|The ZIMBABWE Situation||Our
thoughts and prayers are with Zimbabwe |
- may peace, truth and justice prevail.
Mugabe to seize British firms if sanctions are imposed RW JOHNSON AND TOM WALKER PRESIDENT Robert Mugabe is planning to seize dozens of British companies in Zimbabwe if sanctions are imposed on his government. Sources close to Mugabe, who faces growing international condemnation for his crackdowns on political opponents, white farmers and independent journalists, say he is furious that foreign governments are considering such a course of action. A leading member of the president’s Zanu-PF party warned that he planned to retaliate for any measures taken at Britain’s instigation — such as a ban on travel to European Union countries and America — by targeting the interests of thousands of Britons. According to the Southern African Business Association, there are about 300 British companies in Zimbabwe, with a total investment of hundreds of millions of pounds. Some of the big players, such as Barclays bank, BP and Cadbury, are considered too vital to the economy to be nationalised. But scores of family businesses, many of them in tourism, could be confiscated and distributed among Mugabe’s party faithful, the sources said. Zanu-PF has warned repeatedly in recent months that white British passport-holders in Zimbabwe should renounce their UK citizenship. Aides of Mugabe say that in the event of sanctions, those who have failed to become Zimbabwean citizens will face repercussions. Many white farmers have already decided to comply with the measure. But a prominent businessman in Harare said yesterday that many of the 50,000 whites still in Zimbabwe were determined to hold onto their British passports. “If Britain starts imposing sanctions, selective or otherwise, the repercussions will be immediate,” said the businessman, who had been warned of Mugabe’s plans by ministers in the president’s inner circle. “It’ll be tit for tat. People will simply have their right to live here taken away and they’ll lose their businesses.” Possible measures under consideration by the EU and America include “smart sanctions” targeted at Mugabe and his closest associates, such as freezing bank accounts. Debt relief measures and aid could be affected and the Commonwealth is expected to consider calls for Zimbabwe’s suspension. Most businessmen were silent when the threat of confiscation surfaced in the local Financial Gazette last week. Mugabe’s aides say the president believes the opposition Movement for Democratic Change (MDC) was created by British and western corporate interests to break his grip on power, which will be tested by elections in March. Wilfred Mhanda, who leads the Zimbabwe Liberators Platform, an association of anti- Mugabe war veterans, said a plan to grab British business assets had existed since the early days of Mugabe’s guerilla offensive against the Rhodesian authorities. “The idea was that we would seize power, take all the land from the white farmers and nationalise all white-owned businesses,” he said. “When Mugabe came to power a compromise deal was struck, with the British paying for land reform. “In Mugabe’s eyes, the whites have broken the agreement by encouraging both the farm workers and urban employees to support the MDC.”
HARARE (Reuters) - Twenty people have been injured and thousands teargassed after police and militants from the ruling ZANU-PF party intervened to stop a rally by Zimbabwe's main opposition party, an opposition spokesman says.
Welshman Ncube, spokesman for the Movement for Democratic Change (MDC), said militants occupied a stadium in Zimbabwe's second city of Bulawayo and beat up opposition supporters to stop the rally, while police teargassed those waiting outside.
"The police moved in as between 8,000 and 10,000 of our people were waiting outside the stadium to get in for the rally," Ncube told Reuters.
"They chased them and threw teargas," he added. "Some of our people have been assaulted and tortured by members of the militia in the stadium."
Police said they did not target MDC supporters.
"The police moved in to stop violence between supporters of two parties," a police spokesman said. "The police threw teargas to disperse the crowd to avoid any further trouble."
The violence came just hours before a visit by Nigerian President Olusegun Obasango, who is due in Zimbabwe later on Sunday for talks with President Robert Mugabe over his pledge to end violent seizures of white-owned farms.
Mugabe faces his toughest electoral challenge ever from MDC President Morgan Tsvangirai. Analysts say ZANU-PF has stepped up a violent drive against the MDC and the seizure of white-owned farms in a campaign to win Mugabe presidential elections scheduled for March 9-10.
Mugabe, 77, is fighting for political survival after nearly 22 years in power. He has pushed through legislation tightening security and electoral laws to favour his party.
At the weekend travellers were being beaten and harassed on suspicion of supporting the opposition Movement for Democratic Change as the President sought to ensure his re-election in March.
But even as he increases repression, Mugabe is facing a quiet challenge from within his own party. So many Zanu-PF MPs have failed to attend recent sessions that the ruling party has been unable to pass legislation to impose heavy restrictions on trade unions and the press and to put the adminstration of elections in the hands of the government.
Zanu-PF rebel Eddison Zvobgo is credited with forcing the government to recall the Press Bill for revisions. Zvobgo, a former Cabinet Minister sacked by Mugabe, is chairman of the parliamentary legal committee. He has thrown a spanner in the works by voicing objections to the new legislation.
The objections raised by the legal committee have forced the government to withdraw the Press Bill for revisions and to make changes in other legislation.
Zvobgo, 67, trained as a lawyer at Harvard University in the United States and is a founding member of Zanu-PF. A Minister throughout the 1980s, he was sidelined by Mugabe because of his undisguised ambition to succeed the President.
Zvobgo lost his Cabinet seat and a place on the party's Politburo, but he retains influence in Masvingo, Zimbabwe's most populous province. Although he has vowed to stay in Zanu-PF until he dies, he has refused to campaign for Mugabe in the presidential elections.
Zanu-PF MPs are unhappy being pressed to vote for repressive laws that were created by unelected colleagues. 'Many Zanu-PF MPs detest [Information Minister] Jonathan Moyo and they do not want to support his Press Bill,' said the source.
'Mugabe will probably force them to vote for his legislation in the coming week, but at least they have given him yet another problem.'
In recent weeks the government has increasingly used violence, torture and murder to intimidate voters, according to human rights monitors in Zimbabwe. The escalation in violence came as Ministers gave assurances to the European Union that ithad restored the rule of law.
Zimbabwean civil society groups are calling on the EU to ratchet up its pressure on Mugabe. They also want United Nations Commissioner for Human Rights Mary Robinson to visit Zimbabwe to encourage the government to stop gross abuses.
Welshman Ncube, MDC secretary-general, accused Mugabe's government of creating 'no-go areas' for opposition supporters ahead of the presidential vote. 'There is no prospect of the elections being free and fair,' he said.
Mugabe is fixing the election by gagging the press—and London is doing nothing
Robert Mugabe is nearly there. While the world sleeps, he is putting the final pieces in place to fix the Zimbabwean presidential elections, which must take place before 17 March. By the time you read this, the Access to Information and Protection of Privacy Bill will probably have been passed by parliament. Its purpose is to intimidate or shut down the home-grown independent press — the Daily News being by far the most important newspaper — and to make it practically impossible for foreign news organisations to cover the elections.
least a year Mugabe has succeeded in keeping out most foreign journalists far
more effectively than did apartheid South Africa, or indeed Rhodesia under Ian
Smith. A few slip in as tourists, as I did last week on behalf of the Daily
Mail, but it can be a bit hairy. The BBC hasn’t had a correspondent in the
country for many months: it either reports from South Africa or, as on BBC1’s
Ten O’Clock News on Tuesday evening, has someone in London talking to film.
There is a brave band of local stringers, most of them Zimbabwean, reporting
news under the watchful eye of Jonathan Moyo, the sinister information minister,
who probably taps their phones and certainly reads their articles on the
As a result of all this, Mugabe’s worst crimes have not received as wide a coverage as they should have. The world knows that awful things are going on in Zimbabwe, but is probably unaware of how awful they are. I hadn’t realised, until I was in the country last week, that between 80 and 90 per cent of white-owned farms have already been confiscated, or scheduled for confiscation, and that some blacks are already dying of starvation. Nor had I grasped how widespread Mugabe’s reign of terror is. He and Moyo have grasped the simple truth that by banning foreign camera teams and journalists they can dramatically reduce the amount of bad coverage they receive. Now they are tightening the final screw in the hope that we will know even less about what is really going on. Once the new media Bill becomes law, all journalists in Zimbabwe will be required to have a one-year renewable accreditation from the government, which means they can easily be silenced. Non-Zimbabwean citizens will not be allowed to work as journalists.
The independent local press will also face draconian new laws. Hitherto it has been remarkably outspoken, though not without paying a price. Nearly a year ago the Daily News’s presses were bombed by saboteurs. The offices of Geoffrey Nyarota, the paper’s indomitable editor, have also been bombed, and he was arrested, and briefly detained, before Christmas. Several Daily News journalists have been attacked, and its street vendors are regularly beaten up. The courage of these people is terribly moving for a spoilt Western journalist such as myself. They really do live in fear of their lives. For hundreds of thousands, possibly millions, of Zimbabweans, the Daily News carries their hopes of freedom. Mr Nyarota and his staff have taken everything that has been thrown at them, and not a single issue has been missed, but the new media Bill threatens the paper’s survival. It will have to seek registration from the government — which may well be refused — and its journalists will be required to have the same renewable accreditation as local stringers. Mr Nyarota says that he will challenge these new rules and continue publishing come what may, but there is undoubtedly a danger that the paper will be closed down in the next few weeks.
With these swingeing new measures against the media, Mugabe is well on the way to securing victory in March. He will not, of course, allow international monitors to observe the proceedings. He would definitely lose a free and open election: the opposition Movement for Democratic Change (MDC) got more registered votes at the parliamentary elections in June 2000 than Mugabe’s Zanu-PF, but secured only 56 seats to Zanu-PF’s 94, mostly because Mugabe nominates 30 MPs. Things have deteriorated since then, with the economy in ruins and starvation looming, and it is a certain bet that in a fair fight he would lose to the MDC’s leader, Morgan Tsvangirai. But Mugabe is doing his damnedest to ensure there isn’t going to be a fair fight.
In a strange way, his clampdown on the Western media has helped the British government. Let’s face it: if there had been more horrible pictures and reportage on our television screens, there would have been more pressure on the government to do something. I certainly don’t advocate a Kosovo-like campaign, but the government could and should have introduced ‘smart sanctions’ aimed at restricting the foreign travel of Mugabe, his cronies and their children, and freezing their foreign bank accounts, which are bulging with looted money. The United States Congress has just approved the Democracy Bill, which contains similar measures, but Britain, the European Union and the Commonwealth have been dragging their feet. Why are we so reluctant to act? If Jack Straw believes that Zimbabwean whites — whom as an old Leftie he may not like — are suffering more than Zimbabwean blacks, he is very much mistaken. On Tuesday our narcoleptic Foreign Secretary said in the Commons that the British government would press for Zimbabwe’s suspension from the Commonwealth in March ‘if the situation in Zimbabwe continues to deteriorate’. In March! Big deal! By then the election will have taken place, and it will be too late to do anything.
My starting point is this. Mugabe is not — at least, not yet — a raving lunatic and bloodthirsty tyrant like Idi Amin or Emperor Bokassa of the Central African Republic, who kept human heads in his fridge. He still cares what the international community thinks; he is still susceptible to pressure; and he certainly doesn’t want to have his foreign bank accounts frozen and his foreign travel — including those trips to London and Paris with his pretty young wife, Grace — curtailed. So there is much that Western governments could do — though they have left things appallingly late. As for the media, we too have a vital role to play. Why else would Mugabe try to keep us out? A lot of difficult decisions have to be taken about how to cover events over the next few weeks, but we surely cannot simply watch the spectacle from afar. There are competent camera crews in Zimbabwe, and lots of brave journalists, prepared to take risks and produce pictures and copy for the Western media. Going in as a tourist may be dangerous, and will probably become more so, but it is an option. What happens in Zimbabwe will be one of the biggest international stories of the year, and one way or another newspapers and media organisations are going to have to work out how they will do it justice.
"We have already responded to the EU, and any reports to the contrary are just ridiculous," Moyo told the state-run Sunday Mail newspaper.
"We handed the response although the seven days had not yet expired, as Tuesday was the deadline," he said.
"We are committed to constructive partnership and cooperation," he said.
Moyo said the response was given to the Spanish ambassador in Harare on Friday, but did not detail what the response contained.
Zimbabwe faces possible EU sanctions over widespread rights abuses ahead of the presidential election.
The EU turned up the pressure on Zimbabwe on January 11 when it gave President Robert Mugabe's government one week to state in writing that it would accept international observers and news media before and during the polls.
The demand was tabled by the Spanish EU presidency, on behalf of all EU member states, during a meeting in Brussels with a delegation from Harare, led by Foreign Minister Stan Mudenge.
Possible sanctions might include a European travel ban on Mugabe and associates, a freeze on their assets, and the suspension of development aid which has been averaging 20 million euros (18 million dollars) a year.
Getting the EU to speak with one voice on Zimbabwe has been a top priority for Britain, the country's former colonial power, which opposes the ham-fisted way in which white-owned farms have been reclaimed.
The EU renewed its concern about Zimbabwe in October, when its foreign ministers called for consultations with Harare over political violence, election monitoring, press freedoms, judicial independence and land reform.
Those consulations started with last Friday's meeting in Brussels, and follow-up rounds could be organized in the coming weeks.
Nigerian Arrives for Zimbabwe Talks
Nigerian Leader Arrives for Talks on Zimbabwe Crisis After a Day of Violence
The Associated Press
HARARE, Zimbabwe (AP) Supporters of President Robert Mugabe clashed with members of Zimbabwe's main opposition party in the country's second largest city Sunday. At least 18 people were injured in the violence.
Later, the Nigerian president met with Mugabe in the capital to discuss the nation's deepening political crisis.
Police fired tear gas to quell the violence in the western provincial capital of Bulawayo, where the opposition Movement for Democratic Change was planning a rally expected to draw 15,000 people.
The opposition said thousands of its supporters were entering a stadium for a rally when they were attacked by about 150 militants from Mugabe's ZANU-PF party.
Eddie Cross, an opposition official at the stadium, accused police of being "in cahoots" with the militants by allowing them to camp in the stadium overnight.
The visit to Harare of Nigerian President Olusegun Obasanjo came ahead of March presidential elections in which the longtime ruler, Mugabe, 77, is fighting for political survival.
Political violence has intensified alongside seizures of white-owned farms for landless blacks in a campaign government critics say is aimed at shoring up Mugabe's waning support.
Obasanjo arrived in Harare around 9 p.m. Sunday for a meeting with Mugabe, accompanied by several Nigerian election observers, state radio reported. He was to leave later that night.
The report could not be immediately confirmed. Nigerian officials refused to comment on the visit, and most foreign media groups were barred access to the Nigerian delegation.
The late hour was highly unusual for what had been billed in by Zimbabwe media as a full state visit including ceremonial events.
Obasanjo was expected to stress the need for international recognition of the March 9-10 poll, in which Mugabe faces opposition challenger Morgan Tsvangirai. Tsvangirai was to address the aborted rally in Bulawayo.
"So much for Mugabe's promises that he will allow free and fair elections," said Welshman Ncube, the opposition's secretary-general.
Violence also continued Sunday in farming districts northwest of Harare, the Commercial Farmers Union and witnesses said.
After a week of rampages by militants in the Karoi and Chinhoyi corn and tobacco districts, chanting militants fanned out in the nearby town of Banket, forcing residents to flee behind locked doors, witnesses said. Shots were heard in the town, which is 60 miles from Harare.
Nigeria brokered a deal with the 54-nation Commonwealth of Britain and its former territories that calls for ending intimidation of opposition supporters, halting the occupation of white-owned farms and ensuring free and fair elections.
Zimbabwe insists it has complied with the Sept. 6 accord signed in the Nigerian capital of Abuja.
But independent human rights groups say violence has continued, perpetrated mostly by ruling party militants and youth militias.
Mugabe's government has come under intense criticism from Britain, the European Union and the United States for failing to curb lawlessness and imposing a ban on EU officials it accuses of bias on monitoring the election.
Business News: Movers & Shakers-the Basics of Unit Trusts
Zimbabwe Standard (Harare)
January 20, 2002
Posted to the web January 20, 2002
ZIMBABWE is currently experiencing very high rates of inflation, with the November 2001 rate standing at 103,8%. At the same time, since the government directive on interest rates of January 2001, deposits are generally attracting very low rates of interest, averaging below 30% for most types of accounts and short-term investment instruments.
In these times of economic hardship, earning a negative real interest rate is not a viable option as this entails a loss in the buying power of your savings. If we look at 2001, for example, we will find that money invested at the beginning of the year would have been worth just slightly above half its initial value at the end of the year after receipt of the interest income. Given this, it is important therefore, for people to consider alternative avenues for preserving and enhancing their wealth.
A number of such alternative investment vehicles are available to investors, including the property, stock and money markets. Although the residential property market registered staggering levels of growth in the past year on the back of relatively cheap mortgage finance and remittances from locals in economic exile amongst other factors, it will not be the focus of this article as we will dwell mainly on the avenues open to people wanting to invest on the stock and/or money markets.
The stock market provides a platform for people interested in buying and selling shares. Although motives vary significantly, people generally buy shares in a company in the hope that the return in the form of dividends and the appreciation in the share value will more than compensate them for the risk assumed in making the investment. But as Ted Allen put it: "Buying shares is exactly the same as going to a casino, only with no cocktail service." Thus, although it is true that fortunes can be made from investing on the market, it is equally true that the same fortunes can just as easily be lost in the same market.
People with relatively small sums of money, say below $500 000, who invest directly on the stock market, choose the counters they want to invest in for both rational and irrational reasons such as, "someone told me that our company is making a lot of money" or because they heard that share prices in a particular sector, for example, the financial services sector or the agro-business sector, was doing well on the stock exchange, or purely because they like a certain company.
Such investors normally do not carry out detailed research on the sectors or companies they wish to invest in nor do they try to assess whether the risks involved in investing in the particular counters are commensurate with the expected returns. With such limited resources, investors are also unlikely to be able to invest in a diversified portfolio of shares which will make it possible to withstand adverse share price movements in some counters. Although no one can categorically say these factors are bound to lead to these investors suffering losses given the unpredictability of share price movements, it is generally accepted that a more disciplined approach to the investment process would be more likely to produce better results.
In this article, we will look at one investment vehicle, unit trusts, that is available to people who wish to invest but feel they have neither the resources nor the financial ingenuity to enable them to make informed investment decisions. Basically, unit trusts are formed by pooling funds from different investors and investing the funds into various instruments. The portfolio so formed is divided into units, each representing a claim on a proportion of each asset held. The value of each unit will go up or down depending on the net movement of the underlying assets held in the portfolio. Investors in unit trusts benefit from holding a claim in a diversified portfolio, having their investment managed by investment professionals, having lower unit costs of investment, as well as the ability to increase or decrease their investment holding with ease. Although asset management companies use different names for their unit trusts and can structure them to achieve different objectives, these trusts can generally be grouped into four broad categories: equity funds, balanced funds, index linked-funds and money market funds.
Equity funds are when the bulk of the funds under management are invested in exchange quoted long-term corporate securities. Here, the fund managers would seek to identify the key economic, market, political and social forces set to drive returns in the coming short-to-medium term period. They will then try to assess the impact of these drivers on the fundamentals of the sectors and companies to produce a range of plausible scenarios. Based on these and other factors, decisions will then be made as to what and how much to hold subject to set position limits.
There are a number of variations on the equity fund and these include 'blue chip' funds which only invest in top-ranked companies in terms of stability of earnings, growth funds that invest in companies with strong prospects of achieving high growth rates and so on. Equity funds are the ideal form of investment in Zimbabwe at the moment, given the bull run on the ZSE fuelled by factors which include the funds seeking refuge from the low interest rates on the money market, good results being reported by many quoted companies, despite the adverse macro-economic conditions under which they are operating, and belief on the part of many investors that the economy will withstand the current difficult economic conditions.
The next group of funds are the index linked funds.These are structured in such a way that they replicate the behaviour of some indexes. In Zimbabwe, for example, we can have a fund replicating the ZSE industrial index, the ZSE mining index or it can replicate an in-house index tracking system, for example the financial services counters, the top 10 counters or some other counters. These types of funds are popular with investors who believe it is not possible to outperform the market through carrying out research in the hope of identifying undervalued securities and taking up positions. To construct a fund linked to the ZSE industrial index for example, each counter would be included in the portfolio in the same proportion as its proportion on the ZSE industrial index. Most fund managers would, however, try to weed out of the fund those counters in obvious financial distress.
As with all investments, there are risks involved in investing in equities. One of the risks faced by investors in equities is the market risk; this is the risk that adverse movements in share prices will result in the reduction in the value of the principal. These adverse changes in prices could be a result of changes in the profitability status of the sectors and companies invested in, changes in the economic cycle, a fall in investor demand, a fall in business confidence owing to the social or political environment, or changes in government or Reserve Bank policies pertaining to interest and exchange rates, taxes and tariffs, and so on. Liquidity risk-which is the risk that shares bought might not be sold at a fair price owing to significant bid-ask spreads, high search costs, low market turnover amongst other factors-is another risk faced in the equity market. Another risk, which is particularly relevant in Zimbabwe at the moment, is the inflation risk, also known as the purchasing power risk. This is the risk that the return received on investment will be lower than the rate of inflation.
Balanced funds seek to allocate between the equity and money markets, all the funds under management. Here, the fund managers try to allocate funds to different asset classes within set limits, taking advantage of the different earnings prospects of the various instruments. The first step for the asset managers running such funds is to decide on how much to allocate to each asset class. After that, with funds ear- marked for the equity market, the same procedures outlined for the equity funds are followed. For the funds ear- marked for the money market, the managers have to decide on which of the numerous money market instruments to invest in, including government and quasi-government bonds, treasury bills (TBs), commercial paper, corporate bonds, NCDs and bankers' acceptances (BAs).
Money market funds invest the bulk of their funds on the money market instruments. Currently, many investors are not interested in the money market funds due to the lower returns they offer. Some funds are, however, attempting to increase returns from the money market instruments through entering into derivative contracts and arbitrating between various instruments.
In addition to the risks specific to investing in equities, balanced funds also face risks associated with money market instruments. These risks include interest rate risk, this is the risk that changes in market yield will lead to changes in the value of the fixed income securities invested in. If there is an increase in market interest rates, the value of the fixed income securities held by the fund will go down. The other risk faced by the fixed income side of the balanced funds and money market funds is the credit risk-the risk that the issuer of the instrument will default and fail to meet either or both the interest and principal repayment. This risk is more prevalent with instruments with a low credit rating.
Generally, investments in unit trusts are for the medium to long term. It is not prudent to invest monies in unit trusts with a view to making a quick buck. There are a number of unit trusts offering good performances on the domestic market with most funds registering levels of growth well in excess of the rate of inflation.
Although past performance is not necessarily an indication of future performance, it is important to shop around before committing your resources to a particular fund management institution