The ZIMBABWE Situation
An extensive and up-to-date website containing news, views and links related to ZIMBABWE - a country in crisis
Return to INDEX page
Please note: You need to have 'Active content' enabled in your IE browser in order to see the index of articles on this webpage

Anti-graft drive to net party bigwigs

Zim Independent

Augustine Mukaro/ Clemence Manyukwe

GOVERNMENT'S renewed anti-corruption drive is expected to net
more high-profile figures in a cleansing exercise which insiders say will
test the power balance in the fractured Zanu PF party.

This week, deputy Information minister Bright Matonga was
arrested on corruption charges together with Zupco board chairman Charles
Nherera. Business mogul John Bredenkamp was also arrested on charges of
flouting the country's immigration laws by travelling on a South African
passport. Sources this week said police had widened their probe of
Bredenkamp who has been linked to the succession struggles in Zanu PF.

The Zimbabwe Independent this week heard that Bredenkamp has
been linked to a new grouping in Zanu PF which has been pushing for an exit
package for President Mugabe.

The sources said the group - seen as moderates in the party -
wanted to rope in Bredenkamp to bankroll the initiative. Efforts to get
comment from Bredenkamp failed as his spokesman said he was "under
instructions not to talk to the press".

Zanu PF sources yesterday said the arrest of Matonga had its
roots in the Mashonaland West power struggles in which the deputy minister
is involved in a fight for land with farmer Tom Beattie, a self-confessed
financier of the ruling party. A party source said there were senior Zanu PF
officials in the province who had sided with Beattie in the struggle.
"Matonga is paying the price," the source said.

This week's arrests come in the wake of President Robert
pronouncements that graft laws would be amended to strengthen prevention,
investigation, prosecution and punishment of corruption and related economic

Anti-Corruption and Anti-Monopolies minister Paul Mangwana said
government had re-invigorated the anti-corruption drive which would result
in a number of high-profile personalities being arraigned before the courts.

"People are being arrested and the arrests will continue,"
Mangwana said. "There is no (new) operation that we are carrying out but
merely a continuation of the anti-corruption drive. There is no deliberate
policy to target anyone whether in a high or low position."

Ruling party sources said the arrest of Matonga had sent tremors
through the Zanu PF establishment as police had been asked to investigate
more high-profile persons in the Zupco corruption case and the allocation of
Operation Garikai houses.

To bolster its resolve to deal with undesirables, Zanu PF has
hired a private firm to probe the failure of the party's businesses. This
followed another probe two years ago whose results were deemed to be
inconclusive.The party sources said the intensification of the crackdown in
Zanu PF would define the camps in the party as those fingered in the probe
would "coalesce around their godfather for protection".

"Victims have an option to toe the line or face the music," a
source said.

The sources said internal and external audits into Zanu PF
companies would be one of the main bases for the fresh blitz.

The party's politburo had previously set up two committees
chaired by Zanu PF's secretary for finance David Karimanzira.

Analysts have interpreted the committees' mission as having been
intended to push former secretary for administration Emmerson Mnangagwa out
of Zanu PF's succession stakes.

The first probe team into Zanu PF's financial empire unearthed a
number of irregularities in the running of the party's companies. Among the
companies that were said to have virtually collapsed were M&S Syndicate,
Zidco Holdings and Zidlee Enterprises.

External auditors Kudenga & Co chartered accountants, have also
submitted a report on the state of the party's companies.

Mnangagwa used to preside over the ruling party's funds and
investments before he was replaced by Karimanzira.

Officially opening the second session of parliament in Harare on
Tuesday, Mugabe said the Anti-Corruption Commission Act and the Prevention
of Corruption Act would be amended to strengthen them. He said the Police
Act would be amended to enhance the operational efficiency of the Zimbabwe
Republic Police.

He said the Suppression of Foreign and International Terrorism
Bill, which empowers the police to deal with transnational terrorism will be
brought to parliament, while the United Nations Convention on Transnational
Crime, together with the Sadc Protocol on Extradition, which fosters
cooperation in the prevention and suppression of crime in the region, will
be brought before parliament for ratification this year.

Click here or ALT-T to return to TOP

Budget puts govt $253 trillion in the red

Zim Independent

Shakeman Mugari

FINANCE minister Herbert Murerwa yesterday presented a startling
$327,2 trillion supplementary budget which will spawn a hefty deficit and
put the government in the red to the tune of $253 trillion.

The supplementary budget bloats this year's budget to a colossal
$451 trillion, a figure which far surpasses last year's initial targeted
expenditure of $123,9 trillion.

Government this year expects to raise only $216 trillion from
taxes - its major source of revenue. The gap between revenue and expenditure
means government will have to borrow an additional $253 trillion, a move
that will push government further into debt. This is the only time in the
history of Zimbabwe that a supplementary budget has exceeded the original

The new figures mean that government will have a budget deficit
of 56% this year alone. During his budget statement last year, Murerwa had
projected that the country would have a $13,9 trillion budget deficit which
translated to -4,6% of the gross domestic product (GDP) - the country's
total wealth.

The budget deficit of $253 trillion in the supplementary budget
translates to 30% of the GPD which has been shrinking for the past seven

Presenting his mid-term fiscal policy review, which analysts
described as a narration of the problem rather than a solution, Murerwa all
but admitted that government's spendthrift ways and inflation had cranked up
the expenditure in the first six months of this year.

His supplementary budget means that government will have to
borrow more than half of the money it needs to meet its mounting obligations
this year - a move that economists said would fuel inflation and crowd out
productive sectors from lending institutions.

Murerwa said government incurred a deficit of $17,8 trillion
which it financed through borrowing from the local market. Government is
currently saddled with a whopping $46,1 trillion debt which means that each
and every Zimbabwean - including children - owe nearly $4,1 million each.

Murerwa also admitted that inflation will remain high to end the
year between 950-1 000% admitting that its pressures will continue to wreak
havoc unless there is a policy change in both fiscal and monetary terms.

Murerwa's figures are a direct contradiction to Reserve Bank of
Zimbabwe governor Gideon Gono who said inflation will close the year at
between 280% and 300%.

Murerwa made the same promises to reduce inflation by cutting
down on government expenditure, curb unproductive borrowing and reduce money
supply - all of which were part of his commitments in the budget last year
but yielded nothing in the first half.

Murerwa made attempts to revise his economic figures claiming
that the GDP, which he put at $840 trillion, will grow by between 0,3-0,6%
instead of the 3,5% decline that he had predicted during the budget last
year. He said Zimbabwe was battling to service its bloated external debt
which is now nearly US$4 billion with arrears amounting to US$2,1 billion.

Click here or ALT-T to return to TOP

Zim defiant on Bippas

Zim Independent

Augustine Mukaro

ZIMBABWE is not going to change its stance on Bilateral
Investment Promotion and Protection Agreements (Bippas) that were violated
under the country's controversial land reform programme, a position that
could further strain diplomatic relations with affected nations.

Lands minister Didymus Mutasa recently told farmers in Chiredzi
that there was no going back on the expropriated sugarcane estates, most of
which were protected under Bippas signed with South Africa.

Farmers in Chiredzi said the June 22 meeting, held at Hippo
Valley country club and attended by new and dispossessed farmers, failed to
resolve land ownership disputes that have badly affected sugarcane
production since the launch of the land reform programme in 2000.

"The farmers were seeking clarification as to whether government
would honour compensation specifications as spelt out in the Bippa
agreements or prospects of any of them coming back to resume farming," one
farmer said.

The farmers said Mutasa became abusive accusing foreign
investors of stripping Zimbabwe of its wealth, saying "if it was up to me I
would never have signed a single bilateral agreement because foreign
investors just come and take Zimbabwe's assets, giving the country nothing
in return".

Mutasa told the evicted farmers they should "accept the offered
compensation and leave the country", another farmer said. "In all cases,
government is offering not more than 20% of the actual value of the

Under the agreements, government had promised to pay full
compensation to foreign nationals in the event of a dispute arising out of
an investment in Zimbabwe. Compensation would be determined in an agreed way
and paid in the currency and into the account of the investor's choice.

Mutasa's remarks are a direct assault on government's National
Economic Development Priority Programme (NEDPP), and its "Look East" policy.
The most pronounced elements of NEDPP are the promotion, motivation and
solicitation of foreign investment under which government has dispatched
investment missions to China, South Korea, Russia and the Middle East.

Zimbabwe signed bilateral trade agreements with several European
Union countries, four of them ratified by President Robert Mugabe.

Diplomatic sources said government's failure to observe the
agreements has strained relations to a point where displaced farmers are now
seeking recourse to international courts after diplomatic intervention
failed to protect their investments.

The worst affected country is South Africa, which had over 500
farmers throughout the country.

Farmers who spoke to the Zimbabwe Independent said government
had completely ignored the agreements prompting the concerned nationals to
appeal for diplomatic interventions. These have all failed.

Click here or ALT-T to return to TOP

Donor conference to raise water funds for Byo

Zim Independent

THE financially-troubled Bulawayo City Council will next month
hold a donors' conference to raise funds for water sources as the current
dams cannot meet demand for the growing population.

The local authority needs about $6 trillion and US$3,4 million
to carry out projects that will put an end to the perennial water problems.

Addressing a press briefing in the city on Wednesday, Bulawayo
City Council public relations officer Phathisa Nyathi said the conference
was part of the council's plans to solve the water crisis.

The city council has proposed projects to augment water supplies
to the city, which have been classified into short, medium and long-term.

"These proposed projects have financial implications hence the
arrangement of a donors' conference to source money to finance the
projects," Nyathi said.

Bulawayo has been receiving erratic supplies of water from its
five supply dams - Insiza, Umzingwane, Inyankuni, and Lower and Upper Ncema.

In a bid to augment the water inflows, the council has
resuscitated boreholes at the Nyamandlovu acquifer sunk during the 1992

According to Nyathi, the council will in the next six to 12
months drill boreholes and erect elevated tanks in western areas worst
affected by the water crisis last year.

The existing high-yielding boreholes to be drilled in Cowdray
Park, Mahatshula, Entumbane, Emakhandeni and Pumula South will be deepened
at an estimated cost of $1,4 trillion.

In the same period, the council will also construct a pump
station at Insiza Dam, - Staff Writer.

Click here or ALT-T to return to TOP

Fiscal policy review highlights

Zim Independent

     * Government unveils $327,2 trillion supplementary budget;

* First half suffers $17,8 trillion deficit;

* Tax-free threshold raised to $20 million;

* Salaries over $54 million to be taxed at 35%;

* Additional revenue of $140 trillion to be raised;

* Domestic debt shoots to $46,1 trillion;

* External debt climbs to US$3, 968 billion;

* Current account US$434 million in the red;

* Inflation to average 950-1000% this year;

* GDP to grow by between 0,3-0,6%;

* Agriculture anticipated to grow by 23%;

* Mining projected to decline by 10,8%;

* Gold production to fall;

* Tobacco production declines;

* Manufacturing on the decline;

* Multiple fuel prices to be phased out;

* Maize selling price to be reviewed;

* Stakeholders call for devaluation;

* Parastatals continue making losses;

* Arda to be restructured and;

* Corruption now a major problem - Staff Writer.

Click here or ALT-T to return to TOP

Still no solution as doctors' strike in second week

Zim Independent

Reagan Mashavave

JUNIOR doctors' industrial action entered its second week
without a solution in sight after they defied a government order to return
to work before their grievances can be addressed, the Zimbabwe Independent

Hospital Doctors Association (HDA) president Dr Kudakwashe
Nyamutukwa said government's arrogance was making it hard for the parties to
engage in fruitful dialogue.

"All we are saying is that if the government wants us to work it
must meet our demands and not to hold on to our certificates of good
standing," Nyamutukwa said. "We don't want patients or people to suffer. But
the ministry is making the people suffer."

Junior doctors went on strike last week following a deadlock
over salary increases and improved working conditions.

They currently earn $41 million a month and are demanding that
the figure be raised to around $250 million a month. They are also demanding
a review of their accommodation and vehicle loan allowances.

Nyamutukwa said certificates of good standing were normally
issued to junior doctors after completing their housemanship but that
government was withholding these.

HDA said it might be forced to take legal action to compel the
Medical and Dental Practitioners Council to release the certificates.

In a letter copied to the council and Health and Child Welfare
permanent secretary, the doctors demanded that government release their
certificates of good standing or face legal action.

Junior doctors have accused the government of using the state
media to peddle falsehoods alleging that the state pays doctors' fees and
welfare at the medical school.

"To put it on record, government is not paying fees for students
in the medical school. Right now there is a standstill at the medical school
as the university is demanding fees from the last group that is collecting
its results. The group is supposed to begin its housemanship on Monday,"
said Nyamutukwa.

The University of Zimbabwe is demanding that students settle
their fees before collecting results.

Deputy Minister of Health and Child Welfare, Edwin Muguti,
defended fees being paid by medical students arguing that they were
insignificant compared to the total cost of their training.

"Training doctors is very expensive, what they are paying is a
very small amount compared to the total cost that is being settled by
government," Muguti said.

Muguti appealed to the doctors still on strike to go back to
work while their grievances were being looked into.

"We are still appealing to the doctors to go back to work. The
Health Services Board is still working on new salary scales. Housing,
transport and rural allowances will also be reviewed," Muguti added.

The six-year economic crisis hitting the country has resulted in
medical practitioners fleeing the country to work abroad and in neighbouring
countries where they get better salaries and allowances.

Click here or ALT-T to return to TOP

Dutch farmers put Zim land reform on trial

Zim Independent

Augustine Mukaro

IN a development that could put Zimbabwe's chaotic land reform
on trial, Dutch nationals who lost farms under the programme have filed a
case against the government at an international tribunal, demanding that
Harare should uphold Bilateral Investment Promotion and Protection
Agreements (Bippas).

The Dutch Farmers Association, in conjunction with UK-based
Agric-Africa, registered the case on behalf of the farmers at the
International Centre for the Settlement of Investment Disputes in
Washington. The centre was established in 1966 as an affiliate of the World
Bank. It provides facilities for the arbitration of disputes between member
countries and investors who qualify as nationals of other member countries.

The Zimbabwe case is number 74 out of the 104 cases that are
before the tribunal.

A group of 11 dispossessed Dutch farmers took their case for
compensation in respect of confiscated land to the tribunal, claiming more
than US$15 million.

The case was filed by Bernardus Henricus Funnekotter and others,
and then registered by the tribunal on April 15 under Case Number ARB/05/6.
It is still to be allocated to arbitrators.

Arbitrators are expected to hear the case by the end of next

Three arbitrators will consider the matter. The Zimbabwean
government is permitted to choose one arbitrator.

More than 60 Dutch farmers were forced off their properties
despite the fact that they were protected under a Bippa, ratified by
President Robert Mugabe in 1996.

There were about 1 000 Dutch nationals, 70 of them farmers, in
Zimbabwe before 2000 who grew flowers on land that was protected by the

Under the agreement, government had promised to pay full
compensation to Dutch nationals in the event of a dispute arising out of an
investment in Zimbabwe.

Should the ruling by the tribunal favour the applicants, it
could set a precedent for similar claims against government in international
courts. The centre's rulings are enforceable in 140 states that have
the organisation's convention.

The Dutch claimants are being represented by Wiley Rein &
Fielding in Washington, Bishop & Sewell in London, and by Coghlan Welsh &
Guest in Harare. Agric-Africa chairman Bob Fernandes used to work as a
property evaluator in Zimbabwe. Since the land invasions began in 2000, he
has been involved in the valuation of more than 3 000 title deeds of
Zimbabwean agricultural properties.

Officials at the Netherlands embassy in Harare said the farmers
were demanding what Zimbabwe agreed to pay as compensation in the Bippa
between this country and the Netherlands.

"The Dutch farmers want an independent audit firm to assess the
value of the property the government has acquired," the official said.

"Compensation should be in the currency the appellants decide
upon and paid into accounts of their choice. Once compensated the ownership
is transferred to the government."

Click here or ALT-T to return to TOP

Zimbabwe desperate for food, says WFP

Zim Independent

Tendai Mukandi

ZIMBABWE is in desperate need of food aid as a majority of its
poor cannot feed themselves due to runaway inflation.

Zimbabwe is grouped along with Zambia and Malawi among countries
needing urgent food assistance, according to the World Food Programme.

Speaking at the handover of 30 million euros (US$37,7 million)
in Johannesburg this week, WFP's acting regional director, Thomas Yanga,
said Zimbabwe's inflation was denying the poor access to food. The money was
donated by the European Commission.

"Zimbabwe's high inflation rate makes it increasingly difficult
for the poorest to buy any food at all, even when it is available on the
market," Yanga said.

"Many people have already sold everything they have."

Zimbabwe got the biggest portion of the donation of 25 million
euro ahead of Malawi and Zambia.

"Twenty-five million euro (US$31,4 million) has gone towards
maintaining urgent food assistance over the next quarter to 800 000 of the
most vulnerable people in Zimbabwe, including children threatened with
malnourishment and patients receiving anti-retroviral therapy," the WFP said
in a statement. Malawi was allocated 3 million euros (US$3,8 million) while
Zambia got two million euros (US$2,5 million).

The WFP is the largest humanitarian agency providing food
assistance to an average 90 million people worldwide to meet their
nutritional needs each year, including 58 million hungry children in at
least 80 of the world's poorest countries.

The donation is part of the EC's 105 million euro donation
towards WFP operations worldwide for 2006.

Although preliminary reports released last month indicated that
the region as a whole had a better 2005/2006 harvest, Yanga said people
would still go hungry this year if they were not given food assistance. He
cited the outbreak of major diseases like HIV/Aids and chronic poverty as
some of the factors affecting productivity.

"Patients being treated for HIV/Aids or tuberculosis cannot farm
or hold a job when they are at their weakest. Similarly, children who are
orphaned or caring for sick parents need help to put food on the table.

And mothers with young children need assistance to maintain
healthy diets during their most critical development stage," Yanga said.

Click here or ALT-T to return to TOP

Makwavarara scuttles Zanu PF chances in Harare

Zim Independent

Augustine Mukaro

THE Sekesai Makwavarara-led commission's failure to turn around
the fortunes at the politically volatile Town House is jeopardising Zanu PF's
chances of winning an election in Harare, the Zimbabwe Independent heard
this week.

In an interview on Wednesday, Zanu PF Harare province spokesman
William Nhara said the continued extension of the Makwavarara commission's
term would jeopardise the ruling party's chances of making an impact in any
election in Harare.

"Our room to win elections in Harare is being jeopardised by the
failing commission," Nhara said. "We want
to have the service delivery system restored by qualified and
competent people. There are lots of political interests in the affairs of
Harare so the playing field should be levelled."

Nhara said Makwavarara's case has not been removed from the Zanu
PF central committee agenda but had been delayed to allow the commission of
inquiry to conclude its investigations into the allegations raised by Harare

"Makwavarara's case is being discussed in the highest echelons
of Zanu PF but our position remains that we will not co-operate with
Makwavarara until we get a communiqué from the appropriate organs of the
party," Nhara said.

Nhara said he was amazed with Local Government minister Ignatius
Chombo's assertions that service delivery was improving in Harare.

"We are amazed as to what would be going on in the minister's
mind when he says service delivery is improving," Nhara said. "On the ground
service delivery in Harare is deteriorating. We are talking of tangible
things. The minister cannot close potholes, repair burst sewer and water
leakages or provide drugs in clinics, so why is he trying to sweep the
problems under the carpet?"

Nhara said the fact that Makwavarara was not suitable to
spearhead the turnaround of fortunes at Town House was not a Zanu PF issue

"It's not only Zanu PF saying these issues," he said. "It's more
of a ratepayers' issue. Do a snap survey of all stakeholders from business,
politics and ratepayers at home, they all call for improvement in service

Nhara said he had nothing against Makwavarara as an individual
but wanted someone who could turn around the fortunes of Harare.

"There are certain prerequisites for each job, at least
demonstrable deliverable even through experience. Makwavarara doesn't have
any professional qualifications."

Nhara said the Zanu PF Harare branch had communicated its
position to the highest levels of government and party and were waiting for
an explanation on Makwavarara's fate.

Makwavarara was appointed chairperson of the Harare commission
more than two years ago after the government sacked the elected MDC mayor
Elias Mudzuri.

She was elected to council on an MDC ticket and to deputy mayor
before turning her back on the opposition to join Zanu PF.

Click here or ALT-T to return to TOP

Zanu PF fails to cough up for poll petitions

Zim Independent

Clemence Manyukwe

ZANU PF has failed to pay billions of dollars to lawyers for
services rendered in defence of 17 election petitions lodged by the
opposition Movement for Democratic Change.

The lawyers are based in Harare and Bulawayo.

Asked to comment last week, the ruling party's secretary for
finance, David Karimanzira, who is also Harare governor, said: "Ask people
at the finance department at Zanu PF headquarters, they would know better."

Workers at the department said they were not authorised to

Speaking on condition of anonymity, lawyers this week said Zanu
PF had resolved to fund the cost of the lawsuits on behalf of its
legislators whose victory was in dispute, but was struggling to settle its

"Last year the total bill was $4 billion and the party paid a
quarter of that. The unpaid amounts would attract a 30% monthly interest," a
lawyer said.

"Every time we ask for the money we are told that cheques are
ready but nothing materialises," he added.

The MDC did not win a single case in the Electoral Court in all
the 17 constituencies whose poll outcome was in dispute.

The opposition party in the 2000 general election and the 2002
presidential poll said the elections were not free and fair, citing among
other things violence, politicisation of food aid and rigging. It won a
number of related cases.

On Wednesday last week Innocent Gonese, the MDC's parliamentary
chief whip and secretary for legal affairs in the Morgan Tsvangirai faction,
could not say how many of their cases were pending in the Supreme Court.

This week the Supreme Court ruled that the appointment of judges
to the Electoral Court by the chief justice was inconsistent with the
provisions of the constitution. This means the cases can be brought back to

Click here or ALT-T to return to TOP

Multiple fuel pricing to be eliminated

Zim Independent

Clemence Manyukwe

CABINET has approved the elimination of multiple fuel pricing,
Finance minister Herbert Murerwa said yesterday.

The government introduced multiple fuel prices through subsidies
for different sectors of the economy such as farming and the transport

"Cabinet has approved a fuel price trigger mechanism and a
revised facility for farmers that is based on actual use in support of
production," Murerwa said during his mid-term fiscal policy review.

"The government will be implementing a gradual movement towards
the elimination of multiple fuel prices in line with cabinet's position."

Farmers were buying fuel at a heavily subsidised price of $11
000 per litre while public transport operators were getting their fuel at
$22 500 per litre. The general public was buying fuel at between $450 000
and $600 000 per litre.

The minister said stakeholders had made strong representations
on the need to devalue the Zimbabwe dollar for them to viable adequate

He said in the mining sector production costs were affecting the
viability of the sector with gold threatened by a further decline.

"Revenues have remained constrained by the fixed value of the
Zimbabwe dollar hence strong representations over the industry's viability
have been presented to government," Murerwa said.

He said consultations with tobacco farmers had revealed that the
current 35% early delivery bonus was not enough to enable them to venture
into tobacco farming in the next season.

Murerwa said Reserve Bank of Zimbabwe governor Gideon Gono would
make the necessary announcements soon to help tobacco farmers.

He added that Gono had reduced statutory reserve thresholds for
financial institutions which have made commitments to increase their support
for agriculture.

On maize, the Finance minister said government will shortly
announce a new maize selling price.

"Following the increase in the maize producer price to $31,3
million per tonne, cabinet approved the adjustment of the maize selling
price from the current $600 000 per tonne and the necessary announcements
will be made shortly," he said.

Murerwa said farm disruptions had undermined the banking sector's
confidence to finance farming operations.

Banks required guarantees that when they finance crops, farmers
would be able to harvest and repay their loans.

"To this end, government will take a firm stand against any new,
unwarranted disruptions on farming operations," he said.

Click here or ALT-T to return to TOP

Minister adjusts tax-free threshold

Zim Independent

Dumisani Ndlela

FINANCE minister Herbert Murerwa yesterday adjusted the tax-free
threshold from $7 million to $20 million a month after admitting inflation
was eroding disposable incomes and affecting the livelihoods of millions of

But the adjustment fell far short of proposals from trade unions
which had demanded that tax-free income should be pegged against the poverty
datum line, currently at $60 million per month for a family of five.

The tax relief will become effective in September, when analysts
project the poverty datum line to have escalated to $120 million, assuming
that prices for the consumer basket increase by an average of $20 million
per month as has become the pattern over the last five months.

"The present unfavourable macro-economic environment
characterised by high inflation has reduced the relief accorded to
individual taxpayers, especially those below or near the poverty datum
line," Murerwa said.

Murerwa said there was need for government to complement salary
adjustments through regular reviews of the pay as you earn (PAYE) income
brackets and tax-thresholds but insisted these had to be made after
considering the revenue requirements for the fiscus.

Cumulating revenue collections for the half-year to June
amounted to $76 trillion against a target of $58,2 trillion.

PAYE, together with value added tax (Vat) and corporate tax,
contributed to this overperformance.

Cumulative collections for PAYE amounted to $16,9 trillion or
22,2% of total revenue, against a target of $9,9 trillion.

"This strong performance largely reflected higher wage and
salary settlements against the background of the prevailing inflation
environment," Murerwa said.

Murerwa widened the tax bands to end at $54 million per month
above which income would be taxed at a rate of 35%.

"This measure will release about $35 trillion to taxpayers,
thereby enhancing their purchasing power," Murerwa said.

He said inflation remained "our biggest challenge, affecting
savings and investment, undermining day to day business activity, as well as
creating price instability in the conduct of ordinary transactions".

"It has also eroded the purchasing power of our domestic
currency, adversely affecting the livelihood of the ordinary household as
standards of living fall and basic social services become unaffordable,"
Murerwa said.

Click here or ALT-T to return to TOP

'Parastatals burden govt'

Zim Independent

Paul Nyakazeya

THE country's loss-making parastatals have presented government
with the undue burden of carrying their debts through fiscal support,
Finance minister Herbert Murerwa said yesterday.

Presenting the mid-term fiscal policy review yesterday, Murerwa
said most parastatals continued to perform dismally due to huge debts.

"The debt stock for the major parastatals as at June 2006, stood
at $76,43 trillion. As a result parastatals are failing to service their
debts, often calling on government to assume their obligations," Murerwa

Despite receiving support under the Parastatal and Local
Authorities Reorientation Programme (Plarp) to enhance their performance,
the National Railways of Zimbabwe, Zimbabwe Iron and Steel Company, Air
Zimbabwe, Zesa Holdings and Arda had continued to make losses, Murerwa said.

The thrust of Plarp was to steer parastatals and local
authorities towards sound corporate governance, efficiency, profitability
and sustainable long-term growth.

Murerwa said government had introduced the National Economic
Development Priority Programme (NEDPP) to help with the parastatals
restructuring exercise.

Under NEDPP, financial packages to support the re-equipping of
Air Zimbabwe, NRZ, Zesa Holdings and plant refurbishments at Ziscosteel and
Hwange Colliery would be availed, he said.

"This will complement our on-going medium and long-term
initiatives on joint ventures and strategic alliances," Murerwa said.

"Performance guidelines for parastatals are being reviewed, with
compliance being enforced through the relevant ministries and other
structures under NEDPP," added Murerwa.

Click here or ALT-T to return to TOP

Fiscal policy puts average inflation of above 1 000%

Zim Independent

FINANCE minister Herbert Murerwa's fiscal policy statement
issued to support government expenditure with a $327,2 trillion
supplementary budget will see government missing its inflation targets,
Phoebe Goremusandu, a senior market analyst with Old Mutual Asset Management
said yesterday.

"The revised expenditure figures given by the minister imply
that government will experience average inflation of about 1400% in 2006,"
she said in a statement.

"This inflation expectation is mostly in line with market
expectations and is way above the original inflation estimate of around 300%
implied by the minister when he gave his budget speech in December 2005."

She said it was also worth noting that both the expenditure and
revenue supplementary estimates were double the original estimates thereby
reinforcing the inflationary message. On the budget deficit, Goremusandu
said; "The revised figures given by Murerwa implied a fiscal deficit of
around $200 trillion which widens the budget deficit to around 24% of GDP,
against an earlier estimate of 4,6%.

"In the absence of other initiatives, this deficit will maintain
the inflationary expectations at the current high levels."

The minister, however, allocated $327,2 trillion instead of the
$614 trillion that ministries had requested. He said the tax relief given by
the minister that raised the tax-free income from $7 million to $20 million
was welcome but was out of line with the Central Statistical Office
estimates that put the poverty datum line for June 2006 at $68m.

"The revision of the tax-free band was about 186%, which is much
softer than the movement of prices in the economy in 2006," Goremusandu

In his statement, the minister decried the high cost of
government debt arising out of the expensive short-term government debt.

"There is therefore need to improve the link between fiscal and
monetary policy and the two have to be co-enablers," said Goremusandu.

Click here or ALT-T to return to TOP

Chinamasa set to deny charges

Zim Independent

Clemence Manyukwe

JUSTICE minister Patrick Chinamasa will plead not guilty to
charges of attempting to defeat the course of justice when his trial kicks
off on Tuesday, his lawyer has said.

Harare lawyer James Mutizwa said Chinamasa, who has failed to
turn up for trial on two previous occasions - July 3 and July 17 - would
definitely be in court at the beginning of August.

Chinamasa and five others, including the head of the Central
Intelligence Organisation (CIO) in Manicaland province, Innocent Chibaya,
are accused of attempting to coerce state witnesses to withdraw their
testimonies against supporters of State Security minister Didymus Mutasa,
who were facing charges of violence.

Chinamasa's lawyer said the minister had not been avoiding

"He is anxious to get it settled. He will definitely be in court
and will deny the charges," the lawyer said.

According to the state, the six accused persons promised
monetary rewards to witnesses in exchange for the freedom of Mutasa's
supporters, including Makoni North chairman Albert Nyakuedzwa, who have
since been imprisoned for three years for acts of violence.

This week, Nyakuedzwa was back at the High Court facing murder
charges arising from a fatal assault of war veteran Wilson Mukono.

Violence was directed against James Kaunye and his supporters
after he expressed a desire to challenge Mutasa in Zanu PF's primary
elections in 2004.

Chinamasa and the others are also accused of promising Kaunye
that charges of attempted murder he was facing at the time would be dropped
if Mutasa's supporters were not prosecuted.

Assistance in setting up a cattle project and free services from
the District Development Fund was also alleged to have been promised to the
war veteran.

On July 3, the AG's office said Chinamasa did not turn up as he
had not been served with summons.

On the second occasion the prosecutor Levison Chikafu applied
for a warrant of arrest and it was granted, only to be cancelled later
through the intervention of Senior Public Prosecutor (Eastern Division)
Florence Ziyambi, who said the AG had reached an agreement with Chinamasa to
move the trial to August 1.

The agreement had not been conveyed to Chikafu, she added.

In previous interviews with the Zimbabwe Independent, Mutasa has
said the case "will not go anywhere".

He added that those behind it made a blunder by not consulting
him first because he would have made them understand that Chinamasa and the
others had no case to answer.

Click here or ALT-T to return to TOP

Mugabe admits failure

Zim Independent

PRESIDENT Robert Mugabe this week indicated that government had
failed to bring to an end disruptions on farms, six years after embarking on
the agrarian reforms.

In an address at the opening of the second session of the sixth
parliament on Tuesday, Mugabe said disruptions and indiscipline continued on

"Attention should continuously shift towards clearing
impediments to optimal productivity in the agricultural sector," Mugabe
said. "These include adequate and timely resource mobilisation as well as
security of tenure and stability on the farms, issues of commodity pricing,
production and farmer support programmes."

On disruptions on farms, Mugabe said: "I wish to make it crystal
clear that government will not hesitate to deal firmly with all cases of
indiscipline on the farms."

In an address in July 2004 at the opening of the fifth session
of the fifth parliament, Mugabe promised to personally see to it that the
chaos, which he referred to then as "irregularities", were brought to an

Said Mugabe then: "A number of issues related to land reforms
remain outstanding. Whatever irregularities have occurred in the process of
land reform are now being attended to so they can get corrected. The
presidency is dealing with this matter," he said.

Despite setting up various commissions of enquiry, taskforces
and carrying out land audits as well as coming up with laws including a
constitutional amendment touted as the panacea to troubles in the
agricultural sector, Mugabe said in the latest parliamentary address there
was still instability on farms.

A week earlier President Mugabe told Zanu PF members during the
ruling party's 23rd National Consultative Assembly that people were "pushing
and being pushed" off farms.

Justice for Agriculture chairman John Worsley-Worswick this week
dismissed Mugabe's promise to bring order on farms as rhetoric.

"What he says in public and what happens on the ground are 180
degrees diametrically opposed. There has not been any rule of law on
commercial farms for the past six years," he said.

The president of the Commercial Farmers Union, Doug Taylor
Freeme, attributed failure to restore productivity to the absence of
consultations when government is dealing with land matters. - Staff Writer.

Click here or ALT-T to return to TOP

Zanu PF slammed for double-standards

Zim Independent

THE Mutambara-led faction of the splintered Movement for
Democratic Change has condemned double-standards displayed by Zanu PF in
denouncing violence in the opposition while shielding from justice its
members facing similar charges.

Although the faction has said it will not co-operate with an
inquiry set up by Morgan Tsvangirai's faction, its deputy secretary-general
Priscilla Misihairabwi-Mushonga said Zanu PF had perpetrated violence for
the past 26 years.

"Their moral uprightness in condemning such violence leaves a
lot to be desired, especially in view of the fact that known perpetrators of
thuggery and murderers are still roaming the streets," she said.

She singled out Joseph Mwale and Kainos Zimunya also known as
Kitsiyatota who allegedly murdered Tsvangirai's election agents Tichaona
Chiminya and Talent Mabika in the run up to the 2000 general election.

Misihairabwi-Mushonga commented in the wake of the arrest and
subsequent release on $20 million bail of Mabvuku MP Timothy Mabhawu
following the attack on Harare North MP Trudy Stevenson by alleged
Tsvangirai supporters.

Mabhawu and three MDC youths were arrested on allegations of
assaulting Stevenson.

Mubhawu was arraigned before the court facing allegations of
bankrolling youths that attacked the legislator. - Staff Writer.

Click here or ALT-T to return to TOP

Zimbabwe on agenda of IMF meeting

Zim Independent

Dumisani Ndlela

THE International Monetary Fund (IMF) is expected to schedule a
board meeting in September to review Zimbabwe's overdue financial
obligations, sources indicated this week, suggesting that fresh measures
could be taken against Zimbabwe for non-cooperation with the multilateral
lending institution.

The board meeting will open another anxious chapter in Zimbabwe's
relationship with the IMF after the country survived expulsion from the
Bretton Woods institution when it settled its overdue financial obligations
to the IMF's General Resources Account (GRA) in February.

Sources indicated government and central bank authorities had
been informed about the pending review, expected to take place exactly six
months after an IMF board meeting that maintained censure of the country
after payment of arrears to the GRA arrears.

Speculation has deepened in the market that Finance minister
Herbert Murerwa was making frantic moves to block an IMF team due in the
country around the same month for a routine Article IV consultation.

The mission's findings, together with any attempts by the
country to clear outstanding arrears, are meant to establish Zimbabwe's
cooperation with the Bretton Woods institution's demands for an overhaul of
economic and structural policies.

Article IV consultations are routinely conducted on IMF members,
but Zimbabwe is understood to be digging in its heels on the planned visit,
insisting its repayments should be rewarded.

Zimbabwe cleared its overdue financial obligations to the IMF's
GRA but still remained with substantial arrears amounting to US$119 million
under the Poverty Reduction and Growth Facility (PRGF)-Exogenous Shocks
Facility Trust (ESF).

An IMF spokeswoman told businessdigest from Washington that the
IMF executive board had communicated with the Harare administration its
desire for a comprehensive economic package to rescue the country from its
economic quagmire.

"The executive board has asked Zimbabwe to adopt a comprehensive
package of macroeconomic and structural policies to address the
deteriorating economic situation," the spokeswoman told businessdigest on
Tuesday, two days before Murerwa's fiscal policy review presented to
parliament yesterday.

"The board also decided to maintain the remedial measures now in
place," the spokeswoman said, indicating that "the declaration of
non-cooperation, suspension of technical assistance, and exclusion from the
list of PRGF-eligible countries" remained firmly in place until Zimbabwe
fully repaid its outstanding debts.

The Zimbabwe Independent reported last week on government's
latest plans to block an IMF mission to the country, but no confirmation was
available from Murerwa who has ignored calls made to his mobile phone since
last week.

While Zimbabwe survived expulsion from the IMF, the country has
essentially lost all benefits of membership to the multilateral financial
institution, an issue that has piqued the Harare administration which kept
the money printing press running over the past year to raise cash to buy
United States dollars to settle its GRA debt.

An IMF board meeting of March 8 refused to restore Zimbabwe's
voting and related rights and to terminate the country's ineligibility to
use the general resources of the Fund. The move upset government and central
bank governor Gideon Gono who alleged politics in the handling of Zimbabwe's

Click here or ALT-T to return to TOP

Zim dollar loses ground

Zim Independent

Paul Nyakazeya

THE Zimbabwe dollar remained defenceless against mounting
hyperinflationary pressure, losing significant ground against major
currencies on a thriving parallel market that has become the benchmark for
commodity pricing in the country.

The currency was this week quoted at above $500 000 to the
greenback, from $450 000 last week, well above the inter-bank rate of $101
195, 54.

Parallel market dealers were quoting the British pound at around
$810 000, from $750 000 last week.

They said the rate was even higher on large volumes.

On the official market the Zimbabwe dollar is trading at $187
586 to the British pound.

Dealers said the rate for the pound could reach $1 million
before the end of the third quarter in a tightly-short market.

Zimbabwe is currently going through its worst economic crisis in
history, characterised by acute foreign currency shortages as well as
shortages of basic food commodities.

The impact of the foreign currency crisis has been the shortage
of fuel as well as failure to import critical capital equipment by
industrial operations, resulting in low productivity which has in turn
worsened the foreign currency situation due to low exports.

The tobacco selling season, which was widely expected to usher
in an improvement in foreign currency inflows has failed to make an impact.

Reserve Bank of Zimbabwe (RBZ) governor Gideon Gono is expected
to devalue the local currency or adopt measures that could allow the
currency to depreciate on the interbank market when he presents his monetary
policy review next week.

Economic consultant, John Robertson, said Gono was unlikely to
stop the parallel market, but warned that the parallel market would continue
to stoke inflation due to its impact on the pricing of goods in the country,
mainly those with import components.

Click here or ALT-T to return to TOP

Govt should respect people's rights

Zim Independent

THE Law Society of Zimbabwe (LSZ) feels compelled to comment and
make a statement on the National Constitutional Assembly (NCA) arrests due
to the importance of the issues as they relate to aspects of human and
people's rights.

The LSZ is a statutory, autonomous, independent and
self-regulating body which governs, regulates and administers the legal
profession in Zimbabwe.

Its members are registered legal practitioners.

Some of its duties are;

* To promote the study of the law;

* Making recommendations on legal training;

* Representing the profession and articulating its views on
various issues;

* Promotion of justice; and

* Defending human rights, rule of law and the independence of
the judiciary.

We are therefore qualified to issue this statement.

On July 12, 128 NCA activists were arrested in Harare for
allegedly contravening Section 46 of the Criminal Law (Codification and
Reform) Act Chapter 9:23 which relates to obstruction of the streets and

Ms Evidence John collapsed at Harare Police Station due to
hunger and uninhabitable conditions of detention and was further denied
access to medical treatment, legal representation and food.

In Bulawayo, three NCA activists and two bystanders were
arrested and detained in filthy and uninhabitable Bulawayo Central Police
Station holding cells.

They had to pay admission fines to buy their freedom.

In Mutate, 10 NCA activists were arrested for contravening
Section 37 of the said Act which criminalises a demonstration that poses a
realised risk to public order.

The LSZ notes with concern the persistent violation of human and
people's rights by arresting and denying detainees their inalienable right
to food, medical treatment, legal representation and placing same into
degrading, inhuman and uninhabitable holding cells; the sum total of which
is torture.

We condemn such self-serving legislation which derogates from
people's rights to freedom of expression, assembly and demonstration.

The government should improve the conditions of police holding
cells and prisons to meet internationally-accepted standards as a matter of
urgency so as to protect and promote people's rights.

It should be noted that these rights are sovereign and should be
respected at all costs.

* This is a statement issued by the Law Society of Zimbabwe
following the arrests of NCA activists last eek.

Click here or ALT-T to return to TOP

Currency reform: act of a government stuck in the mire

Zim Independent

Shakeman Mugari

WHEN fuel stations started lopping off zeros from
fuel-dispensing machines early last year many Zimbabweans did not see this
as a warning sign of an impending crisis.

And when the money needed to do casual shopping became heavier
than the groceries it could buy, few could tell where the country was

Many did not realise that it was a reflection of the dire state
of the economy. As is typical of Zimbabweans, they adjusted by tossing away
their wallets and replacing them with bags. But worse was to come.

They did not see that Zimbabwe was going the German way during
the Weimar era after the First World War when its citizens needed
wheelbarrows to carry money for shopping. Zimbabweans joked about it hoping
to ease the pain of being multi-millionaires who couldn't afford basics.

But now the joke has lost its tickle - the effects of a
worthless currency have reached such alarming levels that even the most
sophisticated calculators are struggling to cope with the number of zeros.

So severe is the problem that it has now rendered computer
accounting systems and tills in the shops redundant.

Information last week that government was planning to slash
three zeros from the local currency to facilitate transactions in the
purchase of goods and services told the magnitude of the problem.

Government is toying with the idea of dropping three zeros from
the currency to create what would be called a "kilo" dollar.

The proposal submitted to government by the Institute of
Chartered Accountants of Zimbabwe (ICAZ) would save computer application
systems threatened by the overflowing zeros.

In their submission to Finance minister Herbert Murerwa last
month, the ICAZ said large transacting figures were causing computer
accounting systems to fail to transact, store or process.

It said accurate financial information had been compromised due
to large transaction values which most accounting systems were not able to

The accounting organisation said companies, especially banks,
did not have the foreign currency to acquire new software to cater for the
number of zeros.

ICAZ said much software in Zimbabwe cannot support a $10 000 000
000 (11 digits) figure. Almost all software fails at $1 trillion that has 15
digits. The accounting body said dropping the three digits would ensure that
the existing software remains in use. The proposal means that government
will strike off three zeros from the local currency to introduce a

A kilo-dollar will be equivalent to the $1 000 currently in
circulation. That in essence means a $100 000 bearer's note becomes 100
kilo-dollars. In commodity terms, a loaf of bread which costs $200 000 will
sell at 200 kilo-dollars.

The kilo-dollar concept is an alternative to Reserve Bank of
Zimbabwe (RBZ) governor Gideon Gono's initial proposal for an outright
currency change.

Economists say while this would ease the burden of carrying
large sums of money and conserve the current accounting systems which are
under stress, it was a short-term measure that indicated that government had
not only lost the war against inflation, but was now preparing for further

They said the decision would not address the key issue of
inflation and lack of foreign currency battering the Zimbabwean dollar.

The analysts said removing zeros would not suffice for as long
as inflation remained as high as 1 184%, and set to continue heading north
in light of government's failure to cut down on its borrowing and
money-printing activities.

Peter Robinson, a director of ZimConsult consulting economists,
said because of the "abominable mess that this economy is in, knocking off
the zeros will just be another short-term expedient that we have become used

"Inflation is going to get higher and we will need to go back
again and knock off more zeros. It will not work because it is not
accompanied by the right policies from government," Robinson said.

A new currency requires a low inflation rate and a stable
currency, he said. There are however no signs of a government policy to
stabilise the currency and bring down inflation save for the constant
rhetoric that borders on propaganda.

Perhaps the major problem is that the people have lost faith in
government and the RBZ's claims that inflation will come down. Robinson said
government had squandered all credibility it had and people no longer
believed it had the will or capacity to deal with the economic crisis which
is now six years old.

For currency reform to work, it needs the people to have
confidence in the monetary system and government policies.

But because there is no confidence in the system, analysts warn
that there is likely to be chaos and confusion when the changes are made.
Besides, any slight alteration of a currency is a huge exercise.

Other analysts believe that government is skirting round real
reforms that come with currency changes by making cosmetic changes to the

The introduction of the kilo-dollar would not improve the value
of the currency, neither will it stabilise it against major currencies.

CFX Financial Services economist, Blessing Sakupwanya, said the
crisis remains and could even get worse as long as government does not
address the issue of money supply growth, currently the major contributor to

"Money printing for expenditure will have to be cut to reduce
inflation while interest rates have to stabilise and steps should be taken
to address the foreign currency shortage," Sakupwanya said.

The real problem is that Zimbabwe's economic quandary cannot
support a currency reform just yet. The impulse in government though would
be to leap in defence of its policies by using other countries as case
studies to justify their decisions.

Brazil, Argentina and Turkey will be used as examples of
countries that have plucked off zeros from their currencies in the past.

It is almost certain that the propaganda mill will cite
Mozambique, which slashed zeros from its metical currency recently, as a
reference point.

However, apart from being in the same region, there are no
similarities between Mozambique and Zimbabwe's economies. While Zimbabwe's
economy has shrunk by a cumulative 44% since 1998 and the decline is poised
to continue, Mozambique's has grown by an annual average of 6,5% since the
late 1990s.

That growth although blighted by occasional floods has been
sustained. Its inflation is stable at below 15%. These positives are absent
in Zimbabwe.

A local finance advisory company, KM Financial Solutions, said
unless the economics is addressed, Zimbabwe might have to go through the
same process again.

"The case of Mozambique is quite different in that their
currency has not deteriorated to the same levels as the Zimbabwean dollar,"
KM Financial Solutions said.

Economist John Robertson said the move would make life easier
but government is only dealing with the symptoms of inflation and not the
problem itself.

"The reality is that of all the measures that government has
come up with so far, none of them deals with the issue of money-printing,
restoring commercial agriculture and curbing corruption - all of which are
inflation drivers," he said.

Click here or ALT-T to return to TOP

The urgency of constitutional and political reforms in Zimbabwe

Zim Independent

By Pedzisai Ruhanya

THE doctrine of constitutionalism entails among other things
institutions of government and the allocation of power to these state
institutions. Critically constitutions seek to control, govern or restrain
the exercise of power by democratically established institutions. The
doctrine of constitutionalism therefore rests on restraining governments in
their exercise of power over those that they govern.

A critical analysis of the political context of Zimbabwe since
the Constitutional Referendum loss in February 2000, the farm invasions and
the lawlessness associated with it, as well as the subsequent disputed
elections in 2000, 2002, 2005 and the circus in the local government system
administered by Ignatious Chombo, with the connivance of Zanu PF and
therefore the executive arm of the government, are matters urgent enough to
call for a thorough and broad-based constitutional reform process in the

Beyond the urgent need for a democratic constitutional
framework, Zimbabwe requires a regime change of its political culture in
both the ruling Zanu PF and resistance movements such as the two factions of
the Movement for Democratic Change (MDC) as well as civil society

A combination of the above issues has created the current
political and economic crisis that Zimbabwe will remain trapped in until it
extricates itself through a democratically established supreme law of the
land that will lay the foundation of a democratic society founded on law and
order and not on the rule of the "dear leader" as is the situation in the

Scholars who study institutions have concerned themselves with
the problem of ensuring that the exercise of power by government officials,
which is essential to the realisation of societal values, should be
controlled so that it should not be destructive of the values it was
intended to promote. It is in this light that most modern constitutional
debates have always linked the idea of constitutionalism with the use and
abuse of power both in theory and in practice. From a historical
perspective, it has been argued that the concept of constitutionalism has
been a reaction against the concentration of power that accompanied the
consolidation of modern states, and in Africa it has to do with the
post-colonial administration that sought to consolidate its power after
independence, Zimbabwe included.

The need for constitutions to restrain the powers of the
executive or the governing authority could be further understood from the
creation of the United Nations Charter in 1945 and the Universal Declaration
of Human Rights in 1948 which fundamentally were created to protect and
promote the rights of both nations and individuals following the devastation
caused by the Second World War where Adolf Hitler and his likes violated the
human rights of those who opposed his authoritarian rule.

A new constitutional dispensation in Zimbabwe should seek to
have executive restraint apart from having independent institutions such as
the legislative and the judicial arms of the state. Zimbabwe currently has
an imperial executive arm with sweeping powers and accountable to itself.
The head of state, the executive president, is answerable to himself and
there are no constitutional safeguards to control the abuses associated with
that office. This scenario has led to other arms of the state to be
appendages to the executive to the extent that the president indirectly runs
the judiciary by using his proxies to appoint judges to the bench. The
result is that the country's judiciary, especially the High Court and
Supreme Court, are now packed with political appointees with no capacity to
make independent rulings against the executive arm of the state.

The independence of the judiciary especially at the level of the
Supreme Court should be seen by making robust judgements against the
powerful in society especially the government. If the judiciary fails to
make such judgements in a troubled country such as Zimbabwe, then that
judiciary cannot be regarded as independent.

Since the Constitutional Referendum fiasco in 2000, the farm
invasions and the violence associated with the elections in 2000, 2002 and
2005 and the current state-sponsored violence against people demonstrating
for constitutional reform and other issues such as the sky-rocketing cost of
education and poor remuneration in the country, it has become even more
clear that dialogue based on a new constitutional order is the way forward
out of the crisis in the country. The electoral disputes and the
institutions put in place to administer the elections have been exposed for
lacking constitutional independence to run their own affairs without
interference from the incumbent government of Zanu PF. As a result,
processes administered by the Registrar-General, the Zimbabwe Electoral
Commission (ZEC), all run by the government, would not in the eyes of
Zimbabweans produce legitimate electoral processes and outcomes. The only
way is to create independent electoral institutions that are not
administered by civil servants and serving or former soldiers in order to
have a democratic electoral process and outcome. So far, Zanu PF has refused
and cheats itself by saying these institutions packed by its supporters are

It is a circus of greatest proportions to posit that ZEC under
Justice George Chiweshe, the war veteran and former soldier, is independent.
Assuming that ZEC was independent, then the question to ask is why is it
silent about the failure to hold elections in Harare to choose the local
authority's leadership? The situation becomes sad when Chombo through Zanu
PF is allowed to fire elected officials and appoint Zanu PF people as
commissioners while refusing to hold elections. Recently Zimbabweans
witnessed Zanu PF's Harare province passing a vote of no confidence in
Sekesai Makwavarara, a clear indication that commissioners are serving the
interests of Zanu PF. Having lost the elections and fearing to lose again,
Zanu PF refuses to have elections in Harare and administers the affairs of
the capital through the back door.

It is therefore imperative to have a democratic constitution
that clearly outlines the role of the executive in local government in order
to deal with the chaos currently prevailing in Zimbabwe and benefiting
losers such as Zanu PF.

In order to have a constitution in both theory and practice,
Zimbabweans starting with Zanu PF need to change their political culture so
that it entails the ethos of democratic governance. Critically Zanu PF needs
to dismantle its infrastructure of violence such as the Border Gezi militias
and de-militarise state institutions and that the repressive state
institutions such as the army, the police and the Central Intelligence
Organisation (CIO) should not be involved in party political matters. There
should be a culture of political tolerance and Zanu PF needs
to cultivate that among its supporters.

Zanu PF followers should know that it is lawful to differ on
political grounds and legitimate to disobey, criticise or demonstrate
against a government failing to deliver on its electoral promises or against
state-sponsored violence. They should be told about the sacrosanct nature of
the constitution and other legitimate and democratic laws of the state but
not the Public Order and Security Act and the Access to Information and
Protection of Privacy Act. These should be lawfully defied.

Political culture is important because without it, even the best
of constitutions will not work. For instance for the past six years, Zanu PF
violated even that bad constitution that it has amended 17 times. It has
violated property rights enshrined in the constitution. It went further to
violate other rights such as the right to freedom of expression, banning
newspapers such as the Daily News and the Tribune. Zanu PF went further to
violate its own constitution when in November 2004 its politburo amended its
constitution outside its congress and without the authority of its central
committee in its bid to elevate Vice-President Joice Mujuru to the second
vice-president of the party. This is the political culture that needs to be
changed because it becomes difficult for Zanu PF to respect the national
constitution when it disrespects its own.

In my view it's the duty of all political players and civic
society organisations to make sure that Zimbabweans understand that for a
constitution to have meaning, it must have people who respect it. This calls
for national programmes of education in schools, churches and communities on
political tolerance.

This brings me to the current dispute in the MDC where the two
factions are accusing each other of violence. It is a shame that such a huge
democratic resistance organisation finds itself in such a situation. MDC
leaders should occupy the moral high ground and condemn violence and other
illegitimate political practices by its members. However, in accusing each
other of violence the two factions should understand the divisive nature of
Zanu PF. They should work together to identify the source of the violence
and if it is not inspired by Zanu PF then they should deal with it

The attack against Trudy Stevenson in Harare and that of Temba
Sibanda who lost his eye in Bulawayo are the worst things to happen in a
party fighting a regime that has "degrees in violence". Both Stevenson and
Sibanda have the right to differ with anyone and carry out their political
activities without fear. This is the freedom that most Zimbabweans want to
reclaim from Zanu PF, otherwise the new constitution and the new Zimbabwe we
want will be doomed if people emulate Zanu PF's medieval political tactics.

* Ruhanya studies at the University of Essex in the UK.

Click here or ALT-T to return to TOP

Bloch's article on zeros irresponsible, mischievous

Zim Independent

By Mfandaidza Hove

IN the article "Local currency set to lose three digits",
(Zimbabwe Independent, July 21), it was reported that the government plans
to eliminate zeros from the local currency following suggestions reportedly
made by the Institute of Chartered Accountants of Zimbabwe.

In the same paper, Eric Bloch, in his column, supports the move
and argues that "the interim solution is to eliminate the zeros, as has been
done over the years by many other countries, including Italy, Brazil and
Argentina. Most recently, and very close to home, Mozambique has done so,
only a few weeks ago".

He goes further to state: "Mozambique has demonstrated a
capacity to apply a practical, viable solution to a critical, economically
debilitating problem. Zimbabwe needs to do likewise, and to do so promptly
and dynamically, with total disregard for misplaced,
ego-preservation-related fears that doing so can be construed as admission
of economic failure or mismanagement."

Whilst it is true that Mozambique recently eliminated the zeros
from its old currency, the metical (MZM), Bloch's article is not only
misleading the public, but is also mischievous.

The reason for this is that Bloch omitted to inform his readers
that the political economy of Mozambique prior to the decision to eliminate
the zeros, was and remains radically different from that of Zimbabwe.

Since the introduction of a new constitution leading to
multi-party democracy in Mozambique in 1990, the country has enjoyed
political stability and has experienced sustained economic growth since

Between 1993 and 1999, the economy grew at an average rate of
6,7%, and between 1997 and 1999, the country's economy grew at an even
greater rate averaging more than 10%.

Although the devastating floods of 2000 slowed down economic
growth to 2,1%, a full recovery was achieved in 2001 when the growth rate
was14,8%. Since that year, Mozambique's economy has maintained an average
annual growth of 7%, and is expected to continue this expansion by between
7% and 10% for the next five years.

This growth has been achieved through prudent macro-economic
policies against the backdrop of a stable political environment that has
resulted in significant improvements in the country's national integrity to
a level now regarded as internationally acceptable. This has made it
possible to introduce impressive economic reforms, particularly regarding
the privatisation of state-owned enterprises, reduction in customs duties
and the much-needed streamlining of customs management. Considerable reforms
have also been introduced to the Commercial Code, the judiciary and civil

In addition, tight monetary controls coupled with sound reforms
of the financial sector resulted in the reduction of inflation from 70% in
1994 to less than 5% from 1998 to 1999.

Inflation has continued to maintain falling trends although the
floods of 2000 temporarily increased it to 13% by 2003. The country's
currency has also gained significantly against major currencies - from a
loss of 50% of its value against the United States dollar since December
2000, it stabilised in 2001 and has remained steady at about MZM24 000 to
US$1. The decision to eliminate the zeros has resulted in a conversion rate
of MZM27 to US$1.

It is against this background of a growing, and well-managed
economy with a low inflation rate that Mozambique took the decision to
remove the zeros from its currency. In contrast, the Zimbabwe economy has
shrunk by about 44% since 1998, and is expected to deteriorate by as much as
6% this year. Such a decline is unprecedented in peacetime, and might even
be worse than the average declines during recent civil wars in countries
such as Ivory Coast, the Democratic Republic of Congo (DRC) and Sierra

Of special concern to Zimbabweans now is that, because inflation
is still so high, we will have to repeat this exercise of removing zeros
again and again. The need to do this will stop only when we have brought
inflation under control.

Further negative trends in Zimbabwe are also reflected by the
gross domestic product per capita that has fallen from US$880 in 1999 to
less than US$400, and is forecast to shrink to US$350 by the end of 2006.

Unemployment is over 80% and the budget deficit is at least 60%
of the gross domestic product when the Reserve Bank of Zimbabwe's illegal
quasi-fiscal activities are, as they should be, taken into account.

These are some of the omissions that Bloch made. Consequently,
it would not be unfair to describe his article as irresponsible, mischievous
and almost reckless.

It is interesting to note that a contributor to the paper's
opinion columns, RES Cook, commenting on Bloch's earlier contributions,
asks: "Really Mr Bloch, what dreamland do you inhabit? You certainly cannot
be living in the land inhabited by the vast majority of suffering and
struggling Zimbabweans."

A decision to eliminate the zeros from the Zimbabwean currency
will not address the severe economic meltdown that the country is
experiencing. The causes of this decline are, of course, self-inflicted and
include the economic consequences of the unbudgeted payments to war veterans
in 1997, the costly military adventures in the DRC in 1998, the land-grab
exercise since 2000 and unprecedented levels of corruption in the public
sector. The "stolen" elections of 2000, 2002 and 2005 have earned the
country the pariah status that it now has in the international community of

Consequently, until political legitimacy is restored through
free and fair elections on the basis of a new, people-driven constitution,
the country will remain a "rogue state" and no one will have any business
dealings with us.

* Mfandaidza Hove is MDC secretary for economic affairs.

Click here or ALT-T to return to TOP

Politics is the problem and the solution: it's that simple

Zim Independent


IT is salutary that government has acknowledged the pivotal role
of agriculture in Zimbabwe's economic recovery, but dismaying that President
Mugabe believes such recovery can be attained on the basis of a shortsighted
selection of who to deal with in the international community.

Speaking at the opening of the second session of parliament on
Tuesday, President Mugabe put agriculture at the centre of economic
recovery, emphasising the need for timely delivery of inputs, security of
tenure and the need for stability on the farms.

In this regard, he promised firm action against those causing
havoc on newly-acquired farms by either vandalising equipment or destroying

These activities are no less detrimental to Zimbabwe's food
self-sufficiency than corruption is to the administration of justice and the
well-being of the financial services sector.

If only there was sufficient political will to deal resolutely
with corruption and malfeasance.

Mugabe observed when he addressed his party's central committee
two weeks ago that what was needed to revive agriculture were skills, money
and labour. "Not everyone can be a farmer," it finally dawned on him.

The least we can say is that a major Operation Murambatsvina is
required on the farms before people can take government seriously about what
needs to be done. Productivity cannot be enhanced by looking for scapegoats
such as Western sanctions and transitory droughts. Time must finally come
when people should tell each other some home truths. That time is now.

We fear that these good intentions cannot be achieved by a
sorely divided nation. Without a comprehensive political settlement, it is
hard to see how government hopes to marshal the nation's abundant talent and
resources for the common good. There can never be an outright winner in
Zimbabwe's current badly polarised political environment, not even by an
over-exuberant opposition trying to tap into the groundswell of a
disenchanted nation. Is this the legacy that Mugabe wants to bequeath to
this country?

A quick political settlement will help us lure back the talent
and skills of our sons and daughters scattered across the globe because of
economic and political problems at home. Every year Zimbabwe spends billions
of dollars training manpower in various skills that we lose to other
countries because of bad policies. Developed nations that have more
resources than ourselves save millions from the pool of cheap labour and
skills that we lose.

It is the skills more than the trickle of American dollars and
British pounds that we need to get this country out of this malaise. It is
the goodwill of everybody that we need to get international aid, debt relief
and national development. The recovery of the economies of Zambia, Malawi
and Mozambique in recent years demonstrates just how important foreign
direct investment and debt cancellation can be to a poor country's

Zimbabwe needs to harness all its resources - material and
human - to produce and sell goods in the best markets across the globe. It
was in this regard, we presume, that the president called on parliament to
ratify the revised Cotonou agreement that regulates trade regimes between
Europe and African, Caribbean and Pacific nations.

But we fail to see how this can be achieved in the face of the
current political standoff between Zimbabwe and the European Union. It
matters very little that we choose to call that dispute a bilateral issue
between Zimbabwe and Britain. Those countries act as a bloc and consider an
injury to one as an injury to all.

Similarly, we have lost a great deal in textile trade
concessions under the Agoa arrangements with the United States. We don't
doubt that inroads have been made in finding new markets in the Far East.
The normal tendency is for nations to work on principles of aggregates, not
substitution, to expand their markets and negotiate favourable trade deals.

In this regard our "Look East" policy has been informed by
bigotry as if that part of the world is eager to cut special deals with us
as a nation.

Our cotton, our minerals, our tobacco and our processed products
must be sold to the best bidders to the benefit of the nation. We should
work to reconcile Zimbabwe to the community of nations. There is no doubt
that we have more to lose by our isolation than can ever be made up for by
cutting minute trade agreements in the East. Shortages of power, fuel, drugs
and balance of payments support bear testimony to this dire state.

It is the holistic, all-embracing vision that we found missing
from the president's address. Piecemeal policy initiatives with no mass
appeal only invite cynicism from business and other stakeholders. No
leadership that is serious can afford that.

Click here or ALT-T to return to TOP

Treading path to a false revolution

Zim Independent

Candid Comment

By Joram Nyathi

I HAVE followed with interest Violet Gonda's interviews with
Welshman Ncube, Lovemore Madhuku and Tendai Biti on her SW Radio Africa's
Hot Seat programme. Last week's installment was especially revealing on the
sticking points between the two MDC factions.

Gonda sought a clarification on the stalemate. Ncube's response
was simple: violence, the constitution and respect for majority decisions.
These were the issues that culminated in the split of October 12 and still
keep them apart.

I found Biti's response most disconcerting to say the least. He
went off at a tangent of evasion and stonewalling, talking about "resonating
with the masses", as if he had never heard about the violence in his party.
He was not going to exhaust himself on issues of violence when people were
hungry, wanted drugs, could not afford school fees for their children and
were tired of Mugabe, he said. He said the MDC was "not set up by the genius
of individuals" but by ordinary people who wanted "a democratic
confrontation with the regime".

With due respect, this is obfuscation of the worst sort. Are we
saying hungry and sick people should be subjected to terror attacks in the
name of fighting Mugabe?

We all know that fiendish fascists like Adolf Hitler and Benito
Mussolini committed their atrocities in the name of the people and they had
their apologists and philosophers. The leader is supposed to set the moral
compass for his followers, not for him to shirk responsibility and principle
in order to "resonate" with the people. I couldn't understand why Biti found
it so hard to denounce violence as a tool of the camp that he represents.
Which amounts to a tacit endorsement.

Instead he said he was focusing on the "bigger picture", as if
that noble goal was exclusive of principles, fair play and respect for human

We have heard similar demagoguery from Mugabe that Zimbabweans
don't want a new constitution, human rights and the like but food, drugs,
transport and education for their children. It is as if human rights and a
better standard of living are mutually exclusive.

Issues of violence can't be peripheral in a struggle where Zanu
PF's alleged big crime is violence against members of the opposition. Least
of all should we tolerate a culture of impunity for perpetrators of
violence. It is simply giving hostage to fortune and Zanu PF will make
maximum political capital of it, albeit to a very sceptical audience.

Tolerance for "small" crimes starts as an aberration before it
becomes endemic in the party. That is how corruption, nepotism, tribalism,
cronyism and political patronage have become so pervasive in all facets of
life in Zimbabwe. Those fighting for democracy have a chance to demonstrate
that they are better than Zanu PF.

While Zanu PF violence can be traced back to the nature of
guerilla warfare during the liberation struggle, I cannot understand why we
can't transcend that stage 26 years into Independence. What Biti calls "the
fundamental process of turning the dream of a new Zimbabwe into a reality"
cannot be achieved using the methods of the tyranny we seek to destroy. This
can only lead to a "false revolution" where the new leaders are no more than
an accident of time and space instead of principled statesmen.

We insisted on the MDC looking at the "bigger picture" in its
internecine fight when we thought the causes of the split were frivolous. It
has turned out that they are structural and a number of political
opportunists and financial refugees are finding it safer to hide in a crowd
than stand up for the principles of the original MDC. There is no one who
has a monopoly on this bigger picture and that picture is not exclusive of
principles and personal integrity. Ranting aloud against Mugabe is no more
confrontational or more effective than so-called "quiet diplomacy". Citing a
litany of Zimbabwe's problems is not the same as resolving them. It is
merely playing to the gallery. Even Mugabe can do that. Any villager will
tell you what he wants. So what?

The other big disease afflicting opposition politicians the same
way it has afflicted Zanu PF since Independence is the growing culture of
denial. In the case of the murderous attack on Trudy Stevenson, a few
apologists for violence went so far as to claim Arthur Mutambara's camp was
trying to gain political mileage. The least one can say is that this is most
callous. It is callousness informed by ignorance and selfishness - that such
a thing will never happen to me.

In his letter to Mugabe that we have serialised over the past
three weeks, Joshua Nkomo revealed that in 1983 seven Catholic priests wrote
a pastoral letter condemning the dastardly "excesses" of the Fifth Brigade
during Gukurahundi in Matabeleland North. The response from Zanu PF
spokesperson Nathan Shamuyarira was that this was "contrived propaganda".
That propaganda turned out to be "an act of madness" that cost 20 000
innocent lives while their compatriots who were cheering Mugabe on thought
it would never happen to them. Indeed we all thought the madness had been
cured until it manifested itself as Operation Murambatsvina last year. Then
it had been shorn of ethnicity or regional trappings. But we are fast
relapsing into the same ethnic divisions with no content.

I have no doubt that people like Biti can do better. As a
lawyer, his answer to Gonda's question on the use of violence was a simple
yes or no. You cannot afford to be ambivalent and to equivocate on basic
matters of principle of you are a political leader.

Click here or ALT-T to return to TOP

Currency reform doomed without economic reform

Zim Independent

Editor's Memo

By Vincent Kahiya

PERU went through its worst inflation between 1984 and 1990. The
highest denomination in 1984 was 50 000 Soles De Oro. By 1985, it was 500

In 1985 the country initiated currency reforms which saw the
introduction of the Intis, a single unit which was exchanged for 1 000 Soles
De Oro. In 1986, the highest denomination was 1 000 Intis before a
stratospheric rise to 5 000 000 Intis by 1990. There was more currency
reform in 1991 which created the Nuevo Sol exchanged for 1 000 000 Intis.
The overall impact of hyperinflation was that 1 Nuevo Sol was equivalent to
1 000 000 000 pre-1985 Soles De Oro.

In Mexico, President Carlos Salina de Gortari in 1993 responded
to the inflation in his country by stripping three zeros from the peso to
create the nuevo peso (new peso). The parity was $1 000 = N$1. The
transition was done in three years from January 1993 to January 1996, when
the word "nuevo" was removed from the currency, returning it to the peso.
The parity that followed was N$1 = $1.

Confusion was avoided by making the "nuevo peso" currency almost
identical to the old peso. Both of them circulated at the same time. Later
all currency that only said "peso" was removed from circulation. The Banco
de Mexico (Bank of Mexico) then issued a new currency with new graphics,
also under the "nuevo peso". These were followed by the current almost
identical peso currency.

Closer to home, Angola went through a period of horrific
inflationary spikes from 1991 to 1995. In early 1991, the highest
denomination was 50 000 kwanzas. By 1994, it was 500 000 kwanzas. In the
1995 currency reform, 1 kwanza reajustado was exchanged for 1 000 kwanzas.
The highest denomination in 1995 was 5 000 000 kwanzas reajustados. In the
1999 currency reform, 1 new kwanza was exchanged for 1 000 000 kwanzas

The overall impact of hyperinflation in Angola during the period
led to: 1 new kwanza = 1 000 000 000 pre-1991 kwanzas. Zimbabwe, the holder
of the dubious distinction of having the highest inflation in the world, has
started toying with the idea of currency reform with the central bank
inviting submissions on how to deal with the havoc hyperinflation has
wreaked on the Zimbabwe dollar.

The most telling submissions on this subject have come from the
Institute of Chartered Accountants of Zimbabwe (ICAZ) who have proposed the
introduction of the kilo-dollar to ease the load on cash purchasers of goods
and services and to breathe life back into failing accounting systems. The
ICAZ proposals for currency reform on paper mirror the route taken by Peru,
Argentina and Mexico of stripping zeros from the currency. The reforms in
the three countries were carried under different rafts of measures to
mitigate the effects in hyperinflation and to promote economic recovery,
hence the varying degrees of success.

The Argentine experiment worked because of President Salina de
Gortari's commitment to reform. Those reforms resulted in efficiency gains,
a greater openness of the investment framework and closer integration into
the world economy. Thus currency reform was underpinned by economic reform
and a quest to expand trade.

The same was not the case in Peru and Angola where inflation
remained high as economic reforms failed.

Zimbabwe's economic fundamentals today are a major threat to any
quest to rehabilitate our currency, especially when President Mugabe
believes that a key role of the Reserve Bank is to print money in times of
emergencies, notwithstanding the resultant inflationary spur.

He told a luncheon for MPs on Tuesday that the US printed money
when the (George) Bush administration sent troops to Iraq. The significance
of the US example was baffling because whatever the Americans printed, if
ever they did, remains tradable the world over including here. Can the same
be said of our currency?

President Mugabe's message on Tuesday was that the government
would order the printing of more notes again if it feels there is need to do

Currency reforms in Zimbabwe are at the mercy of populist
policies fashioned to score political points against opponents at the
expense of national progress. Dropping zeros on our currency as proposed by
ICAZ, if adopted, could be the beginning of a process of far-reaching reform
which can become disastrous if not accompanied by prudent reforms
underwritten by huge foreign currency injections. The examples of Peru and
Angola mentioned above demonstrate that.

My major fear is the RBZ being hurried by government into
effecting the reforms without not only consulting adequately and weighing
the efficacy of doing so, but before adequately educating the public that
overnight they have ceased to be "millionaires" with the introduction of the
kilo-dollar. The education campaign should start now. So should the reforms
without which the whole project is doomed.

Click here or ALT-T to return to TOP

How well informed is Kangai?

Zim Independent


IT must have been obvious to all but the most gullible of
commentators that UN Secretary-General Kofi Annan did not tell President
Mugabe that he would use his office to get sanctions lifted. Why? Because
the sanctions had nothing to do with the UN and Annan was in no position to
give undertakings about matters that did not concern him.

Sanctions are a matter for those imposing them and Annan would
not have wanted to add to his problems just ahead of his retirement by
lobbying on behalf of President Mugabe in Washington and the EU's 25
capitals - a doomed mission if ever there was one!

Annan's office last week confirmed to this paper that he gave no
such assurance. Yet Caesar Zvayi proceeded to hold a "conversation" with
Kumbirai Kangai based on the false premise that Annan would "work to have
the sanctions lifted". Kangai, who should know better, said the "efforts
were welcome".

What do we have here: a journalist and a politician who have
bought the government's spin without stopping to consider how unlikely it

Politicians have a vested interest in marketing a certain
viewpoint. We have no doubt Annan was polite in his chat with Mugabe in the
lobby of a Banjul hotel. But it is the duty of journalists to apply a
measure of scepticism regarding what they are told lest they make fools of

While we are about it, this may be a useful opportunity to deal
with a persistent lie that Zanu PF spokesmen peddle.

"The Labour government refused to honour its obligations to fund
land reform," Kangai told Zvayi, who looked as if he would swallow anything,
"and we responded by taking land from their kith and kin." He was then
invited to wax indignant over the Clare Short letter.

Kangai must be aware that Britain gave £44 million for land
reform in the 1980s and 90s, money that wasn't always wisely spent. The
Labour government, when it came to power, set aside £36 million to fulfil
its obligations under the 1998 land donors accord with the Zimbabwe
government. The only condition they attached was that the UNDP should
certify any proposed land reform programme as viable and designed to
alleviate poverty.

In the event the Zimbabwe government proceeded with a programme
of land seizures that a UNDP technical team subsequently said was not

Only in a state where the flow of information is strictly
controlled could these facts be ignored by a journalist and a politician in
a newspaper interview!

Kangai demonstrated the cognitive dissonance that is becoming
the hallmark of his party when he suggested that if Britain insists the
dispute with Zimbabwe is not a bilateral one, then it should "step aside and
let us engage the EU to remove the sanctions they misled the EU to impose".

This coming, in all seriousness, from the ruling party's
secretary for external relations. How well informed is he?

He was also allowed to get away with an easy question about
Taiwan instead of a more challenging one about Tibet. Why does that country
remain a Chinese colony (with Han Chinese literally colonising it by the
day) and why doesn't Zanu PF care?

He was however asked a good question about China using Zimbabwe
as a market for its goods and not as an equal trading partner. But he
quickly wriggled off that hook by claiming trade was mutual.

"Our trade is bilateral," he clai-med. "The Chinese get tobacco
from us and a few other things; we also get a few other things from China."

So there you have it!

Perhaps the most frequently deployed accusation against the
foreign press is that they have tarnished Zimbabwe's image and that this in
turn is keeping tourists away. The expression "negative perceptions" is
invariably used.

In this context consider the events of last week. A handful of
civic activists marched with banners to Town House to protest deteriorating
service delivery in the capital. They are set upon by riot police, assaulted
and arrested. Two journalists covering the event are also detained.

We must remember in all this that Harare is run by a
state-appointed commission headed by an unpopular stooge "mayor" instead of
by councillors and a mayor elected by the city's residents.

The attack on the peaceful demonstration was reported around the
world. Protesting against service delivery is considered a basic right in
most capitals except perhaps Beijing, Pyongyang and Havana. The response was
an over-reaction that makes Zimbabwe look like a brutal police state.

When somebody from the Zimbabwe Tourism Authority next naively
proposes a "turnaround" strategy for the tourist industry, he should be
reminded of this episode and the impact it has on "perceptions" of the
country. Police wielding batons and teargas against a handful of peaceful
protestors doesn't play well, even in the Chinese press.

Why were people detained in police cells for exercising a
constitutional right to free expression? Why has the judiciary failed to
uphold that right when Posa clearly stipulates that police need to be
informed of a demonstration, not asked for permission? Why were journalists
held long after they had produced their press cards?

So long as Zimbabwe remains a country in which free expression
is trampled on and people are detained for exercising their civic rights, it
will get the reputation it deserves.

Muckraker has been trying to follow events at Iron Mask Farm in
Mazowe. The farm was seized from its elderly but productive owners in 2002.
The state media told us it would be handed over to a charity for street kids
under the patronage of First Lady Grace Mugabe, with Gideon Gono as chairman
of the board of trustees.

But that was the last we heard of it. Nobody ever saw the street
kids. But somebody collected cheques for the produce. Then last week Grace
Mugabe's spokesman said there would be a groundbreaking ceremony at the
weekend, which duly took place on Sunday.

What explains the four-year delay? And why are there twice as
many street kids in Harare today than there were when the farm was seized
but none appear to be finding their way to Mazowe?

We also don't understand why it was necessary for the government
to take a farm that was the product of a couple's life's work and give it to
a charity whose work would not be necessary if the state had fulfilled its
primary obligation to care for its people.

We were however impressed by the dexterity of the president in
linking the Iron Mask scheme to the UN's Millennium Development Goals. This
at a time when a growing number of children are dropping out of school
because their parents cannot afford to keep them there and standards of
living have plunged to pre-1953 levels.

You have to admit, government is good at spending money. It has
splashed $400 billion on luxury vehicles for members of the anti-corruption
commission. What we liked in this report was Minister Paul Mangwana's

"Do you want them to walk on foot?" he asked. "Are you sure they
should be pedestrians?"

Perhaps Mangwana should be asked why the commissioners who
include Eric Harid (chair), Johannes Tomana, Kuziwa Nyamwanza, Retired
Brigadier Elasto Madzingira, Alice Nkomo, and Rungano Wutaunashe, don't
already have cars? Whatever the case, this example of state extravagance is
an inauspicious start to the commission's work.

A fuel allowance we could understand but $44 billion each for
new vehicles! That works out at US$444 000 each at the official rate.

What we know is that the commission is struggling to obtain a
secretariat and a departmental head. But in Zimbabwe cars always come first!
Members of the senate are demanding all-terrain vehicles, we gather.

The commission will have a formidable task. RBZ governor Gideon
Gono, speaking to journalists last week, said corruption spurred by
selfishness had now become the Number 1 enemy, rather than targeted
sanctions imposed by the international community.

"Corruption has become a millstone around our necks," he said.
"It's worse than the sanctions."

"Some were benefiting from the situation," he pointed out, "a
few in positions of authority."

Surely not!

We were intrigued by Alexander Kanengoni's piece in the Sunday
Mirror headed "Several hours with Mugabe". This was the occasion when Mugabe
admitted he was "very worried" about the economy, and then blamed the
problems on everybody else.

Readers will recall Muckraker commenting last week on the
absence of challenging questions during this curious get-together. Kanengoni
describes the session as an "interview". But he doesn't say what questions
he asked!

Later it turned into a three-hour "conversation", we are told.
But still we weren't told what was asked. And these were journalists!

We did like the bit, however, about the Iranian president's
speech in Banjul being cut short by a breakdown in the public address
system. And about an uncle telling the young Robert, stuck up a tree, to get
down the same way he got up.

Isn't that what the nation is telling him now?

But we should curse Zinedine Zidane who lost Zimbabwe a fine
deal. Mugabe supported Italy during the World Cup final while his son
Bellarmine (9) supported France. If France won, the youngster wagered his
father, they would trade places, he to Munhumutapa Building to become
president and the old man to Hartmann House to become a primary school

It was an exit made in heaven - and then Zidane blew it (or is
it Bleu it?).

Now we may understand why young Chatunga wanted to leave
Hartmann House. His father is refusing to pay his school fees because they
are too expensive! According to a London-based website he told the school
authorities he could not pay over $100 million when his other son, Robert
jr, required only $25 million at Kutama.

Congratulations to Victoria Ruzvidzo for her company-spo-nsored
trip to Dubai. She "discovered" that most Zimbabweans travelling to Dubai
buy "trinkets" such as clothes, power generators, food, television sets,
toys and chocolates, among other items. Her view was that the "billions of
dollars in foreign currency" could have been used to buy spare parts for Air
Zimbabwe or to import fuel or power.

Muckraker has lots of sympathy for Victoria's patriotic
journalism, that is provided she is able to answer a few questions honestly.
What useful items did she bring back herself from her trip? Did she buy the
$258 million ticket or was it sponsored by the state-run airline? Is she
aware that most of the expensive "trinkets" are purchased by well-heeled
government employees and those in the ruling party who can afford them?

Those are the people who can still afford toys and chocolates
and luxury vehicles. How many ordinary Zimbabweans can afford a Mercedes
Benz S600? Yet we see them all around the capital.

Victoria must have also been miffed that people prefer imported
clothes when our flea markets are full of zhing-zhongs from China. She is
also missing something. A short trip into the industrial areas will show
Victoria that there is very little manufacturing going on. The formal sector
is severely crippled and Zimbabweans are forced to spend millions of dollars
importing cooking oil, soap and toothpaste when our own workers are being
laid off. We are fuelling an industrial boom in neighbouring countries while
our own economy is shrinking. That's how dangerously shaky our sovereignty
has become, underpinned by empty slogans and blind journalism.

We were surprised to read in the Herald that government had
"resumed" land allocations. We weren't aware that there had been a temporary
halt to the chaos of offers and withdrawal of letters.

What we found interesting was the admission by President Mugabe
of a bitter home truth - not everyone is a farmer. If this obvious fact had
been appreciated from the beginning there would have been no need for the
destruction called "fast-track" because it would have been possible to
identify people who had an interest in farming and allocate them land.

Mugabe told chiefs and other traditional leaders in Kariba last
week that land uptake in the seven years since 1999 was only 40%. He said
people got land on the basis of "ambition" alone, which was not good enough.

"You need capability, money and labour. Not everyone can be a
farmer," he said.

Does one need to be a rocket scientist to know that? It appears
the chickens are coming home to roost.

Finally, Muckraker loved the story doing the rounds that Gideon
Gono asked to resign. The president agreed on condition that he restored
inflation to where it was when he came into office.

Click here or ALT-T to return to TOP

How to discourage investment

Zim Independent

By Eric Bloch

A FEW weeks ago, the Minister for State Security and Land Reform, Didymus
Mutasa, met with a large group of dispossessed farmers in Chiredzi.

The meeting took place fairly soon after Zimbabwe had, very belatedly,
acknowledged liability to various foreign nationals, in terms of Bilateral
Investment Protection and Promotion Agreements (BIPPAs), for compensation in
respect of farms expropriated by the State.

The farmers were seeking clarification as to government's compensatory
intents, and as to the extent, if at all, that any of them would have an
opportunity to resume farming.

The many reports that emanated from those who attended the meeting were in
accord that the minister was extremely belligerent.

Apparently he stated acrimoniously that "if it was up to me I would never
have signed a single bilateral agreement because foreign investors just come
and take Zimbabwe's assets, and give Zimbabwe nothing in return". He
continued by advising the evicted farmers that, to all intents and purposes,
they should "get your money and leave Zimbabwe". (This conflicts with recent
governmental statements that white farmers were welcome "as long as they
regarded black farmers as equals", stated only a month ago by President
Mugabe when speaking in Matabeleland South, and that such farmers should
apply for 99-year leases).

The minister's statements of negative perceptions of foreign investment also
conflict diametrically with the much governmentally lauded National Economic
Development Priority Programme (NEDPP), and with the president's greatly
heralded "Look East" policy. A most pronounced element of NEDPP is the
promotion, motivation and solicitation of foreign investment. Investment
missions were despatched to China, South Korea, Russia, the Middle East, and
elsewhere. Statements of joy in the state-controlled media have trumpeted
forth of the growing interest in investing in Zimbabwe being displayed by
leading Canadian mining houses, South African investors, and many others. Is
the honourable Minister trying to undermine the NEDPP-driven investment
drive? Surely not!

And his contention that foreign investors merely take Zimbabwe's assets and
give nothing in return, is devoid of even a "smithereen" of substance. Of
course, any investor, foreign or domestic, wants to benefit from his
investment. Why should he place his capital at risk, politically,
economically, or otherwise, if he is not to realise something for doing so?
To expect that of an investor would be naivety in the extreme. But to
suggest that there is no quid pro quo between investor and Zimbabwe is even
more naïve.

The foreign investors inject greatly needed foreign exchange and technology
transfer to Zimbabwe, and very often expand Zimbabwe's international
markets. Their investment generates employment for Zimbabweans. That
employment is of critical importance, for more than 80% of Zimbabwe's
employable population is without formal sector employment.

And the investment invariably stimulates much downstream benefit to the
Zimbabwean economy. Many inputs of goods and services are sourced from
within the economy. In numerous instances the new investment is strongly
export-related, yielding vital inflows of foreign exchange. In other
instances the new investment is import-substitutory, thereby reducing
foreign exchange needs. The earnings of the employees of the investment
venture are expended within the economy.

Those earnings, and the investment profits, attract taxation for the
near-empty coffers of the fiscus. The extent of benefits to Zimbabwe of
constructive foreign investment is vast, but the minister denies their
existence, and does not welcome foreign investors. How can he justify a
stance which is so at variance with the official policy of a government of
which he is a senior member?

Of course, the minister is not alone is discouraging foreign investment. A
major field for investment is the mining sector, but investor uncertainty as
to investment security in that sector is immense. For several years
government, in general, and the president and the Minister of Mines in
particular, have made statements that government will enforce black economic
empowerment within the mining industry. Few, if any, foreign investors are
opposed to the principle of substantive indigenous ownership in mining. In
fact, most welcome it. But they do want to know the basis thereof. Will the
indigenous Zimbabwean participation be governmental, or private sector? Very
few are enamoured by any prospect of the former, for they are conscious of
the wide-ranging parastatal mismanagement that has long prevailed in

Similarly, will the co-investment by Zimbabweans be equitably funded by
them, or is the foreign investor expected to provide all the capital, and
then forfeit much of it?

Having witnessed the vehement opposition of government to payment of
compensation for farm lands, and the tardiness and inadequacies of
compensation for farm improvements and moveables, there is an inevitable
fear that like inequities and injustices will apply to acquisition of equity
in mining ventures under an indigenisation policy. And the investor wants to
know whether the policy will be motivational and facilitational, or
authoritarian and mandatory, over what period of time will compensation be
forthcoming, and what security will be accorded the investor on that
investment which he is permitted to retain.

In like manner, the investor also needs to know the extent that the
operations of the investment entity will be subject to economic regulation,
and the extent to which Zimbabwe's presently grossly over-regulated economy
will be deregulated. If an investor places his capital, his skills and his
energies at risk, he wants to be the master of his investment's destiny,
instead of that destiny being subject to the whims and fancies of a
government which has, for 26 years, demonstrated great volatility. Zimbabwe
is dragging its feet in formalising its mining sector indigenisation
policies, and needs urgently to enunciate an authoritative, constructive,
investment-conducive, policy.

If Zimbabwe wants to discourage investment, and assure the continuing
decline of its economy, it must continue to alienate the foreign investors,
be castigating of those investors' motives, be reluctant and delinquent in
honouring BIPPAs, minimise investment security, and make statements such as
that attributed to the minster at the Chiredzi farmers' meeting.

If, on the other hand, it genuinely wants investment, instead of
non-forthcoming Far Eastern largesse, it must do exactly the reverse of such
measures, and convincingly demonstrate that foreign investment is welcome.

Back to the Top
Back to Index