The ZIMBABWE Situation Our thoughts and prayers are with Zimbabwe
- may peace, truth and justice prevail.

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22 January 2004


Mugabe Needs To Add Substance To Mbeki’s Encouraging Announcement 



Today’s comments by President Thabo Mbeki, suggesting that President Mugabe has agreed to enter formal talks with the MDC, are deeply encouraging. Similarly, we were encouraged when Mbeki made the same announcement after his visit to Harare back in December.


Following Mbeki’s comments back in December our initial sense of encouragement has been replaced by a degree of scepticism as to the nature of Mugabe’s commitment to a process of dialogue. 


To date, Mugabe and Zanu PF have taken no steps that would indicate a commitment to entering into a process of formal dialogue to end the country’s multi-faceted crisis. There have been no approaches to the MDC whatsoever. In fact it has been business as usual with court orders being ignored and political violence carrying on relentlessly.


If Mugabe has given President Mbeki renewed undertakings that he is prepared to begin negotiations then Mugabe himself needs to formally announce, to the people of Zimbabwe, that dialogue is to take place. Mugabe and Zanu PF need to demonstrate a tangible commitment to dialogue.


The MDC is ready for dialogue, as we unequivocally stated in December, but while we wait for Zanu PF the people’s suffering continues.


Paul Themba Nyathi

MDC Secretary for Information and Publicity


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Anti Hijack Trust

Dear All

 Not a good week. House robberies particularly in Borrowdale and it's outlying areas. A child was threatened with rape in one of them and in another a policeman was visiting the main house at the same time as the cottage was being trashed by a gang of robbers!!! Dogs were poisoned to death in Avondale by a gang which broke into a car and stole items, and in Helensvale there have been at least 3 robberies in one road since Xmas. There are more vehicles being stolen from parking lots and private premises than being hijacked, at present.


A metallic silver Toyota Corolla, very new looking, is plying the Enterprise road with no number plates and no documentation displayed except masses of "For Sale" notices on its windows. There are numerous cars on our roads with no registration plates at all, and still dozens of motorists chatting away on their cellphones whilst driving. There are many luxury cars turning into the Lewisham shopping area being driven by young women obviously going for a work out!!! Are they aware of hijackers?? and do they have any vehicle protection systems fitted to their cars. Likewise, teenagers are driving luxury cars to school, what are thery going to do in the event of being attacked by an armed gang???


Fitting tracking systems in your vehicles should be a priority, we can give you the names of reputable companies,or, register your vehicles with us, it will cost you Z$10 000 per car per year, there is no guarantee you will get your car back but everything will be done to find it. Email our office for details,


Our HOTLINE number for victims of hijacking and attempted hijackings is 091 242 512, unfortunately we cannot deal with every type of crime, but we remain focused on hijackings and house robberies. We are, however, always ready to listen if you feel the need to offload some of the stress, but please don't phone the Hotline for that, our office number is 309870 mornings only, or cellphones, 091 221 921 / 011 404 301/ 091 357 307 / 091 313 333.


"Hijack Update" will appear in the Independent on the last Friday of each month, not each week, but will be double the size, our thanks once again to Track-It and TM Supermarkets for this sponsorship. We will make every effort to keep you informed weekly through this mailing list of any new information. Some new sponsors have begun contributing to the Trust but we still need more.

Only 1 company has asked to be spared from further sponsorship this year, this is amazing and we thank all of you so very much for helping us to continue.


With much love

Mary van Heerden - Anti Hijack Trust.


Coblem Enterprises (Pvt.) Ltd;
T/A Roadgrip
Phone: +263 4 665741/3, 663641/2
Fax:       +263 4 661311
Mobile: +263 11 604929

The information transmitted is intended only for the person or entity to which it is addressed and may contain confidential and/or privileged material.  Any review, retransmission, dissemination or other use of, or taking of any action in reliance upon, this information by persons or entities other than the intended recipient is prohibited.   If you received this in error, please contact the sender and delete the material from any computer.

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      Police probe grain scams

      Brian Mangwende
      1/22/2004 7:47:08 AM (GMT +2)

      AS Zimbabweans puzzle at the headline-grabbing shooting incident that
landed businessman Xavier Kadhani in the dock, police have since opened
investigations into the operations of Blue Ribbon Foods as it emerged that
the ill-fated $279 million wheat deal was handled through a third party
identified only as Charles Chombo — masquerading as the brother of Local
Government Minister Ignatius Chombo.

      It is suspected that the milling company, together with several other
millers and fast food outlets, could be in violation of the Grain Marketing
Board (GMB) Act, which gives the state-run parastatal the monopoly to buy
grain from farmers. The Act requires all grain produced to be registered and
delivered to GMB within a fortnight of harvest.

      Minister Chombo yesterday confirmed that the issue had been brought to
his attention and was yesterday scheduled to meet with the culprit over the
issue. He said Charles Chombo, who he maintained was not his relative, had
in the past used the minister’s name in shady deals that included illegally
exporting sugar to Zambia and acquiring vehicles from a local assembly

      "He is a conman who came to Zimbabwe from Zambia using fake travel and
professional documents. He at one time worked for the Harare City Council
but after we discovered that he had fake papers, I wrote a letter to the
relevant authorities for him to be deported from the country. Right now I
will be delighted if he is arrested," said the minister, who could not
however explain why the conman had not been apprehended or deported.

      Highly placed sources at the milling company in Harare confirmed that
a man identified as Charles Chombo had acted as an agent for Kadhani in the
supply of 279 tonnes of wheat to Blue Ribbon Foods, which was later
delivered to the company’s depot in Msasa.

      Police spokesman Wayne Bvudzijena confirmed that Kadhani had revealed
the identity of the middleman, but refused to name the agent since the case
was now before the courts.

      "He told us the name of the agent, but since the case is now in court
we cannot comment on that," Bvudzijena said. "However, we are looking into
the transactions of Blue Ribbon because we understand they are dealing in
controlled grain without the express authority of the GMB."

      Kadhani, who in 1996 was reportedly rescued by President Robert Mugabe
after his mansion in the leafy suburb of Greystone Park was about to fall
under the hammer for failing to honour a debt with the Central African
Building Society, was arrested last week for shooting an executive at Blue
Ribbon over the payment of $169 million.

      The chief executive officer of Blue Ribbon, Mike Manga, confirmed that
the milling concern did not deal with Kadhani directly but through a third
party, although he could not reveal the identity of the person.

      "It would be prejudicial if I reveal the name," Manga said. "The
police are still investigating.

      Kadhani has since been hauled before the Harare magistrates’ court
charged with attempted murder after he allegedly shot James Kange of Blue
Ribbon in the left leg. The former Hunyani Holdings chief executive was
remanded out of custody to February 2 on $100 000 bail.

      "Chombo (Charles) was Kadhani’s agent and dealt directly with Blue
Ribbon," a source said. "Blue Ribbon would write cheques to Chombo who in
turn would write cheques to Kadhani. The deal went sour after Chombo’s
cheques to Kadhani bounced."

      The arrest last week of the embattled former Hunyani Holdings boss
over what at first appeared to be the non-payment of wheat delivered to Blue
Ribbon Foods, has caught the searching eye of the police who are now keen on
unravelling goings-on at the former TA Holdings subsidiary.

      Impeccable sources within the police said indications were that
pressure on the force appeared to be rising inexorably this week to widen
the net in the investigations, which should now include the GMB.

      This, the sources said, came after it emerged that the issuance of
permits to move grain was tainted with allegations of corruption and
influence-peddling where some corrupt GMB executives are reportedly in the
pockets of influential politicians, most of whom have the permits to move
grain through their fronts.

      Although police are still trying to piece together the circumstances
leading to the shooting incident, grain industry sources were unanimous that
there were a lot of underhand deals at the GMB and said that widening the
investigations could open a Pandora’s box.

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      Soaring inflation forces firms to hike borrowing powers

      1/22/2004 7:09:58 AM (GMT +2)

      THE hyperinflationary environment, which saw annualised inflation
peaking at 619.5 percent in November, has forced most firms to revise
upwards, directors’ borrowing powers as the need to maintain strategic
stocks has become more and more vital to the viability of businesses.

      However, alarm signals have recently been given on account of rising
interest rates that have left firms with high gearing in the lurch.

      Directors of sister companies Radar Holdings Limited (Radar) and
Border Timbers Limited (Border) will early next month seek increased buying
powers at extraordinary general meetings (EGMs) to be held on February 5 in

      Radar will seek shareholder approval to increase of directors’
borrowing powers to a limit of $60 billion while Border will seek a ceiling
of $40 billion.

      "The increase in borrowing powers is to maintain parity of borrowing
powers with the aggregate borrowing powers of the company’s subsidiaries and
to make provision for the effects of hyperinflation on the limits of your
company’s borrowing powers," the two firms announced in identical

      Meanwhile, engineering and construction conglomerate Radar continues
on its aggressive share repurchase trail.

      Radar, which bought back 4 591 580 shares (8.29 percent of the issued
share capital) following an EGM held in August, will once again seek
shareholder approval for a further repurchase of shares.

      Next month’s EGM will consider the approval of the repurchase of 5 541
942 shares (10 percent of the issued share capital).

      This will see a total of 18.29 percent of the group’s issued share
capital being wiped off the register within a quarter.

      Radar, with a total issued share capital of 55 419 420 shares, is one
of the more tightly held stocks on the Zimbabwe Stock Exchange (ZSE) and
these buy-backs will see the counter becoming even more illiquid.

      Radar, whose stock grew by a phenomenal 2 448 percent last year to
close the year at $790, closed last week at $400.

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      Govt relocating illegal Gonarezhou settlers

      Staff Reporter
      1/22/2004 7:26:39 AM (GMT +2)

      THE government has finally started relocating families that had been
settled illegally around the Gonarezhou national park to pave way for the
ambitious Great Limpopo Transfro-ntier Park.

      Environment and Tourism Minister Francis Nhema confirmed that families
occupying the buffer zones of the park were being resettled to avoid
interference with the multi-million dollar tourism project.

      Masvingo governor and resident minister, Josaya Hungwe, who could not
be contacted for comment at the time of going to press, is handling the
resettlement of the families.

      "I am not sure about how the issue is being handled because it is
being done by a committee led by governor Hungwe. Certainly the families are
being moved away from the buffer zones of the park," said Nhema.

      Concern had been raised that the area surrounding the park was unfit
for human settlement, as the occupants and their crops were prone to attacks
by marauding animals.

      The park embraces South Africa’s Kruger National Park, Mozambique’s
Limpopo National Park and Zimbabwe’s Gonarezhou National Park, the Manjinji
Pan Sanctuary as well as the Malipati Safari Area.

      The project, which has been on the drawing boards since November 2000,
was concluded by the heads of state of the three participating countries in
Mozambique last year.

      Zimbabwe has struggled to make its contribution into the project,
dubbed the world’s biggest park covering 35 000 square kilometres, due to
lack of funds.

      Mozambique and South Africa, the other partners in the project, have
announced massive investments in recent weeks.

      Mozambique last year got a R65 million (about $55.3 billion on the
interbank rate) from the German Development Bank for infrastructure
development, while another R65 million will soon be made available for the
resettlement of people from the footprint of the Limpopo national park.

      The country’s demi-ning programme, within the vicinity of the national
park, has also received R10 million ($8.5 billion) from the donor community.

      The South African government has announced a R40 million ($34 billion)
fund for the building of infrastructure in the eastern part of the Kruger
National Park.

      Zimbabwe needs to develop the 50 km corridor connecting Gonare-zhou
National Park to the great park.

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      Money lenders must come under bank regulator’s ambit

      1/22/2004 7:38:54 AM (GMT +2)

      ARE money lenders a forgotten lot? How many registered money lenders
do we now have? Are they also of no fixed abode? Is there any on-site and
off-site supervision and surveillance or they operate on "auto-pilot"?

      Money lenders must come under bank regulator’s ambit

      ARE money lenders a forgotten lot? How many registered money lenders
do we now have? Are they also of no fixed abode? Is there any on-site and
off-site supervision and surveillance or they operate on "auto-pilot"?

      I think they also need to come under the ambit of the bank regulator
otherwise we have another case of an " accident-in-waiting". It has been
noted with concern that some of the registered money lenders are deposit
taking. They are also undertaking a number of banking activities for which
they are not licensed to do. It is the sincere hope of the writer that the
regulations governing the operations of these institutions be revisited,
focusing on such issues as to who administers the legislation. How many
registered moneylenders do we now have? Physical location etc.

      Basically it’s that information that is readily available for most if
not all registered financial institutions. The people who borrow from money
lenders as well as those who put their trust by making deposits with money
lenders need protection from the state. Protection in this regard refers to
protection from complete loss following the collapse of a moneylender or
protection from unfair possession of collateral in the event of a dispute
arising between the parties. Chimbadzo is sore and normally people end up
borrowing from them when they HAVE TO!

      One of the instruments used to tighten monetary policy is the deposit
ratio that has been increased by 10 percent for the traditional
institutions, including the introduction of this policy to other
institutions that have been traditionally exempted. While this is a good
measure of addressing the inflation challenge, sight should not be lost of
the fact that this remains an indirect tax to financial institutions (FIs)
since such resources do not earn interest.

      The introduction of other institutions that were previously exempted,
such as building societies, is a welcome move that would ensure resources
are directed to core business such as financing the development of housing
and property in general. In general, the measures are welcome as they level
the playing field in the financial sector.

      This is another piece of good news brought by the governor in his
monetary policy statement. Simplified, the auction market simply refers to
the means through which buyers and sellers of forex are brought together in
order to facilitate the smooth and orderly transfer of foreign currency.

      What the governor has done is total elimination of the risks
associated with trading forex on the informal market, such as in dark
alleys, at Roadport etc; elimination of the risk of buying fake money which
has been making rounds in the economy, leaving honest forex seekers in tears
after they had been duped by forex conmen.

      The informal parallel market, black market as others would prefer, has
been eliminated and what is now in place is a formal forex market where
rules of the market will be clearly defined. This is a market that is safer
than the "underground" one where people even risked losing all their money.

      The successful operation of the currency market will therefore depend
on a number of factors, some of which are discussed below. The Currency
Exchange Market should be:

        a.. A market where buyers and sellers can transact at a price
justified by market forces. Where necessary, intervention by way of
regulating the market to avoid unscrupulous traders would be necessary. This
will keep the market of traders or speculators who can mop the entire market
with the hope of reselling at the "sellers price"; or those who can mop the
entire market for purposes of financing illicit trade such as drugs or as
part of any other white collar crime.

        a.. A market that provides members or participants with timely and
accurate information on such indicators as volumes traded, settlement price,
price of past transactions, bid and offer prices etc. The ZSE has good best
practice to offer from which something similar could be emulated or improved

        a.. A market that is fairly liquid and continuous i.e. one without
large price changes between trades, where a liquid market is defined as one
where forex could be bought or sold quickly at a price that is close to
prices for previous transactions;

        a.. A market with reasonably low transaction costs in relation to
the value of the trade e.g. brokerage costs, cost of transferring the forex

        a.. A market that responds and adjusts quickly to new information,
especially that information which has something to do with supply and

      While the implementation modalities are not very clear to many, it is
presumed that the Currency Exchange Market will also pick best practice from
our local stock exchange, which I think is rated high in the region and

      I see similarities between the Currency Exchange and the stock
exchange with the difference lying in the product on offer, albeit the
implementation modalities are not necessarily going to be the same. Lest we
forget, the mistakes that contributed to the closure of the Zimbabwe
Agricultural Commodity Exchange (ZIMACE) should be taken as lessons not to
be repeated otherwise an inefficient market only invites the undesired
policy reversal by government.

      The Monetary Policy Statement is being applauded for a number of
factors, some of which include the following:

        a.. The positive steps taken of bringing discipline into the
financial sector is applauded as the benefits are already filtering down
into the economy through prices of money, forex, commodities etc. This may
be too quick to say but the indications seem favourable so far;

        a.. There is partial liberalisation of the interest and exchange
rates especially through the introduction of the currency exchange market
where currency will be auctioned. We hope this will kill the black foreign
currency market that has been thriving to the extent of threatening the
viability of the real sector;

        a.. The challenge of controlling the "impossible trinity" of
interest rates, exchange rate and inflation rates has been partially
attended to as there is now hope that inflation will come down over time on
condition there will be no stop-go policies or another policy reversal;

        a.. There is evidence of wide consultation. However, there may be
some who feel left out and such are encouraged to stand up and have their
voices heard;

        a.. Efforts to ensure a healthy and ethical financial sector
complement RBZ efforts to achieve price stability and stable value of our
currency. The governor is trying to bring DISCIPLINE into the financial
sector, so where rules of the game are not observed, it is vital that the
regulator does his job. All he needs is the support of every one.

      As I invite debate on issues arising from the Monetary Policy
Statement, I wish the authorities would consider the following as the
implementation of policy rolls out:

      1. Complementarity between fiscal policy and monetary policy is of
vital importance. At least monetary policy should not continue to do
fire-fighting for fiscal policy;

      2. Need for capacity building within the department responsible for
bank supervision. The supervisor should have capacity to assess unacceptable
levels of risk and capacity to assess and compare state-of-the-art risk
management models used in the banking sector;

      3. A healthy economy depends on a healthy financial system and the
banking system in turn depends on a healthy economy. We should not forget
that even healthy banks can be pushed into a crisis by macro-economic

      4. The Reserve Bank should minimise the moral hazard effect that
arises e.g. if bank management is aware that the RBZ will bail them out
should the bank become insolvent, that bank management may take additional
risk with the bank’s investment portfolio.

      5. Need for extensive public disclosure of financial institutions’

      6. RBZ to ensure that banks have strengthened their internal
governance to address risk of losses from fraud as well as strengthen
management controls in banking;

      7. Is there a default consensus that the RBZ is the bank regulator, as
in bank supervisor? International best practice has evidenced the
establishment of an autonomous body solely responsible for bank supervision.
Probably this area needs national consultation and national consensus before
settling for a default arrangement;

      8. There is need to harmonise some policies in both the banking and
non-banking sector. For instance, who supervises money lenders and how many
are they by the way? I presume whistle-blowers have a job to do here but am
not sure if they will be rewarded too, since a lot of dirty work is taking
place in this sector that is now operating like a mini bank;

      9. Ensure prosecution of criminal behaviour and willingness by the
authorities to take robust action including closure against offending banks;

      10. No information is given on how whistle-blowers would communicate
their information. The sooner that information is made available the better
because some of us are raring to blow the whistle! Information required
includes physical location of the office, hotline? Payment modalities etc
and more importantly, no risk of victimisation.

      11. Deregulation of interest rates, if it goes unchecked in the
inter-bank market, may lead to excessive increase in real interest rates,
which could also lead to distress borrowing and inelastic demand for credit.
A hands-off policy by the RBZ on inter-bank borrowing may precipitate a
crisis shortly because of the risks that accompany that increase.
Institutions with large exposure to long-term assets that are funded by
short term liabilities may be adversely affected by excessively high
interest rates;

      12. Loans to directors, insiders, fraud, mismanagement, loans to
political interests etc tend to cause a concentration of risk, banking
difficulties and banking failures. Such practices should be kept under check
otherwise they do not only bring down banks but can threaten the viability
of the entire economy;

      13. With increased freedom of entry into the financial sector and
freedom to introduce new instruments, e.g. derivatives, options etc, (that
again tend to go unregulated for a while until there is a crisis), there is
a tendency that market players will take excessive risk, hence the need for
prudential legislation and supervision. By the way, where is the Securities
Bill? This has taken too much time and I hope it is for the good of the
economy, otherwise, a lot is happening and since there is no legislation to
prosecute imprudent behavior in the Money Market, Capital Market and now the
Currency Exchange Market.


      To conclude, it is vital to note that both the market and the
authorities have a role to play in ensuring a sound banking environment
through prudent policies e.g. some which specify limits on credit,
liquidity, interest rates and foreign exchange risk. Everything should not
be left entirely to the market especially where the market seems to come up
with outrageous indicators e.g. 1000% interest rates in inter-bank
borrowing. This can kill the consumer who gives life to the bank. Remember,
where two elephants fight, it’s the grass that suffers. The consumer is the
grass in this case and it should not be the case, hence the call for
consumer protection. Policymakers and bank supervisors should continue to
pick best practice from banking sectors in other countries. Borrowing the
Zambian idea of auctioning currency is one such good example. We should not
try to re-invent the wheel unless it is really necessary.

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      Is the Zimbabwean economy overbanked?

      Hama Saburi
      1/22/2004 7:51:33 AM (GMT +2)

      THE frenzy that marked the entry of wholly-owned Zimbabwean banks has
evaporated in a wave of panic — re-opening debate on whether the shrinking
southern African economy had the capacity to accommodate most of the new
players when it embraced western-backed market reforms in 1991.

      Up until recently, the banking sector had masked its fundamental
weaknesses under cosmetic super-profits that made it a curious success story
in sharp contrast to the performance of other sectors fast collapsing into
recessionary heaps.

      The cover was blown recently when the Reserve Bank of Zimbabwe (RBZ),
in its new monetary policy, closed all the avenues that had become conduits
for speculative and non-productive illegal deals.

      Experts said the profit margins within the banking industry have come
off significantly because of the new monetary policy against the backdrop of
high operational costs.

      While there is money to be made from the new foreign currency auction
system, which started on January 12, 2004, margins have taken a big knock
compared to what banks were creaming on the illegal parallel market.

      The lending book that was funding speculative deals has lost its
sparkle after being redirected to the productive sector at 30 percent
interest. Again, the margins have come off.

      "Profitability has suffered in a very big way and the only way to stay
in banking is through cost curtailment, mergers and retrenchments," said a
local banker who declined to be named.

      Players within the banking industry hinted this week that not much
justice had been done about the issue of the local market’s capacity to take
on board new players after the subject was first brought up in the local
media in the late 1990s.

      Then, it was almost certain that the sector was getting over-banked,
dramatised by the collapse of the late Roger Boka’s United Merchant Bank
(UMB) in 1998 after fraudulently faking Cold Storage Commission bills.

      The UMB fiasco almost swallowed Minister Francis Nhema’s Zimbabwe
Building Society (ZBS), which was badly exposed to the merchant bank. The
RBZ came to ZBS’ rescue with a Z$300 million package.

      Even after the near-collapse of the Universal Merchant Bank, Genesis
Investment Bank and First National Building Society (FNBS), bankers were
still adamant that these were isolated incidences which were management

      The key thing, they argued, was the need for newcomers to focus on
specific niche markets; hence applications for new banking licences
continued to flood the offices of the registrar of banks.

      Farai Dyirakumunda, a local analyst, said the sector had become
over-banked to a "certain extent".

      Dyirakumunda said: "People expected the new banks to get into niche
markets, but they all came up with the same banking models. I don’t see a
situation where all these banks will survive. One or two banks may close,
but some may go for mergers."

      Indeed, most new banks went for the mass market at the time of entry
only to somersault towards high net-worth individuals, citing high
transaction costs of maintaining small accounts.

      "I suppose that going forward, there is still scope for new entries,
but in my opinion, it would be for totally innovative banking models," he

      Seventeen commercial banks with a total asset base of Z$2.9 trillion
as at September 2003 operate in Zimbabwe, up from four in 1980. This bank
population is almost neck-on-neck with South Africa, the giant continental
economy, which boast of 19 banks and six foreign-owned banks.

      Only a few multi-national banks such as Standard Chartered Bank,
Barclays Bank and Stanbic Bank previously dominated the banking sector.

      But in the last few years, a number of new players came on stream
which include Trust Bank, First Bank, Metropolitan Bank, Time Bank, Kingdom
Bank, NMB Bank, Agricultural Bank of Zimbabwe, Century Bank, Barbican Bank,
among others.

      This has been facilitated by the liberalisation of the financial
sector in 1991, which did away with restrictive regulations that had
previously kept most young entrepreneurs out of the lucrative sector.

      Zimbabwe, with a population of at least 13 million people, has six
merchant banks, five finance houses, nine discount houses and five building
societies including FNBS, which is currently under curatorship.

      Economic consultant, Samuel Undenge, said the star attraction for most
banks that opened shop after 1991 were the super profits raked in from
speculative transactions.

      "It’s not an issue of over-banking, but unethical practice where the
attraction was speculation, which was not being checked by regulation.

      "If there were tight regulations, some people would not have set up
banks and asset management companies," said Undenge.

      Since the release of the new monetary policy on December 18 2003, four
asset management companies including ENG Capital Asset Management have
closed down.

      A subsidiary of ENG, Century Discount House, has also been forced to
close shop, while commercial banks namely Century Bank and Trust Bank have
been rescued by the central bank through liquidity support.

      Analysts told The Financial Gazette this week that the first major
wave of consolidations was about to begin, with surviving banks being forced
to reassess their fundamental strategies amid the weight of competition,
deregulation and globalisation.

      There is, however, concern as to whether mergers can salvage the banks
that are on the verge of collapse and whether something can be done to
maintain cross-border investments made so far.

      Undenge said mergers would not be unique to Zimbabwe. The slowdown in
profitability and the new capital requirement of Z$10 billion by September
2004 make mergers even more compelling.

      Asked about the possibility of the RBZ issuing new bank licences,
Undenge said: "As of now, the major task is to clean up the sector and once
that is completed, we may see the creation of other banks."

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      Is Chiyangwa’s world collapsing around him?

      Dumisani Ndlela
      1/22/2004 7:54:02 AM (GMT +2)

      IT didn’t appear like there was trouble lurking when Philip Chiyangwa
went to court as a witness in the trial of two ENG Capital Asset Management
directors Nyasha Watyoka and Gilbert Muponda.

      Flamboyant as usual, the man had walked into court dressed as if for
an executive appointment — a designer suit over a chequered shirt and a
maroon tie. The total cost, minus, of course, the multi-million dollar
leather bag perched on the witness’ podium, would be enough to sustain a
suburban family of six for a whole month or more. But that was not the

      A threat made to a police officer investigating the two youthful ENG
directors during the court session is what landed the self-proclaimed black
economic empowerment guru and ZANU PF chairman for Mashonaland West in a
spot of bother that has since evolved into an outright ordeal.

      Chiyangwa is also being accused of interfering with police
investigations by initially refusing to release the three ENG vehicles
recovered at his home.

      It simply gets curious: after Chiyangwa had been ordered to withdraw
the threats, he insisted: "I will deal with him later."

      The question is: where does it get curious?

      Some legal minds feel the magistrate could have dealt with Chiyangwa
in the same court session if he held him to be in contempt of court for
refusing to withdraw his threats against the investigating police officer.
He did not.

      Then the drama begins: two days later, Chiyangwa is arrested by police
for defeating or obstructing the course of justice.

      It should have come as a big shock to Chiyangwa.

      What had suddenly changed in the police attitude towards the
self-appointed black economic empowerment activist that would prompt the
arrest? Hadn’t a Harare magistrate, Wilbert Mandinde, exactly a year ago,
ordered police to take action against Chiyangwa after "providing wrong
information and failing to produce insurance papers for his car" after he
had rammed into fellow businessman Philip Baki Mutasa’s car and they had

      Other legal minds feel that there was reasonable suspicion that
Chiyangwa, who is also the Member of Parliament for Chinhoyi, had committed
an offence and it would not have been appropriate for the police to turn him
in without going through their normal procedures.

      But political pundits fear there is a much bigger political game
behind Chiyangwa’s arrest.

      "It’s political winds that have changed not the laws," one critic who
has been following the case closely remarked.

      A day before his arrest, Acting President Joseph Msika had sounded the
alarm bells over Chiyangwa’s imminent humiliation.

      "It doesn’t matter whether you are up there (politically), I will show
you that I have more political muscle than you," Msika said in a veiled
threat to Chiyangwa just before his arrest.

      Now the real war has begun in the party, long reported to be ravaged
by factionalism. Chiyangwa’s defence lawyers charged during his remand
hearing that his arrest was the work of their client’s political foes within
the party.

      Chiyangwa had long been held as being disrespectful to Msika, a member
of the former PF ZAPU led by the late Joshua Nkomo. During the party’s
national conference in December last year, a contentious document had been
circulated among party faithfuls alleging that Msika was a sell-out who
dined and wined with white farmers.

      The controversial legislator was linked to the aberrant document,
which contained allegations considered taboo in the "revolutionary party"
which accused the privileged white land owners of being intent on derailing
the Third Chimurenga — the name given to the controversial last round of
land acquisitions.

      Msika promised to deal with his detractors after the conference,
accusing them of outright lies. But even so, soon after Chiyangwa’s arrest,
President Robert Mugabe reinforced his oft stated, but largely undelivered
commitment to deal with corruption, warning businessmen that those who
misbehaved would face the full wrath of the law.

      This served to emphasise, according to some analysts, that it was not
Msika’s war; it was a war against corruption with President Mugabe’s full

      For President Mugabe, analysts say, this has been the opportune moment
for him to absolve his party of its tainted image of graft in the top
echelons. And what better target than Chiyangwa, if he wants to be perceived
as serious?

      The Mashonaland West Province, from where President Mugabe hails and
over which Chiyangwa presides as the ruling party’s chairman, had become
increasingly annoyed by the continued detention of the maverick businessman.

      "As provincial supporters, we perceive Chiyangwa not as (Msika and
Mugabe’s) person, but our pillar of hope within ZANU PF structures," Listen
Guvero from Mashona-land West Province told The Financial Gazette.
"Chiyangwa is a big man in the province and commands lots of support here."

      Indeed ZANU PF bigwigs in the province back Chiyangwa, and have been
wondering what has befallen them.

      One of them told The Financial Gazette that serious problems might
ensue in the province if Chiyangwa is made to suffer more than he has so

      But the question is: who is Chiyangwa to hold so much influence in the
province that boasts of such political luminaries like Nathan Shamuyarira,
Webster Shamu and President Mugabe himself, among others?

      What would cause President Mugabe to remain aloof in this issue when
his nephew and sister, Leo and Sabina Mugabe, have shown so much concern
over the detention of Chiyangwa?

      Chiyangwa’s entry into ZANU PF has itself been curious. Several
attempts by the tycoon to get into the party’s structures had been spurned.
At one time, he wanted to contest for the party chairmanship but his bid was
constantly shot down.

      Chiyangwa shot to prominence in the 1980s when he started promoting
local boxers, at one time flying the late Proud "Kilimanjaro" Chinembiri to
London for a bout with the now undisputed world heavyweight champion, Lennox
Lewis. The bout did not take place.

      Later on, he brought into the country a group of international
wrestlers from the hugely popular World Wrestling Federation (WWF) for a
show that turned out to be a big flop. Then he went into beauty pageantry
and horse racing, again failing to reach any notable heights.

      Because of these failures, Chiyangwa became known among his peers as

      But his zeal to make good bucks remained undiminished by his failures
and, in 1992, he brought into the country rhumba artist, Kanda Bongo Man.
The show was a big success and marked a turning point in his fortunes.

      He then bought a number of companies that had been threatened with
liquidation, which he has now turned around into profitable ventures.

      These companies — Midiron Enterprises (Pvt) Ltd, Crittall Hope (Pvt)
Ltd and Delward Engineering (Pvt) Ltd — fall under Chiyangwa’s business
empire, Native Investments Africa Group.

      He is seeking to reverse his interests in the group’s companies into
Zimbabwe Stock Exchange (ZSE)-listed counters.

      But it has been his role as a self-proclaimed black economic
empowerment activist that has ruffled feathers and finally propelled him
into the world of flamboyance and showy opulence associated with the African
nouveu riche.

      In 1994, Chiyangwa and a group of other black businessmen formed the
Affirmative Action Group (AAG) to magnify and champion a campaign for the
localisation of ownership in foreign owned companies.

      The group — or rather Chiyangwa — became a vocal proponent of the
indigenisation campaign, overtaking another grouping — the Indigenous
Business Development Centre. With an unfamiliar brand of activism, he
wreaked havoc in the business sector, and often stopped court-sanctioned
auctions in which black business people’s properties were to come under the
hammer for loan defaults.

      Ironically, it was his role as a founder president of the AAG that
became his bane when police eventually fingered him in connection with the
unfolding ENG Capital Asset Management case.

      The ENG directors, who are facing allegations of defrauding investors
of close to $61 billion, had apparently gone to Chiyangwa to seek help
because he was a known black empowerment activist, Chiyangwa said during
their trial.

      He had not interfered with police investigations into the case, he

      But police nabbed him soon afterwards, alleging he had interfered with

      After receiving a High Court judgment for his release, police refused
to budge, instead preferring more charges against Chiyangwa: perjury and
contempt of court.

      At a remand hearing that followed, a magistrate refused to grant
Chiyangwa bail, saying the state had a strong case in arguing that he would
interfere with investigations if released.

      Chiyangwa’s lawyers made a High Court appeal the following day and the
businessman was granted bail.

      But the state said it would appeal.

      Effectively, this set aside the High Court judgment that granted him

      Even though he finally secured his freedom this week after a Supreme
Court confirmation of the High Court judgment, for once, Chiyangwa was
condemned to a life of misery in a dirty remand prison, away from his posh,
breath-taking double-storey, 18-bedroomed mansion in which he has lived a
life many can only watch in Hollywood movies.
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      RBZ issues alert over increasing bank frauds

      Staff Reporter
      1/22/2004 7:58:21 AM (GMT +2)

      THE Reserve Bank of Zimbabwe (RBZ) has issued an alert over increasing
fraud cases involving banks, saying the trend was symptomatic of the
inadequacy of some financial institutions’ internal controls.

      "The regulatory and supervisory authorities have noted with concern
the growing number and frequency of reported cases of bank frauds involving
very large amounts of money.

      "In the majority of cases, insiders, or the banks’ own staff have been
involved in the actual perpetration of these crimes, in some cases as
syndicates within individual institutions and, in other cases, involving
their other connections in other banks," the central bank said in a

      This comes in the wake of two high profile fraud cases involving two
commercial banks, Trust and First Bank, which lost $7.7 billion and $1
billion, respectively.

      The Anti-Money Laundering Guidelines issued by the RBZ in 2002
highlighted the need for banks to maintain adequate information systems,
internal and accounting controls and procedures, which are statutory

      The alert released by the central bank is part of ongoing efforts to
rebuild confidence in the banking sector, which has come under attack
because of the cash crisis, the liquidity crunch and fraud cases.

      "Banks should provide for adequate checks and balances to mitigate
against frauds, forgeries, all forms of defalcations, self dealings, cases
of conflict of interest.

      "It is clear that all these control aspects are part of an institution
’s sound risk management and good corporate governance standards, whose
importance in the banking industry cannot be over-emphasised.

      "The management and control of risk is central to success in the
business of banking."

      The central bank, which recently set up a Troubled Bank Fund (TBF) to
bail out troubled banks and ring-fence any systemic risk that might arise
from any potential failure, has emphasised that sound corporate governance
was an indispensable condition for any such aid package.

      The RBZ has recently instigated management changes at Trust, which had
become the country’s biggest bank by virtue of its asset base of $800
billion while shareholder changes are reported to be in the offing at
Century Holdings.

      Both banking hou-ses have been given liquidity support by the RBZ in
recent weeks.

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      $600 million vehicles for Makwavarara, Chideya

      Staff Reporter
      1/22/2004 7:48:05 AM (GMT +2)

      THE political war at the Harare City Council has caught up with Town
Clerk, Nomutsa Chideya, and the Acting Executive Mayor, Seke-sai
Makwavarara, who councillors allege procured personal-issue vehicles valued
at over $600 million, leaving the cash-strapped council in the lurch, The
Financial Gazette established this week.

      But Chideya yesterday dismissed the allegations, saying "it was a
matter of different strokes for different folks".

      Councillors allege that the purchase of the vehicles was done without
council approval, after the executive committee on December 15, 2003 and a
full council meeting the following day had already spurned it.

      However, Chideya yesterday showed The Financial Gazette minutes of an
executive committee meeting of January 6, 2004, which granted him the right
to buy a new car, with his current Madza B2500 twin-cab truck being
converted into a courtesy vehicle for council.

      "The council budget had, in fact, already given provision for the
purchase of the cars.

      "We had an untenable situation whereby the Town Clerk was driving a
Mazda B2500 when his juniors were driving Wolves," Chideya said.

      He said Makwava-rara’s car had been bought out of a realisation that
she had been using vehicles of staff on suspension.

      The only car that had been available for her was a Mazda 626, yet she
was entitled to a Mercedes Benz.

      He said the whole issue was degenerating into a political war.

      According to council policy, the Town Clerk is entitled to a new car
after his current vehicle, just about three years old, has been used for
five years, a council member said.

      He is given the right of first refusal to buy the car at book value
from the council after the period.

      Sources said Chideya no longer wanted his current vehicle, a Mazda
twin-cab truck, because it is similar to those driven by some departmental
heads in the council who happen to be his juniors.

      As a result, he had proceeded to purchase a modern, sleek Prado from
Croco Motors for a whopping $400 million while the the Acting Mayor had
bought herself a Raider Twin-Cab for $230 million, again from Croco Motors.

      The Acting Mayor’s vehicle was also bought without council approval,
they said.

      The two are driving the vehicles without registration numbers and
sources close to the administration said treasury was failing to raise the
$630 million required by Croco Motors for the cars.

      "Full council has not considered the purchases but this has not
stopped the two from procuring the vehicles.

      "Croco Motors have released the vehicles even before payment," a
source told The Financial Gazette.

      The council is battling funding problems, which have resulted in its
failure to acquire spare parts and water treatment chemicals.

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      Zanu PF desperate for urban voters

      Cyril Zenda
      1/22/2004 7:52:29 AM (GMT +2)

      THE ruling ZANU PF party, clutching the straws for its political
survival amid waning fortunes, kicked off its campaign for the crucial 2005
parliamentary elections — a "must win" for the once revolutionary party
blamed for the economic melt-down that has seen a significant proportion of
the citizenry living below the poverty datum line.

      Political analysts said it is clear from the actions and activities of
ZANU PF that the party, which has been in existence for over four decades,
is preparing for a make or break election that may come anytime within the
next 18 months. ZANU PF will have to win with at least a two-thirds majority
to consolidate its current precarious hold on power.

      At the weekend, ZANU PF, balancing on a political knife-edge, held its
annual National Youth Assembly in Harare with a particular focus on the
forthcoming general elections. The youth meeting also coincided with a party
campaign rally in Glen Norah high-density suburb, where party stalwarts
announced the party’s desire to re-capture the urban constituencies lost to
the opposition Movement for Democratic Change (MDC) in 2000.

      In the 2000 parliamentary election, the opposition MDC, then barely a
year old, grabbed a surprise 57 mainly urban constituencies out of the
country’s 120 contestable seats to deny ZANU PF which, alongside the late
Joshua Nkomo’ PF-ZAPU, were the leading liberation movements, a comfortable
majority. One seat, the Chipinge South constituency, went to minority ZANU,
which has controlled it since independence in 1980.

      "The ruling party is already in an election gear and everything it is
doing, is doing so with its eyes set on 2005," said University of Zimbabwe
(UZ) political science lecturer, Eldred Masunungure. "It could be more than
18 months ahead, but ZANU PF is already showing that it is determined to get
a two-thirds majority so it is doing everything it can to achieve this."

      Joseph Kurebwa, another UZ political science lecturer, said there
might be a limited swing in one way or the other depending on the situation
obtaining when the elections are held and what the political parties may do.

      "I don’t think ZANU PF has better chances of re-gaining lost ground .
. . same as the opposition," Kurebwa said. "We may end up with the same
situation as the one in 2000."

      Kurebwa said no major changes would emerge from the poll unless the
Delimitation Commission, the body responsible for drawing up electoral
boundaries, substantially changes some constituencies to merge parts of
urban and rural areas.

      In the June 2000 elections, ZANU PF, while dangling the land carrot,
won most of the rural seats but performed dismally in urban areas where the
electorate was worried more about the worsening economic situation and
growing poverty than anything else.

      "The economy is one of the biggest challenges to the ruling party and
it has realised this and that is why it is now trying to clean up the mess
18 months before the election," Kurebwa said.

      Lovemore Madhuku, chairman of the National Constitutional Assembly and
also a law lecturer at the UZ, said ZANU PF may win the election, but would
find it difficult to penetrate the opposition’s urban stronghold.

      "Under the current electoral framework, ZANU PF will win elections,
but not in Harare, Bulawayo and other urban centres," Madhuku said. "It will
get a two-thirds majority, not because it has regained popularity, but
because of the undue advantage it gets from the current electoral

      Madhuku said there are about 35 urban constituencies where ZANU PF
cannot defeat the MDC, but it can get all the other seats "in one way or the
other", referring to some tactics that the ruling party has been accused of
employing to win elections before.

      Past elections have been marred by untold political violence and
electoral fraud, largely blamed by both local and international observers on
the ruling party.

      These include the 2002 presidential election won by President Robert
Mugabe, which MDC leader Morgan Tsvangirai is now challenging in the High

      ZANU PF has won nine out of the 12 parliamentary by-elections held
since 2000 to increase its seats in Parliament from 62 to 66 and observers
cited violence and widespread voter apathy as the main factors contributing
to the results.

      More than a dozen ZANU PF legislators have had their elections
nullified by the High Court mainly on the grounds of the violence that
characterised the 2000 polls but are still sitting in Parliament on the
legal technicality that they are appealing against the rulings in the
Supreme Court.

      Analysts said after using the land issue to get the rural vote into
its pocket, ZANU PF was now using the anti-corruption trump card to try and
lure the urban vote, but by and large, it will continue using its
traditional tactics to remain in power.

      "Election violence, harassment and intimidation are now part of the
standard tools in ZANU PF’s election armoury and it will not hesitate to use
them since they have proved to be effective in the past," Masunungure said.
"I don’t see it (ZANU PF) making any (electoral) changes that are likely to
level the playing field."

      The opposition could lose more ground, especially now since it has
been thrown into near-oblivion with last September’s closure of The Daily
News, the country’s only independent daily that devoted most of its energies
to covering the opposition.

      "I don’t see The Daily News coming back on the scene before 2005 and
this could cause considerable erosion on opposition support," Masunungure
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      Mbeki’s credibility as peace broker at stake

      Brian Mangwende
      1/22/2004 7:53:11 AM (GMT +2)

      THABO Mbeki, widely seen as having both economic and diplomatic clout
to bring about an end to Zimbabwe’s debilitating political crisis, may rue
the June 2004 deadline he set for the resumption of talks between country’s
feuding political parties amid growing concern that any slight miss could
render the South African president an ineffective broker.

      With the June 2004 deadline drawing close, there is nothing at the
moment to suggest that relations between the ruling ZANU PF and the
opposition Movement for Democratic Change (MDC) are thawing, casting doubt
over Mbeki’s pledge to bring the two parties back to the negotiating table.

      In fact, ZANU PF has juggled with issues on the public agenda at a
faster pace than the South African leader has ever imagined.

      Smarting from the disputed 2002 presidential ballot, the ruling party
has diverted public attention from economic mismanagement, blamed on its 23
years in power, first by tackling the emotive land issue ostensibly meant to
resettle landless peasants and then of late the cracking down on corruption
in both the public and private sectors.

      Political analysts said the resumption of talks may be relegated to
the peripherals, something the South African leader has realised, but cannot
do much about it.

      Mbeki, who has been labelled a "dishonest broker," within the MDC
circles, risks losing the respect of other world leaders who had put so much
faith in him hoping that the veteran politician would use South Africa’s
superior economic muscle to whip President Robert Mugabe into line.

      It however, remains to be seen whether Mbeki would succeed where
Olusegun Obasanjo of Nigeria has almost given up.

      Mbeki, at the centre of the delicate arbitrage for the past couple of
years, has been attacked by the international community and the clergy in
South Africa on his stance of "quiet diplomacy," which is widely seen as the
main obstacle to political change in Zimbabwe.

      The United States of America tasked Mbeki last year to play a leading
role in redressing the volatile political situation in Zimbabwe. The USA,
which is the world’s only remaining super power, has not made it a secret
that it wants a regime change in the southern African country.

      Mbeki has since promised the world that Zimbabwe’s two main political
parties would have returned to the negotiating table by June this year.

      Talks between ZANU PF and the MDC collapsed about three years ago
after the two parties failed to agree on the agenda.

      President Mugabe and the MDC leader Morgan Tsvangirai have agreed to
mutual talks, but the 79-year-old Zimbabwean leader has demanded that the
opposition party should first recognise him as the legitimate President.

      Tsvangirai has vehemently refused to recognise President Mugabe,
saying he stole the March 2002 presidential election and has pressed ahead
with the election petition challenging his legitimacy in the High Court.

      On the other hand, the state has taken Tsvangirai to the same court on
allegations of plotting to assassinate President Mugabe in the run-up to the
2002 presidential poll.

      "The President set the deadline for himself and it stands. But really
at the end of the day, it’s the events in Zimbabwe between the two political
parties that will determine whether that deadline would be met or not.

      "We still have five months to go, let’s wait and see what happens, but
the President’s deadline stands. He (Mbeki) believes there would be progress
in Zimbabwe. The President and President Mugabe have already said in public
that there are informal talks already taking place," said Mbeki’s spokesman,
Beki Khumalo.

      Political commentator, Heneri Dzinotyiwei, argued that Mbeki’s
strategy had gone off track in that people who were initially anxious to see
the resumption of dialogue had since lost hope.

      He said people had already given up on any prospects of negotiations
anytime soon or before next year’s parliamentary elections.

      "Both parties are now focusing on reconciling their power bases at the
expense of national interests. So many things are taking place in the world
and Zimbabweans are just being bypassed. But the opposition has more to lose
if there are no talks and ZANU PF knows that," said Dzinotyiwei.

      Constitutional law expert and chairman of the National Constitutional
Assembly, Lovemore Madhuku, said efforts to crack down on corruption by the
government were also meant to buy time as ZANU PF prepares for the 2005
parliamentary elections.

      "ZANU PF is not interested in talks," Madhuku said. "They have been
using the talks language to buy time. All they are interested in is
consolidating power. The whole monetary policy issue is also merely a
political gimmick.

      "They want to create an impression that we are now heading towards
economic recovery ahead on next year’s parliamentary elections. They want
the Reserve Bank governor’s monetary policy to succeed by all means and are
willing to sacrifice their own. They will not talk," said Madhuku.

      Since the unveiling of the new monetary policy last month, the
government has been on a massive crackdown on corruption.

      "Once ZANU PF has realised that it can remain in power without talking
to the MDC, then forget the talks. Mbeki’s June deadline means nothing. It’s
not achievable neither is it feasible. In fact, ZANU PF believes that
talking to the MDC would be a weakness," Madhuku said.

      The MDC national spokesperson, Paul Themba Nyathi, confirmed this week
that ZANU PF had not been forthcoming on the talks.

      "We have submitted our position to the clergy who are playing a
mediating role," Nyathi said. "We can’t continue seeing our country being
destroyed. Anything can be done before or after June. Anything is possible.
There is no substantial timetable for dialogue. We have already put together
a team to negotiate and we stand ready, but ZANU PF has so many internal
problems within its ranks which are stalling talks. We understand why it is
not easy for them to dialogue, especially for a party that has been in power
for the past 23 years. It would be difficult just to relinquish power like

      He added: "We have a frame work for the talks and if ZANU PF wants to
add to it they are more than free to do so. However, our position for the
negotiations stand. We as Zimbabweans have the responsibility to solve our
problems so that history can judge us correctly. Mbeki just mentioned June
as a benchmark, nothing else."
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      The pendulum has swung . . . again

      Nelson Banya
      1/22/2004 7:55:51 AM (GMT +2)

      EQUITIES are once again in vogue following a massive reversal of
fortunes on the money market that saw rates coming off in the just-ended

      The Zimbabwe Stock Exchange’s benchmark industrial index recorded a
63.98 percent surge in the past week, as the money market finally met its
waterloo in the latest development to take place in the country’s volatile

      The index, which closed last week at 320 449.9 points, put on 205
046.96 points (63.98 percent) to close at 525 496.86 points yesterday.

      Although financial stocks have remained largely subdued as the market
closely watches developments on that front, the slide has largely been
stemmed by marginal gains in ABCH (up $10 to $260 in the week), Barbican ($3
to $40), Barclays ($29 to $50), CBZ ($8 to $25), First Bank ($3 to $12),
Kingdom ($24 to $50) and NMB ($32 to $70).

      Finhold, which has bucked the trend throughout the financial sector
crisis, continued on its solid path, putting on $345 to close the week at
$700. However, heavyweight counters Meikles, Old Mutual, National Foods and
Tanganda drove the recovery, gaining $2 200 (to $4 500), $2 500 (to $4 900),
$410 (to $1 300) and $600 (to $1300), respectively.

      Investment rates, which have been in steady decline in the past two
weeks, finally nose-dived this week, with overnight accommodation rates
being quoted at around 100 percent, while call money was attracting rates
around 60 percent.

      The 90-day deposit rates were oscillating around 80 percent.

      Dealers said the return of liquidity, which has seen daily excesses of
about $600 billion during the week, had sent the rates plummeting, with only
those financial institutions with unresolved liquidity problems attracting
higher rates, up to about 300 percent.

      Liquidity has returned to the market, largely due to injections by the
central bank, coupled with the offloading of speculative foreign currency
positions, mainly by financial institutions whose operations have come under
greater scrutiny in recent weeks.

      The softening of rates on the money market has turned out to be a boon
for the ZSE, which had been stuck in the doldrums since the last quarter of

      Analysts say the market was likely to run, as the inverse relationship
between asset prices and interest rates asserts itself.

      Mike Tippett of Kingdom Stockbrokers reckons the recovery of the ZSE
will continue to be driven by quality stocks, especially those with an
export orientation.

      "In the medium term, we believe that exporters will benefit from the
market driven rate realisable on export earnings through the auction

      "Although these auctions have started at levels considerably below
parallel market rates prior to the release of the monetary policy statement,
this reflects a temporary supply-side bubble as speculative forex positions
are offloaded," Tippett said.

      Monday’s forex auction saw the local currency recording gains against
the United States dollar, with the weighted average rates being $3 832.41 to
the greenback.

      The derived local currency rate against the British pound was,
therefore, $6 778.74 per unit and $522.22 to the South African rand.

      The auction rate for the Botswana pula was $1 079.54. The euro fetched
$4 683 on the auction.

      Analysts said this week that the direction of the rates would become
clearer as the volumes of bids grew in the coming weeks with greater
participation and, consequently, demand.

      To date, the auctions, which debuted on January 12, have recorded 171
as the highest number of bids.
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      In-fighting looms as Sibanda guns for top post

      1/22/2004 7:49:31 AM (GMT +2)

      BULAWAYO — Zimbabwe National War Veterans Association (ZNWVA) leader
and former ZANU PF provincial chairman for Bulawayo, Jabulani Sibanda, has
set his sights on reclaiming the provincial chairmanship where he had an
inglorious exit after being booted out last year.

      Buoyed by his election as the ZNWVA boss in December last year,
Sibanda has since announced his intention to fight for the top ZANU PF
provincial post in the country’s second largest city, a development that
could once again re-ignite infighting within the ruling party. "I will be
taking part in the elections for a new provincial executive," Sibanda said.

      "There is nothing that can stop me. Those who have a problem with my
contesting the elections for a new executive, it is their problem. It will
be wrong for anyone to try and bar me from contesting and reclaiming my
post," said the former bodyguard of the late Vice President Joshua Nkomo.

      Sibanda was unceremoniously booted out from the ruling ZANU PF and
from the local ZNWVA chapter over allegations of graft and gross

      Investigations by The Financial Gazette revealed that Sibanda remained
expelled from ZANU PF, as the Politburo, the ruling party’s supreme
decision-making body, is yet to receive his appeal against dismissal. A new
executive for both Bulawayo and Harare provinces is expected to be put in
place before December this year when ZANU PF holds its congress, held after
every five years.

      — Staff Reporter

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      Call companies to account

      1/22/2004 7:37:20 AM (GMT +2)

      INVESTMENT advisors have for a long time now always had financial
counters, the hitherto remaining seaworthy vessel for equity investors, as
their key picks among blue chips and mid-caps. But in a cruel twist of fate,
the glitter has just vanished and the financials are no longer in vogue.

      Although the stock market has broadly been in a manic-depressive mood,
it is mostly the financial counters that have grabbed investor attention for
the wrong reasons and hence have come off in a big way. And the Zimbabwe
Stock Exchange (ZSE) has since been forced to suspend three financial
counters until they issue cautionary statements clarifying certain pertinent
issues in the face of the unfolding financial sector crisis.

      This should be applauded as it could help put an end to the counters’
savage two-week slump and protect shareholders who today look at the
financial stocks, the real-turned-fool’s gold, with a mixture of disgust and
despair following their breathtaking losses. The counters’ terrifyingly
swift retreat was understandable after the financial sector hit stormy
waters. We have said it before that there is always this dark side to
runaway stock prices because as the market overheats, it becomes less
tolerant to the slightest whiff of bad news.

      Although it could be too early to say whether the financials will
overcome the three-week wobble, whipsawed investors, who must surely be
feeling that investing in shares is more like shooting craps, should have
been told the extent to which the all-embracing malady in the financial
sector impacted on these companies’ operations.

      The mind boggles therefore as to why the concerned entities had to be
forced by way of suspension to issue cautionary statements. Is this not one
of the basic requirements of the ZSE? These companies should know that the
only expectations they should live up to are shareholders’. They have
fiduciary obligations to the shareholders. Nothing less.

      It is the right of shareholders to demand full disclosure on such
issues and they must get it. They should not be deprived of this pertinent
information because remaining mum, as did the three, is somewhat misleading
to the shareholders. Good judgment should, therefore, have led the three
companies, which as it has turned out, were right at the scene of this
financial accident, to issue cautionary statements.

      It is this height of arrogance and total disregard for the bourse’s
requirements by the option-rich company executives which, if we might add,
has added strain to corporate credibility, that underline the need for a
radical shareholder agenda through the judiciary system and an overhaul of
the ZSE’s listing requirements to give the stock market more teeth.

      It goes without saying that, although generally speaking most
investors are risk-averse, risk is, however, an avoidable consequence of
investing in equities. Investing in shares entails all the advantages and
disadvantages of ownership especially insofar as both common stock owners
and preferred stockholders are concerned. It is a relatively risky
investment because the investors could lose money if the companies in which
they hold shares do not do well or even go bankrupt.

      This is why it is imperative that shareholders are kept abreast of
events that might have a material effect on their investments. Anything less
is unacceptable.

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      Survive together — or die alone

      1/22/2004 7:39:58 AM (GMT +2)

      FRIENDS of mine are rushing off to the rural areas to secure for
themselves plots of land where to grow crops to stave off hunger and
starvation. These are professional media workers retrenched for political
reasons or made redundant when their publications folded up in our shrinking

      They hardly expect to become rich. They merely hope to survive and be
able to feed their families.

      Some have tried their luck in South Africa or Botswana and come back
disillusioned and poorer than they went. Others still dream of making big
money overseas, queueing at foreign embassies for ever more expensive visas
and trying to overcome increasingly higher bureaucratic hurdles.

      You phone a friend and say: "See you next week". By next week he is
gone. There is enormous social disruption. People use you as long as they
think that your "influence" can help them, and walk away when your
"influence" has not produced results. "Everyone for himself, and the devil
take the hindmost".

      Mairos Mubvumbi believes that if you have God on your side, all will
be well with you. "God, being the senior covenant partner who owns
everything there is, has the obligation to bless, protect and provide for
the believer."

      But surely that cannot be the solution to our general malaise? Surely
it is not enough that a few using their divine "influence" will be blessed
while the godless masses remain in their misery? I do not recognise in the
God who is so particular about his friends the God of Jesus Christ who
socialised with "sinners and tax collectors", and other disreputable

      He does not allow us to escape from the general misery while leaving
the less fortunate behind: "When you obey God, He will bless your line of
business and you will be surprised by the financial increase that results
from obedience." That is the Pharisee talking (Luke 18: 9-14) who tries to
strike a business deal with his God.

      I do not hear in it the voice of Christ who commends the Samaritan
rebel attending to a suffering stranger, while frowning on the law-abiding
priest (Luke 10: 29-37), and who holds us responsible for our sick,
imprisoned and famished fellow human beings (Matthew 25: 31-46).

      Not the people who win the rat-race will be blessed, but those who
drop out of the race altogether and pick up the stragglers.

      We will save this country only if we all of us pull together and
accept responsibility for the life and well-being of everyone, even of the
white "enemy of the state", the displaced Malawian farm labourer, the person
dying of the unspeakable disease and the "traitor" supporting the wrong
party, raped and tortured.

      We will save this country only if we are once more able to act in
solidarity. That means as much as saying: your trouble is my trouble, what
hurts you, hurts me, when you are imprisoned I cannot be free either.

      Prosperity is never just for me. Wealth is never just my private
fortune and good luck. There is no absolute right to private property (that
is the element of truth with which one could have tried and justified our
"land redistribution" before it went so disastrously wrong and turned into
an orgy of greed). Whatever gifts I have — knowledge, skills, health, talent
for leadership, capital, land — I am given for the up-building of the

      God never blesses just me, but always us. And maybe the rest of us
through me: if I play my role and serve them in whatever way I can, their
lives will be saved. If I fail them, they will be lost. God makes us
dependent on one another and responsible for one another. He does not
interfere with signs and wonders, dropping gift parcels from heaven.

      Government and the striking doctors jointly are responsible for the
many people who are at present dying — nobody will ever be able to exactly
identify them all, but I know personally at least a number of them — as a
result of government hospitals being at a standstill. God will not let us
off the hook by working miraculous cures to save them. We all of us together
have the power to stop this awful suffering, and we will be asked why we
have not done so.

      We have the technical means and the skills to eradicate almost all
infectious diseases. If we acted in true solidarity worldwide we could do
it. Why don’t we? Why do we spend more on arms, on the military and security
(often a euphemism for political oppression) than on public health care
(e.g. our budget for 2004)?

      Before I try to strike a deal and offer God my "perfect obedience"
(Mubvumbi) in return for my personal health and prosperity, we should ask
ourselves what we are doing to promote health for all in a healthy,
productive economy.

      If our leaders stopped all those wars which are destroying communities
and families on our continent, we could tackle AIDS in earnest. You cannot
fight this disease with a dilapidated economy like ours. Dying of AIDS is
not an act of God. It is due to human neglect.

      If we used all available human resources, skills and experience, we
could face the common enemy. Instead greed and jealousy divide us and turn
fertile fields into wasteland. We either join forces and survive. Or we go
it each alone and die.

      People’s power that crosses all ethnic and national boundaries will
give us prosperity. The land is not our prosperity. It gives us merely weeds
unless our ploughs touch it.

      Individuals being blessed by "financial increase" is not enough. Where
there are many losers there must be at least some winners. What is our
hyper-inflation but one vast confidence trick?

      I do not believe that God blesses the prosperity of those lucky few
while the country as a whole sinks still further. There must be an increase
in production in real terms for the country to prosper. And all its people
must have access to that newly created wealth, not just those who make the
correct political choice or pray in the right way.

      Fr Oskar Wermter SJ is a Catholic priest based in Mbare and a writer.

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      Counter invading ZANU PF turf (Part 2)

      1/22/2004 7:40:41 AM (GMT +2)

      After fortifying its traditional support base as we saw last week,
ZANU PF is now making some very interesting manoeuvres to try and win back
the loyalty of the country’s intelligentsia and the urban electorate, which
is the MDC’S traditional support base.

      Last week, I discussed how ZANU PF is consolidating its support
structures ahead of the next general elections by patronising, in addition
to the war veterans, the war collaborators, ex-detainees and restrictees,
using the liberation war legacy as its trump card. I suggested that the best
way for the opposition to deal with this complexity is to start by
reclaiming the liberation war legacy, which has been privatised by ZANU PF.

      For instance, rather than having a simplistic blanket criticism of the
allowances given to the war veterans, the MDC could advocate for means
testing of all assistance given to the ex-fighters.

      This would mean that only ex-fighters who are unemployed, destitute,
poor and landless should receive support. War veterans who are gainfully
employed, in charge of the armed services, running the government, or have
successful businesses, either as beneficiaries of the land reform programme
or various other indigenisation and black-empowerment schemes surely do not
need any assistance. This should also apply to war collaborators and their
sister organisations.

      If the MDC is not careful, it will further alienate itself from this
powerful force in Zimbabwean politics and will further lose grip on the
liberation war legacy much to the detriment of the party.

      If means testing is applied to all the allowances given to the war
veterans now, the total expenditure on the ex-fighters can be reduced by
more than 60 percent. The fact that the chief criminals in abusing funds
meant for the war veterans were the undeserving elites running the armed
forces and the government is an instructive departure point. It is totally
unwise for the opposition to push simplistic and opportunistic ant-war
veteran rhetoric without properly understanding the dynamics at play.

      Of course, there are individual war veterans and collaborators inside
and outside government structures who, for personal benefit, are behaving
like paid mercenaries and prostitutes on behalf of ZANU PF. However, this
does not warrant surrending the entire liberation war legacy, lock, stock
and barrel to the ruling party. ZANU PF does not deserve the liberation war
advantage that it is being given on a silver platter by the opposition.

      Newly resettled farmers also constitute a very fertile ground for ZANU
PF support. Government has set aside $64 billion in this year’s Budget to be
disbursed to the new land-owners through the Land Bank for input
acquisition. If this money is not abused by bureaucrats within the party and
it gets to its intended beneficiaries, we have a situation whereby it will
be extremely difficult for the MDC to win the loyalty of these people.

      The opposition must see to it that the $64 billion is disbursed
transparently and to deserving people, otherwise that money will be used for
ZANU PF campaign purposes. If there happens to be any misallocation or
embezzlement, it is the duty of the opposition to expose such anomalies and
malpractices and put them within the broader framework of our struggles.

      In an effort to invade the MDC’s traditional support base, the
government has awarded a 250 percent salary increment to all civil servants
across the board with effect from this month. It should be realised that
government is the biggest employer and this move could cripple efforts by
the Zimbabwe Congress of Trade Uunions (ZCTU) to stage mass demonstrations
in protest against the state of the economy, high cost of living et cetera.

      If this is conceptualised within the context of the monetary policy
announced by Reserve Bank Governor Gideon Gono, the implications could be
great. A lot has already been said and written about the monetary policy and
its unprecedented efforts to rationalise Zimbabwe’s macro-economic
fundamentals, particularly in the financial services sector.

      If there happens to be an improvement in the economy as is already
evident in the form of increased inflows of foreign currency on to the
official market, reduction of the hyperinflationary rate and an increase in
the disposable income of urban workers, then the government might get
substantial support from the urban electorate. The government’s success or
failure in this regard depends on how the opposition will react and on
whether or not they will be offering better alternative policies.

      The first real fruit of the monetary policy is the increased inflows
of foreign currency onto the official market, resulting in our dollar
getting a bit of strength against the world’s major currencies. The
crackdown on corruption and laxity in the financial sector can also improve
things even further. The opposition must be pragmatic and argue that the net
against corruption must be cast wider.

      It cannot be doubted now that there is rampant corruption in all
sectors of the economy. What with recent developments in the ENG saga,
multiple ownership of farms and the tractor scandal, the impasse between
medical aid societies and doctors, corruption in the judiciary and

      There must be a holistic approach to corruption involving the setting
up of an independent anti-corruption commission, with powers of
investigation, search, seizure, arrest and other ancillary powers, rights
and privileges that naturally fall within that ambit.

      This is what the opposition should be pushing for. They have got their
parliamentary seats and popular support to their side so there is nothing to
fear. The refusal by the government to institute major anti-corruption or
anti-graft drive in the face of all these scandals would be itself
scandalous for it would mean, by implication, that they also have some
skeletons in their cupboards and this is where the opposition should make
the most noise.

      It may be wise for the MDC to resume political activity now focusing
on issues of the economy with particular emphasis on corruption and
vigorously supporting those positive aspects of the monetary policy. The
current cosmetic anti-corruption move by the government is just an attempt
to win back the International Monetary Fund (IMF) thump of approval between
May and June this year when the fund embarks on its routine Article iv
consultations with the Zimbabwean government, and to hoodwink the urban
electorate into voting for ZANU PF in the next general elections in 2005. At
least that’s my interpretation of it until and unless better political will
and commitment to fight corruption is exhibited.

      I have a feeling the governor of the central bank will soon be stopped
by very heavy political hands and I just hope he wont be assassinated. Oh
yes, it can be that nasty. My perception of corruption in Zimbabwe is that
it is all-pervading. It is like a complex spider’s web and to attack any
part of this anomalous and fossilised structure would mean, by implication,
to attack every other part, including executive power itself.

      In that case, it is tactical for the MDC to support the monetary
policy and what it seeks to achieve and they must always be vigilant and
ensure that no-one use their "economic and political muscle" to scuttle
investigations. Of course, this is assuming that the party’s cadreship is
not also privy to some of these unfolding shady deals. If the governor’s
monetary policy is implemented untempered with, ZANU PF may be hoist with
its own petar because in as much as the government has complained of
economic sabotage, it is becoming apparent that the biggest saboteurs are
from within the system.

      If the MDC stands aside and watch without making any input, ZANU PF
and the government will again claim to have solved the economic mess that
they are widely believed to have wrought on the nation. If the economy
recovers, the government might as well decide that there is no more need for
any POSAs and AIPPAs and thus democratise. Once they democratise, they will
then claim to have solved both the land question and the democracy and human
rights questions so dear to the MDC, in addition to its monopoly over the
liberation war legacy.

      If the MDC is not careful, it will soon be rendered irrelevant. The
party has to learn to be combative and pragmatic in using ZANU PF strategies
against ZANU PF itself so that the party gets hoist with its own petar.

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                  A winning nation has nothing to hide

                  1/22/2004 7:36:33 AM (GMT +2)

                  IN the late 1980s to the early 1990s, South African
industrialist Clem Sunter became a household name because of the dynamic
lectures he gave on South Africa’s options for a brighter post-apartheid

                  I remember being a great fan of Sunter, whose High
Road/Low Road Scenarios made him a one-man think-tank for South Africa and
any other developing countries that cared to borrow from his philosophy.

                  But if the truth be told, I admired Sunter’s forward
looking and perceptive thinking in a rather smug way. I felt that Zimbabwe
was so far ahead of South Africa and many other countries in Africa with
regard to the fundamentals for development spelt out by Sunter that it would
take decades for them to catch up.

                  How wrong I was! Things have changed so much for the worse
in Zimbabwe since the on-going political turbulence began in 2000 that I
have had to eat my words. Recently while rummaging through my papers, I came
across a newspaper cutting of a report on one of Sunter’s lectures and read
through it again. I was shocked to discover that Zimbabwe was now at the
bottom of the heap on aspects which I had previously proudly marked with a
star to indicate my country’s sterling performance at that time.

                  Sunter gave a long list of pre-requisites for a "winning
nation", but I have picked a few which show why our country has gone to the

                  lCLEAN GOVERNMENT: Sunter said: "For this, you need a
multi-party system and plenty of elections to give citizens an opportunity
to vote out bad politicians. Beyond a certain level of corruption, people do
not work because they are totally disillusioned."

                  It is ironic that all our current troubles stem from a
refusal by the ruling party to accept that anyone else except ZANU PF has
the right to govern this country. While in Sunter’s scenarios, elections are
supposed to protect the electorate; in Zimbabwe’s case, their sole purpose
seems to be to protect the ruling party by hook or crook to ensure that it
remains in power perpetually.

                  lSOCIAL HARMONY: Sunter said: "If people fight and kill
one another, you cannot have a winning nation. People must use energy
constructively and there must be a strong sense of social justice running
throughout society."

                  The complete opposite has happened in Zimbabwe because of
the political violence and lawlessness that has dominated events since the
people voted "NO" in the 2000 constitutional referendum.

                  lMONEY: Sunter said: "You cannot create something out of
nothing, savings equal investment. We must bring inflation to single
figures …"

                  Zimbabwe’s money troubles have been more than obvious even
to the most economically uninitiated. The ongoing turmoil in the finance
sector more than proves Sunter right. As for inflation, the new Reserve Bank
Governor Dr Gideon Gono’s goal is to bring the country’s hyper-inflation to
a lower three figure rate of 200 percent by the end of this year. Reaching
single digits will be a miracle. Will we ever be a winning nation again in
that department?

                  lWHAT MAKES A WINNING NATION: Sunter said: "In the 1960s
‘losing’ nations benefited from international aid, but now that world banks
have had their fingers burned, losers don’t get a cent."

                  Sunter’s comments seem spot-on for Zimbabwe in view of our
troubles with the World Bank and the International Monetary Fund.

                  lVALUES: Sunter said: "By 1985 the world was moving away
from ideologies towards ‘systems that work’. People are fed up with
ideologies such as Marxism and apartheid as well with anyone who comes up
with a single idea claimed to be the answer."

                  In Zimbabwe, we urgently need the levelling of the
political playing field so that people from all walks of life can contribute
to political discourse. This should not be the preserve of members of the
ruling party only.

                  lBE A GLOBAL PLAYER: Sunter said: "The last requirement
for a winning nation is to be a global player — to look outwards. Outward-
looking economies grow three times faster than inward-looking ones and
export their strengths."

                  Zimbabwe’s illogical drive to make itself an island doing
things its own way culminated in the country’s sulky withdrawal from the
Commonwealth towards the end of last year. One of the reasons given by the
leadership for this unwise move was that this would forestall the
Commonwealth’s efforts to monitor Zimbabwe and get the government to attend
to issues raised by the grouping. What a tragic development this is.

                  A winning nation should not have anything to hide and
should take pride in being transparent. The world has truly become a global
village and to deny the inter-dependence that goes with this phenomenon is
unrealistic and unreasonable.

                  When I last read about Clem Sunter, he was about to take
over as chairman of Anglo American’s Gold and Uranium Division.

                  But while writing this article I have found myself asking,
where are you, Clem Sunter? Could you perhaps come up with a winning formula
to help our politicians develop an open mind and the ability to change? To
tell them all is flux — that nothing is static except a skeleton.

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Dairibord Embarks On Cattle Restocking

Financial Gazette (Harare)

January 22, 2004
Posted to the web January 22, 2004


DAIRIBORD Zimbabwe Limited (DZL) has embarked on an ambitious cattle
restocking prog-ramme under which the company will fork out $2 billion to
farmers for the importation of dairy cows.

DZL chief executive officer Anthony Mandi-wanza said this was part of his
group's efforts to rebuild the country's national herd.

"Farmers can now access this facility to import additional dairy cows,"
Mandiwanza said.

The country has lost a big chunk of its dairy cows to diseases such as the

In its unaudited interim financial results for the six months ended June 30
2003, DZL said the volume of raw milk received declined by 27 percent due to
diseases and the chaotic land reforms.

Focus, DZL said, would be on increasing the dairy herd so as to produce more
milk as well as non-milk products.

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Fresh Outbreak of Foot-And-Mouth Looms

Financial Gazette (Harare)

January 22, 2004
Posted to the web January 22, 2004

Zhean Gwaze

ZIMBABWE risks a fresh outbreak of the dreaded foot-and-mouth disease (FMD)
after the government failed to source enough foreign currency to buy the
vaccines necessary to eradicate the disease.

Zimbabwe needs about one million doses of vaccines a month to completely
wipe out the disease which threatens to reduce the country's cattle herd.

The vaccines are imported from neighbour-ing Botswana's Vaccine Institute.

The Department of Veterinary Services has of late indicated that a national
vaccination programme was required to combat FMD, but this has not been done
due to foreign currency constraints.

Zimbabwe has partially managed to contain the disease through paltry doses
of vaccines sourced through appeals from international donor organisations
such as the Food and Agriculture Organisation, European Union and the
Southern Africa Development Community.

An official in the farming sector this week told The Financial Gazette that
another outbreak of FMD was looming, warned against uncontrolled movement of
livestock because of a shortage of pasture precipitated by poor rainfall in
most parts of the country.

"The government has failed to erect the 600 square kilometre fence in the
areas most affected by FMD due to forex shortages and as a result, it should
put measures to administer a national vaccination programme before the
cattle herd is depleted," the official said.

The national herd is said to have dwindled from 5.1 million in 1998 to 250
000 this year due to drought, FMD, an acute shortage of stockfeed and
destocking by most farmers because of the chaotic land reforms. FMD
outbreaks have impacted negatively on Zimbabwe in recent years as thousands
of cattle have died.

The country has stopped exporting beef to the European Union and regional
countries because of persistent foot-and-mouth outbreaks and a decline in
the national herd.

The country was still exporting limited beef to the Democratic Republic of
Congo. The quantities could not be established by the time of going to

Zimbabwe had an annual export quota of 9 100 tonnes of beef to the EU which
used to earn the country about US$2 billion annually.

The government is said to be trying to seal a deal with China to establish a
FMD vaccination production plant facility locally and save the country
billions in foreign currency.

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