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

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AI Index: AFR 46/002/2005 (Public)
News Service No: 020
28 January 2005

Embargo Date: 28 January 2005 00:01 GMT

Zimbabwe: Continued detention of Roy Bennet is a gross injustice
Amnesty International today expressed its very great concern at the continued detention of Roy Bennet, the opposition Member of Parliament (MP) for Chimanimani who has now spent exactly three months in prison.

Roy Bennet was given a 15-month jail term with hard labour following an incident on 18 May 2004 when he pushed the Minister for Justice, Legal and Parliamentary Affairs to the floor during a heated debate in parliament. Amnesty International does not condone Roy Bennet’s actions, but has severely criticised the parliamentary procedures used to convict and sentence Mr. Bennet.

"The procedure used to convict Mr Bennet was biased and politically motivated while his detention is grossly disproportionate to the offence committed," said Kolawole Olaniyan, Director of Amnesty International’s Africa Programme. "The government must redress this miscarriage of justice as a matter of urgency."

Legal experts in Zimbabwe have pointed out that common assault, the offence with which Roy Bennet would most likely have been charged had the matter been brought before a criminal court, would attract a far less severe sentence. In many such cases only a fine is imposed. Even if a more serious assault charge were brought against Roy Bennet it would not have attracted such a severe penalty.

Amnesty International today repeated its call for Roy Bennet’s immediate release on bail pending either a review of his conviction and sentence by an independent and impartial court, or a trial before an independent and impartial court.

In December 2004 Amnesty International communicated to the government of Zimbabwe the organisation’s serious concern about the proceedings which led to the conviction and sentence of Roy Bennet. The Minister for Justice is alleged to have verbally abused Roy Bennet.

Under Zimbabwe’s Privileges, Immunities and Powers of Parliament Act (as amended 1991), parliament is empowered to sit as a court and to award and execute punishments for specific offences which are listed under the Act. Assaulting a Member of Parliament within the precincts of parliament is one such offence. In the case of Roy Bennet, parliament tasked a five-person parliamentary committee, known as the ‘Privileges Committee’, to review the conduct of Roy Bennet and make a recommendation to parliament in terms of the powers vested in parliament under the Act.

The committee recommended a sentence of 15 months’ imprisonment with hard labour, with three months to be suspended, subject to good behaviour. On 28 October parliament voted to accept the committee’s recommendation. In both the committee and parliament voting was split along party lines. Under the Privileges, Immunities and Powers of Parliament Act there is no provision or mechanism for appeal against sentences passed by parliament. Roy Bennet was taken into custody on 28 October, and is now detained at Mutoko prison.

For further information see Zimbabwe: Unfair trial of Roy Bennet, MP, 24 December 2004, at:

Amnesty International has repeatedly expressed its concern over the treatment of opposition parliamentarians in Zimbabwe, including unfair prosecutions, arbitrary detention and assault.

For further information see:
Zimbabwe: The unfair prosecution of parliamentarians Fletcher Dulini Ncube, Moses Mzila Ndlovu and sixteen others, January 2002, at:
Zimbabwe: Fear for safety /Health Concern/ Conditions of detention, February 2002, at:
Zimbabwe: Rights under siege: Torture in police custody of opposition MP Job Sikhala, May 2003, at:
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Zim Independent

The best thing to happen to Zimbabwe
By Rejoice Ngwenya

MOROKA village, a few minutes’ drive into Botswana from Ramokgwebane border post, is only termed a village because it is under the administration of a kgotla run by Headman Jakalasi.

My grandfathers and uncles have been citizens of that village since the early fifties. Only in 1979, the eight-kilometre stretch from Francistown was a dusty track patronised by old 404s and donkey-drawn scotch-carts. On either side of this ancient highway, one would see fragile pole- and-mud huts strewn over wide areas of semi-arid terrain, occasionally punctuated by under-developed maize and sorghum crops. Large herds of cattle and well-fed donkeys were a common sight across the roads, posing a deadly hazard to unsuspecting motorists from the “wealthy” Rhodesian side.

Today, the reverse is true. This past holiday season, my nocturnal encounter with the village was an astounding revelation. It was like driving through Warren Park in its early days — scattered but well-built brick-under-tile houses with electric lights flickering defiantly from fascia boards. By the time I got to my uncle’s house, I had already been treated to a spectacle of a well-stocked supermarket, satellite dishes and running water in homes of what may be termed “messengers” in Harare.

Rural electrification at its best! I agonised over how long the Zanu PF government had promised to tar the road from Chachacha via Tongogara to my primeval Mudzengi village kwaNhema, in Shurugwi.

Time-warped electoral promises have pacified villagers since 1980, who probably by now struggle to find transport to the provincial hospital — simply because bus companies are tired of risking their hard-won assets on the rugged roads of rural areas. Perhaps the only thing that illuminates these forgotten places is either a solitary light from the chief’s bedroom — a symbol of our government’s “highly successful” rural electrification programme — or tungsten lamps dangling from verandahs of bottle stores at “growth points” — Zanu PF’s euphemism for glorified tuckshops. What a joke!

It turns out that Moroka village is one example of how public accountability, democracy and respect for citizens combine to form a potent potion of economic development. Mind you, I have not even mentioned anything of Lobatse, Mahalapye and Gaborone.

When cross-border travellers comment on how the South African police and their Tswana counterparts abuse Zimbabweans, I usually chip in with a very simple analysis. In our own country, citizens are arrested, charged, convicted and then brought to court to formalise the process. They are sometimes incarcerated for months on end in remand prison without being brought to trial.

I also remind the critics of the Tswana and South African justice systems that in our country, we need permission from local police to express public opinion, hold meetings and distribute political messages. We cannot appear on television or talk on radio unless we sing praises of the government.

In fact, if we so much as venture to criticise the president, there is a suitable charge for that too. Therefore the burning question is: if our own government or system is so spiteful of human rights, why should Tswanas and South Africans respect us? Who will respect you if you do not respect yourself?

My submission is that all that glitters in Botswana is in fact not just diamonds, but a high degree of accountability, respect for citizens’ rights, political sanity, tolerance and good old love for other people. The vengeance and ridicule characterised by our own political discourse is alien to Botswana. I know it not from speculation, but through direct experience.

On their television, members of different political parties discuss openly. At bars, they share jokes, beer and sarcasm. They display their party livery without fear — which I cannot say of Zimbabweans in Mashonaland Central where Zanu PF warlords mention words like enemy, no-go area, destruction etc — words that have no space in the vocabulary of civilised democracies.

I am sure that many of our brothers, sisters and mothers who I saw standing in the blazing sun at the border post in Plumtree are Zanu PF supporters. I salute their business acumen, but would echo the conscience of a Tswana immigration officer who, when there is a problem in their documentation, would shout: “Go back to your country and work there. Isn’t it you who say President Robert Mugabe is the best thing that ever happened to Zimbabwe? So what do you want here? Buyela kogae! Go back to your country.” A harsh reality.

The bare facts are that where a government is accountable, responsible and democratic, the gains are massive. Firstly, everyone wants to invest in that country. This creates more jobs and a higher sense of individual security. Secondly, markets and monetary “emotions” remain bullish and consumers keep spending, resulting in higher everything — per capita gross domestic product, foreign reserves, standards of life.

In our case, we border-jump because the risk of being caught and whipped at the kgotla is less threatening than being perpetual social rejects at home. In its own ugly way, we deserve a whipping, because we play ball in the

wrong camp — a hostile corner.

I would really care less if this talk sounds like from one whose self-esteem is well below sea level. I represent five million plus Zimbabweans citizens who either have no jobs at homes or clean pigsties and old people’s homes in Pholokwane and Leytonstone. If you do not agree, that is entirely your prerogative.

Zimbabwe right now is at the bottom of the competitive rung while Botswana is flying high. For some reason, Sir Seretse Khama left a legacy of decency that has had a domino effect on his successors. In one way, the bloodless transition from being a British protectorate to an independent republic paid dividends, unlike our own version of outright military conquest that left nationalists with a hangover for haematoid murals on the front doors of political competitors.

Both Zimbabwe and Botswana are in the fast lanes, but while ours is towards destination self-immolation, theirs is towards stardom. We have a choice to stand and watch, or slow down and learn.

Ngwenya is a Harare-based marketing executive.



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Zim Independent
Populist policy takes gloss off education
By Ray Matikinye

HOW Zimbabwean secondary school students pass their School Certificate or General Certificate of Education Ordinary and Advanced Level examinations at the end of each year in some of Bulawayo’s working-class suburbs could easily be compared to trying to mount a galloping horse with one’s arm tied behind their back.

The problem is not much of student-to-teacher ratio brought about by a phenomenal expansion of schools which is routinely touted by the Zanu PF government as one of its major success over the past 25 years. Neither is it due to lack of professionalism or low morale among teachers over dispiriting working conditions and low pay, but something more daunting.

Hard-pressed parents of high school students in Bulawayo’s working class suburbs are not pouring honey on books like Jews of the ghetto used to do so that their children appreciate learning is sweet. Neither is the government pouring money on textbooks to spice up students’ education and allow them to learn more effectively.

Students are forced to go to great lengths to complete each assignment given by their teachers due to a critical shortage of textbooks. The high cost of imported textbooks spawned by a steep depreciation of the Zimbabwean dollar against major international currencies has nettled poor and middle-class parents alike. It is now commonplace to come across a class of 40 pupils sharing only five prescribed textbooks in Zimbabwe’s urban and rural secondary schools.

“We have devised a cluster system where five or more pupils who live near each other share a prescribed textbook on a rotational basis,” says Magadelene Ngwenyama, a teacher at a school in one of Bulawayo’s working class suburbs of Luveve.

Sharing textbooks among so many students also diminishes a book’s lifespan.

Like other high schools, students living in the same section of the working class suburbs share a single textbook to do their homework. Teachers cannot copy a whole lesson involving a lot of figures and tables on a single chalkboard they also share with another class and still give instructions in an allotted 35-minute lesson.

“That is impossible,” Ngwenyama, who teaches accounting, says, adding: “The school managed to buy only two prescribed textbooks this term because parents resist levy increases proposed by the school committee to raise enough money to augment textbook stocks.

“It is so frustrating to both the teacher and the students,” she says with a sigh of resignation.

A skewed populist policy grounded on putting a lid over levy and fee increases by the ruling Zanu PF government to endear itself with the electorate mismatched by dwindling resource allocation threatens to unhinge an erstwhile praiseworthy effort by the state.

The Education Sport and Culture ministry gives schools grants for textbooks from its budget allocation each year but the cost of replacing torn ones has risen dramatically over the years, forcing at least five pupils to share one textbook. Parents and guardians have to buy textbooks at enormous cost as well.

“School textbooks and exercise books are expensive for us that depend on a monthly pension,” bemoaned 70-year old pensioner Trynes Sibindi, who fends for his two grandsons at high school that were bequeathed to him by a son who died three years ago.

But parents seem to have found a good bedfellow in Education minister Aeneas Chigwedere who has rebuked school committees and headmasters for raising levies and fees to meet escalating administration costs without his ministry’s consent.

Last year the ministry suspended several headmasters and ordered some schools to close for ignoring a ministry directive not to increase fees or levies.

Others, particularly white-dominated schools, were penalised and accused of attempting to maintain elitism. Concerned parents, keen to give their children the best education they can, took the ministry to court over the issue.

For instance, a single set of imported, prescribed textbook costs almost half the monthly salary of a general worker and unless parents scour used textbook vendor stalls littered along the city’s pavements, there is little hope for them to buy new ones. Some enterprising parents have tried to photocopy textbooks but still the costs for doing so are prohibitive.

“We charge $75 000 levy for a term and are the cheapest,” says a bursar at Magwegwe secondary school who refused to be identified. “Others such as Sikhulile in the same suburb charge $300 000,” she added.

A term’s levy charged at Magwegwe secondary school is half the price of a literature textbook such as Shakespeare’s Macbeth or Twelfth Night and a third of the price charged for a Thomas Hardy paperback, Far From the Madding Crowd.

Ngwenyama says: “Our job as teachers is like bricklayers expected to construct a house without being given the bricks.”

But despite all the shortcomings in the administration of education,

Zimbabwe’s education is highly rated in the Sadc region, attracting students from almost all neighbouring countries each year, although critics say this is more for what the education used to be than for what it is now.

In addition to the debilitating and morale-sapping shortage of textbooks, Zimbabwe has lost thousands of its trained teachers and other professionals to neighbouring countries while general school infrastructure is collapsing.

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Zim Independent
Ruling in MaFuyane inquest set for today
Loughty Dube

THE ruling on the inquest into the death of Johanna MaFuyane, the wife of the late national hero and veteran politician Joshua Nkomo, is expected to be made public today (Friday) amid allegations that her death was not due to natural causes.

Coroner and provincial magistrate for Bulawayo, John Masimba, is expected to hand down the judgement having gathered evidence from 11 witnesses during the inquest last year. This followed a request by the Nkomo family for an inquest after suspecting foul play in events surrounding her death.

Ten witnesses including the late MaFuyane’s personal bodyguards, state security agents and doctors who attended to her when she was taken to hospital testified in a case that has been before the courts for the last 14 months.

Nicholas Collen Shava, MaFuyane’s driver and a key witness in the case, died before testifying at the inquest. Doctors who testified in the case include Etwell Mari, Stanford Mathe and Chandisaita Tarumbwa.

The ruling in the case was supposed to be made last week but public prosecutor Bongani Walter Dube told the court that the ruling would be made today as court transcribers had taken too long to transcribe the record of the court proceedings.

“The delay in coming up with the judgement in this case was due to the fact that transcribers working on recording and transcribing court proceedings took long and this did not give the magistrate enough time to write his judgement,” Dube said.

He said the process was now completed and the presiding magistrate was ready to make his ruling.

MaFuyane died at the Roman Catholic-run Mater Dei hospital in Bulawayo after she collapsed at her Matsheumhlophe home on June 3 2003. She was declared a national heroine and buried at Heroes Acre.

Dr Mari, who attended to her when she was brought into hospital, told the court that she did not have a heartbeat and her eyes were fixed when she arrived at the hospital suggesting that she could have been dead on arrival.

In a letter written to the courts by MaFuyane’s eldest daughter, Thandiwe, on July 4 2003 seeking an inquest into her mother’s death, the Nkomo family says they were worried by the “grey areas” in the matter.

A summary of a sudden death report in the possession of the Independent indicates that she died of asphyxiation, due to the forcing of large amounts of water down her throat.

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Zim Independent
EU hunts for Mugabe treasures
Gift Phiri

WITH less than eight weeks to go before the European Union reviews its targeted sanctions against President Robert Mugabe and his officials, investigators in Britain and the United States are working flat out to track assets held by those under review.

The Zimbabwe Independent heard this week that the Jersey Financial Services Commission, in conjunction with the Joint Financial Crimes Unit, has intensified its search for funds that could be held in offshore accounts by Mugabe and his cronies in the Channel Island.

Financial investigators believe members of Zanu PF have used proceeds from 25 years’ access to the national treasury to buy houses and other real estate in the UK, the US and elsewhere.

While the investigators have revealed that proof of ownership has probably been hidden several layers deep beneath “shell corporations” and intermediaries, the investigators think the expertise and records exist to make tracking possible.

The commission on its website has listed Mugabe, his wife Grace, and 95 ministers and advisers as “politically exposed persons” who require scrutiny by banks to ensure there was no “reputational risk” to the institutions.

“Politically exposed persons” are identified with what the commission calls “potentate risk”, a term given to the risk associated with providing financial and business services to officials of countries tainted by “corruption, bribery, scandals and scams”.

“President Mugabe and his associates clearly fit the definition of a ‘politically exposed person’ as defined in the commission’s guidance issued in the Anti-Money Laundering Guidance Update,” the commission said.

The Independent understands that as yet, no-one has been able to quantify the scale of the assets in question, and some may be a great deal more difficult to locate than others.

The commission, which regulates Jersey’s 250 trust companies, 150 investment firms, 70 banks and 30 fund administrators, said financial institutions should “review files” to determine whether any links existed with the listed individuals.

Jersey is a self-governing British dependency, which has grown to become prosperous because of “offshore” bank accounts held there.

EU and US officials have of late been intensifying the trawling of financial institutions for possible holdings by political and military leaders of the Zimbabwean regime.

But the commission seems doubtful.

“We have no reason to suppose Jersey is being used for this.”

But it also said: “Nevertheless, regulated institutions should review their files to determine whether or not they have any connection with any of the named individuals. They will then wish to satisfy themselves that they know the customers concerned and have taken any appropriate action to address any reputational risks that may arise.”

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Zim Independent
UN food agency puts Zimbabwe on high priority
Godfrey Marawanyika

THE Famine Early Warning System Network (Fewsnet) has placed Zimbabwe on the high priority list. The country needs urgent food assistance to save 5,8 million people from starvation, the network says.

In its latest report released on Wednesday, the United Nations forecasting arm classified Zimbabwe amongst priority nations such as Somalia, Eritrea and Ethiopia.

The report said in Somalia there were about 1,8 million people in need of food, Eritrea, 2,2 million and Ethiopia 8,2 million.

“Staple food availability is declining as market prices continue to rise,” the report said.

On Zimbabwe it said: “High inflation and the Grain Marketing Board monopoly are exacerbating the situation. While cereals are still available in urban areas, continuing erosion of real incomes makes them unaffordable to many.”

Although Zimbabwe officially says that it no longer requires food assistance, the UN has constantly said that the country is in need of food aid.

“Zimbabwe has imposed restrictive trade barriers that make both formal and informal trade unattractive to most traders,” the report said.

The Grain Marketing Board was faced with logistical problems and was unable to supply the country with maize, Fewsnet said.

“As a result, the GMB has had to ration supplies, leading to widespread scarcities, a booming black market and high retail prices that are beyond the reach of some Zimbabweans,” it said.

Last month Fewsnet said maize prices on the parallel markets continued to rise, limiting the ability of deficit households to buy enough food to satisfy their needs. It warned that levels of malnutrition were expected to rise between January and March.

“In most urban centres staple cereals continue to be available. But a smaller proportion of urban households are able to purchase sufficient food due to the continued erosion of real incomes,” Fewsnet said.

“Food-insecure households in both urban and rural areas are responding through reducing their consumption. Over time, levels of malnutrition and related diseases are expected to rise, peaking in the January to March 2005 period.”

Fewsnet said its targeted feeding programmes currently allowed by government could not adequately address the food insecurity problem facing both urban and rural communities in Zimbabwe.

“The humanitarian community in Zimbabwe needs to find fresh ideas, palatable to both the government of Zimbabwe and the donor community, to expand the limited working space in which they are currently forced to operate,” the report said.

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Zim Independent
Mbeki under pressure on Zim

FORMER South African Reserve Bank deputy governor Gill Marcus has called on government to be more outspoken on human rights violations in Zimbabwe.
Her comments echo those of a variety of prominent leaders who have demanded stronger condemnation of the actions of President Robert Mugabe’s government.
With Zimbabwe’s parliamentary elections scheduled for March, there is pressure on South Africa to play a greater role in ensuring that the poll is free and fair, in contrast to the March 2002 presidential election which was panned by some observers as “daylight robbery”.
Marcus, who is now working in the private sector, was asked at a breakfast function this week for her views on Zimbabwe.
“The South African government was pursuing a policy that it determined, but a stronger comment on human rights abuses was necessary,” she said after the event.
However, Marcus stressed that her comment did not amount to an angry attack on government’s position on Zimbabwe.
“The expectation of members of the South African public that President (Thabo) Mbeki could tell the head of state of another country what to do was both ahistorical and presumptive,” she said.
It is unclear whether the opposition Movement for Democratic Change will contest the elections against the ruling Zanu PF.
Human Rights Watch said this month that “in Zimbabwe, parliamentary elections scheduled for March are likely to unfold in a climate of repression and intimidation”. It said pressure should be placed on leaders of the Southern African Development Community (Sadc) to push Mugabe to ensure free and fair elections.
The organisation said “the human rights situation in Zimbabwe continues to be of grave concern (and) the government continues to use (its) laws to suppress criticism of government and public debate”.
There have been indications recently that the African National Congress (ANC) is turning up the volume of its “quiet diplomacy”.
Last week, for the first time, ANC secretary-general Kgalema Motlanthe expressed criticism of the Zimbabwean political climate. He said the ANC “have been concerned about several things” and had put pressure on Zanu PF to strictly adhere to the Sadc election protocol.
He said the MDC should not have to ask for police permission to hold meetings.
Former Truth and Reconciliation Commission chairman Archbishop Desmond Tutu made headlines last year when he noted Zimbabwe’s human rights abuses and asked whether government’s “quiet diplomacy” approach to Zimbabwe was working.
Other prominent leaders, including Congress of South African Trade Unions (Cosatu) general secretary Zwelinzima Vavi, have raised their concerns over reported human rights abuses in Zimbabwe.
Although the tripartite alliance of the ANC, Cosatu and South African Communist Party says that it has reached broad agreement on issues including Zimbabwe, this could be tested.
Cosatu has asked permission from Zimbabwean Labour Minister Paul Mangwana to enter the country on a fact-finding mission early next month to meet labour unions.
If permission is refused, or if the Cosatu team is booted out, as happened during an aborted mission last year, this could again throw the issue into the public arena. —Businessday.   MDC prepares dossier for Sadc troika
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Zim Independent
MDC prepares dossier for Sadc troika
Staff Writer

THE opposition Movement for Democratic Change (MDC) said yesterday it had prepared a dossier to be submitted to a Southern African Development Community (Sadc) delegation which was expected in the country last night.

The Sadc delegation of lawyers from South Africa, Lesotho and Namibia — countries which form the regional body’s troika for politics, defence and security that monitor elections — is due to assess whether Zimbabwe is complying with election guidelines adopted in Mauritius last August.

The troika’s chairman is President Thabo Mbeki who has been at the forefront of resolving Zimbabwe’s political and economic crisis.Mbeki and other Sadc leaders are racing against time to ensure Zimbabwe holds a free and fair election in March.

The Sadc team is scheduled to examine Zimbabwe’s electoral laws and institutions to see if they have been sufficiently adapted to facilitate a free and fair election. Some Sadc countries want the United Nations to be involved in Zimbabwe’s election.

Sadc leaders are anxious for Harare to comply with the regional bloc’s principles governing democratic elections in the region.

The Sadc protocol stipulates that member states should hold regular, free and fair elections.

It encourages the establishment of “all-inclusive, competent and accountable national electoral bodies staffed by qualified personnel” as well as competent legal entities to arbitrate in the event of disputes arising.

The Sadc protocol also demands that for elections to succeed political and civil liberties such as freedom of assembly and expression must be upheld. Parties should also be given equal access to the public media to campaign.

Member states are encouraged to prevent electoral fraud and cheating.

Zimbabwe has enacted two new laws in a bid to comply with the Sadc rules.

A purportedly independent commission has been set up. Voting will be done in one day instead of two and the counting of votes will be done at polling centres.

However, the MDC says the electoral reforms are cosmetic and piecemeal. MDC leader Morgan Tsvangirai has been travelling in Africa and Europe to mobilise the international community to bring pressure to bear on Zimbabwe to hold a genuine election.

The MDC’s dossier says the legal framework and political environment are hostile to a free and fair poll.

MDC legal affairs secretary David Coltart said the dossier would be submitted to the Sadc team so it could understand the situation on the ground.

“We have a comprehensive document which we will submit to them on the current situation,” he said.

The dossier says the environment is not conducive for free and fair elections. It cites a series of legal and political factors that would make it impossible for Zimbabwe to hold a legitimate election.

The MDC document says laws such as the Public Order and Security Act, the Access to Information and Protection of Privacy Act, and Broadcasting Services Act were restrictive.

It also says political intolerance and violence were still high, while political and civil liberties were being curtailed. The dossier indicates that repression and human rights abuses would militate against a free and fair election.

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Zim Independent
Is it Bush, Blair or Mugabe?

OPPRESSIVE, dictatorial, autocratic, despotic, authoritarian, totalitarian, cruel, repressive, brutal, tyrannical, lawless, bloodletting, restrictive and intolerant.

The list can go on and on.

Do these words describe George W Bush’s Republican party, Tony Blair’s Labour party or Robert Mugabe’s Zanu PF?

I wish Information minister Jonathan Moyo was ready to answer but pity he is wallowing in the mire!

Tjiliwa wa Lugondo,


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Zim Independent letters
Advice for Streak

WHILST I look forward to the return of Heath Streak and the other so-called rebels into the Zimbabwe Cricket fold, I would urge them to think very seriously about the timing of their comeback.

I suggest that if they do come to some form of agreement with the ZC, they only make themselves available after the Zimbabwe Cricket tour to South Africa. Should four, five or however many are chosen, play against the Proteas, they will be in a no-win situation as it is highly unlikely that any of them will shine against a strong South African side, particularly after having not played regular first-class cricket for almost a year now.

Any Zimbabwean test team, irrespective of the make-up will more likely than not, be thrashed by the South Africans. This being the case, it will give ample ammunition to Peter Chingoka, Ozias Bvute and the local media to say: “You see we should have stuck with the youngsters who at least beat Bangladesh in the One-Day Internationals and who are gaining experience game after game rather than having these rebels back who perform no better.”

Conveniently forgetting the difference in strength between Bangladesh and the Proteas, let the youngsters pit themselves against our neighbours to the south in the Tests and ODIs and only then can the cricket fraternity gauge how far they have come in terms of experience.

Trevor Blyth,


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Zim Indep.
Time to reward MDC

WHILE the state media may want to downplay the achievements made by MDC president Morgan Tsvangirai during his trips abroad, the truth is that he and his delegation have covered a lot of ground.

Zambian president Levy Mwanawasa was recently quoted by a local weekly calling for UN involvement in the forthcoming Zimbabwean parliamentary election by sending monitors and observers. It is crucial that the UN intervenes as Zimbabwe under President Mugabe has never held free and fair elections.

There were acts of violence against PF Zapu members in 1985. In 1990 Patrick Kombayi, then a Zimbabwe Unity Movement (Zum) official, was almost shot dead by the late vice-president Simon Muzenda’s bodyguard.

The culprit was convicted and sentenced by the courts only to be pardoned by President Mugabe.

Many Zanu PF parliamentarians walked their way to parliament over dead bodies.

A good number of results for the 2000 parliamentary election were nullified

by the High Court because there was evidence that Zanu PF candidates had used violence to steal the election — evidence that the elections were not free and fair.

Had it not been for the Supreme Court, which made sure that the appeals against the nullifications were put on hold, some of the Zanu PF MPs who lost cases in the High Court could have lost their seats.

The above analysis is just to prove the point that there have never been free and fair elections under President Mugabe in Zimbabwe, contrary to what he and Zanu PF may want the world to believe. That is the reason why the MDC president, the entire MDC leadership and all the progressive forces of Zimbabwe should try their best to educate Sadc, Africa and the international community on the reality regarding the state of democracy in Zimbabwe.

If the truth be told, it is the MDC which has to be credited with peace prevailing in the country. Had it not been for the position taken by the party leadership that the party would not participate in the 2005 parliamentary election if Sadc guidelines on elections are not adhered to, hundreds of people opposed to Zanu PF could have been murdered by now.

This happened in the 2000 parliamentary election, in the 2002 presidential election and in most of the parliamentary by-elections held after 2000. Zanu PF tried in vain to contain its sponsored thugs for fear that its violent nature would be exposed to the world.

Peace-loving Zimbabweans should in turn reward the MDC for its stance which has seen the reduction of violence by voting for its candidates in the March election should the party finally agree to take part.

If the MDC is able to contain violence before it assumes power, Zimbabweans are guaranteed of peace with an MDC government in charge.

Development only takes place in a peaceful environment and that is the reason why all peace-loving Zimbabweans should rally behind the MDC.

While the party should continue to prepare for the election, a decision on whether to participate or not should only be made just before the sitting of the nomination court.

If the decision is made before a careful analysis is made, Zanu PF will resort to violence and the electorate will be confused if the MDC withdraws its participation after initially making a commitment to participate.

I also call on the UN secretary- general Kofi Annan to seriously consider the Zambian president’s advice and assemble monitors and observers for the forthcoming election.

Mwanawasa is closer to Zimbabwe and it is apparent he knows what the environment in Zimbabwe is like.

Benjamin Chitate,


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Zim Indep.
How we can tackle corruption

I ADDRESS this letter and appeal to you (the editor) in as much as I do to every Zimbabwean across all political, social or religious divides, to look critically at corruption in this country in the same way the world should have looked at the Tsunami effects had we been forewarned of its coming.

 It’s not Zimbabwean by origin as Zimbabweans have naturally and culturally been a very honest people. It’s foreign culture and let’s know who is bringing it to fight it. Some of those we call friends may not be true friends, but the worms;

 It has killed all our societal values from the core;

 It has pervaded deeply all our lives economically, socially, politically and religiously and is about to explode;

 It’s no longer a cancer in government, private sector, Zanu PF/MDC, etc, but in us all;

 It’s the reason why we cannot unite as Zimbabweans as it has brought economic hardships and consequently the political divide;

 Whoever our true enemy is, is using this strategy to keep us down, out of international focus (economic development), divided and draining our resources;

 It’s the reason why our productive sectors and capacity have collapsed as everyone is discouraged from working hard where others make quick bucks without a sweat;

 It’s the reason behind inflation as our productive sector has been killed and our foreign currency drained, paying for the huge corruption commissions in forex;

 It’s the reason for service provision collapse in both government and private sectors as solutions provided under corruption are no genuine solutions but bubble-gum cover-ups;

 It’s the reason for retrenchments as orgnisations are robbed of both solutions, time, confidence and zeal on the part of the innocent workers, their hard-earned money, etc;

 Perpetrators of corrupt deals usually resign after ruining companies and leave innocent workers to face the bubble-gum solution without enough funding;

 Payments for these deals are being made into foreign currency accounts (FCAs) in the form of holidays and school fees payments abroad, vehicle purchases, etc which are generally luxuries to the beneficiary and rarely come back to build the country;

 It erodes all sense, objectivity and rationale in the way organisations are run;

 Innocent workers and the general citizenry witness corruption as it is committed but keep quiet due to fear, non-concern and ignorance of the effect on them;

 We can go on, but all we are highlighting is look out for it.

Now that everyone (the government, private sector, war veterans, who have always been against corruption from what I know of true war veterans), war collaborators, the two political parties and general public in the country are ready to fight this worm, let’s all rally together as Team Zimbabwe to fight our common enemy.

Part of our strategy can be:

 To establish an anti-corruption levy (hoping it will not be corruptly abused) in every company or organisation to reward the fighters;

 Establish a column in every publication to expose the scourge daily (please editors!);

 Reward adequately the judiciary, police (law enforcers) and everyone to minimise temptations;

 To use this as the key campaign theme for all aspiring candidates across the political divide in the coming election. This will scare away corrupt candidates from whichever party;

 Security organs to put up alert access points countrywide to receive and respond to information on corruption;

 Let’s talk about it everywhere, homes, churches, on the roads, workplaces.

Sendekera Murambatsvina,


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Zim Independent
Stand up to this evil

JANUARY 24 was the anniversary of the freeing of prisoners from Auschwitz concentration camp where one-and-a-half million Jews were slaughtered.

The United Nations honoured the day. Secretary-general Kofi Annan told the world that evil can only prosper when good people remain silent. I have not heard him say much about Zimbabwe!

Human rights activist and Auschwitz survivor Elie Wiesel addressed the UN with a heart-rending account and plea to the world to ensure that evil is never allowed to prosper.

It made me ashamed that President Mugabe likened himself to Adolf Hitler who was responsible for this greatest atrocity ever committed.

As he continued with his speech, I became sick that I was a Zimbabwean, a people who cannot stand up to a dictatorship that kills and tortures its citizens. I became revolted at the Zanu PF cadres, police and civil servants who carry out the wishes of a leadership that employs evil ways to stay in power.

Wiesel told us that the inmates at Auschwitz were not elated when they saw their saviours. They felt they had been tortured as much by the world that stood by and did nothing as by their tormentors. It is up to everyone of us to stand up to evil, whether we are Zimbabwean, Zanu PF or not.

Only when we do this can the world be a better place for our children.

A McCormick,


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Zim Indep.
Reservations over Gono’s 2005 roadmap
Conrad Dube
RESERVE Bank of Zimbabwe (RBZ) governor Gideon Gono this week presented his 2004 fourth quarter monetary policy statement which he also said was a roadmap for 2005.
Gono’s policy is premised on a revised year-end inflation rate forecast of between 20-35% and a reorientation of underperforming parastatals which Gono said were the missing link in the economic turnaround plan.
The policy also points to the implementation on February 1 of the enhanced platinum sector regime, and provides details on the proposed Zimbabwe Amalgamated Banking Group (ZABG).
It also raised the price of gold to $130 000 per gramme from $92 000, while announcing new foreign currency retention thresholds for various sectors.
The policy also sought to recognise and treat tobacco growers as direct exporters for the purposes of exchange rate management, as well as access to foreign currency. This implies that tobacco growers will get 100% of their sale proceeds valued at the ruling foreign exchange auction rate.
Economists and the opposition are however not convinced that the monetary policy statement will set the tone for 2005. They said the statement lacked concrete measures to stabilise the key macroeconomic environment and address policy mismatches in inflation, interest rates and the exchange rate.
The economists questioned the integrity of forecast inflation and growth rates, the viability of exporters due to unfavourable auction rates and the continued doling out of funds to underperforming parastatals.
Tendai Biti, the Movement for Democratic Change (MDC)’s secretary for economics, said: “The monetary policy statement envisages the continued decline of inflation throughout 2005, with the resumption of gross domestic product (GDP) growth of between 3% and 5%. Where do these fanciful figures come from? Do they imply that there will actually be a policy reversal sometime, with a devaluation sufficient to restore exporter viability — this would also, in the short-run lead to the rekindling of inflation.
“It must be pointed out that the Ministry of Finance in its budget for the current year used 270% as its underlying inflation assumption for 2005. There is therefore a clear contradiction between the budget statement and the monetary policy review — one that neither surprises nor shocks us.”
On the viability of exporters, Biti said the main instrument for reducing inflation has been the deliberate overvaluation of the Zimbabwe dollar on the auction market.
“Gono has dug in his heels. Exporting will become progressively less viable in 2005, foreign currency will become more scarce, more jobs will be lost, more shrinkage of incomes and dimming of peoples’ lives and prospects. It’s going to be a continuation of what the state media call ‘an economic turnaround’ but ordinary Zimbabweans who struggle through its effects know better,” said Biti.
The MDC believes Gono precipitated the banking crisis by engineering a sudden rise in interest rates from under 100% to around 900%.
“He then handed the illiquid banks a poisoned chalice in the form of money from the Troubled Banks Fund. In this policy statement, Gono trumpets the Zimbabwe Allied Banking Group as the solution, despite the abject failure of the Consolidated Bank of Kenya, when in similar circumstances the government of Kenya attempted to bail out a number of failed banks. Since ZABG was first announced in September, several of the potential members have been dropped and the grand proposals for ZABG to be a unified bank have given way to it being an amalgam of its constituent parts.”
Economist John Robertson said he was not sure where the $10 trillion to be given to parastatals would come from.
Gono also appealed to political leaders to shun violence in the run-up to the general election in March.
He said: “Any soul lost in this election is a piston lost in our economic engine.”
Zimbabwe National Chamber of Commerce president Luxon Zembe said: “A violent election will wipe out all prospects of economic recovery. The success of the policy statement will depend on whether political leaders will conduct themselves in a manner that will restore confidence.”
He said parastatal support must be tied down to stringent rules that consider operational efficiency “otherwise we will create another bottomless pit”.
“Independent boards composed of non-civil servants must be seconded to the parastatals. These boards must also be empowered to make strategic decisions without which they will be useless if the decisions have to be vetted by parent ministries,” said Zembe.
Priscilla Misihairabwi-Mushon-ga, who is the chairperson of parliament’s portfolio committee on public accounts, said her committee had always raised concern on skewed corporate governance in parastatals.
“There is need for a proper framework in which the $10 trillion will be used. All along management have been paid unrealistic salaries without corresponding production so the money must be tied to specific output which has to do with structural issues,” Misihairabwi-Mushonga said.  
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Zim Independent
New forex deal for exporters
Godfrey Marawanyika

THE Reserve Bank of Zimbabwe (RBZ) has agreed that exporters who in the past sold their hard currency in exchange for Zimbabwe dollars, can now retain more than half of it in their local foreign currency accounts.

This means that local exporters will no longer have to dispose of their earnings at the official rate of $824 to the US dollar.

“We are pleased that under the carrot and stick framework, exporters are responding to the initiative remarkably well, with the bulk of export proceeds now being repatriated within 30 days effectively allowing producers to retain 100% of their earnings in foreign currency accounts (FCAs) free of any surrender requirements at the government priority sector rate of $824/US$,” RBZ governor Gideon Gono said in his monetary statement on Wednesday.

“As of December 2004, 75% of export proceeds were repatriated within 30 days, effectively benefiting exporters through 100% retention of inflows in FCAs. This was up from a proportion of 26,6% of export proceeds which came in with the 30-day period in January 2004.”

He said exporters would now be able to retain 70% of their earnings in their foreign currency accounts and surrender the remainder at the auction rate, on condition that they repatriated the funds within 90 days.

In the past, exporters were forced to dispose of all their foreign currency earnings to the central bank in exchange for local currency within a 60-day period, with at least a tenth of the money sold at $824 against the greenback.

The new policy shift is in line with suggestions made by industrialists to the central bank.

Gono also told indigenous banks that they would be subjected to a new stricter auditing system that will come into effect from March.

Gono’s comments come in the wake of numerous complaints from mostly indigenous bankers that they should be subjected to a less stringent set of supervisory rules compared to the established banks.

“We thus reject the notion and misplaced expectation that the Reserve Bank should treat one class of banking institutions using a different, softer accountability scale, while treating another class with bare knuckles in defence of depositors’ security,” he said.

“This will not happen in the Zimbabwean financial sector and any current or future players in the sector by whatever description, connection or origin, will have to abide by one scale of the supervision, accountability and responsibility standards that are primed to international best practices.”

He said with effect from March 1, the central bank would also introduce “independent computer-based auditing packages to interrogate financial databases at banking institutions to validate their accuracy and validity”.

Last year at least seven local banks were placed under the management of curators, which resulted in loss of confidence in the industry.

The central bank said it was also going to disburse $10 trillion in domestic debt over the next two years as it overhauls parastatals and drives inflation down.

Gono said the country’s annual inflation rate was set to subside from three-digit levels to between 20% and 30% by the end of 2005.

By December Zimbabwe’s inflation rate was 133%, down from 620% at the start of 2004.

Since 2000, the country’s economy has shrunk by 30%.

“Our inflation is still the highest in the world and this remains a scar on our face,” Gono conceded this week.

“In 2005 we expect inflation to end at between 20% and 30%,” he said. This is a revision from the target Gono set last year for a 2005 year-end rate of between 50% and 60%.

The central bank also reviewed the gold price from the current $92 000 per kg to $130 000 with effect from February 1 this year.

Gono said that the Homelink initiative last year alone remitted US$54,8 million, dwarfing most traditional inflows.

“For the economy to operate smoothly, the country needs monthly inflows of at least US$250 million or US$3 billion annually,” he said.

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Zim Indep.
Money-laundering laws must not violate rights
Alex T Magaisa
ONE of the key developments in the financial regulatory structure in Zimbabwe in the past year was the enactment of the Bank Promotion and Suppression of Money Laundering Act to deal, in part, with the problem of money laundering.
The new regulatory structure imposes legal obligations on so-called “designated institutions” which include financial institutions, legal practitioners, accountants, real estate agents, etc for the purpose of suppressing money-laundering. It is interesting that until the recent legal challenge by the Law Society of Zimbabwe against the constitutionality of certain provisions of this law, legislation that has such a huge impact on the financial and regulatory landscape has elicited relatively little interest.
Without interfering in a matter that is sub-judice, I will attempt to put forward a few thoughts and ideas about this law which in reality is part of an emerging global trend in the regulation of financial crime.
Simply defined, money laundering is a process by which proceeds of criminal or other illegal activity are given the appearance of legitimacy particularly regarding their origin. At the risk of over-simplification, one could simply define it as a process of cleaning “dirty money”, that is, giving legitimacy to money that has been obtained from illegal sources. Criminals and those involved in illegal activities are keen to avoid attention from law enforcement authorities and always try to demonstrate the legitimacy of the source of their income. There are various mechanisms by which money launderers pursue their objectives, but essentially they commonly use the financial system — most commonly by opening bank accounts to place their funds into the formal system thereby ensuring integration with legitimate funds. Bank transfers, property acquisitions, etc disguise and re-package the wealth in forms that are apparently legitimate. In the process they use various professional channels to disguise the character of their illegal wealth. Money laundering is commonly used in the perpetration of organised crime and is often complex and difficult to detect.
The increase in electronic and Internet banking has expanded the opportunities for money laundering due to the ease and quickness of transactions across borders as well as the anonymity available to users. In many communities, some people may believe that money-laundering is non-existent simply because it is invisible and hard to track and because it appears to be a crime without a specific victim, dealing with this crime is sometimes ignored in some parts of the world. Yet in fact, when one considers the levels of corruption, parrallel market dealings and insider dealing which also appear to be invisible in many countries, it is easy to assume that in fact money-laundering is a process that is ever-present in most communities.
Acceptance that money-laundering exists but has not been detected and dealt with adequately is a good starting point when appreciating the necessity of legislation to deal with the problem. I would suggest that those involved in dealing with the problem of corruption should pay particular attention to this problem, which effectively provides the cover of legitimacy to otherwise illegally accumulated wealth. Others however may simply dismiss this as a stand-point that is out of touch with the reality of the basic need for survival in a period of economic problems.
The money-laundering legislation ought to be analysed within the context of recent international developments. Money laundering often takes international dimensions because it involves transactions and activities across national borders. The international character of money-laundering prompted the formation of the Financial Action Task Force (FATF) in the late 80s, an inter-governmental organisation for the purpose of developing and promoting policies to combat the crime at both national and international levels. After the September 11 attacks on New York in 2001, and the connection made between money-laundering and terrorist financing, the FATF intensified its focus and strategies towards curtailing this problem. The FATF has continually updated its initial Forty Recommendations which demonstrate a comprehensive programme on how to fight money laundering by adopting a further 8 Special Recommendations (2001) with regards to fighting terrorist financing.
A key part of the FATF’s work is to monitor member countries’ laws and regulations to ensure that they comply with the standards set at the international level. Importantly, it “names and shames” jurisdictions that are considered to be non-co-operative in the sense that their regulatory and enforcement structures do not measure up to the recommended standards. The impact of being designated a “non-co-operative jurisdiction” is that member countries may be advised to take counter-measures against individuals or business entities based in such countries. Arguably, this may have a negative impact on the economic-well-being of the designated countries. Therefore, besides the national interest in curtailing money laundering, there is also an international push towards the adoption of legislation along the lines recommended by the international watchdogs that include the FATF, World Bank and the International Monetary Fund.
Nonetheless, the alarm raised in the context of money-laundering and the international push towards adoption of uniform policies and regulations has often led to laws that have huge and sometimes negative impact on individuals and institutions particularly those on whom legal obligations are imposed. The major obligations on “designated institutions” are that they must record, report and disclose suspicious activities and persons in relation to money laundering. The usual targets are persons and institutions normally involved in the financial markets which are the common conduit for the pursuit of money laundering. The obligations are not only onerous but sometimes they place the affected persons in very difficult positions in ways that affect their constitutional rights.
For example, if a bank suspects that due to unusually huge and frequent
deposits, a customer may be involved in money-laundering, it has the obligation to report to the authorities with the duty to conduct investigations. This obviously runs counter to the important principle of confidentiality in the banker-customer relationship. In this situation, let us assume that the customer then seeks to withdraw his funds. If the bank allows him to withdraw the funds under investigation, it may be considered to be assisting that person to launder money.
On the other hand, if it refuses to give him the money, it not only beaches the bank’s contractual duty to the customer (which may attract civil legal proceedings against the bank) but it may also give a signal to the suspected person that something wrong has been detected in his scheme in which case he might flee the jurisdiction. For that the bank might be considered by the authorities to have “tipped off” the suspect and therefore might be liable to prosecution under the laws.
So given this and related problems one can understand the calls by the so-called “designated institutions” with duties to report and disclose for better clarification and certainty in the laws and their consequences. There, the judiciary might play a key role in giving proper directions on how to deal with this matter without incurring further legal claims and costs.
The legal and compliance costs imposed on designated institutions are also a key area of consideration. They have to keep records over a period of time, which adds to storage costs while employees must be properly trained to detect and report suspicious activities in terms of the law. They will also need to employ properly trained staff responsible for compliance. These additional costs are a burden that will be borne initially by designated institutions but are most likely to be passed on to the consumers. In addition, transferring key policing duties to the private sector from the public sector (police) could lead to reduction in the development of the capacity of the police force which has the primary duty in this area.
In addition, care ought to be taken in designating institutions as there is a danger of causing unnecessary conflicts or interests particularly where confidentiality and trust are key elements such as in the legal profession. It is unnecessary and illogical to impose such onerous disclosure obligations on lawyers, which essentially make them prosecutors against their clients when the relationship between the lawyer and client is founded on the basis of trust and confidentiality. Legal ethics already bind lawyers to pursue certain avenues should they feel that they cannot represent a client for whatever reason and it is unnecessary to impose further obligations that undermine this relationship. Fear among citizens that their lawyers will unnecessarily report “suspicions” might end up deterring otherwise innocent citizens from approaching their lawyers for assistance. Given that most of the players that are designated institutions will invariably rely on lawyers, one might have difficulties in determining the role and obligations of lawyers in such situations.
The key cause of these problems is the phenomenon of legal transplantation by which laws developed and designed within specific contexts are transplanted into contexts that are fundamentally different. Most legislation in this area is similar across both developed and developing countries yet the mere enactment of legislation does not necessarily entail that it will be effectively and properly implemented. A more important problem is that in countries where human rights are under threat, there is a possibility and well-founded fear that some authorities might abuse powers under the onerous and wide-ranging laws and still claim that they are following an international trend in fighting terrorism and money-laundering.
One could imagine a case where a lawyer is arrested because he or she failed to report a “suspicious” transaction, simply as a way of harassment. Such action might be taken by the authorities and will be perfectly legal yet in fact it disguises the true intent of the authorities. The fears that the money laundering laws potentially affect the rights of citizens, including privacy, expression, property, etc can be more real in some communities than others.
To simply promote the spread of uniform laws, without considering the contexts within which they will operate may have consequences that international bodies may not have foreseen or intended. It is necessary, in the global efforts to combat money laundering and terrorism, to avoid over-reaction and to be sensitive to the factors applying in different jurisdictions. It is also important for international bodies monitoring such laws to check not only whether the laws have been enacted and are being implemented but also whether the implementation is in line with recognised human rights standards.
 Alex Tawanda Magaisa is Baker & McKenzie lecturer in Corporate & Commercial Law at The University of Nottingham 
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Zim Indep.
EU market could double Zimbabwe sugar output

ZIMBABWE can increase sugar output by nearly 50% if allowed greater access to the European Union (EU) market to compensate for expected loss of revenues from planned sugar reforms, an industry official said.

The EU is planning reforms which will cut preferential prices for sugar from African, Carribean and Pacific producers (ACP) by about 40%, and has proposed more access to offset likely falls in revenue.

Zimbabwe Sugar Association secretary Steve Frampton said on Wednesday that Zimbabwe’s quota would not be reduced as a result of the reforms, but a price cut would still hit the industry hard.

“For us there will be a reduction in prices and we will be happy for any sort of compensation that will come, so we are looking forward to increased access to the EU market,” Frampton said.

“We are saying we have the capacity to expand production to 620 000 tonnes if allowed to increase exports.”

The southern African nation — expected to emerge from a five-year recession this year — has two export preferential agreements with the EU allowing it to sell 56 024 tonnes of white sugar to the trade bloc.

Former European colonies in the ACP — which includes Zimbabwe — supply the EU, the world’s biggest sugar purchaser, with 1,6-1,7 million tonnes of the commodity each year under preferential deals at above-market prices.

The EU has sketched out plans to compensate poor countries for any loss in revenue, but some nations say this may not be enough for producers who export all their sugar and import to meet local demand.

Zimbabwe’s total export figures for 2004 are not yet available, but the country met its EU quota last year and in 2003 exported a total of 124 300 tonnes.

Besides sugar exports to the EU, Zimbabwe also has a 12 000 tonne quota to the United States and ships sugar to India, Malaysia, Egypt, Canada and South Africa.

Sugar production fell 16% to 422 300 tonnes last year after some cane farmers failed to plant because their land had been earmarked for seizure by the government.

In 2000 President Robert Mugabe’s government began seizing white-owned farms in a policy that has disrupted commercial agriculture and been partly blamed for food shortages in the country since 2001.

But he argues that the land reforms were necessary to correct imbalances brought about by nearly a century of colonial rule which saw white farmers getting about 70% of the country’s fertile land.

Zimbabwe’s major sugar producers include Hippo Valley Estates, owned by Anglo American Zimbabwe, itself a subsidiary of miner Anglo American and Triangle Ltd — which is owned in turn by South Africa’s Tongaat-Hulett and Anglo American.

Mkwasine Estates is jointly owned by Hippo Valley Estates and Triangle Limited.

A Hippo Valley spokesman said the sugar producer was negotiating with the government after Mkwasine and its estates were earmarked for compulsory seizure by the government.

Hippo produced 236 116 tonnes of sugar in 2003 and although last year’s figures were not available, the spokesman said production for this year would not be much different from past years. — Reuter.

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Zim INdep.
The role of auditors clarified
Roadwin Chirara

THE recent collapse of CFX Bank and the holding company after a due diligence had been carried out has brought the role of auditing firms under scrutiny.

Their ability to effectively carry out their duties as curators and financial managers has been questioned. With this in mind, the Zimbabwe Independent sent questions to the current president of the Institute of Chartered Accountants of Zimbabwe, Eric Bloch, on the role played by auditors in the collapse of some financial institutions. The following are the questions presented to him and his answers on the issue.

Q: What role have auditing firms played in the collapse of financial institutions in the light that they have found nothing sinister in the audited accounts of banks, and are such firms competent enough to handle audits of large financial companies?

A: Chartered accountants are very extensively trained in all facets of auditing and all audit personnel of firms undertaking audits receive extensive training. The conduct of audits is invariably subject to comprehensive monitoring and review by qualified audit partners and audit managers.

No evidence has been forthcoming to indicate, at this time, that any of the troubled financial institutions had been subject to defective audits, or that auditors had played any role in the collapse of such institutions. However, as explained above, it is not practically and realistically possible for audits to expose financial mismanagement, abuse and frauds in instances where collusion between personnel of the financial institutions override normally effective internal control systems, or in instances of sophisticated and exceptionally well concealed frauds (and especially so when such frauds are found upon highly skilled forgery of documentation of a nature which must be perceived to be prima facie genuine).

The institute has no reason to doubt the competence of Zimbabwe’s firms of chartered accountants to handle financial institution audits, but has taken and will take appropriate action in any instance where it is established that such competence does not exist.

Q: What is the cause of the failure to detect abnormalities in the financial statements of the collapsed financial institutions?

A: The failure to detect abnormalities in financial statements of collapsed

financial institutions has, in so far as we know to date, been occasioned by such institutions having had necessary internal control procedures in place to an extent required to satisfy auditors, but collusion between personnel of such institutions and/or highly skilled forgeries and computer engineered frauds cannot always be detected or that it becomes evident that the internal control procedures have effectively been over-ridden.

Q: Auditing firms have been accused of rubberstamping accounts of failed institutions. What is your comment?

A: No evidence has been forthcoming to corroborate the allegation, and the institute has no reason to consider that there is any substance or validity to the allegation.

It appears that, to all intents and purpose, auditors are being made “scapegoats” when, in reality, the fiscal mismanagement and abuses, and diverse frauds were pursued in ways as successfully circumvented the apparently good and sound international procedures of the institutions, and the auditors’ evaluations of such procedures and systems, primarily by recourse to advanced and high-level collusion and forgeries within the institutions.

Q: Will auditing firms as curators be able to turn around the fortunes of failed financial institutions, having failed to detect frauds and financial irregularities?

A: Many chartered accountants have developed extensive business and managerial skills and therefore are very suited to fulfil posts as curators, judicial managers and the like. In doing so, they have to determine whether the relevant entity has sufficient inherent substance and purpose as necessary to recover from its troubled financial circumstances, after determining the extent of the institution’s negative circumstances and based thereon to identify alternative opportunities and measures to achieve such recovery.

Their expertise is such that whilst not all financial institutions can be effectively salvaged due to the extent of damage sustained, others can be restructured effectively and restored to viable and secure operations by recourse to that expertise.

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Zim INdep.
ZABG opening set to stir legal furore
Shakeman Mugari

THE move to open the Zimbabwe Allied Banking Group (ZABG) looks set to cause a legal furore because the inclusion of three financial institutions — Barbican Bank, Royal Bank and Trust Bank — was done arbitrarily in breach of regulations.

The Reserve Bank of Zimbabwe disregarded the provisions of the Troubled Financial Institutions (Resolution) Act.

Former directors and shareholders complain that the central bank lynched its own laws in its hurry to open the ZABG.

Among crucial issues disregarded by the RBZ is the provision to seek confirmation from a High Court judge before amalgamating the banks.

There was no effort to inform former directors of the move to take over their banks as required by some sections of the Troubled Financial Institutions (Resolution) Act. The central bank was also supposed to issue a proper statement to announce the inclusion of the three banks in the ZABG.

Analysts said the central bank acted arbitrarily because it had become too powerful and no longer accountable to anyone. They said this type of decision by the central bank was unprecedented.

In a statement last week, the RBZ announced that Barbican, Royal and Trust Bank would become the first financial institutions to be swallowed into ZABG.

It said Intermarket had been left out because of its ongoing merger talks with an unnamed financial institution while Time Bank had a pending court case with the central bank.

Also not explained was whether such criteria had been arrived at in consultation with shareholders and former directors and ordinary depositors.

Former bank owners and shareholders said they were not informed of the take-over of their banks.

It is this huge discretionary power by the central bank that has created resentment in the financial sector amid allegations that the RBZ was getting too powerful.

The analysts said the RBZ had transformed itself from a mere regulatory authority to a player and referee in the operations of the financial sector.

This has seen the bank spreading its tentacles into all facets of the sector. They said this was not good for corporate governance.

Through amendments of standing regulations and/or creation of new ones, they said, the RBZ has now put a dead man’s grip on the financial sector.

Over the past 12 months several laws have been passed to give the RBZ more sweeping powers. The Financial Laws Amendment Act passed last year gives the Reserve Bank of Zimbabwe powers to be the licensing and regulatory authority of asset managers, unit trusts, microfinance and money-lending companies.

This is in addition to the Troubled Financial Institutions (Resolution) Act, which gives it the power to take over collapsed banks without due compensation to shareholders and former directors.

The RBZ’s influence has also spilled into fiscal policy issues, rendering the Ministry of Finance and Economic Development almost irrelevant.

In January last year the central bank also took over the registration of banks, a role previously reserved for the Ministry of Finance. The RBZ is now the registrar, supervisor and controller of banks.

The analysts say the central bank has arrogated to itself too much power and is diverting from its core business of regulating the financial services sector and defining the monetary policy of the country.

It has also gone into bureau de change business of buying foreign currency directly from the market. It announced that it would go directly into the market to buy foreign currency under its Homelink initiative. A company in which the RBZ has a majority shareholding has already been formed with Gono as the chairman.

There is also a prospect of the central bank venturing into retail banking through the “troubled” Zimbabwe Allied Banking Group (ZABG) where it has a large shareholding together with the government.

Analysts say control on the banking sector has also been widened to include human resources issues. The RBZ now wants to be directly consulted in the appointment of key staff in the banking sector.

According to the new plan, the central bank will scrutinise the CVs of the top three personnel in each department. The RBZ will also be involved in the appointment of chief executives and senior management of banks.

This week Gono promised to tackle virtually every sector, including parastatals which he accused of gross inefficiency.

He will also intervene in the governance of local authorities. The two sectors were allocated $10 trillion for their turnaround plans.

All this, analysts say, has made the RBZ too dominant whilst its venture into the direct purchase of forex and entry into the retail banking through ZABG compromise corporate governance.

Bankers have questioned the powers and impartiality of the RBZ as a monetary authority.

Dr Alex Magaisa, a law lecturer at the University of Nottingham in the UK and a regular columnist of the Zimbabwe Independent, said the RBZ was now too powerful.

He said the bank was getting too involved in the affairs of individual banks and might expose itself to legal liability if something went wrong.

“The RBZ is becoming too powerful. More important, however, is that by getting actively involved in individual institutions’ affairs, the RBZ might expose itself to legal liability in case something goes wrong as a result of their interventions,” said Magaisa.

“The best scenario is that an independent supervisory authority should be created so that it concentrates solely on the supervision of financial markets generally and leaves the central bank to focus on the key monetary policy duties.

He said while there was nothing particularly wrong in the supervisor being the authority responsible for registration, the question was whether the RBZ would behave any differently from the ministry.

This means that the central bank now has unilateral powers to decide on the fate of any bank without any alternative for the banks to challenge its actions. The issue in which the troubled Time Bank has dragged the RBZ to court is a case in point. There are now serious doubts about the impartiality of RBZ in its future dealings with Time Bank after the case has been concluded.

Its effort to control the recruitment policy of banks is also open to abuse by the central bank.

“The idea of playing a role in the recruitment obviously makes the chosen ones indebted to the governor and this might compromise both the RBZ’s supervisory role and the executive’s independence which is very important in corporate governance,” Magaisa said.

Others said the recent move by the reserve bank to open MTAs under the Homelink brand did not augur well for the sector. They said the central bank was usurping roles initially meant for the private sector. The Reserve Bank is now a full-time operator of several foreign currency exchange outlet around the country.

Their Homelink outlets are already competing directly with private banks and other money transfer agencies. To consolidate its grip on the foreign currency trading the RBZ has since formed Homelink Pvt (Ltd) in which the bank would have majority shareholders.

“Playing the leading role in the buying of foreign currency from the public, the Reserve Bank is transcending its actual role. What then becomes the role of private banks,” asked an economist with a local bank. “The playing field in the purchase of foreign currency is no longer level. What guarantee do we have that their policies would be fair. It is now the referee and the player in the financial sector,” he said.

There are also reservations that the government’s move to venture into retail banking through the ZABG can also compromise the central bank’s role. They say it is against basic corporate governance for the central bank to operate a retail bank as what is happening with ZABG. This means that the RBZ is literally jostling for customers and business with established banks.

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Zim INdep.
GDP forecast to slow down
Eric Chiriga

THE country’s gross domestic product (GDP) growth for 2005 is expected to decelerate by minus 3,5% from last year’s minus 6,4%, Finhold has said. “There is going to be a decrease in the rate of decline of GDP growth but the figures remain negative,” an official at Finhold said.

This is contrary to Reserve Bank of Zimbabwe (RBZ) governor, Gideon Gono’s claim that the economy will register positive GDP growth.

“We anticipate a GDP growth of between 3% and 5% this year,” Gono said while presenting his monetary policy statement for the fourth quarter, 2004 on Wednesday.

In his monetary policy statement for the third quarter to September 30, Gono also forecast 2005 GDP growth of 4%.

Economic analyst John Robertson said there was going to be a shrinkage of GDP this year.“The governor’s forecast GDP growth figure of between 3% and 5% totally contradicts evidence on the ground,” he said.

He said there was confusion and uncertainty about government plans in the mining sector, tourism was weak while the manufacturing sector was declining.

Over the past four years, the major contributors to the country’s GDP, namely agriculture, manufacturing and tourism have been in free-fall since government embarked on the controversial land reform programme.

Tobacco production, formerly the country’s major foreign currency earner, has gone down by 58% during the same period.

Maize production has also decreased by 72%, according to the Commercial Farmers Union.

Manufacturing has declined by more than 35%.

At its peak, tourism contributed 6,5% to total GDP while agriculture and manufacturing contributed 16% and 18% respectively.

GDP is one of the key components of measuring the country’s economic performance.

Zimbabwe is in its sixth year of economic recession, which was sparked by the violent seizure of white commercial farms in 2000.

Gono is however optimistic that GDP growth will return to positive territory because of the combined effects of the concessional financing facility and increased foreign currency availability.

He said the rapid decline in inflation and improved confidence in the productive sector would help boost the economy.

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