow the network was already in motion.

Mpofu: What has been the key to this growth?

Mpore: We are doing things on many angles. Firstly we have put in place
measures to increase the availability of network. Secondly we have
contingency plans to mitigate frequent power outages. We also have
value-added services such as our 3G service which will start testing this
month. We have also finished putting our GPRS Edge, which is slightly slower
than 3G.We are taking steps to connect Zimbabwe to the submarine cable in
order to have true broadband services.

Mpofu: Last week you told legislators that you were targeting 98% of
subscribers to be on the prepaid platforms. Why are you targeting prepaid

Mpore: This is not common in Zimbabwe alone. I see this trend in many
African countries. Prepaid is easy to manage and we do not have many people
with a proven credit record, so we don’t encourage it (credit).

Mpofu: We understand that Telecel has plans to list on the Zimbabwe Stock
Exchange. Can you confirm?
Mpore: That is an issue for shareholders. At this stage I don’t know what
they have decided but this is one of the options that is to be considered.

Mpofu: As MD, what recommendations would you give a board that intends to
raise capital?

Mpore: A combination of both fresh funds through financial institutions or a
vendor financing approach with the suppliers and going public are options
that I would consider.

Mpofu: What is your view of infrastructure sharing among operators?

Mpore: We need a sustainable policy by the regulator (Post and
Telecommunications Regulatory Authority of Zimbabwe) that forces those that
are reluctant to share their infrastructure to do so. Such a policy would
prevent duplication of investment. Currently we are doing site sharing but
it is becoming more and more difficult to achieve.

Mpofu: But those with the infrastructure would argue that they have invested
so much into the hardware?

Mpore: It happens everywhere else. Networks agree on where to expand and
there won’t be any reason to put three towers on one hill. On this we agree
with our competitors in principle. All the operators should obviously invest
and then agree to share to avoid duplication.

Mpofu: Is Telecel in a position to match competition if one of your
competitors partners with a South African mobile company?

Mpore: I came from a market with six operators and we were still doing
business. I’m used to such an environment; it forces operators to do what is
best for the market. During my stay in Cote d’ Ivoire we managed to grow to
four million subscribers from a million in less than three years.

Mpofu: What is your greatest fear in this market?

Mpore: Like you I have fears that if the politics of the day do not go well
business will be affected. But my understanding is everything is on course
at the moment.

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Poor Country Status: the Pros and Cons

Thursday, 04 February 2010 19:25

ZIMBABWE'S foreign debt is estimated at about US$5,2 billion and
considerably overdue for settlement, while the country's coffers are
presently so barren that there are no prospects of the nation remedying its
payment defaults in the near future.
Zimbabwe's total debt including domestic and external arrears is US$5,7
billion, of which US$5,2 billion is external and US$413 million domestic
liabilities. The external debt of US$5,2 billion includes total arrears of
US$3,6 billion.

Zimbabwe currently needs up to US$10 billion for economic recovery. It is
officially estimated the country needs US$45 billion for the next 10 years
to recover to 1997 gross domestic product (GDP) levels.
However, the politicians are divided along political lines on the way
forward. Indications suggest a massive chasm in the political hierarchy over
Finance minister Tendai Biti's recommendations to apply for the Highly
Indebted Poor Country (HIPC) status.

Some Zanu PF ministers are reportedly determined to oppose the move, on
grounds that doing so would "open the floodgates to foreign interference",
not just in Zimbabwe's economic affairs, but also in its politics. They
contend that an HIPC initiative would "be used by Western countries as an
instrument of regime change".

Biti strongly contends that HIPC status is the best option for Zimbabwe,
stating that the options do not accord Zimbabwe a "holistic and viable
approach to its debt and arrears problems" significantly diminishing the
extensive current restraints upon economic growth and poverty reduction.

But what are the advantages and disadvantages of Zimbabwe falling under

Institute of Chartered Accountants chief executive, Sonny Mabheju told
businessdigest that the HIPC programme required a number of conditions to be
fulfilled, largely similar to those attached to International Monetary Fund
(IMF) and World Bank loans, which require "structural adjustments and at
times including privatisation of public entities like water and electricity".

"The country must (also) maintain macroeconomic stability and has to
implement satisfactory poverty reduction strategies for at least one year,"
Mabheju said.

He said the process of complete debt relief is long and at times painful to
the indebted country.
Between 1996 and 1999 a number of modifications have been made to the HIPC
process but they have remained largely not easy for the poor countries.

"Smaller multilateral institutions, non-Paris Club bilateral creditors and
commercial creditors who together account for about 25% of total HIPC
initiative amounts have honoured a small percentage of their expected relief
so far.  Some commercial creditors have gone to the extent of seeking
litigation against HIPC initiatives," he said.

For a country to qualify for the HIPC process, it has to among other
eligibility criteria:
lEstablish a track record of reform and sound policy implementation under
the auspices of an IMF- and International Development Association-supported
lDevelop a Poverty Reduction Strategy Paper through a broad-based
participatory and consultative process;
lFace an unsustainable debt burden, beyond traditionally available
debt-relief mechanisms - the debt sustainability analysis confirms that
Zimbabwe's debt is unsustainable until 2029 and;
lHave a per capita income of less than US$1 095 (Zimbabwe's per capita
income was US$340 in 2008.

Mabheju said commercial creditors have in some cases resorted to selling
debt due to them to "vulture" funds.

Vulture funds are companies which buy the debt of poor nations cheaply when
it is about to be written off and then sue the debtor country for the full
amount of the debt plus interest which may be several times the amount they
paid for the debt.

He said the normal commercial investment vulture funds can be used for
normal business speculation where a distressed asset is bought cheaply
during times of economic distress and sold later at a profit when the
economic environment improves.

In 1996 a vulture fund paid US$11 million for some Peruvian debt and then
sued the country for US$58 million.  The same fund sued Congo Brazzaville
for US$400 million for a debt the fund bought for US$10 million.

Zambia bought some agricultural equipment from Romania for US$30 million and
failed to repay the loan.  Romania was prepared to write off the debt after
some negotiations.  A vulture fund came in and bought the debt for US$3,5
million and sued Zambia for over US$50 million.

"HIPC initiatives do not seem to protect poor debtor countries against
commercial creditors, smaller lender institutions and non-Paris Club
creditors," he said

Mabheju said it was important if a country considered going the HIPC route
to getting debt relief to analyse the composition of its creditors.

"If it has creditors not bound by the HIPC initiatives, it has to proceed
cautiously to avoid the possibility of vulture funds coming in to cause more
damage than the original debt.

Vulture funds are generally viewed as immoral and there are calls to make
them illegal wherever they exist.  It is however up to each potential victim
country to be proactive and avoid being preyed upon," said Mabheju.

It is however up to each potential victim country to be proactive and avoid
being preyed upon," said Mabheju.

According to a document prepared by Biti, experience of 35 countries for
which packages have already been approved, debt service paid on average has
declined by about 2,5% of GDP between 1999 and 2007. Their debt burden is
expected to be reduced by about 90% after the full delivery of debt relief.

Some of the disadvantages of HIPC status are that it does not bring
additional funding for the development needs of poor countries. This means
that poor countries may have to continue contracting new debt to meet
developmental needs. HIPC status also takes time to reach its completion
point. Originally the time lag between the decision and completion points
was three years.

Economist David Mupamhadzi told businessdigest this week that the issue of
the country's external debt was central to the sustained recovery of the
economy. He said the government of Zimbabwe should come up with a clear
arrears clearance strategy since this was "one of the first steps towards
the reengagement with the international community".

"The HIPC route is one option which the government could adopt, and this
approach will be widely supported by the international finance institutions.
Taking this option will enable the government to make huge debt service
savings, and this will provide the government with an opportunity to
redirect resources to other critical areas of the economy.

"For example in January 2010, the Republic of Congo, reached the completion
stage of the HIPC initiative, and they generated a total debt service
savings of US$1,9 billion.

"Furthermore once a country adopts a credible debt clearance strategy, this
will also improve the country's risk profile to both domestic and
international investors," Mupamhadzi said.

Economist Eric Bloch said officials in Zanu PF's intention to block the HIPC
route demonstrates yet again their "extreme paranoia and, even more so,
their intractable determination to remain in power, irrespective of the
negative consequences upon the country and its populace of not pursuing the
only practical way of dealing with the country's crippling burden of debt".

"They are once again proving that they are readily willing to sacrifice the
best interests of the nation to protect their own desires and wishes," he

Bloch said those opposing the HIPC option do not even suggest any practical
alternative path to be followed to "deal with the gargantuan debt arrears
that they caused Zimbabwe to accumulate".

"And undoubtedly they have decided consciously or unconsciously that as the
economic recovery is hindered by the country's ongoing debt-servicing
default, they will attribute all culpability to the international community.

"They will deliberately contend that the tardiness of economic recovery is
partially attributable
to the continuing huge debt arrears, and will strive to deflect any
suggestions of their being even remotely responsible for continuing national
poverty and suffering," Bloch said.

Economist Brains Muchemwa told businessdigest on Monday that being
considered under the HIPC eliminates the incidences of delusional fiscal
populism and its associated ills.

"The associated improved in-flows of offshore capital will erode the
existing high country risk being priced into cost of capital, whilst the
reprieve on the fiscus will be a huge stimulus on capital expenditure to
address the high unemployment and fragile consumer spending," Muchemwa said.

Bloch said the world's major creditor nations which constitute the Paris
Club have aided various heavily indebted nations by restructuring and
rescheduling debt.

However, with the magnitude of the political differences that continue to
characterise those in authority in Zimbabwe, there is no certainty that the
Paris Club would agree to a programme of Zimbabwean debt-rescheduling,
especially so as the international community remains uneasy at the
pronounced disregard for law and order, and for human and property rights in

There are also the continuing defaults in honouring Bilateral Investment
Promotion and Protection Agreements (Bippas). Analysts said the Paris Club
negotiations would, in all probability, be extended, whereas Zimbabwe
urgently requires resolution of its debt crises.

By Paul Nyakazeya

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Zim Faces Maize Deficit Again, Despite Govt Claims

Thursday, 04 February 2010 19:23

FARMERS' organisations must be feeling vindicated after Agriculture ministry
permanent secretary Ngoni Masoka last year turned a deaf ear to their
warnings of a maize deficit.

Commercial Farmers Union (CFU) vice-president Charles Taffs told government
officials and delegates at an agriculture conference last year that farmers
were unprepared and not equipped for the season. Masoka dismissed the
warning as mere talk.

And Farmers Development Trust chief executive officer Lovegot Tendengu did
not help the situation either. He backed Masoka's claims.

Although government agrees now that it could have set the bar a bit high in
terms of output, the state is still to revise its projections downwards
saying a nationwide crop assessment would soon be underway.

This is not the first time government has blundered. A few years back, then
Agriculture minister Joseph Made flew around the country in a helicopter and
announced a "bumper harvest."

Made was wrong.  Now Masoka faces the same fate come harvesting time.

Deon Theron, the president of the CFU, which represents the remaining white
farmers, this week said: "All indications are that this season will be a
total disaster. We will be very lucky if we get more than 500 000 tonnes.

"We need about 1,8 million tonnes of maize, so over a million tonnes will
have to be made up by imports."

Theron said apart from poor rains, which affected much of the late-planted
crop, poor preparations and continued disturbances on white commercial farms
had also contributed to another poor season.

"We predicted the dry conditions affecting the crop now and advised farmers
to plant early, but a lot of our farmers who were going to put seed in the
ground early were being harassed," he said. "Producing adequate food for
ourselves is going to be a problem as long as we don't find a way forward
and resolve the disputes on the farms for the benefit of the country."

Also, the Metrological Services Department's weather forecasts made CFU's
projections irrelevant. While CFU urged farmers to plant early, the
metrological department forecast above average rains for the 2009/10
agricultural season.

Farmers may be to blame too for trusting the weather people given the
outdated technology the department is stuck with.

The Zimbabwe Commercial Farmers' Union (ZCFU), which represents the majority
of resettled black farmers, also gave a grim assessment of the current
agricultural season.

ZCFU president William Nyabonda told the state media recently that: "We are
likely to have a food deficit and we are now appealing to the government and
other stakeholders to start preparing to deal with the food deficit. It is
time for the government to start crafting a budget to source additional
grain from neighbouring countries."

Finance minister Tendai Biti has since said he was working on a budget to
import food and the cabinet has adopted matigatory strategies to counter
effects of the imminent drought.

Annually, Zimbabwe needs 2,2 million tonnes of cereals, according to Masoka.
Of the 2,2 million tonnes, 1,8 million tonnes are consumed by Zimbabweans
while the rest goes to stock feeds.

Over the years, Zimbabwe has been relying on food imports to cover food

Taffs last year argued that Zimbabwe was headed for another farming disaster
saying resources -- mainly inputs -- were not yet in place.

He said: "The rains are upon us and we are still talking about agricultural
finance. I have been all over the country and we are in an unprepared state.
We need to be real with ourselves. We will have a deficit and we need to be
prepared for that."

Masoka then argued that in the prior season, Zimbabwe had received R300
million in December 2008 and only received inputs on Christmas eve but
output was reasonable.

"Last year we were assisted by South Africa with R300 million in December
(2008). We needed seeds inputs and fertilisers. We are more prepared this
year (2009) than we were last year. We only got the money on 20 December
last year and got the green light to disburse the money on Christmas Eve and
we did not go wrong," Masoka said then.

Masoka's argument was premised on the fact that Zimbabwe had got funding
from South Africa late but still managed to have improved food for the
country in the 2008-9 season.

Zimbabwe embarked on a chaotic land re-distribution exercise in 2000 meant
to benefit landless blacks but the programme ended up largely benefiting
Zanu PF officials amid accusations that many party chiefs own more than one

Chris Muronzi

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GNU Discord will Prolong Sanctions –– Analysts

Thursday, 04 February 2010 18:36

FEBRUARY 20 is nigh and very important to Zimbabwe!
The European Union will meet and topping its agenda will be Zimbabwe’s
political crisis. A lot has happened since the country’s main political
parties signed a unity government pact in September 2008: the economy is on
a recovery path and the people seem to be optimistic about the future.

But the politics remain poisoned.

The main protagonists –– Zanu PF and the MDC-T –– entered into a marriage
which with the benefit of hindsight is now proving to have been merely one
of convenience.

President Robert Mugabe’s Zanu PF met last week and unequivocally resolved
that it would not concede any further ground to MDC-T in its demands for the
finalisation of the sticking points of the global political agreement (GPA).

The reasoning behind the stance is a red-herring: sanctions imposed by the
US, Britain and its Western allies should be immediately and unconditionally
lifted. The true reason behind the party’s intransigence is that it has
never wanted to relinquish power whether through the ballot or any other

Mugabe and his Chinese-style politburo want the world to see the sanctions
as an albatross around the nation’s neck, stifling political renewal and
survival. But the moribund party also sees the continued imposition of the
sanctions as a leverage in favour of the MDC-T in the fight for political
space. Zanu PF’s  political survival has been premised on its usual bravado
and brute force but the sanctions call for the taming of these.

To make matters worse, the MDC-T leader and premier of the inclusive
government, Morgan Tsvangirai, seems to have panicked after the politburo’s
resolution, political analysts observed this week,
Tsvangirai, they argued, has joined Sadc and the African Union to fight in
Zanu PF’s corner by calling for the lifting of sanctions.

The political analysts said the former trade union leader has been entrapped
by Zanu PF, hence his call last Friday for Western capitals to ease
sanctions on Mugabe and his inner circle.

Tsvangirai’s panic, according to the political analysts, was understandable.

Britain’s foreign secretary David Miliband stated in the UK parliament on
January 19 that the MDC-T holds the key to the EU’s forthcoming decision on
the sanctions. Zanu PF’s spin-doctors immediately went into overdrive to
tell the world that Tsvangirai was holding the nation to ransom by failing
to order his “masters” to let go of the embargo.

Speaking on the sidelines of the World Economic Forum in Davos, Switzerland,
last Friday Tsvangirai suggested that the world capitals should take “a
two-stage approach” to ease some of the sanctions, among them targeted, and
acknowledge the progress so far made by the unity government. He urged the
West “to ease travel and financial restrictions targeting President Mugabe
and his inner circle”.

The EU sanctions currently impose restrictions on 203 key Zanu PF and
government figures allegedly involved in violence and human rights abuses
and 40 companies associated with the individuals and their sources of

Tsvangirai said he believed that the level of political risk was far reduced
from what it had been a year ago. He admitted that certain benchmarks still
had to be reached and it was up to Western capitals to decide, but said
there was a case for easing of the targeted sanctions against his former

“It is a very positive signal to those who doubt that they have anything to
benefit from this inclusive government,” said the premier.

Tsvangirai and his party do not have a concrete position on the sanctions.
The premier and Finance minister Tendai Biti are pushing for the lifting of
sanctions on parastatals first, while another group in the party feels that
all embargoes should remain in place as leverage for the party.

The companies which Biti wants removed from the sanctions list include ZB
Bank, Agribank, Infrastructure Bank of Zimbabwe, Zimre Holdings, Industrial
Development Corporation, Minerals Marketing Corporation of Zimbabwe, and the
Zimbabwe Iron and Steel Company.

But what has become apparent is that the EU and the international community
are not convinced that Zimbabwe has, or is, coming out of tyranny and moving
towards democracy where human rights, among them a free press, respect for
property rights and the rule of law, are beginning to take root.

Continued violations of property and individual rights, propagation of hate
speech in the public media and a general dearth of the rule of law have
weakened the case for the lifting of sanctions, political and economic
analysts have observed. To worsen the situation, talks to resolve the
sticking issues of the GPA are teetering on the brink of collapse and as a
result the inclusive government is hanging by a thread.

No resolution has been found on the rehiring of central bank chief Gideon
Gono, the appointment of Attorney-General Johannes Tomana, provincial
governors and the swearing in of MDC-T treasurer-general Roy Bennett as
deputy Agriculture minister, among a host of other outstanding issues.
Government insiders said the government was hanging by a thread and the next
month could prove to be crucial to its survival.

Western capitals are clear on the course the country should take before it
is re-admitted into the community of nations –– respect for human rights and
the rule of law.

“The most important factor influencing the United Kingdom’s views on the
lifting of EU restrictive measures will be evidence of actual change and
reform on the ground in Zimbabwe,” says British ambassador to Zimbabwe, Mark
Canning.  “These are not MDC-T measures.  These are not Zanu PF measures.
They are the EU’s, and we will make our own judgments as to when they should
be reinforced or eased.  But the key to having restrictive measures eased,
or lifted, is for those in Zimbabwe who are currently resisting progress to
implement the commitments to reform they agreed to in the global political

Other Western diplomats in the capital were this week mum on what they
thought on the sanctions, but judging by the outcome of a fact-finding
mission by the EU last September, the embargoes could remain in force. The
mission found that the benchmarks for reforms had not been met.

Political commentator and business mogul Mutumwa Mawere concurred with
Canning arguing that it was up to Zimbabweans to do what was right for the
country to move forward.

“For the country to move forward, new capital injection is required,” said
Mawere. “This capital will not come from Zimbabwe. The people with the
required funds are more comfortable partnering in stable environments. It is
up to Zimbabweans and not just the political actors to convince the
cooperating partners that the change that they see in evidence is
sustainable and underpinned by sound policies and ideological thinking. To
the extent that after almost a year into the unity government the partners
have not found each other completely.”

He added: “It makes it difficult for third parties to engage meaningfully
with a body that is yet to establish itself as a going concern.  The
rumblings internally do not help.

“There may be a dispute in terms of the reasons why targeted sanctions were
imposed but there can be no dispute that reforms have to be urgently
implemented to attract not just official development assistance but private

The pressure, Mawere said, was now on Tsvangirai to lead the campaign
against the sanctions.

Political writer Tanonoka Whande is of the opinion that although the
sanctions “assisted” the MDC-T, they were a reaction to the trampling of
ordinary people’s rights by Mugabe’s regime. He argued that Tsvangirai had
no power over the lifting of the sanctions, yet he was behaving as if he

“He is trying to accept responsibility for something he did not create and
this convinces Mugabe that, indeed, Tsvangirai had something to do with the
imposition of these sanctions,” wrote Whande. “The fact is that Tsvangirai
cannot call for the removal of sanctions because the reasons why those
sanctions were imposed are still in effect.”

Human Rights Watch is also of the opinion that the sanctions should remain
in force.
“Zanu PF has continued committing grave human rights abuses and acting as if
the agreement had never been signed,” said Georgette Gagnon, the group’s
Africa director. “The European Union runs the risk of reinforcing ongoing
repression and impunity in Zimbabwe if it eases the sanctions now.”

Concrete reforms, Human Rights Watch argued, should take place before the
travel bans and assets freezes are lifted.

Constantine Chimakure

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US$500 000 Fraud Hits FBC Bank

Thursday, 04 February 2010 18:14

FBC Bank has been hit by a US$500 000 fraud but the bank remains sound,
officials say.
The bank says four workers at its Mutare branch will soon appear in court
facing fraud charges relating to the missing funds.

FBC Bank spokesperson Agrippa Mugwagwa announced in a statement that staff
at the branch had colluded with other external customers to siphon funds out
of the bank.

He said: "Four staff members at our FBC Bank Mutare Branch are under
investigation following the unearthing of fraudulent transfers at the
branch. Preliminary indications are that around $500 000 was fraudulently
transferred by the four staff members in collusion internally and with some
external parties."
But the bank is confident it will recover the funds.

Mugwagwa added: "The bank has established where the funds were transferred
and prospects of recovering the funds are high. The bank remains in a
healthy financial position despite the fraud."

Sources close to the developments told businessdigest that one of the
suspects, Rodrick Chongo, is still at large. Chongo, who was a supervisor at
the Mutare branch, is understood to have gone into hiding this week when
police pounced on his colleagues. Sources said early this week, FBC Bank
uncovered irregular transactions dating back to end of last year and
instituted investigations.

The investigations exposed a hole in the banks books of US$500 000. A US$5
000 reward has been placed on Chongo.

An advert in the state-controlled daily, the Herald, shows that police might
not have leads on his whereabouts and are hoping a call will come through
the hotline.

Banks have suffered huge losses in the past year from armed robbers. Kingdom
Bank and Barclays Bank lost thousands of dollars in robberies.

But the FBC fraud is the biggest loss suffered by banks owing to fraud or
robbery so far.

In December 2004, CFX was rocked by a fraud that brought the bank to its
knees and had to be recapitalised once again. Premier also suffered a fraud
in 2007 which resulted in the resignation of former Premier Finance Group
chief executive Exodus Makumbe and chief operating officer Cassius Gambinga.

Chris Muronzi

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New RBZ Bank Policy a Drop in the Ocean — Analysts

Thursday, 04 February 2010 18:08

THE Reserve Bank on Monday reduced statutory reserve ratios for  local
banks, a move analysts said will offer little financial reprieve to the
financial services sector.
Central bank governor Gideon Gono last Friday presented a low-key Monetary
Policy Statement that, among other policy changes, slashed the minimum
statutory reserve ratio to 5% of incremental liabilities from the current
10% of total liabilities.

The central bank also liberalised remittances and transfers of investment
income relating to dividends, profits, capital appreciation proceeds and
loan repayment to inspire confidence into the economy.

The statutory reserve ratio policy would affect the change in liabilities
rather than the aggregate deposits or liabilities.

The new directive, according to banking experts, will have little impact on
Zimbabwe’s banking sector given the relatively slow growth in deposits since
the dollarisation of the economy in January 2009.

The move to reduce the ratios came at a time when treasury has projected
between US$4 and US$6 billion in domestic savings over the next two years
driven by “incentives to savers”.

Independent economist Daniel Ndlela said the new policy was a drop in the

“Ideally, he (Gono) should have removed the statutory reserve ratio and put
in place measures that promote financial intermediation,” Ndlela said. “It’s
a blunt instrument and he wants somebody to make a mistake.”

The Bankers Association of Zimbabwe president John Mangudya could not be
reached for comment as his mobile phone continued to ring unanswered.

Last year, the International Monetary Fund warned that Zimbabwe’s financial
institutions were facing serious exposure following revelations that the
apex bank continued to channel statutory reserves to finance quasi-fiscal
projects, which rendered it incapable of backing up banks in the event of a
liquidity crunch.

The IMF criticised the central bank for using foreign reserve assets to fund
its operating expenses, withdrawals of foreign currency amounts and debt
service, as well as payments on behalf of the government.

The bank, according to the report, accumulated US$40,3 million in arrears on
operating expenses during the first nine months of 2009.

“We believe the additional liberalisation measures taken by the governor are
likely to continue to inspire investor confidence in the economy,” said ZABG
in a statement. “While we expect positive growth in the productive sectors
of the economy we believe the huge international debt overhang coupled by
the illiquid local money market will militate against a speedy economic
recovery. T

The continued sustenance of the inclusive government is also key to the
constructive reengagement with international development partners and

Bernard Mpofu

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Will they Ever Pay Up their Debts?

Thursday, 04 February 2010 18:02

A LOW key but nonetheless focused monetary policy statement with less
rhetoric than usual was presented on January 29. This was a major departure
from the grandstanding which the country had come to expect every time the
monetary authorities took to the podium between 2003 and 2008.
The talking point on the statement so far has been the failure of the
Reserve Bank of Zimbabwe to redeem gold bonds at maturity. These bonds were
issued to gold mines for unpaid gold deliveries to Fidelity Printers &
Refiners, a subsidiary of the RBZ.

The Special Tradable Gold-backed Foreign Exchange bonds were issued in
January 2009 with a tenor of 12 months and an interest rate of 8%. Few
mining houses managed to sell the bonds to the banks and pension funds at
discounts as high as 30% to raise liquidity for working capital. Many
prospective takers of those bonds on the secondary market shunned them
because they were worried about the creditworthiness of the issuer.

Teir caution has since been vindicated. As largely feared by many, the
central bank has failed to pay up on maturity. Instead they have rolled the
bonds over for a further six months. With the central bank having been
relieved of some of its income generating operations, it looks largely
unlikely that it will be able to meet all outstanding obligations from its
own resources. The plan, it seems, is to transfer the indebtedness of
so-called "government's RBZ-held debt" from the central bank to the central
government. This will merely add on to government debt without improving the
chances of repayment of these obligations.

Already the government has external debts of US$3 465 million including
arrears of US$2 317 million. The obligations increase to US$4 290 million
after adding on government-guaranteed debt owed by public enterprises. An
addition of a further US$1 billion or so of domestic debt, most of which was
used to fund consumption, will only further worsen the indebtedness of
central government. With revenue collections currently being lower than
expenses, it will be folly for anyone to expect government to prioritise
paying debts.
Financial institutions which jumped onto the gold bonds because they were
being offered at big discounts might live to regret their decisions. The
returns on these instruments were high but the risk was high as well. It may
end up just being paper money that may not be realised soon, if at all.
There is little hope that the bonds will be paid off after the six months
roll-over period. This may call for the impairments to be done on the
affected institutions' financial statements.

The gold bonds debacle should remind investors that default risk is still
high in this country. Many borrowers are failing to settle their obligations
when they fall due largely because they are not generating adequate cash
flows. It is clear from the monetary policy statement that most banks remain
uncomfortable to give out loans. Only 48,2% of the total deposits amounting
to US$1,33 billion were given out as loans and advances. Even such banks as
CBZ and FBC which are believed to have most of the public sector deposits
are also cautious in their lending. CBZ bank, with deposits equivalent to
27,5% of the market, gave out 61,8% to borrowers. The most aggressive banks
were NMB, Agribank, MBCA and CFX with loans to deposit ratios between 70%
and 200%. Amongst the commercial banks FBC was the meanest after lending
only US$16,3million (16,6%) out of deposits totaling US$98 million.

Manufacturers received the highest loans amounting to US$142 million or 22%
of the total. The next in line was the distribution sector followed by
agriculture while the least favoured beneficiary was the construction

The RBZ, in contrast, recommends that agriculture should be allocated the
most credit of say 30% with manufacturing and mining getting 25% apiece
while the other sectors share the remaining 20% of loans and advances. RBZ
bases its recommendations on the relative contribution of the sectors to the
national income while banks are considering the relative creditworthiness of
the borrowers.

It is obvious that local banks cannot sufficiently fund this economy alone.
Foreign participation is needed for local industry to increase production.
The foreigners have publicly expressed interest in doing business in this
country provided the conditions are supportive of private investment. A
small price to ask, but, not, apparently, when dealing with politicians.

Ranga Makwata

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Industry Must Innovate to Survive –– CZI

Thursday, 04 February 2010 17:59

ZIMBABWE’S industries should be innovative in the production of goods, so
that they are able to compete with not only neighbouring countries, but also
globally as the era of trade liberalisation and global competitiveness has
arrived, business leaders have warned.
The business leaders were speaking at an export management training workshop
in Bulawayo on Wednesday.

Confederation of Zimbabwe Industries (CZI), vice president of the Joseph
Kanyekanye told business leaders that the local industry should embrace good
practices that would enhance their businesses.

“Global competitiveness is important and local industry should make sure
that their businesses are attractive globally. There are no more borders in
the world that we live in and as business we should be looking for
partnerships that will enhance our businesses competitiveness in the global
world,” Kanyekanye said.

Over the past five years, the country’s industries have been operating at
less than 50% capacity, making it difficult for the production of
competitive goods. This situation has seen the country importing basically
everything from neighbouring countries.

Kanyekanye said various measures were to be put in place to assist the local
industry in producing competitive products.

“Government should put up deliberate assistance for industry, such as
supporting low interest rate loans which businesses can borrow and be able
to be competitive. Industry should also be assisted on how they can export
their goods as most of them are not aware of the procedure,” he said.

He added that there was a need for attitude change on the part of both
industry and government to ensure that the local industry thrives in the
global economy.

Zimbabwe is a signatory to the Economic Partnership Agreement (EPA) with the
Eastern and Southern Africa (ESA) regional groupings, together with
Mauritius, Seychelles and Madagascar.

Imports from the countries that signed the interim EPA have received duty
and quota free access to the European Union (EU) since January 2008.

As a result of the new agreement, these countries must now liberalise their
markets to EU imports over the next 15 years, gradually removing tariffs on
between 80 and 98% of imports from the EU depending on the country.

CZI chief economist, Lorraine Chikanya said the country stands to benefit a
lot from the EPA, hence a need to improve the quality of our products.

“In the EPA, Zimbabwe will have cumulative and progressive market
liberalisation, where it is looking at a situation that by 2013, 45% of EU
imports will be coming into the country for free and will increase to 80% by
2022. This means that our products will now be competitive in the EU markets
as there will be no duty charged,” she said.

Chikanya however indicated that this trade liberalisation would mean that
local industries will need to pull up their socks so that their goods are
attractive to other countries.

“Opening up of the market for EU products would provide for stiff
competition for the local industry, as Zimbabwe is already importing most
products from South Africa and Botswana.

These neighbouring countries are already competing for space with our local
products, what more EU products? It is therefore important for the local
industry to be extremely innovative in their production.”

Chikanya also said in preparation for 2013, business needs to think about
strategies to increase competitiveness, at national, regional and
international levels.

“We need enterprises that allow other players to come in and be partners. We
need to change our mentality of exporting raw materials into exporting
value-added products, recognising of course the challenges facing the

“The industry needs to know that there is no going back on liberalisation.
It needs to be inventive and come up with ways on how to utilise the policy
environment they are subjected to.

“In a nutshell, the private sector needs to rethink their strategies and
revise their business models,” she said.

Fortune Dlamini-Moyo

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The Good, Bad, and Ugly of January

Thursday, 04 February 2010 17:48

JANUARY has shown that it is hard to predict anything in Zimbabwe, although
short-term planning is now possible.
The economy however has shown signs of improving. Businessdigest this week
looks at the good, bad, the ugly and, business quotes of the month and
wishful thinking during the period under review.

The Good

*The Medium-Term Plan, the overall national economic development policy
between 2010 and 2015, has targeted to achieve US$9 billion gross domestic
product within the next five years.

*TN Holdings Limited shares started trading on the Zimbabwe Stock Exchange
with an opening listing price of US5,5c.

The listing of TN Holdings was completed through a reverse takeover of Tedco
Ltd by TN Financial Holdings Ltd resulting in the change of name to TN
Holdings Ltd. The company's share closed the month trading at US$2,2.

*The 2009/10 tobacco output is projected to surpass 80 million kg, compared
to the 56 million kg of the crop that went through the auction floors last
season, Zimbabwe Commercial Farmers Union president, Wilson Nyabonda, said.

*Finance minister Tendai Biti  lobbied the International Monetary Fund (IMF)
in Washington to restore the country's voting rights and offer lines of

*The stock market responded to events that are happening locally and abroad
and offering relatively attractive returns.

The Bad

*Zimbabwe is battling a skills crisis, with several companies struggling to
recruit from the domestic market.

*The rate of growth in capacity utilisation is expected to slow this year
with the overall recovery in the economy turning out to be lower than
officially predicted, president of the Business Council of Zimbabwe,
Kumbirai Katsande said.

*Abortion of a planned auction of 300 000 carats of diamonds from the
Chiadzwa field by Mbada Diamond after it emerged that KPCS procedures had
not been observed.

*Most employers are failing to pay workers' salaries on time while others
have approached the courts for exemption from implementing industry minimum
wages, setting the stage for protracted labour disputes

The ugly

*Zimbabwe will continue to experience power shortages. A Zimbabwe Power
Company generation report dated January 24 2010 shows that only one unit is
operating at Hwange.

*The other five are tripped due to system failure with only Unit 6 expected
"to return to service soon".

*Continued disruptions on farms have resulted in more than 1 500 farm
workers losing their jobs, the General Agriculture and Plantation Workers
Union of Zimbabwe (Gapwuz) said.

*The Reserve Bank is broke to the extent of having some of its property
being attached by the messengers of court.

Wishful thinking

*Secretary for Mines and Mining Development Thankful Musukutwa said the 30%
growth which government projected for the mining sector in 2010 was
attainable as most mines that had closed due to viability challenges are

*Zimbabwe should be self-sufficient in electricity generation by 2015, with
the country exporting surplus power to its neighbours, according to the
Mid-Term Plan.

*Zimbabwe is projected to host a third of the tourists (about 130 000)
expected to visit South Africa for the World Cup soccer showcase in June,
Tourism and Hospitality permanent secretary Sylvester Maunganidze.

Quote of the month

"Employees must be allowed to decide how they want to space their children
and how many children they want to have regardless of whether they changed
the employer or not.
"ZCTU also wants the breastfeeding period to be increased from one hour per
day to two and this should be over 18 months and not the current six.
"Other proposed changes include a 48-hour notice to go on strike instead of
the current 14-day written notice," -- ZCTU legal advisor Zakeyo Mutimutema
on the trade union's proposed paternity leave for men.

*Negotiations between Israel and Palestine have been going on for several
years now if not decades, yet you expect us to conclude the talks here
faster and at the behest of the media," -- Priscilla Misihairambwi-Mushonga,
one of the chief negotiators in the current stalled dialogue to save
Zimbabwe's coalition government, speaking to a journalist.

*"The (Indigenisation) Act is good, we want indigenisation to be in full
throttle, but the policies should encourage the flow of investors into the
country," -- Zimbabwe National Chamber of Commerce president, Obert Sibanda,

*"All we are saying is that while we appreciate that these companies played
a bigger role in sustaining Mugabe's government, there is need now to review
the situation and see what can be done to help save these companies from
imminent collapse." -- Gorden Moyo, the Minister of State in the Prime
Minister's office advocating the European Union to remove sanctions on 40
Zimbabwean companies.

*"The past 10 years can be described as an unnecessary decade. Before
abandoning the credit facility scheme, we had 180 000 accounts countrywide.
However, because of some notable achievements in the economy we decided to
re-introduce credit facilities and now our account holding base stands at 38
000,". -- Edgars managing director, Raymond Mlotshwa talking about his
retirement in March after serving the company for 29 years.

Ideas that might never materialise

*Government intends to set up economic crimes courts in Harare, including
four provincial towns to curb fraud, graft and other forms of corruption.

According to the latest three-year macro-economic policy released by the
Ministry of Finance, these crimes courts would work closely with the
Anti-Corruption Commission. These decentralised anti-corruption offices are
envisioned in Bulawayo, Gweru, Mutare and Masvingo.

*Confederation of Zimbabwe Industries is urging the government to consider
the adoption of the South African rand as a single currency to eliminate the
negative effects of cross-rate, its president Kumbirai Katsande said.

*Players in the poultry industry are calling government to impose a ban on
the importation of genetically modified chickens, a development they said
would promote the local industry.

Paul Nyakazeya

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Dollarisation Limits the Moving Tide

Thursday, 04 February 2010 17:42

THE trend of moving from house to house amongst Zimbabwean tenants has
subsided due to the adoption of a stable currency.
Three years ago estate agents said an average tenant moved after about a
year and half due to the continuous rise of rentals as the local currency
lost value against major currencies at an alarming rate. Those who were
paying rentals in US dollars then were said to have stayed a bit longer.

"The dollarisation of the economy has resulted to tenants staying in the
same property for a long time. There are however some landlords who have
reviewed their rentals upwards (in US dollars) when all economic
fundamentals are pointing the other direction,"

Tenants, who are near prime amenities like schools, shops, public transport
and security with no water and electricity problems have had every reason to
settle in and stay where they are for many years, even when rentals are

The Estate Agent Council of Zimbabwe said between 2004 and 2007 there was a
lot of movement in residential areas as many informal activities resulted in
the property market being distorted.

"In some cases rent was being paid in fuel coupons or groceries, which were
equal or more than the value of the local currency which was required each
month using the prevailing official rate."

Zimbabwe endured the longest and most severe period of hyperinflation since
Germany in the early 1920s resulting in the currency being rendered useless.

During the period under review the local currency was revalued three times
removing 12 zeros to try and tame inflation.

"Movement slowed down during the first half of 2008 as most landlords
virtually started to charge in US dollars refusing to accept the local

The fact that fuel coupons then, were seen as a stronger currency than the
official Zimbabwe dollar was testimony to a nation in agony. Rentals rose by
more than 20 000% inside one month.

While the dollarisation scheme has been described by some analysts as
solution it was said to be unworkable.

"It has been tried before by other countries that have suffered
hyperinflation. But it always failed to fix underlying problems and can, at
best buy some time for an unpopular and failing government."

Potential homeowners who had ready cash then also distorted the market as
they were willing to pay what was being asked without any negotiations.

Paul Nyakazeya


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Erich Bloch: Give Bonds Prescribed Asset status

Thursday, 04 February 2010 18:41

LAST week the Reserve Bank of Zimbabwe (RBZ) announced that the Special
Tradable Gold Bonds, which were due to mature on Monday this week, are to be
"rolled over" for a further  six months.
That announcement was not of great surprise to the holders of the bonds for
it has been widely-known for an extended period of time that RBZ is in
financial problems. Nevertheless, the failure to redeem the bonds on time is
tragic, with cataclysmic consequences.

The RBZ has been the victim of immense financial constraints for some years.
Many attribute its apparently near-bankruptcy to gross mismanagement and
self-motivated profligacy.

That they have such a perception is readily understandable, for there is a
pronounced awareness of the immense magnitude of largesse funded by RBZ,
ranging from the funding of numerous motor vehicles, vast quantities of
tractors, ploughs and diverse other farm equipment and inputs for the
agricultural sector and to much else. Although, for having the view that
primary culpability is not with the RBZ, this columnist will (without
legitimate foundation!) be accused of being an RBZ apologist, nevertheless
that view persists.  The reality is that the fault, very substantially and
unequivocally, is that of the Zanu PF government.

Year after year, preceding the negotiation of the Global Political Agreement
(GPA), that government endlessly demanded, with great intensity, that RBZ
engage in innumerable quasi-fiscal operations. Desperate to retain its grip
on power, and recognising that the ongoing intensive economic collapse which
it had occasioned (despite speciously and spuriously attributing blame for
that collapse to others) could weaken that grip on power, it vigorously
sought to beneficiate a distraught populace in order to retain the support
of the electorate.

However, it did not have the resources to do so, having progressively
bankrupted the fiscus, accumulating a national debt in excess of US$5
billion, including more than US$2 billion of pronounced debt-servicing
arrears. Therefore, in pursuit of its endeavours to retain electoral
support, it recurrently imposed upon RBZ to incur the expenditures.

Such quasi-fiscal operations are anathema to any central bank, and most of
the world's central banks are vested with the autonomy to resist any
pressures to engage in such operations, be such pressures applied by
government, by the populace, or others.

However, despite repeated appeals for such autonomy, the RBZ was not
accorded that autonomy, and the Zanu PF government exploited its grip on the
RBZ by incessantly driving it into those untoward quasi-fiscal activities.
Amongst the many consequences, including being a major contributant to
extreme hyperinflation, was that the RBZ's reserves were grievously eroded,
and that it was not only unable to service its expenditures and debts
timeously, but also that it recurrently withheld foreign exchange due to
private sector enterprises (during the pre-demonetisation of Zimbabwean
currency period).  Amongst the many unserviced debts were those of RBZ's
subsidiary, Fidelity Printers & Refiners (Pvt) Ltd. Those debts included
considerable amounts due to gold producers for gold deliveries to Fidelity,
to whom delivery was mandatorily required by the prevailing legislation,
preceding the 2009 issue of gold dealers' licences to a few producers.

Unable to service those debts, the RBZ issued 12 months, special tradable
gold bonds, with an eight percent per annum coupon. This hit hard gold
producers, who initially needed payment to service ongoing operational cash
flow needs, as well as to fund development and increased productive capacity
expenditure.  Some were able to convert the bonds to cash by trading them
within the money market, but demand was limited, and the trade discount very
considerable, motivating many to retain the bonds, notwithstanding their
cash flow constraints. They fervently hoped that redemption would be
effected when due, belatedly enhancing their cash flows, but that was not to

In announcing the "roll over" of the bonds, the RBZ stated that it was
vigorously pursuing various avenues to raise the required funding, and was
also engaging in substantive discussions with the Finance ministry to
resolve the payment crisis. This is commendable, but in reality the
prospects of the RBZ accessing external funds are minimal, until the GPA is
fully implemented, albeit very belatedly. Although there is very extensive
international willingness, in principle, to accord Zimbabwe lines of credit,
there is a major reluctance to convert that willingness into action until
such time as there is irrefutable evidence of genuine and extensive progress
towards Zimbabwe political stability. The untenably prolonged delays in
transforming the totality of the GPA from declarations of intent to
actuality are pronounced constraints upon international funding being

The inability of the RBZ to service its obligations was intensified by the
contemptuously minimal capitalisation of the bank accorded by government in
the 2010 Budget, being a niggardly US$10 million. To all intents and
purposes the impecunious circumstance of the RBZ is attributable to
government, by virtue of the debt imposition created by the Zanu PF
government. The Finance ministry must recognise its moral, and impliedly
legal, obligation, to fund the RBZ satisfactorily, either by direct
provision of sufficient funds, or by a partial privatisation of the central

It must also do so in recognition of the very negative economic consequences
of the RBZ default. On the one hand, the non-availability of the funds is
tragically retarding the viability of operations of gold producers, and on
the other hand is markedly restraining the development and growth of gold
production. This adversely impacts upon national export earnings, upon
levels of employment, upon downstream expenditures into the economy, and
upon fiscal inflows. Concurrently, Zimbabwe's poor international credit
rating is further worsened, which is a deterrent to much-needed lines of
credit being forthcoming, and to critically necessary investment, which is a
prerequisite for Zimbabwean economic recovery and growth.

Merely as a transitional, very short-term alleviating measure, the Finance
ministry should immediately accord the bonds prescribed asset status,
rendering them a somewhat more attractive investment status for insurance
companies, pension funds, and other relevant institutions. This would
enhance tradability of the bonds, thereby improving gold producers access to
desperately needed funds.

The bonds should also be classified as acceptable instruments for settlement
to Zimra of gold producers' income tax, PAYE, VAT, witholding taxes, and
other tax liabilities. Every effort must be speedily taken by government to
minimise the tragic consequences of the non-redemption by RBZ of the bonds
when due.

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Muckraker: Food Security is the Greater Good

Thursday, 04 February 2010 18:58

UNDER the heading "ZDF to safeguard land reform", the Herald last week
carried a story in which Defence minister Emmerson Mnangagwa, addressing
students at the army Staff College, said the ZDF "as a matter of priority"
will ensure the land reform programme is not reversed "because it is the
country's heritage and source of pride".
This is an extraordinary statement for a minister with a legal background.

The land policy will be determined, according to the GPA, by the government
of national unity acting in concert, not by ministerial fiat.

Central to the GPA is a land audit to determine who among Zimbabwe's
avaricious elite got what. It is the duty of the ZDF to uphold
constitutional governance. Greedy politicians and officials from the old
regime cannot be allowed to retain their ill-gotten gains.

Declarations that "the land reform programme is one of the major priorities
of the country's defence forces" is nothing more than populist drum-beating.
The ZDF must be a non-partisan professional force committed to the
well-being of all Zimbabweans. Mnangagwa had a duty to spell that out.

We saw Nelson Chamisa spouting the same brand of populism at the Quill Club
last Friday. Land reform could not be reversed because "it is an important
national issue", he declared.

Important national issues are those so-determined by the GNU. Land reform
has been plagued by cronyism and corruption. Are those features to remain an
"important national issue"? What should be an important national issue is
cleaning out the Augean stable that Zanu PF has bequeathed to the nation.

Chamisa must stop propitiating the beneficiaries of misrule. Land reform is
what the people will decide in drafting a new constitution. It is what we
decide as a nation, not what people like Mnangagwa decide.

Agriculture minister Joseph Made has said the land audit was premature
because new farmers weren't ready. But they were ready when it came to
diverting fuel supplies and selling farm fertiliser, seed and implements.

What do Mnangagwa, Chamisa and Made think of the seizure of Kondozi Estate
and lately Matuntska banana estates? Is that calculated theft part of the
"irreversible" land reform? Is it a source of "national pride" that a huge
black-owned horticultural operation was occupied and pillaged by ministers?

And what do they make of Zimbabwean diplomats helping themselves to banana
estates in the Burma Valley that are supposed to be protected by Bippas? Is
that what they mean by "no going back"?

It is time we stopped this spurious patriotic idiocy. Land seizures and
theft of equipment and produce cannot be a source of national pride. Nor can
the destruction of commercial agriculture. People like Chamisa need the
courage to say so instead of pandering to Zanu PF demands.

In the same vein, we were surprised to hear Justice Bharat Patel's decision
that enforcing the Sadc tribunal's ruling on land reform would be against
Zimbabwe's domestic laws and agrarian policies. He declared that "the
greater public good must prevail".

We are at liberty to question court judgements, we understand, so long as
such criticism is couched in moderate terms.

What does the "greater public good" mean when agriculture has been
decimated? What if land reform has been partisan, violent and destructive?
How have farm workers fared in terms of "the public good"?

What can we say of a land reform policy where more people have been
dispossessed than resettled? What public good is there when we have been
reduced to importing maize and milk? The greater public good is food
security and greater investment in agriculture.

On another matter, why did Zimbabwe nominate a judge to sit on the Sadc
tribunal when the government disputes the legality of that tribunal's
rulings? The answer is very simple. It rejects the tribunal's rulings when
they don't suit its political purpose.

That is misrule writ large and the message will not have been lost on the
investor community.

There have been a series of calls recently for sanctions to be lifted. These
include Arthur Mutambara recently returned from Davos. He believes all
sanctions should be removed immediately.

What did the business community gathered in the Swiss resort make of this
Zimbabwean leader, we wonder, who ignores the pillage of Bippa-protected
farms and the assaults on law-abiding and productive farmers? Let's hope he
spared them his "jokes" about half-pregnant women!

Mutambara has been clear on the land issue in the past but now engages in
tom-foolery at a Miss Zimbabwe Tourism event which signals to investors a
complete lack of seriousness at the top of the GNU.
It was funny watching him in Davos at the BBC debate looking for the camera
as it panned across the room. When it did finally stop at him his question
was less than earth-shattering.

Mutambara is a clever guy who seems unable to get serious. The unrelenting
seizure of farms in the Burma Valley offers him an opportunity for
statesmanship. Instead he gave us demagoguery.

The message should be: No change in sanctions until theft and violence

Why does he think Zanu PF should be rewarded with the lifting of sanctions
when they refuse to stop seizing other people's property? Why should people
invest in Zimbabwe when its leadership refuses to obey the rule of law and
treats regional courts with scorn?

The Herald on Wednesday reported the last-minute switch of clubs by Warriors
captain Benjani Mwaruwaru. The 31-year-old striker moved from Manchester
City to Sunderland on Tuesday in a deal that was concluded at the 11th hour.

Not that there is anything amiss with Benjani's switch to a new club to earn
more game play but it is the attempt by the Herald to exaggerate his scoring
prowess in the English Premier League which caught our attention.
"Benjani earned his move to City after shining for Portsmouth, where he had
scored 19 times in 70 appearances, in January 2008", the Herald gushed on

While we appreciate that Benjani is a good player who has kept the
Zimbabwean flag flying in the Premier League, we find it unconvincing for
the Herald to suggest that a striker who scores 19 goals in 70 outings is a
shining example of goal scoring in a league where other strikers have
already banged in 20 goals in 24 outings.

Let's hope Benjani does not have a personal relationship with the reporter
because we have heard reports of Zimbabwean foreign-based football players
showering sports journalists with all sorts of gifts in return for positive

Who is responsible for the mess at Beitbridge? For year after year
successive  Finance ministers and Zimra officials failed or didn't bother to
come to grips with this disaster. What a shop window for Zimbabwe greeting
visitors to the country!

Now we have the dynamic Tendai Biti in office can we expect some change? It
needs a take-charge person who can sort things out. Will Biti rise to the
challenge? And what does Gershom Pasi do apart from making piles of money?
Please guys, let's see some action. Beitbridge is a  national disgrace.

Poor old Gabriel Chaibva. He hasn't learnt the basic law of Zimbabwe
politics: Nobody likes a turncoat however loud they bleat their loyalty to
their new masters. The suspicion always is they'll turn again.

Defecting to Zanu PF is rather like leaping from the frying pan into the
fire. Chaibva can't even tell which way the wind is blowing. Evidently not
a very bright politician!

Congratulations to Chief Secretary to the President and Cabinet Dr Mishek
Sibanda for introducing strict curbs on officials travelling outside the
country, and in particular slashing delegation sizes.

This is all with a view to reducing the government's massive travel bill.
Air Zimbabwe was being abused, we are told.

Sibanda's letter was sent to officials at the Public Service Commission,
parliament, permanent secretaries, the Reserve Bank, the police, Zimra, and
chairpersons of parastatals.

The restrictions include a reduction of the number of official delegations
to only necessary members, we gather.

But is there not one department missing from the list? Dr Sibanda's own?
It was reported that President Mugabe took delegations of up to 60 people on
his trips to Rome and Copenhagen last year.

Many of these people were wives and hangers on, news agencies reported. If
these reports are true we would expect these economies to start at the top.

Perhaps Dr Sibanda can confirm that he will take the axe to all levels of

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Land: Zanu PF Tool in Suppressing Dissent

Thursday, 04 February 2010 18:36

ZANU PF is a creature of habit and Robert Mugabe has sharpened the one tool
in his vast arsenal, effectively destroying persons who challenge his
authority or support any opposition to his despotism and brutal hold on the
levers of power.
The fast-track land acquisition programme is one such tool, which has been
genetically modified by Zanu PF pseudo-political scientists to garner
illusive votes. Land reform comes into sight as a revolutionary exercise
that corrects a colonial wrong. The illusion is that revolutionaries are
taking back stolen land by colonial settlers and their offspring and
redistributing it to landless peasants.

Since Independence, Zanu PF has blatantly employed the tactic of land
seizures and unlawful private property requisition from black political
opponents and fellow nationalists to settle old scores and to disenfranchise
powerful opposition figures. The first victims of farm evictions in
independent Zimbabwe were black patriots.

Egregious examples of aggravated farm seizures occurred when in 1983, Dr
Joshua Nkomo's farms and private property were expropriated and he was
evicted under spurious treason allegations. He had been the father of
Zimbabwe's liberation struggle, whilst on the other hand Mugabe had been an
appointed functionary who caught the liberation struggle midstream.

In Marondera on February 14 1982, Mugabe told a Zanu PF crowd that: "Zapu
had bought more than 25 farms and more than 30 business enterprises
throughout the country. We have now established they were not genuine
business enterprises, but places of hiding military weapons to start another
war at an appropriate time. He was trying to overthrow my government. Zapu
and its leader, Joshua Nkomo, were like a cobra in a house. The only way to
deal effectively with a snake is to strike and destroy its head."

Nkomo was subsequently accused and charged with treason for unlawfully
trying to overthrow the government of Robert Mugabe. These incendiary
political statements stoked the flames of hate and formed the basis of a
sequence of well-choreographed campaign rhetoric that aroused intolerance
toward the Ndebele, Zapu, and its former freedom fighters, Zipra. This
mantra was effectively regurgitated on state-controlled media until the
majority of Zimbabweans believed that Nkomo presented a clear and present
danger to Zimbabwe's sovereignty.

This was the precursor for Gukurahundi, the massacre of 20 000 people in
Matabeleland by the North Korean trained Fifth Brigade.

Mugabe invoked the draconian colonial-era law and the farms were confiscated
under the notorious Unlawful Organisations Act, which was enacted by settler
regimes to suppress liberation organisations. Home Affairs minister Hebert
Ushewokunze enthusiastically instructed the loyal police to dispossess land
from Joshua Nkomo personally. Collectively Nkomo, Zapu and Zipra guerrillas'
land that was wrongfully stolen by Zanu PF and Mugabe include the following

Ascot Farm, Solusi; Hampton Farm, Gweru; Woody Glen Farm, Umguza; Nest Egg
Farm, Gweru. Nijo Farm, Harare now belongs to Arda and Snake Park and
Salisbury Hotel became government-training centres.
In 1992 Mugabe reiterated that no compensation would be paid to victims of
the Matabeleland crisis because atrocities were committed "during a state of
war." At Nkomo's funeral in 1999, Mugabe came close to showing remorse and
admitting culpability for Gukurahundi by referring to the massacres as a
"moment of madness''. In September 2006, Nathan Shamuyarira, who served as
Information minister during the Fifth Brigade operations, is reported to
have told a conference on national reconciliation in Vumba: "No, I don't
regret. They were doing a job to protect the people."

In August 1963 Ndabaningi Sithole founded the Zimbabwe African National
Union (Zanu) and in 1964 he appointed Mugabe to be his secretary-general.
Mugabe competed for the presidency of Zanu during its early days, and his
rivalry with Sithole intensified when Mugabe took over the party in 1976.

In the 1990s, Ndabaningi Sithole argued that land should be re-distributed
to black people and that all black people should be given equal opportunity
to access the land. The response from Zanu PF, through the sharp tongue of
its eloquent spokesperson Eddison Zvobgo, was swift. He ridiculed him for
wishful thinking and called him "mad", further commenting that Zanu PF would
need to colonise Zambia to achieve what Sithole was talking about. This
compelled Sithole to show his leadership resolve and resettle landless
people on his private Churu Farm on the outskirts of Harare.

The government first accused Sithole of not owning the farm, which he had
bought in 1979. Later in 1992, through Health minister Timothy Stamps,
government declared Churu farm a health hazard that would pollute Lake
Chivero. Despite obtaining a High Court injunction that clearly stated: "The
Land Acquisition Act was being used as a punitive measure and political
weapon," Zanu PF went ahead and forcibly removed 4 000 landless residents
from Sithole's Churu farm.  The government did not make provisions for their
alternative settlement.

The late Vice President Joseph Msika, then Local Government Rural and Urban
Development minister, said Churu farm residents should "go and join their
homeless colleagues in the streets" and then apply to his ministry for aid.

The Zimbabwe Republic Police evicted the remaining 1 600 residents of Churu
and resettled them at a camp formerly used by Mozambican refugees.

Sithole was being punished amongst other things, for the following
statement, which he made in parliament: "I move that in view of the failure
of the present government to run the country to the satisfaction of the
majority of the people of this land and in view of the social crisis which
is building up, this House of elected representatives of the people of
Zimbabwe passes a vote of no confidence in the present government.

"This reveals the true nature of the Zanu PF-led government, notably its
hypocrisy, callousness and a lamentable lack of a keen sense of justice and
an abominable deficiency of what is right and what is wrong, a government
that is not fit to rule."

In December 1997, Sithole was found guilty on all three charges of
committing acts of terrorism, illegal possession of arms and conspiring to
assassinate Mugabe. High Court Judge Justice Chatikobo, sitting with two
assessors, convicted him. He denied the charges and appealed against the
He was granted the right to appeal, but no appeal was filed and the case was
set aside as his health deteriorated.

In July 1993 Mugabe said: "We will not brook any decision by any court from
acquiring any land. We will get land we want from anyone, be they black or
white, and we will not be restricted to acquiring under-utilised land."

James Chikerema, co-founder of Zapu and one of Zimbabwe's first trained
guerillas had his property -- Diana Farm -- designated and included for
compulsory acquisition without compensation in 2000. He said, "As far as I'm
concerned, it's Mugabe's vendetta against me."

Enock Dumbutshena, Zimbabwe's first black judge, became independent Zimbabwe's
first black Chief Justice, and was a respected jurist who fearlessly ruled
against the government. He later lost his horticultural property.

When land was being taken away from the blacks, most Zimbabweans ignored the
injustices, reducing it to quarrels between political foes. The
international community responded with deafening silence while proponents of
private property rights remained indifferent.

Once there were no more opposing political voices with land to confiscate,
Mugabe moved on to white farmers, using the excuse to right a colonial
wrong. Regrettably, he targeted agricultural entrepreneurs, the majority of
whom had bought farms on the market in post Independence Zimbabwe.

Most farmers, encouraged by Mugabe whose government issued "certificates of
no present interest", invested in horticulture, irrigation and farm
Zanu PF targets for attack and destruction any group of persons or
individuals it deems economically independent.

Minorities are vulnerable, easy targets because of their skin colour, their
language and culture. The post-Independence land issue has never been a
black or white issue -- it has been political from the beginning. After all
black political opponents' land had been grabbed, they were imprisoned or
mysteriously died. Mugabe moved on to white farmers, shifting his reasoning
to righting a colonial wrong. All along, it has been Mugabe spinning the
dogma to mollify sycophantic followers whilst rewarding associates on
self-enrichment exploits.

Matibe is a political commentator.

By Phil Matibe

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Women have Right to Demand Equal Representation

Thursday, 04 February 2010 18:29

I HAVE never been too fond of radical feminism or any form of extremism for
that matter; finding it to be an aggressive, usually narrow and unhelpful
approach to conflict resolution.
Radicalism is often reactionary, manifesting as a reaction to some undesired
reality and is usually the preserve of those who feel they have something to
defend against all costs and something to fight for against whatever odds.

As an activist, I have found that radicalism has its place, its use and its
benefits in pursuing the elusive goal of attaining social justice for

Some weeks back, I read with glee, that Emilia Muchawa and a group of women
had broken into song and dance protesting the negligible female
representation in the constitution-making process's committees and even had
the gumption to threaten to derail the process altogether.

Now I reckon there are those who found such conduct distasteful, extreme and
even uncalled for -- but every once in a while, it is necessary for
discontent to erupt into something more than passive resistance.

I do not know whether these women intended to make such a vocal display of
their displeasure but I would like to think it was neither premeditated nor
meant as a gesture of disrespect for the process -- I would like to think it
was a spontaneous and extreme reaction to long suppressed frustrations that
women have felt at having to be side-lined time and again in critical
decision-making processes.

And I dare say, no one can argue that women's grievances are legitimate and
their frustration a natural consequence of ineffectual words never put to
practice as our country has a great gender policy on paper and absolutely
nothing to back it up on the ground.

The transition from theoretical gender policy frameworks to the
implementation and practice of the same has yet to manifest; and while one
can appreciate that it is not easy to reverse the thinking of years and that
gender equity will be a process -- one expects to see a degree of commitment
towards living up to the words enshrined in the treaties, legislative
instruments and laws which Zimbabwe has signed, ratified and enacted.

From the Committee on the Elimination of Discrimination against Women to the
Sadc Protocol on Gender and Development, and other treaties focusing on the
need for gender parity, Zimbabwe has made a commitment on paper that is yet
to manifest in actuality; so with the imminent crafting of a new
constitution, women have every right to insist if not demand equal

Article VI of the Global Political Agreement having stated without
equivocation that the parties are, "Mindful of the need to ensure that the
new constitution deepens our democratic values and principles and the
protection of the equality of all citizens, particularly the enhancement of
full citizenship and equality of women," it is only natural that a deviation
from these noble goals be met with resistance, and if need be, outright

However, cognisance must be taken of the fact that men folk have deeply
internalised cultural values and have often related to women on a
paternalistic level -- an unfortunate consequence of being born and raised
in a patriarchal society.

Having said this, I found the gesture made by Muchawa and the other women
present at that gathering to be a definitive act of kicking paternalism to
the curb.

Emphatically, Zimbabwean wo-men are making a statement they have no use for
paternalistic gestures; men do not ever need to make decisions (regardless
of how well-meaning the intention) on behalf of women. They are saying that
"we can and we will speak for ourselves."

In this context, my view is that paternalism is premised on two
considerations; the first being that men adopt a benevolent and "fatherly"
attitude towards women and by assuming this attitude they (men) then make
decisions ostensibly meant to benefit women without the inclusion, consent
or will of the women themselves.

So perhaps, it was with good intent that these men gathered, figuring that
they would "know what was best for women" and go ahead with the business of
crafting the constitution without the permission, participation or
involvement of women.

Inexorably, the women's movement in this country has over the years
consistently challenged and resisted patriarchal and paternalistic
attitudes - suffice to say, the constitution-making process presents the
most volatile battlefront yet. --

By Delta Ndou

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Comment: Sinister Wind Blows from Addis Ababa

Thursday, 04 February 2010 19:19

President Robert Mugabe was gleeful on his return from Addis Ababa this
week. He had just attended the 14th African Union summit which he described
as the "best-ever" for him.

He had many reasons for his joyousness but many Zimbabwe watchers must have
felt there was something sinister about his jubilation.

Mugabe had gained a propaganda coup in Addis, gained because he had not
himself masterminded it. That bit had been done for him by British Foreign
secretary David Miliband who, because of sheer ineptitude or a tendentious
reading of the Zimbabwean situation, had told the House of Commons that
Britain would wait for a cue from Morgan Tsvangirai's MDC to end the
sanctions imposed on top Zanu PF and government officials and some

For the pan-African menagerie of heads of state and government gathered in
Addis this was proof positive that the sanctions were not, in the first
place, imposed for the good of the generality of Zimbabweans but were meant
to change the government in Harare through unconstitutional means.

Their response to Miliband's maladroit statement was unanimous: the
sanctions had to be lifted without any conditionality. For Mugabe this was
cause for celebration but for Zimbabwe watchers the decision was based on a
one-sided reading of the story. The AU did not consider, at all, the real
situation on the ground where the majority of Zimbabweans are still being
denied their civil liberties, where the rule of law is still anathema to the
elite in power, where the majority continue to be impoverished by a regime
that thrives on greed and brute force.

But the implications of the AU's call for the lifting of sanctions are a

Bolstered by the pan-African body's support, Mugabe's Zanu PF party will
continue on their intransigent path in negotiations on the outstanding
issues of global political agreement. Indeed the party has already dug in
following its politburo's pronouncement that it would make no further
concessions in the talks until the sanctions are unconditionally lifted.

The European Union is meeting in Brussels soon to review its position on the
sanctions and intelligence from diplomatic sources indicates that the
sanctions would not be lifted any time soon. This is a classical impasse:
The EU won't lift sanctions before the outstanding issues are resolved; Zanu
PF won't resolve outstanding issues until sanctions are lifted! It doesn't
look like either side is willing to give. The winner is Mugabe.

The AU, together with Sadc, is the guarantor of the global political
agreement that has resulted in the present state of affairs in Zimbabwe. The
first's stance on sanctions is likely to have far-reaching implications for
the second's ability to resolve the Zimbabwean question. If indeed the vote
in Addis was unanimous it means Sadc countries, including the negotiations
facilitator South Africa, are against the continued imposition of sanctions;
again strengthening Mugabe's position.

But Mugabe's most important triumph in Addis was the elevation of Malawi
President Bingu wa Mutharika to the position AU chairman. Mugabe's
triumphalism was manifest in his effusive praise of this development.

Zimbabweans know the relationship between these two peas in the same pod:
Bingu owns a farm in Zimbabwe which he won't be dispossessed of, as is the
case with other foreigners; Mugabe has about the most important highway in
Malawi named after him.

Bingu doesn't care a hoot how Mugabe treats his people living in Zimbabwe.
Malawians bore the brunt of Mugabe's land grab: they provided about all the
labour on the farms and were left homeless and destitute when their former
employers were chased away. There were no protests from Liliongwe.

In 2005 Mugabe embarked on an urban clean-up operation which destroyed 700
000 homes and left two million people homeless. Needless to say, the
majority of these were Malawians who had for a century, generation after
generation, provided cheap labour in Zimbabwe's towns and mining
Bingu did not say as much as a nay.

If the Malawian president does not care about millions of his people who
form huge minorities in all southern African countries, why should he care
about ordinary Zimbabweans who continue to suffer under the repressive
regime of his chief confidant?

But Mugabe's coup de main in Ethiopia was the election of Zimbabwe to the AU's
Peace and Security Council. Commenting on this he said: "That is very
important. We will be able to ward off interference from external forces
that are always trying to tarnish our image."

But where will this, Mugabe's victory, leave his country?

One thing is for sure: Zimbabweans will not revel in the peace and the
security the AU advocates, of which Mugabe will be a guardian angel. The
miasma coming out of Addis will continue to choke them in the form of bad
governance and denial of their democratic rights such as a free and fair

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Candid Comment: GNU: Things Aren’t Looking Good

Thursday, 04 February 2010 19:12

ZANU PF and MDC officials have lately been demonstrating dislike for each
other. In parliament on Wednesday MPs from across the political divide
heckled and shouted at each other over a sanctions motion which Zanu PF
wanted to introduce.

The business of the House was adjourned as a result of the fracas which is
emblematic of the cracks in the super-structure of the GNU. It isn’t looking

Already battle lines have been drawn between President Robert Mugabe’s Zanu
PF and the Morgan Tsvangirai-led MDC. Daggers have been drawn and the
victim — the inclusive government -— may face imminent death if regional and
continental leaders fail to flex their muscles and force the two chief
political protagonists to compromise and resolve the outstanding issues of
the September 2008 global political agreement (GPA).

The intervention should be for the sake of the suffering Zimbabweans whose
rights since Independence in 1980 have been trampled upon by a regime whose
political survival has been through brute force. The days of camaraderie in
Sadc and the African Union should come to an end! The two bodies should move
swiftly and firmly to save the shaky government which is sitting on a powder
keg threatening to explode any time. They have to demonstrate the same zeal
they exhibited when the Madagascar crisis erupted last year.

Mugabe and Tsvangirai should be told to their faces that this is not time
for politicking and they should find each other sooner rather than later.

Regional and continental leaders should move in to resolve the deadlock
which is threatening to tear apart the gains of the last 12 months and
return the country to the pre-June 2008 era.

There is evidence galore that Zanu PF’s intransigence and insincerity in
fully consummating the GPA has left the unity government hanging
precariously while Sadc and the AU, the guarantors of the pact, watch.

The government is weighed down by a deep-seated deadlock on how to manoeuvre
through the outstanding issues of the GPA, which in my opinion was a poorly
crafted pact signed in a rush to restore peace and stability as the country
was gravitating towards anarchy and degenerating into a failed state.
Several issues that could have been tied down by the pact were left hanging
and are now haunting and threatening the robustness of the house Mugabe,
Tsvangirai and the smaller faction of the MDC led by Arthur Mutambara built.

Dramatic events that will shape or destroy the inclusive government have
happened in the last two weeks — Britain’s foreign secretary David Miliband
on January 19 said Tsvangirai’s MDC holds sway in the removal of sanctions
imposed on the country; Zanu PF’s political bureau responded last Wednesday
declaring that the party would not concede further ground; and Tsvangirai in
a state of panic last Friday called for partial lifting of the sanctions.

The three events highlighted how estranged Zanu PF and the MDC-T are in this
inclusive government.
Strangely, there is growing belief among Zanu PF bigwigs that government
would be better off without the MDC-T because they strongly believe that
Tsvangirai and his party do not add any value by joining the government.
This explains why Mugabe and the people from his crowd attribute the current
slow and painful economic recovery to the MDC, arguing that it was acting
Finance minister Patrick Chinamasa who came with a magic wand in January
2009 — the introduction of multi-currencies — before the formation of the
inclusive government a month later.

Zanu PF wanted Tsvangirai and the MDC-T to use their international goodwill
to have sanctions lifted against the country, Mugabe and his inner circle.

So myopic is the reasoning in Zanu PF that its leaders fail to realise that
they owe their continued stay in government and political legitimacy to
Tsvangirai and the MDC-T.

Zanu PF forgets that the inclusive government has largely been donor-funded
under various programmes, among them the humanitarian plus, and that once it
collapses the support for education and the improving health sectors will be
withdrawn as  Mugabe’s government alone lacks the trust and goodwill of the
donor community.

Because of Zanu PF’s intransigence, the MDC-T has reached a breaking point!
Those in the know in the party say Tsvangirai is under tremendous pressure
to pull out, not disengage from government as he did last year.

MDC-T secretary-general Tendai Biti’s statement earlier this week exhibited
the growing frustration in the party. Biti wrote: “In the last four weeks,
following the Zanu PF congress, we have seen an acceleration of destruction
and insanity on the part of the former ruling party. We have seen an
increase in the decibels of destabilisation and recklessness. This has been
manifested in unlawful farm invasions, disobedience of lawful court orders,
the ... vitriol against the president of the MDC and intransigence at the
negotiating table.

“It is clear as a pikestaff that Zanu PF is creating the conditions for the
total breakdown of the inclusive government. It is clear to us that Zanu PF
is making a case for the establishment of irreconcilable differences amongst
the parties leading to a total breakdown of this relationship.

He said the “inevitable consequence of their homicidal actions” would be the
holding of free and fair elections under the protection and supervision of

Surely Mugabe and Zanu PF cannot win a free and fair poll and the danger is
that the party will unleash violence to secure victory even if the election
is supervised by Sadc, the AU or the United Nations.

Constantine Chimakure

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Editor's Memo: Reform Agenda Stalled

Thursday, 04 February 2010 19:02

NEXT week the inclusive government will complete its first year in office.
It was a dramatic period characterised by a historic agreement between
bitter political rivals; infighting; pulling out and coming back; and
continued internal strife.
There was however some modicum of progress in restoring a measure of
political and socio-economic stability, although beyond the façade of change
the situation remains fundamentally the same.

When the inclusive government came, expectations were high that things would
change for the better and far-reaching reforms would be introduced during
the transition to lay the ground for full recovery and prosperity. The
reforms were supposed to underpin an irreversible transition from
dictatorship to democracy.

Unfortunately, the past still remains with us. The dictatorship has not
disintegrated. In fact, there is a growing danger that we might slide back
to the dark days of repression.

The inclusive government was expected to restore economic stability and
recovery. But only cosmetic economic reforms followed the introduction of a
multi-currency regime. Although the economy has started showing signs of
recovery, structural reforms and huge financial outlays required to revive
the economy and put it on a sustainable recovery path remain elusive.

Zimbabwe is still looking for up to US$10 billion to fund economic recovery
but has only managed to secure paltry sums to kick-start an economy
devastated by extended periods of leadership and policy failures,
mismanagement, corruption and incompetence. The social structure is still
dislocated. The provision of essentials including water, electricity, health
and education is still as erratic as ever. Unemployment, poverty and
attendant problems abound. Not much has changed. Zanu PF is resisting

In terms of the bigger picture the situation is worse. No serious reforms to
set the country on a broader and sustainable path towards recovery have been

The inclusive government has so far failed to restore the rule of law, end
human rights abuses, stop farm disruptions, promote civil and political
liberties, and rebuild ruined democratic institutions, while introducing new
ones. Repressive laws are still on the statute books and are being used
ruthlessly to stifle freedoms of association, assembly and expression.

Prospective newspapers are still being denied licences to operate. Those
which were closed at the height of repression have not been given the
opportunity to reopen. Investors waiting for radio and television licences
to introduce new broadcasters are still being blocked as well. Zimbabwe has
the most repressive media environment in the region.

Although members of the Zimbabwe Media Commission (ZMC) have been appointed,
the process is in limbo. Applicants for newspaper licences, including
NewsDay, one of the papers waiting in the wings to enter the controlled
market, are unable to file their applications for licences because the ZMC
is practically non-existent. ZMC does not even have offices and a physical

The introduction of the ZMC, which wields dangerous powers to punish
journalists for whatever reason, on its own is also a problem. The
constitutional body is dominated by partisan political appointees mandated
to do the bidding for their parties and not really promote press freedom.
They would be guided by the interests of their parties and not those of the
media and the public.

The constitution-making process, the central reform premise, is also
stalling. The new democratic system will require a constitution that
establishes the desired framework of governance. The constitution would set
the principles of government, limit state power, establish a mechanism for
elections, outline fundamental rights, and define the relationship between
the national and local government.

A clear separation of powers must be established between the executive,
legislature and the judiciary.
Strong restrictions should be imposed on activities of the police,
intelligence services, and army to prohibit any political interference. One
of the mandates of the inclusive government was to ensure security sector
reform but nothing has been done.

In the interests of preserving the new democratic order and preventing the
ever-present risk of the rise of another dictatorship, the
constitution-making process should be inclusive, transparent and democratic.
The current process is anything but this. In fact, it's a disgrace.

It is incomprehensible why the MDC factions are part of such a discredited
and chaotic constitution-making process when they always claim to stand for
genuine democratic reform. Despite clear evidence that the process is
badly-flawed, the two parties -- whose now barely credible claims on
democratic reform are becoming increasingly hard to believe -- are still
participating in the charade.

History teaches us that although the disintegration of dictatorship is a
cause for major celebration, it does not lead to democracy by itself. People
who would have suffered for a long time and struggled for change ought to be
proud of themselves. The living and the dead will be remembered as heroes
who helped to shape the history of freedom in their country.

However, precautions must be taken to prevent the rise of a new repressive
regime out of the ashes of the old. Aristotle warned long ago that "tyranny
can also change into tyranny". People may claim to be struggling for
democracy when in fact they seek only to impose a new refurbished model of
the old one.
Reforms are critical for Zimbabwe to move forward. Since China launched its
own reforms and opened up to the outside world in 1978, it has achieved
measurable political stability and incredible economic growth. But when
reforms are blocked there will be no meaningful recovery or progress.

Dumisani Muleya

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