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Pressure builds for talks on Zim crisis

Mail and Guardian

Angus Shaw | Harare, Zimbabwe

24 May 2007 07:18

      Momentum is building to start South African-brokered talks to
resolve Zimbabwe's deepening crisis, opposition officials said on Wednesday.

      But the opposition Movement for Democratic Change has again
refused demands that before talks proceed, it recognise President Robert
Mugabe as the nation's legitimately elected leader. That condition stalled
two previous initiatives.

       The opposition alleges it has been robbed at parliamentary and
presidential by violent intimidation of voters and ballot rigging.

      The opposition also has demanded the repeal of sweeping media
and security laws, electoral reforms and an end to state-orchestrated
political violence.

      Both main opposition parties were now considering setting aside
their demands in a bid to get to the negotiating table, where the demands
could likely be tackled later, said opposition officials.

      "There must be an environment where there are no conditions and
no issue is taboo in negotiations," said one official who asked not to be

      South Africa has insisted none of any likely participants in
talks, including representatives of civic groups, air their negotiating
positions through the media and has enforced a news blackout, saying the new
initiative will not be conducted through the media.

      President Thabo Mbeki of South Africa, appointed in March by the
Southern African Development Community to mediate on Zimbabwe, was given
until the end of June to return with concrete proposals on narrowing the
wide differences between President Robert Mugabe's ruling party and the
opposition Movement for Democratic Change.

       "The pressure is on. The situation here is impacting on the
whole region and President Mbeki has a deadline to meet," said the official.

       Mugabe's fellow African leaders have heard repeated calls to do
more to press Mugabe to embark on reforms. But at the summit at which
Mbeki -- who has longed advocated quiet diplomacy over confrontation with
Mugabe -- was appointed to mediate, the Southern African Development
Community voiced full support for Mugabe.

      At another regional summit in Kenya on Wednesday, Mugabe had
harsh words for his opposition and his critics in the West, and was
applauded by fellow African leaders.

       Earlier this month, Mbeki sent a delegation headed by Sydney
Mufamadi, a Cabinet minister, to Harare for talks with Mugabe.

      Mufamadi did not meet with opposition leaders in Harare, but
several top aides of Morgan Tsvangirai, leader of one opposition faction,
and rival faction leader Arthur Mutambara have shuttled to and from South
Africa in recent weeks.

      Mutambara, his secretary general Welshman Ncube and Ncube's
opposite number in the Tsvangirai group, Tendai Biti, have met with South
African officials in South Africa.

      In line with the South African news blackout, none has confirmed
reports of a meeting in South Africa with Mugabe's Justice Minister Patrick
Chinamasa, the ruling party's chief negotiator in previous failed
inter-party talks, when he was en route to the just-ended gathering of the
continent wide African Union in the West African nation of Ghana.

      Opposition officials dismissed as "rubbish" media reports that
secret talks were already on track.

      But "something has to be done to find a way forward and it has
to be done urgently" said one official.

      There were suggestions for at least initial talks in June for
Mbeki to deliver to regional leaders, he said.

      No comment was immediately available from Chinamasa or the
ruling party.

      Ronnie Mamoepa, South African Foreign Affairs spokesperson,
would not confirm any details of the mediation process.

      "There will be to-ing and fro-ing between Pretoria and Harare.

      Mediation is a process not an event. We are not going to comment
except to say that mediations remain on course," he said.

      Zimbabwe's economic meltdown worsened this month as inflation
spiraled out of control to a record 3 714%, the highest in the world.

      Consumer prices doubled in April, according to the official
Central Statistical Office, putting many basic goods out of the reach of
ordinary Zimbabweans.

      In formal businesses, unemployment has soared to more than 80%.
Scores of businesses have closed down and most main factories operate at
around or less than 30% of their capacity.

      Power failures and water shortages occur daily and shortages of
food, hard currency, gasoline, medicines and other essential goods are

      Health and social services have crumbled in a nation with one of
the world's highest rates of HIV/Aids infection. An estimated 3 000 people
die each week from Aids-related illnesses.

      Mugabe blames the crisis on successive years of drought and
Western economic sanctions, but critics say corruption, mismanagement and
the often-violent seizures of thousands of white-owned commercial farms
since 2000 disrupted the
      agriculture-based economy in the former regional breadbasket. -

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Desperate Zimbabwe farmers get ox power

Business Day

24 May 2007

Dumisani Muleya


Harare Correspondent

THE Zimbabwean government is desperate to revive its collapsed agriculture
sector, the economy's mainstay, after spending the past seven years ruining
it through a policy of chaotic seizures of white-owned commercial farms.

The country's reserve bank has been tasked to come up with a project to set
up technical colleges that will produce at least half a million ox-drawn
carts and ploughs.

Central bank governor Gideon Gono, President Robert Mugabe's point man on
the economy, said the latest project was part of government's mechanisation
programme designed to resuscitate the crumbling sector.

Gono has been central in trying to revive agriculture, although his past
schemes such as command agriculture and winter crops have failed.

This has left the country facing chronic food shortages. Three-million
Zimbabweans, about a quarter of the population, face starvation.

"We are going to set up the institutions in 62 districts of the country as a
way of creating employment for youths as well as bolster agricultural
production," Gono said.

Zimbabwe's highly mechanised agricultural sector was destroyed by the farm
invaders and equipment worth millions of dollars was vandalised.

Most the farms seized were given to Mugabe's cronies and top government

Most of black communal farmers given farms have failed to use them bec-ause
of lack of capital and inputs. Gono said the new project would avail farming
implements to communal farmers.

"Communal farmers contribute to the country's national food security so we
decided to recognise them and improve their traditional way of farming," he
said. "We will provide them with working capital and equipment for them to
start running businesses."

Zimbabwe has remained a net importer of maize and wheat although it used to
be a leading exporter before the farms were confiscated by Mugabe in a
populist drive to cling to power.

Gono has constantly said it was unacceptable that Zimbabwe has to beg for
food with all the land and capacity to produce more than its needs.

On Tuesday he repeated this, showing his worry about food security.

"It's time now we stop importing maize and even wheat, wasting the little
foreign currency we have. We have to produce and this we can do as we have
the capacity," he said.

Zimbabwe is importing maize from Malawi and SA, among other countries.

Gono said the government would put more than 350000ha of land under the
Accelerated National Irrigation Development Programme in a bid to mitigate
food shortages.

The reserve bank has already started disbursing the funds earmarked for the
programme, with Z$27bn already released for the project.

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Soldiers go hungry


Clemence Manyukwe Staff Reporter
lNational security threatened lTraining to be shelved
ZIMBABWE'S soldiers are starving and may have to suspend training if the
army does not immediately get additional government funding, a parliamentary
committee has heard.

Soldiers are disgruntled over poor salaries, Defence Secretary Trust Maphosa
told the parliamentary committee on Defence and Home Affairs on Tuesday.
Committee chairman Claudius Makova (ZANU PF, Bikita West) immediately warned
of the consequences on national security if the situation is allowed to
Maphosa said because of inadequate funding, the Zimbabwe Defence Forces
(ZDF) is fast running out of food, and training may have to be suspended if
government does not avail more funds.
According to Maphosa, pilot training at the Air Force of Zimbabwe, an
exercise that used to be completed in two years, now takes five years
because of lack of financial resources.
The ZDF has also been hit by a shortage of spare parts, while the Zimbabwe
National Water Authority has disconnected water supplies to military
instalments due to non-payment of bills.
In a bid to ease the food shortages, the army had formed a farming company,
Sunpillar, but funding problems had bogged down its projects.
Funds that had been allocated in the national budget to build houses for
soldiers were exhausted before completion of the surveying stage.
Maphosa said soldiers had signed a contract with the government to provide
peace and stability, in return for government meeting their basic needs such
as accommodation. But while the force is loyally honouring its end of the
bargain, the other side was not.
Maphosa told Members of Parliament (MPs) that a private in the army takes
home $300 000 per month.
"We were allocated $134.85 billion for salaries for the whole year, and 85
percent has already been spent. We have 15 percent to take us to the end of
the year," Maphosa said.
Committee chair, Makova, a retired army colonel, expressed concern at the
low salaries. The MP, who owns a security company, said the guards working
for him were getting double the soldiers' earnings.
Makova said the guards earned $611 000 per month and, because he raises
their salaries every month, they will be earning $800 000 soon. Makova said
the low army salaries had a negative bearing on national security.
"You, the leadership should act as their trade unionists. The youngsters in
the army are different from you who cling to patriotism even when the going
gets tough," Makova said.Force of Zimbabwe, an exercise that used to be
completed in two years, now takes five years because of lack of financial
The ZDF has also been hit by a shortage of spare parts, while the Zimbabwe
National Water Authority (Zinwa) has disconnected water supplies to military
instalments due to non-payment of bills.
In a bid to ease the food shortages, the army had formed a farming company,
Sunpillar, but funding problems had bogged down its projects.
Funds that had been allocated in the national budget to build houses for
soldiers had been exhausted before completion of the surveying stage.
Maphosa said soldiers had signed a contract with the government to provide
peace and stability, in return for government meeting their basic needs such
as accommodation. But while the force is loyally honouring its end of the
bargain, the other side was not.
Maphosa told Members of Parliament (MPs) that a private in the army takes
home $300 000 per month.
"We were allocated $134.85 billion for salaries for the whole year, and 85
percent has already been spent. We have 15 percent to take us to the end of
the year," Maphosa said.
Committee chair, Makova, a retired army colonel, expressed concern at the
low salaries. The MP, who owns a security company, said the guards working
for him were getting double the soldiers' earnings.
Makova said the guards earned $611 000 per month and, because he raises
their salaries every month, they will be earning $800 000 soon. Makova said
the low army salaries had a negative bearing on national security.
"You, the leadership should act as their trade unionists. The youngsters in
the army are different from you who cling to patriotism even when the going
gets tough," Makova said.
Around November each year, the government comes under severe criticism for
allocating a huge chunk of the national budget towards the Defence Ministry.
Despite the substantial resources allocated in the 2007 vote, inflation,
ranked the highest in the world, has eroded the government's purse and
incomes to a point where salaries in the civil service are now meaningless.
Last month, inflation reached 3 714 percent, a record high.
Zimbabwe is in the throes of a seven-year recession characterised by chronic
foreign currency shortages and abject poverty ravaging 80 percent of the
country's population.

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MDC close to sealing 'unity accord'


Njabulo Ncube Chief Political Reporter

THE FRACTURED Movement for Democratic Change (MDC) is closer to agreeing on
a coalition for next year's elections, with both factions ready to endorse
Morgan Tsvangirai as a sole opposition candidate to challenge President
Robert Mugabe at the presidential polls, The Financial Gazette can reveal.

However, there is still bickering over candidate selection for the general
election, sources involved in the talks say.
Presidential, parliamentary and local government elections are scheduled to
be held in March next year and insiders in both camps of the MDC said
yesterday there was now agreement on the need to tackle President Mugabe and
his ruling ZANU PF party as a united front.
The sources said in the event of Tsvangirai, who controversially lost to
President Mugabe in 2002 in an election marred by violence, winning, Arthur
Mutambara's rival faction would nominate a vice president.
Mutambara, who was brought in to lead the pro-senate faction at the expense
of Gibson Sibanda, a founder member who had been Tsvangirai's deputy,
drafted the proposal to have Tsvangirai as the sole candidate for the
opposition next year. He had previously made public comments that implied he
would back Tsvangirai.
However, while consensus has emerged on Tsvangirai's candidature and on the
need for the opposition to field single candidates in the other polls, the
sticking point in the "unity accord" is over the procedure to be used in
selecting candidates.
A source said: "The only outstanding issue in the whole unification
negotiations is the selection of candidates. How do we do it without
antagonising each other after coming from an almost three-year split? We are
trying to find common ground, and this should be solved in the next round
(of talks)."
The option many appear to support would give each camp the right to choose a
candidate for constituencies where it already holds a seat. The sitting
Member of Parliament would, however, still be subjected to confirmation
through primaries.
An October 2005 split over participation in the Senate elections has left
the opposition severely weakened and unlikely to pose a serious threat to
Officials said the holding of S elections in 2010 would have given both
parties time to discuss total reunification. There had been talk of the
factions holding separate congresses, leading into a single, joint congress.
But with local elections now only eight months away, a coalition, the
sources say, is the best option.
"With the harmonised polls less than eight months away, time is not on our
side. We cannot have the luxury of having three congresses. So what we have
achieved is to go in as an opposition coalition to fight Mugabe. We will
then attend to full unification when we deliver freedom and democracy,"
added a senior MDC official privy to the talks.
Gabriel Chaibva, spokesman for Mutambara's camp, said: "What I can confirm
is that indeed the two MDC formations have been talking in terms of
strategies for next year's elections. Our national executive council
resolved to adopt a principal philosophy of one candidate for local,
mayoral, parliamentary and presidential elections. We have called upon all
democratic forces to endorse the principle."
Nelson Chamisa, the spokesman for Tsvangirai's faction, also confirmed
on-going talks
"The national executive council sat on Friday last week and discussed
several issues, among them the need to ensure that there are synergies of
efforts and unity of purpose," said Chamisa.
"I am glad to say that, as a party, our focus is to make sure that all
Zimbabweans unite against poverty, misery and injustice."

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ZUJ locks horns with Zimpapers


Staff Reporter

THE Zimbabwe Union of Journalists (ZUJ) has locked horns with Zimbabwe
Newspapers, the largest employer of journalists, after the company's
management stopped remitting workers' subscriptions to the union.

It is feared the publishing company made the decision after being
pressurised by the Ministry of Information and Publicity, whose Permanent
Secretary, George Charamba, has over recent weeks, been publicly hostile
towards ZUJ.
The union fears a similar order will be issued to other government media
houses, whose journalists reportedly constitute about three quarters of the
300-strong ZUJ membership.
The union, led by Matthew Takaona, has incensed Charamba over its support
for a voluntary media council.
ZUJ is part of a coalition of media groups, which constitute the Media
Alliance of Zimbabwe, which plans to launch an independent media council
next Tuesday. The government sees the move as a threat to Tafataona Mahoso's
Media and Information Commission (MIC).
Charamba has accused ZUJ and media rights groups such as Misa-Zimbabwe of
being part of a Western plot to topple President Robert Mugabe.
Subscriptions from the Zimpapers Harare branch have now been in arrears for
three months.
The ZUJ executive council has filed an urgent High Court application
challenging Zimpapers' cancellation of subscriptions of about 60 of its
journalists and other media workers from the Harare branch of the Zimbabwe
Stock Exchange-listed company.
ZUJ lawyer, Rodgers Matsikidze, said Zimpapers had yesterday filed a notice
to oppose the union's action, arguing the matter was not urgent.
"The company's argument is that the workers have refused to be members of
ZUJ, although there is no evidence to that effect. It is my belief that the
company is putting pressure on the ZUJ branch to claim that all members do
not want anything to do with ZUJ. I personally think it's part of a bigger
plan to weaken ZUJ. We will meet in court because there is more to it than
meets the eye," he said.
As a sign of government's growing opposition to ZUJ, it has introduced
separate awards for its journalists so they do not compete in the
industry-wide National Journalistic and Media Awards (NJAMA), run by ZUJ.

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Inflation triggers scramble for assets


Dumisani Ndlela Business Editor

THE increase in the inflation rate announced last week was phenomenal,
considering it was benchmarked against a higher base last year.

But the rise was expected: inflation has maintained its upward trajectory,
and people remain mindful of the fact that inflationary pressures remain
entrenched in the crisis-ravaged economy.
But there was shock and awe.
The rise in the inflation rate astounded even the most pessimistic analysts,
and left the market convinced of a gloomy outlook for the rest of the year.
According to highly placed sources, there was disquiet at the Central
Statistical Office (CSO), the government agency that collects data on price
increases for the inflation rates.
A senior CSO official was overhead asking a cabinet minister if they could
release the new statistics, to which the minister reportedly retorted
unkindly to the official that the information was compiled for public
There were attempts to manage the dissemination of the statistics by
releasing them exclusively to the state press, which squashed a tiny report
on the new inflation figures between unattractive "adverts".
But as soon as news filtered into the market that the inflation rate had
burst past 3 000 percent and was on the verge of breaking the 4 000 percent
mark, consumers joined dealers in the scramble for scarce foreign currency
on the parallel market.
The year-on-year inflation rate for April increased by 1 513,7 percentage
points, the highest margin since Zimbabwe slipped into hyperinflation, to 3
713,9 percent.
The month-on-month inflation rate went up 50,2 percentage points from 50,5
percent in March to 100,7 percent in April.
The stampede on the parallel market pummelled the defenceless local unit to
an unprecedented low against the United States dollar on increased demand.
The Zimbabwe dollar, which had been trading at 30 000 to the greenback,
weakened to $38 000 to the US unit last week.
It weakened from $60 000 and $3 900 to $65 000 and $4 500 against the
British pound and South African rand respectively on announcement of the new
inflation figures.
Parallel market dealers said the local unit was still taking a drubbing from
sustained demand.
It further fell to $45 000, $85 000 and $6 000 against the US dollar,
British pound and South African rand respectively in morning trade
"There is just too much demand," a dealer told The Financial Gazette.
"Everyone wants foreign currency."
The equities market also got a major boost from the stampede for assets.
Essentially, people have lost faith in the local currency because of the
hyperinflationary environment.
To preserve their wealth, they are buying assets and foreign currency.
The inflationary cycle has made it unattractive to hold the local currency
when costs of goods and services are increasing on a daily basis.
In other words, people are now making sure they spend their little incomes
as fast as they can on goods rather than save.
The population, in order to avoid the inflationary effect, flees the
domestic currency as a store of value, and instead shifts their wealth into
hard currencies and durable goods.
Increasing shortages in the crisis-sapped economy have also caused the rush
for foreign currency.
Low capacity in the productive sector has resulted in dwindling output,
resulting in shortages.
This has triggered imports, and, consequently, a rush for foreign currency.
The acute shortages in the economy have compounded the inflationary woes.
Scarcity, by nature, generates inflation.
Fuel is in short supply, as is maize meal, the country's staple food, and
basic commodities such as sugar and cooking oil.
Foreign currency is also in short supply.
These shortages have invented informal markets for fuel and foreign
The fear is that increased money printing this year to import cereals to
cover local production deficits will worsen the inflationary situation.
Huge sums of cash are likely to be printed to raise money for grain and fuel
imports, as well as for other offshore fiscal obligations.
The outlook is gloomier than many expected.

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ZANU PF reforms fall prey to hostilities


Charles Rukuni Bureau Chief

BULAWAYO - The ZANU-PF leadership in Bulawayo is in denial. Though the
leadership says there are no factions within the province sources say the
restructuring of the party, which will pave the way for elections will not
be completed by this weekend.

National chairman John Nkomo said two weeks ago that a taskforce chaired by
deputy national political commissar, Richard Ndlovu, would supervise the
restructuring exercise and should complete it by Sunday, May 27.
He said the taskforce's brief was to define structures and not conduct an
audit. The audit has already been completed.
Political commissar Elliot Manyika said the audit had revealed that some
cells and wards were not well structured and did not have enough membership.
Ndlovu said on Tuesday he could not comment on the restructuring exercise as
he was just "settling in".
Sources, however, said members of the politburo from Bulawayo were trying to
paint a rosy picture by pretending there were no divisions when they were
quite aware that there were two distinct factions, one loyal to them called
"petition" and the other loyal to younger war veterans called "godhi".
The current interim executive was reportedly behind the politburo members
and was pressing for elections when it did not have enough members to set up
the structures required. The other faction claimed to have more members.
The sources said the structure of the taskforce that had been proposed by
Nkomo made it difficult for it to complete the exercise on deadline. Nkomo
said the taskforce should comprise party leaders from Matabeleland North and
South as well as Bulawayo itself.
It had been agreed that Matabeleland North and South should each be
represented by one member of the politburo and the provincial chairman. In
Bulawayo, however, each "faction" was to be represented by four members,
clearly indicating that there were divisions.
Bulawayo has been a divided province since the death of former
vice-President Joshua Nkomo and the formation of the Movement for Democratic
Change, which drew a lot of support from the region.
The younger war veterans, who have swept all provincial elections only to
see the elected executive suspended, claim that the local leadership is
against them because they want to bury the past, while the older generation
want to keep the fires of ZAPU burning.
The divisions have now spilled into the succession issue with the younger
war veterans allegedly backing another term for President Robert Mugabe.

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Govt plans to evict ex-farm workers


Clemence Manyukwe Staff Reporter

THE government will soon evict former workers that are still living in
compounds on acquired farms, and has set up a team tasked with restoring
order on the farms.

This is despite a court ruling two years ago, which declared that such
evictions were illegal.
Public Service, Labour and Social Welfare Minister Nicholas Goche told the
House of Assembly last week that ex-farm workers still living in farm
compounds, who are unwilling to work for the new owners, would be required
to leave.
Goche was responding to the first report of a joint committee on lands,
agriculture and labour, on the plight of farm workers.
The committee found that workers formerly employed by white farmers were
reluctant to work for the new farmers, citing low wages and poor working
"Apart from paltry wages, your committee was not happy with the generally
appalling conditions of service for farm workers, especially as regards
housing, employment contracts, late and non-payment, denial of lunch breaks
and sick and compassionate leave," the joint committee said in its report.
The report, tabled in Parliament in March, urged Cabinet to formulate clear
policy guidelines on former farm workers unwilling to work for new property
Goche said the government had set up an inter-ministerial committee
comprising officials from his ministry, the two deputy police commissioners
Innocent Matibiri and Godwin Matanga, and officials from the Ministry of
Local Government to restore security on farms.
"At the end of last year, the committee came up with a programme to visit
farms to explain to workers government's position that those workers who
stay at farms but do not want to work for the new farmers should move away
to make room for those who want to work," said Goche.
He said the programme had, however, failed due to "financial constraints",
but that funds could soon be made available to complete the task.
"My earnest hope is that the necessary funding will be set aside for this
exercise for it is predicated on the restoration of productivity in this
important sector of our country."
In 2005, a magistrate issued a court order barring the eviction of workers
at Chabwino farm after they had argued that the houses they occupied had
been built using their own funds.

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Power sector: challenges, way out


Continued from last week

IN this second part of the presentation made to the Forum of Energy
Ministers in Maputo, Engineer Simba Mangwengwende and contributing author Dr
Njeri Wamukonya analyses the weaknesses in regulation and the reforms
instituted so far to avert a seemingly inevitable power crisis in Africa.

In its annual report for 2006 the Southern Africa Power Pool (SAPP)
Coordination Centre shows that only the National Electricity Utility of
South Africa (ESKOM), the largest utility, had satisfactory financial
results for the year ending March 2006.
ESKOM achieved a rate of return of 8.4 percent and had an impressive cash
collection performance with an average of only 22 days of revenue
outstanding. Other utilities had negligible or negative rates of return as
low as -23 percent and revenue outstanding as high as 207 days.
A study by the African Energy Policy Research Network (AFREPREN) in 2005
also highlighted similar poor financial performance in utilities in East,
Central and West Africa (AFREPREN, 2005).
In Uganda revenue outstanding was 369 days in 2000 before the utility was
unbundled. Performance subsequently improved to 194 days in 2003 after the
introduction of a new management.
The other utilities that provided financial information showed modest
profits but poor cash collection with revenue outstanding being six months
to over a year.
As will be dealt with in more detail later, the reasons for the poor
financial performance is due to weaknesses in regulation where many of the
companies are not run as the self-financing businesses which they can be but
as providers of a state-subsidised social service.
ESKOM, whose bonds are listed on the stock exchange, performs well as it is
subject to the efficient regulation of the financial markets.
Power Sector Reforms
Since the early 1990's almost every country in Africa has been undertaking
reforms in the power sector designed to improve operational and financial
performance as well as attract investment from the private sector into a
sector that has been dominated by state-owned monopolies.
Many of the reforms were triggered by power crises or difficulties in
mobilising funding from traditional multilateral and bilateral development
agencies. These traditional sources cannot provide the huge financial
resources required to finance power sector investments over the next 20 to
25 years (Table 5).
Based on the generally-held assumption that the poor performance of the
power sector is due to the history of having vertically-integrated, state
owned and state-managed monopoly utilities, the conventional reform and
restructuring strategies that have been adopted usually involve the
unbundling of the utility, privatisation and setting up independent
regulatory agencies.
Assessment of the impact of the reforms on the performance of the power
sector in Africa has been the subject of a number of studies. One of the
more recent studies (AFREPREN, 2005) made the following findings:
n Reforms were primarily designed to bridge short-term generation shortfalls
and enhance the financial health of state-owned power utilities; most of the
generation projects by IPP's have been fossil-fuel based and have not been
using sustainable energy sources such as hydro, solar, wind, geothermal or
n Electrification of the poor has not been significantly addressed; the
removal of subsidies has led to disconnections of the poor; rural
electrification funds and boards have little to show in terms of
electrification of the poor.
n Reforms have marginalised local private sector investment in the power
sector; in the medium term the state is effectively handing over the entire
electricity industry to non-national operators.
n Performance of regulatory agencies has been constrained by lack of skill
or experience and lack of independence; consequently they have done little
to ensure the power sector's sustainability and to promote environmentally
sustainable options.
Attracting the private sector has not resulted in the significant investment
flows into the African power sector that had been hoped (Table 6). A year by
year breakdown of these investments is given in Annex C.
Out of US$251.346 billion invested over the period Sub-Saharan Africa only
got US$5.883 billion, which is just over two percent.
Consistent with the findings by AFREPREN, more than three quarters of the
investments, US$4.476 billion went into power generation driven mainly by
short-term emergency needs rather than long-term economic requirements.
In contrast to the poor electrification results that have so far been
achieved under current reforms, it is interesting to note that the
impressive electricity access rates in North Africa (Table 3) were achieved
before the recent power sector reforms. South Africa is the other country
with an impressive electrification program that was driven by the
state-owned utility, ESKOM, from 1991 before the present restructuring in
the country. There are important lessons to be derived from the North
African and South African experiences and these are highlighted later.
Although power sector reforms have not yet achieved the expected quantum
leaps in performance they have at least served to firmly establish the
agenda of power sector performance improvement among the policy makers and
other stakeholders. This is an important achievement as the continent
prepares to deal with the challenges facing the power sector.
Summary of Challenges
The poor operational and financial performance of the power sector that
continues to persist despite the reforms is often blamed on external factors
such as droughts and shortages of investment resources. The standard
explanation for the non-implementation of known priority projects is lack of
funding. However, these are just the effects of deficiencies in strategic
planning and regulation. Although extended droughts and rapid increases in
oil prices for importing countries have contributed to the worsening of the
crisis in the power sector, these are not new phenomena that could not have
been anticipated.
Effective planning can anticipate and provide for growth in electricity
demand and for the adverse impact of droughts on availability of hydropower.
Steep increases in prices of inputs such as oil are also not new and should
have been planned for. Effective planning creates the bankable projects and
programs required to facilitate the mobilisation of human, financial and
other material resources.
Regulation is a concept that has come to be associated with the regulatory
agencies that are being set up in the various countries as part of power
sector reforms.
While such institutions are an important aspect of regulation it is
important to note that the issue involves both policy and institutions.
Regulatory policies, more than institutions, are the critical issue. Simply
defined, regulatory policies are the rules by which business is done.
There are two fundamental rules for doing business. A business, whether
publicly or privately owned, can be set up to make money in order to provide
products and services or it can be set up to provide products and services
in order to make money. The overriding purpose of the business is either to
provide products and services or to make money. As long as a business is
making both products and services and money there is really no significant
difference in the rules of business. The difference comes when there has to
be a choice between making money or providing products and services.
In the power sector we are dealing with an essential service that has to be
provided whether money is made or not. Under state ownership the business
rule for the utility was to make money in order to provide a service. If the
money could not be made, the state provided a subsidy to ensure that the
service continued to be provided. Under private ownership the business rule
changes to provision of a service in order to make money. If money cannot be
made the business would normally stop providing the service. Since the
service is essential and cannot be stopped, the regulatory challenge in
attracting private sector investment is to ensure that both the service and
money can always be made. The private sector will not invest unless they can
be assured of this.
In summary challenges for the African power sector are as follows:
n Planning - the challenge is to develop bankable policies and projects
instead of the current wish lists of "priorities" that remain unimplemented
for years.
n Regulation - the challenge is to attract investment by developing policies
and rules of business that ensure that efficient investors can always make
money when providing safe, secure and reliable electricity products and
n Institutions - the challenge is to establish national, regional and
continental institutions with clearly defined roles for the development and
implementation of policies and plans.
The rest of the paper is devoted to the further elaboration of these issues.
2. Planning: Challenge of developing implementable projects
Wish Lists versus Bankable Projects
Highly summarised lists of proposed priority programs and projects in the
various regions of Africa are given in Annexes D, E, F, G, and H as part of
the information on the current status of the power sector in Africa. Details
of individual projects are available on the websites of the various power
pools, utilities and ministries of energy and finance.
The New Economic Partnership for Africa's Development (NEPAD) Energy
Initiative (Zhou, 2003) has generated a number of projects that have been
made available at investment conferences.
Through the World Bank's PRSP initiative, the United Nations Millennium
Project and regional and continental bodies such as ECOWAS and FEMA, an
attempt has also been made to define electrification targets for poverty
reduction and to meet the 2015 MDGs. Some of the more ambitious targets
envisage achieving universal electricity access in Africa as early as 2030.

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MDC turns on political heat


Njabulo Ncube Chief Political Reporter

THE Movement for Democratic Change (MDC) has lodged an application in the
Supreme Court challenging the legality of sections of two key electoral laws
the main opposition says President Robert Mugabe has used to maintain his
hold on power.

The Morgan Tsvangirai faction of the MDC, which is yet to decide on whether
it will participate in next year's elections, is challenging sections of the
Zimbabwe Electoral Commission (ZEC) Act and the Zimbabwe Electoral Act, in
what will turn political temperatures to boiling point in the build up to
the March 2008 elections.
Five sections of the ZEC Act, namely Sections 3 (1) (a) (chapter 2:12),
section 3 (1) (b) (chapter 12:2), section 15, Section 15 (1) (d) and 15 (2)
(chapter 2:12) and section 15 (3) (chapter2: 12) are being challenged by the
Tsvangirai faction.
These give President Mugabe the prerogative to appoint the chairperson of
the ZEC and four other commissioners, and prohibit political parties from
providing voter education to the electorate.
Tsvangirai's party is also contesting Section 16 of the Electoral Act,
regarding the appointment of the registrar of constituencies and polling
officers. The officials are supposed to be drawn from the public service,
but the MDC charges that the provision allows the veteran Zimbabwean leader
to stuff the system with party activists.
The MDC says the two electoral laws make President Mugabe the "referee,
player and supporter" in elections, in violation of the Constitution.
Legal experts said the timetable for the 2008 elections would be in shambles
should the Supreme Court endorse the MDC's arguments.
With less than 10 months to go before the crucial elections in which
President Mugabe is likely to square up with Tsvangirai for the second time
in as many years, the ZANU PF strongman will have little time on his watch
to revamp the electoral processes, the legal experts say.
In his founding affidavit, the opposition leader says the MDC views the
cited sections as being inconsistent with the provisions of the
Constitution, and must therefore, be declared null and void.
He said the opposition party had a vested interest in the matter, as it
would field Tsvangirai as the opposition's presidential candidate in the
event that the MDC decided to participate in the presidential polls next
"The applicant (MDC) will also participate in the parliamentary and
senatorial elections in the event that these are held in 2008 as has been
reported in the government-controlled media," reads part of Tsvangirai's
affidavit. "It is therefore, important that all legal instruments, which
regulate the elections comply with the provisions and spirit of the
Constitution of Zimbabwe for there to be free and fair elections."
He said section 3 (1) (a) of the ZEC Act contravened section 61 (1) (a) of
the constitution, in that the Act limited the appointment of the chairperson
of the commission to "a person qualified to be appointed as a judge of the
High Court or Supreme Court."
The constitution provided that the chairman of the Commission "shall be a
judge of the High Court or a person qualified to be appointed as a judge of
the High Court or Supreme Court.
"Given that the chairman is appointed by the President who, under the
current set up, is the President and Secretary of the ruling ZANU PF party,
the section, as appears in the Act, leaves room for the President to appoint
party activists from his political party merely because that person might be
qualified to be appointed as a judge having regard to his educational
qualifications and experience after being admitted as a legal practitioner."
He said Section 3 (1) (b) of the Act contravened section 61 (1) (b) of the
constitution in that the constitution provided that in addition to the
chairman, there shall be six other members of the commission, at least three
of whom shall be women, appointed from a list of nine nominees submitted by
the Committee of Standing Rules and Orders. The Act, he argues, gives a
total of four other members of the Commission, in addition to the Chairman,
at least two of whom shall be women. The Act also reduced the number of
nominees to be submitted to the Committee of the Standing Rules and Orders
to seven.
Section 61 (8) of the Constitution stipulates what shall or may be provided
for in an Act of Parliament. Among the functions of the Zimbabwe Electoral
Commission as laid out in section 61 (4) of the constitution is "to conduct
voter education".
However, in section 15 the Act dealt with voter education by persons other
than the Commission or political parties. Tsvangirai said section 15 of the
Act was invalid as its provisions were not included in section 61 (8) of the
Constitution. The MDC wants the section declared null and void, saying they
contravene the provisions of section 61 (8) of the Constitution.
Tsvangirai argues in his affidavit that section 15 (1) (d) and 15 (2) of the
Act should be declared null and void because they contravene section 20 of
the constitution which protects freedom of expression.
"The requirement that other persons or organisations involved in voter
education must furnish the commission with a programme for a approval by the
same commission offends against both principles of natural justice and
hinders enjoyment of freedom of expression. The commission must have its own
programmes. The constitution does not allow it to approve voter education
programmes of other persons or organizations."
Section 15 (3) of the Act contravenes section 61 (8) of the constitution, as
the constitution does not call for criminal or penal provisions to be
included in the Act. The Act says anyone who violates these provisions is
liable to a custodial sentence or a fine.
Section 16 of the ZEC Act makes the commission the sole and exclusive
recipient of all foreign contributions or donations for the purpose of voter
education. The MDC argues that that scenario is not provided for in section
61 (8) of the constitution.
Tsvangirai's challenge is the latest in a series of legal battles that his
party has fought against ZANU PF.
After the tightly contested 2000 general election, the MDC mounted court
challenges against results in 39 constituencies that had been won by ZANU
PF. The High Court nullified the results in half the constituencies, citing
violence and intimidation by the ruling party. However, ZANU PF appealed,
drawing out the battle into the 2005 election.

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Zim dollar burns


Dumisani Ndlela Business Editor

THE Zimbabwe dollar tumbled on the parallel market following an
inflation-sparked explosion in demand for foreign currency as investors took
flight from a struggling domestic currency.

The local unit weakened dramatically on Thursday on new inflation statistics
that indicated the rate had climbed up by the biggest margin ever in a month
to touch a record high of 3 713,9 percent year-on-year for April.
The Zimbabwe dollar, which had been trading at $30 000 to the greenback on
Wednesday last week, plunged to a low of $38 000 to the United States dollar
and slid further to $45 000 to the US unit yesterday.
Dealers said buyers were scrambling for inadequate foreign currency on the
parallel market and rates were moving daily on increasing demand.
"There is huge demand and everyone is looking for foreign currency," one
parallel market dealer said.
The defenceless Zimbabwe dollar traded at $85 000 to the British pound, from
$60 000 on Wednesday last week. It hit a low of $6 000 against the South
African rand, from $3 900 against the rand on Wednesday last week.
Dealers said the market was in critical shortage - sellers were not willing
to dispose hoping to take advantage of even higher rates on future
Buyers were bidding aggressively, pushing the rates higher.
"It looks like everyone is coming to the parallel market because they can't
get the foreign exchange from the official market," a dealer said,
indicating that he was failing to meet orders from a list of buyers.
Dealers from the official market said foreign currency inflows remained very
limited, and the bulk of transactions were being made on behalf of the
central bank, which was paying $15 000 or more for the US dollar from those
selling through the official channels.
The exchange rate for non-central bank transactions on the official
market remains fixed at $250 to the US dollar.

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Police ban march


POLICE have banned a planned protest by bank employees, saying they feared
unruly elements would hijack the protest and cause mayhem in the capital.

This immediately sparked a go-slow at POSB yesterday. Reports swirled in the
market a crippling strike could take place in the sector soon.
Bank workers had sought permission to stage work protests against their
employers for refusing to award them 165 percent salary increments. An
independent arbitrator determined the increments for the bank employees.
The increment would have raised the minimum income for bank workers to $626
725, from $86 000. The workers, who are affiliated to the Zimbabwe Banks and
Allied Workers Union (ZIBAWU), also won the right to bi-monthly transport
and housing allowance reviews.
However, the Banking Employers Association
of Zimbabwe, which represents the banking institutions, refused to implement
the judgment by the arbitrator, forcing ZIBAWU into mobilising its members
for the planned protest.
Police wrote in a letter to ZIBAWU last week signed by officer commanding
the Harare central district, I.M Tayengwa: "For security reasons, your
application has not been approved. Unruly elements are highly likely to join
your march and create chaos for them to loot . . . and destroy property and
- Staff Reporter
Last year bank employees staged a crippling work boycott, which paralysed
operations at the country's financial institutions. Police had to intervene
at some banks after the job boycotts became riotous.

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Youth Service report opens can of worms


Clemence Manyukwe Staff Reporter

A PARLIAMENTARY report has opened the lid on the rot in government's
much-touted National Youth Service programme, revealing how youths and
soldiers are fighting over food, and how female recruits live in constant
fear of sexual abuse by their instructors.

The report, tabled in Parliament last week, recommends the temporary closure
of the camps, underscoring the legislators' "horror" at the living
conditions at the centres. The report was compiled after tours of the
national youth service centres and vocational training centres by Members of
Parliament (MPs).
Youths frequently go to bed hungry, the MPs established, and at one youth
camp, there had been "an upheaval" over food.
"The committee was disturbed by the diet offered at the National Youth
Service Centres. At Guyu National Youth Service Centre in Matabeleland
South, the committee was horrified by the state of the barracks. They had no
doors or windows and the students complained about finding cats and snakes
in the barracks."
Trainees get a cup of porridge with no sugar each morning, and lunch is
always sadza with either beans or boiled cabbage.
At Magamba Vocational Training Centre (VTC), which the MPs visited in March,
students said they had been on a monotonous diet of sadza and cabbage every
day since the centre opened in January.
"The committee was dismayed by the state of hostels at Magamba VTC. The
hostels were old and falling in and doors had no handles. The ceilings were
badly affected by termites and the students were crowded in small rooms, as
some hostels had become inhabitable," the report said.
"The condition of the ablution facilities at Magamba was quite appalling as
well. In some hostels only one out of six toilets was in working order and
showers were rusted and leaking."
At Kaguvi VTC, the report reveals how a fight erupted between soldiers and
the youths.
"The committee was informed of an incident of violence involving army
personnel, a unit of the operation Maguta programme based at the centre, and
National Youth Service students. An upheaval arose over the issue of delays
in the serving of food and one student had his arms broken."
The report says the administrators of the youth service centres have not
been forthcoming with information regarding life at the camps. The MPs have
recommended that cases of violence and abuse be reported to the police and
be fully investigated.
"Since the inception of National Youth service, there have been some
worrying reports that female trainees were sexually abused by male
instructors or by fellow male trainees," the report says.
Zanu PF Gutu South MP Shuvai Mahofa chairs the 17-member committee,
dominated by the ruling party.

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RBZ eyeing broad reforms


THE Reserve Bank of Zimbabwe (RBZ) is pushing for reforms to enable it to
achieve greater autonomy and change the way it decides on monetary policy.

The central bank has recommended the enactment of legislation drastically
curtailing credit to government, saying demand for lending to government is
undermining its ability to effectively pursue its policies.
The bank has also proposed laws establishing a Monetary Policy Committee
(MPC) to determine monetary policy, and wants to be allowed to market other
minerals in addition to gold.
The proposals are contained in a document submitted by the central bank
during a meeting last Thursday between RBZ chief Gideon Gono and
"Section 7 (2) of the (RBZ) Act provides for lending to government. The
worldwide trend is to discredit extending credit to government," the central
bank document says.
"Lending to government should be prohibited and, in the exceptional case
where it is permitted, be severely limited by statute."
Although the law says the central bank shall "not be subject to the
direction or control of any other person or authority", it is felt that this
provision is undermined by the requirement "for consultation and/or consent
of/by the Minister of Finance".
The bank has recommended a constitutional provision, as well as an amendment
to the RBZ Act, providing for greater operational independence .
"Section 45 (Monetary Policy provision), requires the bank to consult the
Minister in the formulation and implementation of the monetary policy of
Zimbabwe. Consultation may compromise the Bank's independence in formulating
and implementing monetary policy," the document says.
Another area in which the RBZ is seeking autonomy is in the registration and
deregistration of banks. It wants the requirement that the Registrar of
Banks should consult the Finance Minister when registering or deregistering
a financial institution to be dropped.
The central bank says the existing law does not specify prohibited lending
The RBZ has also proposed an amendment to the Minerals Marketing Corporation
of Zimbabwe Act, which bestows the right to market all minerals, except
gold, solely on the parastatal. The RBZ, through Fidelity Printers, has the
monopoly on all gold purchases and sales. It wants to be mandated to buy and
sell other minerals perceived to be "strategic".
Another proposal is for the formation of the MPC for purposes of making
monetary policy decisions.
MPCs - a panel of experts that decides and votes on key monetary policy
issues such as interest rates - have become the norm in modern economies.
Current Zimbabwean law, however, does not provide for the establishment of
an MPC, and does not state clearly who is responsible for monetary policy.
"Several arguments have been advanced for and against the establishment of
MPCs. An argument in favour of the establishment of an MPC includes the
pooling of knowledge in the monetary policy decision making," the RBZ says.

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NGOs make silent stand at Africa meet


Staff Reporter

ZIMABABWEAN non-governmental organisations (NGOs) attending the African
Commission for Human and Peoples' Rights (ACHPR) meeting in Ghana have
refused to address the Commission on the human rights situation in the
country because of concerns about their security in the face of threats made
against them by Justice and Parliamentary Affairs Minister Patrick

At least five NGOs from Zimbabwe, including the Media Institute of Southern
Africa (MISA-Zimbabwe), the Human Rights Trust of Southern Africa and the
Zimbabwe Lawyers for Human Rights (ZLHR), had been expected to deliver
separate statements last Saturday. Instead, the groups released a joint
statement through the Civil Liberties of Nigeria in which they expressed
grave concern over Chinamasa's utterances.
In a live radio interview in the Ghanaian capital Accra, Chinamasa branded
Zimbabwean civic society organisations as regime change activists, singling
out MISA-Zimbabwe Legal Officer Wilbert Mandinde as one such "British
 funded" activist.

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Zim takes ivory ban fight to Netherlands


Staff Reporter

FEARING a ban on ivory trade would worsen the foreign currency crisis facing
the country, Zimbabwe will next month take its lobby to the Netherlands
where opponents, who accuse the country of opening game areas to poachers,
are digging in their heels.

Leading the campaign against trade in ivory are Kenya and Mali, who are
arguing that trade in ivory will escalate poaching of elephants on the
George Pangeti, the Parks and Wildlife Management Authority chief executive
officer, said the authority, one of the major revenue centres for the
country, was ready to fight Zimbabwe's case in the Netherlands.
Outlawing ivory trade would cost Zimbabwe between US$100 million and US$120
million at a time when the country's economic fortunes have taken a turn for
the worst.
With inflation hovering above 3 700 percent, the highest in the world,
Zimbabwe has battled crippling foreign currency shortages for seven years
blamed on government mismanagement of scarce national resources.
The government denies the charge and lays the blame squarely on targeted
economic sanctions imposed by the United States of America and the European
Kenya and Mali, said to have won the support of many members of the
Convention on International Trade in Endangered Species of Wild Fauna and
Flora (CITES), whose meeting is scheduled for next month, also have the
support of the rich animal rights and environment lobby, which is expected
to rally behind the proposed ban.
They will formally present their proposals and arguments for the ban at the
CITES meeting in the Netherlands.
Environmental and animal rights lobby groups have prepared dossiers to
support the ban. These include cases of increased elephant poaching in
Zimbabwe's game areas as well as the reckless slaughter of the beasts by
poachers, some of whom are alleged to be conniving with well-connected
politicians owning vast tracts of game areas in the country.
Kenya and Mali want a ban on both raw and manufactured ivory trade.
Environment Minister, Francis Nhema, told The Financial Gazette that the
country would fight to retain its right to ivory trade, saying its
conservation policies were among the best on the continent.
"It is imperative for us to keep fighting and all stakeholders in this issue
should join hands in the fight," Nhema said.
He said Zimbabwe could lose billions of dollars in potential revenue from
ivory sales if the ban came into force.
He accused Kenya of fronting a political agenda against Zimbabwe.
"We know that the ban is not a brainchild of Kenya. We are certain that
there is a non-governmental organisation (NGO) that is behind the proposed
ban," Nhema said without revealing the identity of the NGO.
Zimbabwe is battling an overpopulation of elephants, with an estimated
annual population growth rate of five percent.
A recent survey conducted by the World Wide Fund for Nature showed that
Zimbabwe's elephant population stood at more than 100 000, against a
carrying capacity of 47 000.
Hwange National Park alone has an elephant population of about 45 000.

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Minerals price boom skirts Zim


Staff Reporters

ALTHOUGH miners elsewhere are smiling all the way to the bank owing to high
mineral prices on the world market, their Zimbabwean counterparts have a sad
tale to tell and are battling to survive, Chamber of Mines president Jack
Murehwa said last week.

Murehwa told delegates at the chamber's Annual General Meeting (AGM) that
Zimbabwe had not benefited from the boom in mineral prices currently
benefiting mining houses internationally.
He said high
inflation, a skewed exchange rate and
foreign currency and power shortages had devastatingly affected mining
operations in the country.
Nickel, platinum and gold had continued to fetch good prices on the
international market, buoyed by strong demand in China.
"While prices of metals are currently
so good, with a lot
of investment being made in other African countries, we in Zimbabwe have not
benefited from this boom . . . Surely, our government has control over
issues such
as exchange rate management, inflation control, provision of foreign
currency, approval of correct tariff structures to enable utilities like
ZESA to sort out its power generation and supply, so that the mining sector
and other businesses can thrive," said Murehwa.
"Unfortunately price booms like we are experiencing today are not a long
term feature and once we miss them they are unlikely to return in the short
term," said Murehwa.
Murehwa said both government and the chamber had not achieved their goals as
set out at last year's meeting, especially regarding empowerment in the
mining sector.
"We achieved neither the growth nor the empowerment to the extent we had
anticipated and it is sad to note that our industry experienced and
continues to experience declines in volumes in the production of most metals
and minerals despite the very buoyant metal/mineral prices which prevailed
throughout the past 18 months," he said.
"Sadly, the metals and minerals that have survived the decline also risk
stagnation or decline as policy frameworks continue to change," said
The mining sector is now the country's largest foreign currency earner after
agriculture's collapse and contributes five percent to the country's Gross
Domestic Product.

...but CAG boss sees potential 'mining paradise'
GREG Hunter, the chief executive officer of the London Stock Exchange
(LSE)-listed Central African Gold (CAG), says Zimbabwe can be Africa's next
mining paradise after the Democratic Republic of the Congo (DRC) if it
addresses its political and economic woes.
The CAG boss said Zimbabwe, reeling from mounting economic hardships, had
disregarded as a source of large gold deposits in Africa, though the country
offers large and valuable resources, which are hard to find elsewhere on the
Hunter said his African oriented company chose to set up operations in
Zimbabwe because of its exciting geology.
"Zimbabwe could become mining's next Democratic Republic of the Congo, if
the political situation here improved and in the meantime business in
Zimbabwe was hard but not unmanageable," he said in an interview with an
online mining website.
"Factors that make Zimbabwe appealing to mine in are the country's good
infrastructure, a highly qualified workforce proficient in English and the
proximity of South Africa to Zimbabwe from which consulting skills can be
quickly and easily sourced. It is not impossible to find skilled miners in
the country, despite the fact that mine industries in Botswana and the DRC
have attracted some experienced mining workers," said Hunter.
CAG is a mining and exploration company established to identify, acquire and
develop gold projects in Africa. It aims to build it into a mid-tier African
focused gold exploration and production company. CAG, which is also listed
on LSE as Alternative Investment Market (AIM), currently has an extensive
exploration portfolio in Mali, Botswana and Ghana.
CAG moved into the country about two months ago when it acquired Falgold
(84.7 percent) and Olympus (100 percent) mines for US$6.2 million that
produced about 21 000 ounces last year.
Hunter said the mining regulatory environment in Zimbabwe was still
functioning and mining tax rates of 15 percent with no royalties payable by
gold companies made operating in the country more attractive.
This is despite the fact that the Minister of Mines and Mining Development,
Amos Midzi, issued a warning last week to mining companies telling them to
develop operations in the country or risk their mines being seized.
Hunter added that the company has not experienced more problems due to power
cuts currently gripping the country than it has in Ghana, where it is
operating the Bibiani gold mine.
"Zim (Zimbabwe) works, the relative ease of registering mining permits is
evidence of this," he said.
Hunter said competition in the country had intensified with new mining
companies moving in, a number of smaller deals being done by private
companies, and private individuals and funds increasingly trying to invest
in Zimbabwe by buying into the Zimbabwe Stock Exchange.
Hunter said CAG had had some success in adding value to its resource base in
the country. The company started a high level exploration programme that
will soon be followed up by a confirmatory drilling programme on known areas
of interest.
"We have initiated an exploration programme and continue to produce gold in
Zimbabwe, while we wait for the political situation to
normalise. If the situation improves and the size of the company reaches a
certain critical mass, we will raise capital externally and maximise the
value of the company in Zim (Zimbabwe)," said Hunter.

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Local engineers engage government over brain drain


LOCAL engineers are engaging government in the resort town of Victoria Falls
on the need for a regulatory framework to govern the activities of the

Zimbabwe Institution of Engineers (ZIE) president Engineer Martin Manuhwa
said the institution would take advantage of interactions during its
congress, which opened in Victoria Falls on Tuesday, as is being held
jointly with the World Council of Civil Engineers to push its agenda.
"We need an act of parliament and we will be discussing this with government
representatives who will attend the congress. By the end of the congress, we
should have the government's view and position on the proposed act of
parliament for the profession," he said.
The congress ends on Sunday.
Engineers have left the country in droves due to an economic crisis now in
its seventh year.
"Our profession has been hit by a number of problems but the major issue
that has (bothered us) is that of engineers opting for the exit route to
other countries like South Africa and Botswana," said Manuhwa.
He said there was need to reduce "the risk factor" caused by the current
economic crisis.
"No one wants to invest his or her money and resources in a risky
environment," he said. "We are concerned at the continual decrease in the
standards of living of professional people," he added.
Experts attending the conference raised fears that the brain drain in the
engineering sector was likely to leave the country without qualified
- Staff Reporter

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Treating the symptoms



THAT Zimbabwe's educational system is in the same bed as other
once-promising sectors of the economy now battling for survival in the
country's overcrowded intensive care unit is beyond debate.

While the authorities might not admit it openly, choosing to look at it
through rose-tinted glasses, the truth of the matter is that a lot can be
said by the unsaid.
Nothing however, can be more telling of the desperate depths of despair in
government today to find a cure for the skills haemorrhage than the latest
attempts to limit widespread human capital flight from all facets of the
economy to greener pastures. As a result, poor Zimbabwe has been reduced to
a dual role of being the training ground for the world's bustling economies
and a dumpsite for the chaff failing to meet the grade in the competitive
With effect from next month, all university and college students receiving
government grants and loans will be compelled to join the civil service -
not long ago a much sought after job market before years of under-funding
reduced it to one of the least paying sectors - for specific periods before
they can be allowed to find work elsewhere, ostensibly to stop the
unprecedented brain drain. That is if reports in a weekly government
mouthpiece are anything to go by.
Revelations of the cadetship scheme came hard on the heels of reports
carried in this publication revealing that the public service is losing an
estimated 40 employees daily for reasons varying from poor working
conditions and pathetic salaries to the HIV/Aids pandemic decimating the
country's most productive age groups. The vacancy rate in the Mines
Ministry, a top contributor to the Gross Domestic Product, stands at an
alarming 52 percent, impairing the resource sector's ability to plug rampant
leakages costing the crisis-riddled economy between US$40 million and US$50
million weekly. The situation in the Home Affairs Ministry is equally
depressing. The vacancy rate for the ministry, which presides over the
police, has been put at about 45 percent, once again, a recipe for disaster
given the inverse relationship that exists between crime and manning levels.
Figures yet to be endorsed by government suggest that 4 500 teachers have
resigned from the civil service since January, meaning to say 900 teachers
are leaving the noble profession every month. The situation is even more
terrifying in the health sector where nurses, pharmacists, radiographers and
doctors are leaving in droves for Europe, Asia, the United States and
Britain, where per capita income is high. Government has had to recall
experts in this field from retirement in order to save lives.
As it is, the public service is literally deserted and this explains the
shoddy service Zimbabweans have to put up with every day despite parting
with a significant portion of their incomes in pay-as-you-earn taxation. The
passion, commitment and dedication to duty is just not there anymore in the
civil service. A good number of those still hanging in there are a
disgruntled lot, simply waiting to seize the opportunity to join the Great
Trek, while in the meantime moonlighting to supplement their meagre incomes.
It doesn't end there.
At the very top, senior civil servants hardly spend time in offices as focus
has shifted to the farms wrested from former white commercial farmers and
other private business interests that have nothing to do with their brief in
government. Unfortunately, the trend extends right across the army, the
police and members of the secret service, and yet this is an unforgivable
offence in other countries.
With a third of the country's population (four million people) living
outside its borders, the rapid pace of the brain drain is impeding efforts
to right the country's shrinking economy. The situation is just not
sustainable. Losing US$200 000 invested in training a medical practitioner
alone is, by any measure, beyond what any Third World country can afford.
What more for Zimbabwe, neck-deep in the throes of a recession now in its
seventh year!
And yet it is difficult to fault the poor civil servant. Most civil servants
earn monthly salaries of not more than $480 000, a far cry from the
breadline quoted at $1,7 million. With inflation steeped at 3 714 percent,
the brain drain can only get worse. True, investments and remittances from
the country's sons and daughters in the diaspora have helped lessen the
economic bleeding, but again, at what cost?
We have said it before and we will say it again, legislation alone cannot be
the panacea to the country's multi-faceted woes. As opposed to treating the
symptoms, the government should swallow its pride: close ranks with its
perceived enemies and address the root causes without delay and before the
ailment mutates into a full-blown crisis. One-size-fit-all measures to limit
mobility might further inhibit development, not to mention violating the
rights of those concerned.
The net effect of the cadetship scheme will only be felt among the country's
poor. Children of the country's nouveau-riche, including high-ranking civil
servants and politicians, will continue to enrol at some of the world's most
expensive schools and colleges, never mind the source of funding.

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Law charging duty in foreign currency passed secretively


Matters Legal with Vote Muza

SINCE the promulgation of Statutory Instrument 80A of 2007, more fully known
as the Customs and Excise (Designation of Luxury Items) Notice 2007, there
has been a lot of debate on the legality or otherwise of the state's
intention to charge duty on certain designated goods in foreign currency.

Some legal experts have labelled the law illegal based on various reasons.
This highly charged debate on the state's controversial and somewhat
objectionable move culminated in a report carried by the Herald recently
stating (against comments by several legal experts) that indeed, there is
nothing wrong in the state charging certain imported goods in foreign
To be more precise, the Herald quoted a high ranking Zimbabwe Revenue
Authority official stating before a Parliamentary Committee that the
government's move had support in law.
Out of my desire to know more about the law on import duty, and also by way
of attempting to enlighten readers, I decided to carry out my own research.
My first port of call was the Finance Amendment Act number 10 of 2003. (The
Herald's source incorrectly cited the Income Tax Act). Section 44 of this
Amendment Act repealed section 115 of the Customs and Excise Act (Chapter
The heading of the new section 115 to the Customs and Excise Act reads as
follows; "conversion of foreign currency and payment of duty in foreign
currency in certain cases". For the benefit of readers I shall also cite in
full Section 115 (2), which reads as follows: "The minister may,
notwithstanding Section 41 of the Reserve Bank of Zimbabwe Act (Chapter
22:15) or anything provided in or under the Exchange Control Act (Chapter
22:05), require every person, including a resident of Zimbabwe who imports
any item of goods (hereinafter in this section called luxury item)
designated by the Minister by notice in a Statutory Instrument to be a
luxury item, to pay any duty and value added tax payable on such item in
United States Dollars, Euros, or any other currency dominated under the
Exchange Control (General) order 1996 (Statutory Instrument 110 of 1996)."
An Act of Parliament introduced this clause in 2003, close to four years
ago. Due to the apparent pervasive ignorance, or confusion about this law, I
am left to believe that its passing may have been secretive, and devoid of
any parliamentary debate.
I also have strong doubts if this controversial law was presented to the
public for their views. The evident shock and disgust by individuals and
groups put paid to the fact that this law might have been introduced without
a wide public consultation process.
Our finance and legal regime is a hard-hat area that is not for the
faint-hearted. It is made up of a plethora of laws, whose presence may
bemuse even the best of judges and advocates. That there was ignorance about
the above cited law is no one's fault, but primarily that of the authorities
whose tendency to over-regulate and bulldoze laws without the public's
approval is well documented.
Statutory Instrument 80A of 2007, controversial as it may be, was passed
lawfully. It exists by virtue of an Act of Parliament, and its content
creates no inconsistency with other existing laws like the Reserve Bank Act
or the Exchange Control Act. The crafters of this law knew what they were
doing, especially when one observes the manner in which the provisions of
the Reserve Bank Act were ousted and rendered irrelevant.
In the circumstances of our economy and our foreign policy, the
justifiability of this law may be debatable. Government argues that its sole
intention is to discourage the public from spending scarce foreign currency
on "luxuries". On the other hand, members of the public who are prisoners to
the dictates of a hyperinflation economy see value in investing their wealth
in imports. The solution, in my view, lies in government introducing
policies that allow for a normal flourishing of our economy, and not to
attempt to save itself by extorting currencies of foreign states from
lVote Muza is a legal practitioner with Gutu and Chikowero. He can be
contacted on Email:

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FinGaz Letters

Shooting from the hip

EDITOR - Featured on BBC World's Hard Talk and interviewed by Stephen Sackur
on Sunday May 13, Tokyo Sexwale, one time Robben Island inmate, now Mr
Moneybags as well as a political hopeful to replace Thabo Mbeki as the ANC
president at elections slated for later on this year, does not mince words.
Asked to use a morality stick to measure President Robert Mugabe's regime
against the dismantled apartheid state, he stops just short of lumping the
two together ". . . Mugabe is one of us, he is a freedom fighter . . ."
Pressed to elaborate he explains: ". . . He (Mugabe) used to be one of us,
he used to be a freedom fighter, a democrat but it does not mean he will
remain like that . . ."
On Mbeki's failed quiet diplomacy and recent regional consent to give it
another shot,Tokyo does not rule out regional sanctions against Zimbabwe
should the current Mbeki effort falter. Given the collegiate political
processes at the ANC, it is unlikely that the sanctions option is one that
has not been fully ventilated within the party.
The leader of the opposition MDC, Morgan Tsvangirai, interviewed on the same
programme by the same reporter on Monday May 14, comes out soft spoken as
usual but credible, humorous and articulate.
Pressed on why the Southern African Development Community has prolonged
Mbeki's quiet diplomacy mandate, he remarks: ". . . Privately they (regional
leadership) reminded him (President Mugabe) he does not live in China . . ."
Clearly though, the MDC could never win a free and fair election in Zimbabwe
as long as President Mugabe remains afflicted with the political neurosis
that causes him to forcibly deny Zimbabweans the right to be ruled by a
government of their own choice, a most basic universal human right.
By putting Zimbabwe's democratisation constraints on the international
agenda, exposing the violent and corrupt manifestations of ZANU PF, the
courageous activists in civic organisations, the churches through the
Zimbabwe Council of Churches, the Catholic Commission on Justice Peace, the
student bodies and all concerned Zimbabweans have won.

Jacob Mungoshi
 Read writing on the wall, Betera

EDITOR - I would like to respond to the letter by Mordecai Betera, (The
Financial Gazette, May 17), which was quite depressing. First, Betera needs
to be reminded what we learned in primary school that if you want to quote
someone, do it correctly.
A close scrutiny of Kadungure's letter reveals that he said, ". . . the MDC
sought intervention predominantly from the region, vesting monumental trust
in the post-apartheid South Africa", not as Betera put it. In our context,
region means in and/or around Zimbabwe. South Africa is a black country, so
I do not see any racial bias in trying to engage Thabo Mbeki to resolve our
However, it is clear that Betera needed the obvious answers for everything,
although our political and economic status is enough writing on the wall.
Recently, human rights lawyers were arrested on spurious charges. Peaceful
demonstrations by their counterparts were crushed. The inflation rate
reaches 3 700 percent, beating the world record.
All these factors should suffice to give Betera a clear picture of a
Zimbabwe which was painted by Innocent Kadungure. Thank you Kadungure, we
definitely 'need a new civilisation'. As to Betera, please look at the wall
and stop talking gibberish.

E.B.G. Zvandasara
 The way to go

EDITOR - I applaud the article by Terence Zimwara and I'm convinced that his
proposal is the only way for the government and the Reserve Bank of Zimbabwe
to go. A free market will just about dismantle the structures of the
parallel market that we see today.
One might argue that players on the parallel market will in turn increase
their rates but I can assure you that parallel marketers deal for value thus
if the official rates are determined by the market, parallel market dealers
will be driven out of business.
How, one might ask? There is no security on the parallel market and people
are just going there because there is no better alternative. If the parallel
market rates are at par with official rates, people will rush for the more
secure transactions. If parallel market dealers raise their prices, they are
bound to operate at a loss and, like Terence said, inflows of foreign
curreny are bound to increase at market determined rates.

 Normalising the abnormal

EDITOR - Tony Namate's suggestion (Readers Forum, May 17, 2007) that ZESA
should embark on a scheme of voluntary load shedding represents a selfish
and skewed mentality that has sadly become a norm in our increasingly
divided society.
Namate suggests that ZESA should raise electricity tariffs to "market"
levels so that those who can afford the higher rates would not have to
experience power cuts, while the majority would have to use electricity only
when desperately necessary.
Things are difficult in Zimbabwe but this should not give people an
opportunity to shamelessly advocate for policies that will further widen the
chasm between the rich and the poor. Namate is right in pointing out that
almost everything is now being bought on the black market, but that does not
mean we should normalise the abnormal.
Rather than showing us his insensitive side, Namate should in fact be at the
forefront of advocating for people's rights so that everyone gets the basic
necessities of life. Unless Namate was speaking with tongue in cheek, as he
often does in his cartoons, it is difficult to see why he would think of
such a difficult solution to a simple problem. It would be easier for rich
people like him to have electricity generators installed at their homes.
Namate's ideas belong to the Stone Age era where men derived satisfaction
from seeing their fellow beings suffering. Next time we read his
contributions, we expect Namate to encourage ZESA and the government to
invest more in solar energy technology for the benefit of all people - rich
or poor.
It is bad enough that ZESA has to use load shedding to distribute a scarce
resource because by now they should be looking at how to bring electricity
to rural and remote areas of the country. However, it would be a tragedy if
ZESA were to condemn a section of the society to total darkness simply
because they are poor.
In these difficult circumstances, ZESA has to be commended (only in this
respect) for making sure that all men are equal.

Hudson Taivo
 Rule of law thrown out of the window

EDITOR - The breakdown of the rule of law in Zimbabwe, characterised by the
callous defiance of court orders by the police, has done enough damage to
the country"s reputation in the eyes of all right thinking people.
It is a fact that no investor will ever commit his funds in a place where
his investment is not safe. While the land reform programme was a noble
idea, subsequent amendments to the constitution banning access to the courts
by aggrieved parties whose land had been forcibly acquired further
buttressed the view that the rule of law has irretrievably broken down.
Access to the courts for the determination of one's rights is a fundemental
human right in any functional democracy. The danger with this law is that it
can be used to punish the government's percieved enemies with impunity. The
agricultural sector is unlikely to see any major investment as long as this
law remains in place because it scares away investors.
As for other sectors of the economy, the situation is equally sad. The
defiance of court orders has reached unimaginable levels in our country.
This creates a climate of impunity, which cannot be reconciled with any
meaningful investment into our sickly economy.

Kudzayi Kadzere
 A new wave of birth pains for Zim

EDITOR - I was sitting in the Kgale Mountain in Botswana, looking towards
Zimbabwe and my heart sank. I felt hopeless, miserable and weak. What is
happening to the land that should be flowing with honey and milk?
I began to think about the inflation rate, the poverty, murders and
violence. When I thought of the widows and orphans, tears started falling
from my eyes. If it is difficult for a man, think of the widows and orphans.
They have no one to appeal to except God. Is it that God cannot see or hear?
Very soon I was disrupted by a young couple who had a young baby who was
crying softly on the mother's back. I could see the pride and love of the
parents as they nursed their fruit of love. Suddenly I thought about birth
pangs and I felt shivers running down my spine. I tell you, it's bad when
women sweat profusely and cry when the doctors continually order "push, push
. . ." Today I say to Zimbabwe push, push . . .
The pains of a woman become more frequent and closer as the birth
approaches. I remembered the situation in Zimbabwe before 1980 and suddenly
a smile like the rising sun showed on my face.
Zimbabwe experienced birth pains towards independence - people, including
President Robert Mugabe, were killed, maimed and tortured. Leaders of that
era had become jail birds. Their lives were in constant danger and it got
worse before independence. That's when bases like Chimoio and Nyadzonya, to
name but a few, were bombed. Come 1980, Zimbabwe was born, resulting in
great joy and jubilation.
However, we can't live for yesterday as things are no longer the same. The
situation in Zimbabwe is bad. The country has been riddled by poverty,
death, desolation and darkness due to excessive power cuts. President Mugabe
and others bore the birth pains of independence but we are now experiencing
a new wave of birth pains.
Let us help bring about a bouncing baby (a new Zimbabwe). The process of
delivering a baby involves some stages. Let us be patient and follow the
stages slowly and painfully. Let me warn you that you shouldn't use drugs or
alcohol to relieve the birth pains because the contractions might be
disturbed leading to the birth of a deformed child. We have gone through too
much to risk the birth of a deformed child (broken Zimbabwe). At times
doctors have to interfere so that the birth pains can come, like President
Thabo Mbeki is trying to do.
In congratulating Mbeki for being chosen as the midwife, I want to caution
him that Zimbabweans, SADC, Africa and the whole world are anxiously waiting
for that new baby (Zimbabwe) and history will hold you accountable for the
success or failure of its birth.
After all these thoughts passed through my mind, I started down the mountain
with birth pains, but I had one thing - hope. Zimbabwe is experiencing its
second level of birth pains after the liberation struggle and the Concerned
Africans Association and other organisations have to play the midwife's
Zimbabwe is a blessed country and almost every mineral is available -
diamonds, oil, gold and good soils for agriculture. Unfortunately some
people have taken what God has prepared for his children for their own. I
take this opportunity to tell them that they might win against the people
but the God of the weak, widows and orphans shall not be overcome. Wherever
you are every morning breath a prayer for Zimbabwe.

Simbarashe Chirimubwe (president)
Concerned Africans Association

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Beware of China Bearing Gifts

African Path

      Kimberly Ba

May 23, 2007 11:00 PM

China is busy wooing African leaders into economic partnerships that
will have repercussions for many years to come. If you look at some of the
most tumultuous countries in Africa, you will find a Chinese connection.
Sudan and  Zimbabwe are two African nations that come to mind. We all know
about the ongoing genocide in the Darfur region of Sudan but also the brutal
regime of Robert Mugabe, President of Zimbabwe.

Let's first look at China in Sudan. As a close ally of Sudanese leader
Omar al-Bashir, the Chinese are supplying military equipment that allows
al-Bashir's military to slaughter the people of Darfur. Throughout this
crisis, the Chinese have steadfastly supported Sudan regardless of how many
people they murder in Darfur. Depending on which source you want to believe,
between 200,000 and 400,000 people have been killed in Darfur since 2003. Of
course any attempt by countries on the United Nations Security Council to
impose sanctions on Sudan is voted down by China.

As a loyal friend, China is so involved in Darfur that they might as
well be slaughtering the people of Darfur themselves. Expecting China to
care about the plight of the people in Darfur would like asking Hitler to
show the Jews sympathy. time not to use it again, they can't help
themselves. At least with Sudan, China is loyal, supportive and very
generous. Did I mention that the majority of Khartoum's oil exports go to
Beijing? Beijing gets oil, Khartoum gets weapons. China is not benevolent
when it comes to the Sudanese, they will benefit if oil is extracted from

Secondly, China's involvement with  the petty dictator of Zimbabwe
should be scrutinized; the last thing Robert Mugabe needs is for someone to
pat him on the back and bail his sorry ass out of trouble. With inflation at
more than 3,200%, all Mugabe can do is blame the British and the West for
the severe economic trouble he has led the country into. As if Mugabe needs
anymore encouragement, China has become the largest purchaser of Zimbabwe's
tobacco and promises to provide $500 million in trade income next year.
What about those starving jobless folks who live in Zimbabwe who can't
afford to buy bread?

With a population of over one billion people, China needs access to
the natural resources in Africa and are capitalizing off the West's lack of
interest in Africa, particularly the US. China will benefit the most from
reaching out to Africa but Africa's leaders should be very cautious. China
has proven they have no regard for human rights, personal freedom or dissent
which makes them the last country you would want aiding and abetting tyrants
in Africa. The only thing China can do is bring out the worst in these
struggling countries.

China is a not a good role model for Africa, it has the world's
cheapest labor market, while the majority of sub-Saharan Africans are
unemployed. In China, the average worker earns $20 a day while the average
worker in sub-Saharan Africa earns less than $1 a day. Partnering with China
will do nothing to improve the plight of Africa's poor.

As long as African leaders cozy up to China and buy their cheap goods,
none of them  will ever be able to develop their own natural resources,
industries and agricultural potential. Why buy something made in Africa if
you can buy it cheaper in China? The incentive for African companies to
produce their own goods is non-existent if  their economies are flooded with
cheap products from China. China knows better than the West, that the
easiest way to win allies in Africa is to bring the checkbook.

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