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FinGaz

      RBZ bites the bullet

      Nelson Banya
      7/22/2005 8:56:52 AM (GMT +2)

      RESERVE Bank of Zimbabwe governor Gideon Gono yesterday increased the
key accommodation interest rate by 20 percentage points and scrapped a
facility for cheap funds extended to exporters last May, as the central bank
moved to staunch resurgent money supply growth.

      The central bank also effectively devalued the dollar by 62 percent,
from $10 800 against the United States dollar at Monday's auction, to $17
500 against the greenback - a 21-fold adjustment from $824/US$ at the
beginning of 2004.
      The exchange rate adjustment amounts to a cumulative 182 percent
devaluation inside three months and should provide relief to exporters who,
however, will now access more expensive funds following the decision on
interest rates.
      "An analysis of Zimbabwe's purchasing power parity using the June 2005
inflation outturn yields a PPP-consistent exchange rate of around $15
000/US$, implying that our exporters are more than compensated for
competitive loss arising out of developments on the inflation front," Gono
said.
      On the interest rate front, the central bank hiked the benchmark
accommodation rate from 160 percent to 180 percent for secured lending and
from 170 to 190 percent for unsecured lending. The key policy rate increase
will see bank lending rates, which currently hover around 185 percent,
rising beyond 200 percent.
      With broad money supply growth ticking up from 177.6 percent in
January to 235 percent by May spawning an attendant increase in inflation,
from 133.6 percent in January to 164.3 percent last month, Gono looked to an
increased cost of funds as well as a reduction in the number of
concessionary facilities to stem the tide.
      Presenting his mandatory mid-term policy statement in Harare
yesterday, Gono said the upward momentum in the rate of inflation was
expected to persist throughout September before tapering off in the last
quarter of the year. He added that the RBZ was still targeting a year-end
inflation rate of about 80 percent despite the recent reversals caused by
high levels of monetary expansion, a 178 percent hike in fuel prices,
drought-induced supply shocks on the food component of the consumer price
index and the cost-push effects of wage and salary pressures.
      "The unfavourable trend is, however, expected to reverse during the
last quarter of the year, with annual inflation still targeted to rescind to
around 80 percent by December 2005. The recent upturn in monthly inflation
is not sustainable and is at variance with the collective vision of
macroeconomic stability. Against this background, monetary authorities will
continue to maintain a tight monetary policy stance over the outlook
period," Gono said.
      Announcing a new regime of foreign currency surrender requirements
that will see exporters getting $17 500/US$, Gono said the exchange rate
adjustment would also result in the 5 percent interest rate for borrowing
exporters falling away.
      "Consistent with this, the current adjustment in the exchange rate
also took into account the previous benefits exporters were deriving from
the 5 percent special exporters' fund.
      "With immediate effect, therefore, the 5 percent borrowing facility
has been set aside, with the exporters' viability concerns now being
addressed through the exchange rate.
      "The 20 percent agriculture facility, however, remains in place."
      Following the government's recent liberalisation of fuel procurement
which has enabled individuals and corporates with free funds to import fuel,
the central bank will, with effect from August 1, allow designated service
stations to sell fuel at an initial price of US$1 per litre, Gono said.
      In the same vein, the central bank has, with immediate effect,
suspended the Import Tracking Control Numbers (ICTN) system, in order to
allow for the free inflow of free funds.
      Turning to the financial sector, which has enjoyed a relatively stable
first half after a tempestuous 2004, Gono said while the sector remained
generally safe and sound, adequately capitalised and profitable, the central
bank would increase minimal capital thresholds with effect from September 30
2006.
      "A comparative analysis of the country's minimum capital requirement
against other supervisory jurisdictions in the region indicates that
Zimbabwe's minimum capital requirements are still far below international
trends," Gono said.
      Commercial banks would, in 16 months time, be required to increase
their minimum capital levels 10-fold to $100 billion, merchant banks,
finance houses and building societies to $75 billion, discount houses to $50
billion and asset managers to $10 billion.

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FinGaz

      Talks: Chissano joins the fray

      Njabulo Ncube
      7/22/2005 9:13:15 AM (GMT +2)

      JOACHIM Chissano has joined the confusing quest for a negotiated
political settlement in Zimbabwe as African Union (AU) chairman Olusegun
Obasanjo's emissary, the former Mozambican president revealed this week.

      Obasanjo has renewed efforts to get President Robert Mugabe and
opposition leader Morgan Tsvangirai of the Movement for Democratic Change
(MDC) to engage in dialogue as a way of resolving Zimbabwe's deepening
political and economic crisis.
      In an interview with the South African Broadcasting Corporation (SABC)
on Monday night, Chissano said he had been approached by Obasanjo to be the
Nigerian leader's special envoy to Harare as the AU renews efforts to break
a costly five-year political impasse.
      Chissano said he accepted the honour bestowed on him by the AU
chairman, adding that he would be in Harare "soon" although no timeframe had
been set.
      "I was approached by President Obasanjo about talking to President
Mugabe. I accepted and will be visiting Harare soon," said Chissano, adding
a fresh dimension to the AU's initiative to coax President Mugabe to engage
the opposition.
      Obasanjo's bid to revive talks between the ruling ZANU PF and the main
opposition party started on the sidelines of the AU summit in Sirte, Libya,
earlier this month.
      Chissano has a warm relationship with the veteran Zimbabwean leader
and was best man when President Mugabe wed his second wife Grace in 1995.
      However, despite public statements by Obasanjo that a meeting between
President Mugabe and Tsvangirai was likely, officials in Harare quickly
water on the possibility, with a government spokesperson reiterating
President Mugabe's statement that his party would only engage the MDC in
parliament.
      President Mugabe has also stressed at rallies since his return that
his government's position regarding talks with the MDC had not changed.
      He told journalists after a rally at the Border Gezi Youth Training
Centre in Mount Darwin on July 15 that there was no way ZANU PF could talk
with the MDC unless the opposition party "becomes nationalistic in outlook."
      The MDC, whose leadership is aware of Obasanjo's renewed attempts to
break the impasse in Harare, flatly denies its political agenda is directed
from Downing Street and Washington.
      President Mugabe is adamant Britain and the US are using the
opposition to effect regime change because he seized white-owned land for
redistribution to landless blacks. Previous attempts by Obasanjo and Mbeki
to get ZANU PF and the MDC to talk have drawn blanks.
      Unconfirmed reports have suggested that Mbeki's newly appointed deputy
president, Mlambo-Ngcuka, who visited Harare a fortnight ago, had also
raised the issue of dialogue with the opposition in her meetings with
President Mugabe and Vice President Joice Mujuru.

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FinGaz

      Inflation jump sends alarm bells ringing

      Rangarirai Mberi
      7/22/2005 9:15:38 AM (GMT +2)

      THE rise in the rate of inflation to June was not unexpected.

      What will send alarm bells ringing though is the sheer size of the
jump and, crucially, how much inflation will heat up further once June's big
fuel price hike kicks in.
      The Central Statistical Office (CSO) last week said inflation had
risen to 164.4 percent in June, 20 percentage points up on the May figure of
144.4 percent. According to the CSO, the rise came on the back of a 4 641
percent rise in postal charges and a 263 percent increase in education fees.
      The disappointing new inflation numbers immediately raised debate this
week as to the few options that remain open to the central bank, still
bravely standing by its audacious year-end inflation target of between 50
and 80 percent despite growing signs that the figure will continue to climb.
      Speculation has immediately followed last week's release of the
inflation report, with many debating over what possible reaction the Reserve
Bank of Zimbabwe (RBZ) might take. The central bank last month remained calm
after May inflation had risen 15.3 percentage points.
      A senior RBZ official told The Financial Gazette then that there would
be no panic as a rise had always been expected, pointing to May comments by
RBZ chief Gideon Gono in which the governor had raised rates "on the back of
the high upside risk on inflation envisaged over the outlook period".
      However, many say that "upside risk" has now panned out into a full
blown scare demanding some sort of policy intervention.
      The calls are based on concern that the increases in inflation have
been getting progressively broader while, in the outlook period, the
prospects look dim.
      Fuel prices rose 180 percent in June, but because the latest figure is
based on a CSO survey from mid-May to mid-June, the fuel price hike has not
been factored in the June numbers but will reflect in the July data.
      Fuel scarcity means companies are sourcing expensive fuel on the black
market, which will raise production costs.
      But business executives say because many are now unable to cut back on
costs any further, the higher production costs will bleed into shop shelf
prices and ultimately feed inflation.
      "Our inflation forecast for the year is at around 200 percent, but
that might be higher," says Luxon Zembe, Zimbabwe National Chamber of
Commerce (ZNCC) president.
      There is an anticipated surge in state spending to fund an unplanned
$3 trillion housing programme. Economists also expect a spike in food prices
spurred by shortages.
      The RBZ used a package of austerity measures to slow inflation down
from the 623 percent to 123 percent in March this year, but inflation turned
back higher in April, rising to 129.1 percent and laying the ground for the
current run.
      Government blames the drought and other outside factors, but critics
blame increased state spending and the fuel crisis.
      The popular reaction to each increase in inflation has always been to
immediately open speculation about a rate hike. Given that the new inflation
level is now some 14 percentage points above the RBZ's indicative 91-day
Treasury Bill rate of 150 percent, it was no different this week, as
speculators spread rumour that the RBZ would have to raise the bank rate
again above inflation.
      But with inflation heading further up, such a policy would mean the
RBZ having to chase every inflation rise with a rate hike.
      A rate hike now would be the second inside three months, an unlikely
option for a central bank that has always sought to pursue a long-term
strategy on inflation.
      Another option, economists say, is leaning on government to ease up on
its spending while also tightening its lending to government. However, given
the political risk that government has taken out on the "reconstruction"
programme, the RBZ would be unlikely to find any success on that front.
      "What they (RBZ) might try to do is hold on to the few things they can
still control," a senior bank executive said Tuesday. "But the options are
very few."
      However, there is not a lot that the monetary authorities still have
in their control. The past six months - and especially the period after ZANU
PF's took a huge majority at the March 31 poll - have seen a hardening of
positions by a bolder government.
      This has left little room for that promised engagement with local
business and international capital that is widely seen as key to tough
recovery efforts.

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FinGaz

      Newspaper industry under siege

      Hama Saburi
      7/22/2005 9:17:35 AM (GMT +2)

      FAR from the glamour of making news headlines, it has not been a
stroll in the park for the local newspaper industry. Just like every other
sector of Zimbabwe's troubled economy, the industry is sailing through
stormy seas.

      And how things change. At the time Jonathan Moyo, the voluble former
government spin-doctor-cum critic was firmly in charge of the state
propaganda machinery, the hostile regulatory regime, parachuted through
parliament in 2002, had become the single largest threat to the survival of
the industry.
      Using the cover of the Access to Information and Protection of Privacy
Act (AIPPA), which in its original form was described by the late former
ZANU PF legal supremo Eddison Zvobgo, as "the most calculated and determined
assault on our liberties guaranteed by the constitution," four newspapers
closed shop not because of viability constraints, but because of the
restrictive AIPPA.
      With the inglorious exit of Moyo - the principal architect of the
much-maligned legislation in February - a new threat has emerged.
      Industry experts said the newspaper industry is under siege from
northward bound operational costs tracking resurgent inflationary pressures
compounded by the fuel shortages that have rendered newspaper deliveries
almost impossible.
      In most instances, critical inputs have ballooned by margins exceeding
the rate of inflation, which reached 164.4 percent last month, ringing alarm
bells for the sector.
      Newsprint has been the largest headache for the industry dominated by
four publishing houses namely The Financial Gazette, The Zimbabwe Newspapers
Group (Zimpapers), which owns The Herald, The Sunday Mail and The Chronicle
among other titles; the Zimbabwe Mirror Newspapers Group, publishers of The
Daily Mirror and The Sunday Mirror and The Zimbabwe Independent Group, which
prints The Zimbabwe Independent and Sunday Standard.
      In the last six months, the price of newsprint manufactured by Mutare
Board & Paper Mills (MBPM) has skyrocketed by an average 160 percent with
printing charges going up by around 70 percent. Relentless cost increases of
other essential inputs such as inks, plates and films have deflated
prospects of an early recovery, leaving industry players with only one
option - cutting down on costs within their control.
      Zimpapers chief executive Justin Mutasa was quoted saying the
country's largest publishing group, which uses 150 tonnes of newsprint
weekly had a couple of strategies up its sleeve to contain the situation. As
of last month, Zimpapers was having to contend with a weekly newsprint bill
of about $2.1 billion.
      "Management is currently working out various options to find a
permanent solution to the problem of newsprint in the country," Mutasa said.
      Industry experts said the sector was at the crossroads. Traditionally
industry players used to tinker with advertising rates to catch up with
burgeoning costs but not anymore. With industry and commerce on its knees,
advertising budgets have been slashed to the barest minimum, leaving
publishing houses in the lurch.
      Alternatively, publishing houses could simply pass on the extra
charges to the reader by reviewing the cover price. Though not a major
revenue centre, there is the threat of consumer resistance. On average,
weekend papers are now fetching $15 000 while the dailies have a $10 000
price tag. Business weeklies are going for as much as $20 000.
      "It is such a delicate balancing act we are having to perform daily
and we certainly cannot continue like this for long," said an industry
expert who declined to be named.
      The industry is divided on the way forward with radicals clamouring
for price controls to keep a tight lid on runaway overheads. The dominant
view is however, that the skewed operating environment is symptomatic of the
decadence caused by the five-year economic recession that has reduced
Zimbabwe into a basket case.
      Lovett Manduku, chairman of the Printing, Packaging and Newspaper
Industry said the industry, which is locked in a deadlock with its employees
over salary increases, has only been able to offer a 20 percent rise against
the 200 percent demanded by the workers.
      "Printing orders have been drastically cut down by over 1000 percent
so obviously short runs are more expensive and have low profit margins. Of
late we have had companies asking for exemption to pay wages, which has
never happened before, but it is now happening. There is also a flight of
skills," said Manduku.
      Nothing short of wholesale improvements in the economic environment
could staunch the bleeding, said analysts.
      Deputy Information Minister Bright Matonga said the main supplier of
newsprint, MBPM, was experiencing problems in accessing foreign exchange
required to import pulp and chemicals and of late has had to change source
markets.
      "It is either they (MBPM) must source cheaper raw materials or they
should re-equip their factories to improve on efficiency and quality," said
Matonga, adding that the ministry could help by lobbying for the industry to
get priority on the foreign currency auction system.

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FinGaz

      Bank minimum capital requirements up 10-fold

      7/22/2005 9:28:43 AM (GMT +2)

      FINANCIAL institutions must increase their minimum capital ten-fold by
September next year, Reserve bank of Zimbabwe (RBZ) governor Gideon Gono has
announced.

      Gono however issued a positive review of the state of the financial
sector, much of which is still trying to find recovery after the turmoil of
last year that claimed six commercial banks and several other financial
institutions.
      "The financial sector is generally safe and sound, adequately
capitalised and profitable over the half year ended 30 June 2005," Gono
said.
      The RBZ head's remarks are in stark contrast to December 2003, when in
his maiden monetary policy statement he reserved his sharpest rebuke for a
then free-wheeling financial sector, described the banking system as "an
accident waiting to happen".
      Under the new banking capital requirements, commercial banks will be
required to lift their capital requirements to $100 billion from the current
$10 billion, merchant banks will raise their capital from $7.5 billion to
$75 billion, the same as building societies and finance houses. Minimum
requirements for discount houses will increase to $50 billion from $5
billion.
      Asset management companies will be required to expand their capital to
$10 billion from the $500 million required currently. Six asset management
companies have gone under this year alone, a sign that unlike the banking
sector, fund management remains well off the recovery path.
      Gono said the increase in minimum capita requirements has been
necessitated by the continuing need to safeguard the safety of depositors.
      "A comparative analysis of the country's minimum capital requirements
against other supervisory jurisdictions in the region indicate that
Zimbabwe's minimum capital requirements are still far below international
trends," Gono said in his mid-term monetary policy statement review
yesterday.
      The ten-fold increase gives an indication of where RBZ believes
inflation will stand in a year's time. The $100 billion figure might seem
large in the current economic environment, but when a rise in inflation is
factored in, most banks are unlikely to struggle to meet the new
requirements. However, if inflation does continue to slow as RBZ
anticipates, then it is also likely that the new requirements might spawn a
fresh crisis in the banking sector as banks scramble to recapitalise.
      Several banks have already rushed to shareholders seeking fresh
capital via rights issues. Kingdom Financial Holdings Limited has raised
$101 billion to recapitalise its banking arm, Kingdom Bank, while NMBZ
Holdings shareholders will meet next week to vote on a proposed rights offer
to raise $100 billion for NMB

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FinGaz

      No more cheap funds for exporters

      7/22/2005 9:29:12 AM (GMT +2)

      THE Reserve bank of Zimbabwe will no longer shield exporters from the
vagaries of rising interest rates, following the withdrawal of a
consessionary financing facility through which they could borrow at 5
percent interest.

      RBZ governor Gideon Gono yesterday announced the measure while
acceding to demands by exporters to adjust the exchange rate. The exchange
rate was adjusted by 62 percent from last Monday's average auction rate of
$10 800/US$, to $17 500 against the greenback.
      Gono said the new exchange rate should restore the viability of
exports.
      "An analysis of Zimbabwe's purchasing power parity using the June 2005
inflation outturn yields a PPP-consistent exchange rate of around $15
000/US$, implying that our exporters are more than compensated for
competitive loss arising out of developments on the inflation front," Gono
said.
      Exporters and farmers were accessing loans at 5 percent and 20
percent, respectively, since the withdrawal of the productive sector
facility through which they could borrow at 50 percent interest at the end
of June.
      "Our consultations with industry players, as well as representative
bodies of exporters over the past quarter led to mutual convergence of mind
on the need to rationalise the support being extended to exporters through
the exchange rate instrument.
      "With immediate effect, therefore, the 5 percent borrowing facility
has been set aside, with exporters' viability concerns now being addressed
through the exchange rate," Gono said, adding that the 20 percent
agriculture facility would remain in place.
      Following another interest rate hike yesterday, exporters will now
access loans at over 200 percent interest. Prior to the latest interest rate
hike, bank minimum lending rates averaged 185 percent per annum.

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FinGaz

      Selected service stations to charge forex for fuel

      7/22/2005 9:29:38 AM (GMT +2)

      SELECTED service stations will, with effect from August 1, be allowed
to sell their fuel in foreign currency at an initial price of US$1, the
central bank has announced.

      Central bank chief Gideon Gono said the move was meant to alleviate
the current fuel crisis, which is dramatised by long, winding queues for the
commodity, as well as to relieve foreign exchange pressure in the market.
      "Over the past few months, the Reserve bank has been conducting
feasibility studies on the possibility of allowing some designated fuel
filling stations to sell their petrol and diesel in foreign currency.
      "With effect from August 1, the motoring public can access fuel at
designated service stations, which will be announced in due course by the
Ministry of Energy and Power Development, through payment in foreign
exchange, at an initial price of US$1 per litre," Gono said yesterday.
      Zimbabwe's six-year old fuel crisis deepened following the March
elections and has reached critical levels in recent weeks, prompting the
government to announce a 178 percent increase in the pump price to $10 000
for petrol and $9 000 for diesel per litre. The authorities have also
relaxed conditions to allow individuals and companies with access to free
offshore funds to import the commodity.
      The shortage has seen fuel prices rising to as much as $70 000 per
litre on the black market.
      According to the central bank, Zimbabwe currently requires 900 million
litres of diesel and 730 million litres of petrol annually to operate at
full capacity, but strained foreign currency resources, at a time when
international oil prices have been rising, has seen the country failing to
import the requisite quantities of fuel.
      The country's total fuel import requirements have risen sharply from
just over US$200 million in 1992 to a projected US$500 million this year,
with an estimated 1.2 million vehicles now on Zimbabwe's roads, against just
over 500 000 in 1995.
      "At a time when Zimbabwe's export performance has remained modest, the
best way forward for the country is to reorient locals to accept the reality
that the country cannot sustain the current demand for fuel.
      "In this regard, there is need to invest in transport infrastructure
and change habits to encourage conservation of fuel," Gono said.

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FinGaz

      Gono sticks to inflation target

      7/22/2005 9:30:01 AM (GMT +2)

      INFLATION will continue to rise in the remainder of the current
quarter, central bank chief Gideon Gono said yesterday, while still sticking
to his year-end inflation targets despite signs of increased pressure on
prices.

      Dropping a heavy hint that central bank will follow a policy of
chasing inflation figures with frequent rate hikes, Gono said the RBZ "will
continue to maintain a tight monetary policy stance over the outlook
period".
      Inflation would rise further up to September, but would slow in the
last quarter of the year to around 80 percent, Gono said yesterday, pledging
tighter money market liquidity management and hinting at further rate hikes
over the near term.
      "The transitory upward momentum is expected to progress through
September 2005, before tapering off in the last quarter of the year," Gono
said.
      The rise in inflation would be driven by the 178 percent jump in fuel
prices effected towards the end of June, wage and salary increments,
increased rentals and monetary expansion, the Reserve Bank of Zimbabwe (RBZ)
governor said.
      "The unfavourable trend is, however, expected to reverse during the
last quarter of the year with annual inflation still targeted to recede to
around 80 percent by December 2005."
      Yesterday's 20-percentage point rate hike is the second inside three
months, after the massive 65-percentage point rate lift of May 19. The
governor also said central bank's policy on the money market would be to aim
for short market positions to keep inflation in check.
      Inflation quickened 20 percentage points in the year to June to 164.4
percent, with month-on-month inflation coming in at 18.1 percent, rising 5
percentage points from May. The RBZ at its May monetary policy review
downgraded its December inflation targets from 20-35 percent to 50-80
percent, hoping a tight monetary policy would subdue an anticipated boom in
money supply.
      RBZ's defiant stance on inflation is apparently underpinned by an
anticipated recovery in industrial output, and a decline in public borrowing
as government completes grain imports. Government borrowing, up 343 percent
year-on-year in May, has driven much of the inflationary pressures, Gono
conceded yesterday. Latest central bank figures show that domestic debt
stands at $12 billion, with May money supply growth at 235 percent.
      Inflation peaked at 623 percent in January last year, before a range
of austerity measures introduced by RBZ reined it in through last year.
However, a rise in April to 129 percent broke the downward trend, and
inflation has managed big jumps since then.

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FinGaz

      MDC to boycott senate elections?

      Staff Reporter
      7/22/2005 9:30:27 AM (GMT +2)

      THE opposition Movement for Democratic Change (MDC) could boycott the
forthcoming senate elections in protest against what the party deems a
unilateral and piecemeal approach to constitutional reform.

      MDC leader Morgan Tsvangirai said there was immense debate within the
party about whether or not it "should give credence to the senate project by
participating in the elections".
      Tsvangirai said the MDC believed that any constitutional amendment had
to be holistic, comprehensive and broad-based.
      "That's why we advocate a truly people-driven constitutional reform.
Why we are opposing these piecemeal constitutional amendments is that
(President Robert) Mugabe is undertaking this project to suit himself," he
said.
      President Mugabe is waiting for the 17th amendment of the constitution
to accommodate ruling ZANU PF loyalists and Sithembiso Nyoni - whose
position as Minister of Small to Medium Scale Enterprises was rendered
constitutionally untenable after she failed to secure a parliamentary seat
within three months of her appointment in April.
      The Constitution of Zimbabwe Amendment (Number 17) Bill that seeks to
provide for the reconstitution of Parliament as a bicameral legislature
consisting of a House of Assembly of 150 members and a 66-member senate, was
gazetted last Friday by the government.
      Debate within the MDC is split over participation in the elections,
which would be interpreted as a tacit endorsement of the constitutional
amendments, or boycotting at the risk of ZANU PF going it alone.
      The ruling party, which needs a two-thirds majority in Parliament to
amend the Constitution, agreed at an extraordinary session of its inner
cabinet to set up a senate.
      Of the 66 senators, five would be elected in each of the 10 provinces,
plus the president and deputy president of the Council of Chiefs and eight
chiefs elected by the council to represent eight non-metropolitan provinces.
      President Mugabe has the prerogative of appointing six senators
ostensibly to represent special interests groups such as the new farmers.

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FinGaz

      NSSA, ZANU PF chefs clash over TeleAccess

      Staff Reporter
      7/22/2005 9:14:13 AM (GMT +2)

      A SHOWDOWN is looming between the National Social Security Authority
(NSSA) and some influential ZANU PF bigwigs opposed to a massive
telecommunications project being considered for funding by the national
pensions scheme.

      The Financial Gazette can reveal that two NSSA board members were
approached by named ZANU PF heavyweights to stymie the TeleAccess Zimbabwe
deal that had passed through preliminary investment approval stages and now
awaited board consideration.
      TeleAccess, controlled by Daniel Shumba of the Systems Technology
fame, is in the market to raise $210 billion needed to roll out the
country's first privately-owned fixed telecommunications network to rival
state-run Tel*One.
      The cash-rich NSSA, on the prowl for lucrative greenfield investments,
is among local investors earmarked to back the stalled project, licensed in
2000 after a year-long wait.
      Government sources said some ruling party bigwigs were against the
funding of TeleAccess because its project promoter, Shumba, was involved in
the Tsholotsho debacle that was meant to change the make-up of the ZANU PF
presidium, it is alleged.
      The TeleAccess boss is one of the six ZANU PF provincial chairmen
suspended for five years last year ahead of the ruling party congress for
attending a function in Tsholotsho that was not sanctioned by the party.
      Political interference is cited among the major contributing factors
to the poor financial shape synonymous with the country's loss-making state
enterprises.
      NSSA chairman Edwin Manikai denied "official" interference when
contacted for comment this week but admitted some board members had been
approached.
      Manikai said TeleAccess' papers would be treated just like any other
commercial transaction regardless of agendas of individuals or groups. He
added that his board had resolved to shut out attempts to influence the due
processes.
      "There has been no official interference as such and by that I mean
written communication to me as chairman. The mode of interference would be a
directive and I have not received that," said Manikai. "There is an
interest, which interest has come to the attention of the board and board
members have been contacted by people making inquiries about the TeleAccess
proposal. I am not surprised because the project is significant and of
national interest as it was approved by Cabinet and I am not surprised by
the lobby," he added.
      Manikai said NSSA was a national institution which did not belong to
individuals. He said his board was resolute on protecting NSSA's integrity
and ensuring everything was done in the best interest of the authority.
      "What is right will stand firmly today, tomorrow and over time," he
said, adding the labour ministry has been very supportive of his board "and
I have no doubt the spirit will prevail over everything else."
      In terms of the private placement, TeleAccess will issue 500 million
ordinary shares valued at $350 billion to the new investors. In the post
transaction period, Distinguished Ownership Investments, the majority
shareholder, will reduce its stake from 98.5 percent to 78.8 percent.
      New investors would have a combined 19.96 percent with the balance
owned by Hirider Investments.

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FinGaz

      Frustration creeps into MDC, says Tsvangirai

      Njabulo Ncube
      7/22/2005 9:14:44 AM (GMT +2)

      MOVEMENT for Democratic Change (MDC) president Morgan Tsvangirai this
week admitted frustration was beginning to creep into the opposition party's
ranks amid a restructuring initiative ostensibly designed to refocus the
party.

      Tsvangirai, who recently dissolved the MDC's shadow cabinet in a move
critics interpreted as a sign of a crisis within the leadership, now
effectively oversees the day to day operations of the party.
      Party sources said that a major source of internecine conflict in the
MDC has been the extent of power wielded by the party's top six officials -
Tsvangirai, vice president Gibson Sibanda, national chairman Isaac Matongo,
secretary-general Welshman Ncube, his deputy Gift Chimanikire and national
treasurer Fletcher Dulini-Ncube.
      Investigations this week revealed that Tsvangirai had decided to
expand his standing committee from the top six to include four new
groupings - the political, economic, resistance and international
committees.
      In an interview with The Financial Gazette this week, Tsvangirai, who
defended the restructuring exercise, said more changes were in the offing,
but categorically denied the exercise was intended to thwart any opposition
to his leadership at the party's national congress, to be held early next
year.
      "I am not under threat from anyone within the MDC. It is wishful
thinking by the enemy to try and destabilise the MDC. I can understand the
fears of the people about me being a dictator. We can't create another
Mugabe in Tsvangirai. But I think I am within my rights to do certain things
because the buck stops with me," said Tsvangirai.
      "The changes that are being implemented and those that are imminent
are born from the fact that we have not achieved what we set out to achieve
at our formation about five years ago," he said, adding that failure to
wrest power from President Robert Mugabe through the electoral route had
resulted in frustration within the party, especially among the youths.
      "Instead of looking at the enemy (ZANU PF), our people are looking
within. There is frustration. The electoral route has proven to have its
limitations hence our decision to engage a consultant to help the party
devise new strategies to engage the enemy. We have taken very bold measures
to reposition the party from what it was five years ago," said Tsvangirai.
      "I personally think stayaways or mass actions are an exhausted
strategy. What is imperative is for the MDC leadership to regain the
confidence of the people and go back to the resistance mode. It is not about
winning power through an election anymore. The people and the leadership
must realise they are no longer living in the comfort zone. The MDC's
challenge now is to be relevant to the expectations of the people," he said.
      Party insiders confirmed this week that the restructuring exercise has
created uncertainty within the party's organs as the veteran trade unionist,
himself under immense pressure following three consecutive electoral losses
to President Mugabe's ruling party, has indicated there would be no sacred
cows.
      The Financial Gazette has it on good authority that the party's
national executive has approved the hiring of an independent political
consultant to assist with the restructuring of the party as well as to draw
up fresh strategies to wrest power from President Mugabe.
      The party would also map out strategies to tackle the challenges posed
by the closure of democratic space due to a set of allegedly repressive laws
passed by the ZANU PF-dominated parliament.

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FinGaz

      Govt shoots itself in the foot again

      Njabulo Ncube
      7/22/2005 9:17:00 AM (GMT +2)

      AT a time when President Robert Mugabe's government is under the
microscope over the roundly condemned demolition exercise that has sparked a
humanitarian crisis of alarming proportions, the government-appointed Media
and Information Commission (MIC) has once again refused to grant operating
licences to two independent media groups, an action analysts view as a
devastating blow to media diversity and freedom of expression.

      With the African Union (AU) understood to be preparing a defence for
Harare to prevent the humanitarian crisis unfolding in the country put
before the United Nations' Security Council, the MIC on Monday came up with
the same old flimsy arguments and reasons to deny the ANZ, publishers of The
Daily News and its sister newspaper The Daily News on Sunday operating
licences.
      The denial of a licence to the ANZ comes hard on the heels of a
similar refusal to The Tribune, whose publisher Kindness Paradza is a former
ZANU PF legislator who allegedly earned the wrath of the ruling party after
he had the temerity to criticise the Access to Information and Protection of
Privacy Act (AIPPA).
      Analysts who spoke to The Financial Gazette this week said the
paranoid government had again shot itself in the foot with its latest act of
arrogance at a time when Harare was still battling to convince the world,
especially the UN and international pressure groups, that there was no
humanitarian crisis in the country.
      They said the seemingly flagrant violation of freedom of expression
worsened Zimbabwe's standing in the West, Commonwealth, the European Union
and other influential international bodies baying for the further isolation
of Harare. The MIC's actions also did not augur well for South African
President Thabo Mbeki's renewed bid to solve Harare's crisis.
      It is understood Mbeki, whose government is reportedly toying with the
idea of offering Harare a soft loan aimed at bailing out Zimbabwe from its
crippling fuel crisis and mounting debts to the international community, has
put the repeal of repressive media laws as one of the pre-conditions for the
soft loan being allegedly sought by the Harare authorities.
      The denial of operating licences to the ANZ and The Tribune comes amid
concerted efforts by the Zimbabwe Union of Journalists (ZUJ) to improve
relations between the government and the media, which had been greatly
poisoned since 2000.
      In denying the ANZ a licence, Tafataona Mahoso, the chairman of the
MIC, said the group had circumvented existing legislation by deliberately
contravening some sections of the controversial AIPPA by, among other
things, publishing The Daily News without a registration certificate.
      "Having found that the applicant contravened Sections 66, 72, 76 and
79 (6) of the Act, the application for registration is hereby denied," reads
part of Mahoso's determination, which has sent alarm bells ringing among the
country's media watchers and analysts.
      The MIC, cherry-picked by former information and publicity minister
Jonathan Moyo before his fall from grace, ruled that ANZ's contravening of
Section 66, which deals with registration of mass media services, was
inexcusable.
      "In addition, the applicant (ANZ) continued publication after the
Supreme Court judgment also confirmed applicant's determination not to
submit to the registration requirement. The excuse that the service of the
Supreme Court judgment on the applicant was delayed was not acceptable in
view of the fact that the illegal publication also carried a story about the
same judgment," said the MIC.
      Chakanyuka Bosha, the ZUJ national coordinator, said the journalism
fraternity had been taken aback by the decision of the "wrongly" constituted
MIC at a time when the organisation was attempting to mend fences with the
government.
      "We (ZUJ) are shocked by the latest development, we had hoped the MIC
realised the need for media diversity in the country and allowed The Daily
News to resume publication," said Bosha. "The ANZ stable is a crucial
alternative voice to media pluralism in Zimbabwe. The decision arrived at by
the Commission is harsh especially if you consider that it's coming from a
wrongly constituted media body," added the ZUJ official.
      According to AIPPA, one of the members of MIC should be from a
journalists' union, a requirement largely ignored by the government when it
cherry-picked MIC commissioners.
      Attempts by former minister Moyo to coax certain journalists to join
the commission came to naught after it was realised they were not members of
ZUJ or the Independent Journalists Association of Zimbabwe (IJAZ).
      Other analysts said they viewed Mahoso's refusal to licence the ANZ,
whose former majority holder was Econet boss Strive Masiyiwa, as a political
decision.
      In denying The Tribune a licence last week, Mahoso claimed the
publishers had not proved that they had enough capital to sustain the
business and that the publisher planned to operate from his home upon being
granted a licence.
      The Tribune's operating licence was suspended for a year in June last
year after Africa Tribune Newspapers (ATN), the publishing company, failed
to notify the MIC of the change in ownership from Ukubambana Kubatana
Investments.
      Tribune publisher Paradza has vehemently denied Mahoso's charges,
saying as far as he was concerned the publishing company had met all the
requirements needed to be re-registered in terms AIPPA. Mahoso had added
that Paradza's proposal to operate from his house would be in contravention
of the Harare city council by-laws.
      "All I told the commission was that our assets were being kept at my
home. I never alluded to the fact that I wanted to operate the business from
my home. Our submissions are clearly recorded in black and white," Paradza
said in a statement to MISA-Zimbabwe.
      "The issue of whether we had enough capital to resume operations does
not arise as there are banks that are willing to loan us funds for the
re-capitalisation of the project."
      MISA-Zimbabwe has also condemned Mahoso's refusal to licence both the
ANZ and The Tribune. "That The Tribune has no permanent offices at the
moment is the making of the MIC and the same body cannot therefore refuse to
grant a licence on such flimsy grounds," said MISA-Zimbabwe in a statement.
"The operations of the MIC over the past three years indicate it has failed
to develop the media or demonstrate its impartiality where it concerns the
need for media diversity in Zimbabwe. This bolsters the growing number of
voices branding the MIC a partisan and unnecessary body whose sole existence
is merely to cause suffering and worsen the plight of Zimbabwe's media
workers and owners at the expense of the reading public which is dying for
alternative sources of information," the statement said.
      The Zimbabwe National Editors Forum added its voice in condemning the
MIC's ruling on the ANZ, with forum chairman Iden Wetherell reiterating
calls for the abolition of the regulatory body.
      "It is a shocking - if predictable - decision, which should be seen as
part of a wider attempt to limit criticism of the regime as it fails to cope
with the manifold crises its misrule has spawned. The repeal of AIPPA and
abolition of the MIC must be the first priority of any talks on the
restoration of democratic rule," Wetherell said.

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FinGaz

      IMF debt payment to be speeded up

      Rangarirai Mberi
      7/22/2005 9:27:33 AM (GMT +2)

      ZIMBABWE will speed up repayment of its debt to the International
Monetary Fund (IMF), Reserve Bank of Zimbabwe governor Gideon Gono pledged
yesterday, a day after an IMF spokesperson confirmed August 16 as the day
Zimbabwe's future in the fund would be decided.

      Gono said Zimbabwe had been increasing repayments to the global lender
for more than a year, and would further raise repayments over the coming
months.
      "Over the past 18 months Zimbabwe has progressively escalated its
repayments to the IMF from US$1.5 million per quarter to the current level
of US$9 million per quarter, giving a cumulative total repayment of US$36.6
million," Gono said.
      Frances Harden, a spokesperson for the IMF, said in Washington on
Wednesday that the IMF board would discuss Zimbabwe's case next month, after
the expiry this month of a six-month grace period that the IMF gave the
country in February after Harare pledged to up its repayments.
      Zimbabwe's arrears to the IMF stand at US$306 million, 57 percent of
its IMF quota. Deepening economic trouble has seen Zimbabwe fail to repay
the loan, resulting in its voting rights being suspended and the IMF
beginning a process to expel the country from the fund last year.
      However, yesterday Gono said Zimbabwe remained committed to healing
all strained relations with international finance groups and foreign
investors, whose withdrawal from Zimbabwe has left the country facing
worsening foreign currency shortages.
      As part of attempts to coax external capital back to Zimbabwe, Gono
said Zimbabwe needed to honour all bilateral investment protection
agreements with foreign governments in order to reassure sceptical
investors.
      Despite the real threat that Zimbabwe could become the first country
to be expelled from the IMF, Gono sounded optimistic yesterday that
relations would be restored in time to avoid expulsion, pointing to last
year's meeting between President Robert Mugabe, traditionally a strident
critic of the IMF, and Abdoulaye Bio-Tchane, the IMF's director for the
Africa department.
      An IMF delegation that held consultations in Harare in May painted a
dim view of the future of Zimbabwe's economy, saying the country needed to
institute "a comprehensive policy package that should include decisive
action to lower the fiscal deficit, a tightening of monetary policy, and
steps to establish a unified, market-determined exch-ange rate."
      It added: "A rebuilding of relations with the international community
is a critical part of the effort to reverse the economic decline."

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FinGaz

      No questions on free funds, Gono promises

      7/22/2005 9:27:59 AM (GMT +2)

      HOLDERS of free funds from offshore sources will, with immediate
effect, be free to bring in productive imports "on a no questions asked
basis", central bank chief Gideon Gono said yesterday.

      An acute shortage of foreign currency underpinned by a drastic
reduction in exports and general economic activity has seen Zimbabwean
authorities assuming stringent controls in trying to deal with a blossoming
informal market for foreign exchange.
      However, the chronic shortage of fuel - among other basic
commodities - has seen the government relaxing conditions for holders of
free funds to allow for the importation of critical requirements.
      "In order to allow for the free inflows of free funds which, for one
reason or the other, found their way into offshore markets, the Reserve Bank
is pleased to announce that the programme of Import Tracking Control Numbers
has been suspended with immediate effect.
      "The Reserve Bank's exchange control unit will, however, continue to
carry out close surveillance to ensure that holders of corporate FCAs
(foreign currency accounts) do not abuse the privilege by importing trinkets
at the expense of essential productive usage of foreign exchange resources,"
Gono said.
      Several Zimbabwean businesspeople and firms have, over the past year,
run into trouble with the law over alleged exchange control violations.
      Former finance minister Christopher Kuruneri, who has been in remand
prison for over a year, is on trial facing charges of externalising foreign
currency used to develop real estate properties in South Africa. Kuruneri,
who denies the charges, insists he used his free funds earned from
consultancy work abroad to develop the properties.
      Other businessmen, mainly bankers, have fled the country after alleged
exchange control violations.

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FinGaz

Comment

      Sense of déja vu

      7/22/2005 9:49:22 AM (GMT +2)

      THE spectre of yet another failed agricultural season, especially
caused by human error, is frightening to say the least.

      It would provide a perfect backdrop to a tragic and disastrous failure
of small-scale commercial agriculture with devastating consequences on local
economic pride and promise. But we have a strong sense of déjà vu as we inch
towards the rain season.
      Perish the thought because another poor agricultural season's
consequences on the enfeebled economy will be, for want of a better word,
incalculable. Traditionally the backbone of the economy, the agricultural
sector is at a crossroads. Hence Zimbabwe's bread-basket-turned-basket-case
tag. This is mirrored in the shrunken state of the economy. The erstwhile
resilient economy is inevitably caving in having lurched from one crisis to
another over the past five years. We cannot overemphasise the fact that
agriculture fires the local economy. Returning it to the pre-crisis levels
will therefore certainly soothe the economy's running sore.
      We say so because agriculture had, prior to the crisis, the single
biggest sectoral contribution to the country's gross domestic product. Then,
Zimbabwe was a reliable regional breadbasket, which position we yearn to
return to. It had a robust agricultural sector that anchored a reassuringly
resilient and relatively stable economy - which stood in stark contrast to
the stagnation and misery obtaining in its eastern and northern neighbours
and indeed the rest of the so-called Third World.
      But now, with its food security situation in the most precarious
position ever, the country cuts a different image. It has been reduced to a
basket case characterised by a lingering contagion of uncertainty while the
economy, previously seen as one of the strongest in Southern Africa, has
been pushed to historic contraction.
      The most frightening thing though is that, even if mother nature does
not send its worst in the form of devastating droughts, the worst-case
scenario alluded to earlier could just become a reality given the
uncertainty surrounding the availability of agricultural inputs.
      While maize seed could be available on the back of leftovers from last
season where the uptake was low for obvious reasons, the government has to
urgently ensure that the country has adequate stocks of other inputs such as
fertilisers and chemicals. Shortages of these critical inputs, which could
impair the quality of crops, have been with us for a long time now.
      It is worrying that they have spilled over from three seasons ago
without any contingency plans being put in place to ensure their
availability. We have voiced our concerns time without number but the
problem keeps on recurring. This boggles the mind given that government had,
at independence, identified land reform as the best way of intervention for
guaranteed food security and economic empowerment.
      We are not going to be swayed by arguments that the country has
suffered biting foreign currency shortages. While this is a fact, it is also
true that the problem of agricultural input shortages has, as already
pointed out, been with us for some time now. If government was not just
politicking and truly believed that the land is the economy and vice-versa,
why then did it not, over the years, slowly build something like a rainy-day
fund - a special purpose vehicle to guard against such eventualities?
Doesn't this boil down to a question of priorities?
      Be that as it may, we believe that there is no point in raking over
the ashes. Suffice to say that for the nation not to be caught asleep at the
switch once again this year, the government has to deal with what is fast
becoming a perennial problem and now. It would be a tragedy if we were to
have a repeat of what happened last year when most farmers got the inputs
when it was too little, too late.
      This should galvanise the government to make sure that the land reform
programme improves the economic standing of most of those who benefited from
the exercise, ensure their social protection, add value to the national
economy as well as guaranteeing food security.
      This can only be possible if those running the country's agriculture
strive to find a modus vivendi with key stakeholders by acknowledging that
the days of scapegoating and accusing maize seed and fertiliser companies of
sabotaging the economy are numbered. Indeed Zimbabwe needs a fresh approach
because the current one is not working.
      The government should not, as it has done in the past, be obsessed
with driving a hard bargain when it comes to the agricultural input price
war by talking at cross purposes with input producers. These producers just
want to continue operating above the red-ink line.
      Government must therefore tread very carefully and in good faith this
time around. It should be realised that fed up with the government's
strong-arm tactics, where it forced seed houses to sell their products at
uneconomic prices, the producers scaled back on their production in Zimbabwe
and instead bolstered production at their operations dotted around the
region. Zimbabwe does not need to be reminded of the consequences of that
development. We have already talked about how most of the new farmers have
been left devastated with a psychology of impotence and pessimism against a
background of biting inputs shortages.

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FinGaz

      AND NOW TO THE NOTEBOOK.....

      7/22/2005 9:53:13 AM (GMT +2)

      Chokwadi
      CZ is happy that very soon, just after Operation Murambatsvina and
Operation Garikai, one other operation that is coming is Operation Taurai
Chokwadi.

      Wonderful, isn't it?
      This operation will make it a point that all Zimbabweans tell nothing
but the truth. Yes every Zimbo, no matter who they are and what they do.
Whosoever breaks this truth code will find themselves at Caledonia Farm, or
they will end up moulding bricks at Whitecliff.
      Well, well, well, hopefully CZ will not find himself there - together
with Pius Ncube, Lovemore Madhuku, Greatmore Chatya, Cde Made, Cde Pats, Cde
Tazzen, Cde Obadiah, Cde Wayne, Cde Timbe, Cde Kunonga et al.
      When a public official tells the nation that there is more than enough
fuel when it is not true, he will find himself at Caledonia. If Cde
Sithembiso Nyoni tells people that Mupedzanhamo will be open tomorrow, and
it does not open, she will find herself at Caledonia. Same with you! Don't
say you were not warned!
      Fidza
      Zimbos are still wondering whether Cde Fidza really granted that juicy
interview to that British tabloid, The People. What else can they do but
wonder especially now that the man can no longer answer any question without
including a verse from the Bible.
      CZ wonders how Cde Fidza's family and friends are coping with this
new-look man, because from the look of things, even if he is asked his name,
age and sex, he is no longer capable of answering. Instead, he is quick to
refer to one or two verses in the Bible.
      Last weekend, what was supposed to be a simple interview with The
Herald failed to achieve the basic purpose of an interview . . . the man
could not give any information what so ever. It was a sorry apology for an
interview?
      From the look of things, it appears that questions were sent to him
and he sub-contracted some notorious pretender at this outfit calling itself
Destiny for Africa Network to answer the questions for him. Otherwise there
is no way a new born-again Christian can have so many chapters and verses at
their fingertips.
      We have seen the same trick from people like Mike Tyson before, so we
are not at all amused. CZ would like to tell his brother that it is not
advisable to use God's name in vain.
      Agreement
      If there is one thing that CZ and his brother-in-crime Wood-pecker are
in agreement about, it is the treatment that this Professor who was once
(mis)information minister should get from the media. No oxygen of
publicity - period!
      The man got a chance to show what he is capable of doing given a
little more power and he did exactly that! So where are all these illusions
coming from?
      And what is this that CZ's getting? That Woodpecker could be in hot
soup over his recent pot shot at the professor? Jesus God! Hopefully there
is no iota of truth in this rumour.
      This professor man should be smiling all the way to hell following the
recent denial of publishing licences to The Daily News and The Tribune. He
should be as happy as a puppy with two tails. It's all his brainchild. His
legacy.
      Never mind the hypocrisy by the new tenants at the information
ministry that they are going to loosen up the criminal media laws!
      Status
      This one came from one of CZ's fans. The fellow is upset about the way
some of us choose to behave. There he is:
      Recently, I went into this bar. One of these seedy bars in one of
Harare's noisy high-density suburbs. Just to get one bottle of these
"precious waters of wisdom". You know, it is very important for a family
man. A father has to look wise every time he gets home otherwise he is just
as good as no father at all!
      "How can a married man not drink and retain his sanity in this world?"
my grandfather always used to ask every time my grandmother complained about
his suicidal drinking habits.
      I needed just one bottle. I needed some wisdom before getting home to
explain why, as the man of the house, I could not afford the family a simple
holiday trip to the village. You know with beer it starts off as one . . .
then the last one; then the last, last one; then the final last one; the
very final last one . . . until the following morning! This beer thing!
Whoever introduced it should be hanged!
      I then decided to visit the gents. The place was somewhere at the back
of the confusion that we have the effrontery to call a pub.
      I rushed there. It was important. I had to shake my best friend like
yesterday. This beer business!
      As I was getting out of the place - which stank to high heaven - I
couldn't believe what I saw. This "gentleman" who had always been strutting
around the bar with a can of Castle lager was replenishing it. Guess where?
At the tap outside the stinking men's place. Yes, I caught him "red-handed"
pouring tap water into the can because he did not want people to know that
he was as broke as a snake.
      He could not stay at home and watch ZTV because everyone would know
that he was broket. He could not drink the ordinary bottled beer because he
could not afford it. And besides, it was not good for his "status." So he
had to do something to maintain this "status."
      There are so many of us who are right now living a lie. Just too many
of us that it is actually embarrassing for us to ever talk about it.
      Why would a man in his right senses who knows that he has only $60
000, enough to drink about three quarts, decide to go all the way to some
funny and crazy club where he will only be able to drink two pints? Is the
beer honestly different? Or is it this thing about status - what one thinks
he is, which he is in fact not?
      Or why would a woman in full control of all her mental faculties
pretend she can't speak fluent Shona because she grew up in Harare, when her
English is even more execrable? Or talk as if she has a clothes peg on her
nose?
      What is wrong with our thinking that we get so obsessed with this
false belief that there are people who are always watching us . . . people
who hold us in high esteem . . . people whom we have to impress?
      Is it this inferiority complex that we grow up with that makes us
think if we do things to show-off - even where we can barely afford it-we
can shrug off our poor backgrounds and be new persons altogether? New
persons with a noble background in a superior class?
      And at the end of it all, what do we get from it all? Nothing. If
anything, we are in trouble . . . neck-deep in debt we have no capacity to
pay . . . because at one time we had to appear like people of class!
      Shameless feeling of shame, can we call it? Being ashamed of ourselves
that we wish we were not ourselves. So ashamed of ourselves that our women
become virtual denizens of hair salons and "beauty" parlours dying to make
themselves look at least like an ugly white woman.
      We are so ashamed of our selves that we even try to sugar coat our
backgrounds . . . you come from Mrewa, you were born under a tree, went to a
rural school from grade one to four etc . . . but all this is doctored to
something else . . . Marlborough, Belvedere Maternity Hospital, Queen
Elizabeth, Girls' High, London, US . . . etc, etc. Status!
      At times you can see clearly that someone is really struggling to make
ends meet . . . but from the peanuts they earn, more than half goes to pay
rent for a room - only one room for that matter - in Borrowdale, Greendale,
Highlands . . . any such places because there is status to maintain!
      Our children can no longer have names with meanings . . . because you
would look like a lowly, lowly person. A person of no substance. No status.
      But why do people die to live a lie? Why do we stress ourselves so
much about things that we know are way beyond our reach? Why do we lose
sleep over useless things?
      There is nothing wrong with having dreams, no matter how vaulting they
might be, but to dream to a point of living that dream is something else.
Isn't it?
      Surely what this status thing will bring to this land really wears a
hat!

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FinGaz

      Pensions hike to leave govt in fix

      Own Correspondent
      7/22/2005 9:57:44 AM (GMT +2)

      A PROPOSED 300 percent increment in pensions for former civil servants
looks set to complicate the government's fiscal equation ahead of the
expected supplementary budget.

      Already, the government faces massive unplanned expenditures in the
form of the reconstruction programme following the demolition of shantytowns
and informal vending sites, as well as relief aid following a huge food
deficit.
      Sources in the Ministry of Public Service, Labour and Social Welfare
told this paper that the government has approved a 300 percent increment in
pensions payments to former civil servants in an effort to adjust their
earnings to inflation levels.
      Statistics released by the Central Statistical Office (CSO) last week
indicate that the rate of price change, which started shooting up after
parliamentary elections in April this year, had reached about 164.3 and 13.1
percent in June, on a year-on-year and month-on-month basis, respectively.
      The sources confirmed that prior to the approved increment, a majority
of government pensioners were earning far below $100 000 per month, implying
that taken against inflation, these long-range lenders were incurring a loss
of staggering proportions on their life savings and investments.
      Deputy Finance Minister David Chapfika professed ignorance over the
issue when this paper asked him whether the supplementary budget, expected
this week, would commit some funds to finance these unplanned expenditures.
      "I don't know about that. What I know is that an increase in pensions
will have to be based on earnings. Where would that money come from?"
Chapfika asked.
      John Robertson, an economic analyst, said the fiscal spill caused by
unplanned pension hikes and a host of unbudgeted expenditures, would have to
be covered by the supplementary budget.
      "All government pensions have been adjusted for inflation. As a
result, some pensions have increased from about $100 000 to about $3
million.
      "This is a positive move because pensions had remained stagnant for
too long, even as inflation was leaping. This discourages savings. The
increment will cushion the savers and investors from the bite of inflation
and make them less poor. But a lot more needs to be done to encourage
savings and investments," he said.
      The government this month admitted that populist policy actions,
particularly Operation Garikai - an unplanned mass public housing programme
launched to compensate its demolition of shantytowns - has, in combination
with a bloated cabinet and the crushing drought, landed it in a fiscal mess.

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FinGaz

      Ministers not singing from same song sheet

      7/22/2005 9:50:50 AM (GMT +2)

      IT never ceases to amaze me that some government officials seem
genuinely perplexed over the widespread condemnation of Operation
Murambatsvina/Restore Order and the scepticism shown towards its belatedly
and hurriedly conceived twin, Operation Garikai/Hlalani Kuhle.

      And yet there is so much that is incongruous, contradictory and
illogical about the way these exercises were embarked on that the officials'
failure to appreciate the negative reactions they have sparked is a cause
for concern. Instead of trying to force the tedious hype surrounding these
operations down the nation's throat, government ministers should stop to
reflect. They would discover that they do not seem to be singing from the
same song sheet. Each time an official opens his or her mouth to speak about
these operations, the public learns something more disturbing and
confounding.
      For example, after almost three months of being told that the clean-up
exercise was a well planned and thought out initiative that the government
had conceived ahead of the sudden swoop on vendors and informal traders in
Harare, the truth has finally surfaced. About two weeks ago, Finance
Minister Herbert Murerwa let the cat out of the bag when he told parliament
that no budgetary provision was made for Murambatsvina prior to the sudden
announcement that $3 trillion would be allocated for Operation
Garikai/Hlalani Kuhle. Said Murerwa: "It is very clear that when we
announced the 2005 budget, we had not anticipated this programme."
      Murerwa pointed out that some aspects of the previously announced
budget would now have to be "re-prioritised", which could be bureaucratic
speak for something more serious. The adjustments that have to be made to
accommodate the new expenditure could mean that some sectors such as health
and education deteriorate even further because of lack of funding.
      The sum of $3 trillion being earmarked for Garikai/Hlalani is not
peanuts by any standards but quite a lot of tax dollars. It does not inspire
public confidence in the government's fiscal prudence to see such a large
amount of money being allocated on impulse. It is particularly inexcusable
for the government to resort to this haphazard way of doing things when it
has had its fingers burnt before. It shows that no lessons have been learnt
from similar spur of the moment decisions in the past such as the awarding
of unbudgeted pensions and gratuities to war veterans and the chaotic
implementation of the land reform programme.
      The nation first heard about Garikai/Hlalani Kuhle shortly before the
arrival of United Nations Secretary General Kofi Annan's envoy, Anna
Tibaijuka in Zimbabwe. Her mission was to assess the humanitarian
implications of Murambatsvina under which the government rendered hundreds
of thousands of people homeless by demolishing their houses. Tellingly,
however, the hustle and bustle that was so much in evidence during the UN
envoy's two-week visit has died down. Most of those deprived of a roof over
their heads three months ago are still sleeping in the open.
      The question the defenders of this exercise need to ask themselves is
why the government has put the cart before the horse every step of the way
in implementing it. Surely, if these were well thought out plans, the
government would have provided alternative temporary accommodation before
embarking on its demolition spree. As things stand, it is a cruel taunt to
call the (so far) phantom reconstruction programme Garikai/Hlalani Kuhle
when the people displaced by Murambatsvina are unlikely to have proper homes
again for the foreseeable future. Where does the government expect these
people to live until the four model houses being displayed endlessly on
television miraculously transform into sprawling suburbs.
      The government will have a hard time convincing the world of its good
intentions as long as it persists in refusing to acknowledge the most
fundamental flaws in its approach - its failure to recognise that no
initiative is worth the trouble if it dehumanises the supposed beneficiaries
and results in the violation of their rights. You can destroy structures and
clean up later but you cannot criminalise and degrade fellow human beings as
a prelude to building them better houses. It simply does not make sense.
      Moreover, Zimbabwe, which has one of the lowest slum rates in Africa
according to Tibaijuka, did not have to go headlong into the destruction of
so-called illegal structures. With a proper plan based on a genuine desire
to improve the lot of the people, Garikai/Hlalani Kuhle could have been
implemented in phases with beneficiaries moving into new houses prior to the
destruction of their shacks. It is instructive to note that countries such
as Kenya have not destroyed the sprawling slums in their urban areas. The
government officials must have realised that it is the lesser of two evils
to allow their people to have roofs over their heads than to throw them out
without having alternative accommodation in place.
      In a few months' time the rainy season will be upon us. The hundreds
of thousands of displaced Zimbabweans who have borne the brunt of this
winter out in the open will then have to endure soaking conditions under the
same circumstances.
      How can government ministers continue to feel at ease in their own
minds when all this is happening? It does not matter how hard they try to
pretend that everything about Garikai/Murambatsvina is a bed of roses. There
is something seriously wrong when a disaster plan is needed to mitigate
against the negative effects of the implementation of a programme that is
touted as being people oriented.

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FinGaz

Letters

      What has happened to my beautiful country?

      7/22/2005 9:32:26 AM (GMT +2)

      EDITOR - I am the son that came to the UK to study. The same son that
regrets everything at this present moment.

      My mother back there at home tells me she can't afford money to buy
bread anymore.
      So while I work and raise money for my studies, my rent, and expensive
food, I also have to worry about whether my mother actually has enough to
eat. My heart bleeds.
      Somehow I feel guilty that I should be there with her in these times
of trouble. I feel saddened when I can buy two loaves of bread with a single
pound while she has to carry thousands with her. While she waits in the
queue to get it, I have nobody else in the shop at times at all.
      Is this what this government has reduced my country to? Do they
actually sleep better at night and think "argh, we are great leaders, and
all is good"? It is there for everybody to see.
      My mother tells me things like salt cannot be found at times. The
cheapest commodity on earth. And dont even get me started on petrol. Her car
has been parked for ages in the garage. Does my mother have to queue and
toil for everything all her life?
      People ask me at college and at the workplace whether I can't wait to
get home when I graduate . . . unfortunately not. I'm scared. What with the
overzealous policemen that I see on TV demolishing houses, and the shocking
levels of inflation.
      It will be good to be back home, don't get me wrong. I can't wait to
give my mother a big hug, speak Shona for a whole day for a change, and eat
sadza and macimbi etc. It's the political situation and the country sinking
to its knees that is killing all the good things I have to look forward to
when I am back home.
      I'm absolutely certain that even if I came back with my law degree I
still will have to queue for bread and fuel on a daily basis.
      I pray for my mother, all the mothers around the country toiling to
feed their families on a daily basis, my fellow Zim students facing
hardships at the local institutions, and everybdoy else.
      My heart bleeds for you. I have tears in my eyes as I write this
because all I can think of is the million-dollar-question: What happened to
my beautful country ?

      Sichu Tingaz
      United Kingdom

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FinGaz

Letters

      Talks alone will not pull us out of this mess

      7/22/2005 9:33:27 AM (GMT +2)

      EDITOR - Why this renewed talk of dialogue between ZANU PF and the
MDC? Talk is not going to resolve the economic mess created and sustained by
ZANU PF.

      Action is required, and everyone knows what the solution is - the
restoration of the rule of law. Everything else flows from that - an end to
Murambatsvina and any other operation that the government might dream up, an
end to selective application of the law, and an end to rigged elections.
      Only then will the international community rescue the economy. Can
anyone seriously imagine that international support will be forthcoming if
the MDC agrees to the ZANU PF way of ruining the country?
      Does anyone believe that ZANU PF will agree to anything proposed by
the MDC when it ignores advice from everyone and everywhere?
      The government, desperate though it may be, holds all the levers of
power. Opposition can only take the form of words, and words cannot prevent
the government doing whatever it sees fit.
      South African President Mbeki is wrong. Zimbabweans cannot solve their
problems as long as the rule of law has been forcefully suspended.

      Ken May
      Zimbabwe

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FinGaz

Letters

      Govt rubbing salt into festering wounds

      7/22/2005 9:36:57 AM (GMT +2)

      EDITOR - I felt compelled to contribute to the Operation Murambatsvina
saga that has made headlines in many newspapers in the world.

      Surely, I would have thought that as educated as our politicians are,
they should have done a better job, a job well planned and well thought out
rather than bring such disgrace to our country.
      I do not see, surely, the urgency of destroying the livelihood of so
many when the prevailing economic conditions do not call for such harsh
punishment for already suffering Zimbabweans. The government is rubbing salt
into sore wounds.
      I believe the squatter camps and the illegal structures that had
become so prominent in Zimbabwe's high-density suburbs and other areas are a
result of the lack of our government's focus and lack of vision. Our
government should learn to take responsibility for situations that they
create.
      A transparent government should be accountable to the people. How can
we destroy people's shelter, especially during this bitterly cold winter
season?
      Why didn't the government give the affected people time to prepare for
the destructions? Why didn't it offer them more humane shelter after the
destructions instead of the pathetic accommodation at the so-called transit
camps?
      This is bad governance that should be condemned at all costs. Apa
vatongi vedu makaresva zvachose.
      Planning is imporatnt in the future, and give the people decent
accommodation.

      Eddie Kwaramba
      Canada

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FinGaz

Opinion

      Journalism standards in Zimbabwe have plummeted

      Sure Kamhunga
      7/22/2005 9:51:41 AM (GMT +2)

      I WAS amused when I read a statement by the Minister of Information
and Publicity, Dr Tichaona Jokonya, during the presentation of a draft code
of conduct by the Zimbabwe Union of Journalists (ZUJ).

      He spoke of a "crisis in the media fraternity", particularly what he
termed the informal media operating via the Internet which he said needs to
be addressed. At the same occasion, ZUJ president Mathew Takaona spoke about
lazy journalists who are loathe to research and verify facts.
      Both could have been saying the same thing albeit differently, but the
truth is that there is something seriously wrong with journalistic standards
in Zimbabwe.
      To start with, the calibre of journalism graduates being churned out
by the various tertiary institutions in the country leaves a lot to be
desired, as some of them lack the depth and inquisitiveness that should be
the hallmark of any aspiring journalist. To make matters worse, some of them
can't conduct a sensible interview and sometimes embarrass not only
themselves but also the organisations they represent. You then wonder what
sort of article the journalist will write and even feel for the sub-editors
and editors who have to labour to re-write the article.
      At best, some of the published articles are not properly researched
and given appropriate background, and at worst, leave the reader none the
wiser or more confused and with more questions than answers. On the other
side of the coin, there is no consistent and religious follow-up of running
issues and topics.
      The most glaring weakness is in business and financial reporting,
where the country is desperately short of experienced middle and senior
level journalists who are adept and at ease tackling mundane and complex
business and financial issues. This is a specialised area that needs passion
in addition to the requisite skills and formal training.
      Small wonder then that such important policy announcements as the
central bank's quarterly monetary statements are not given the proper
in-depth coverage and analysis that they deserve, save for the usual profuse
praise given to such pronouncements by "analysts" and "economists".
      Secondly, remuneration for journalists in Zimbabwe still leaves a lot
to be desired. Only a few publications have seen the light and have begun
recognising and rewarding talent. It is a sad paradox that journalists are
highly regarded in society but they are still struggling up the social
ladder and some confirm they struggle to make ends meet.
      Being human, they become susceptible to subtle and direct
"inducements" and "softeners" from unscrupulous people who want to either
curry favour with the media or are seeking publicity. This inevitably
compromises the journalists' professionalism and objectivity, and clouds
their moral judgment on what is right and wrong. The loser in this case is
not the readership, but the journalism profession itself.
      That is why there has been an exodus of experienced and senior
journalists who have either left the profession or have ventured into public
relations and corporate communications disciplines, where remuneration is
comparatively much better.
      Those that have stuck with the profession are doing so out of the love
of it, while others have found innovative ways of making an extra dollar by
venturing into what Jokonya has termed "informal Internet media". This,
ironically, is a creation of the government itself. When it imposed severe
restrictions on the operations of foreign correspondents in Zimbabwe, this
led to the closure of the bureaux of foreign news organisations.
      This naturally created a void that needed to be filled and it does not
need a rocket scientist - as former information minister Jonathan Moyo is
fond of saying - to realise that someone had to feed the foreign news
organisations with news about Zimbabwe.
      This has led to the development of a thriving "Internet media
industry" in Zimbabwe where enterprising journalists are writing for foreign
papers and news agencies under assumed names to escape the wrath of their
employers and the law. Unfortunately, standards have been compromised
because some of the articles are sometimes laden with falsehoods and
inaccuracies because there no is way the foreign media organisations can
verify the facts.
      Articles have also been spiced up and given a sensational angle to
ensure they are published, something the journalists would never dream of
doing if they were writing for their employer.
      This is where ZUJ, together with other interested parties, should come
in firstly to make a skills gap analysis, formulate a programme of action to
help address the skills gap and also offer refresher courses to improve
standards in the newsrooms. Without such a dedicated effort, Takaona's
comment that some Zimbabwean journalists are "either lazy to think or dig
deeper into the stories" will ring true in a year's time as it is today.
      For things to change, there is need to end the polarisation that
exists between the public and private media, which even extends to the
owners of these organisations. It is an open secret that until probably a
few months ago, it was considered professionally treasonous for a journalist
from the public media to interact with colleagues from the "other side".
      There is even an association of editors for those working for the
public media and another for those in the private media, all pursuing
seemingly different agendas. One is forced to ask, is this really necessary?
Once again, this sad development is a creation of the government itself,
which, through its draconian media laws, promoted this polarisation.
      This polarisation could frustrate efforts by ZUJ to enforce the code
of conduct. Unless it gets the solid backing and agreement of the entire
media fraternity, the document presented to Jokonya will not be worth the
paper it is written on.Without doubt, the draft code of conduct is a small
step in a long journey towards restoring and improving professionalism in
journalism, but evidently more still needs to be done.

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