• Mass panic grips Zimbabwe banks
• $30bln lifeline for Century
• Chiyangwa to stay behind bars for two more weeks
• Speculation rife Mudzuri faces the sack
• Zvobgo out of hospital
• Bigwigs frantically scurry for cover
• ZANU PF heads for split over Chiyangwa
• Indigenisation drive loses momentum
• Make information on banks public
• Banking is a reciprocal relationship
• Finance sector crisis: beyond the numbers
• Counter invading ZANU PF territory
• Winter wheat crop hangs in balance
• Will the property market crash?
• Financial sector must never operate on autopilot again
• Despots are fair game like everyone else
• Zvakwana Newsletter #47 - Soul & Inspiration

Mass panic grips Zimbabwe banks

Investors fear that banks will go bust Hundreds of Zimbabweans have besieged several new banks to withdraw their money amid rumours they are going bust. The panic follows a crackdown on alleged corruption in financial institutions, which has left at least six banks in serious trouble. A Zimbabwean man said: "I don't want to take chances. Today I am going to withdraw all my money from my bank". Police have recently arrested lawyers, insurance agents and a top politician implicated in a banking scandal. Another woman in in the second city of Bulawayo says: "I came here as soon as I heard on the radio that several banks owned by locals would be closed." Magistrates arrested A senior official of the ruling Zanu-PF party has been in custody for several days, accused of blocking enquiries. Philip Chiyangwa says he is a victim of rival factions vying to succeed President Robert Mugabe. The scandal came to light last week after a financial firm, ENG Capital Management, failed to account for 61 billion Zimbabwe dollars ($74m at the official rate, $13.5m on the black market) of investor's money. The firm, which has now been liquidated, was being run by three youths. Chiyangwa headed calls for black empowerment Other financial institutions have been affected by the crackdown as some of those involved in ENG Capital Management are also directors of local banks. On Tuesday, a magistrate ruled that Mr Chiyangwa, an MP who spearheads the black empowerment lobby, must remain in custody for another two weeks. The magistrate said that he might interfere with witnesses. Police said they had found a dozen cars belonging to the company at Mr Chiyangwa's house. Police say they are investigating the involvement of several top ruling party politicians in the institution but have not released any other names. No-nonsense The man behind the crackdown on alleged corruption in financial institutions is Gideon Gono, the new Governor of the Reserve Bank. Local politicians and economists have praised him for his attempts at cleaning up the industry. Mr Gono is said to be a no-nonsense administrator and has earned the praise of many Zimbabweans for his new monetary policies. President Mugabe has commended the governor for a job well done and warned corrupt leaders of his party that the net is closing in on them.

      The widely expected mergers and acquisitions frenzy in the financial
sector would most likely involve mostly indigenous institutions seen to be
in tight liquidity positions. Talk of the mergers has also triggered
speculation that the long-awaited consolidation in what has turned out to be
a shaky financial sector would at last be under way.

      Impeccable banking sector sources confirmed the developments, which,
however, were being kept under the wraps "until an appropriate time".

      They said the modalities for the changes at Century, which was
reportedly given until next week to find a new investor, were still being
worked out before a public announcement is made.

      "The RBZ, which dispatched a team of inspectors to Century, has come
out with its position, which the group had to comply with, in return for the
Z$30 billion liquidity support advanced on Tuesday.

      "Apparently, Century is amenable to the arrangement, which could see
the entry of a new equity partner as they are now scouting for a potential
investor," the source said.

      As the news of the RBZ’s directive broke, market speculation was rife
that a sprawling financial services company which in the past has been
linked to a hostile take-over bid for Century was likely to emerge as the
new shareholder.

      Should the two financial institutions’ nuptials come through, this
would mark the first step towards a spate of mergers and acquisitions in the
banking sector.

      Analysts said the changing environment and stringent new capital
requirements, which require commercial banks to have capital bases of at
least Z$10 billion by September 2004, would trigger a string of mergers
involving the smaller institutions. To date, only a few banks satisfy the
new requirements.

      The liquidity support was advanced under the Troubled Banks’ Fund
(TBF), which was established by the RBZ to ring-fence distressed banks to
head off possible contagion.

      The support comes with conditions, in line with the central bank’s
policy not to accommodate banks with liquidity problems.

      Among the conditions for qualification, the RBZ requires banks to work
out comprehensive programmes to overcome their liquidity problems as well as
solid proof of the ability to reimburse funds availed through the fund.

      Sources said it is the latter requirement which might have
necessitated that a new equity partner with financial muscle come on board
to inject some funds into Century.

      Century Bank, the group’s flagship retail bank, is one of the five
banks that stood suspended from the Real Time Gross Settlement System
(RTGSS) due to the protracted liquidity crunch. Other banks are Trust,
Agribank, Barbican and Metropolitan.

      The RBZ last week offered Trust Bank liquidity aid in return for some
management changes that claimed the scalps of chief executive officer
William Nyemba, executive director for merchant banking Chris Goromonzi and
finance director Nyevero Hlupo.

      Trust has also announced that the board would also be restructured "in
cooperation with the central bank".

      Century’s case has been made more complex because of its exposure to
the operations of ENG Capital, whose asset management company was the first
high profile casualty of the monetary authorities’ shift from leniency.

      ENG, whose executive directors Nyasha Watyoka and Gilbert Muponda were
arrested and have been arraigned before the courts where fraud charges have
been preferred against them, had built up a significant stake in Century
through various investment vehicles.

      Although the exact extent of ENG’s holding in Century could not be
ascertained, it is believed to be upwards of 30 percent.

      Erstwhile controlling shareholder Jefta Mugweni’s Campion Investments
holds 24.26 percent, while Moses Chingwena’s direct and indirect interest is
just below 20 percent.

      Mike Nyamazana, the head of corporate and investment banking at
Century who was in charge of Century Discount House (CDH) at the time of its
demise, recently confirmed in court during the remand hearing of the
arrested ENG directors that firms linked to ENG had bought a significant
stake in Century.

      In a related development, the RBZ said Century was liable for CDH’s
obligations to investors.

      "The Reserve Bank said it was Century which was supposed to manage the
liability of the closed discount house as the authorities had not sanctioned
the transaction between Century and ENG.

      "So the group will also take responsibility for the lot of CDH staff,"
one source revealed.

      Century had hitherto denied liability for CDH’s obligations to its
depositors, believed to run close to $100 billion, saying the business
belonged to ENG since April 2003 following its sell-off in a $1.5 billion
transaction.

      "Century Bank and its group operating companies are not affected by
the recent action taken against Century Discount House (CDH).

      "The Century Group, having obtained the necessary shareholder
approval, sold CDH to ENG Investments (Pvt) Limited effective 1 April 2003,"
Century said in a statement after the closure of the discount house.

      Speculation rife Mudzuri faces the sack

      Staff Reporter
      1/15/2004 7:15:41 AM (GMT +2)

      A TEAM investigating the operations of Harare City Council, including
mayor Engineer Elias Mudzuri, on allegations of corruption and mismanagement
has deferred the release of the report to next week amid speculation that
the recommendations will result in the mayor being axed.

      Local Government, Public Works and National Housing Minister Ignatius
Chombo confirmed that the report, which was supposed to be released this
week, will be made public next week to allow the James Kurasha-led
commission to clarify some of the issues raised in the report.

      "The chairman phoned me to appraise me on the contents of the
preliminary report, which will be handed to me by Friday. Hopefully, on
Monday, the committee will clarify some of the issues to me and thereafter
the report becomes public," he said.

      Chombo, however, declained to comment on speculation that the
embattled mudzuri would be shown the exist saying "munogoziva zvandisati
ndaona sei?" (How can you be privy to information I am unaware of?) However,
sources said the recommendations were likely to see Mudzuri being forced out
of the picture permanently.

      "The fact that the minister is the custodian of the Act that governs
the operations of the council simply means he has the final decision prior
to the commission’s recommendations. Stakes are very high that he (Mudzuri)
will be fired considering the fact that they had been on the warpath over
the operations of the council," one source said.

      Mudzuri, the first opposition mayor of Harare in 23 years, has crossed
paths with Chombo since his election in 2002, leading to a series of court
battles. The High Court last month dismissed an urgent application by
Mudzuri seeking the dissolution of the Kurasha commission and his
reinstatement.

      Mudzuri insisted this week that the commission was investigating the
operations of the council and not his suspension, as the High Court has
ruled that it was not mandated to investigate him.

      Kurasha could not be reached for comment.

      A close relative told The Financial Gazette this week that the former
ZANU PF legal supremo had been discharged, but is still to fly back home.

      Zvobgo was allegedly suffering from a brain tumour and underwent two
operations at a private clinic in Cape Town, South Africa.

      "He is out of hospital," said the relative who declined to be named.

      Zvobgo was flown to South Africa in October 2003, just before he was
expected to appear before a ZANU PF disciplinary committee on allegations of
de-campaigning President Robert Mugabe during the 2002 presidential
elections.

      The legislator dismissed the allegations, saying they were trumped up
charges meant to discredit him in relentless efforts to have him booted out
of the ruling party.

      High ranking ZANU PF sources have, however, indicated to this
newspaper that it would be detrimental for the party to try Zvobgo,
especially at a time when ZANU PF is consolidating its structures throughout
the country ahead of next year’s parliamentary elections.

      1/15/2004 7:29:31 AM (GMT +2)

      THERE is a heightened anxiety over the situation obtaining in the
financial sector, whose honeymoon has been abruptly interrupted by the new
Reserve Bank of Zimbabwe monetary policy.

      This anxiety has since translated into an unprecedented run on certain
banks as depositors, for fear of burning their fingers, pressed the panic
button. Zimbabwe Stock Exchange-listed financial counters, which ranked
amongst the bourse's bell-whether stocks, have come off in a big way. And
very few, if any, equity investors will land on their feet in these falling
counters.

      Indeed, it is all panic stations in the sector, with some of the
quoted financial companies issuing unscheduled trading updates, sparking
suggestions that they are merely trying to reassure the market and put a
floor under their shares. The panic could trigger a deal-making frenzy in
the sector, where players, seeking consolidation and strategic alliances,
will soon be promiscuously courting prospective partners.

      Be that as it may, this will not however ensure that the current
crisis is the last shock to hit the financial sector or that the situation
could not take a turn for the worse. This is why we feel that the central
bank, the country's financial regulator which is now increasingly becoming
more assertive, should, in tightening its monitoring and supervisory role,
ensure that a requirement for transparency is an integral part of its
cocktail of measures to overhaul the whole sector.

      Relevant information pertaining to the soundness and stability of
banking institutions should be readily available to the public. This will
ensure that the market imposes discipline on banks as creditors and
depositors would be able to decide whether or not a bank qualifies to
receive their funds. They will be able to assess the banks on the basis of
the information from the central bank on among other factors, size of bad
loans as well as sound risk management processes founded on international
norms and best practices. Capital adequacy should also be included because a
strong capital base acts as a safety buffer necessary to ensure that any
adverse fluctuations on the income statement will not immediately cause
capital to go below the prescribed minimum.

      Unfortunately this is not so at the moment. In a typical
jumping-in-the-dark scenario, the public knows very little, if any, about
the banks they do business with. A plethora of banks have violated capital
ratios set out in the governing laws, rely on a few and potentially volatile
depositor concentration, depend on daily accommodation from the market, do
not meet provisioning guidelines, have inadequate credit review methods and
have therefore unsustainably high unsecured or under-secured non-performing
loans, among others.

      We believe therefore that the current situation where the public is
deprived of enough financial detail about banks and will have to depend on
the concerned banks' own interpretation of their financial status does not
augur well for the investing community, with or without a depositor
protection scheme.Creditors and depositors should have this information
because the markets can only be expected to reinforce necessary incentives
for banks to operate safely and more competitively by ensuring that poorly
managed banks do not get business.

      Then and only then, should the public be justifiably expected to bear
the
      full consequences of doing business with certain institutions!

      1/15/2004 7:25:51 AM (GMT +2)

      EDITOR — I believe that the situation in the banking sector has gone
on for long enough. Such continued instability is not in the best interests
of the economy.

      The stand-off between the international banks and the indigenous banks
is detrimental to all stakeholders. I believe its time that all stakeholders
were made aware of what is really at stake so that they can make rational
decisions.

      Firstly, the daily settlement system must work smoothly in order for
funds to flow through the economy. This ensures that sectors requiring funds
are able to access them. The governor of the Reserve Bank has a point in not
giving overnight accommodation to struggling banks. There is more than
enough money in the market to help everybody settle their positions.

      By refusing to lend on the inter-bank market, the international banks
are depriving the market of funding, some of which is for the productive
sector.

      We know for a fact that international banks have not been and are not
willing to lend to certain sectors in this economy due to perceived risk and
policies dictated from abroad. Thus even if they enjoy the "flight to
quality " (where deposits are taken from the indigenous banks and placed
with institutions perceived to be safe), they cannot deploy those deposits
because they are unwilling to lend. The deposits will eventually become an
expense to them. For the depositor this means lower rates for their
investments and eventually the international banks may even have to charge
depositors for keeping money with them since it is a cost to them. All banks
have to pay statutory reserves to the central bank of 50 percent for all
deposits held on a weekly basis. They do not earn interest on this money
kept with the Central Bank. If they do not profitably deploy the other 50
percent they will not be able to pay interest to depositors and make a
profit. The reality is that banks are in business to make money just like
everyone else.

      There are stories circulating of depositors with billions being turned
away because they are just not willing to accept the low investment rates
offered by the international banks. So it is not necessarily in the best
interests of depositors to move their funds to an international bank simply
because their indigenous bankers are struggling.
      This brings me to my next point.

      Banking is a reciprocal relationship. Clients deposit funds, the bank
lends that client and others funds. However, with international banks it is
not that simple. They want the deposits but they are simply not willing to
lend financial support to those sectors in the economy that need it. Thus a
number of them have been labelled fair weather friends.

      The indigenous farming sector is an example. Interestingly, some bank
executives borrow from indigenous institutions to fund their farming
ventures because they are more responsive to their needs.

      Now they are kicking the same institutions in the teeth by refusing
them loans on the inter-bank market. The liquidity problems among indigenous
financial institutions in the financial sector are partly a result of the
fact that blue chip corporate clients and their executives deposit their
funds with international banks for the perceived safety and prestige while
banging on the doors of indigenous banks to borrow funds for the blue chip
companies as well as their personal interests including speculation.

      Naturally, the borrowings are at a premium since they have to be
funded partly from inter-bank borrowings from the international banks they
place deposits with. Essentially they borrow their own money at a higher
premium than necessary. However, this is because international banks are not
willing or take too long to consider requests for funding and they get a
better service from indigenous banks who are anxious to get into and stay in
business.

      It is interesting that the same executives and their blue chip
companies were at one time falling over themselves to get seats on the
boards of indigenous banks and were heartily pleased when the banks
published financial results reflecting billions, because they also got to
share in the wealth.

      Some of these same executives were able to very easily speculate on
shares including their own blue chip companies using funds borrowed from
indigenous banks because of the lax laws on insider trading, making millions
in the process. Which proceeds were still placed with international banks.

      So blue chip companies and their executives are equally at fault. they
want to have their cake and eat it. They too are fair weather friends, now
refusing to accept cheques drawn on the indigenous banks where they have
both corporate and personal borrowings. A shame indeed and the banking
public is none the wiser.

      As for the trade in foreign currency, there have been numerous calls
for devaluation for years. The development of the parallel market was simply
a response to the prevailing regime of high inflation and an artificially
low exchange rate. In a normal market, banks do exactly the same thing —
they trade in currency, they take positions. sometimes they do it at a
profit and sometimes markets work against them and they make a loss.

      Pearl Khabo,

      Harare.

                  1/15/2004 7:23:46 AM (GMT +2)

                  OTHER than beginning with letter "b" what do banking and
bricks have in common?

                  It is with deep sadness to watch the unfolding events in
the finance sector. There is disappointment, anger and pain. Pain for those
that fell victim to the unbridled passions of those they trusted. There is a
sense of betrayal.

                  Here and there, astronomical estimates of the amounts at
risk have been mentioned — millions, billions and trillions.

                  Given the nature of the business world, it is natural for
most people to view the effect of the crisis in money terms. Only what is
measured is normally taken into consideration.

                  Modern day corporations are currently working at
incorporating ethical and qualitative factors into their published financial
statements. With this in mind, the real and full impact of the "banking
crisis" in Zimbabwe could be viewed as more severe than is currently
apparent.

                  It is unimaginable that a handful of individuals took
siege of a nation, abused a system and incidentally spiralled inflation to
unprecedented levels. For all the wrong reasons, the economy made news
headlines around the world. It has been said that we have broken the
Guinness book of records on the inflation front. This is heart-rending. It
has brought tears to a number of people.

                  Given their level of education, it is impossible to
believe that the persons responsible were not aware of the effects of their
actions. All caution was thrown to the wind for self-enrichment and power.

                  The result was an arrogant bunch of beings who trampled on
the poor, the widows and the fatherless for their own gain. The nation is
considered a basket case in international economies, a handy example of
"hopeless" black Africa.

                  How many people lost their lives due to lack of forex to
buy medical supplies? How many children of school-going age are now at home
because of inflation? How many families are going hungry due to the
breadwinners losing their jobs? How much potential investment was lost
because Zimbabwe is a shunned investment destination by international
corporations? How many skills were lost to other countries because of the
shrinking industrial base? How many girls of school-going age are now in
prostitution to support their families? How exposed are they to HIV/AIDS?

                  How many young men have resorted to crime to put food on
the table? What about families who live in shacks because bricks are now too
expensive?

                  What about the stress on the nation as a whole? Will we as
a people ever be able to place monetary value on this pain, loss of dignity
and lost opportunities? It is incumbent on leaders to behold the bigger
picture for their decisions, choices and actions.

                  While the finance sector is not totally responsible for
the challenges facing the nation, they play a major role. Given the large
sums of money that pass through their hands, the impact of any recklessness
can not be underestimated. They are a trigger point to the welfare of the
nation; hence the territory comes with heavy accountability. It is expected
of bankers to be men of honour. That some of them were caught with their
pants down is unsettling.

                  It is high time corporate governance included
non-financials to their performance measures. Tools such as the Balanced
Scorecard, which have several Key Performance Indicators (KPI) could be
considered for use by all corporations that pose a risk to stakeholder
funds. Each KPI is auditable and carries a target to be achieved by a given
deadline.

                  One such that comes to mind is that each financial
institution could set a minimum target for low income clientele, e.g. 25
percent of the whole client base must be low income earners. This will
coerce banks to cater for all sectors of the economy.

                  Disclosure of emoluments for directors and senior managers
could also inform the public as to the usage of their funds.

                  Minimum balances must be a function of people’s earning
capacity, instead of the current "one size fits all" approach. How can
someone who earns Z$150 000 per month pool a minimum balance of Z$450 000?
Why not come up with a tier system with banded minimum balances? This is
what strategic posturing is all about. Companies tailor their services,
pricing and profitability structures to their customers’ billing potentials.
It is as basic as that. Business is about win-win relationships. Companies
should tailor their service offering to meet customer needs not the other
way round.

                  Incentives for meeting the KPIs could be preferential
treatment for state tenders for example. Secondly, such measures can foster
a culture of service to the nation, thereby encouraging a savings culture as
indicated by the central bank. After all business is a calling to serve not
to self-enrichment.

                  The reluctance to lower minimum balances as per the
central bank directive could imply that the institutions do not have the
money on hand. It is possibly tied up in a fleet of vintage cars, some
Picassos or property number 100.

                  It is regrettable that national resources at the central
bank are now being used for diversionary processes of relaying and
reinforcing banking foundations. The new governor and his team should be
focusing on value-adding activities; instead they are engaged in changing
diapers. It may be a while before the new team starts creating value for the
nation but it is a relief that the impasse is broken.

                  However, of this Zimbabwe should be proud that Zimbabwe
herself has initiated the clean-up process. It is a home-grown solution
tailored for a specific situation and not borrowed from those who will never
know our pain. To this, well done Zimbabwe, we have what it takes to arise.
The phoenix in us as nation is very much alive.

                  Psalms 107 (extracts from verses 28 to 43)

                  "Then they cry out to the Lord in their trouble, and He
brings them out of their distresses.

                  He calms the storm, so that its waves are still.

                  He turns a wilderness into pools of water, and dry land
into water-springs.

                  There He makes the hungry to dwell, that they may
establish a city for a dwelling place,

                  And sow fields and plant vineyards, that they may yield a
fruitful harvest.

                  He also blesses them, and they multiply greatly; and He
does not let their cattle decrease.

                  When they are diminished and brought low through
oppression, affliction and sorrow,

                  He pours contempt on princes, and causes them to wonder in
the wilderness where there is no way; yet He sets the poor on high, far from
affliction, and makes their families like flock.

                  The righteous see it and rejoice, and all iniquity stops
its mouth.

                  Whoever is wise will observe these things, and they will
understand the lovingkindness of the Lord".

                  Link P. Jongwe is a Chartered Management Accountant. She
has worked on business information systems in Europe and Sub-Saharan Africa.
She is currently based in Johannesburg, South Africa.

      1/15/2004 7:22:46 AM (GMT +2)

      In the revolution of any nation or community of people, there are
certain landmark historical processes an/or events which any political
leader can ignore at their own peril.

      In Zimbabwe, the liberation struggle and more recently the
constitutional referendum in February 2000 are such historic processes,
among others, that will continue to serve as reference points in defining
who we are as a people, as Zimbabweans. You ignore that and you perish. That
is the tragedy of political reality in Zimbabwe.

      During the liberation struggle, Zimbabweans said "NO" to colonialism,
imperialism, foreign dominance and exploitation.

      We demanded to be masters of our own destiny and declared that we
shall lead ourselves, "be it to the sea, to the mountain or to the desert".

      These are values that have become entrenched as a core part of our
identity as Zimbabweans and we cherish and hold them in high regard (I for
one do because they arise out of our consciousness and our struggles as a
people).

      During the constitutional referendum in February 2000, we said "NO" to
black oppression just as we have said "NO" to white foreign oppression.

      We demanded involvement and participation in setting up governmental
structures and in influencing the direction of governmental policy.

      That is fundamental. Again these are values, traits and qualities that
constitute a core part of our identity as a people and we are proud of it.
At least I am.

      The tragedy of our situation in Zimbabwe is that the two major
political parties are each emphasising, if not over-emphasising, just a part
of our identity as Zimbabweans and they want to negate the other part that
is not in lime with their own interests.

      That is going to be major cause of the demise of both parties because
Zimbabweans do not have a split conscience, personality or identity inspite
of our heterogeneity.

      We celebrate our diversity as Zimbabweans because we know that
diversity is a source of enrichment. We are Zimbabweans and we are part of
the community, with Zimbabwean conscience, hopes and aspirations.

      That’s who we are and we don’t wish or aspire to be anything else, for
to do that will be self-negation.

      My contention is that the party that would articulate truly Zimbabwean
aspiration is the one that will win the next general elections, everything
being equal.

      In one of my previous articles entitle,"MDC needs better ideological
clarity" (Financial Gazette November 13-19 2003 page 16-17) I outlined the
sequence of events that led to the co-option of the war veteran into the
status quo at a time when it appeared like they would be on the side of the
people.

      Since then, the war veterans association has remained a very powerful
tributary organisation to ZANU PF.

      In the article referred to above, I also pointed out that the
co-option of the war veterans into the status quo was accompanied by the
privatisation of the liberation war legacy by ZANU PF and a very powerful
ideological policing operation.

      It may be necessary for readers to revisit that article because it
puts this particular contribution in perspective.

      The very same tactics are being used again by ZANU PF ahead of the
2005 general elections and the MDC is too daft to see it.

      War collaborators, ex-detainees and ex-restrictees who have been left
out when the war veterans get their gratuities and monthly pensions have now
been promised their own share and I can assure you that before the end of
the year, these people would have been given huge sums of money.

      They will thus be further patronised and integrated into ZANU PF
structures, and together with the war veterans, they form a formidable force
which I doubt the MDC has the capacity to withstand.

      The response of the MDC to this development will determine whether or
not the party can manage to win the loyalty of these groups. Already the war
veterans are clamouring for a review of their monthly pensions from $100 000
to half a million dollars and ZANU PF cannot afford to antagonise the war
veterans, especially now that we are approaching another general election.

      It is also very clear that this recent demand by the war veterans is
well-timed.

      Already the armed forces have reiterated their earlier controversial
statement that they will not salute a leader who does not have liberation
war credentials.

      What is the MDC’s policy vis-a vis the liberation struggle, land, war
veterans and collaborators, ex-detainees, ex-restrictees and so forth?

      The fact that there is no such policy at all continues to further
crystallise the perception that the MDC has no respect for the values of the
liberation struggle and that they are a "sell-out" organisation.

      I have already said that you cannot afford to ignore the values of the
liberation struggle as a reference point in defining our identity and
aspirations, and survive politically.

      Let’s get the facts straight. No-one, and I mean no-one, should be
paid for liberating Zimbabwe.

      The fight for freedom is priceless; its reward is freedom itself. In
the liberation war such as we fought, too many sacrificed too much that any
system of material rewards is divisive and a recipe for disaster.

      Indeed the liberation struggle in one way or the other involved many
more people than ex-combatants, war collaborators, ex-detainees and
ex-restrictees. In fact the war involve the entire nation.

      So, do we reward everybody? Why not? But the problem is that we are
too poor to reward everybody materially. That is the crux of the matter.

      One would think the best reward for everybody was to have achieved
majority rule.

      That should have settled the matter and a heartful "thank you", as we
took good care of the casualties and destitute would have been the point
route for our country.

      This would be an obligation, not a reward.

      Basically, what is happening in Zimbabwean is that we are witnessing
the politics of poverty amid plenty for the political class.

      I would rather like to believe that if it was a shared poverty, it
would not generate so much tension.

      As long as the poverty in our country is not shared between the people
and their leaders, the people shall continue to demand a share in the
conspicuous wealth that the post-independence ruling clique enjoys.

      But one cannot help getting the feeling that we are degenerating into
a nation of pressure groups and mercenaries fighting for inclusion into the
political class.

      The war veterans and their sister organisations must not forget that
their plight is also the plight of the common man.

      People have been left out of the "independence dividend" by the
forgetful political class. If these groups feel that they alone have been
singled out for this raw deal, that perception is wrong.

      On the other hand, if we also think that the war veterans and their
allies are being naughty and troublesome, that perception is equally wrong.
So, as things stand right now, what is the way forward for the MDC?

      In my view, in this particular context, the MDC, small opposition
political parties and civil society must start by reclaiming the liberation
war legacy which has been privatised by ZANU PF.

      ZANU PF neither owns the liberation war legacy nor the war veterans.
That legacy and its ex-combatants belong to Zimbabwe, and consequently to
all opposition political parties and civil society as well.

      Most Zimbabweans made sacrifices of one kind or the other and fought
in the war in different ways, and no contribution is of lesser value.

      All opposition political parties should clearly and actively defend
the liberation war legacy and articulate policies that address the war
veterans, war collaborators, ex-detainees and so forth as an important
section of the Zimbabwean community.

      The opposition can even go further to include victims of protected
villages ("keeps") and widows of heroes (who as far as I know from a
personal interaction with many of them, are largely neglected by the
government by being subjected to crippling bureaucratic bungling) or even
much further include Gukurahundi victims and those who were either raped,
maimed or displaced.

      Isaya Muriwo Sithole is a Harare-based legal practitioner.

                  1/15/2004 7:34:20 AM (GMT +2)

                  ONE of the major criticisms that has been levelled against
emerging markets is NO LONGER lack of capacity to consult or formulate good
policies, but lack of capacity to boldly implement sound policy measures as
well as ENFORCE relevant legislation.

                  By coming up with such a comprehensive and
all-encompassing monetary policy statement, Reserve Bank of Zimbabwe
Governor Dr Gono should be congratulated for his boldness, the credibility
and renewed confidence that he has injected into the economy. However, it is
important to note that the market is now closely monitoring the authorities’
capacity to ensure that the visible and tangible benefits that should arise
following the implementation of this policy statement are filtering to the
majority of the people. The purpose of this article is to sound warning
bells on some of the areas that I think could have been overlooked. In the
interim, what is now being asked for is the continued boldness to sustain
discipline in the financial sector, (i.e. no policy reversals please!). The
boldness should not only come from the governor alone but the entire
government and the people of Zimbabwe. Probably what I am asking for is the
political will to let Gono do what he has to do and what he can do best in
his area of expertise. This is the first instalment in a two-part series.

                  THE majority of the people who have felt the pinch of
hyperinflation are strongly behind the inflation battle but what the people
would like to see are positive results. While the proposed measures to fight
inflation are good, I wish the governor had mentioned no recourse to
seignorage as one of the methods that would help bring down money supply
from around 500 percent to the target of below 200 percent by year-end.
                  However, should recourse to seignorage be unavoidable, let
it be for financing capital projects. This has been the case with a number
of economies that have been under siege like ours. This alternative, if it
has to be done, has greater potential to bring about positive multiplier
effects to the economy than if the resources are used to finance
unproductive recurrent expenditure.
                  To ensure a successful fight against the inflation
scourge, warning bells are being rung for those with ears to listen. The
bells are saying watch out for the continued use of exemptions, subsidies
(direct and indirect) etc for these create opportunities for arbitrage.
Monitoring capacity has to be strengthened, otherwise this is another “
accident in waiting”!

                  The measures adopted on liquidity support are commendable
and this should have been done yesterday. There is no need to use kids
gloves on imprudent behaviour. Frowning at poor balance sheets is not good
enough. All players in the financial sector have to play ball according to
the rules of the game rather than change goal posts for some and confuse
honest and ethical players who only get to know the new rules of the game
when the game is over! As long as the rules keep changing in favour of a
select few, this creates a moral hazard, which is even more difficult to
fight.
                  With the spirit of transparency and good corporate
governance, best international practice calls for the publication of names
of those exhibiting imprudent behaviour - for why protect the devil?
                  The information that the market is looking forward to as
Gono implements his monetary policy statement includes the following:
                  lWho gets what liquidity support and how much?
                  lIs the market going to get regular reports on liquidity
assessment of financial institutions (FI) or how is the market going to be
kept informed of the health of the financial sector since financial
statements alone have proved inadequate?
                  lWhat is acceptable security? Can the Reserve Bank
diversify options available to FIs for use as “acceptable security”?
                  lReference is made to “stiffer penalties”. What penalties?
How stiff? If they are to be an effective deterrent, I am sure the public
would like to know how stiff the penalties can be;
                  lIt’s a common adage that where two elephants fight, the
grass suffers. So when intra-bank lending rates go up beyond the reach of
many, the consumer suffers yet he or she is not part of the fight. Where is
consumer protection, if any, in the governor’s monetary policy statement?
                  Protection is called for since the consumer may not have
contributed to the liquidity crunch but this could have emanated from poor
internal governance and weak control measures within the bank etc.

                  Partial liberalisation of interest rates is one of the
best news contained in the monetary policy statement. Best in the sense that
there is evidence of effort to move away from the status quo that has hurt
the economy so badly. A total liberalisation would be tantamount to
devaluation that could shock the economy. While partial liberalisation is
not good enough, it is appreciated that it’s a step forward especially for
an economy under hyperinflation.
                  Maintaining the status quo where abnormally low interest
rates prevailed in the market was a case of getting Economic Principles 101
upside down. The negative real interest rates were no incentive for any
serious investor in the real economy, but this created an opportunity for
arbitrage for speculators. I believe that in the medium to long term, the
market will find an equilibrium price for money since borrowers will
determine the direction of the rates.
                  The immediate impact of this partial liberalisation is
that most borrowers have been forced to think twice before signing the loan
agreement. It is thus hoped that the message is making lenders think twice,
especially regarding for how long they can go on asking for rates that
consumers cannot afford. A reasonable price for money has to be established
sooner rather than later since lending is one of the core businesses of
those financial institutions undertaking ethical business practices - rather
than commodity broking!
                  Dual interest rates create opportunities for arbitrage.
What measures are being put in place to ensure that subsidised funds do not
move to unintended beneficiaries or sectors e.g. from Agribank (30 percent)
into the 900 percent+ lucrative high interest earning financial instruments
on the money market? By the way this gives an indirect subsidy of 830
percent, which represents somebody’s profit margin.
                  I am simply posing a question on the nature of the
administrative machinery that is in place, and its capacity to administer
the subsidised loan facility to the targeted sectors. How effective and
water-tight is the implementation process and the monitoring system and to
what extent will the infrastructure minimise leakages as well as discourage
imprudent behaviour?
                  For those who remember an earlier article on the
“Impossible Trinity”, the argument was that controlling interest rates does
not necessarily bring about the desired objectives. The market will
definitely take advantage of poor policies and make money out of it, more so
if the responsible authorities in charge of monitoring and enforcement of
prudential rules and regulations in the financial sector decide to sleep,
leaving the sector on autopilot.
                  Notwithstanding the desired objectives of such a policy, I
believe the market would be interested in receiving regular information
regarding evaluation of this subsidy programe with respect to who gets what,
when, how much, for what purpose etc.
                  Publications by the Ministry of Lands, Agriculture and
Resettlement regarding land allocations are one such example that can be
emulated ( minus weaknesses in that strategy!). Publication of such
information may induce peer pressure to pay back, to use resources for
intended purposes rather than divert resources to speculative investments
such as marrying more women, luxury vehicles, bricks or refrigerators!
                  At least the taxpayer, who is the effective financier of
this subsidy, needs to know how his or her hard earned money has been used.
These are public funds that are being used to subsidise targeted economic
sectors so that there will be a win- win situation for all at harvest time,
hence the need to make public all ethical and unethical beneficiaries and
culprits alike. For those market players who end up engaging in criminal
activities, the public desires to see the culprits prosecuted, especially
those operating on the “fringes of illegality”.
                  Asset management companies
                  While the governor is honest and bold enough to
acknowledge and make public the observations made on the conduct of asset
management companies, it is very sad and disturbing to note that the
legislation governing the operations and activities of such companies was
gazetted in 1998. Where was the regulator for the past five-six years? Asset
management companies must have had “a real good time” operating on autopilot
without questions being asked. I presume this is a lesson for us all (No
finger pointing please!) with regards to understanding the legislation that
we pass through the House, knowing and understanding who administers that
legislation and more importantly, making sure that the legislation is
meeting the desired objectives. If there is no monitoring taking place, then
there is no way we will get to know the weaknesses in the system and the
areas that require fine-tuning. The governor should be applauded for the
measures introduced in this respect. HOWEVER, warning bells are now ringing
in the other sector that involves money-lenders!

                  Judith Kateera is a member of the Zimbabwe Economics
Society.

      1/15/2004 7:21:52 AM (GMT +2)

      I HAVE felt aggrieved ever since learning that the Kenyan government
is to let former President Daniel arap Moi off the hook for misdeeds
committed during his marathon 24-year stint as head of state.

      I have found the announcement by Kenya’s Permanent Secretary for
Ethics and Governance, John Githongo, that Moi will not be prosecuted rather
disappointing because it could set a bad precedent. I am afraid that
treating the former strongman with kid gloves will send the wrong signal to
corrupt and ruthless despots still holding sway in different parts of Africa
that they can abuse their powers to their hearts’ content with impunity.

      Kenya’s decision has the effect of slowing the momentum generated by
the ousting of warlord Charles Taylor from power in Liberia and the ongoing
prosecution of the former President of Zambia, Frederick Chiluba, for
allegedly stealing US$34 million during his 10-year tenure of office.

      Developments in the cases of Chiluba and Taylor, who has been indicted
for war crimes by a Human Rights Tribunal in Sierra Leone, have raised the
hopes of ordinary people in other parts of Africa that their own corrupt and
ruthless leaders would one day also be called upon to account for their
sins, which include plunder, graft, genocide, brutality and incompetence.

      I am particularly horrified by the reasons given for not targeting
Moi, who is accused of massive theft of state assets. Githongo said one
factor taken into consideration in arriving at the decision was the manner
in which the 79- year-old former Kenyan leader had "graciously conceded
defeat" in elections held in 2002, which swept President Mwai Kibaki into
power.

      It is no secret that in Africa, power is not always won and held by
playing by the rules. Selfish and greedy leaders perpetuate their reigns not
by serving their countries but by bringing them to their knees economically.
They do this while building a myth that portrays them as intrepid fighters
for justice on their people’s behalf. But this myth is tarnished by the web
of genocide, civil wars, tyranny, flagrant violations for human rights,
economic mismanagement and lack of accountability that are now the rule
rather than the exception in many African countries. Ex-president Moi was
guilty of a fair number of these horrors in the 24 years that he clung to
power.

      I therefore, find it hard to understand that he should be rewarded
with clemency and praise for the fact that the long-suffering people of
Kenya finally got their act together and booted his corrupt regime out of
power.

      The statement by Githongo that: "We regard the former president as a
special democratic case for Kenya and therefore for Africa and he will not
be subject to the kind of scrutiny given to others", in my view, altogether
misses the point, i.e to hold errant leaders accountable for their actions.

      Graciously conceding defeat in an election should be the norm in a
democratic environment. That on this continent this is the exception rather
than the rule demonstrates how Africa’s erstwhile independence heroes have
turned out to be far worse than the "colonial oppressors" they replaced.
Allowing Moi to go scot-free implies that we Africans are prepared to accept
the lowest common denominator of behaviour with respect to dictators who
have plunged many parts of the continent into chaos. The people of Africa
surely aspire to a higher level of ethical and democratic behaviour for
their leaders and bringing people like Moi to justice would be a powerful
form of deterrence for like-minded Big Men still presiding over the rapid,
backward slide of their countries.

      I dispute Githongo’s statement that by agreeing to acknowledge that he
had been resoundingly defeated in the 2002 elections, Moi had acquired
"democratic stature that should be recognised." As far as I am concerned,
the only person who deserves that accolade in Africa so far is Nelson
Mandela of South Africa who voluntarily and actively set in motion the
process for his own relinquishing of power after serving only one term of
office. His action is the more remarkable because despite spending 27 years
in jail fighting for his country’s Uhuru, he did not brandish his long
incarceration as a weapon by which to hold his people to perpetual ransom.

      This is unlike some leaders on the continent who spent far shorter
periods in detention but who believe this gives them exclusive entitlement
to govern.

      The reason I am opposed to the mollycoddling of culprits like Moi is
not that I am an unfeeling cynic who wants to see old men approaching the
end of their days being humiliated. I believe that these dictators should be
brought to book simply because they owe their long-suffering people an
explanation. They need to help us understand the paradox they represent in
that despite being grandfathers who should have mellowed with age and become
more humane and compassionate, the opposite has happened. Most of Africa’s
old-style strongmen who cling to power until they are octogenarians or
nonagenarians actually become more tyrannical, more ruthless, more brutal,
more corrupt and greedier in their dotage. If they are still capable of such
horrors in their old age, there is no reason why they should not be required
to take responsibility for their actions.

      The second reason given by the Kenyan government for allowing Moi to
get away with murder, namely to avoid a long-drawn out process and a drain
on resources, is equally unconvincing. This is particularly so because while
Moi’s transgressions are to be swept under the carpet, "everyone else will
be fair game," according to Githongo. It seems to me that the Kenyan
government has chosen to take half measures by focusing on "softer" targets
while leaving the main culprit to go scot-free. We are in danger of seeing a
repeat of what happened at the Nuremberg trials when Nazi operatives
chorused that cop-out, "We were following orders" as an explanation for the
part they had played during the holocaust. But in this case the chief
architect of that dark period in human history, Adolf Hitler, had committed
suicide. In the Kenyan situation, Moi is still very much alive. Let him face
the music and do the talking.

January 15, 2004

~~~ Newsletter 047 ~~~
Soul & inspiratiotn

Remember that you must be connected to the internet to view the pictures in this newsletter.

You can't shake hands with a clenched fist.
~ Indira Gandhi

Lighting the way
Human rights are human rights and they are of universal validity or they are nothing. There are no peculiarly African human rights, what has been reported as happening in Zimbabwe is totally unacceptable and reprehensible and we ought to say so regretting that it should have been necessary to condemn erstwhile comrades. The credibility of our democracy demands this. If we are seemingly indifferent to human rights violations happening in a neighbouring country what is to stop us one day being indifferent to that in our own?
~ Archbishop Desmond Tutu, South Africa

It's up to you so . . . choose your New Year Resolutions

2004 sees consolidated civic response to the deteriorating crisis in Zimbabwe
The zanu pf enforced media blackout does not easily allow for the sharing of positive evidence that resistance forces are alive in Zimbabwe. However it is heart warming to be able to report that a historic meeting recently took place in Mashonaland Central whereby strategic civil society organisations, NGOs and pressure groups met to agree on their consolidated and collective effort to counter zanu pf oppression. It is even that much more admirable that this unification is happening under the extreme repression that we are facing. There is clear evidence that zanu pf has a big fight on its hands. And we at Zvakwana are among those who are committed to encouraging people to Get UP and Stand Up against the regime.

dead bc desperately seeking licences
Beware people! There are these sad looking dead bc personnel waiting around in car parks and the like. They are after evidence that you have a listener's licence for the radio in your vehicle. This requirement was declared illegal but now it seems things have changed. Inspectors are targeting motorists in shopping centres and fining them for not having licence stickers. Even if you wanted to support moyo's propaganda by willingly buying a licence, these licences are only available at dead bc in Anlaby house or 2nd Floor Eastgate. This is a scam and very inconvenient for the public. In previous years Post Offices were agents and this made buying a licence relatively convenient for the public. Zvakwana is encouraging Zimbabweans to Switch Off The Propaganda! Don't support the dead bc until we see media reform in Zimbabwe. Zvakwana to one party broadcasting.

Mugabe regime ever desperate seeks new ways to quieten people
Zvakwana has been informed that the small dictator verging on his 80th birthday (how much hair dye is that?) has put Operation Nyararai (shut up) into motion starting off in the rural areas. It is obvious that the regime is afraid of the growing rumble of the discontent engulfing this place. He and his henchmen believe that by trying to scare people into silence will mean less resistance. But of course as we have said before: the more you repress the greater the resistance. Watch out for some good things to come as we smack down Operation Nyararai. And of course it is for everyone to help us. Make a commitment to speaking out, and get up and stand up. Do not be beaten by these unfair tactics. Use every way you can think of to keep talking, to keep on finding ways to subvert the regime.

Premier Services (formerly Public Services) Medical Aid Society owes services providers hundreds of millions of dollars for services already provided to their members. Members residing in South Africa are waiting years for payment in Z$. Despite representation in person, in writing and by telephone, PSMAS is not paying these huge debts to providers and members, who are now in financial trouble themselves due to this non payment. PSMAS has opened a laboratory of its own while refusing to pay huge debts to other laboratories. Is this a scam to close quality laboratories down? Service providers are now regretfully having to charge PSMAS patients cash up front before a service can be rendered.
~ Gertrude, Zvakwana subscriber

Church supports violent dictatorship
HEAR the Word Ministries in Borrowdale last month gave President Mugabe a $30 million gift raised through a collection at the church. Members of the congregation this week said there was a danger that the church group - formerly Rhema - could be seen as part of Mugabe's patronage network. Pastor Tom Deuschle, the head of the church, however said the gift was in accordance with the scriptures and should not be interpreted in any way as an endorsement of everything Mugabe is doing. "It wasn't a Christmas present. It was a collection for a gift to the president. It amounted to close to $30 million. The scriptures say that we should honour our leaders," said Deuschle. Zvakwana urges you to email Hear The Word with your comments on supporting mugabe's violent regime: postmaster@htwm.co.zw

Start 2004 with a bang and set up a community based resistance group!

Education crisis in Zimbabwe
The new school term that has just started in Zimbabwe has caused untold pain for many Zimbabweans who are now struggling to educate their children in the face of high levies. Us hardworking people should not have to consider withdrawing our children because of high costs. Whatever happened to the government's commitment to providing free, or even affordable education? In some cases increases have topped the 2000% mark.

The government's propaganda rag, the herald, pointed out on Jan 12 the following:

"Our Government, in line with the socialist ideology, which seeks to eliminate the caste system from society, proclaimed education for all at independence in 1980 when schools were desegregated. This vision was subsequently enshrined under section 4, subsection (2) of the Education Act (Chapter 25:04) of 1987 which stipulates that "No child in Zimbabwe shall be refused admission to any school on the grounds of race, tribe, colour, religion, creed, place of origin, political opinion or the social status of his parents".

This noble move ensured that Zimbabwe has had one of the highest literacy rates in the world. Standards have dropped badly since those early days of zanu pf governance. These days zanu pf chefs send their children either to expensive private schools within our borders or to external universities and colleges. Zvakwana, with the help of a network of resistance activists located in various countries is compiling a list of zanu pf chef relatives in order to do expose these double standards. The people here will then be given the clear situation through Zvakwana's network of grassroots activists.

I am glad that we can start a good mutual relationship based on the betterment of our country's future politically, socially, and also on the disbursement of the news and now I subscribe. I look forward to a good working relationship with you and I will start henceforth to supply you with news on what is happening in our society. This has nothing to do with money but I feel that it is more of a social obligation than anything else.
~ Brother in arms, Tapiwa - Zvakwana subscriber

Choice channels for the First Family
During the recent postal strike DStv had difficulty getting copies of its Dish magazine to customers. People were encouraged instead to go to DStv offices to collect their copies. But postal addresses had already been stamped on the packets so customers got somebody else's copy. Which is how Muckraker ended up with a copy addressed to Hon RG Mugabe, Zimbabwe House, 7th Avenue, Harare. We don't know whose copy Hon RG Mugabe has, but if he would like the one belonging to him he is free to call Muckraker and ask for it. What intrigues us about this is why the president should want to subscribe to satellite television, with all its subversive British and American stations transmitting "lies" about Zimbabwe, when he could be watching ZTV with its good news about the success of the land programme, not to mention its entertaining gyrating jingles. Zimbabweans will be curious to learn that after a hard day's work, Bob and Grace like nothing better than to put their feet up and watch Will and Grace, and other American or British TV programmes. Perhaps they just have it for the kids, switching across to Newshour once the little ones have gone to bed? Somehow we doubt it. It looks as if, like the rest of us, they can't stomach ZTV! What's the betting they watch BBC World, Star Trek, Outer Limits, The Drew Carey Show, and CSI Miami? Who knows, Grace may even pick up a few tips from Nigella Lawson on the Food Channel!
~ Muckraker's column, The Zimbabwe Independent

"If you refuse to co-operate, we can take you to the army barracks and detain you, and you will see what will happen."
~ Zimbabwe's new defence force boss, general constantine chiwenga, giving the country's doctors and nurses a final order to end their two month strike

This quotation above, is an example of the violence being promoted by mugabe's stooges. It is a clear reminder of what we don't want in Zimbabwe, and what we must vote to get rid of. Zvakwana! Sokwanele! Enough!

Phillip's visit to jail is an indication of zanu pf's in fighting
Yes, it is good to see how mugabe and his ill-fated political party are unravelling. Zvakwana is receiving countless messages from all and sundry saying how pleased they are that a chef like chiyangwa who has gotten rich and fat cheeked on the back of a deteriorating fiscal system is now an inmate. Zvakwana recently received information from activists passing through Harare airport - they saw phillip stride through the airport without even clearing any customs. It is time that the chefs realise that their arrogance will haunt them. Meanwhile Zimbabwe Lawyer's For Human Rights recently issued a statement on the chiyangwa affair. In their statement we note that chiywanga is referred to as the Hon . . . it is time that we reconsidered the use of this title for those who do not deserve it.

To view and play with George Bush action dolls please click here. He can be dressed up, and sometimes he can be seen to be having certain difficulties.

Zvakwana keeps the regime on the hop
It is clear that a regime is rattled when they deploy trucks of riot police to stop activists putting stickers in the central business district. Zvakwana activists were recently harassed by some of the nation's "cop-outs" when they were trying to distribute some stickers. Imagine that mugabe is even so scared of stickers. They are worried. If you want some beautiful stickers so that you can put them on buildings and the like in your local area then email news@zvakwana.org and we will send you some.

Trudy Stevenson: fast forward MP!
We are sharply congratulating Trudy for becoming so organised ahead of the parliamentary elections which zanu pf is likely to spring on us in the near future. You can find her office situated in the foyer of Mount Pleasant Hall. There will be some information for you to access including copies of the Hansard that will give you an opportunity to read about what goes on in Parliament. And if you are a carpenter and can help with some partitioning then please do so as she is needing help to make the office that much better. Zvakwana is urging all the other progressive MPs out there to work hard to build local support in preparation for the elections. There have been many complaints that MDC MPs are not seen to be doing so much work in their constituencies. Avoid complacency! People vote you in, and they can vote you out. One time.

Ghosts in zanu pf and . . . making the old man more presentable
While the zanu pf web site clearly states that various politburo and cabinet posts are vacant they continue to list the late muzenda as alive and well. Meanwhile Zvakwana has been receiving notification from subscribers that businesses around Zimbabwe are starting to receive some letters saying that zanu pf are embarking on an effort to replace the presidential portraits that show mugabe from many years back. Apparently government printers are producing another set. However it is not clear whether this is in preparation for a new face altogether as inside zanu pf faction fighting is heard to be saying.

Make sure you SPEAK OUT - keep discussion alive, keep information flowing.

Please remember Zvakwana welcomes feedback, ideas and support for actions.

Enough is enough, Zvakwana, Sokwanele.