US$1m blown on Mugabe image

Zim Independent

Itai Mushekwe

GOVERNMENT has blown over US$1 million on a propaganda campaign
through a London-based New African magazine in a bid to spruce up President
Robert Mugabe's battered image. The campaign is also designed to exonerate
government from state-sponsored political violence by the police against the
opposition in March, the Zimbabwe Independent has heard.

The secret propaganda war - to fight negative publicity against
government - is said to be targeted largely at foreign audiences who have of
late been shocked by images of bruised opposition leaders after they were
brutally assaulted in police custody.

The massive publicity campaign is similar to apartheid South Africa's
information blitz during the 1970s in which government squandered R64
million on clandestine media hype in what became known as the Muldergate
Scandal.

Information minister Connie Mulder resigned in disgrace after the saga
which saw government buying newspapers and bribing journalists.

Dictators and discredited regimes spend millions in hard currency in
trying to revamp their tarnished reputations. The Zimbabwean government has
secretly bought newspapers and also set up websites for propaganda purposes.
Last week it launched Voice of Zimbabwe, a propaganda station aimed at
overseas audiences.

Sources close to the New African said government paid in hard currency
for the publication of a 70-page supplement as a damage-control measure to
counter international outrage over the beating of opposition leader Morgan
Tsvangirai together with his supporters whose battered images were carried
by various international media.

The revelation comes at a time when the country's foreign currency
coffers have all but run dry, with government failing to procure fuel, food,
electricity or medicines for the poor. "Given the advertising rates at New
African magazine, the Zimbabwean government paid over US$1 million for its
70-page sponsored supplement published last month in which they give their
side of the story following the clashes between police and opposition
activists," a source said.

The violence by the police against members of the opposition who were
on their way to Zimbabwe Grounds in Highfield for a meeting resulted in the
death of activist Gift Tandare, while scores of people were left with
serious injuries.

Material used in the supplements was gleaned from a document recently
published on the Ministry of Home Affairs website justifying police
repression and portraying the MDC as a violent party.

The New African claims to be a pan-African magazine out to defend
African governments which it sees as demonised by Western media. Baffour
Ankomah, the magazine's editor, came to Zimbabwe for the special government
supplement and took the opportunity to interview Mugabe and his spokesman
George Charamba. Ankomah also interviewed opposition leaders Tsvangirai and
Arthur Mutambara.

A full-page advert in the New African magazine costs US$11 900 (£5
900). An inside cover double page costs US$25 400 and a double page spread
costs US$22 400. About 82% of New African magazine circulates in Africa.

Information minister Sikhanyiso Ndlovu refused to answer questions
about government spending on the supplement.

"I can't answer that," said Ndlovu. "It's between you and your
Ghanaian sources. It's all rubbish. What we do as government or as party is
our own prerogative. Have you questioned the MDC over the funds they're
getting from the Australian government?"

An independent media commentator, Sizwe Thuthuka, said media in nearly
all African countries had become critical of Mugabe's governance record
which has seen the collapse of the economy as well as emigration of many
Zimbabweans to other countries.

"Mugabe is now desperate to convince his African colleagues that he is
the victim," said Thuthuka. "No African newspaper or broadcaster can take
his 'I'm the victim' mantra when they see images of opposition supporters
who have been tortured or assaulted in detention.

"He has no one to turn to. As a result he uses a lot of forex, which
is in short supply in Zimbabwe, to spruce up his image using European media
outlets to reach African audiences."

Gono, Mujuru on collision course

Zim Independent

Shakeman Mugari

RESERVE Bank governor Gideon Gono is embroiled in a dogfight with
senior Zanu PF politicians over alleged misappropriation of billions in
public funds by a company closely linked to the ruling party.

Gono is fighting with top politicians supporting Dande Holdings, owned
by Zanu PF MP for Guruve North, David Butau, who are trying to stop an
investigation by the central bank into the abuse of $122 billion disbursed
by the RBZ.

Butau's main political allies in the ruling party include politburo
members, Vice-President Joice Mujuru and her husband, retired army commander
General Solomon Mujuru.

It has been claimed the Mujurus have an interest in Dande, although
the company has denied it. Dande is involved in a chicken project marketed
by Vice-President Mujuru. The company also employs Mujuru's daughter and its
management told the Zimbabwe Independent last year that it employed her in
appreciation for the support the Mujurus had given to Dande. Vice-President
Mujuru last year raised eyebrows when she took Dande executives on a trip to
China to sign business deals.

The Dande scam is understood to be at the heart of fierce political
clashes between Gono and the Mujurus. Government insiders have told of a
campaign by the Mujuru faction in Zanu PF to evict Gono from the central
bank.

Gono fought battles with former Finance minister Herbert Murerwa, a
Mujuru ally, over the control of the Treasury until President Robert Mugabe
intervened by firing Murerwa in February. Mugabe has said there are people
who want to kill Gono because he was blocking their illegal business
interests. Recently Gono said there were renewed efforts to force him out,
but vowed to hang on.

The Dande saga has rekindled the fight between Gono and the Mujurus.
Between 2005 and last year, Dande got $122 billion from the Reserve Bank for
farming purposes under the Agricultural Sector Productivity Enhancement
Facility, but the money was allegedly diverted to other uses. Gono's attempt
to probe Dande over this issue has set him on a collision course with Butau's
political allies in Mashonaland Central province.

Gono recently told MPs and senators that he would not step down from
the RBZ. Zanu PF officials said Gono's statement was in response to
incessant attacks that had been launched against him by MPs from the
province through parliamentary committees.

The investigations turned nasty when the RBZ found that part of the
$122 billion was used to source foreign currency on the parallel market. The
RBZ found that the project at Dande has not made significant progress to
justify the amount of money that it has received.

"We suspect that funds have been used for purposes other than
implementation of the project, given the slow progress made to date against
the significant amount disbursed," said an RBZ report.

The report recommended that the central bank stops any further
disbursements until the outstanding issues had been cleared.

The documents show the investigators also intended to question Butau
on the issue. They said the investigators would ask Butau to avail his local
and foreign bank accounts to assist in the matter. Butau this week said he
was not aware of such an investigation.

"If there was anything like that, then it did not reach me. We are not
carrying out any personal fight with anybody," said Butau.

The RBZ team believe that Dande used some of the money to pay $14,5
billion to businessman, Hanif Ismail, for a purported purchase of bulldozers
to clear 15 000 hectares of land. The money was paid to Ismail through four
companies which the RBZ said used the money to buy foreign currency on the
black market.

Ismail told the investigators that he had raised £99 000 which he took
to South Africa. Documents to hand show that Ismail, who was the main
beneficiary of the foreign currency, was later forced to repatriate US$22
900.

Gono refused to comment on the issue this week saying: "Why don't you
ask the people who gave you the story."

Dande chief executive, Evison Musanjeya, confirmed that the RBZ had
raised concerns about the money but said the issue was clarified. "Yes, they
were making a routine check on the project because we got money from them
but the issues have been clarified and work is progressing well," said
Musanjeya. The Independent has learnt that the RBZ has now stopped
disbursement of funds to Dande.

Displaced farmers troop back to Zim

Zim Independent

Augustine Mukaro

A NUMBER of displaced Zimbabwean farmers who relocated to neighbouring
countries to flee the chaotic land reform programme have started to troop
back into the country after encountering fresh problems at their new bases,
the Zimbabwe Independent heard this week.

Farming officials this week said over 40 farmers have returned to
Zimbabwe after their attempts to re-launch their farming careers in
neighbouring countries failed to take off the ground.

Justice for Agriculture chairman, John Worswick, confirmed that
farmers who went to neighbouring countries faced a number of problems like
commodity price changes that made contract farming unviable. Worswick cited
Mozambique's skewed tobacco contract farming as the biggest problem.

"Over 30 tobacco farmers who had relocated to Mozambique have returned
to Zimbabwe after a fallout with Universal Tobacco Company, the major
sponsor of tobacco farming in that country," Worswick said. "The issue is
before the courts at the moment so I can't give details. However, farmers
doing other crops in the same country have recorded successful stories."

Worswick said farmers in Zambia and Malawi were having problems coping
with falling commodity prices against local currencies that are appreciating
in value.

"Around 10 families have returned from both Zambia and Malawi against
the revaluation of the Kwacha," he said. "Farmers need to be doing diverse
business ventures to survive such an environment."

He said farmers returned from Nigeria after the government there
failed to avail funds on time to kick-start the proposed projects.

The Commercial Farmers Union last week reported an increase in farm
invasions and continued disturbances on remaining farmers.

More than 20 African countries invited Zimbabwe's commercial farmers
displaced from their properties by violent land seizures executed by
government under the fast-track land reform from 2000.

Countries such as Ghana, Cameroon, Sudan, Guinea Bissau, Benin,
Central African Republic and Namibia had offered the farmers vast stretches
of land.

'MMCZ acting in conflict with its principles'

Zim Independent

THIS letter below was written on October 23 last year to the Secretary
for Mines Thabani Ndlovu by Murowa managing director, Cameron McRae,
expressing concern over the uncontrolled trade in Marange diamonds.

DEAR Mr Ndlovu

Following the meeting on the Kimberley Process Certification Scheme
(KPCS) on October 11 during which we raised our concerns regarding the
developments in Marange, we were requested to consolidate our concerns and
suggestions in writing in order to assist your ministry in addressing the
issues.

Firstly, I would like to point out that ultimately these are not the
concerns of Murowa Diamonds only but that of the mining industry and country
as a whole. The following points summarise our main concerns:

Marange Diamonds availability

According to our information, Marange diamonds are popping up for sale
throughout Zimbabwe and there is now a real possibility of illegal export of
the diamonds and with a significant impact on the KP accreditation and he
credibility of Zimbabwe.

Ownership and Tenure: The MMCZ has been issued a special grant over
the area covered by EPO 1523 and 1520 which are within the Chimanimani RA
1518. According to the Precious Stones Trade Act, a registered dealer like
the MMCZ should not hold title to mining claims etc. In addition all the
small scale miners involved in the Marange operations are not registered. We
understand that the current position therefore creates a risk for the KPC in
that all title must be legally acquired.

Purchase of Diamonds by the MMCZ

Whilst we appreciate the MMCZ's efforts to mop up the supply of
diamonds into the market, we are greatly concerned that the purchasing
activities are from illegal diamond miners and traders and therefore
legalising the illegal. These activities also appear to be encouraging the
trading of diamond outside of the formal system.

No declarations of the production were submitted and there is no chain
of custody for the diamonds as required by the KPCS and by law. Without
first registering people involved in the Marange operations, purchases of
the production by anyone, including the MMCZ, are illegal according to both
the Ministry of Mines Act and the Precious Stones Trade Act, and in direct
contravention of the KPCS. By purchasing the Marange diamonds, MMCZ is
acting in conflict of its principles as defined in the MMCZ Act as such
activities disregard the national interest of Zimbabwe and the common
interest of legal diamond producers, especially in view of the negative
impact the activities have on Zimbabwe's participation to the KPCS.

We believe that the diamonds that are not purchased by the MMCZ are
being traded with parties whose business interests are not known. Such
activities contravene the KPCS regulations and conventions. It is important
to note that without the KPCS, Zimbabwe and its producers cannot export any
diamond production. The consequences of that would be huge on Zimbabwe and
its ability to earn foreign currency.

Chain of Custody and Security

The lack of control of diamond movements or the absence of chain of
custody of the diamonds from Marange poses a threat to security in the
diamond industry. Through illegal activities Marange diamonds may find their
way into Murowa production or can end up being traded as if they were from
Murowa resulting in adverse impact to the integrity of Murowa product and
causing damage to the company's reputation.

Legislation

Legislation on dealing with illegal possession and dealing in rough
diamonds is weak and has been further weakened by the current lack of
enforement as evidenced by activities in Marange communal lands.

The issues raised above are national issues hat should be of great
concern to the government and country therefore warrant urgent and serious
attention in order to implement effective solutions fast. In order to
facilitate regulatisation of the Marange operations, government should
urgently target preserving the area and policing it. If the current issues
remain unresolved, serious harm to the country will occur and Murowa and
other diamond industry players will be so affected. The credibility of the
country and its KPC certification could be undermined and the possibility of
exclusion from the KPC is very real if the Marange diamonds start being used
to fund illegal activities.

We are prepared to work with government in areas where we can, to
ensure that Zimbabwe remains a reputable participant to the Kimberley
Process Certification Scheme. Addressing the concerns and issues contained
in this letter are part of this.

The issues that need to be addressed are:

* The application of the relevant legislation,

* Registering Marange diamond miners,

* The requirements to satisfy the KPCS and

* Security concerns about easy access to Marange diamonds and to the
availability of the diamonds in the unofficial market.

The government also needs to take a pro-active position by advising
the KPCS about developments on the ground and actions being taken to address
them.

Yours sincerely

Cameron McRae,

Managing director.

ACR

Zim Independent

THIS is legal opinion given to the Chief Mining Commissioner by the
Attorney General's office in November last year regarding the validity of
the ACR claims in Marange and the legality of the MMCZ holding mining title.

ATT: Mr F Mabhena

Reference is made to the memo by the chief mining commissioner (dated
30 October, 2006) and to communication and documentation received from New
Africa Securities (pertaining to African Consolidated Resources PLC). These
two sets of communication, though from two different sources, seek to bring
to light the issues pertaining to the validity of African Consolidated
Resources (ACR) claims over Exclusive Prospecting Order (EPO) 1523.

Brief facts

For the purpose of this opinion, the facts shall be summarised from
the fragmented documentation which has been received from New Africa
Securities and from the Chief Mining Commissioner. De Beers or Kimberlitic
Searches (De Beer's subsidiary) applied for and was granted EPO 1523
approximately three years ago which was due to expire on 28 March, 2006.
There is no indication in the available documentation as to when the EPO was
actually granted for purposes of computing the three year period the EPO was
granted.

De Beers submitted an application for an extension of the EPO
approximately two months before its expiration. The exact date has not been
provided, but the Chief Mining Commissioner states that it was some time in
February 2006. The Mining Affairs Board only sat on 14th June, 2006 by which
date EPO 1523 had expired in terms of the law. On that same day, the Mining
Affairs Board purportedly recommended to the secretary (of Mines) that the
De Beers EPO 523 be extended for a further period of 12 months from the date
it had expired. Meanwhile on 5 April 2006, ACR had applied to peg claims on
the same ground covered by the De Beers EPO 1523.

Claim certificates were duly issued to ACR in terms of section 45 of
the Act. In July 2006 the Mining Commissioner claims to have been directed
by Ministry of Mines to cancel the ACR certificates of registration on the
ground that they were pegged on ground not open to prospecting due to the De
Beers EPO. This was to cancel the ACR claims from the date of registration.
It is alleged that on 11 August, 2006 the Ministry of Mines or Mining
Commissioner reserved the ground (RA 1518).

In a letter dated 15 September, 2006 the Mining Commissioner Harare
indicated that earlier communication rescinding the ACR claims was incorrect
and that the claims as stamped and signed were valid.

Subsequently, the Mining Commissioner Harare, wrote to Dashaloo and
Possession Investments (ACR subsidiaries) on October 9, 2006 stating that
his letter dated September 19, 2006 was incorrect due to misinformation and
therefore the claims were invalid as they were pegged within an existing EPO
registered to De Beers.

It is alleged by ACR that De Beers gave notice of abandonment of the
EPO in terms of Section 112 of the Mines and Minerals Act [Clapter 21:05].
No evidence to support this notice of abandonment has been tendered by
either ACR or the Mining Commissioner. Following the reservation by the
Ministry of Mines referred to above, the Ministry proceeded to issue three
(3) Special Grants (numbers 4718,4719 and 4720) to the Minerals Marketing
Corporation of Zimbabwe (MMCZ).

claims are valid - AG

Zim Independent

Advice sought

In light of the above facts, the chief mining commissioner seeks
advice in light of the claim by ACR that their claims are valid as at the
time of their registration, the De Beers EPO had expired and ceased to
exist. Secondly in terms of the Precious Stones Trade Act [21:06], it's
alleged that MMCZ is not lawfully competent to hold mining title.

Advice

1. De Beers EPO

From the documentation provided, it is not in dispute that EPO 1523
had been registered in the name of De Beers for a period of three years
expiring on March 28, 2006. In terms of Part VI of the MM Act there are no
specific procedures specified as to how a concession holder (De Beers)
extends their EPO which is due to expire after its three year validity
period. Section 94 merely states that an EPO may be extended by the minister
(of Mines) on the recommendation of the Mining Affairs Board for a further
period of three years. The inference drawn from the wording of this
provision is that an application for extension may be made at any time
before the EPO expires. In short the delay by the Mining Affairs Board to
meet and reach a decision in respect of the application for an extension by
De Beers was simply an administrative failure to diligently perform their
statutory duties.

This administrative shortcoming simply meant that the EPO belonging to
De Beers expired due to effluxion of time and therefore the area covered by
the EPO was open to pegging by other approved prospectors. There is no
provision in the MM Act which prevents or bars any person from applying to
peg on ground where there is an expired EPO. Further to this, there is no
provision in the MM Act which provides for the retrospective extension of an
expired EPO. In terms of the law, an extension cannot be made to something
that has expired. There are no provisions in the Act that grant
discretionary powers to the Mining Affairs Board or the Minister to
retrospectively grant such an extension.

2. ACR's Claims

In light of the legal provisions highlighted in relation to the
expired and then purportedly extended EPO of De Beers, it is vital to
highlight the relevant legal procedures which ACR was to follow in terms of
the MM Act. In April 2006 ACR applied to the Mining Commissioner for a
prospecting license and was granted several certificates of registration
through their subsidiary companies for the original registration of the
mining locations in dispute. Statutory Instrument 247 of 1977 provides that
a certificate of registration in form MM8 shall be in respect of mining
locations. At the time of application, the area covered by the ACR
application was available for pegging by any person due to the expiration of
the De Beers EPO. Section 31 of the MM Act clearly provides for 'ground not
open to prospecting' and the provisions of this section do not cover ground
formerly covered by an expired EPO.

Further to the above statutory provisions, the MM Act clearly
indicates the procedures to be followed by the Mining Affairs Board in
cancelling any duly issued certificate of registration. This section clearly
stipulates the periods of notice which the Mining Commissioner should give
(30 days) a person notifying such person of the proposed date when the
cancellation is to be effected. Section 50(l)(a) provides that the
cancellation may be effected, if at the time of pegging the affected area
was situated on ground reserved against prospecting. Section 50 states
clearly that notice should be given through registered mail to the address
of the person as recorded by the Mining Commissioner.

Alternately, where there is no address in the Mining Commissioner's
records, the notice of intention to cancel shall be effected through
publication in the Government Gazette. To ensure that there is fairness in
the entire process, section 50(2) states that the notice should indicate to
and inform the person affected that they have a right of appeal to the
Minister, which much be made before the effective date of cancellation. The
availed documentation does not show an adherence to these statutory
procedures.

3. Real rights as held by ACR

The inference to be drawn from the above discussion is that the mining
rights held by ACR through their certificates of registration are real
rights which entitle the holder to exercise all such subsidiary or ancillary
rights which will enable him to effectively carry out his prospecting and/or
mining operations. The right acquired by ACR is enforceable against all
other persons who seek to deal with the thing in a manner inconsistent with
the exercise ACR's power to control it.

4. Section 35 of the MM Act - effect of reservation

This provision is clear in what it seeks to enforce, that is, the
enforcement of the cessation of prospecting and pegging rights held by any
person within the reserved area from the hour and date so specified in the
notice. The proviso to section 35(1) states in no uncertain terms that the
"holder of a mining location other than an exclusive prospecting
reservation, within any such area shall retain and may exercise all rights
lawfully held by him which existed at the date and hour as from which such
notice takes effect in terms of this subsection". Section 5 of the MM Act
defines "mining location" and when read in conjunction with this proviso, it
gives a right in respect of a mining location.

Furthermore, the notice of reservation must specify a time period
within which it will be in force. There is need for documentary evidence
indicating that the area allocated to ACR is in fact not a "mining location"
as defined. If this is the fact then their operations in the reserved area
were not to be ceased due to the reservation.

5. Special Grants - section 294 (MMCZ or ZMDC)

The MM Act is clear in that holders of special grants may exercise
their right only over ground which is open to prospecting, that is to say,
ground over which no other person possesses a right. This is the legislation's
way of ensuring and protecting persons with existing rights from
dispossession through the issuing of special grants. In the event that no
evidence is adduced to counter the legality of ACR's rights over their
claims, the special grant thus only covers ground within its area which is
open to prospecting. The legality of the granting of the special grant to
MMCZ is irregular as this is clearly outside the scope of their statutory
functions and powers. The special grants issued to MMCZ under section 291 of
the MM Act can only be for "prospecting, mining operations or other
operations for mining operations".

The specific functions of the MMCZ stated under section 20 of the Act
limits their functions exclusively to the marketing of minerals. Further to
this, section 21 of the Act empowers the Corporation to do, either by
itself, jointly with others or through its agents, any of the things
specified in the Schedule. The things listed in the schedule do not include
"mining operations or prospecting". This leads to the inference that MMCZ if
issued with a grant in terms of the MM Act would be clearly acting outside
the scope of its statutory functions and powers as a marketer of minerals in
Zimbabwe. This is clear evidence of a misinterpretation of the applicable
statutory provisions by the Ministry in issuing the grant to MMCZ instead of
ZMDC.

In terms of the ZMDC Act, specifically Section 20, one of corporation's
functions is to "engage in prospecting, exploration, mining and mineral
beneficiation programmes". It is this function which the Ministry improperly
gave to MMCZ which exhibits that our law has an appropriate statutory body
which should be tasked with the prospecting and exploration of the minerals
in the Marange area. No further discussion or elaboration in this regard is
needed as this provision is self explanatory.

6. MMCZ and the PST Act

The MMCZ Act (section 20) sets out the functions of the corporation
clearly. Section 21 (Powers of Corporation) allows the MMCZ to exercise its
functions through its agents and these functions and powers are listed in
the Schedule to section 21. Of importance for the present purposes is
paragraph 26 of the Schedule which states that the corporation has the power
to store, refine, smelt, process or sell any minerals acquired by the
corporation. However, it should be pointed out that the corporation is
purchasing diamonds from the miners in the Marange area where it is the
holder of an unlawfully issued grant. As pointed out in the preceding
paragraph MMCZ does not have the authority in terms of the enabling Act to
undertake mining activities either through itself or through its agents.

MMCZ is incapable of holding the grant as this is not one of the
functions it may perform as mining activities are outside the scope of its
statutory mandate.

In terms of the MMCZ Act (Part VI) the control of sale and export of
minerals is vested in the corporation. Further to this, when these powers of
the MMCZ are read in conjunction with Statutory Instrument 282 of 2002 (The
Precious Stones Trade (Amendment) Regulations, 2002 (Nol), it is the MMCZ
which should be aware of the Kimberly Process Certification Scheme and
should ensure that exporters comply with the standards required therein. All
duly licensed dealers may purchase the precious stones but must sell them
through the MMCZ in compliance with the MMCZ Act.

Conclusion

In light of the above observations our legal conclusions are as
follows:

* In terms of the MM Act, the EPO held by De Beers had expired despite
their having applied for its extension two months before its expiration
date. The delay to act by the Mining affairs Board created the legal vacuum
whereby the land was open to pegging and prospecting by other persons. The
purported extension at a later date was defective;

* The ACR claims are valid rights they acquired in terms of the law.
In the event that they were to be cancelled, the statutory procedures for
cancellation, that is due notice and right of appeal to the Minister, should
have been observed to give legal validity to the purported cancellation;

* The reservation in terms of the Act was properly done save for the
fact that the law provides that existing lawful mining locations are not
affected by such reservation.

* The issuing of special grants to MMCZ is not in accordance with the
law. We are of the view that these could have been issued to ZMDC once the
encumbrance of issuing them to ACR had been removed;

* MMCZ can in terms of the law be a licensed dealer in precious stones
but it cannot be the holder of a grant over a mining location as this is
outside the scope of its functions and powers as captured in the MMCZ Act;

* The provisions of the MM Act, the MMCZ Act and the ZMDC Act were not
properly applied by the Ministry and;

* In future we urge your office to consult this (AG) office before
making decisions of this nature which have both legal and national
implications.

Zim must reform before polls - Blair

Zim Independent

Dumisani Muleya

BRITISH Prime Minister Tony Blair yesterday stepped up pressure on
South African President Thabo Mbeki to address the Zimbabwe crisis, saying
reforms are "essential" before next year's crucial elections.

Blair's remarks in an address in Johannesburg at the end of his
African tour came as Mbeki is struggling to get his mediation in Zimbabwe
off the ground. Mbeki is due to report back to Southern African Development
Community (Sadc) leaders, who tasked him to deal with the issue, by June 30.

Blair said Mbeki and Sadc needed to move with speed to tackle the
local political and economic situation ahead of next year's joint
presidential and parliamentary elections.

Mbeki himself recently said there was not much time to create
conditions for free and fair elections next year. Blair said Africa and Sadc
have to rise to the occasion on Zimbabwe.

"African governments should also hold other African governments to
account. The world is waiting, wanting to re-engage with a reforming
Zimbabwe government ... but for the people of Zimbabwe this is urgent, and
change before the 2008 elections essential," Blair said.

"I welcome the determination of the countries of Southern Africa to
tackle Zimbabwe's problems through Sadc and President Mbeki's leadership
bringing the two parties together."

Mbeki's mediation team has met with President Robert Mugabe as well as
Zanu PF and opposition MDC negotiation teams.

MDC leaders this week had meetings with Zimbabwean civic groups at the
Institute for Democracy in Pretoria to discuss mediation and other issues.

They did not meet Blair because they were not on his itinerary. State
media reported that they "stole" out of the country to meet Blair.

"We left the country in broad daylight on Tuesday afternoon in the
full glare of the CIO to attend an all-stakeholders meeting of Zimbabwean
civic organisations in Pretoria to discuss building a consensus on how to
resolve the Zimbabwe situation," MDC faction leader Arthur Mutambara said
yesterday.

"It's totally false that we had gone to South Africa to meet Blair.
This was just a poor attempt by the CIO and their media agents to attack the
credibility of the opposition. It was also a failed bid by government to
undermine President Mbeki on his mediation efforts."

Blair did not meet MDC leaders as this was never on his agenda, a
senior South African official also confirmed.

Blair met former South African president Nelson Mandela yesterday and
was due to meet Mbeki today. Blair lamented Zimbabwe's disastrous decline
under Mugabe, from being one of the strongest economies in Africa into
violent dictatorship and economic shambles.

"In Zimbabwe decades of repression have forced up to one third of the
population to flee. Life expectancy has dropped from 60 in 1990 to 37. And
South Africa's economy loses 3% of GDP thanks to Zimbabwe's economic
meltdown," he said.

Blair, who is quitting office on June 27, said it was the
responsibility of the international community to help repair the damage in
what was once seen as a post-colonial success story before Mugabe's regime
ruined the country's social and economic structures.

"The international community must of course be prepared to help
rebuild the shattered country," he said. Blair said African leaders must get
tough on authoritarian governments such as those in Sudan and Zimbabwe.

"Wealthy nations and Africa both face a choice ... Our challenge is to
support the good. Africa's challenge is to eliminate the bad," Blair said.

He also said Africa has a choice between the path of progress taken by
countries such as South Africa, Botswana and Ghana or follow the destructive
path of "violent repression that leads to an economic spiral" like the one
taken by Zimbabwe and Sudan.

Blair's visit to Libya, Sierra Leone and South Africa came on the eve
of the G8 summit in Germany, during which Chancellor Angela Merkel has vowed
to press rich nations to fulfil aid pledges to Africa under a 2005 Blair
initiative.

Blair, who put Africa top of his foreign policy agenda, said the world's
most industrialised economies must help Africa out of the economic doldrums
and poverty.

"Next week at the G8 Summit, leaders will show whether, having put
Africa at the top of the global agenda, we have the perseverance and vision
to see it through. I hope we have," he said.

"We need each G8 to be bolder on Africa than the last. If we give up,
we will lose the chance in this continent, rich as it is though its people
are often poor, for our values to take root."

Blair acknowledged some people were growing cynical over repeated -
and often only partially fulfilled - Western pledges, but said instead of
being undermined the policy needed to be enhanced.

"The fact that we don't get it all done doesn't mean that we got
nothing," he said. "We've got to make the case in the developed world that
in the end this is in our own self-interest as well. This is not about
charity."

Aippa under Africa scrutiny

Zim Independent

Augustine Mukaro

THE African Commission on Human and Peoples' Rights (ACHPR) has
resolved to make a ruling on the Access to Information and Protection of
Privacy Act (Aippa)'s compatibility with the African Charter and bring
finality to a communication filed before it in 2005.

The ACHPR's 41st session, which ended in Accra, Ghana, on Wednesday,
said it would now make a decision on the basis of papers filed by both
parties despite government advice that it had filed supplementary
submissions.

The Independent Journalists Association of Zimbabwe, Misa-Zimbabwe and
the Zimbabwe Lawyers for Human Rights (ZLHR) in 2005 submitted a
communication seeking an opinion by the ACHPR to the effect that Sections 79
(1) and 80 of Aippa contravened Article 9 of the African Charter.

The complainants also sought a directive to the government of Zimbabwe
to ensure that the said sections were repealed or amended to expunge
accreditation of journalists and criminalisation of "falsehoods".

Appearing on behalf of the complainants on Wednesday, Misa-Zimbabwe
legal officer Wilbert Mandinde argued that no progress had been made by
government in either amending or repealing Aippa. He submitted that instead
the police had become more vicious in their application of the law.

"In the circumstances, we request the commission to come up with a
decision on the sections under challenge based on our written submissions to
the commission. This, we hope, will eventually put to rest the
merry-go-round situation which we have witnessed on cases involving Aippa at
the Media and Information Commission, the Administrative Court, the High
Court and the Supreme Court over the past five years," said Mandinde.

However, Policy and Legal Research director in the Ministry of
Justice, Legal and Parliamentary Affairs Margaret Chiduku who appeared on
behalf of government denied the assertion that no progress had been made,
stating that there was movement behind the scenes.

She advised the commission that the government had filed supplementary
submissions, which she requested the commission to also consider before
coming up with a decision on the matter.

The ACHPR secretariat denied having received the supplementary
submissions in question. The commission then ruled that it would now make a
decision on the basis of the papers filed by both parties.

"Madam chairperson, I am of the opinion that this commission can make
a determination based on the information already provided by both parties,"
Commissioner Tom Nyanduga said. "We have to bring finality to this case."

The commission is now expected to come up with a decision on the
sections under challenge. However, before their decision is made public, the
commission will present its findings as part of its activity report for
adoption to the African Union Council of Ministers' meeting, which takes
place before the African Union's heads of state summit.

During arguments on the matter at the 38th ACHPR Session held in
November 2005, the commission was advised by the then Director of Public
Prosecutions Loice Matanda-Moyo that Aippa was being reviewed by the
Minister of Information and Publicity with a view to ensuring removal of any
infractions of the African Charter.

Teachers get 600% salary increment

Zim Independent

Lucia Makamure

GOVERNMENT has awarded teachers a salary increment of more than 600%,
the Zimbabwe Independent has learnt.

The increments came after the teachers threatened to go on a strike
after they failed to agree with the government on a 200% salary increment
two weeks ago.

Teachers who spoke to the Independent on condition of anonymity
revealed that they have been awarded a salary increment of 639%. Transport
and housing allowances have been increased by 245% and 110% respectively.

The increments, which are effective from June, will see the lowest
paid teacher at grade C earning a net salary of more than $2,5 million.

Progressive Teachers Union of Zimbabwe secretary-general, Raymond
Majongwe, confirmed the pay increases but refused to release the figures.

"We have been awarded a salary increment but I cannot tell you the
figures as we are still negotiating," said Majongwe.

Meanwhile, hospital doctors have gone on strike two weeks after the
government failed to respond to their fresh demands.

President of the Hospital Doctors Association, Dr Amon Severeki, said
yesterday the doctors would remain on strike until government responds to
the demands they made three weeks ago.

He said the doctors are demanding a monthly salay of $70 million and a
US$3 000 car loan.

The Permenant Secretary in the Ministry of Health and Child Welfare,
Dr Edward Mabhiza, said something is being done to address the plight of
health personnel.

NMB probe widens

Zim Independent

Shakeman Mugari

THE NMB Bank foreign currency fraud deepened this week with
revelations that the central bank has now widened its investigations to
other financial institutions it suspects to have been involved in the
scandal.

The central bank suspects that the US$4,7 million fraud involved two
other commercial banks that should be investigated.

Sources however told businessdigest this week that the investigations
could be widened to include "no less that four other commercial banks".

A team of RBZ investigators and police are expected to interview top
management and treasury officials from the two commercial banks whose
identities have not yet been released to the media.

The investigations will centre on companies - Haus (Pvt) Ltd and
Forthfort Enterprises Ltd - whose accounts police and RBZ suspects to have
been used to siphon the money out of NMB.

Preliminary findings show that the two companies provided the bulk of
local currency for the foreign currency externalised by an assistant manager
in NMB's treasury department.

The foreign currency was transferred to AKB Bank in Zurich under
account number 16701690347 to a company called Cardinal Finance.
Investigators plan to interview the officials from the two companies on
Monday.

A search at the Companies Registrar show that Forthfort Enterprises
has three directors, Edwin Tome, Eddy Edwin Tome and Edwin Edward Tome. The
investigators are interested in finding out why the directors' names are so
similar. They believe that it could be one person using different names.

The file for Haus (Pvt) Ltd could not be found at the Companies'
Registrar.

Cardinal Finance's account was used to transfer the foreign currency
from NMB Bank through 65 transactions between 2005 and March this year.

Sources this week said the investigations will be completed in the
next two weeks after which a report will be submitted to the governor Gideon
Gono. Gono yesterday said he was not in a position to comment on ongoing
investigations.

"I cannot discuss an ongoing investigation with the media. Even if we
finish our investigations there is no way you could expect us to give it to
the media," said Gono this week. "It is not proper for me to even speak to
you about such matters."

Sources however said the RBZ has increased its surveillance on the
banks since the NMB Bank was unearthed
four weeks ago. New stiffer surveillance measures are expected to be
announced in early July as the RBZ reacts to the fraud.

Midzi, Gono sing different songs

Zim Independent

Paul Nyakazeya

THE Minister of Mines And Mining Development, Amos Midzi, this week
said the country will not seek foreign investors to mine diamonds in Marange
after government gave a grant to the Zimbabwe Mining Development Corporation
(ZMDC).

This contradicts statements by Reserve Bank governor, Gideon Gono who
said in his monetary policy that ZMDC did not have the capacity to mine
diamonds in Marange. Gono said the mining sector needed foreign investors to
undertake such a huge project.

A recent report by the parliamentary committee for the Ministry of
Mines and Mining Development also found that ZMDC did not have the capacity
to operate in Marange and needed a foreign partner.

"Government's decision is that the ZMDC should go it alone. From what
we've seen, since Zimbabwe Mining Development Corporation took over, there
is no need for external investors," Midzi told journalists at a press
conference this week.

"The corporation (ZMDC) has not drawn on any expertise or equipment
from outside, which is testimony that we are able to do it on our own,"
Midzi said.

Government in November last year sealed off Marange diamond field and
took over the diamond claims previously owned by London-listed African
Consolidated Resources. African Consolidated Resources is still contesting
the takeover.

The Chamber of Mines last week said the mining industry could collapse
under the weight of heavy debts and an unsustainable exchange rate.

The mining sector is the biggest foreign currency earner in the
country.

A six member delegation from the Kimberley Process Certification
Scheme arrived in the country this week to assess the mining situation in
the country after about 20 000 illegal miners descended on the Marange
diamond deposit last year in August resulting in some diamonds finding their
way to the black market against rules set up to curb trade in gems from
conflict zones.

Midzi dismissed reports that the delegation had come to Zimbabwe to
access the mining of diamonds in the country.

"I would like to dispel the notion that the team has imposed itself on
us to assess the situation. They are here at our invitation. We expect the
team to visit River Ranch, Murowa and Marange so that they can make their
own assessment," Midzi said.

Midzi said government had dealt with problems at Marange.

CFI hatches a golden egg amid the diamonds

Zim Independent

By Admire Mavolwane

FOR most it came as no surprise that "diamonds" were allegedly found
in the grounds at a primary school in Epworth sometime last week. If diesel,
pure than the purest, could be found flowing from rock escarpments in
Chinhoyi, why not diamonds in Epworth Mission! Every stone that glitters or
has lustre has assumed some speculative value.

However, the rush to the unfortunate school underlines the desperation
of ordinary Zimbabweans. With the almost endemic shortages of water,
electricity, coupled with grinding poverty and sheer hopelessness, one can
be forgiven for having impaired vision. School children in Epworth now have
diamonds on the soles of their shoes.

On a more sombre note, what would be the effect on the economy of
discovering diamonds in Epworth? The first will be that the little
infrastructure the school possesses will be decimated through indiscriminate
digging. Already, before the stones are confirmed to be genuine gemstones,
part of the precast wall surrounding the school has been destroyed.

What about the prices of lodgings and goods in the surrounding
suburbs? Those who lived in Kwekwe and Gweru at the height of gold panning
will attest to the fact that the prospects of such quick riches have a
negative impact on prices in the towns adjacent to the presumed El Dorados.

On the positive side, diamonds have been discovered at a time the guys
from the Kimberlite Process are in the country. Besides visiting Marange,
Murowa and Beitbridge, they will perhaps have the opportunity to kill two
birds with one stone and certify the Epworth diamonds as well.

Moving away to lighter issues; today is the last day in the biggest
retail supermarket promotion, the OK Grand Challenge. Tomorrow lucky
shoppers will walk away with some magnificent prizes. In order to
accommodate one of the important stakeholders, shareholders OK Zimbabwe
released its results for the full year to March 31 2007 in time for the
Grand Challenge's finale.

Revenues were up a remarkable 2 862% to $219,4 billion. This growth
whilst way ahead of the average official inflation of 1 301%, is more in
line with the internally measured average inflation rate of 2 497%.

Shortages and price controls on basic products, bread, flour and maize
meal, whilst unfortunate turned out to be a blessing in disguise as it
enabled the retailer to focus on higher margin products. Operating profits,
thus increased by 3 766% to $34,4 billion, as operating margins increased by
four percentage points to 16%, courtesy of a more favourable sales mix.

Interest income of $6,8 billion, at 20% of operating profits is
playing a reduced role to the one it used to do in the previous years. This
is in no way an indication of lessening ability to generate cash, but a
function of low interest rates and the impact of inflation on working
capital management, which necessitates more frequent reinvestment into
stocks.

Attributable earnings of $30,9 billion were achieved reflecting a
return of 3 291% on the prior year. Whilst the results are really
commendable, converting the earnings to US dollars using the old mutual
implied rates on the balance sheet dates of $157,43 in 2006 and $20 747,38
this year shows a remarkable shrinkage in hard currency terms.

Last week we wrote about Pelhams having taken inordinately long to
come out of the December 2003 induced difficulties, when compatriots PGI,
Art, CFI and others were already singing sweet tunes. If ever there was a
successful turnaround story, then CFI's one is as classic a case as German
early 1920s hyper-inflation. If Zimbabwe was America then on the basis of
the recent interim results to March 31 2007 executives at the group would
all of a sudden claim to be turnaround strategists.

Turnover from operations grew by 3 212% to $127,8 billion spurred on
by volumes growth across all the major business units. Noteworthy was the
51% increase in table eggs volumes, 100% placement of day old broiler chicks
and an upward trend in the exports of hatching eggs. If one then factors in
the IAS41 biological assets, aggregate turnover balloons to $166,2 billion.

Operating Margins more than doubled from 27% to 59% benefiting from
stringent overhead controls, margin management and the uplift in biological
assets. The overall result was a sixty eight fold growth in operating
profits to $95 billion. Of this amount, $13,5 billion was derived from IAS41
accounting.

Unlike previous years when the group was funding its operations
through borrowings, CFI is now a huge cash machine, churning out a net $13
billion internally in six months. This surplus cash found its way into
investments which resulted in interest inflows amounting to $1,4 billion
against a payment of $81 million in the previous period.

A portion of the cash was also deployed on the stock market, from a
fair value adjustment on these investments of $23,1 billion was written to
the income statement. After accounting for the inevitable provision for the
taxman, the growth in earnings was a disproportionate 8 846% to $85,9
billion.

Applying the same old mutual implied rates mentioned earlier to these
numbers, shows a much lower regression in hard currency terms, when compared
with OK Zimbabwe.

To underline the fact that the group is no longer wobbly, working
capital wise, the Board declared a dividend of $4 per share, the second
since the fateful December 2003.

Management are urged to seriously consider writing a book, with a
suggested title which reads "Seven or Eight Winning Habits of
Turnaroundists", or something close to that. At least they have that claim
to fame.

Delta blames price hike on maize imports, forex shortages

Zim Independent

Paul Nyakazeya

DELTA says its shock beer price increases last week were triggered by
the sharp rise in the cost of importing maize and the continued foreign
currency shortages.

Delta has been importing maize, one of its major inputs, from South
Africa since a major shortage hit Zimbabwe two years ago. Critics say the
maize shortage is caused by the chaotic land reform but government blames
successive droughts.

The company increased the price of beer by 100%. The price of opaque
beer (scud) increased to $25 000, up from about $10 000. The retail price
for a pint Castle, Lion, Black Label and Pilsner is now $20 000, up from $9
000. A quart of beer, Castle, Lion, Black Label is now going for $40 000, up
from $16 000.

The sorghum-based beer, Eagle, a brand for the lower end of the
market, is now selling for $22 000.

Delta corporate affairs manager, George Mutendadzamera, told
businessdigest this week that the company had been forced to hike prices
because of the increase in the cost of maize imports and foreign currency
shortages.

He said the cost of beer like any other product was a function of the
cost of production and inflation.

The price increase coincided with the shortage of beer which
Mutendadzamera blamed on shutdown of one of their bottling lines at
Southerton factory for scheduled repairs.

"Lager beer constitutes the core of our business portfolio and thus
continues to attract investment on a planned basis in plant, technology and
quality systems."

He said the line had suffered some major breakdowns in May. "The firm
demand for lager beer coupled with a planned shut down in mid-May on one of
our bottling lines at our Southerton factory, led to a situation where our
brand and pack mix in the market was less than optimal," Mutendadzamera
said.

"The line is now back to full operation and we note a significant
improvement in the availability of our brands in the 375ml and 340ml packs."

He however said the demand for beer remained high despite the price
adjustments. "Notwithstanding these price adjustments demand for our Lager
beer remains strong, an indication that consumers continue to perceive value
in our products," Mutendadzamera said.

The plant experienced recurrent breakdowns after the maintenance
resulting to the decline of beer volumes.

Delta posted a turnover of $375 billion in the first quarter of this
year, mainly on beer sales.

Commenting on the impact of foreign currency shortages on the company's
repairs and operations, Mutendadzamera said: "The risk associated with
imported spares has been significantly reduced through Delta's initiative of
setting up Malbruk ltd, a local company specialising in the fabrication of
spares for our plant."

Mutendadzamera said currently Malbruk was supplying 50% of Delta's
engineering spares requirements.

Zambia says benefiting from Zimbabwe crisis

Zim Independent

Kuda Chikwanda

ZAMBIA says it has benefited from Zimbabwe's crisis including
qualified personnel that have fled the country since the economic meltdown
started seven years ago.

Zambia's finance minister, Ngandu Magande, said this during an
International Monetary Fund (IMF) question and answer session after a
meeting of economic ministers from member countries. He was responding to a
question about the impact of Zimbabwe's meltdown on the Zambian economy.

"We know what Zimbabwe is going through. But economically, I want to
say that apart from the demand on the Zambian economy to provide what (the)
Zimbabwean economy has failed to, it has not been very interruptive. If
anything, we have gained," Magande said.

He said Zambia had welcomed skilled white farmers, whose land was
seized by government under the fast track land reform programme, saying some
of them had been Zambian farmers who fled the country after independence,
and settled in Zimbabwe.

"We accommodated them because we believe in Zambia that peace is
important. If you find people fighting, there is no use leaving them on the
ground where they are fighting. If you separate them obviously the fighting
gets less," Magande said.

He said Zambia's accommodation of the white farmers had caused a
temporary diplomatic rift between Zimbabwe and Zambia.

"Accommodating them caused us some political problem with our black
brothers that we are accommodating people running away from them. So we
reconciled them. So we actually benefited out of the skills that these
people have brought."

Magande said that while Zambia did not intend to ride on the
misfortunes of Zimbabwe, his country had benefited from increased tourist
arrivals on their side of the Victoria Falls.

The IMF recently predicted that Zimbabwe's economy was set to shrink
for the eighth year in a row, with Gross Domestic Product (GDP) expected to
fall by 5,7% this year, and a further 3,6% in 2008.

Zambia on the other hand is expecting growth of 6% for 2007.

To add to Zimbabwe's miseries is the fact that it is the only member
of the eleven nation Sadc grouping whose economy continues to slide.

Botswana is expecting a growth rate of 4,3%; Madagascar, 5,6%;
Mozambique, 6,8%, whilst predictions for Namibia are at 4,8%.

Swaziland's economy will grow by 1,2%; the Democratic Republic of
Congo (DRC), 6,5%; Lesotho, 5,1%, and South Africa, 4,7%.

Angola's economy, recovering from years of civil war, will register
the highest GDP growth in the next two years IMF predicting a 35,3%
expansion in 2007, and 16% in 2008.

The average growth rate for Sadc for 2007 is 6,8%, and marginally
lower for 2008, where it stands at 5,2%.

Can bank internal control systems be trusted?

Zim Independent

By Martin Tarusenga

IT'S barely a month since the Zimbabwe Independent on April 20
published an article urging bank stakeholders to assess published financial
statements for potential threats to their stakes including forex and other
deposits.

Just when we thought our financial sector was safe and sound, another
bank has been fleeced of foreign currency belonging to depositors, putting
the security of the whole banking system into question.

NMB Bank confirmed two weeks ago that it had lost US$4,7 million to a
well organised fraud by one of its staffers in the treasury department.

The jury is still out on whether some senior officials in the treasury
department were involved but that the fraud took more than a year to
discover is clear indication of the porous state of the bank's internal
audit system.

A perusal of NMB Holdings Ltd's December year-end financial statements
shows no material reporting of foreign currency activities in this bank - a
reporting omission which could have been cause for concern to forex
depositors.

The statements on corporate governance and risk management do not
provide any insights into how NMB's internal control systems managed the
forex deposits over the year, including the US$4,7 million that is now at
risk.

Further, the split of this bank's liabilities does not show the forex
deposit liabilities on their own.

From analyses of the reports on the unfolding event in the papers it
turns out that the US$4,7 million is at risk because the bank's treasury
forex internal control systems and the RBZ forex remittance approval system
for exporters gave in - 65 times!

The established risk control principle requiring the independence of
treasury, middle and back offices, reinforced by well publicised scandals
such as that of Barings of the UK, was apparently violated in this case.

One would expect that banks in Zimbabwe and the associated governance
systems are at grips with this principle in a way that the fraud-tight
operation of this internal control mechanism is a given fact in all banks -
leaving no room for such operational risk incidents.

Whether or not this is an isolated case could be determined by pinning
down special distinctive circumstances and characteristics of NMB that
remove it, in this regard, from the rest of the banking system in Zimbabwe.

Apart from the unfolding operational risk incident and the resolved
deficiencies associated with its scandalous history outlined in this paper,
there are no oddities which warrant the singling out of NMB as the only bank
with a potentially high operational risk exposure.

Just like the other banks, NMB had in place a new corporate government
that was recommended by the central bank three years ago. It was generating
good post tax profits within performance ranges of the other banks and
indeed attracting a favourable credit rating.

Against this background, one could take a precautionary conclusion
that NMB might not be the only bank with flawed internal control systems
that expose stakeholder assets to risks.

There is reason to believe that the bank may just happen to be the
first in a series to come.

A look at financial reports of all financial institutions clearly
shows a general omission of critical information that depositors and
shareholders require to make informed decisions about their banks.

Hard evidence of deficient internal control systems in banks can only
be obtained by the central bank in regulating and supervising the banking
system and when a risk exposure has materialised as may be the case with
NMB.

Otherwise the state of bank internal controls to protect stakeholder
assets can only be gleaned from the banks themselves particularly from the
published financial statements and from information obtained by "putting one's
ear to the ground".

Contextualising internal controls as a system of managerial tools to
prevent and control risks of error and fraud this system can conveniently be
analysed at board level, management and individual business line levels.

Note here that this is just a convenient way of analysing the system
as in practice the system is or should be integrated as one.

At the individual business line several banks highlight their
practices to maintain business continuity plans. No bank however mentions
the strategies such as regular drills to ensure that these continuity plans
are actually implementable.

The business procedures in the various business lines are not
highlighted hence it is not clear whether banks maintained documented
business procedures as part of internal control systems.

To the extent that highlights of business line procedures facilitate
reporting on performance of the respective lines, it is therefore not easy
to ascertain performance of the individual business lines rendering it
difficult to formulate appropriate corrective action that will improve
internal controls.

Additionally emphasis of the independence of some key functions within
the individual business lines such as to minimise collusion of officers in
fraudulent activities are not highlighted.

The independence of customer relations from credit approval processes
for instance how the Treasury front and the back offices minimised fraud
over are not highlighted in most financial statement published by banks.

At management level all banks reported explicitly on their risk
control - covering the control of the typical bank significant risks
including credit, market and operational risks.

The reporting tended not to provide insights into the actual risk
exposures prevailing over the year of reporting and how risk controls were
actually engaged to control the exposures leading to the results being
reported. Instead most of the reports were derived from established risk
theory and standards about what should be and not what is.

In consequence a clear picture of the internal risk control practices
on the ground was not apparent.

Control activities of the internal audit function over the year of
reporting were generally not highlighted.

Only statements that this function existed were made. Use of the audit
plan and the audit strategies within the plan, referenced on internal risk
control, were not highlighted.

The requisite support that the audit function must give to management
in protecting bank stakeholder interests was therefore not apparent. The
same applies to the external audit function.

Internal control systems at management level to ensure compliance to
policies, laws and regulations were again scantly reported on.

Banks however reported being in compliance with the various
regulations. No comments were however made on how material and effective the
compliance was to the protection of stakeholder assets in the respective
banks.

At the board level the reports typically mentioned the board
composition, including the board committees and often general statements
about skills of the directors.

There were no highlights about how the board functionaries used their
skills to affect effective internal controls over the year of reporting.

Convincing reporting on internal controls should link to the
performance results by way of highlights over the year of reporting which
led to the performance numbers being reported.

When incidents do occur against such reporting they can be taken by
stakeholders to be pure chance occurrences - otherwise the effectiveness of
internal controls become questionable.

* Martin Tarusenga is principal consultant with Systemics Consulting.
Contact mtarusenga@aol.com

Zim worries IMF

Zim Independent

Itai Mushekwe

THE International Monetary Fund (IMF) says it is very concerned about
the continued deterioration of economic and social conditions in Zimbabwe.

Responding to questions from the businessdigest the IMF said Zimbabwe
had failed to adopt a comprehensive policy package to address the current
economic meltdown.

"The Fund is very concerned about the continued deterioration of
economic and social conditions in Zimbabwe," said an IMF spokesperson.

The renewed concern by the IMF comes as inflation last month surged to
an all time high of 3 713,9%, up from 2 200,2% in March worsening the plight
of ordinary Zimbabweans. Four in every five economically Zimbabweans is not
formally employed and about 80% of the population lives below the global
poverty datum line of US$1 a day.

The IMF has repeatedly urged the Zimbabwean authorities to urgently
adopt a comprehensive policy package to address the economic crisis but with
no success.

"It (IMF) has also called on the government to provide adequate social
safety nets and food security to vulnerable groups," said the spokesperson.

"A comprehensive package of reforms would need to center on fiscal
tightening, including elimination of quasi-fiscal activity, and exchange
regime and price liberalisation, which would be conducive to monetary and
inflation stabilisation."

The call for government to provide adequate social safety nets comes
amid reports of massive food shortages this season with an estimated 1,5
million people reported to be facing hunger.

The Fund said it was willing to work "closely" with Harare to
formulate and implement broad-based policies to improve the welfare of
Zimbabweans.

"We stand ready to work closely with the authorities to formulate and
implement such a policy package, which would improve the welfare of the
Zimbabwean people."

The IMF has among other things called upon the government to implement
its policy recommendations, which include cutting down government
expenditure and reducing money supply.

It also ruled out any possibilities of extending financial support to
Zimbabwe anytime soon. "Zimbabwe is currently not eligible for financial
assistance from the IMF.

At its Board meeting on February 23, the IMF Board reviewed issues
related to Zimbabwe 's overdue financial obligations and kept in place the
related remedial measures, the declaration of non cooperation, the
suspension of technical assistance, and the removal of Zimbabwe from the
list of PRGF-ESF eligible countries."

The Fund also said the central bank governor, Gideon Gono's intention
of introducing a new currency would not address the country's inflationary
crisis. "The introduction of a new currency alone will not address the
hyperinflation."

Zimbabwe battles to sustain jumbo boom

Zim Independent

Shame Makoshori

THE thick early morning dust rising from the eastern horizons of the
Hwange National Park appears like a sign of an imminent heavy storm.

Suddenly, the 4x4 game drive vehicle grinds to a halt and a group of
tourists are ready to receive their first lecture from the tour guide.

"It is not a storm but a herd of buffaloes," the tour guide explains.

"There are many of them in this national park and they move in
families of up to 200. But buffaloes can be very dangerous if they are
alone. This is one of the many herds that move around the park," the
explanation goes.

A sharp sound of a breaking branch captures the attention of the
tourists.

"They are elephants. They enjoy feeding on small tree bark. All these
dry bushes were crushed by the jumbos. There are about 45 000 elephants
here. They are the major attraction and generate the bulk of revenue for
hotels and lodges," he emphasises.

But like many people preoccupied by the commercial benefits of game
ranching, he has paid little attention on the collateral destruction and
environmental degradation the unsustainably high number of elephants have
inflicted on the habitat, threatening their own survival.

The Hwange National Park measures about 14 500 square kilometers and
can only accommodate 20 000 elephants.

Adult jumbos consume between 150 and 200 litres of water per day and
feed for 20 hours a day.

There are clearly not enough pastures and water in the area.

The elephants have to compete for the shrinking pastures with other
small animals.

The national elephant herd has grown to about 100 000 against a
carrying capacity of 45 000.

It is estimated to be growing at the rate of 5% per annum.

About 700 kilometres in the eastern part of the country in the
Gonarezhou National Park jumbo numbers swelled to about 25 000 in 2005 when
the park could sustain 10 000.

Across the region, 300 kilometres in the north east, villagers in Omay
Nyaminyami district are fighting battles with stray elephants that have been
trampling on their maize fields because of serious pasture shortages in the
nearby Tashinga National Park.

Stray elephants have killed more than 150 villagers in a decade in
areas of highest concentration.

There are serious signs of siltation in Lake Kariba, which has
threatened its aquatic life and the commercial benefits associated with
fishing and tourism.

In most game parks there are high levels of siltation and gullies
snake across the forests.

Officials battle to rehabilitate them to strike a balance between big
animal numbers and the overburdened pastures.

"That is why we insist that we have to control the number of elephants
in the area and sell the ivory in order to benefit these communities," said
Environment and Tourism minister Francis Nhema.

But Nhema will have to do more than point out the economic benefits
from the culling of elephants when he attends the Convention on
International Trade in Endangered Species (Cites) meeting in the Netherlands
which plans to impose a 20-year ban on global ivory trade.

Cites has already placed conditions on the trade in ivory arguing that
it promotes poaching. Southern African countries, including Zimbabwe, will
lobby against a proposed 20-year ban in ivory trade.

Nhema said he had since started lobbying other countries to block the
proposed ban.

"Japan has officially informed us that they are supporting the ivory
trade, and many more countries have indicated they will support us but I
cannot reveal them now because they might decide not to vote," Nhema said.

"I have met 26 ambassadors accredited to Zimbabwe and they seem to
understand our position," he said.

But Nhema will have to do more to convince Cites because even other
African countries that stand to benefit from the ivory trade are backing the
ban.

Mali and Kenya have said they will support the proposal to ban ivory
trade for 20 years.

"Mali is a little kid in wildlife management and Kenya's once bustling
elephant population was naturally controlled by perennial droughts that
rocked east Africa in the mid-90s so they have nothing to worry about," said
Nhema.

He said Kenya and other African countries backing the ban had very
little knowledge of wildlife management and have a long way to go before
they reach the levels of their southern African counterparts.

"We know that Kenya, Mali and the rest of countries backing the ban
still have to learn more about elephant management from the countries that
have succeeded to maintain large elephant populations."

There are serious shortages of water in the Hwange National Park for
instance, and efforts by the Zimbabwe Water Authority to pump water in
reservoirs in the park have been affected by the shortage of power, spares
and foreign currency.

Government ecologists say instead of leaving the elephants and other
animals to starve to death it is critical for southern African countries to
be allowed to cull them and sell the ivory.

In worst cases animals have been reported to have starved to death due
to the dwindling pastures and water shortages.

They are forced to migrate into neighbouring countries where they face
serious threats of poaching.

Until 1989 the authority tried to maintain elephant densities to
levels not exceeding a single elephant per square kilometre.

"But since the transfer of the population to Cities Appendix 11, which
allows limited trade in ivory, pressure still remains for the authority to
reduce the numbers," says an ecologist in the Parks and Wildlife Authority.

Kenya and Mali has won the support of many members of the Cites
members and rich animal rights lobbyists.

They will base their argument on the fact that trade in ivory
precipitates poaching.

The Global Environment Outlook of 2003 rated Zimbabwe and other
African countries as having excelled in wildlife conservation with an
increased number of protected areas established both at national and
regional levels.

Analysts say if the countries lobbying for the continued trade in
ivory win their argument, there is need for tight controls in Zimbabwe due
to the rampant corrupt activities especially in the hunting sector and
conservancies.

Mbeki mediation faces collapse

Zim Independent

Augustine Mukaro/Orirando Manwere

THERE are increased fears that time is running out for the Southern
African Development Community (Sadc) mediation initiative in Zimbabwe, as
government appears unmoved by calls for a new constitution and electoral law
reforms ahead of the country's joint elections scheduled for next March.

Government announced that presidential and parliamentary elections
would be held in 2008, resulting in increased calls for a new constitution
as a prerequisite for the polls if the country is to produce an
internationally acceptable result.

Sadc heads of state in March appointed South African President Thabo
Mbeki to mediate in the Zimbabwean crisis.

Analysts said the Sadc initiative risks becoming irrelevant as Zanu PF
is already working on a parallel programme, Constitutional Amendment 18, a
move seen as trying to avoid a constitutional overhaul which Sadc is
expected to facilitate through Mbeki.

The concerns come at a time when the opposition MDC (Morgan Tsvangirai
faction) has filed a court application challenging the constitutionality of
some sections of existing electoral laws which they believe should be
reviewed urgently.

However, stakeholders say a new constitution and electoral law reforms
can still be achieved if there is political commitment. There are even
proposals to delay the elections to allow the constitutional overhaul to
take place.

Zimbabwe has held three major elections - the parliamentary elections
in 2000 and 2005 as well presidential elections in 2002 - whose results have
been disputed by the opposition and the international community,
precipitating the current political impasse.

Stakeholders on the other hand concede that there are hurdles that
have to be overcome by the opposition and other groups demanding a new
constitution. The major task is to convince progressive members in the
ruling party to put their weight behind efforts for a new constitution.

They argue that all stakeholders from political parties including the
ruling party and civics have frameworks which could be synthesised into a
comprehensive new constitution.

Stakeholders expressed fears that an election under the prevailing
political environment would be a waste of time. Polls under present
circumstances, they say, are susceptible to rigging that attracts
international condemnation.

However, the reform efforts face serious resistance from hardline Zanu
PF stalwarts who are already working on a parallel plan to maintain the
ruling party's advantages derived from the current set up.

Opposition MDC's Tsvangirai faction spokesman Nelson Chamisa said his
party was convinced that their demands were achievable if there was national
consensus and political will.

"The biggest resource lacking in efforts to resolve the Zimbabwean
crisis at the moment is political will and commitment, particularly from
Zanu PF," Chamisa said. "Government's proposal for Amendment No 18 is an
effort to waylay other initiatives. We can't afford to fast-track everything
for the sake of time. Our roadmap is process-based and takes on board the
general populace."

National Constitutional Assembly (NCA) chairman Lovemore Madhuku said
the government was not sincere about political reforms and was taking
advantage of the Mbeki intervention to buy time.

He said there was need for civil society to continue mobilising its
members and to avoid dependence on the Sadc initiative as the government had
made it clear that a new constitution was not a priority.

"We have to continue mobilising the masses and continue building
pressure among all the democratic forces in the country," Madhuku said. "If
the Sadc initiative fails, we have plans B, C and D, but I cannot divulge
that at the moment. We will continue to soldier on because this is a process
and desired results cannot be achieved overnight."

Madhuku said civil society organisations believe they should be given
an opportunity to be heard as this process cannot be left to politicians
alone.

"So we are working on a document under the Save Zimbabwe Campaign
which we expect to present to President Mbeki. We have not been invited to
the dialogue but we are working on a consolidated document which we shall
submit for consideration," said Madhuku.

Reverend Ray Motsi, one of the founding members of Save Zimbabwe
Campaign said the coalition was consulting widely among its membership and
was expected to adopt a position paper on the Sadc initiative by the end of
this week.

He however expressed concern that there was not enough time for Mbeki
to meet all stakeholders as dates for the elections have already been set.

"In the event that nothing is achieved, we have to continue lobbying
even beyond the elections because this is a process," Motsi said.

Analysts said government still had a constitutional framework that was
rejected in 2000, the MDC factions have frameworks and the NCA also has a
framework which could be used as starting documents.

"What's required is an all-stakeholder national conference which will
agree on the need for a new constitution. It would take at most six months
to come up with the desired constitution," an analyst said.

Crisis Coalition Zimbabwe coordinator Jacob Mafume said Save Zimbabwe
Campaign was in the process of pushing for a new constitution or even an
interim measure that would level the electoral playing field.

"There are many frameworks for a new constitution to hand," Mafume
said.

"We need to build the desire for a new constitution among all
stakeholders and then progress on one platform. It's easy to work out the
modalities once there is commitment from all stakeholders," he said.

"It would need about four weeks to put together the various proposals
and then call for a referendum."

Mafume said the call for a new constitution was to level the political
playing field and to promote the common good.

Zimbabwe Election Support Network (Zesn) chairman Reginald
Matchaba-Hove said there was sufficient time for stakeholders to agree on an
acceptable electoral dispensation.

"We are agitating for the removal of electoral hurdles that have made
free and fair elections impossible in the country," Matchaba-Hove said.

"We are calling for a new constitution that would establish an
Independent Electoral Commission, repeal sections of Posa and Aippa to allow
free campaigning, and give unlimited access to media to all involved
parties.

"Otherwise holding elections under the current conditions would be a
waste of time because it will give the same results as 2000 and the same
reports of electoral fraud would be reproduced."

Matchaba-Hove said his organisation was encouraging people to go and
vote beginning at local levels because that is where democracy starts.

Zimbabwe Peace Project chairman Alouis Chaumba said their push for a
new constitution was aimed at eliminating electoral barriers that have
discouraged the ordinary people from viewing elections as a way of making a
change.

"We are working towards the elimination of barriers such as the
prohibition of political gatherings, violence and intimidation," Chaumba
said. "We are already encouraging people to participate in elections at all
levels and view the elections as a way of making a change to better their
lives.

"Under the current situation people often don't see the importance of
their vote. So unless these fundamentals are addressed the elections would
be just a routine exercise that would not improve anyone's life."

A people-driven constitution would seek to remove powers of the
president to appoint unelected members, establish an independent electoral
commission, repeal sections of Posa and Aippa and entrench a Bill of Rights,
among other draconian provisions.

National Security minister Didymus Mutasa said last week that Posa
would remain in force and was needed by government to quell unrest.

As services collapse,corruption flourishes

Zim Independent

BESIDES having to contend with leaking water pipes and frequent power
outages, Zimbabwe's urban residents still have to grease the palms of
officials to ensure they can get access to even these dysfunctional
services.

"As residents, we are faced with the twin evil of a continuously
deteriorating service delivery system and corrupt officials, some of them in
decision-making positions, who take advantage of the sorry state of affairs
to fleece us when we ask for the situation to be rectified," Edmore Mbirimi,
a resident of Chitungwiza, a satellite town 25km from the capital, Harare,
told Irin.

Three weeks ago, the sewage pipe at his house burst, an increasingly
common problem in urban areas throughout the country, and he telephoned the
works department that promised to come "soon".

After a 24 hour-wait, he decided to call again and was grumpily told
that the sewage department was overwhelmed and he had to wait his turn.

When sewage started to seep into the house, he was assured that the
problem would be rectified the same day but, again, no one turned up.

"It was on the sixth visit that a young employee accosted me on my way
out and bluntly told me that nothing would be fixed unless I 'dropped a
feather', suggesting that I had to pay the plumbers for them to repair the
burst pipe," Mbirimi added.

The public works officials have now stalled work at his home, after he
attempted to report the corruption to higher authorities, who also failed to
take action.

It is now commonplace for urban centre residents to experience
weeks-long water cuts, frequent power outages, uncollected refuse and live
with a broken down sewage system. Municipalities, power and water utilities
often cite the lack of foreign currency to import parts needed to make
necessary repairs on infrastructure, buy new vehicles for refuse collection,
or to buy electricity from neighbouring countries.

Recently, the Chitungwiza municipality indicated in a report that it
had suspended garbage collection because its trucks had broken down, and it
lacked the capacity to repair them, adding that the situation had been
worsened by the rampant theft of spare parts.

Mbirimi's neighbour, Josphat Matema, is a pragmatist. He has made
friends with the official plumbers by paying them and buys them an
occasional beer when they come around to do a job.

"I don't even have to visit them. They have pledged to check on my
house every fortnight because I am now their friend. Faced with such a
crisis, I don't have a choice but to pay, otherwise I would forever be
moaning," Matema told Irin.

Matema, a mechanic, is one of several thousand residents who have to
pay kickbacks to authorities to access water, electricity and a functioning
sewage system.

The need to pay kickbacks is despite the fact that municipalities and
utilities such as the Zimbabwe Electricity Supply Authority (Zesa), which
recently hiked tariffs by 350%, are charging exorbitant rates that most
ratepayers cannot afford.

Annual inflation currently stands at more than 3 700% and unemployment
is estimated to be around 80%, those with jobs struggle to raise money for
transport to go to work and have a decent meal because of poor salaries.
Many pensioners receive monthly payouts which can only buy a bar of soap.

Harare resident, Margaret Muhoni (66), a widow, has to live without
water and electricity for a year.

Before being cut off, Muhoni had paid about US$0,10 (at the parallel
market exchange rate, where US$1 buys $50 000) a month for services until
her bill suddenly shot up to US$60. She was told that her bill was
incorrect, but to her surprise, authorities insisted that she pay the amount
while they corrected the anomalies.

"I shed tears when one of them who seemed to know me suggested that
since I have a daughter living abroad, I should pay him in foreign currency
to have my bills normalised but the truth is I could not pay for what I
think were deliberate errors meant to force me to give them something," said
Muhoni.

She accused the authorities of taking advantage of her old age. Muhoni
has let out some rooms in her property, but the rental is nominal because of
the absence of running water and power. She has to buy firewood for cooking
and heating, while she and her tenants fetch water from a nearby church.

Irin was unable to get comment from the municipality, power or water
authorities, but an official in the Chitungwiza works' department said it
took two to tango.

"The issue of corruption is real, especially in these times of
suffering where employees are poorly paid and are extremely demoralised
because they mostly have to work without protective clothing, but residents
are also to blame as they encourage unscrupulous practices," the official
told Irin.

The Combined Harare Residents Association (CHRA), a ratepayers'
watchdog, blamed the corruption and shoddy service delivery on the absence
of an elected council.

"This (corruption) is an issue of serious concern to us but it does
not come as a surprise because there is no legitimate authority to monitor
and instill discipline in employees who feel free to do whatever they please
knowing that they will not be called to account for their unscrupulous
actions," said Precious Shumba, CHRA spokesman.

Since Elias Mudzuri, elected as mayor on the opposition Movement for
Democratic Change (MDC) ticket in 2002 was fired by the government for
alleged incompetence three years ago, the Harare municipality is being run
by a controversial commission.

Most of the municipalities in the urban centres are run by
MDC-dominated councils, who complain that they are being frustrated by the
Zanu PF government. - Irin.

Comment

Zim Independent

     
A SIX-MEMBER team from the international diamond certification body,
the Kimberley Process Certification Scheme (KPCS), arrived in the country on
Tuesday to assess Zimbabwe's compliance with diamond trading regulations.

Reports say the team was expected to visit key diamond mining areas
around the country. Mines minister Amos Midzi said the team had not imposed
itself on Zimbabwe, but was in the country at the invitation of the
government.

The team was expected to visit diamond mining areas, including the
contentious Chiadzwa fields in Marange, Murowa in Zvishavane and River Ranch
in Beitbridge. The visit of the team underlines government's poor polices
which at the end of the day attract international attention.

Zimbabwe has mined diamonds for decades, albeit on a small scale and
the recent opening of the Murowa diamond mine raised the profile of the
country as a diamond producer. The two ventures did not attract the
attention of KPCS. The Marange diamonds saga has however not helped at all
to raise the profile of the country. In fact, as stated in a letter by the
Murowa CEO, which we carry on Page 6 of this edition, the illegal extraction
of diamonds in Marange threatens exports of the precious stones.

But Midzi and his government colleagues have in preparation for the
visit been trying to clean up the mess in Marange in a bid to have its
actions endorsed by the KPCS. All this would have been unnecessary had
government stuck to basic tenets of investment protection and minerals
extraction policies.

At Marange, the KPCS team was this week shown ZMDC doing organised
test mining of diamonds under tight security. The team was also shown
records of stones extracted under the test programme. Zimbabwe is labouring
to prove that all its operations at Marange have been above board, hence
Midzi's statement this week that the KPCS team was in the country at the
invitation of government. That is however not enough to launder government's
soiled image as a result of illegal mining in the last quarter of last year.

It is important for the KPCS to know that senior government officials
in Manicaland actually encouraged people in the region to dig for diamonds
in Marange and then sell the precious stones to the Minerals Marketing
Corporation of Zimbabwe in contravention of the Ministry of Mines Act and
the Precious Stones Act.

It is also documented that the uncontrolled extraction and marketing
of the stones resulted in nefarious side-marketing which involved government
officials and prominent businesspeople. In April central bank governor
Gideon Gono said the country could have been prejudiced of US$400 million
due to smuggling of diamonds from Marange.

State Security minister Nicholas Goche is also on record as saying
diamonds illegally mined from Marange could have been sold to places as far
as Israel.

The KPCS team should also be alive to the fact that government was
planning to mortgage diamonds extracted from Marange to retire a fuel debt
with Equatorial Guinea. Even President Mugabe in February joined in
condemnation of the shady mining of diamonds in Marange, accusing unnamed
government officials of plunder.

There is therefore all the evidence that the mining of diamonds in
Marange has its roots in illegality that will not earn the country a good
score card from the KPCS. But our government will console itself with the
thought that diamonds extracted from Marange have not been used to finance
conflict. That does not make them clean because the gems have become a means
by which senior government officials and their cronies have continued to
acquire illicit wealth.

The handling of the whole Marange diamonds saga points to government's
penchant for disregarding the law for political expediency. The government
deliberately creates chaotic scenes in the name of indigenisation and
empowerment. State apparatus are then mobilised to clean up the mess in an
exercise meant to portray government as working for the betterment of the
country. We saw this with the looting of productive farms like Kondozi in
Manicaland at the height of the land reform programme. The script was
adapted for the Marange tragedy.

The KPCS visit is s crucial test of government's mining policies. That
the KPCS team is visiting is testimony there is something amiss here. It is
a wonder why Zimbabwe works so hard to attract the wrong kind of attention
all the time. As if the mess at Marange was not enough, our government is
working hard to gain a measure of notoriety through the proposed mining
legislation. Are there people in government employed to give Zimbabwe a bad
name?

The real cost of bad governance

Zim Independent

Candid Comment

By Joram Nyathi

AS Zimbabwe slowly slides back to the dark ages, I was reminded of the
old adage that "necessity is the mother of invention". Except that as a
country we haven't invented anything but are adapting fast to our dire
political and economic circumstances.

In street lingua, people are talking about this abiding crisis
separating the "men" from the "boys".

The boys are found mainly among the urban poor. It is now common to
see a man rushing from work with a packet of sugar in his hand or a 5kg bag
of mealie meal on his shoulder. It was an unthinkable embarrassment only a
few short years back. Buying sugar or mealie meal was a business for women
and the kids in the townships.

The father of the house only bought meat at the end of the month. This
took the form of a long entertainment drive with friends out of town to
where meat was rumoured to be affordable - KwaBhora, Mutangadura or Landos
on the Mahusekwa road in Mashonaland East province. There the men spent the
day braaiing and plying themselves with beer before buying the home
allocation late in the afternoon.

All that is a luxury left to real men today. They don't have to think
about fuel. They can still afford to buy a whole beast or at least pool
resources and share. The boys have been reduced to women who expect to be
greeted with praise if they bring home a packet of tomatoes. Meat has become
a rarity - a delicacy.

The differences go beyond that. Frequent power outages mean that
buying a whole beast might turn into a big loss for the boys if it goes bad.
So you can justify a daily purchase of a portion of meat from the local
butchery without serious blushing.

Country has come to meet town. Every household worthy of respect must
have stacks of firewood. The risk is to go without a meal. He is nearly a
real man the father who can still afford either illuminating paraffin or
cooking gas. The smallest child in the house knows where to fetch lighting
matches and candles the moment the bulbs blink. It's a whole new culture and
a survival strategy in the new Zimbabwe.

On the other hand, real men have gone a step further. Many have bought
huge generators which automatically switch on the moment Zesa starts its
pranks. Some have installed huge solar panels. They have also invested
heavily in gas stoves, just to make sure.

In the face of unreliable water supplies from the latest thoroughly
incompetent impost called Zinwa they have erected huge water tanks on their
mansions in the northern suburbs which they fill with water on the day it
comes. They drink healthy bottled water. Others have gone a step further and
sunk boreholes on their premises.

Real men are creatures used to comfort and won't spare a penny to
pamper themselves. It obviates the need to change the system, which they
silently expect the expendable poor to spearhead. To them, money is the
limit to a heaven on earth.

Those among the poor who have experienced losses in terms of groceries
going bad because there was no power have quietly borne their misery. Those
who have had their expensive electrical gadgets destroyed by frequent
unplanned power cuts have silently replaced them if they could or are having
to cope without. I have just noticed that a colour television set I bought
for $3 000 in 1988 now costs $18 million.

Zesa didn't find it necessary to consult stakeholders about possible
alternatives to its unilateral imposition of power black outs. The
inconveniences we endure and the losses we incur daily have not stopped the
parastatal from hiking rates at will. Like the Harare Commission which
levies rates for garbage it doesn't collect, Zesa is accountable only to
politicians, not to ratepayers.

What I don't know is whether people fully appreciate the true costs of
this shoddy performance by both government and its bloated and unaccountable
parastatals. For at the end of the day the costs of buying firewood and
paraffin far outweigh what they would pay for electricity. Also, money which
should have been invested in more productive projects is being spent on
generators, solar panels, water containers, firewood and many other expenses
which official inefficiency necessarily creates.

You would expect an explosion from an already overtaxed population.
But we have borne these burdens of service failure with stoical equanimity.
Yet we are being rendered indigent everyday while those who impose these
burdens on us get fatter from looting the resources of the state. Whether it
is a curse or a blessing to be Zimbabwean is the biggest question of our
time.

You can't indigenise a failing economy

Zim Independent

Editor's Memo

By Vincent Kahiya

LAST week we published a letter to the editor containing an article
from May 1932 sent in by a reader who had seen it reproduced in another
paper and thought it might be of interest given the present circumstances.
It reads:

"In order for a man to make a profit in a productive enterprise, the
man must have access to capital, he must control machinery or other means of
production, he must be allowed to supply his goods to customers who are able
to pay for them, and in addition, he must be eligible for social support in
the form of credit.

"If you interfere with any of these necessities you will disorganise
his business. If you interfere with all of them, you will destroy it. Yet
nowadays interference with the operation of economic laws has become the
chief occupation of governments."

The publication of the article in the state media was somewhat ironic
as it coincided with reports of government's intentions to seize majority
stakes in all the country's foreign-owned businesses in what could be a
re-enactment of President Mugabe's ruinous land reform policy.

Under the legislation approved by cabinet two weeks ago, all companies
will be required to give up at least 51% of their shares for allocation to
economically disadvantaged "indigenous" Zimbabweans.

The latest quest at fouling up by the state is not surprising as it is
premised on Zanu PF's indigenisation policy which is as clear as mud. This
is a policy which has over the years been used as a basis of populist
programmes which have neither benefited the intended segment of the society
nor improved the country's economic outlook.

The greatest weakness of Zimbabwe's economic policy formulation is
that plans have not facilitated ease of doing business for either local or
would-be foreign investors. Basic guidelines for policymakers and
development practitioners denote that a sound investment climate is crucial
to achieving economic growth. To achieve this, microeconomic reforms aimed
at simplifying business regulations, strengthening property rights,
improving labour market flexibility, and increasing business's access to
finance are necessary to raise living standards and reduce poverty.

Reforms at the micro level become part of an elaborate economic
programme where the role of the state is to ensure that there are
synergistic links between reforms and general policies, be they political or
economic. The reforms at the end of the day are meant to achieve the goals
set under an economic programme.

This simple framework of governance has been lacking in Zimbabwe's
policy environment where technocrats in government and the private sector
have worked feverishly to implement reforms in the absence of a coherent
economic programme. That is to say reforms have been implemented with no
clear goal in sight.

The result thereof is a muddled economic environment in which
politicians dream up policies on the hoof, even when there are no resources
and requisite infrastructure to ensure that reforms achieve the desired
results. The proposed indigenisation and mining laws are two pieces of
legislation which government wants to implement without any clear economic
policy framework.

There is of course NEDPP which the government believes will achieve
quick results to mend the economy. But how does partial nationalisation of
big businesses fit in the realm of fixing the economy in the shortest time
possible? In fact the current economic environment militates against any
quest to achieve rapid indigenisation.

The success of government's own long-standing plan on this front
depends on the ability of the state to create an enabling macro-economic
environment characterised by growth and spearheaded by a vibrant domestic
private sector. To achieve this, a two to three-year ceiling on government
expenditure accompanied by fiscal incentives to stimulate productive
investment and to accelerate privatisation of state enterprises is
necessary. Current fiscal and monetary policies have embarrassingly failed
to achieve this.

There is also need for industrialisation of the economy through
foreign direct investment and increasing indigenous private investment in
the economy. This has not been practicable due to retrogressive investment
policies and the absence of domestic savings which make mobilisation of
financial resources virtually impossible. In short, you cannot indigenise a
failing economy like ours.

Past attempts to bring indigenous players into the economy through the
National Investment Trust and other such institutions have only exposed the
real intentions of the government - enriching cronies who are always first
at the feeding trough. What has happened to the plan to cede a portion of
Zimplats' shareholding to locals?

What we have seen over the years is not indigenisation of the economy
but plunder of anything that appears to be doing well in this difficult
environment. It's called stripping national assets.

Sour grapes

Zim Independent

Muckraker

A CURIOUS little note could be found on the editorial pages of the
Saturday Herald last weekend.

"Due to circumstances beyond our control," it read, "we are unable to
carry the column 'The Other Side' by Nathaniel Manheru today. Any
inconvenience is sincerely regretted."

The same message was repeated for Caesar Zvayi's column on the next
page.

What is the meaning of this? What circumstances involving the absence
of the two columnists could be "beyond our control"? Could they not get
their copy in on time? Were they both suddenly called away on urgent
government business?

If they felt it expedient to attend a funeral, the launch of a radio
station, or a visit to Kenya, surely they could have submitted their
material ahead of schedule? Whatever the case, the Herald's editor appears
to have had no control over it!

But the funniest dimension to this uncontrollable double absence was
the thought that readers might experience some "inconvenience". What
possible inconvenience could be caused by the absence of these two artful
dodgers and to whom?

Meanwhile, Zvayi has instructed his lawyers to take action against the
Standard if it does not apologise for an advertisement it carried by the
ZCTU containing the organisation's response to accusations he made about
them. The Standard understandably declined to do so. The views expressed in
the advert were self-evidently not those of the paper.

Every week Zvayi pours forth a toxic barrage against real or imagined
enemies, insulting all and sundry in obedience to the fevered needs of his
political masters.

Now he has been treated to some of his own medicine he wants to hide
behind the coattails of his lawyers.

How pathetic. If Zvayi can't stand the heat he should stay out of the
kitchen.

Another poisonous pen at the Herald, Godwills Masimirembwa, who
featured in this column last week, has not been entirely candid with Herald
readers about his qualifications. He may indeed be a lawyer but can he
practise?

Perhaps he could tell us what it means to be "struck off" in the legal
profession? He should tell us that story instead of writing copiously about
Aborigines. It's closer to home.

Also, we want to know about a bid to set up a law practice in
Botswana. What happened to that project? It seems God didn't will it!

Muckraker was intrigued by a lead letter in the Herald on Monday. It
said a statement by George Charamba on the president's academic achievements
was "spot on". The president did not suffer from a crisis of academic
achievement, the writer, Godwin Hatiye, said. Many of the awards made to
African leaders were designed to flatter them, he said, so they could work
to further Western interests.

"I am glad we Zimbabweans have opted to die on our feet than live on
our knees," he proclaimed.

Isn't it interesting how state officials and their admirers think
Zimbabweans are happy to live on their knees? Has anybody ever taken a straw
poll on the streets of Harare or Bulawayo posing the question:
"Letter-writers to the Herald think you are happy to live on your knees. Do
you agree?"

And where are these letters really coming from or can we guess?

Tafataona Mahoso, billed on ZTV as a political analyst, should try and
get small facts right so his larger arguments become more persuasive. In his
African Focus column last weekend he described Nepad as the New Economic
Partnership for Africa's Development and gave the name of the former
Malaysian premier as Mahatir Mohammed.

In fact Nepad is the New Partnership for Africa's Development, there
is no "economic" in it, and the former Malaysian PM is Mahathir Mohamad.

This is elementary stuff most journalists are required to know.

Thank God for his servant, Archbishop Desmond Tutu. He shines like a
bright light upon our darkened land. On the BBC last Sunday he saluted the
Catholic bishops for their bravery in speaking out on human rights abuses
and denounced his own Anglican communion for "kow-towing" to Mugabe.

"God is weeping," he said while the Anglican bishops, instead of
addressing violence and misrule in Zimbabwe, debate issues of human
sexuality.

It was a crystal clear call for his church in Zimbabwe to wake up and
stop collaborating with the enemy. Anglican members across the country
should know what shame their leaders have brought upon their church and how
they bring comfort to tyranny.

Still on the subject of churches, the Fingaz carried a curious little
story last week headed "Church built its house on sand". It was about Local
Government minister Ignatious Chombo approving the occupation of the
Celebration Centre - home to Celebration Church - despite a report by
experts condemning the multi-million structure in Borrowdale as unsafe.

The building was a fire hazard, the paper claimed, basing its report
on "documents" in its possession.

It was by any standard a hatchet job and one can only speculate what
sort of motive the person who supplied the documents had in dishing such
dirt on the church group which is patronised by the well-heeled. A rather
cloudy picture of the centre's portico told us nothing in particular. And
yet it was given front-page prominence.

Let's hope this "revelation", clearly fed by somebody with an axe to
grind, had nothing to do with the 32-page supplement marking the church's
25th anniversary carried in the Independent the next day. Was this a case of
sour grapes? We hope not.

So who set up the meeting between Jerry Rawlings and Patrick Chinamasa
where the former president called upon the Justice minister and his
entourage to apologise for the "troubles" that have arisen as a result of
the land seizures in Zimbabwe?

A defiant Chinamasa said Zimbabwe owed no one an apology.

Chinamasa and his "entourage" were in Ghana for the meeting of the
African Commission on Human and Peoples' Rights. Perhaps Ghanaian president
and African Union chair John Kufuor asked an old ally of President Mugabe to
see if he could talk some sense into the Zimbabwean minister But it was to
no avail. What Chinamasa was seeking was a defence of Zimbabwe's position by
African nations.

Those who resisted land reform should "realise the consequences" of
opposing the government, he declared.

He really doesn't get it. In a democratic society citizens are at
liberty to seek recourse in the courts or to campaign against a programme
that deprives them of their livelihoods. They are allowed to oppose
government policy, especially where that policy has proved to be disastrous
for the country's economy.

It is precisely because Zimbabwe's government used coercion and
violence to achieve its aims that it has the reputation it does today.

Munyaradzi Huni in the same edition of the Sunday Mail that carried
the Rawlings story (and we can be sure there was much there that wasn't
reported) lamented that "the solidarity and vigilance that the continent's
founding fathers used to fight colonialism has disappeared. At times one is
tempted to think that Africa has given up."

And there you have the dawning realisation of one of the regime's
bright-eyed young propagandists that contrary to all the claims by Zvayi,
Mahoso and others, Africa does not whole-heartedly back Mugabe's internal
repression or phoney war with the West. They see it for what it is - a bid
for their solidarity while Zimbabwe's rulers do what they like.

Zimbabwe's ruling class, as revealed in Accra, are meeting scepticism
and resistance wherever they go. And the reason is not difficult to discern:
they are giving Africa a bad name.

And just when Zimbabwe needs investment most a small coterie around
Mugabe plan to help themselves to a stake in the mines, banks and other
businesses.

Do they actually sit down and decide which policy would be the most
damaging to the country and proceed to implement it? Because it certainly
looks like that.

Gordon Brown, Britain's prime minister-designate, is anxious to
discard any suspicion that he is a dour humourless Scot. So he recently told
a Labour Party meeting about an episode involving his namesake, George
Brown, Harold Wilson's deputy who had poor eyesight and enjoyed a drink.

Attending an embassy party in Washington George Brown heard the band
strike up and thought he would take a twirl on the dance floor. Spotting a
vision in purple at the other end of the room, Brown made his way towards
his objective, asking: "Madam, would you care to dance?"

"This is not a waltz," replied the person in purple, "it's the
Venezuelan national anthem. And kindly remove your hand from my arm, I am
the Papal Nuncio."

Government should review taxation policies

Zim Independent

By Eric Bloch

WHEN former Minister of Finance, Herbert Murerwa, delivered his budget
statement to parliament last November, he foreshadowed that for so long as
pronounced inflation endures, it would be necessary to bring quarterly
supplementary budgets to parliament. As a general rule, it is most
undesirable that a government resort to recurrent budget modifications.
Doing so is an encouragement to ministries to disregard the fundamentals of
vote compliance and utmost probity in the management of their votes. It also
hinders effective economic planning in both public and the private sectors,
and creates pronounced uncertainty in national and international money
markets, and impacts adversely upon investor confidence.

However, the principle that "for every rule there is an exception"
must apply in circumstances when inflation vastly exceeds the projections
upon which a budget is formulated. In such circumstances, even the most
essential of governmental expenditures must soar upwards to levels markedly
at variance with the votes. In consequence, proper fiscal management and
control dictates that revenues and expenditures be realistically reviewed,
and appropriate budgetary measures applied to ensure that the state does not
incur unsustainable deficits, but that it is also able to service
effectively national needs.

Admittedly, hyperinflation should result in some enhancement in dollar
terms (albeit not in real terms) in the state's revenues, for many corporate
taxable profits, employment incomes, and other taxable incomes become
greater in dollar denominated terms, not withstanding that their effective
purchasing power will undoubtedly shrink. This results in greater flows of
income tax to the fiscus, insofar as the quantified amounts are concerned,
although improbably insufficient to match the rise in the state's
expenditures.

In like manner, indirect taxes will have yielded a greater than
anticipated inflow to the fiscus, if quantified in dollar terms, as value
added tax, customs duties, and the like are applied to the higher than
foreshadowed values of sales, imports, and so forth, but that greater inflow
will not have sufficed for the greater, inflation driven outflows.

In formulating supplementary budgets to address the widening gap
between the state's revenues and expenditures, it is theoretically possible
to close or narrow that gap by introducing new taxes, or increasing existing
ones, or both. But when the overwhelming majority of the population is
struggling to survive the ravages of inflation and the onslaughts of a fast
declining, appallingly mismanaged, economy, doing so is impractical and
unrealistic.

Most are grievously poverty-stricken and cannot afford existing taxes,
let alone new or greater ones. And the few who are fortunate enough to have
incomes above the poverty datum line are already the most highly taxed in
the region, and very possibly in the world. That excessive taxation is
motivating more and more of Zimbabwe's skilled, and its entrepreneurs, to
depart Zimbabwe for less economically oppressive jurisdictions. Moreover,
with elections less than a year away, any government would be loath to
alienate electoral support by resorting to greater taxation.

The alternative available to government, which can and must be
pursued, is to reduce expenditures vigorously, concentrating its revenue
outflows upon the most critically essential. Reduction in the gargantuan
size of the cabinet and its supportive infrastructure would be a major step
in the right direction. So too would be the dissolution of the senate, and a
major cutback in the excessive number of Zimbabwean embassies, consulates
and trade missions abroad, as well as a massive curtailment in the size of
presidential cavalcades, and of defence forces vastly in excess of
Zimbabwean needs.

Zimbabwe is at peace with all its neighbours, and its only conflicts
are with its economy, with the corrupt, and within a rapidly dividing ruling
party. Therefore its defence infrastructure is pronouncedly excessive, and
now being expanded by the foolhardy creation of the war veterans' reserve
force, clearly being established only to maximise the prospects of continued
rulership by Zanu PF, and not for necessary defence purposes. The state's
expenditures could also be very greatly contained if it stopped talking
about curbing corruption and actually does so.

But the overdue supplementary budget is not needed only in order to
regularise the state's fiscal inflows and outflows. It is also vitally
necessary, and long overdue, to address the taxation inequities afflicting
the populace. It is incomprehensible, and diabolically cruel, that persons
earning anything over $100 000 per month are subject to income tax, when the
minimum needs for a family of six (as determined by the Consumer Council of
Zimbabwe) was, in April, $3 349 052. How can any government, acting in good
faith and with the interests of the nation at heart, extort vast taxes from
those who do not even have sufficient income to ensure the survival of
themselves and their dependants? On any remuneration income in excess of
$100 000, and not exceeding $200 000, per month, income tax is imposed at a
rate of 25%, with that rate rising to 30% on income in excess of $200 000,
and not exceeding $300 000, per month. On incomes over $300 000, and up to
$1 million per month, the rate is 35%, whilst incomes in excess thereof, and
up to $3 000 000 per month, are subject to a rate of 40%, and from $3
million to $5 million per month the rate is 45%. Thus, persons whose incomes
are below the PDL are faced with direct taxes ranging from 25% to 45% of
their inadequate incomes as exceed a paltry $100 000 per month!

Government is certainly afflicting the poor, and even more if it is
borne in mind that much of their minuscule after-tax income still attracts
indirect taxes, such as VAT at a rate of 15%. For the so-called fortunate,
earning above $5 million per month (which is not significantly greater than
the PDL) the tax rate is a horrendous 47,5%, greater than the rate of tax
anywhere else in Southern Africa.

Government very urgently needs to formulate a supplementary budget
which effectively addresses these malevolently harsh, wholly untenable,
taxes. When doing so, it must give recognition to the extreme hardships of
most of the populace by not only justly modifying the tax rates, but also
removing the taxable benefit status of transport allowances given to
employees earning less than, say $3 million per month, for the taxation of
those allowances, over and above the massive costs of transport, make it
impossible for many to pursue employment, as the transportation costs, and
taxes thereon, exceed their incomes. In like manner, canteen meals for such
employees (which are often the only food they can have, as their incomes are
to low for them to feed their families and themselves) should cease to be
taxable benefits.

There is also an overwhelmingly urgent need for government to revise
the quarterly payment date system applicable to corporates, who are required
to estimate their annual taxable profits, compute the taxes payable thereon,
and pay prescribed percentages thereof on specified quarterly payment dates.
Not only is the system most inequitable for those whose revenue flows are of
a seasonal nature, requiring many to pay taxes on unrealised profits but it
is especially so when hyperinflation is endemic. In dollar terms, the very
great majority of the profits, of the corporates will be generated late in
the year, by virtue of ongoing inflationary impacts, and yet much of the
taxes thereon become payable before those profits have been earned. The
effects upon corporate cash flows are most deleterious, endangering the
viability and continuance of the businesses. In government's anxiety to
achieve maximum revenue flows, it is prejudicing itself and all Zimbabwe, by
progressively killing the geese that lay the golden eggs!

Zim Independent Letters

Stop complaining Zinwa

THE Combined Harare Residents' Association (CHRA) is extremely
concerned by the errant behaviour of the powers that be at the Zimbabwe
National Water Authority (Zinwa) including the Ministry of Water Resources
and Infrastructural Development, Munacho Mutezo and his deputy, Walter
Mzembi.

The incessant complaints typical of cry babies and failures are
intended to camouflage their incapacity to satisfy the demand for water.

Mutezo, was quoted in the May 15 Herald accusing the City of Harare of
being dishonest in its dealings with the water authority. The media has been
awash with misleading comments by Zinwa since they were imposed on Harare by
Local Government Minister, Ignatious Chombo.

Is it by coincidence or design that the decision to hand over our
assets and lifeline to Zinwa was made at the time he re-appointed the
illegal Commission running Harare on December 13, 2006.

These accusations follow hard on the heels of yet another disastrous
action by Mutezo. The reshuffling of the Zinwa board in October last year.
This was clear confirmation that Zinwa has failed to perform, even to the
lowest standards expected from parastatals. Minister Mutezo ordered the
water authority to urgently address the water woes being experienced in
Harare. The regime constantly demonstrates its centralist and commandist
attitudes and believes that by issuing orders, the situation will be
rectified despite the fact that our water woes arise from a combination of
bad policies, partisan political interference as well as technical and
financial problems.

The time has come for the whole nation to reject and denounce this
madness from Mutezo and his cronies at the water authority. They are forever
complaining about almost everything related to their services, blaming every
bad thing on the City of Harare.

CHRA rejects these irrelevant excuses and insists that Zinwa must be
disbanded with immediate effect or it becomes a department in the Ministry
of Water Resources and Infrastructural Development with clear terms of
reference which do not include the responsibility of water distribution,
treatment, supply.

Mutezo must realise that he is a minister responsible for a failed
parastatal and just shut up as Zinwa has nothing to show for its existence.

CHRA demands the immediate return of water and sewer reticulation
services to the local authority from Zinwa in line with Parliament and
Senate recommendations.

Combined Harare Residents

Association, Harare.

-----------------
Nothing racist about Australia's Zim policy
OVER the past two weeks, a number of misleading articles have appeared
in the state-controlled media about human rights in Australia and Australian
support for the people of Zimbabwe.

Australia has become used to hearing such abuse from the Zimbabwe
government and its supporters. Whenever Australia stands up to protest
against Zimbabweans being beaten up by police for no reason other than their
political views, or against other human rights abuse in Zimbabwe and
violations of the rule of law, the state-controlled media responds with a
series of distorted images and allegations about our country. In the twisted
logic of the Zimbabwe's Ministry of Information, Australia is "the most
racist country"!

We are not troubled by such accusations - what we are trying to do is
to stand up for ordinary Zimbabweans, those suffering from appalling
policies, an out-of-control inflation rate, no jobs and physical violence
and intimidation. If doing so means we'll get abused by those whose policies
have created such an appalling situation, then so be it. We trust that the
majority of Zimbabweans understand our position very well.

But for those who may be interested, there are three facts about
Australia that you would not ever be aware of if you only read or listened
to the words of the Zimbabwe government's apologists.

* Unlike in some countries, in Australia we can recognise problems,
talk about them, and take steps to fix them. The Australian government
recognises that our indigenous fellow citizens (aboriginal and Torres Strait
Islander people) are among the most disadvantaged in our community, and that
the complex problems they face are due to the legacy of history, and of
inadequate policies over many years. The government is undertaking
comprehensive reform of indigenous affairs, and next year's budget has
provided for a record US$3,5 billion in an indigenous-specific programme -
on top of funding they receive through mainstream programmes and services
that benefit all Australians.

* Notwithstanding massive problems, indigenous Australians have seen
major advances. They now own some 20% of Australia's land - roughly
equivalent to four times the total size of Zimbabwe - as a result of major
policy, judicial and legislative initiatives over the last 30 years. A
recent study in Australia's Northern Territory found life expectancy for
indigenous women improved by 14 years over the last 40 years, from 54 to 68
years, and for men improved by eight years over that period from 52 to 60
years. This is still not as good as the Australian average but it is an
improvement compared to those countries where, appallingly, life expectancy
for all has been falling. Since 1990 Zimbabwe's life expectancy has fallen
from 61 to 33 years.

* Notwithstanding their own situation, or how difficult their own
lives are, indigenous Australians, just as much as all other Australians,
want their government to stand up and send a message to the government of
Zimbabwe that its policies are unacceptable and must be changed. Zimbabwean
activists supported the aboriginal land rights movement in the 1970s;
Zimbabweans and indigenous Australians campaigned together against apartheid
in South Africa. And indigenous Australians have called for action when
those same Zimbabwean activists are now being oppressed by their own
government. That's not racism.

Australia supports the Sadc initiative to resolve the problems
presently besetting Zimbabwe. Until such a solution is reached, Australia
will continue to keep smart sanctions against targeted individuals in
Zimbabwe under review. We also remain committed to providing what assistance
we can to the people of Zimbabwe, through our humanitarian programmes, and
the Australian Fund for Zimbabwe, which will total US$18 million this year
and the next. And we will look forward to changes, through democratic
processes, that will bring a better life for all Zimbabweans.

Jon Sheppard,

Australian ambassador to

Zimbabwe.

--------------------------

The real house of horror

ABOUT two weeks ago I saw a very interesting article in one of
the Herald editions where the writer referred to Dynamos as the "House of
horror". This I am not disputing but would like to add ZBC to this list. In
fact Dynamos is child's play compared to ZBC.

The culture at ZBC is such that every time there is a new
Information minister, there is also a change in management and at times a
change in the production team - imagine!

All this is done in the hope of trying to micro manage the
institution through people who at the end of the day feel they owe their
being at the institution to the minister and the board.

Because people know this is now the trend, there is no long-term
planning and people will continue leaving by the day. Who can blame them
when there seems to be no policy on how things are supposed to be done.

The result is you get sub-standard work and when it comes to ZBC
you get people flip-flopping when it comes to programming policy.

When the late Minister Tichaona Jokonya was appointed, he went
on about sub-standard programmes being aired by ZBC and how the institution
was being run by an uneducated lot and a clueless board.

The truth is at the time Minister Jokonya came in programming
had improved; keeping in mind the new Broadcasting Authority of Zimbabwe
regulations, the institution was being manned by some professional people.

Out went Jokonya, in came Paul Mangwana. He is told to follow
Jokonya's roadmap. The board and probably the chief executive had been
decided upon already so that was a no go area. What a circus it turned out
to be.

In came "The Duke" Sikhanyiso Ndlovu and it's almost six months
since these second interviews were held and no announcement of the unlucky
two has been made.

I say unlucky because elections are just round the corner and
come April 2008 the president will most likely appoint a new minister and
following tradition he or she will most likely get rid of the sitting
management in another costly and meaningless so-called restructuring
exercise.

The sole purpose has been to staff ZBC with homeboys who most of
the time are clueless when it comes to broadcasting.

Henry Muradzikwa when you were appointed CEO of ZBC you talked
so much about coming up with exciting programmes like Friends of Zimbabwe
and revamping This Morning. It is now seven months and there is nothing.

Business Today which replaced a more lively This Morning is not
only pathetic but is on and off the air, the main news at times starts 10
minutes late and ends 10 minutes early after having subjected us to 10 to 15
minutes of promos.

George Charamba please do your job. Correct things at ZBC before
it is too late. Even an outsider like me can tell that things are falling
apart at the institution.

For those intending to do a thesis, ZBC would make a very
interesting study. It is the real house of horror.

Cheni Masawi,

Harare.

-----------------------

Inflation way above 3 700%

THE inflation rate of 3 700% announced recently is not the
reality.

The figure of over 100% for the month of April gives an annual
current rate of 409,600% if monthly inflation continues at 100%. The
annualised rate of 3 700% is much lower since 11 of the 12 months are
calculated at the lower inflation rates then prevailing.

After making allowances for the distortions in the official
statistics, such as the use of controlled prices at which goods are only
available to the few with access to currency at official rates, a more
accurate rate of current annualised inflation is more than three times
higher!

Michael Jack,

Msasa, Harare.

-----------------------------

Review tax bands

PLEASE can someone remind the new Finance minister that the
previous minister recommended that the rates for the PAYE tax bands be
reviewed quarterly. In my view, the tax-free portion of earnings should be
increased from the $100 000 allowed from January to at least $5 000 000 with
effect from July 1.

I know it will not take long for the computer payroll software
providers to adapt their systems.

Simon Pitt,

Harare

----------------------

Don't worry about World Cup
In a letter to the Editor (Independent May 18), Kurauone
Chihwayi suggests that the World Cup 2010 to be staged in SA be shifted to
any other country which is not near Zimbabwe. He cites political and
humanitarian concerns.

I think Chihwayi need not be unduly worried about the prospect
of Zimbabwe and its regime benefiting from SA as the World Cup venue.

A look at the timetable of South African Airways shows that,
under present conditions, only Bulawayo would qualify as a possible camp
choice for foreign teams preferring accommodation in Zimbabwe rather than in
SA.

Given the correctness of the SAA timetable, flights from Harare
as well as from Victoria Falls to Johannesburg (let alone any other venues)
take well over the 90 minutes stipulated by Fifa as the maximum travel
distance.

If Fifa sticks to their guns, neither Harare nor Victoria Falls
would qualify as camp sites for teams participating in the World Cup.

There remains, of course, the "possibility" that Air Zimbabwe
jets fly so much faster than the planes of SAA that they beat the time
condition set by Fifa ..... A remote possibility.

Ludwig Real,

Harare.