Friday, 29 July 2011 10:32
WHILE the mid-term fiscal policy review was presented to parliament on
Tuesday amid jokes and laughter from cabinet ministers and backbenchers,
there was an uneasy calm and suppressed anger bubbling under the surface
after clashes behind the scenes. There have been angry exchanges between
President Robert Mugabe and Finance minister Tendai Biti over the highly
Biti cracked jokes amid laughter among MPs, saying “money must be eaten” —
in reference to the need for government ministries and departments to
utilise available funds — and several mentions of “Dotito”, a remote area in
Mashonaland Central to illustrate a point, but the humour belied serious
battles over the fiscal policy review between Mugabe and himself.
The fight over fiscal policy drew in cabinet ministers from across the
political divide, especially those in the security cluster and others whose
appeals for more funding Biti had rejected.
Mugabe and Biti were in particular at each other’s throats over the issue of
civil servants salary increases. They also crossed swords over the emotive
issue of currency; that is whether Zimbabwe should continue with the
multi-currency regime, adopt the United States dollar or join the Rand
Monetary Union (RMU).
Biti prefers Zimbabwe should push for regional economic integration by
joining the Southern African Customs Union, which comprises South Africa,
Namibia, Botswana, Lesotho and Swaziland, and hence become part of the RMU
or Common Market Area — the rand zone — but Mugabe strongly opposes this
Tensions before the fiscal policy were exacerbated by Biti’s spurning of
Mugabe and different ministers’ demands for a supplementary budget to cover
government ministries and departments which were struggling with dwindling
allocations or had already exhausted their votes under the current US$2,7
billion national budget.
Fiscal policy – use by government of taxation and expenditure to influence
the economy – is fiercely contested in Zimbabwe due to policy differences
mainly between the populist Mugabe and the economically conservative Biti.
Since becoming head of Treasury, Biti has become conservative and frugal in
the running of the economy and this has led him to repeatedly clash head-on
with Mugabe and others who are spendthrift.
During the debates before this week’s review, whereas Mugabe took an
expansionary stance on fiscal policy which involves government spending more
than its tax revenues, Biti wanted a straitjacket or even contractionary
approach in line with his “eat what you gather” mantra.
The major point of conflict though between Mugabe and Biti was the issue of
civil servants’ salaries. Mugabe has been demanding salary increases for
public servants while Biti insisted there was no money. This led to
contradictory and inconsistent pronouncements by government over the issue.
During the process of crafting the fiscal policy Mugabe and Biti met several
times – including on July 21 and 28 – to discuss the structure and thrust of
the review but their differences invariably flared up. Last week the two
viciously clashed during a heated debate to finalise the fiscal policy
Biti’s argument with Mugabe has been that further salary increases without
adequate funding would bankrupt and ground the government in the next few
months, even in October, because the revenue performance to June indicated a
US$65 million shortfall. Average monthly revenue collections are supposed to
be US$230 million. Actual collections in the first half of the year only
exceed this target by about US$47 million at US$277,3 million, while the
rest of the months were below target.
The minister argued cost overruns were compounded by the unbudgeted for
January and July salary increases. The January salary review created a
budget overrun of US$210 million, while the July increments resulted in an
additional shortfall of US$262 million, bringing the total deficit in that
area to US$470 million.
Biti said the net effect of this was that the monthly wage bill shot up to
$162 million from US$120 million, a dramatic increase for a broke
government, which effectively meant an additional US$42 million every month.
The minister warned in total the employment costs, including employer
contributions for medical insurance and NSSA, would be $1,8 billion against
a budget provision of US$1,4 billion, hence an overall financing gap of at
least US$402 million. The cost overrun crowds out budget support for
recurrent and capital expenditure programmes to merely US$900 million.
Biti further warned that implications of the salary increases would be worse
next year as government would start with an obligation of US$2 billion,
leaving less than $1 billion to cater for the rest of pressing
However, Mugabe and his Zanu PF ministers tried to counter Biti by coming up
with a stop-gap measure in the form of diamond revenues. Treasury
resultantly received recently US$27 million (which is part of the $167
million the Zimbabwe Mining Development Corporation has committed to remit
to the fiscus between July and December 2011) from diamond sales to pay
civil servants’ mid-year salary increases. But Biti said the amount was
In order to accommodate the unaffordable salary increases, Biti then
suggested cutting budget allocations in certain ministries and departments
which Mugabe found sensitive.
Information exclusively obtained by the Zimbabwe Independent shows Biti
proposed that the defence allocation which is US$5,4 million a month be cut
to US$2 million a month; foreign travel be cut from US$4,9 million a month
to US US$2 million; foreign missions from US$2,2 million to US$1 million;
health from US$4,1 million to US$2 million; Zimbabwe Republic Police from
US$3,4 million to US$2 million; special services from US$1,5 million to
US$800 000; Zimbabwe Prison Services US$1,2 million to US$600 000; War
Veterans Administration Fund from US$1,1 million to US$500 000; state
universities from US$800 000 to US$400 000 and other operations: ministries
and departments from US$22,6 to US$11 million.
Mugabe was said to have been outraged by this last week on Thursday and
threatened to take “swift and decisive” measures against the minister. Biti
was resultantly forced to retreat with fear over the proposed cuts,
including on the issue of the RMU.
While Biti succumbed to pressure on the cuts and RMU, he maintained that the
salary increases would create serious financial problems for an economy
already buffeted by many others troubles, including an unsustainable US$7,15
Apart from the debt crisis, Biti said economic recovery was being hampered
by a hostile political environment, low revenues and limited fiscal space,
lack of alternative financial instruments, failure to implement agreed
policies and programmes and a grindingly slow pace of reforms.
Biti then defiantly warned on Tuesday that Zimbabwe was heading for
difficult times because of Mugabe’s populist decisions and mounting
“Zimbabweans must brace themselves for a long winter of despair,” Biti told
parliament. “We have made this bed and we must lie in it. The present budget
and budgets in the foreseeable future will essentially be absorbed by wages,
leaving little room for much needed recurrent and capital expenditure
programmes. More importantly, there is a real danger of government running
completely down as early as October 2011,” Biti told parliament.
“We are likely to run monthly cash deficits and we shall face difficulties
in covering obligatory expenditure commitments. It is a cardinal sin for any
government to spend what it does not have. The elementary rule of common
sense economics is that ‘you eat what you kill’. Or put simply, ‘you reap
what you sow’. We have sown the wind of an unbalanced budget and we will
reap the whirlwind of economic instability.”
Against this backdrop, the explosive policy differences between Mugabe and
Biti are likely to persist amid repeated volatile clashes.
Friday, 29 July 2011 10:36
SENIOR Zanu PF politburo members have said their party was not prepared for
early national elections and will only hold primary elections after the
referendum for a new constitution, delimitation of constituencies and voter
registration in 2012.
This represents a major climb-down from Zanu PF’s previous stance that the
polls should be held this year. It also comes at a time when some officials
close to President Robert Mugabe and his party’s negotiating team have ruled
out reviewing forward timelines for elections agreed to by the GPA
negotiators. They said it was impossible to fast-track the elections roadmap
to hold polls this year.
In separate interviews with the Zimbabwe Independent on Wednesday, the
senior officials dismissed talk of primary elections later this year saying
rules and regulations outlining the criteria for party parliamentary
candidates would only be presented to the politburo for approval after the
Zimbabwe Election Commission (Zec) completes the demarcation of
“If you hear anyone talking of primary elections this year, you must just
dismiss it as utter nonsense and madness,” said one official. “We can only
hold our primary elections after the referendum and after the delimitation
of constituencies. How can we have primaries when we don’t even know what
kind of a parliament we will have in the constitution and how many
constituencies we will have? This can only come after voter registration and
On election timelines, another official said there would be no review of
election roadmap timelines because they were agreed after consultations with
Zec and Mugabe’s approval.
“Do you seriously think (Patrick) Chinamasa and (Nicholas) Goche can agree
and append their signatures to something without the approval of the
president?” the official said. “Mugabe knew and agreed to the timelines and
the team also consulted Zec on how much time they needed to do the voter
registration, compilation of the voters’ roll and delimitation of
constituencies. Those times cannot be reviewed downward, but obviously
things that can be done concurrently would be done.”
The official said Zanu PF’s insistence on holding elections this year was
just a way of putting pressure on Finance minister Tendai Biti to avail
funds for the speedy completion of the constitution-making process.
“We say that to put pressure on MDC-T and Biti so that funds are made
available for the constitution-making process, Biti is releasing the money
in dribs and drabs meaning he will determine how long the
constitution-making process will take,” said the official.
It has also emerged that Zanu PF is deeply divided over the rules and
regulations for its primary elections with one group insisting that only
people in the provincial executive and those who have held party positions
for at least five years from cell to provincial levels should contest the
The other group led by director of the national commissariat retired Air
Vice Marshal Henry Muchena wants the rules relaxed to allow popular people
even at grassroots level to fight it out with provincial executives to avoid
what happened in 2008 when party supporters boycotted elections in protest
at candidate imposition.
It is also alleged that there is a plot by some politburo members to get rid
of Muchena and former CIO director: internal Sydney Nyanhongo from the
national commissariat department. The two stand accused of telling party
supporters at meetings that the most popular candidates, irrespective of
their positions in the party, would be allowed to contest on the party’s
Muchena and Nyanhongo’s objective is to ensure a Zanu PF victory and avoid a
repeat of the 2008 polls when some constituencies failed to agree on a
“There is a big fight over the criteria to choose candidates to contest
elections. A certain group of politburo members are lobbying for Muchena and
Nyanhongo to be fired from the commissariat because of what they are telling
people countrywide. The two believe that Zanu PF can win if it allows the
most popular people to contest the elections and they are arguing that
candidates should be chosen on the basis of their popularity and not on what
provincial or national position they hold,” said one politburo member.
However, another top official dismissed the call to relax the rules and
regulations saying the limit would remain at five years and one should be in
the provincial structures.
The official, however, said there would be a waiver for diplomats and
retiring top government officials.
Friday, 29 July 2011 12:55
DIAMOND revenues cannot sustain the wage bill to year end given the current
high employment costs which are overrunning the budget, Finance minister
Tendai Biti said in the midterm budget statement.
“The July 2011 salary review will create an additional US$262 million budget
overrun and compares to only US$167 million expected from diamond proceeds,”
Employment costs had initially been budgeted to constitute 52% of the total
2011 national budget but the wage reviews in January and the latest in July
will have employment costs consuming a 65% chunk of the projected budget
outturn to full year.
The recent July salary review has been financed from diamond proceeds from
the Zimbabwe Mining Development Corporation (ZMDC), which has since
committed itself to providing diamond proceeds of up to US$167 million to
finance employment costs.
The figure still falls short of projected employment costs of US$262 million
due to salary increases.
“Our concern for the plight of workers must be balanced by the fact that the
same budget has to look after 13 million of our people and employment costs
cannot disproportionately consume the entire budget,” said Biti.
Between January to June 2011, Zimbabwe exported 716 958,50 carats from its
alluvial diamond mines in Marange.
Only US$103,9 million of diamond exports have been accounted for, compared
to US$24,8 million in the same period last year.
A total of 2,33 million carats have been produced to June 2011 but only 30%
(being diamonds from Marange) have been sold.
This has given rise to questions on whether the ZMDC can fully honour their
commitment of providing US$167 million to treasury.
Despite huge production at Marange this year, no payment has been received
by treasury for income earned between 1 January and 30 June 2011 as the
revenue allocation structure continues to prejudice the state.
Under the current ownership and taxation structure, the net proceeds to the
government is only 56%, which falls way short of Zimbabwe’s peers Botswana,
where government receives up to 80%. The Zimbabwe Revenue Authority’s role
in the mining and the selling of diamonds has been questioned.
But in the proposed Diamond Revenue Bill, government should receive at least
75% of gross sales and the role of Zimra would be clearly defined so that
relevant authorities should stick to their defined mandates.
“It is imperative and urgent that the proposed Diamond Revenue Bill be
concluded and this will address the proper legal framework dealing with the
audit of all diamond revenue, its sharing and distribution, as well as the
role of Zimra at both production and marketing levels,” an analyst said.
“The commitment undertaken by ZMDC should be fulfilled so that the proposal
to finance civil servants’ salaries from diamond proceeds does not become a
ministry of finance problem since they are now playing their role the
Given the outstanding issues with the Kimberly Process Certification
Framework, where Zimbabwe still remains in an indeterminate state, the full
production target of 8,2 million carats may not be fully exported and
realised to benefit the country.
Analysts say civil servants’ hopes should not be too high.
Biti has to come up with other sources of revenue since civil servants will
not be able to revert to old salaries. The pressure will be piled on by year
end, as civil servants will expect bonuses.
Friday, 29 July 2011 12:53
LAWYERS representing Econet Wireless say they will appeal to the Supreme
Court following a ruling by the High Court that said an earlier termination
of the agreement by Trustco Mobile was not a proper termination, but an
“expression of intention to terminate at a future date,” and therefore was
In a statement, the lawyers said Econet had argued that Trustco’s letter was
not merely an expression of an intention to terminate the agreement.
The letter specifically stated that unless Trustco were paid the disputed
amounts, they had suspended their obligations under the agreement and were
going to shut down their system on June 6, the same date Econet
disconnected the system to avoid inconveniencing its customers.
Thus, Econet had argued that Trustco had repudiated the agreement.
Independent telecoms experts said Econet is a licensed custodian of
confidential customer information.
Whatever happens to that customer data, Econet shall be held to account by
the regulators and by its subscribers, experts said.
Commentators referred to the protests raised by subscribers against the
unsolicited messages Trustco had been sending to customers and commended
Econet for taking customer complaints seriously.
Asked for comment, Econet chairman Tawanda Nyambirai, said he was out of the
country and would only comment after talking to Econet’s lawyers. –– Staff
Friday, 29 July 2011 12:45
THE manufacturing sector will contribute 30% to the Gross Domestic Product
(GDP) by 2015 from 12% presently, driven by growth in agriculture, mining,
tourism and the financial service sector, Industry and Commerce Minister
Welshman Ncube said.
Ncube also said the manufacturing sector’s contribution to exports will be
50% during the same period, up from 26%. Zimbabwe’s GDP is US$8,3 billion.
Officially opening the Confederation of Zimbabwe Industries’ (CZI) annual
general meeting, Ncube said government’s objective as a nation is to improve
the manufacturing sector’s contribution to GDP, from the current 12% to 30%
and its contribution to exports from 26% to 50% by 2015.
“The share of the manufacturing sector in national output (current prices),
which initially improved from an average of 20,6% between 1986 and 1990, to
21,1% between 1991 and 96, declined to an all time low of below 10% through
2007 and 2008, reflecting the de-industrialisation of the economy,” Ncube
Zimbabwe’s manufacturers are grappling with a surge in counterfeit consumer
products on the retail market, ranging from food items to farming inputs. He
said this can be achieved in collaboration with key sectors like
agriculture, manufacturing, mining, tourism and finance, infrastructure
development and small and medium enterprises (SMEs).
“The key objectives across these sectors should be to improve access to
international markets by focusing initially on regional markets, both Sadc
and Comesa,” Ncube underscored.
He said there was need to have access to capital by aligning the financial
sector to the needs of the productive sector, adoption of new technologies
including ICT, development of knowledge- based industries and promoting
activities that can be undertaken by SMEs, taking advantage of their low
On import substitution, Ncube said the situation in Zimbabwe demands that it
rely on this to offer nominal protection for the country’s industry to
counter the surge in the disruptive imports of cheap and “dumped” goods
which can easily be produced locally.
“Value addition remains critical and our nation should graduate from being a
producer of raw materials into enhanced value addition for both the domestic
and export market,” Ncube said.
Friday, 29 July 2011 10:55
ZIMBABWE’s fiscus was bled of nearly US$500 million by mining syndicates
involved in under-invoicing, smuggling and general lack of quality policing
by state agents in the gold and mineral sections of the police,
investigations by the Zimbabwe Independent revealed.
The Mines register is in a shambles. Many small and medium-sized miners
remain unregistered and therefore operate outside the law. Their production
figures are not captured in the national statistics and more often than not
they trade their minerals clandestinely.
The country has an abundance of minerals, among them gold, chrome, asbestos,
platinum, coal, emeralds and diamonds. However, mining’s contribution to the
national fiscus remains negligible due to leakages in the system.
Mining is dominated by foreign-listed companies such as Rio Tinto,
Anglo-American, Implats, Mettalon Gold, Zimasco, ZimAlloys and Mwana Africa.
Some other big names like Lonrho and BHP have since divested from Zimbabwe
for a variety of reasons among them political and unfriendly foreign
currency repatriation policies.
Mines and Mining Development ministry secretary Thankful Musukutwa told
parliament that most Chinese small-scale miners extracting chrome in the
Great Dyke were not registered with the ministry due to loopholes in the
country’s laws, which allow claim holders to keep their claims even though
no production will be taking place so long as they paid their annual licence
Centre for Research and Development director Farai Maguwu said: “For the
country only to collect US$20,7 million as royalties between January and
September 2010 in an industry that generated US$593,8million reflects that
minerals are not contributing their fair share to the fiscus. Some of the
extractive industries are not paying taxes.”
Maguwu added that: “The practice of smuggling and under-invoicing was
rampant in the country. These companies have the blessings of senior
politicians. They pay rent to senior politicians and nothing to the fiscus.
The $593,8million declared shows how porous the minerals sector is at the
Reserve Bank of Zimbabwe governor Gideon Gono is on record complaining about
precious minerals smuggling in the country and the involvement of political
Last week Gono told parliament that the government was reluctant to
implement the recommendations of a report produced by Alex Stewart
International that cited rampant smuggling of minerals by organised
syndicates in the country.
Alex Stewart International is a global company specialising in weight
control and quality analysis in precious metals, metals, minerals and
scraps. The company is also involved in the logistical monitoring of the
metal and mineral products, since its origin until its destiny.
RBZ had hired the reputable consultants to verify the mining export receipts
the country was getting and if there were no underhand hand dealings in
“They produced a report that said the country was prejudiced substantial
amounts of money by mines, between US$300 million and US$400 million,” Gono
said. “There seems to be no political will within the government to pursue
the findings. This is a disservice to the country to do audits if you don’t
want to carry out their recommendations.”
Cases of minerals smuggling came to the fore in the last decade after
discovery of diamonds in Chiadzwa, near Mutare. The development increased
the number of international syndicates that buy minerals on the informal
market. Conversely it emboldened small-scale miners to increase their
activities as they now had a ready market paying in foreign currency.
The international syndicates involve Chinese, Pakistanis, Israelis, Indians
and Russians. These nationals have been seen around the mining towns in
Mutare and Mashonaland provinces which have huge alluvial gold deposits.
Police in the past have nabbed foreigners on charges of smuggling minerals
in Mutare and Bulawayo.
During the infamous crackdown on illegal gold panners and others in 2006/7 a
total of 225 people were convicted. They were sentenced to between two and
five years in prison. Among the convicts were five Russians who were
The five Russians were Volynkin Vladimir, Safonor Alexander, Vorob Vev,
Valerity Kharitonov and Shokolov Ivor.
The operation forced the closure of over 25 000 small-scale mining
operations according to the Zimbabwe Miners Federation.
The operation was brought to an abrupt halt when senior politicians and
government officials were fingered in the illicit deals.
A senior government figure was named in a case involving Mark Mathew Burden
of Kwekwe who faced 48 counts of illegally dealing in gold. Burden was
convicted and fined.
Several ministers and retired army generals names’ cropped up in mineral
dealings in both Zimbabwe and the Democratic Republic of Congo (DRC), where
the national army once served in Operation Sovereignty.
The late Zanu PF commissar Elliot Manyika was also fingered in cases
involving illegal gold mining in and around Bindura.
The late former principal director in government William Nhara died before
the courts completed his trial in dealing in diamonds in 2007. Nhara was
linked to a Pakistani syndicate.
Zimbabwe’s official gold production has declined from a record 26 tonnes in
the 1990s to a paltry 13 tonnes by 2007 according to the RBZ.
The country has since the beginning of the year banned the export of raw
chrome. It has also introduced the controversial indigenisation policy that
seeks to give 51% equity to local people. The regulation has since been
ruled unconstitutional by a Parliamentary Legal Committee.
Finance minister Tendai Biti is on record as calling for the overhaul of
mining laws so that there would be greater transparency in the operations of
the industry. The industry currently is regulated by a number of Acts and
there is greater need for a consolidated legislation. — This investigation
was assisted by the Centre for Public Accountabilty.
Friday, 29 July 2011 10:53
ECONOMIC experts on Tuesday warned that political troubles are dealing some
of the biggest blows to Zimbabwe’s economy this year, the same day Finance
minister Tendai Biti announced his mid-term budget review.
In his statement to parliament, Biti said that he was going to have to make
serious cuts to certain government spending, including procurement of
vehicles and overseas travel. President Robert Mugabe and government
ministers have since the beginning of the year reportedly blown about US$30
million on foreign trips alone.
Biti also stated that the government should fast-track the privatisation of
the country’s ailing parastatals, which are undermining the government.
Analysts point out that the main problem facing the Ministry of Finance is
lack of money, running into millions of dollars. Government, which had a
revenue target of US$2,7 billion in the 2011 budget, has already admitted it
will not hit this figure, with the International Monetary Fund pegging the
shortfall at between US$350 million to US$450 million.
Faced with pressure to promote economic growth and also restore investor
confidence, the Finance ministry is being hindered by crippling policies
championed by Mugabe’s Zanu PF party.
A more recent challenge has been the civil servants pay rise, which
observers said Zanu PF forced through to score political points against the
MDC-T and Biti. On several occasions Biti explained that the country could
not afford the pay hike at this stage. Despite reports that it will be
funded by money from diamond sales, analysts now say that because it had
been forced through, it will bleed the Treasury purse. The pay increase
reportedly forced government to fork out US$40 million, which was not
“The downside is political,” explains economic expert Tony Hawkins. “It’s a
big political issue as you know because the Zanu PF element (in the
inclusive government) spearheaded by the president himself, actively pushed
hard for a wage increase and Biti, as the MDC Finance minister, is saying
look, we haven’t got the money.”
Another economic analyst Masimba Kuchera said the sudden wage increase
pay-out will have a knock-on effect, as the government would have hoped to
put more money into capital expenditure such as on roads, schools and
airports, but now this has been compromised.
Hawkins also raised the issue that the wage bill from the Ministry of Youth
and Indigenisation is allegedly contributing to the general wage
overspending problem. These allegations come amid allegations that the Youth
ministry’s wage bill was funding Zanu PF’s youth militia.
Analysts also say that the controversial indigenisation and empowerment
policy is now hitting black businesses that Zanu PF claimed it would boost.
The law forces foreign-owned companies to cede more than half of their
company shareholding to locals, and is widely blamed for deterring foreign
investors from putting their capital in Zimbabwe. This has been described as
a huge blow for local business who are baying for foreign help.
Biti is under pressure to provide assistance to this sector, which has seen
numerous companies shut down despite talk of economic recovery. The Zimbabwe
National Chamber of Commerce recently stressed that businesses needed
capital to overhaul antiquated machinery and revamp structures, but this was
impossible without foreign investment. And this month, the Confederation of
Zimbabwe Industries threatened to resort to public demonstrations if
government failed to heed its calls to address issues affecting the
viability of local companies.
In his fiscal policy review, Biti said the economy was on course to 9,3%
growth in 2011 due to a recovery in the key mining and agriculture sectors,
but was adamant that salary increases for state workers will be a drain on
the public purse.
The economy grew by 8,1% in 2010, after a sharp contraction for most of the
last decade, which critics blamed on economic mismanagement by Mugabe.
Biti, like the economic analysts, said political problems would stop the
country from registering the double-digit growth needed for a full recovery.
“We are still on course to achieve our GDP growth rate of 9,3%. Agriculture
and mining, with 19,3% and 44% growth respectively, are at the epicentre of
this growth,” Biti said.
The country should achieve a year-end inflation rate of 4,0%, lower than the
initial forecast of 4,5%. Annual inflation rose to 2,9% in June from 2,5% in
Annual inflation reached 500 billion percent at the peak of Zimbabwe’s
economic crisis in December 2008, according to the International Monetary
Fund’s figures. The resource-rich country has experienced single-digit
inflation since the formation of the inclusive government in 2009.
Also helping to keep inflation in check was higher maize output, which Biti
said would rise to 1,45 million tonnes in the 2010/11 season from 1,32
million tonnes in 2009/10.
Biti, however, warned that the country could run up a US$700-million budget
deficit after wage increases for state employees this month as well as
planned grain imports, state welfare programmes and preparations for a
national census in 2012.
He said state wages would now take up 65% of budget revenues.
“The net effect of these (salary) increases is that we have basically become
a salaries government. In 2012 we are going to start with a wage bill of
US$2 billion; we must brace for a long winter of discontent,” Biti said.
The minister said the country would increase revenues from alluvial diamond
sales, freeze recruitment in government departments, weed out 75 000
suspected ghost workers on the state’s payroll, and reform public
enterprises relying on state funding. — SW Radio/ Staff Writer.
Friday, 29 July 2011 10:52
THE Zimbabwe Election Support Network (Zesn) has said the voters’ roll
should be the sole responsibility of the Zimbabwe Election Commission (Zec)
and not a shared job with the Registrar-General’s Office, which in the past
has been responsible for the country’s flawed electoral register.
According to its preliminary statement on Zimbabwe’s Electoral Amendment
Bill 2011, Zesn said while the amendment addressed a number of issues which
it believes were essential for levelling the playing field for credible free
and fair elections, the proposed changes did not go far enough in addressing
the creation of a peaceful electoral environment.
“Zesn is, however, concerned with the continuation of the shared
responsibility for the registration of voters, creation and maintenance of
the voters’ roll between the Zimbabwe Electoral Commission and the
Registrar-General’s office,” read the statement.
“Zesn believes that this arrangement decreases accountability and can
potentially cause inefficiency. Zesn proposes that these responsibilities
must be fully given to Zec which has the sole mandate to run elections in
The amendment provides for the availability of a voters’ roll in both
printed and electronic versions in searchable, analysable and tamper-proof
Zesn added that: “The Bill re-enacts provisions of the Zec Act and provides
for ancillary powers. The major test, however, remains on the independence
of the commission so that it can execute its mandate with efficiency.”
It said making provisions for the creation of permanent poling stations and
polling-based voters’ rolls, was not enough without dealing with politically
“On the face of it, this reform is in line with international best practice
as it reduces risks of double-voting and promotes transparency and
credibility of the electoral system,” it said. “However, the environment
within which elections have been held can scuttle the best laid technical
“Without a permanent solution to electoral and politically motivated
violence, the polling station-based roll will leave communities more
vulnerable to retribution and post-election violence since it will be easier
upon counting to identify voting patterns down to specific
While the Bill placed the responsibility on political parties and contesting
candidates to ensure that politically motivated violence and intimidation
are prevented, Zesn said there was need for vigilance to guard against
selective application of the law.
The amendment Bill proposes the establishment of an observers accreditation
committee, which would be set up by Zec. The committee will be responsible
for vetting the applications and making recommendations to the commission.
However, Zesn said the committee appeared to have a heavy political
influence in that four of the seven members are ministerial appointees.
Friday, 29 July 2011 10:49
THE Agricultural and Rural Development Authority (Arda) has lost hope of
recouping any money from institutions and politicians who benefited from the
10-million euros tractors bought for agricultural mechanisation in early
According to Arda chairman Basil Nyabadza, 428 tractors were bought from
Iranian manufacturer Itmoc for the first phase of government’s farm
mechanisation programme at the height of farm invasions.
Nyabadza told the Zimbabwe Independent on Tuesday that the process to
recover money from tractor beneficiaries was time-consuming and would cost
the authority a fortune.
He revealed that the scheme’s beneficiaries had not paid a cent to Arda
despite numerous letters of demand.
Nyabadza disclosed that the tractor scheme was seriously abused and
beneficiaries were refusing to pay for the equipment because they believed
they were entitled to freely benefit from the land reform programme.
“It’s costly to engage lawyers to ask the farmers and beneficiaries to pay,”
he said. “We are, however, hopeful that the beneficiaries will behave
honourably and settle what they owe the authority. The assets were grossly
abused. Beneficiaries saw Arda equipment as their right and abused it
thereby greatly undermining the authority’s effort to remain capitalised,”
Arda’s position mirrors that of the Reserve Bank of Zimbabwe which is also
failing to recover US$198 million from farmers who benefited under phase two
of the government’s farm mechanisation programme.
Under this scheme, the RBZ distributed 2 134 tractors, 879 ploughs, 840
harrows, 342 planters, 282 vicons, 69 combine harvesters and 19 hay balers
to A2 farm beneficiaries.
RBZ governor Gideon Gono told parliament last week that there was no
political will to recover debts from beneficiaries.
The full list of beneficiaries has not been disclosed but it is believed
that the majority are ministers, senior civil servants and senior Zanu PF
The farm mechanisation debts are very significant in the national debt
presently pegged at over US$8 billion. Zimbabwe has been cut off from most
offshore lines of credit for failing to service its debts.
Friday, 29 July 2011 10:47
THE Confederation of Zimbabwe Industries (CZI) said elections should not be
held this year as politicians were only engaged in mortal combat for
political supremacy at the expense of economic growth, industry and
ultimately at a great disservice to the younger generation.
In his opening remarks at the CZI congress on Wednesday in Victoria Falls,
CZI president Joseph Kanyekanye said Zimbabwe has become a nation of
elections, restructuring of political parties, congresses and elections and
He said elections dissipated economic recovery efforts and created
deep-seated anti-business policies and actions.
“An alien visiting earth with a gig of brain would probably say ‘you guys
have one outstanding issue; economic prosperity,’” Kanyekanye said.
Zanu PF has maintained that elections be held this year while the Movement
for Democratic Change feels conditions are not conducive for a free and fair
election adding a new constitution should be drafted first.
MDC leader Welshman Ncube, who is also Industry and Commerce minister, this
week said President Robert Mugabe would not press ahead with elections this
year because he was not ready to face the consequences of such a move.
Ncube said if Mugabe followed through with such demands, he would find
himself in a similar situation he was in after the June 2008 presidential
run-off poll when he humbled himself and negotiated a power-sharing deal
with his political rival –– Prime Minister Morgan Tsvangirai.
Ncube said Russia, Malaysia, Brazil, China and India had made a dent on
poverty by growing at least 7%.
Kanyekanye said there was no poverty in Malaysia with its unemployment rate
He said CZI was frustrated and angry at the slow pace government was taking
to implement policies that speed up economic performance.
“I am frustrated, angry and unhappy that after CZI’s effort in activating
Botswana’s lines of credit, the Bippa has not been domesticated into law in
the Zimbabwean parliament yet our leaders had time to entertain one
honourable member who was suggesting injecting men so that they can only
have sex once a month when there are more important issues,” he said.
He said government was poor at implementing projects.
The work of government has three speeds; speed, very slow and stop. “We went
against the Medium Term Plan in the first two weeks of its launch by
awarding unsustainable civil service wages,” he said.
Kanyekanye said the alternative road map for industry going forward was
ensuring that there are 18 hours per plant at all costs, remove all labour
cases and agree on new realistic minimums.
He said government must come up with labour laws that are pro-business.
“Government should impose duties on all products from where local capacity
exists such as in fridges, TV, beer, vehicles, shoes and leather industry
and some selected food stuffs,” he said.
CZI said other factors that continue to impact negatively on industry
include uncertainty on the political front, in particular elections and
government policy such as indigenisation.
“Another factor that is weighing on the recovery of industry is the absence
of skilled labour, the skills flight that took place during the economic
downturn is still weighing heavily on industry,” Kanyekanye said.
Kanyekanye said the issue of electricity had remained critical to industry
as power outages had resulted in a lot of down time and have also affected
the operations of plant and equipment at a time industry was trying to boost
Friday, 29 July 2011 10:45
MDC leader Professor Welshman Ncube (pictured below) has said a draft
constitution would only be ready for a referendum towards the end of 2012,
and not this year as outlined in timelines submitted to South African
President Jacob Zuma’s facilitation team by the Constitution Parliamentary
Select Committee (Copac).
Ncube told journalists at the Quill Club this week that Copac timelines
submitted to Zuma’s team last week were unrealistic and nonsensical.
Copac co-chairperson Douglas Mwonzora informed the facilitation team last
week that a draft constitution should be ready for a referendum in December
while his counterpart Munyaradzi Paul Mangwana told a Confederation of
Zimbabwe Industries annual general meeting in Victoria Falls yesterday that
the referendum could be held by January 15 next year.
Ncube said his projections were based on realistic timeframes for the
different stages that still need to be completed before the country can go
for a constitutional referendum.
“Right now you are being told some nonsense that you could have a complete
draft of the constitution during the course of this year,” said Ncube. “It’s
nonsense! Mark my words, you will have no draft before the end of this
He said Copac had so far only done a summation of views collected at ward
level. Compilation of district reports would take about three weeks, which
meant that provincial reports could only be completed by the end of
“Let’s say they regroup after the Heroes’ Holidays (August 8/9); it will
take them another three weeks to do the districts and regrouping to do the
provincials will take them up to end of September. If you are lucky, you
might have some provincial reports by the end of September,” he said.
Ncube recently came under attack from his partners in the coalition
government for saying the new constitution would be a negotiated document,
but he defended his comments saying there was nothing controversial about
He said negotiations among the MDC-T, MDC and Zanu PF would start when the
teams start compiling the national report, owing to the different views
which came from the provinces.
“Just to find a reconciliation of this (the different views) from the three
political parties in Copac will not take less than four months,” Ncube said.
“First, you will agree with me that even if you put a group of lawyers, it
will take equally long. After that, you then say you have a draft. If you
have it by March 1 or even June next year, you will be very lucky.”
The draft would then be taken to an all-stakeholders’ meeting, which Ncube
predicted might be as chaotic as the one held in July 2009.
According to the GPA, comments from the stakeholders’ meeting should be
incorporated in the draft and gazetted, and four months’ notice given before
it can be tested in a referendum.
Ncube said if the referendum was affirmative, the draft would then be
published in a gazette. According to the current constitution, the country
would have to wait for one month before it is taken to parliament for
The GPA stipulates that parliament needs a month to debate the draft before
it can be sent to the president to be signed into law.
“By the time he (the president) gazettes it, you are somewhere towards the
tail end of next year and then you have to go back to the transitional
mechanisms because you must do these things in the transitional mechanism
before you can go to an election,” said Ncube.
He believed the new constitution would be negotiated because people were
simply parroting the views of the three political parties in the inclusive
“The people did not speak with one voice and you are not just going to take
this and fill it in like multiple choice. People gave you different answers
on different things, so the template can’t just be completed by going to
the data. It means that someone must then sit down and ask which opinion is
valid and how do you arrive at that other than to negotiate it?” Ncube
He also blamed the methodology used to get views from the people during
outreach meetings, saying Copac should have either taken the Kariba draft
constitution, which was agreed to by the three political parties’
negotiating teams, or any other draft to the people instead of approaching
the people with a blank sheet.
Ncube said the 15 talking points taken to the people did not cover all
aspects or provisions that should be captured in a constitution.
“It is because we didn’t take the Kariba draft or any other draft for people
to tick or reject. Who is going to fill in the gap where people didn’t speak
because you didn’t ask them?” he asked.
He gave an example of the Bill of Rights, which currently makes up half of
what is contained in the current constitution, saying only three issues —
homosexuality, protection of private property and land, and the death
penalty — were addressed in the talking points.
Ncube said the Bill of Rights should include the protection of life,
protection of liberty, freedom of movement, freedom of association as well
as property rights.
“There are some 24-odd sections and almost half of the current constitution
is made up of the Bill of Rights in terms of wording,” he said. “All those
things must be in the Bill of Rights, so how are you going to put them in
the constitution? You are then going to sit down and negotiate what goes in
and what doesn’t.
“That is why there is nothing controversial; it is self-evident. It is just
that as politicians, we are now beholden to the cliche “people-driven” and
it becomes treasonous to say we asked the people but there are things we
didn’t ask them which we still have to negotiate.”
Friday, 29 July 2011 10:44
POLITICAL parties are scrambling to spruce up their images and bolster their
presence in Bulawayo by setting up industrial committees to stop the city’s
Over 87 manufacturing companies have shut down leaving 20 000 people jobless
and about US$100 million is required to resuscitate the ailing industrial
Finance minister Tendai Biti set aside a US$40 million revolving fund to
assist struggling companies in his mid-term budget review on Tuesday.
Biti’s fund comes in the wake of months of talk of Bulawayo industrial
revival by political parties hoping to benefit from the city’s growing
despondency over relocation of many major companies to Harare.
The first committee to be set up was a cabinet taskforce led by Industry and
Commerce minister Welshman Ncube and comprising Biti, Small and Medium
Enterprise Development minister Sithembiso Nyoni, Indigenisation minister
Saviour Kasukuwere, Agriculture minister Joseph Made, Labour and Social
Welfare minister Paurina Mpariwa, and Economic Planning minister Tapiwa
The taskforce has done nothing to date as only Ncube is a regular visitor to
the city. But observers say Ncube is using the cabinet committee to boost
his political image. Ncube is busy rebuilding structures of his MDC party in
Business in Bulawayo has started treating Ncube’s cabinet taskforce with
suspicion after the ministers failed to attend a crucial breakfast meeting
in the city a fortnight ago.
Confederation of Zimbabwe Industries Southern Region president Ruth Libode
said the ministers’ behaviour was not surprising since it had become a
normal government reaction towards addressing issues affecting Bulawayo.
Prominent city businessman Delma Lupepe questioned why Bulawayo problems
took forever to be addressed while cabinet reacted swiftly in other regions.
MDC-T Bulawayo province last week set up a committee to address the
de-industrialisation of Bulawayo while Zanu PF has also come up with five
standing committees to look into the region’s developmental issues.
The sudden jostling by parties to seek solutions has raised questions on the
sincerity of the parties. MDC-T has enjoyed massive support in the city
since its formation while Zanu PF has failed to win a parliamentary seat in
Bulawayo since 2000.
Friday, 29 July 2011 12:57
Finance minister Tendai Biti sees the mining sector growing by 34%, buoyed
by firming international mineral prices, improved power supply arrangements
and output growth.
International gold prices for gold reached an all time high of around
US$1500/ounce during the first half of 2011 and breached US$1 600 last week,
helped by the US debt worries, while platinum prices also remained buoyant
at around US$1800 in the same period.
“As a result, the sector’s capacity utilisation is expected to increase from
current levels of around 45 - 50%, to reach 60% by year end, enabling mining
to achieve its targeted growth of 34%,” said Biti.
Gold output to June 2011 stood at 5,5 tonnes, compared to 4 tonnes recorded
in the same period in 2010, a 37,2% growth.
Biti sees gold mines maintaining momentum and producing around 13 tonnes of
bullion by December 2011.
Platinum output in 2011 is seen increasing 20% from 8 639 kg in 2010 to 12
000kg, aided by the coming on board of Unki Mine.
Biti says the positive growth trajectory is also projected for all other
minerals except asbestos.
“With regards to asbestos, the re-opening of Shabani Mine is a critical
imperative for the economy. It is a tragedy that Zvishavane is increasingly
becoming a ghost town, with upstream and downstream industries which depend
on asbestos mining having now collapsed,” said Biti presenting his mid-term
fiscal review. “Therefore, the on-going legal disputes between the
Government and the original shareholder must be resolved amicably in order
to allow immediate commencement of production,” he said.
But despite the optimistic outlook for mines, Biti says Zimbabwe’s mining
sector growth this year will not translate into increased revenue for the
He says Zimbabwe’s tax regime was over-accommodating to mines.
“Second, is the virtual absence of beneficiation and value addition in the
economy. Third, is an obscure legal regime codified in the current Mines and
Minerals Act,” said Biti. “Therefore, the long overdue amendments to the
Mines and Minerals Act must be legislated,” he added.
Biti also called for transparency in the diamond mining sector.
“Wherever rough diamonds exist and are not managed transparently and openly,
they become a major source of suspicion, conflict and national dislocation.
Put simply, there are times when resources, instead of being a blessing, can
become a curse,” said Biti.
“The reality of Zimbabwes situation is that there is no connection between
Zimbabwe’s income from diamonds, its output and international prices.”
Zimbabwe exported 716 958,50 carats from its alluvial diamond mines in
Marange, with Marange Resources producing 357 819,80 and Mbada producing 359
138,70 in the first half of the year.
Biti says only US$103,9 million of diamond export shipments was accounted
for in the first half of the year.
Friday, 29 July 2011 12:54
BASED on the growth of the calving rate, Zimbabwe’s national herd of cattle
will maintain a steady trend but might not meet the 5,8 million target set
in the mid-term fiscal policy.
Finance minister Tendai Biti said during the 2010/2011 season, the calving
rate was 45% up from 35% in 2009/2010. Based on that, the national herd
should grow from the current 5,156 million to 5,8 million against the 2010
amount of 5,16 million, supported by US$7 million set aside in the 2011
Zimbabwe’s national herd of cattle has been on a downward trend and might
not meet the 2011 target of 5,8 million from the current herd of 5,156
million (2010: 5,16 million).
According to latest figures from the draft census from the Livestock and
Veterinary Services, Masvingo is still the top producer at 997 634.
Matabeleland North and South make up a combined total of 1,082 million.
Masvingo province carries the greatest amount of cattle totaling 997 634.
Bikita district has 87 579 cattle; Chiredzi 196 616; Chivi 120 755; Gutu 184
418; Masvingo 128 098; Mwenezi 180 850 and Zaka 99 318.
However communal farmers own the bulk of the cattle at 2,67 milllion, which
are however not for commercial purposes. Owing to favourable weather
conditions, Mashonaland East has the highest amount of dairy cattle at 1
Agricultural experts say in order to improve the national herd, there is
need for grassroots investments by government into transforming communal
cattle ranching into commercial.
Experts say this can only be successful by focusing on technology and the
high input costs, particularly for feed.
Globally it is estimated it is estimate that production of livestock will
double in the next 50 years.
Friday, 29 July 2011 12:44
AN audit into the operations of the Zimbabwe Stock Exchange (ZSE) found the
bourse’s asset register in shambles and revealed general poor corporate
A report compiled by Price Waterhouse and Coopers (PWC) to December 2010
recommended that assets belonging to the ZSE should be physically verifiable
and be registered in the name of the exchange.
The PWC report says there was risk of misstated financial statements at the
ZSE through recording of nonexistent assets and fraudulent disappearance of
“The exchange is at risk of financial loss and misstatement, service
failure, control failure and regulatory non-compliance if the issues
outlined in the report are not urgently addressed,” said the auditors.
The audit report released this year showed that assets belonging to the ZSE
had not been registered in the name of the exchange but appeared in the
financial statements of the exchange as assets.
For instance, motor vehicle registration documents were found in the names
of CEO Emmanuel Munyukwi and his wife Mrs R Munyukwi, but were recorded as
fixed assets in the register of the exchange. Although the change of
ownership of a Mercedes Benz S350, registration number ABI-1856 from the ZSE
to Munyukwi was effected on May 16 2009, the vehicle was not removed from
the exchange’s asset register.
The ZSE management commented that the Mercedes Benz S350 was inadvertently
registered in the name of Munyukwi on its purchase and the asset was
physically verified in the audit.
“Mr Munyukwi is in the process of purchasing the E220 and records will be
accordingly regularised,” the report said.
The report also found discrepancies in the reconciliations of brokerage fees
paid to the exchange by brokers and amounts computed by the exchange.
“We have noted that the brokerage income is paid by brokers based on amounts
that are computed and there is no reconciliation to ensure that the
brokerage paid is what is due to the exchange based on the records of trades
maintained by the exchange,” said PWC.
The report also found variances due to underpayments by brokers which were
not recovered by the exchange. While the variance might have been small, the
auditors felt that the exchange was at high risk of a potential material
financial loss if underpayments go undetected.
In the report, the ZSE acknowledged the variances in brokerage fees and
indicated recommendations would be effected immediately. Other findings
included possible non-attendance of committee meetings as there was no
available documentation of meetings during the year under audit.
For instance, there were no minutes of the Executive Committee, Listing
Committee, Surveillance Committee, Central Depository Settlement, Disputes,
Legal and Lobbying, Finance and Budgeting and the Membership committees.
“The Exchange Committee and subcommittees should meet at least once every
quarter in line with best corporate governance practice, and the minutes of
such proceedings documented,” said PWC.
The auditors also recommended that minutes of such proceedings should be
compiled into bound books and kept at the exchange office as required by the
“Recommendations have been noted and will be taken up with the Committee,”
said ZSE management in response to auditor’s recommendations.
Other recommendations by PWC include the separation of the bank accounts of
the Security Fund and that of the ZSE so that resources are accounted for
separately, and that a formal policy should be drafted to provide guidance
with regards to management allowances such as travel.
Friday, 29 July 2011 11:37
THERE are many nails in the coffin of the desperately needed recovery of
the distressed Zimbabwean economy. They range from the endless political
instability to the destructive mouthings of the Minister of Indigenisation
and Economic Empowerment, Saviour Kasukuwere; the dismal circumstances of
most parastatals and their consequentialiy inadequate and erratic service
delivery; the recurrent governmental authorities’ disregard for property and
human rights; the disrespect for international and national laws; to the
insolvency of government absence of capitalisation of the central bank.
They also include gross money market illiquidity and the financial
instability of many in banking institutions, the economically
counterproductive customs tariffs impairing the operations of industry, and
the gargantuan divide between employers’ and labour’s income. These are but
a few of the ongoing drivers of Zimbabwe’s distraught economic
One of the most pronounced of the numerous ills that afflict the economy and
jeopardise substantive recovery is the magnitude of corruption that has
become endemic in Zimbabwe, and is continually intensifying. Most
Zimbabweans are inherently honest, but when a man’s stomach is continuously
rumbling from hunger and his children are ceaselessly crying because of the
pangs of starvation, that inherent honesty disappears. In addition to those
driven to corrupt and dishonest practices by extreme poverty, there is that
minority (usually already well-endowed with assets) driven by intense
avarice to enhance their already substantial wealth.
Although the former’s rationale for resorting to corrupt and unlawful
practices can be understood, despite the criminality and nationally adverse
consequences thereof, the unlawful self-enrichment acts of the latter can in
no manner be even remotely justified.
The greatest tragedy of Zimbabwe’s widespread corruption is the extent to
which it contributes to ongoing economic morass and resultant suffering for
millions of the populace, which in turn contributes to yet further
intensification of corrupt practices by even greater numbers. So widespread
has corruption become that I recall a recent discussion between myself and a
government minister wherein he said: “By now there are only two honest
people left in Zimbabwe”. I responded: “Really? Me and who else?” to which
he had the grace to look embarrassed and to remain silent!
To a very great degree, corruption exists within the corridors of
government, in several different forms, resulting in its ongoing
insufficiency of funds to service national needs. A few of the known
corrupt circumstances and practices prevailing are:
An estimated 75 000 ghost workers in the employ of the state, which
means that various civil servants or their hierarchy are enriching
themselves with the salaries and wages of those non-existent employees.
Even if each of the fictitious civil servants is paid a meagre US$150 per
month, that represents a misappropriation from the fiscus of US$135 million
each year. Especially disturbing is that there were governmental
disclosures of this criminal circumstance more than four months ago, but as
yet there has been no public statement of requisite action being taken to
curb the fraud and bring the culprits to book.
Various government ministers have intimated beliefs that there are
diverse civil servants, including many employed at senior levels, who
recurrently make claims for reimbursement for expenditures allegedly
incurred in the fulfillment of their duties (inclusive of travel and
subsistence expenses), when such expenditures were either not incurred, or
were unrelated to the claimants’ duties.
Countless industrial, commercial and services enterprises have been
subjected to demands, for payments (secretly effected), or other benefits in
kind in consideration for the award of tenders and contracts. Where the
private sector disgracefully succumbs to such demands, the attendant cost
inevitably impacts upon the tender or contract prices, thereby increasing
government’s expenditures and its consequential fiscal deficits.
It cannot be credibly disputed that public servants use governmental
supplies for private purposes. By way of example, hundreds (if not more) of
children of government employees can be seen using stationery for school
purposes, which stationery is clearly meant for government use.
Undoubtedly, many will also uplift for themselves other consumables such as
toilet paper, tea, coffee, sugar, soap, detergents and other cleaning
materials. Equally, they unhesitatingly use their employer’s telephones to
make personal calls within the country, region or internationally.
Those who do expropriate such goods and services perceive them to be
legitimate employment perks, notwithstanding the absence of any contracted
rights to those goods and services. They will similarly seek to justify to
themselves the use of government vehicles for private purposes (and
sometimes even for illicit taxi services). In so justifying they may contend
that the attendant costs to the state are minimal, but cumulatively across
the spectrum of the civil service the cost to the exchequer is very
considerable, further intensifying the fiscal deficit.
It is an equally corrupt practice of various public servants to utilise
confidential information gained through their employment for soliciting
bribes, prejudicing the state, private enterprise, or the population at
Were all those practices to be markedly contained, the state would not
endlessly incur unsustainable deficits, would not have to resort to
punitively highly taxation measures, would be able to address vitally
essential infrastructural needs, and could restore Zimbabwe’s international
Tragically, these incalculable, untenable, corrupt practices are not unique
to the public sector, but are also very prevalent in all facets of the
private sector, be it industry, commerce or otherwise.
Ranging from soliciting and receiving secret payoffs for awards of
contracts, to the theft of raw materials, stocks, tools, other goods, and
consumables, many private sector employees are as criminally immoral and
corrupt as are many public servants. The result is that the viability and
survival of enterprises is in jeopardy as operational costs soar,
consequentially impacting upon selling prices and hence, upon inflation.
If the Zimbabwean economy is not to be buried, one of the many nails that
must be removed from the coffin is substantial containment of the pronounced
corruption that ails the country’s public and private sectors.
Friday, 29 July 2011 11:23
WHEREAS the recent declarations by Brigadier-General Douglas Nyikayaramba on
who should lead the country have been analysed within the context of the
post-2000 political dispensation and need for security sector reforms,
taking a more historical look to the mid-1970s could be more instructive on
the nature of reforms which could deepen democracy in Zimbabwe.
Nyikayaramba should not be taken as an arrant knave, but someone who
represents a system that is prepared to fight in defence of its interests.
As such, taking what he said as a cue for what is expected from the security
sector reforms may be missing the point as this could only be addressing one
of the various symptoms of how deeply entrenched the military, security and
intelligence is in our politics — something that has evolved since the
The mid-1970s is an instructive period in the political history of the
country as it marked the distinction, conflict, struggle for power and
creation of alliances between the political and the military elites not only
in the fight for Independence, but also control of state power in
post-colonial Zimbabwe and this is quite evident 30 years after
One important development was the Mgagao declaration of October 1975
authored by young guerrillas in Tanzania who then became kingmakers in Zanu
PF, making President Robert Mugabe the leader of the party — a position he
still holds 35 years later. The guerrillas, now the military, intelligence
and security elite, continue to wield the hard power they had then, and it
is in this context that one should approach the statements by Nyikayaramba
and their possible impact, meaning and what power lies behind the words.
The Mgagao declaration is instructive in that the armed forces realised that
they could be kingmakers without being the kings and at the same time make
sure that their interests and gains are safeguarded, hence there was no need
to remove their uniforms or leave the barracks. This marked the genesis of a
“deep state” and the deep politics now obtaining in the country. The term
deep state — usually used to describe the Turkish political system which is
now obtaining in many developing and developed countries — refers to a
situation where an entire nation is held hostage by a group of influential
anti-democratic coalitions usually comprising high-level elements within the
intelligence services, military and security.
Turkish Prime Minister Recep Tayyip Erdoan, commenting on the murder of
Armenian Turkish journalist Hrant Dink in January 2007, was prophetic when
he said: “Similar instances of groupings of this kind are possible to
observe in some other countries.” This is a clear pointer to the deep
politics prevailing in Zimbabwe and it is tied to the umbilical cord of the
rise of powerful military elites during the liberation war through to three
decades after Independence.
As such, when Nyikayaramba speaks on who should be the president of the
country he is not only addressing a specific aspirant. In fact, he was
speaking on behalf of a powerful military, security or intelligence cabal,
and already there are some supporting him despite Zanu PF trying to
dissociate itself from his statements. This powerful cabal, which has to a
very large extent been latent in the first few years after Independence may
have rediscovered its power at a time when Zanu PF’s fortunes were on the
decline, as was the case in 1976 when there was dormancy in executing the
war after Herbert Chitepo’s death, to be followed by revival after the
Mgagao declaration. The military-intelligence-security elites, also referred
to as securocrats, rediscovered their pitch at the same time as other
cliques such as liberation war veterans after 1997.
This powerful cabal, made up of elites who have a duty of making sure that
the military, security and intelligence remain unitary, has since 2000 been
flexing its muscles as is signified by their declaration on the eve of the
2002 elections that they would not salute (honour) anyone without liberation
war credentials. While the immediate audience could have been the MDC, it
can also be stretched to mean those who may emerge from within Zanu PF
harbouring presidential ambitions.
It is thus important to locate the debate on security sector reforms within
the context of the deep state and its deep politics. Calls for security
sector reforms are premised on the perception that it is largely partisan
and, to borrow from the likes of Samuel Huntington, should be
professionalised and corporatised.
This approach, running like a silver thread in the current debate on the
proposed reforms suggests that there are “swingmen”—respected military
officers who may refuse to support the authoritarian regime if they come to
believe that democratisation would be profitable to the armed forces, the
intelligence and the security.
In the absence of such swingmen, one would ask: how then would the security
sector reforms be undertaken to move the country from a deep state to a
public one? At the end of the day, it may be argued the security sector
reforms within such a deep state may either be abortive or stillborn as
those benefitting from the status quo would choose to sabotage them. The
extent of the deep state can be seen in the involvement of the securocrats
in running elections, engagement in the economy, dabbling in politics and
location at strategic sectors especially mining, with diamonds being one
very good example. Could one say Nyikayaramba is a loose cannon who made
utterances which may catalyse the security sector reforms, or was he being
realistic in that he knew they would come to naught?
Trying to premise or strengthen the argument for security sector reform on
what Nyikayaramba has said could add weight but given the way the security,
intelligence and military is entrenched in our deep politics, the result
could be cosmetic reforms. As such, it is important to look beyond returning
the soldiers to the barracks for solutions to the problems of a deep state.
Zimbabwe may have failed to seize the constitutional moment to make such
deep meaning reforms to return the state to the public, but there are other
potential game changers.
One way could be a holistic approach to remaking a public state, where
appointments to commissions, boards and other strategic sectors is done
publicly. This could be through parliament or the involvement of the
populace via various participatory mechanisms.
There are a lot of other things, as academic and author Peter Dale Scot
proposed when tackling the same issue after the September 11 bombings in the
US in his book Road To 9/11, which can be done to disentangle Zimbabwe from
this deep politics. This includes the participation of the populace in
everyday politics, harnessing information communication technologies for
social and political engagement and a reconstruction of national
institutions. This, it can be argued, goes beyond mere security sector
reforms which may not be deep enough to uproot our deep politics and state.
Makombe is a Harare-based political scientist.
Makombe is a Harare-based political scientist.
Friday, 29 July 2011 11:25
CONGRATULATIONS to the Sunday Mail which managed to write a front-page story
about the invasion of parliament by a rowdy mob without once mentioning the
party to which the mob belonged.
“Violence rocked yesterday’s (Saturday’s) public hearing on the Zimbabwe
Human Rights Commission Bill in Harare after a group of protesters
temporarily blocked proceedings in scenes that saw a House of Assembly
member and journalist being assaulted,” we were told.
“A good number of those who managed to force their way in heckled Hwange
Central MP Brian Tshuma whom they accused of singing the national anthem
with arms akimbo.
“Some of them tugged him by the necktie and shoved him out of the meeting.”
Another contingent outside the building denounced the Bill which they said
should have been written in local languages. They forced their way in
knocking over equipment.
What is so remarkable about this story is that it was given banner treatment
spread across the front page –– “Violence rocks parly” –– but omitted to
mention that the hooligans responsible for this melee were Zanu PF members
seeking to quash discussion of human rights issues.
So here we witnessed once again the former ruling party perpetrating
violence in order to block democratic debate –– something it always denies.
And the state-owned press, instead of telling the public who was responsible
for this assault on parliament simply omitted to mention the most salient
dimension to the story. Well done the Sunday Mail. This was quite an
Then we had a similar smoke-and-mirrors act, also on the front page, about
how the prime minister has the highest expenditure on travel of all
government departments. His office has a staff complement of 52 but he has
no mandate in the conduct of foreign affairs, the story said.
Is that so? We understood the prime minister to be charged with restoring
international relations and chanelling aid and investment to Zimbabwe.
Perhaps he should stop bothering given the level of hostility to his mission
in the state press. Anyway, if this task was handed to Simbarashe
Mumbengegwi we all know what the result would be. What happened to the last
round of reengagement? And what point is there of insulting those you want
Then there were all sorts of childish accusations about Tsvangirai’s office
being a listening post for the West and running a parallel government. The
writers of these far-fetched stories don’t seem to understand that the
interests they act as apologists for have no prospect of raising aid or
investment so long as Zanu PF is at the driving wheel. The disruption of the
hearings on the Human Rights Commission said it all. This is a rogue regime
that remains unreconstructed and in all seriousness believes the way forward
is to call the US ambassador “Uncle Tom”. That –– and crude attacks on
Lindiwe Zulu –– is the best they can do. Schoolboys could do better.
However, we liked the heading: “The high flying PM”. That’s obviously going
to invite the question: Who is the highest flyer of them all and feels a
compelling need to attend even youth meetings!
Readers may recall suspicions we raised recently about the Child Parliament
which featured youngsters dressed up as generals and policemen. We asked
where the initiative for this outfit came from.
Speaking to a youth forum at the UN this week President Mugabe cited the
Child Parliament as among measures introduced by his government to give
guidance to youths.
So there you have it. Exactly what we suspected.
The international press has had a field day with Mugabe’s attendance at the
UN High-Level meeting on youth. He and the president of Benin are the only
heads of state attending, it is reported. The rest are genuine youths –– ie
Saviour Kasukuwere is in the president’s delegation where he extolled the
virtues of indigenisation. In his speech, Mugabe challenged member states to
institute policies that will nurture and empower the youth so that they play
an integral role in the socio-economic and political affairs of their
Kasukuwere said Mugabe was attending the meeting to “show government’s
commitment to youth empowerment”.
This presumably includes the role of youth militias in elections and the mob
that forced its way into parliament last weekend to discuss human rights!
Zimbabwe has one of the highest levels of unemployment in Africa, at over
80%. Did anyone mention that?
Was Grace in the president’s delegation to New York?
Sorry, we forgot. The AG has warned our colleagues in the legal profession
not to “unnecessarily” mention her name. But that can’t include journalists
who have every right to report on the trial. And it is up to the court to
decide who can or can’t be mentioned.
The AG’s office has warned lawyers representing four South African truck
drivers in the US$1 million trucks deal fraud case against “unnecessarily
mentioning the name” of first lady “Amai” Grace Mugabe.
Chief law officer Chris Mutangadura has objected to the naming of the first
lady when she was not mentioned in the papers relied upon by the state.
Mutangadura said defence lawyer Beatrice Mtetwa had no basis for repeatedly
mentioning Mrs Mugabe’s name because she had no evidence in linking the
first lady to the case.
We thought the Herald did quite a good job in not mentioning the first lady’s
name in its otherwise extensive coverage of the trial! Mutangadura said the
trial could not continue in the absence of Ping Sung Hseih who is the
co-accused in the case.
Transmedia Corporation will next month launch broadcasting equipment in
Beitbridge that will see the border town receiving local television and
radio signals for the first time, the Herald reports.
Transmedia chairman Dr Paul Chimedza last week said the launch of the
“state-of-the-art equipment” early next month would ensure that the people
of Beitbridge receive broadcasts from the country’s own radio and television
“We have brought in new transmitters in an effort to ensure that people hear
their own news and watch their TV,” Chimedza said.
Thirty-one years after Independence Beitbridge residents will finally get a
feel of the “first and permanent choice”. We are sure they haven’t missed
If only the “state-of-the-art equipment” was commensurate with equally good
content. Beitbridge residents will likely continue to appreciate SABC
programmes –– some of which will be in their own language. What they can
look forward to from ZBC is hearing about the “Head of State and Government
and Commander-in-Chief of the Zimbabwe Defence Forces” and watching the
likes of Tafataona Mahoso and Vimbai Chivaura.
It is ironic that they are setting up transmitters in Beitbridge when the
rest of the nation has discarded the “national” broadcaster.
Meanwhile we were amused by a reader’s comment on ZBC’s website which said:
We couldn’t agree more.
ZBC never disappoints on humorous stories. Last Friday they gave us another
scorcher: “Private media caught offside again.” This time the private media
was hammered for saying President Mugabe was humiliated at Andrew Sikajaya
Muntanga’s burial by the latter’s son Dominic.
“Analysts have scoffed at claims by some sections of the private media that
the late Cde Andrew Sikajaya Muntanga’s son, Dominic humiliated the Head of
State and Government and Commander-in Chief of the Zimbabwe Defence Forces,
President Robert Mugabe when he was addressing mourners at the national
Observers, said ZBC, say such sentiments by the private media clearly show
their agenda is one of distorting facts in a bid to misinform the public and
score cheap political points.
“Contrary to these reports President Mugabe gave a eulogy that painted Cde
Muntanga as a legendary freedom fighter whose larger than life achievements
will be a difficult feat to emulate.”
Who can forget Dominic’s fiery speech in which he said of his father: “He
fought against the oppression of the Tonga people, but the jury is still out
on that one.”
“Unfortunately, he was again imprisoned in a free Zimbabwe,” Dominic goes on
“In 1990, he won the Zanu PF primaries but was disqualified over false
allegations. After my father dropped out, Zanu PF had a decade-long
electoral loss. We all know the open palm (MDC) has prevailed over the fist
(Zanu PF) since then.”
Mugabe then reacted angrily and deviated from his prepared speech saying
Dominic would never be like his father but conceded that Gukurahundi was a
Who is offside here? ZBC it seems.
Meanwhile ANC Youth League president Julius Malema was ducking and diving
this week as pressure continued to mount about how he funds his lavish
A youth league media briefing at ANC headquarters, Luthuli House, billed as
an attempt to “clear the air”, turned into a damp squib when the league’s
leadership failed to reveal anything about Malema’s Ratanang Family Trust,
which he has been accused of using to receive cash from businesses that
benefit from government tenders.
Instead of responding to questions, the youth league’s deputy president,
Ronald Lamola, and secretary-general, Sindiso Magaqa, attacked the media,
accusing them of trying to divert attention from the league’s calls for the
nationalisation of mines and the expropriation of land without compensation.
Last Saturday Malema failed in his urgent application for a High Court
interdict that would have prevented City Press from publishing the
allegations about his trust.
Cde Malema must be wishing he stayed north of the Limpopo border where such
a scandal would be a non-event.
After a barrage of vitriolic remarks about the Zimbabwe Independent in
Jonathan Moyo’s Sunday Mail column two weeks ago, we were curious to hear
from a subscriber to that partisan newspaper that he found a copy of the
little-read (not “Little Red”) Southern Times inserted in it this week.
Circulation evidently needs a boost, especially when you have Mabasa Sasa at
the helm pushing Zanu PF’s ridiculous conspiracy theories!
We were interested in the obituary of apartheid warrior General Magnus Malan
carried in the Sunday Times last weekend. In particular we “noted” that his
fellow officers “referred to him sneeringly as a technocrat. “After a few
drinks they called him an idiot.”
When PW Botha resigned, Malan’s star quickly waned, we are told. In 1990 FW
de Klerk packed him off to the department of water affairs where he sank
Now there’s a thought!
Friday, 29 July 2011 11:11
LOOKING at the lack of fiscal space and manoeuvrability the Finance
minister, Tendai Biti, had, one point still sticks out like a sore thumb,
the role of the banking sector. The minister has corroborated what the
governor said last week that out of the lines of credit available to the
tune of US$1,6 billion, a billion has not been taken up. How come?
The private sector has quickly been blamed. Treating the banking sector as
a sacred cow continues to be a source of worry. Or is this because the
powers that be patronise and probably get away with interest- free loans?
The minister raises his concern about ensuring that banks are profitable, no
chef, it’s the companies involved in production whose profitability should
Who would be crazy enough in this environment to borrow at 37%, or even half
that price? But that’s exactly what industry is supposed to do, and be
viable! What we need in Zimbabwe is industry-led growth. We are yet to hear
of banking-led growth. As mentioned elsewhere in this edition; a paltry
US$70 million was availed to the Zimbabwe Economic Trade Revival Facility
(ZETRAF). That’s the only source of funds that may be availed to the private
sector at concessionary rates. Concessionary, or at least reasonable rates,
are what this country needs to move forward. If countries in the EU, whose
economies are more robust than ours, need subsidies and hence the whole WTO
process is stalled because of this what more little Zimbabwe?
We are not advocating treating our private sector with kid gloves, but we
must be realistic as to an uneven global playing field. Biti congratulates
NSSA’s overall package of 15% as being a step in the right direction.
That is 10% interest, three percent handling fees and two percent “other”
fees. The fees alone are already 5%! Companies in the developed world would
fall over each other just to get that as interest. There is such a thing as
a basis point Mr minister. It is quite a substantial return on profit. For
the record, yesterday’s London Interbank Offered Rate for one year was
0,75%. We had high interest rates when we had hyperinflation, and then it
No one is standing in the way of banks attaining positive interest rates.
But with hyperinflation having been relegated to the museum, what is the
justification for the absurdly high interest rates? Barring the political
turmoil and the subsequently poor credit rating for the country,
international lenders would have been falling over each other to lend to
What our banks are engaging in is collective stupidity. They’re still so
much trapped in the short-termism of the lost decade. Industry itself has
already realised this and many are operating on smaller margins. If our
bankers are still interested in the phenomenally high returns, then they
should join the drug dealers and gun runners of this world. There, the high
returns await them as the risks a higher. In fact, the way the banks insist
on charging the exorbitant rates, one wonders if they are not already high
on one of the drugs.
The banks are putting themselves in a catch 22 situation. They are charging
more handling fees and commissions to make up income because they have few
clients as the country is underbanked.
They have fewer clients willing to deposit their money with them because
they are not giving depositors interest. And those that deposit their money
with banks are quickly withdrawing it and taking it elsewhere simply because
they are not getting anything for it. The days of the “high rate” are gone.
It’s time the bankers got detoxified from the high interest rate weed they
have been smoking. Biti and Gono should crack the whip. As the Chinese say
“Hot bottom make (sic) cool head.”
Friday, 29 July 2011 10:57
NOW that the mid-term fiscal policy has passed and comments have been made
and continue to be made over the review, the only thing remaining is to see
whether the statement is in alignment with the current state of the economy.
Already forecasting a deficit of US$700 million, Finance minister Tendai
Biti has definitely no fiscal space to manoeuvre and yet again is expected
to deliver nonetheless.
But in his speech, Biti made it clear that he is no magician and should not
be expected to deliver since the correct fundamentals are not yet in place.
The thrust of the budget has not changed significantly, with the government
set to archive its revenue targets by year-end. But the country is still
facing a myriad of multi-faceted problems. And just as Biti says “we can
only eat what we have gathered,” the nation needs to appreciate the supply
side challenges which continue to choke all economic activity.
Measures proposed in the review statement are only a drop in the ocean given
the many challenges bedevilling the nation. Only if the real problems are
solved will we avoid monetary measures which leave the fundamentals
Without a doubt the political scene remains at the epicentre of our
challenges and the country risk profile and international relations
desperately hangs over the resolution of our political differences. What we
truly need is a shift in mindset, so that we shy away from flogging dead
horses and focus on searching for the real solutions which can sustainably
rebuild our economy.
That is why the elections roadmap and its aftermath are of paramount
importance. There is a real need for political will to see the economy and
livelihoods of Zimbabweans improve. Only a truly founded political will can
sustain the current economic upturn.
The duty imposed on basic goods will just be passed on to consumers, thereby
making groceries more expensive and squeezing the already limited disposable
incomes. The other thing that should be questioned is if the local industry
will live up to expectations and create a constant flow of products.
Already, Olivine cooking oil is not on the supermarket shelves while the
Natfoods family of oils is in inconsistent supply.
The real gist therefore remains in the availability of funding for industry
to improve capacity utilisation to levels above 50% so that products become
more readily available. Without funding, companies will continue to get
expensive debt and not have enough working capital to get back to viable
production. The list of companies in debt keeps growing and will spread to
other sectors of the economy if there are no lines of credit. RioZim’s US$50
million debt, Aico’s +US$20 million borrowings, African Sun’s crumbling
state while CFI and Star Africa continue to sink. Should the minister only
wake up when these companies have gone through fire sales. Aico is seeking
to raise US$8 million from disposals and CFI a similar amount, while Star
Africa, a critical industry, is also in line. Recapitalisation should have
been at the core if not the theme of this review.
The $0,04 per litre fuel tariff imposed on fuel transported by road is
clearly not in alignment with what’s happening on the ground. The cost was
passed on to the consumer. We understand the minister’s bid to promote
pipeline and rail ferrying of fuel, but that has not worked and there should
have been a policy shift in his review. Feruka needs private investors for
its resuscitation and so does NRZ and other state enterprises. And not
putting a timeline to state enterprise reforms exposes the minister’s
On agriculture, the minister identified areas that needed intervention that
are more pressing than the Land Audits and resolving the issue of
compensation, an issue which has deep political undertones and will probably
never get resolved. But already, GMB failed to get US$5 million for its
stock feed plant in Norton and is looking for private investors to take up
There are other issues that should have been highlighted, especially since
they are being touted as national policy. The September deadline on
indigenisation of the mining sector is drawing closer and the minister
concerned has talked about the Sovereign Wealth Fund which will hold 31% of
the equity. Will it not fall under the Finance ministry? If it will, why was
it not provided for?
Friday, 29 July 2011 11:10
By Constantine Chimakure
MEDIA and Information permanent secretary George Charamba’s declaration to
the Parliamentary Portfolio Committee on Media and Information Communication
Technology that there will be no amendments to the Access to Information and
Protection of Privacy Act (Aippa) until after the constitution-making
process is complete is yet another illustration of how disjointed the
inclusive government is.
Charamba’s utterances are in direct conflict with what is contained in the
Global Political Agreement as well as the Government Works Programme (GWP)
launched last year and spearheaded by Prime Minister Morgan Tsvangirai. Both
enunciate the immediate institution of media reforms, not after the
constitution-making process as Charamba claims.
The GWP has an impressive legislative agenda. Government proposes to
democratise the media space by introducing two Bills — a Freedom of
Information Bill and Media Practitioners Bill.
The Freedom of Information Bill will replace the despised Aippa and will
simplify the procedures for accessing information in line with Sadc best
practice, while the Media Practitioners Bill will provide for the regulation
of media practitioners.
Charamba went on to say that the Voluntary Media Council of Zimbabwe should
be formed under the auspices of the Zimbabwe Media Commission, a statutory
Such utterances beg the question of how it would remain voluntary when
incorporated under a statutory instrument.
In November last year the same Charamba said government has no intention of
issuing broadcasting licences to private players in the near future as
required by the GPA until it had developed the capacity to monitor and
regulate the activities of the new players.
According to the GPA signed in September 2008, the three ruling parties had
agreed that government should ensure the immediate processing of all
applications for re-registration and registration in terms of both the
Broadcasting Services Act as well as Aippa. It called on Zimbabweans to make
applications for broadcasting licences.
It is clear that there are elements in the inclusive government whose job is
to undermine and stifle the media. They do not want the media to play its
oversight role on the three arms of the state — the executive, legislature,
and judiciary. The guilty are understandably afraid of the prying eyes of
the media. Media plurality is a reality of the 21st century and trying to
reverse it is akin to rolling back the hands of time.
The Media and Information ministry, it seems, is ignoring and subverting the
tenets of the GPA to suit the Zanu PF agenda.
They have, through these pronouncements, rubbished the agreement on media
reforms. No wonder it has been difficult for the full implementation the GPA
to become a reality. When the Information ministry overrides what was agreed
by the three principals, then it becomes clear that we have a serious
problem on our hands which needs to be addressed urgently.
The Media Institute of Southern Africa aptly described the reluctance by
Charamba and company when it said: “The assertions by Charamba are signs of
Zanu PFs allergic reaction to reforms. Media reforms are inevitable, they
are by public demand. Zanu PF wants to block these reforms and continue with
its propaganda agenda on its failed policies and rampant corruption that is
now in the public domain.
By maintaining the status quo and denying the entry of private broadcasters,
Charamba and his masters are desperately trying to prop-up Zanu PFs
declining grip through the airwaves ahead of elections expected next year.
While Charamba admits that there are no clear regulations on political
advertising, ZBC is churning out Zanu PF propaganda, bordering on hate
language hourly while advertisements of national interest such as the
constitution-making process have been denied space.”
As long as this circus is allowed to continue, media reforms will remain a