FinGaz
National Agenda with
Bornwell Chakaodza
Inflation fight likely to be held hostage to short-term
succession politics
THE introduction of a new family of bearer cheques by the
central bank
during the second half of 2006 which saw three zeros being
taken off every
old bearer cheque was undoubtedly a major highlight of the
year which we
just bade farewell.
Of course, the whole process
was initially not without its teething
problems, but frequent trips to the
banks to make cash withdrawals, hoarding
of cash, speculative tendencies, IT
systems failing to cope and the general
inconveniences associated with high
value transactions became a thing of the
past. Certainly on the currency
front, it was indeed Sunrise - A New
Beginning for Zimbabwe.
But this new
beginning however was followed by skyrocketing of prices of
goods and
services everywhere, making the new operating environment very
tough for the
majority of the Zimbabwean population. In other words, despite
the valiant
efforts of the Central Bank governor Gideon Gono and his team,
inflation
returned with an even greater vengeance and it has remained so to
this
day.
And this is the point I am trying to make here - that each new attempt
to
stabilise things is followed by a very short period of stability before
things go haywire again. In the case of the Sunrise project, convenience
yes - stability certainly not!
To all intents and purposes, inflation
continues to spiral out of control in
this country. The question is why? Why
does it continue to soar given the
fact that winning the fight against it
has become an obsession of the
Central Bank fraternity and other Zimbabwean
economic policy formulators?
What new set of measures are required to ensure
a long-lasting victory over
inflation?
Does the generality of Zimbabweans
understand that inflation is a major
obstacle to the country's development
and that all efforts must be made to
overcome this obstacle? Does the
government understand the simple fact that
its manner of spending is
fuelling inflation? How is the government deficit
being tackled? Do we learn
lessons from previous failures?
My true interest is in getting honest and
sincere answers to these
questions. There is something missing somewhere.
Unless we grasp and
implement that missing link, 2007 looks like it is going
to be just as
difficult as 2006, if not much worse. Certainly, in the
Reserve Bank of
Zimbabwe, the energy is there, the commitment and the
passion is there but
somewhere, somehow the same grit and determination that
is being shown by
the Central Bank and other institutions and individuals is
non-existent.
The need to find common ground in combating inflation in this
country is
therefore pressing. My main fear is that with the succession race
undoubtedly set to dominate Zimbabwe's political landscape in 2007 and
beyond, the country's many other pressing issues are likely to fall by the
wayside. In this kind of political environment we, the innocent and silent
Zimbabweans, will continue to pay the price.
We will hold our breath as
the succession battle is set to dominate yet
another year!
I hope I can
be proved wrong but my main fear is that Gono's turnaround
efforts are
likely to be held hostage to short-term succession politics. To
that extent,
breaking the back of inflation will be that much more
difficult, if not
impossible. Reducing inflation, which at the moment
exceeds 1 000 percent,
to double-digit territory will be but a pipe-dream.
Lasting stabilisation of
our economy cannot be achieved by economic
fundamentals alone, worthwhile
that may be. Neither can it be, as Governor
Gono has said many times, the
work of a single individual or single
institution. The country is much
bigger than any individual or organisation.
Fiscal discipline is of course
required but what experiences elsewhere show
is that successful countries in
both good times and bad are those who
combine both political and economic
reforms.
Engaging the international community is a fundamental pre-requisite
for the
success of any turnaround efforts. So is government and society's
high
degree of awareness of the inflationary problem and their unconditional
backing and support in the fight against it.
Seizing upon private capital
- both domestic and external - to move the
whole turnaround process is of
fundamental importance. That presupposes a
conducive environment in which
investors have confidence, in which
corruption is being fought vigorously at
the practical and not just
rhetorical levels, an environment in which
state-owned companies are being
privatised not half-heartedly but
wholeheartedly. Above all, a political
environment which is free, open and
democratic which sees all Zimbabweans as
Zimbabweans not some as
enemies.
How I wish ZANU PF could appreciate that we all have a vested
interest in
the success of our country and that we must be seen as
such.
Unfortunately, the ruling ZANU PF party is in no mood to be inclusive
of all
Zimbabweans at the moment. There is a marked lack of enthusiasm in
ZANU PF
to embrace all both at home and abroad. Those in power at present
are
failing us big time in this regard. But in truth, there is no harm in
taking
everybody on board in the interest of the country.
Prosperous
countries the world over owe much of their prosperity to the fact
that they
have become rainbow nations - nations of all colours and creeds.
Zimbabwe
has become such a closed society as a result of bad policies of the
ruling
ZANU PF party. This is the real tragedy!
In summary, we very much await the
Central Bank governor's monetary policy
statement on the second half of 2006
and his roadmap for the future with
interest. Certainly, on the basis of
people's experiences of the closing
months of the year just passed, 2007
looks like yet another challenging year
for Gono.
We shall see whether
measures he proposes for the year ahead combined with
lessons learnt from
the ill-fated experiments of the past years will do the
trick this time
round.
This is a season of goodwill. One can be really charitable to the
governor
that in 2006, as in 2005, he at least helped Zimbabweans live
another day!
FinGaz
Njabulo Ncube Chief
Reporter
EVER wondered why debate in Parliament is so poor?
Try
payslips showing that MPs - House of Assembly members and Senators -
each
get three cents and 25 cents for constituency and sitting allowances
respectively.
A perusal of an MPs' salary schedule shows that the
lawmakers gross $117
914.98 (US$39 at parallel market rates), far below the
Consumer Council of
Zimbabwe's average breadbasket for an urban family of
five, which stands at
$351 631 (US$117 at the parallel rate). Apart from a
car loan scheme, the
lawmakers are not entitled to housing or clothing
allowances.
Lower House members and Senators say although their pay-slips at
times come
with the bold inscription; "Fighting Corruption is Everyone's
Business",
their meagre salaries and allowances had contributed to turning
Parliament
into a haven of merchants and brokers.
"That's why Parliament
is home to dealers, it's due to poor remuneration,"
said an MDC
legislator.
Opposition legislators claim they are even poorer than their ZANU
PF
counterparts, whom they say are profiting from benefits such as cheap
fuel,
which they go on to sell on the black markets.
Rural MPs appear
better off than their urban colleagues, as they can rely on
transport
reimbursements. They are paid $10 000 a kilometre for the distance
covered
to and from their constituencies to Harare.
But Harare and Bulawayo MPs claim
they would be lucky to be paid for mileage
of even 30 kilometres.
Parliamentarians are not sure they are covered in a
promised 300 percent
salary adjustment for civil servants.
Zimbabwean MPs are among the least paid
in the region. Monthly, an ordinary
MP in Botswana nets 7 000 Pula, a Kenyan
MP between US$8 000-US$12 000,
while making laws in Angola pays about US$6
000.
Justice Minister Patrick Chinamasa and Clerk of Parliament Austin Zvoma
refused to comment.
FinGaz
Rangarirai Mberi
News Editor
BE afraid. Be very afraid. Last year was the Chinese Year of
the Dog, and
look what happened.
Rhodie mafia trying to whack our
dear leader at Sakubva, the dollar losing
three zeros, inflation gaining
three zeros, unionists jumping out of police
trucks, dirty bus deals, Zisco.
A real dog's breakfast.
Now - hang on to your seats - our great friends the
Chinese have just
declared 2007 The Year of the Pig.
What could this
possibly mean? Here's the most probable picture. We will see
our growing
herd of greedy porkers getting even more aggressive at the
national feeding
trough. They will tuck their greasy snouts deeper into the
national feed at
the expense of everyone else. Survival of the fattest.
But what else could
happen in this Year of the Pig? It's hard to predict
anything in Zimbabwe,
but there are news reports that we reckon - as we too
gaze into the
zhing-zhong zodiac - we are unlikely to see this year.
Examples (strictly
tongue-in-cheek):
ZANU PF to choose new leader
ZANU PF secretary for
administration Didymus Mutasa has called a special
congress of his party to
elect a new leader after President Robert Mugabe
turned around and said he
would now retire at the end of his current term.
News of the President's
imminent departure was met with great weeping and
wailing throughout the
land. But ZANU PF urged calm, saying it wasn't all
bad.
"It shows that we
in the reeling party have suddenly become mature people,"
says Elliot
Manyika, the man who last year told the ZANU PF conference that
there would
be no other candidate as long as the President lived. "When the
President
last year said that we would ruin the party if he ever left, like
children
who burn down the house while their parents are away, he was just
playing
with us, his children. He does that a lot, playing with us."
MDC factions
unite
THE two factions of the opposition MDC say they will now unite after a
series of embarrassing defeats at the hands of the ruling party.
"I was
wrong to lie to reporters at that press conference in November 2005
that the
national executive vote for the Senate had been a stalemate. There
was
nothing of the sort. And I'm sorry to have allowed myself to believe,
just
like Mugabe, that the party is me and I am the party," said Morgan
Tsvangirai, without a trace of his infamous bravado, with which many
remember he had led many imaginary anti-Mugabe street protests.
But
Welshman Ncube and Priscilla Misihairabwi-Mushonga retorted, in chorus:
"How
much is he willing to pay us to come back?"
And Arthur Mutambara, speaking
from NASA's Ames Research Centre in Silicon
Valley, helpfully informed the
nation of an aggressive shuttle launch
schedule in 2007 of five space
shuttle missions and eight expendable launch
vehicle missions, along with
continuing transition work for the new
Constellation Program, plus
investigations into an astro-biologist's theory
that early voyages to Mars
might have killed Martian microbes. He refused to
say what that information
had to do with anything.
Makwavarara fired
SEKESAI Makwavarara has
been fired as Harare commission chairperson.
"I'm extremely very angry.
Listen. A female acquaintance of mine is driving
at night. The grass is
uncut so she doesn't see the council truck racing in
from the right. She
swerves to the left, hits a pothole. Her new 4x4 Land
Cruiser Vigo - and,
no, I had nothing to do with the car's importation -
lands smack in a pile
of uncollected garbage and, imagine, the poor woman
has to plod through all
that rubbish to get back to the road. There's no
street lighting and
suddenly, splash, she finds herself in a pool of raw
sewage. Keeping Sekesai
is no longer in anybody's interests," said Cde
Minister, stunning
journalists who had come to expect nothing but praise for
Sekesai from
him.
Approached for comment, Makwavarara wept: "What about the curtains?
Please,
tell me he said I can keep the curtains."
Inflation slows
further
ANNUAL inflation fell by a further 600 percentage points to 400
percent
yesterday, and many now admit that official forecasts of 300 percent
by
December no longer look as silly as unpatriotic analysts had made them
out
to be.
"The slowdown was helped mostly by a sharp drop in the prices
of scotch
carts, the lower costs of Revlon and anti-dandruff treatment, and
of course,
government's introduction of free public transportation," said
CSO head
Moffat Nyoni.
The stock market fell another 17 percent on the
news - with FML the only
share to rise - as the last remaining Doubting
Thomases finally gave in and
followed the cleverer investors into the money
market where, tails firmly
between their legs, they also bought piles of new
three-and-a-half-year
government Touch-and-Go (TGB) Bonds and the five-year
Strategy for Holistic
Internal Turnaround of Economy (SHITE)
paper.
Zimdollar gains further ground
THE Zimdollar traded firmer against
key currencies yesterday, bolstered by
massive foreign capital inflows and
pledges of fresh aid and debt relief to
Zimbabwe by the IMF and the World
Bank. On the exchange rate market, now
fully liberated, dealers quoted the
Zimdollar at $1 000 to the US dollar,
improved from $6 000/USD two weeks
ago. The Zimdollar inched towards parity
with the rand, as bank tellers were
having to use big sticks to beat away
crowds trying to deposit
forex.
"It's amazing what a little resignation letter can do," said a
currency
dealer, remarks mischievously referring to President Mugabe's
letter to the
nation promising to step down next year.
FinGaz
Njabulo Ncube Chief Political Reporter
Doctors trash Parirenyatwa's
prescription
TALKS between the government and striking junior doctors have
reached a
deadlock, with negotiations unlikely to resume until Monday, thus
prolonging
the suffering of patients at government hospitals.
Health
Minister David Parirenyatwa met the striking doctors on Tuesday in a
desperate attempt to end the month-long industrial action which has resulted
in service delivery at government hospitals deteriorating to alarming
levels. Since the strike began, student nurses have manned most government
health institutions under the supervision of army doctors.
The junior
doctors are demanding that their salaries should be increased
from the
current $56 000 to $5 million. They also want car loans increased
to $2.5
million from $700 000.
But Parirenyatwa has insisted that the doctors should
return to work
unconditionally while negotiations continue.
"The minister
met consulting doctors but nothing tangible has come up," said
a senior
doctor involved in the negotiations.
"We are addressing their concerns,
including their conditions of service.
But we want them to go back to work
while we sort out their grievances,"
said Parirenyatwa. "In fact we are
reviewing conditions of all employees in
the health sector."
Kudakwashe
Nyamutukwa, the president of the Hospital Doctors Association,
said they
would wait until Monday to hear from the minister. "We hope to
have a way
forward on Monday, but nothing has been agreed as yet."
Relatives of patients
admitted to government hospitals were seen taking
their loved ones back
home. Although the government has described the
industrial action as
illegal, no arrests, dismissals or suspensions have
been reported since the
strike began four weeks ago.
The Zimbabwe Association of Doctors for Human
Rights has urged the
government to resolve the dispute between it and its
striking employees
urgently.
FinGaz
Chris Muronzi Staff
Reporter
THE investigating officer into alleged
corruption
involving Local Government Minister Ignatius Chombo has finally
been
transferred to Manicaland after earlier hesitation by his superiors to
go
through with the move.
Sources told The
Financial Gazette this week that
Superintendent Philip Ncube was now in
Mutare after senior officers, who had
earlier told Ncube to continue the
Chombo investigations, finally decided
that he should be
transferred.
Sources say he had been leading the
investigations
into whether Chombo abused a motor vehicle loan from the
Zimbabwe United
Passenger Company (Zupco), after US$22 000 from a total of
US$77 000 could
not be accounted for.
Pressure is
now reportedly mounting on the officers
still working on the case. However,
senior police sources said there would
be no relenting on the
investigations.
In a bid to stop The Financial
Gazette from
reporting on the investigations, Chombo filed a lawsuit against
the paper
about a month ago.
So far,
investigations have focused on the Zupco
loan, while an internal police memo
obtained by this paper late last year
showed that investigators had
unearthed enough evidence to suggest that
Chombo could have misused $14
billion (old currency) worth of farm loans
from the central
bank.
When reached for comment, police spokesperson
Wayne
Bvudzijena professed ignorance over any investigation into Chombo's
business
affairs.
"I am not aware of any
investigations against
Chombo. I only know of investigations at Zupco and
those involving (Deputy
Minister Bright) Matonga and (former Zupco MD
Charles Nherera)," said
Bvudzijena.
FinGaz
Clemence Manyukwe Staff
Reporter
A FORMER managing director of the Agricultural and Rural
Development
Authority (Arda) has appeared in court facing five counts of
fraud,
including one where he obtained funds from the authority under the
pretext
of purchasing a vehicle for Agriculture Minister Joseph
Made.
Morris Mawire, who was represented by Prince Machaya, denied the
allegations
when he appeared before a Harare magistrate.
In a case that
exposes only part of the decay at Arda, prosecutors claim
that between
November 2004 and June 2005, Mawire unlawfully generated
conditions of
service documents that he claimed showed that he was entitled
to a staff
debtors facility of up to $250 million (old currency).
Machaya is also said
to have falsely claimed that he was entitled to
benefits, including lunches
on the parastatal's account, running up bills
amounting to $100 million in
falsely claimed salaries and $6.8 million in
free lunches.
Mawire said
although he paid for the lunches without board approval, he had
done so
thinking that this was normal procedure.
Court papers show that although
Mawire at the time worked for a company
called Zagrinda Private Limited,
jointly owned by Arda and the Farmers'
Development Trust, he was an employee
of Arda.
Besides the fraud allegations, Mawire faces a further two counts of
theft
for allegedly converting to his own use 1 750 Zagrinda bricks as well
as
unlawfully selling 4 755 litres of the company's diesel.
In his
defence outline, Mawire said corporate governance at the company was
routinely ignored. The rules of corporate governance were not strictly
adhered to. This led to a situation where policy issues were decided upon
either by himself (Mawire) or in consultation with (Arda CEO) Dr Joseph
Matowanyika, and implemented.
Mawire said one such instance was when
Matowanyika asked him to pay
Agrifoods $500 million for stock feed, even
though Arda did not deal in
stock feed. Mawire also said he had since repaid
Arda all loans and monies
due to it.
On 28 June 2006 he repaid an amount
of $650 million to the company,
according to his defence outline.
Mawire
denied claiming he had been instructed by Made to sign a requisition
for a
Toyota Corona. The car was, in fact, for Mawire's wife, the court
heard.
"Accused denies that at any stage he ever suggested to anyone that
the
vehicle was for the honourable Minister of Agriculture," the defence
outline
said.
The court also heard that, at another time, when Mawire
approached
Matowanyika for funds to make improvements to his house, the Arda
boss had
suggested that Mawire award himself a loan.
FinGaz
Zhean Gwaze Staff
Reporter
CFU officials appeal to govt to revoke eviction notices
WITH
eviction notices due to expire next month, the Commercial Farmers'
Union
(CFU) has met government officials in a last ditch attempt to get a
reprieve
for the remaining 600 white commercial farmers to be allowed to
remain on
the land.
CFU spokesperson Emily Crookes this week said the union,
which represents
mainly white farmers, had held talks with government
officials in a bid to
reach an accommodation to enable the affected farmers
to continue farming.
"We are in talks with various agriculture government
officials to ascertain
the position of farmers as the deadline approaches,"
Crookes said, without
identifying the officials involved in the
meetings.
The deadline for complying with eviction orders is February 3. It
was set
after the promulgation of the Consequential Bill, under which
farmers
clinging to gazetted land can be prosecuted and jailed for up to two
years.
The CFU's membership stood at about 4 000 before government embarked
on its
fast-track land reform programme in 2000. The union says now, only
600 of
its members are still farming.
But Lands and Resettlement Minister
Didymus Mutasa this week said in press
advertisements that the government
would offer farms to "former (white) farm
owners who are genuine farmers who
desire to continue farming in this
country."
However, out of nearly 600
applications from white commercial farmers for
99-year leases last year,
only 16 were successful.
The leases were given to farmers who have been on
their pieces of land for
at least three years. They were vetted by the
National Land Board for
competence and commitment to farming before being
granted the leases.
"Although we have only received a few cases of wholesale
disruptions, the
most worrying issue is who is taking over the crops. Most
of the crops are
from loans that the farmers borrowed from financial
institutions, and if
they are chased away, who will take responsibility (for
paying back loans)?"
Crookes asked.
FinGaz
Kumbirai Mafunda Senior
Reporter
BICKERING within government over Chris Mutsvangwa's future as
Zimbabwe's
ambassador to China almost cost the country US$200 million in
loans and farm
inputs from China, sources say.
President Robert
Mugabe had to step in to quell the bickering, which had
been characterised
by an exchange of a rash of acerbic letters between
Mutsvangwa and the
Ministry of Foreign Affairs.
Mutsvangwa is resisting a transfer from China to
Germany, in a tussle seen
by observers as a reflection of infighting between
rival factions of ZANU
PF. Mutsvangwa denies reports that attempts to
redploy him from China came
after he had helped alleged rivals of Vice
President Joice Mujuru to compile
a dossier showing she had sealed personal
deals during a trip to China last
year.
"The delivery of inputs including
fertilisers, chemicals and agricultural
equipment by CMEC of China to
Zimbabwean farmers was gravely jeopardised
because the bureaucracts were
failing to register the US$200 million loan
from the EXIM Bank of China," a
government source said.
Zimbabwe had negotiated the CMEC loan to buy inputs
for the 2006-7 farming
season. Without the registration of the loan with
EXIM Bank - as is required
for such loans - the Chinese bank would have been
unable to release the
funds.
Because it had already supplied the
fertilisers, CMEC was exposed to the
tune of US$80 million. Prejudice to
CMEC, sources said, would have led to
the suspension of additional
fertiliser shipments to Zimbabwe, which also
risked being excluded from
further dealings with other Chinese
manufacturers.
At the time, the
Ministry of Foreign Affairs, which has the responsibility
to facilitate
transactions involving foreign governments, was embroiled in
an escalating
feud with Mutsvangwa. In August last year, Foreign Affairs
Minister
Simbarashe Mumbengegwi wrote to Mutsvangwa, "recalling" him to
Harare. In a
separate letter, Foreign Affairs Permanent Secretary Joey Bimha
informed
Mutsvangwa he was to be posted to Germany.
But Mutsvangwa resisted these
directives, saying they were "irregular". He
challenged his recall,
maintaining that the ministry's letter had
"undertones of negative
connotations", prompting Bimha to write back, saying
there was nothing
"irregular" about a diplomat being recalled.
"I wish to inform you that it is
customary for H.E. the President to do one
of three things at the end of an
Ambassador's tour of duty. These are:
Extension of the tour, transfer to
another station or recall. In all these
instances, H.E the President
actually writes 'a letter of recall' to the
Head of State, informing him of
the end of the tour of duty of the incumbent
Ambassador. This is normally
handed over by the incoming Ambassador at the
presentation of credentials,"
reads part of a letter written by Bimha, a
copy of which was seen by The
Financial Gazette.
"I am sure you must have presented the letter of recall of
your predecessor
to the Chinese President. There is therefore no negative
connotation
whatsoever to the use of the term 'recall'. It is a normal term
used in
diplomatic communication. All our ambassadors thus receive a letter
of
recall at the end of their tours of duty."
Foreign Affairs proceeded
to appoint embassy official Abigail Shonhiwa as
Zimbabwe's acting Ambassador
to Beijing and tasked her with overseeing the
departure of Mutsvangwa.
Government insiders said the diplomatic feud "could
have turned tragic and
embarrassing" in November when an unaccredited
diplomat would have welcomed
President Mugabe to last year's China-Africa
Summit.
Bimha declined to
comment yesterday.
Sources said the bickering became so ugly Foreign Affairs
officials asked
former Chinese Ambassador to Zimbabwe, Zhang Xianyi, to snub
Mutsvangwa
after October, his recall month.
Sources said Mutsvangwa
sought the assistance of Misheck Sibanda, the Chief
Secretary to the
President and Cabinet, who set up an inter-ministerial team
comprising
officials from the Ministries of Finance, Economic Development,
Agriculture,
plus the central bank and the Attorney General's office, to
ensure that the
imports came through.
Yesterday, Mutsvangwa confirmed his squabbles with
ministry officials, but
declined to elaborate.
"I am not happy with how
the matter was handled. I have some misgivings on
the manner the matter was
handled. I hope the matter can have a resolution,"
said Mutsvangwa.
When
asked whether he would return to China or leave diplomatic service, as
he
had hinted in an earlier interview, Mutsvangwa said: "I serve at the will
and pleasure of the Head of State either in China or in Germany."
FinGaz
Chris Muronzi
Staff Reporter
ZFC says ammonia nitrate available
FERTILISER shortages are
seen easing in the first quarter of this year on an
anticipated recovery in
ammonium nitrate (AN) supplies, a leading fertiliser
producer said this
week.
Fertiliser companies have been hit hard by a shortage of
phosphates, a key
raw material in making compound D.
Chrispen
Madziyauswa, acting managing director of the Zimbabwe Fertiliser
Company
(ZFC), the country's largest fertiliser producer, told The Financial
Gazette
this week that the current shortage of fertiliser on the market was
due to
supply constraints.
"The shortages are due to supply constraints of raw
materials, particularly
phosphates. The situation should improve during the
first quarter of 2007,"
Madziyauswa said. "We anticipate improvement of AN
supplies from Sable
Chemicals in the first quarter period of 2007."
ZFC
and Sable are both partly owned by ZSE-listed TA Holdings. Together with
Windmill, another major supplier, the companies have failed to meet demand
for compound D, which requires phosphates ingredients. Shortages of ammonia
nitrate have also worsened.
Dorowa Phosphate is the traditional supplier
of phosphates and has been
failing to supply on time for months.
At the
time of going to press, no official comment on the cause of the
shortages
could be obtained from Dorowa.
FinGaz
Nkululeko Sibanda Staff
Reporter
ZIMBABWE is pinning its hopes to avoid a potentially damaging
power crisis
on the Southern African Power Pool (SAPP), a SADC venture to
avert energy
shortages, as fears mount the country remains ill prepared for
a region-wide
electricity crunch expected this year.
Zesa Holdings
acting CEO, Edward Rugoyi, said last week that the state power
utility would
renew supply contracts with its neighbours in order to avert a
crisis.
Rugoyi said Zimbabwe would import 450 megawatts from Mozambique
under a
fresh contract, while South Africa had agreed to extend a similar
contract
to March this year. Zesa, Rugoyi said, was negotiating for a
further
extension beyond March.
Zimbabwe produces 65 percent of its electricity
needs, but the regional
shortage anticipated this year could see Zimbabwe
failing to import the
remainder. Rugoyi said Zesa was also close to sealing
a supply deal with
Zambia, which has surplus power. But Rugoyi said,
long-term, local thermal
and hydropower plants would be refurbished to
increase domestic output to
between 70 and 80 percent.
The demand for
power in the region rose by more than four percent last year
due to the
expansion in industry, raising the need for increased power
supply. It is
feared that Zimbabwe, faced with a deepening foreign currency
crunch, will
be the hardest hit by the power crisis.
SAPP spokesperson, Lawrence Musaba,
has told The Financial Gazette that
Zimbabwe had been placed at the centre
of the power pool as most of the
infrastructure required by SAPP was based
in the country.
Musaba said funding had already been secured from African and
offshore
lenders, saying this would ensure steady power supply.
"The
Southern African Power Pool is driven mainly from Zimbabwe. We have
applied
for funding from the Development Bank of Southern Africa, African
Development Bank, the World Bank and a number of other institutions.
"We
have also approached NORAD, SIDA for funding and we as a body are
optimistic
that should the funding be made available, we will be able to run
and
operate projects that have a capacity to help the region avert the power
crisis facing it," said Musaba.
Major projects aimed for development
include the Hwange Thermal Power
Station and Kariba Hydropower
station.
Musaba added that the power pool would also fund the construction of
a power
grid that would become the basis of power transmission, adding that
the
Alaska Shed Line, Hwange-Livingstone, and Hwange-Bulawayo line also
hinged
on the construction of the same grid line.
"The expansion of
Hwange's Number 7 and 8 substations and another expansion
of Kariba South
stations are expected to boost power provision as they are
all expected to
feed 300 megawatts of power into the main line.
"These projects will require
a total of US$800 million, plus the US$150
million for the transmission
grid. All the funding has been sourced and we
are hoping that things will
fall into place as planned," said Musaba.
Most of the projects, Musaba said,
would be commissioned this year ahead of
the scheduled power outages
forecast to hit the region towards the end of
the year.
"If all these
planned projects come on board, the region would not be as
hard hit as
forecast, but we will be able to contain them, to a certain
extent," Musaba
said.
.as chronic blackouts dim mining's
prospects
Kumbirai Mafunda
Senior Business Reporter
FALCON Gold's
report last week that it had suffered massive losses due to
power outages
could be an indicator of the year ahead for the mining sector,
the last
industry in the country still showing signs of life.
Falgold reported it had
produced 511.14 kg of gold in 2006, 130 kg lower
than its 2005 output, and
said repeated outages by power monopoly Zesa had
robbed the mining firm of
$50 million in potential revenue.
"Operations have been disrupted by the
prevailing Zesa power outages and in
many cases exacerbated by underground
mine workings being flooded, resulted
in a lower tonnage through put which
was 25 percent below budget. A total of
21 kilograms of gold was not
produced due to the power outages, this equates
to a loss of $50 million in
revenue," Falgold said.
Zesa has had to resort to load shedding in households
and industry because
of limited power supplies, which have been worsened by
the closure of its
coal-fired thermal plants. Because of a looming power,
regional power
suppliers have had to limit their supplies to Zimbabwe, while
a foreign
currency crisis has also worked against Zesa's capacity to pay for
power
imports.
Miners and economic analysts warn that Zimbabwe's mining
firms could
register significant losses if power outages worsen further as
feared.
Miners say power cuts would further cut output, already under
pressure due
to shortages of hard currency to import equipment and raw
materials.
"We are already in dire straits and these frequent power cuts are
negating
our efforts to increase production," said a mining executive who
asked not
to be named.
Gold miners say they are currently operating on a
hand to mouth basis
because of the compulsory purchase of gold by the
government at uneconomic
prices. Many foreign investors have put on hold
expansion projects in the
country after threats to partly nationalise
foreign-owned assets.
Observers say nothing much is expected from Zesa in
remedying the power
deficit as the power utility recently suffered two major
setbacks. First,
South Africa's Eskom denied media reports that it would
invest US$37 million
in refurbishing and repairing Zesa's Hwange Power
Station while the
Mozambican government denied reports that Zesa was to
acquire 25 percent of
Hidroelectrica de Cahora Bassa (HCB), the company that
operates the Cahora
Bassa dam.
FinGaz
Personal Glimpses with
Mavis Makuni
EDUCATION, Sport and Culture Minister Aeneas Chigwedere,
must be a worried
man if he watched a number of news clips aired by ZBC-TV
on the eve of the
beginning of the first school term on
Tuesday.
Without exception, the news stories showed how badly things have
fallen
apart in the sector and how absolute chaos now reigns. Parents who
were
interviewed on camera all boldly told it like it is, unlike in the past
when
interviewees were apparently required to sugar-coat the bitter pill
that
their lives had become. The parents who spoke a few days ago all made
it
clear that trying to provide an education for their children had become a
nightmare because of the escalating costs. While they were willing to make
all kinds of sacrifices to pay school fees, levies and buy uniforms, the
parents were unanimous in condemning the poor quality of education their
children were receiving. "We are paying through the nose but our children do
not get quality education and live in squalid conditions at the various
schools."
As if to confirm the parents' complaints about the collapse of
the education
system, a story filed by ZBC-TV's Masvingo Bureau Chief,
Nathaniel Mlambo,
showed even more disturbing and uproarious scenes at the
provincial
education office. A day before they were supposed to be standing
in front of
classes of young Zimbabweans eager to learn, what looked like
thousands of
teachers were yet to be told where they would be deployed. The
teachers
angrily complained on camera about poor remuneration and conditions
of
service. They all hoped to be deployed in their home province of
Masvingo,
as it was impossible to make ends meet while living far away from
their
families. Travelling to schools out of the province gobbled up their
earnings in bus fares, hence their bid to seek transfers.
It is safe to
assume that many other provincial education offices throughout
the country
were similarly inundated with applications from teachers seeking
transfers
for the same economic reasons. And if education officials at all
these
offices were as overwhelmed as their Masvingo counterparts, it is not
difficult to see why the first school term may have started in name only and
not in the sense of getting the education delivery system into gear. To make
matters worse, these developments surfaced after earlier press reports had
painted a disturbing picture of the confusion enveloping the education
sector over how schools should determine how much school fees parents should
pay.
This chaotic and disastrous situation suggests that Minister
Chigwedere
should devote more time to attending to real problems and felt
needs of
stakeholders rather than diverting his attention to pet personal
politically
expedient pursuits that have taken most his time so far. The
minister has
expended considerable energy towards promoting the idea of
renaming schools
and getting all primary school students in Zimbabwe to wear
the same
uniform. This was reminiscent of the dull and grey Mao suit that
once made
all Chinese people look sartorially identical. It must be clear to
the
minister by now that giving schools revolutionary names and getting all
students to be identically attired is meaningless as long as the education
system and the economy continue to collapse. When Chigwedere's ideas on a
universal school uniform and revolutionary names for schools were met with
stiff resistance, he embarked on his most passionate cause - his crusade
against private schools. I have never quite understood what the minister
hopes to achieve by meddling in the affairs of the only institutions in
Zimbabwe that still provide quality education. The minister's tirades
against the owners of these institutions have always sounded undignified and
vindictive.
The minister, who has described private schools as
representing the last
vestiges of colonialism has pontificated that it is
his duty to intervene so
as to safeguard the revolutionary interests of the
nation as well as protect
the parents of children attending these schools
from being exploited. It is
noteworthy that while Chigwedere espoused this
egalitarian view of
education, most government ministers were getting their
children ensconced
at expensive universities and colleges overseas, mostly
in the United States
and the United Kingdom. They shunned the University of
Zimbabwe and other
institutions of higher learning within the country
because of the conditions
prevailing there. By resorting to bullying tactics
against private schools,
Chigwedere has sought to deprive ordinary parents
of the same chance to
choose the best for their children.
The chaos now
prevailing in the education system where public schools are
the pits, should
cause the minister to re-examine his approach rather than
persist in his
belligerence against privately owned schools. All he is doing
by resorting
to strong-arm tactics to impose his will is to hamstring these
institutions
- the surest way to destroy the remaining beacon of hope for
parents
prepared to pay for quality education for their children. It does
not make
sense for Chigwedere to fight to bring down private education
standards to
the same dismal level to which those of public schools have
plummeted.
Rather than waste time on this meaningless feud, the minister
should focus
on arresting the rot within the public education sector.
The administrative
lapses that have resulted in the widespread sexual abuse
of pupils by
teachers, embezzlement of school funds and general decay, are
all crying for
the minister's attention. The minister needs to tackle the
dereliction of
duty that has become so rampant that scenes such as the one
in Masvingo
referred to earlier can be tolerated. It is a shame that when
told about
problems such as the now impenetrable school fees maze Chigwedere
tries to
pass the buck by saying his ministry is not aware of them because
it deals
with individual schools. He was instrumental in creating this
confusion when
he stooped to the populist level of wanting to act as the
treasurer
responsible for determining what schools could levy for various
charges. Now
that things have collapsed around him, he should for once rise
to the
occasion and think of strategies to restore sanity to the school
system. But
one thing is for sure, he will never get it right as long as he
aspires to
achieve the lowest common denominator by reducing the remaining
good schools
to the same sorry state that public schools have been reduced
to under his
stewardship.
FinGaz
Col (rtd) Tshinga J.
Dube
"MAGNA est veratus et prevelebit". This is a Latin phrase that can
be
translated into English as "Truth is mighty and will ever
prevail".
There is no real economic "turnaround effort" in our country,
no matter how
much we may try to claim. We must begin to address the true
economic
problems - or challenges, as we prefer to call them.
I would
like to list the problems in their order of priority. Unlike most of
my
colleagues who have PhDs in Economics, my analysis is based on common
truth.
Experience has shown that it is not always the textbook that has the
answers, though I must hasten to say that I do respect the textbooks and
those who author them.
Our problem number one is that we no longer know
the value of our currency.
Currency is described as a metal or paper medium
of exchange in current use
in a particular country. In any country in the
world, the basic means of
exchange is defined. It is not prudent to have
imaginary exchange rates and
hope that one can still carry out trade with
other economies.
Let us, for instance, take a look at the price of The
Financial Gazette. If
a visitor came to Zimbabwe and went to any of our
banks to change his US
dollars, he would be required to pay US$10 for a copy
of the newspaper. I
cannot think of anywhere in the world where an ordinary
newspaper costs that
much. However, if the same US dollars were changed
outside the formal
market, the same US$10 would purchase 10 copies of the
newspaper. Obviously,
unless they were an imbecile, the visitor would opt
for the latter market.
But the question is, what is the actual value of a
newspaper? One would
argue that due to hyperinflation, the production of a
newspaper makes the
cover price justifiable. The victim is, therefore, not
the producer of the
newspaper or the banker who regulates the value of the
money, but the
reader.
The argument is, unless we go back to the days
when trade was born, when
barter was the only mode of trade, we cannot solve
any pricing or problems
associated with trade. If I gave a street kid US$1,
he would not need a
calculator to tell you that his dollar is worth Z$2 500,
or somewhere
thereabout. What more a man or woman who spent one or two
decades at school?
Should they be so daft as to accept that their US$1 is
worth Z$250?
Let us come to the truth before we can look at any form of
economic
turnaround. The real value of our currency must be defined. It is
not by
accident that I use the US greenback as a yardstick; the greater part
of the
world does the same.
We all agree that our country has the highest
inflation in the world. A
simple definition of inflation is said to be a
progressive increase in the
general level of prices brought about by an
expansion in demand or money
supply or autonomous increase in costs. In
simple explanation, the subject
is money supply and demand.
Even a young
vendor who has never been to school knows the law of supply and
demand. He
is aware when there is scarcity or abundant supply of his bananas
or mangos.
That balance dictates his prices. It is not fair to dictate to
the vendor
what the price of his commodities must be unless you are able to
supply him
with his requirements. The market forces will determine whether
the prices
are fair or not. If not, customers will not buy from him. And if
the
products are not sold, and they are at the risk of going bad, the vendor
will immediately reduce his prices to beat the customer resistance.
We
may argue that our hyperinflation is caused by sanctions. There may be
some
truth in that. But we must learn to accept that we have our share in
the
creation of this environment, the most obvious being our failure to know
the
value of our currency.
There are various effects of inflation. Standards of
living drop, disease
and malnutrition rise, there is an exodus of skills to
countries with better
managed economies, corruption and crime rates
increase, and of course,
inflation also creates a lack of confidence in the
economy by the
population. All these problems cannot be fought by building
more prisons,
but by improving the social status of the people at
large.
I was pleasantly surprised at the recent ZANU PF Conference to listen
to the
party's Economic Committee, led by Richard Hove, telling the truth
about our
economic problems. But while I had been excited about the
committee's
analysis, which I thought had made the conference a lot more
focused, I was
however disappointed to hear the committee calling for price
controls. I
know the chairman of this committee to be an economist by
profession, and
this piece of advice made me wish for the earth to open up
and swallow me.
Market forces determine prices, according to demand and
supply. This is not
a socialist economy where the means of production is
state owned. So what
are price controls for? No amount of appeasement can
make the lives of
people better. We need to address the fundamental
problems.
A number of our troops have over the years been deployed on various
missions
to the DRC, Angola and Mozambique. Most will bear witness to the
fact that
there was nothing called parallel markets in these countries, in
spite of
their protracted civil wars. Of note, one would see women traders
with their
bundles of bank notes at the corner of every street. You would
never see
baton-wielding police officers chasing these traders away.
This
was because, in these countries, it was one's choice whether one wanted
to
buy their bananas using US dollar or Congolese franc, or Angolan kwanza.
In
short, people were honest, and they knew the value of their currencies.
If I
drive to Zambia today, the fuel station attendant would first ask me,
"are
you paying in kwacha or US?" It makes no difference to the attendant,
because he knows the value of his kwacha against the US dollar. Not in our
country.
Here, were I asked that same question, I would first have to
look around to
see if there are no policeman or RBZ detectives before giving
the attendant
the answer. Then, I would want to know the going rate,
etcetera. Can our
economists please have a seminar - I know many of them
have PhDs in
Economics - to determine just what our currency is really
worth.
(Rtd) Colonel Tshinga Dube is the Managing Director of the
Zimbabwe Defence
Industries (ZDI)
FinGaz
Comment
RECENT
comments by the World Diamond Council (WDC) suggesting the possible
smuggling of diamonds from Zimbabwe show how far down the shaft the
country's image as a legitimate world business player has gone.
The WDC's
claims may yet turn out to be exaggerated, or - at least as
claimed
elsewhere in this issue of The Financial Gazette by River Ranch
Limited -
patently false. However, at this stage, the real issue is that the
WDC's
claims give new insight into world opinion on how the ZANU PF
government is
running the economy, or whether it can still be trusted as a
credible
business partner.
The real issue at hand is that, once again, Zimbabwe's
economy faces a new,
serious image threat arising from government's
reluctance to enforce the
law, particularly in matters where ZANU PF
officials see what have come to
be known in business circles as "individual
profit opportunities".
We have seen this before. When ZANU PF loyalists,
posing as "landless
peasants" and war veterans, invaded commercial farms in
2000 ostensibly to
take back land stolen by colonialists, they left not only
a trail of death
and destruction but also a legacy that will linger for the
longer term; a
sharp plunge in farm output and wider fallout in the form of
massive
withdrawals of foreign aid and investment.
But now we know that
the real reason lawlessness was allowed to become rife
on the farms was to
give the chefs ample time to parcel out the choicest
farm land among
themselves.
And so it has been with an unsettling sense of déjà vu that we
have watched
the so-called diamond rush. While police have claimed to have
arrested close
to 20 000 "makorokoza" - illegal gold panners - nobody is
under any illusion
that this lot, literally scratching around for a living,
are the real
beneficiaries of this new greed trip. Neither are we convinced
that the
reported arrest of a dozen police officers for dealing in diamonds
is proof
that, this time, the law has been evoked to protect the country's
image.
And image is what the World Diamond Council's stated concern is really
all
about. Government propagandists have, since Jonathan Moyo burst on the
scene, stuck to the refrain that Zimbabwe's investment drought is due to
"negative publicity".
But what none of them care to admit is that it is
the Zimbabwean government
itself that has given its critics so much
ammunition.
How can the government discard globally accepted principles of
handling
mining claims, allow hordes of shovel-wielding prospectors free
rein for
months, and still not expect "negative publicity"?
The world, as
this WDC clampdown has shown, has now come to expect the
Zimbabwean
government to attack the pillars of its own economy at every
turn. First was
agriculture, and now, so it appears to the world investment
market, Zimbabwe
is working hard to discredit the integrity of its mining
industry.
There
is little doubt that top ZANU PF officials are reaping huge rewards
from the
current economic chaos. Why else would their party's recent annual
conference in effect agree to maintain the status quo? There is always
profit to be made out of anarchy.
But the impact that ZANU PF's
preference for chaos over economic sense has
had on what remains of the
country's image on the global stage is easy to
tell. Zambia, aggressively
seeking foreign investment to lead a recovery of
its resources industry,
recently reported a drop in its inflation rate to
single digits for the
first time in 30 years. Recent figures from Mozambique
also confirm
declining inflation region-wide. But in comparison, new
Zimbabwean inflation
data released yesterday only serves to show continued
economic decline as
one of the effects of the country's choice to project
itself as
lawless.
But they say hope springs eternal. An announcement on Tuesday by two
major
investors in Zimbabwean platinum, Implats and Aquarius, that they
would
increase output at their 50-50 Mimosa joint venture shows that foreign
investors still retain a measure of confidence in Zimbabwe.
Zimbabwe
needs to try and hold on to this remaining confidence. This can on
only
happen if the country cultivates a new image for itself as a state that
is
committed to global norms on managing resources. And this will not happen
through Karikoga Kaseke's threadbare PR attempts at ZTA, but through real
action that actually shows the world that Zimbabwe is ready to shed its
outlaw image.
FinGaz
Economic Viewpoint with
William Nyakudya
In times of an economic crisis, manufacturers and other
producers can only
to stay on by charging viable prices and the viable price
will be determined
by a number of factors which include market forces of
demand and supply.
However at the same time such prices must be
affordable to the generality of
the people and this will largely depend on
the disposable incomes of a major
portion of the population. The Zimbabwean
experience however has clearly
shown that this is no easy pick because these
two partners have very
divergent and sharply contrasting demands. For
sometime now, the state has
been introducing and scrapping price controls as
a policy of reining in on
businesspersons who often take advantage of the
crisis to make abnormal
gains at the expense of millions of people.
For
example the price of bread went up to as high as $700 per loaf from $220
but
after the intervention of the state, the price is now $300 possibly
suggesting that the initial increase was not based on economics. However the
bone of contention with the price controls is the apparent slowness of the
state in reviewing the prices because the price of bread has now been pegged
at $300 for nearly two months while other products have gone up several
times during this period. Fixing the price of bread at that level for that
long when inflation is hovering above 1000% underscores the ineffectiveness
of the price controls as a tool for stirring the economy out of
recession.)
While it is true that businesses often take advantage of a crisis
situation
to make super profits, there clearly a need for restraint by
authorities
when taking action because each time action was taken it often
had
unintended inconveniences for the supposed beneficiary as shown by the
example above.
To help us understand this we need to look at how price
controls have
impacted on businesses over the last few years. While price
controls are
thought to be instruments of controlling inflation, our
experience in
Zimbabwe however, has consistently shown many that with such
measures the
reverse is true. Since 2002 when the policy of price controls
on a wide
range of products was reintroduced, an immediate shortage of
products that
fell under the controlled products followed.
Products like
bread, mealie-meal and other basic necessities disappeared
leaving the
already poor people with expensive alternatives such as rice
while for those
who had the energy they had stand in queues for several
hours before they
could buy bread and this was now a daily routine.
Even products like cement
were suddenly unavailable as the producers of
these products scaled back on
production to reduce losses and this left
people with the option of
purchasing very expensive imported alternatives.
Perhaps what made price
controls extremely unpopular was the emergence of
the parallel or black
market where the controlled products that were in
short supply on the formal
market were found in abundance. Such an
occurrence was a major indictment on
this policy and as such there is need
to clearly understand the consequences
before re-introducing price controls
Currently plans are being made to have a
Price and Income Stabilisation
Commission that will among other things
regulate the changes or proposed
changes to prices and incomes. Chances that
the latest measure will bring
positive results are quite slim given the
economic background of the
country. During the last decade, the state began
a process of ceding control
of key sectors of the economy to private sector
owners as it adopted a more
efficient market based economy.
This model
was now favored because unlike the preceding one, it gave the
role of
determining the price to market forces, which encouraged producers
to make
available adequate products to satisfy the market. Most state owned
enterprises such as Dairiboard, Forestry Commission and others were
commercialised meaning the state though it stake in these entities, the
managing of these was now left into private hands. Therefore in this case
the state could not set the price of milk or allied products but the state
was not obliged to bail out these 'private' enterprises when they went into
the red.
This is in sharp contrast to a system in which this state
controlled much
economic activity, hence it was easier to control the
prices. Because
virtually every level of production was controlled by the
state
manufacturers and retailers could not change prices without the
approval of
state authorities but now the situation is markedly different,
the state now
has a minimal participation in the production.
Therefore
this clearly explains why price controls have often had the
undesired
results. The state cannot determine the prices of basic
commodities and
services when the state is not a producer or party to the
chain of
production. For instance, the many manufactures now mostly source
their
foreign currency on the open market where it is very expensive, the
fuel
sector is largely in the hands of private importers while many
factories now
supplement their power needs by using generators and other
fuels sourced
from private entities.
These along with other key elements of production are
controlled by the
market not the state thus from this perspective one cannot
expect the
government to determine the final price when it has lesser or no
input at
all in the production stages.
The only way the state can
effectively control prices is by returning to the
old socialist system,
which is very unlikely, suffice to say the system in
now largely abandoned
throughout the world. Therefore given the limited
options that are available
to state, it is very likely that price controls
will be used during certain
times for purely uneconomic reasons but as
experience has shown this is not
a sustainable policy.
l William Nyakudya is a member of the Zimbabwe
Economics Society. The
Zimbabwe Economics Society articles are coordinated
by Lovemore Kadenge.
He can be contacted on e-mail lovemore.kadenge@gmail.com or on
cell number
091980016
FinGaz
Matters
Legal with Vote Muza
I GREET all readers of this column in the name of
truth and justice and at
the same time wish all Zimbabweans wherever they
may be not only a peaceful,
but joyful 2007.
I extend this wish
despite the pressing hardships that haunted the majority
of us in 2006, a
year that I personally have no good memories of.
Some may wonder whether it
is worthwhile or sensible to waste time wishing
for prosperity amidst the
intensifying economic meltdown, for it is quite
clear to all realists or
those honest enough to appreciate the true
circumstances of our economy that
the meltdown is becoming more tenacious.
It would appear that the economic
stagnation that had become common in the
past few years is now translating
into an aggressive sprint that I believe
shall soon take us to the dreaded
anti-climax, a scenario that should
positively be expected because after all
this, good things must certainly
come.
So despite the gathering evidence
that we are destined for a grim 2007, a
year that is likely to be
characterised by another picture of multi-faceted
ills, there is need for
hope in particular for those in search of justice
and economic prosperity.
For, without hope for change in our fortunes in so
far as matters of true
democracy, the rule of law and a graft-free society
are concerned, we may be
a doomed nation.
I hope a large body of forward- looking Zimbabweans is
optimistic about
2007, and in particular that this is the year destined to
usher in the
long-awaited economic turnaround. The turnaround is not coming
as a phantom
as we have come to realise in the years gone by, but in reality
and
permanently to improve the lives of the majority of our people who have
hitherto been relegated to living in squalor and destitution that has turned
a sizeable number of them into nomads who traverse the globe in search of
better lives.
As I have said before in this column, and as I shall
continue to say, and
perhaps with what might be boring repetitiveness, the
broad transformation
that can restore Zimbabwe's pride must commence with
the Supreme Law. Not
until a fresh national constitution crafted through the
input of Zimbabweans
of all political, social and religious formations is
introduced are we
likely to see any realistic change in our national
fortunes.
To those of us who are still sane and honest enough to appreciate
the
urgency for prescribing treatment to our structural deficiencies, the
only
lasting panacea is a truly democratic constitution. It must be
acknowledged
without any equivocation that the foundations of our
renaissance can only be
laid once this central legal equation is
solved.
Over the years, our justice system has been seriously compromised as
a
result of the numerous problems facing us and until a lasting solution to
the economic challenges is found, addressing the system's present
shortcomings shall be a Herculean, if not insurmountable task.
In the
middle of the poverty, unemployment, HIV/AIDS panemic,
institutionalised
corruption, under-funding of justice institutions as well
as the
"I-don't-care-attitude" of the authorities, the quest to attain a
just and
peaceful society may remain nothing but a dream.
Legal service fees, which
are undoubtedly necessary to many members of the
public, have become
astronomical thereby undermining the rights of those
affected. The
inaccessibility of legal services for those on the lower
social strata is an
issue that all key stakeholders like government, the Law
Society and our
judiciary must urgently address.
The scenario that presently obtains where
access to the courts and justice
is now a privilege when, after all, equal
treatment before the law is a
right for all be it rich or poor puts to shame
our claim of having
democratic justice delivery institutions.
While I
acknowledge that the role to ensure that the majority of people have
access
to the courts is that of government through legal-aid funding,
attaining and
sustaining such a progressive social scheme in an
under-performing economy
is not easy. A balance must therefore be struck
between the need for lawyers
in practice to remain profitable while at the
same time making sure that
legal fees remain affordable for the common man.
I admit that this is a very
sensitive matter that is likely to meet with
stiff resistance from some
legal quarters but all the same, it remains a
necessary step if we are to
truly have justice for all without regard to
social status, race, colour or
creed.
When I look across some of our borders and notice countries with
thriving
economies, whose citizens in the majority boast of full bellies, I
agonise a
great deal and only pray for divine intervention to extricate us
from our
self-made quagmire. Like the optimist that I am, I hope that our
law shall
set the pace in 2007 for a holistic transformation process that
long-suffering Zimbabweans and myself included have so eagerly waited.
As
I have indicated above, only law, peace and orderliness shall set us free
and restore Zimbabwe's shine whose glitter has been corroded by years of
stinking corruption, maladministration and international isolation.
I
also have a firm conviction that comes from my inner instincts that this
year shall mark an important turning point in our nation's fortunes because
it has been a long time since we have been failing to ostracize the economic
malaise that has made us a laughing stock of the region and
beyond.
lVote Muza is a legal practitioner with Gutu and Chikowero law
firm. He an
be contacted on e-mail: gutulaw@mweb.co.zw
Website: www.gutulaw.co.zw
FinGaz
Allan
Choruma
2006 has just gone by and we have just stepped into 2007. As we
start a new
year it is customary that we look back into the preceding year
and take
stock of what we accomplished, failed to accomplish and the
challenges that
lie ahead.
The year 2006 was a remarkable one in
corporate Zimbabwe. Companies had to
harness all possible resources to stay
in business under very difficult
macroeconomic conditions. With inflation
soaring beyond the 1000 percent
mark by close of 2006, I need not emphasise
that companies did exceptionally
well to survive under a harsh economic
environment.
Having noted the above, what notable events did we witness in
2006 in the
corporate governance arena?
Highlights for 2006
There was
a lot of media coverage on corporate governance issues. This
Corporate
Governance Column was as a result of this media initiative. I
started this
column under the banner: Economic View Point, but due to an
increased
interest in corporate governance issues, my editor agreed to
create a new
column specifically dedicated to corporate governance. Now I am
able to
devote my time and energy on this important subject.
We also witnessed an
increase in the number of workshops and seminars on
corporate governance
country wide. Professional bodies such as the Institute
of Internal Auditors
(IIA), Institute of Chartered Accountants (ICAZ),
Zimbabwe Association of
Pension Funds (ZAPF), Institute of Directors (IOD)
to mention a few, hosted
workshops on corporate governance.
Regulatory authorities such as the Reserve
Bank of Zimbabwe (RBZ) were also
on the forefront in promoting good
corporate governance standards in the
financial services sectors. During
2006 we witnessed the RBZ introducing an
important guideline on Risk
Management: Guideline No. 1-2006/BSD. The other
guidelines already in use
were the: BSD Corporate Governance Guidelines, and
BSD Internal Audit
Guidelines.
The National Association of Non Governmental Organisations
(NANGO) launched
corporate governance guidelines: The Zimbabwe NGO Corporate
Governance
Manual, applicable to all NGOs in Zimbabwe. This was the first of
its kind
in Zimbabwe. My wife Dr. Tsitsi Choruma was also involved in this
project.
The Institute of Directors hosted high profile functions with a
thrust on
corporate governance. The notable and most outstanding corporate
governance
practitioner in Africa, Mervin King, among other dignitaries, was
invited by
the IOD to attend the Old Mutual sponsored manager of the year
gala.
Personally I was impressed with what companies are doing as part of
their
corporate social responsibility programs. Companies have now come to
realise
that they should be responsible corporate citizens by ploughing back
into
the communities in which they do business. In 2006 we witnessed a lot
of
companies taking part in charitable work, health initiatives, sport and
so
on. The most notable efforts came from Dairibord, Barclays Bank, CBZ,
just
to mention a few.
Academic institutions in Zimbabwe can not go
unmentioned. Our universities
and colleges are playing their role in
corporate governance. Institutions
like the University of Zimbabwe (MBA
program) and NUST offer corporate
governance as one of their major subjects.
In fact I am impressed with the
number of MBA students that I assist in
their dissertations on corporate
governance. My friend Victor Mhizha Murira,
a practitioner in corporate
governance, at one occasion invited me to his
MBA class at the UZ to give a
lecture on corporate governance.
Generally
in 2006 we witnessed an increased awareness on the importance of
corporate
governance in both private and public sectors of our economy. Most
companies
and organisations now have functioning boards of directors, board
committees
and other appropriate governance structures. Some companies, most
notable
financial institutions, are now conducting annual performance
evaluations of
their boards and individual directors.
Corporate Scandals
Corporate
scandals and failures reported widely in our media dampened most
achievements that have been made in Zimbabwe to date towards promoting good
corporate governance. We read in the media of company directors prosecuted
for taking bribes, chief executives arrested for fraud, managers found in
conflict of interest situations and so on.
Cases relating to corruption
were also on the increase in the corporate
Zimbabwe. Corruption threatens to
erode all the gains made in promoting a
culture of good corporate governance
in Zimbabwe. The rate at which
executives have been found on the wrong side
of the law is frightening.
Business Ethics remains a big challenge in
Zimbabwe. We need to promote a
culture of professionalism, transparency and
accountability.
Corporate Governance Challenges
As we start 2007, we
face numerous challenges in corporate governance. The
ten challenges that I
have identified are as follows:
n Lack of a culture of transparency and
accountability
n Lack of debate and open dissent at board level.
n CEO
tenure of office, which is open, ended.
n Corporate governance is being taken
as a compliance matter (tick box)
opposed to it being based on voluntary
practices.
n Shareholder/investor apathy.
n Poor corporate governance
standards in state enterprises and public
sector.
n Absence of a home
grown Corporate Governance Guidelines.
n Slackness by government and some
regulatory authorities on governance
issues.
n Lip service on sustainable
use of environment (environmental
conservation).
n The scourge of
corruption and lack of capacity by Anti Corruption
Commission to deal with
the scourge.
Outlook for 2007
As we start a new year, we face a number
of challenges. In 2007 we should
strive to cultivate a culture of good
corporate governance not only in
companies but also in the public sector.
Corporate governance is not only
for the profit making organisations.
Corporate governance is for all
organisations be they be profit making or
non profit making.
I view corporate governance as being both a business
development tool and
also as an economic development tool. There is a
positive synergy between:
corporate governance and company performance, on
one hand and corporate
governance and macroeconomic development, on the
other hand. Companies can
not thrive or perform better if they are badly
governed. Our national
economy can not function well if we have a poor
record of corporate
governance. Badly governed companies, state enterprises
and public sector
impede macro economic development. How can the nation
safeguard national
resources if state enterprises and the public sector are
poorly governed?
How can we promote investment and safeguard investor
resources if companies
are always subject to corporate scandals?
The
challenge for 2007 is therefore to promote a culture of good corporate
governance in Zimbabwe. It is good for the companies, shareholders,
investing public and the national economy.
Best wishes for
2007.
Allen Choruma can be contacted on e mail: allenc17@juno.com
FinGaz
No Holds Barred with Richard
Chimbiri
IS the country on autopilot? With President Robert Mugabe
reportedly away on
vacation, this certainly seems to be the
case.
The year opened, as is now the norm, with increases in the cost
of almost
all goods and services. The cost of bread, milk, transport and
school
uniforms, all went up. But this is not the worst part of the story.
What is
strange is how the government seems to have gone quiet. Very quiet.
It would
seem our government is at a loss as to what to do or say.
There
has been no comment on the price of fuel, the driver of any economy.
It is
no secret that the price of fuel is going up daily on the parallel
market.
And while nobody expects the parallel market to die anytime soon,
one would
expect the government to at least comment on the plans it has to
bring
stability to the economy. The government must at least keep the
channels of
communication open, and show that the country is being run by
flesh and
blood people, and not cruising on autopilot.
As if this pricing mayhem was
not enough, 2007 also began with a flurry of
wildcat strikes. Doctors are on
strike and ZESA workers have also decided to
"make the government see the
light." Other health and essential services
staff have also joined the
strikes. Health and power are two of the basic
services that any government
should provide. Yet they are the very ones that
are facing collapse!
Needless to say, there has been virtually no comment
from the government,
save for the news that a Health Services Board had been
formed to cater for
the remuneration of health professionals.
Indeed, these strikes can be a
harbinger of riots. Imagine what would happen
if the private sector were to
join those who are already striking. The whole
nation would sink into the
type of chaos witnessed during the 1998 riots.
There is also a real, dark
prospect that the country might go the route of
Angola, where residents in
the capital city Luanda have actually become
accustomed to life without
electricity.
Meanwhile, the circus at Harare's Town House continues, with
Makwavarara and
company remaining long on promises and short on delivery.
Most recent and
laughable is the announcement that the commission is to
build new ranks for
public vehicles. Is this really the most pressing need
that the commission
can identify? The commission needs to restore service
delivery including
water and sewage reticulation to acceptable modern
standards. Only then can
they think of building commuter omnibus
ranks.
Another government arm that has left many minds boggled is the
Immigration
Department. Zimbabwean nationals are failing to acquire
passports and
national registration documents. This newspaper reported, a
few weeks ago,
that the passport office had stopped issuing new passports.
What is
surprising, however, is the rate at which Nigerian and Chinese-owned
shops
are sprouting up in the city. Who is granting all these
"businesspeople"
operating permits? Who is issuing visas, residence and work
permits to them?
It seems the registrar-general's lieutenants are too busy
looking East (via
West Africa) to cater for locals. This must be the only
country in the world
where it is easier for a foreigner to acquire a
document than it is for a
citizen to access the same. Yet, once again, there
is no comment from the
responsible authorities.
But the classic "cherry"
on the top of this bitter cake has to be the recent
goings-on in the
agriculture sector. Minister Didymus Mutasa, at least, has
been sending
signals. But they are mixed signals. First, he promises to
extend 99-year
leases to white farmers. Next thing we know is there are
plans to evict the
remaining 500 farmers. At the same time he declares new
(black) farmers who
are not productive will soon get their marching orders.
All this happens at
a time when the same minister has promised a new land
audit. How, then, will
the minister know who is not productive before the
land audit? Note also the
timing of these threats and promises. Dead in the
middle of the rainy
season, when farmers should be left to do what they know
best. Land is one
of the major contributing factors to the economic
stability of this country
and it is time government came out clearly with
its long-term plans for all
stakeholders.
And when ordinary folk look up to the ruling party for a way
forward what do
they get? Ruling party experts pre-occupied with assessing
threats to ZANU
PF's popularity.
"The declining economy continues to be
the major threat to the ruling party's
popularity," reads part of a report
recently compiled by a ZANU PF
committee.
The real issues the report
should have addressed should have included the
question of whether the
government is serving the best interests of the
nation. What does the party
need to do in order to secure the people's trust
and mandate?
The basic
thing would obviously be to communicate with the people, something
nobody
seems prepared to do at the moment.
Only a handful of ministers ever come out
and state their plan of action and
even these seem to have no real control
over their portfolios. And in the
absence of communication there are no
common threads to tie the nation
together.
At the moment Zimbabweans feel
as though they are on a turbulent flight,
with the pilots having simply
switched to autopilot and gone to sleep.
Eating mice is not an offence
EDITOR - The article by CNN
that Zimbabweans are surviving on rats seems to
be peddling an inaccuracy or
misunderstanding.
Among the Shona, certain types of mice are edible, others
are not. Domestic
rats are not edible and are thrown away when killed.
"Mbeva" are a different
type of rats and are wild. They are usually found in
stacks of maize piled
up during harvest time.
In any event, there is a
significant distinction between not only the
domestic and the wild creature
but also (I think) between the term applied
to the distinction as to "rat"
and "mouse". It is not everything that
offends but how it is conceived and
what the particular community regards as
offensive.
For example, calling
some one "Mr Gudo" (baboon) is not an offence among the
Zezuru (some of
them). It is a totem animal (inoyera) and is not supposed to
be killed by
that particular group. The same would go for being "Soko"
(palliated term
for "tsoko" (monkey) among the same group. That is why in
Zimbabwe there is
a Minister called Aeneas Soko Chigwedere.
However, the significance of the
terms is different for racist and general
unfriendly name-calling. A white
person will perhaps be wise in not to call
anyone by those terms and
certainly outside the particular group. How it is
received would depend on
the familiarity of use and acceptance as a joke,
which it may not be even
among the members of the group.
However, a white person is more likely to get
a bloody nose because it is
generally used as a derogatory term by white
people, and one would need to
be sure that it is accepted in the group
before using it.
Mordecai M. Betera
United
Kingdom
-------------
Mnangagwa should go ahead with
lawsuit
EDITOR - News reports say that President Mugabe has
urged Emmerson Mnangagwa
to withdraw his libel suit against John Nkomo. If
that statement is true
then President Mugabe is wrong by all accounts and is
becoming too
authoritarian to the extent that he is taking every-one rather
too much for
granted. President Mugabe should let the law take its course.
Nkomo is a
bully, in my view. He thinks everyone is a nonentity, a pushover,
as they
say.
It is not only undemocratic and unbecoming that a national
leader can so
blatantly take a partisan position in a legal dispute which is
still pending
in a court of law. If anything, President Mugabe is beginning
to manifest
unmitigated authoritarianism.
Nkomo has no respect for other
people. President Mugabe should steer clear
of the Mnangagwa versus Nkomo
suit and allow justice to prevail.
In order to keep in-fighting in the party
at bay President Mugabe should
play an advisory and conciliatory role. The
allegations against Mnangagwa
are very serious and portray him as a
power-hungry person when in fact the
contrary is true.
And so Mnangagwa
should go ahead with his suit against Nkomo. The law will
decide and justice
will prevail, just as good always prevails over evil.
Martin
Stobart
Lupani Rural
-----------
What now,
Cde?
EDITOR - So what now Cde Chombo? What are you going to
do about the commuter
omnibus operators who have openly defied your "order"
to revert to the old
fares? Are you going to sit back and wring your hands
and accept defeat or
can we expect to see some action at last?
Meanwhile,
has anyone noticed how police roadblocks seem to disappear when
these
commuter omnibus operators illegally raise fares? Food for thought,
isn't
it?
Murozvi'
Harare
-------------
Ripped off at
supermarket
EDITOR - I was just wondering if these large
supermarket chains are ever
audited at all. If so, whoever does it is doing
a very poor job of it. If
not, it is high time they are audited bacause they
are ripping consumers
off.
Inasmuch as I appreciate that nothing comes
cheap these days, this
particular supermarket chain has gone so far as to
have different prices for
commodities on the shelves, on the personnel code
sheet and the codes in the
computer system.
What worries me is that at
one time when I wanted doughnuts from this
supermarket's Albion Street
branch, I had to contend with three prices -
$500 from the shelf, $550 from
the shop's personnel code sheet and $750 from
the computer system. A simple
doughnut . . . imagine if you were buying a
considerable quantity of
groceries at such a supermarket. You will also be
paying a huge tip at the
end of the day!
Ripped Off
Harare
-----------
Poor
Maths
EDITOR - It's not true that when teachers get a 300
percent increase their
salaries will shoot up to not less than $300 000 per
month as Zhean Gwaze
reports. Please get your calculations right and try to
get the December 2006
payslip of one of the teachers.
Currently a teacher
(non-graduate) earns a basic salary of $33 000 and if
increased by 300
percent it will translate into $132 000 per month on basic
salary. Then they
have both transport and housing allowances increased to a
total of $87 000
per month. If you are to add the two you will come up with
around $210 000
which is nowhere near the $300 000 mark.
Ola Ola
United
States
---------
Zimbabwe must play by the rules
EDITOR - It
is amazing that one country can face so many barriers. The
challenge to the
World Diamond Council (WDC) is that if they fail to prove
their case on the
"blood diamonds", the loss of earnings plus interest at
Zimbabwean rates
should apply.
The mines are producing within the country, within
Africa - why should
African countries be held to ransom all the time? Is it
because we fail to
respect ourselves first? Because if we were accountable
for all our
transactions, there should be nothing to fuss over. Integrity is
not an easy
thing to attain, neither is it easy to restore once it is
tanished.
Diamonds are now being used to block Zimbabweans' sustenance and
development. ZANU PF bigwigs should not forget that they only control the
local media and local opinions. Zimbabwe is a very small country which
should never forget that it also has to play by the rules.
To expect to
be respected, one has to be able to demonstrate the ability to
respect
others. The so-called ZANU PF bigwigs should not forget that while
they
contributed to the liberation of this country, now it's the turn of
others
to play a meaningful role in developing the country for future
generations.
They should not forget that they are what they are today only
because they
are not allowing others to develop and grow, so they are
suffocating others
except their own.
So for the common person who really is not benefiting from
anything the
bigwigs do, why bother crying and feeling sorry for people who
only care for
their own interests?
Zimbabwe is suffering because the
bigwigs realise that they should protect
their own interests, their power
base, their investments, that is including
Zimbabwe as a whole, because they
believe without them this country will
grind to a halt. What a joke, and
what self-glorification.
Give others a chance to contribute. We were not born
when you went to war.
Now that we are here, we are going to take our
positions of building this
country bottom up, not top down, like you are
doing.
The bigwigs cherry-picked the best where they did not sow, but we
shall sow
and then reap where we have sown with sweat and tears because
there is
nothing solid left for our generation and our
children.
Praying Parent
Harare
---------------
Nothing fiery
about Tekere
EDITOR - I don't know why you prefer to label
Edgar Tekere a "fiery
politician". There is nothing fiery about Tekere. He
is just a confused old
man. He is the one who badgered Robert Mugabe to
accept the leadership of
ZANU, but now he is not happy that the man is
leader.
The country is in a mess because of the little knowledge displayed by
Tekere
and people of his ilk. How does a Third World country become
independent yet
it depends on foreign aid (begging)? I am sure these
politicians thought
running a country was a stroll in the park, that it was
just a matter of
printing money. There can be no African independence
without corruption.
If you fight for independence then you should accept the
corruption that
comes with it. That is exactly what African independence is
all about.
T Ndemera
United Kingdom
-------------
We'll meet at
election time, Made
EDITOR - I want to lodge a complaint over
the pathetic state of affairs in
Rusape and regret ever voting for Joseph
Made.
The man is not doing anything for his constituency. The roads are poor,
the
transport network is poor and schools are deteriorating.
The road to
Tandi is no longer in a good condition for our vehicles with
gulleys almost
everywhere.
Mr MP, I want to assure you that vakuru zvavakati "kuchenjedza
nyamukuta
kuzvara uchada" is exactly what you have done. Tinoda kusangana
pamaelections anotevera, better to vote for the opposition than lazy people
like you.
Imagine what other people like Ray Kaukonde are doing
hauzvioniwo here . . .
Are you sitting in different parliaments or
something? Chabuda hapana
chokwadi akareva
muimbi.
Murombo
Rusape