The ZIMBABWE Situation Our thoughts and prayers are with Zimbabwe
- may peace, truth and justice prevail.

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The Times

            May 28, 2003

            Geldof calls on Africa to throw out Mugabe
            From Anthony Mitchell in Addis Ababa

            BOB GELDOF launched a bitter attack on President Mugabe of
Zimbabwe last night as he flew into Africa 20 years after launching Live
            The Irish pop star called on African leaders to challenge
despots if they wanted the rest of the world to take them seriously.

            "He (Mr Mugabe) is engaging in state-sponsored terror and famine
and that cannot be allowed," Geldof said. "He is a shame on the face of

            Geldof, on his first official trip to Ethiopia since the days of
Live Aid in 1985, added: "You people should be demanding that Mugabe steps
down. I don't care where he goes. He can join Idi Amin in Saudi Arabia, he
can join the ghetto of tyrants, but get him out of there."

            Geldof, whose trip is timed as a "wake-up call" to the G8 summit
of world leaders in Evian, France, early next month, also came face to face
with the horror of Aids.

            He met Meseret Tadesse, a ten-year-old Aids orphan who is one of
three million people in Ethiopia infected with the virus.

            "This is a disgrace," he said at the start of his five-day visit
to the impoverished country - the third-poorest country in the world, with
the world's third-largest Aids population. "I am a father and have a
ten-year-old daughter. This girl wants to be a doctor when she grows up.
Instead she will die within a year."

            The pair held hands in a tiny mud shack in a shantytown on the
outskirts of the capital, Addis Ababa. Families are too poor to buy drugs to
combat the virus.

            The former Boomtown Rats singer also attacked the European
Union. "Their grotesque inability to respond in a full, adequate manner is
responsible for the food shortages here," he said. Some 14 million people,
or one in five of the population, are facing starvation in the country and t
he aid bill is estimated at more than £500 million.

            The singer is a hero in Ethiopia for his fight against the 1984
famine, which culminated in the Live Aid concerts in Britain and America.
Geldof now wants Western governments to each pledge 0.16 per cent of gross
domestic product to helping Africa.

            President Bush signed into law yesterday a $15 billion (£9.2
billion) plan to help to fund the fight against Aids in Africa and the
Caribbean and challenged Europe to follow America's "generous" lead without
delay. Mr Bush, in trebling US spending on Aids over the next five years,
said that he would "challenge our partners and our friends to follow our
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The Herald Wed 28 May 2003

Bank notes crisis worsens

Herald Reporters
The shortage of bank notes worsened in Harare yesterday with some banks
turning away clients after running out of the notes.

This prompted the Zimbabwe National Chamber of Commerce to call on bankers
to introduce incentives to attract cash deposits and encourage the use of
bank cheques and electronic transactions.

Long and winding queues were the order of the day in banking halls and at
automated teller machines.

Most people who were supposed to receive their salaries went back home
empty-handed and disappointed.

A woman said a building society in the city centre told people in the queue
to disperse saying it no longer had any bank notes.

The situation has been worsened by a strike at Stanbic Bank and Zimbank.
There were also reports that security guards who provide the cash-in-transit
service and deposit money in bulk downed tools demanding a salary rise.

At least 105 striking Stanbic bank workers were yesterday arrested in Harare
by the police after they allegedly tried to mobilise other workers to join
the strike in Harare.

Some Zimbank workers who went on strike last week could be seen milling
outside the bank's branch along First Street.

They are demanding the reinstatement of three non-managerial representatives
on the Finserve board who were suspended for allegedly leaking information
to the media.

Some banks reduced withdrawal limits to clients while others referred
clients to branches in the northern suburbs.

Most were only allowing withdrawals of between $15 000 and $20 000.

"This is so embarrassing and disappointing. I want my money but I can't
withdraw it," complained an account holder with CABS who declined to be

Last month, people struggled to access their money soon after the three-day
job stayaway organised by the Zimbabwe Congress of Trade Unions.

ZNCC president Mr Jim Sanders yesterday said he would engage the Bankers
Association of Zimbabwe and urge it to consider introducing measures that
would contribute to alleviating the shortage.

He called on the Reserve Bank of Zimbabwe to be flexible in its response to
inflation and redouble its efforts to make notes available for use "in cash
transactions that have grown in size and in volume".

Mr Sanders said to alleviate the shortages, banks should introduce measures
such as replacing charges on cash deposits with commissions paid to cash
depositors, suspending charges on electronic or direct debit transactions,
suspending charges on issuance of bank cheques and expediting special
clearances of cheques to within eight hours and reducing the charges.

The ZNCC is also proposing telephone clearance on cheques at the request of
account holders for minimal fee.

Mr Sanders called on retailers to make arrangements with banks and security
companies for the early deposit of cash.

He said the RBZ should increase and maintain confidence in the banking
sector by making sufficient cash available for transactions.

At Stanbic Bank, police spokesman Superintendent Oliver Mandipaka said the
employees started gathering at the bank's Samora Machel branch in the
morning, demanding salary increments from management.

"They wanted to demonstrate against management over salary increments," he

After failing to get an audience with the management, the workers then
allegedly went to other branches forcing others to join the strike.

Supt Mandipaka said the police then intervened and arrested the group at the
bank's Nelson Mandela Avenue branch.

"They were taken to Harare Central and we are charging them for contravening
Section 7b of the Miscellaneous Offences Act because their conduct was
likely to provoke a breach of peace," he said.

By late evening some of the workers had been released after paying fines of
$5 000 each.
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Mugabe faces 'fight back campaign' in SA

      May 28 2003 at 04:53AM

      By Basildon Peta

Exiled Zimbabweans in South Africa say they will hold prolonged but peaceful
demonstrations in front of shops and hotels in South Africa which play host
to President Robert Mugabe, his wife and their cronies.

They are also all for a boycott of these shops and hotels because they would
be conniving in receiving money "stolen" from the Zimbabwean people.

The Zimbabweans threatened to call for the boycott after being angered by a
weekend report that Mugabe's wife Grace had spent about R100 000 in four
days on her latest visit to South Africa.

Mrs Mugabe has resorted to Johannesburg for her shopping sprees after
European and American sanctions slapped on her and the president deprived
her of her favourite shopping destinations.

The Johannesburg Sunday Times said it had VAT refund documents which showed
that Mrs Mugabe had spent the money on clothes, food, pharmaceuticals and

The Concerned Zimbabweans Abroad (CZA), a group representing exiled
Zimbabweans, which has convened successful and well-attended protests
against the Zimbabwean government in South Africa, described her alleged
spending as "grotesquely obscene".

CZA president Jay Jay Sibanda said his group would hold peaceful but
persistent demonstrations in front of all hotels which hosted Mrs Mugabe in

"We will also call on all South Africans who sympathise with the Zimbabwean
struggle to boycott any of these shops and hotels until the struggle for
freedom in Zimbabwe is won," said Sibanda. - Independent Foreign Service
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            MDC will not be part of government if Mugabe resigns
            May 28, 2003, 07:45

            Zimbabwe's main opposition party says it will not take part in a
transitional government should President Robert Mugabe give up power.

            Morgan Tsvangirai, the MDC leader, says the arrangement should
follow Zimbabwe's constitution. This provides for an acting president to be
appointed and elections to be held within three months. Tsvangirai was
speaking to Harare-based diplomats from the G8 industrialised countries.

            Speculation that the 79-year-old Mugabe might leave office
before his current term expires in 2008 was fanned last week when Mugabe
urged his party supporters to openly debate his succession.
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      'Condemn Mugabe on Nigeria junket', Prescott urged

The Tories have challenged Deputy Prime Minister John Prescott to confront
Robert Mugabe over his regime's human rights abuses.

Mr Prescott and the Zimbabwean President are both due to attend tomorrow's
inauguration of Nigeria's President Olusegun Obasanjo in that country's
capital Abuja.

Britain welcomed the outcome of April's elections in Nigeria, which returned
President Obasanjo to power for a second term, as a welcome advance for

But shadow foreign secretary Michael Ancram argued that Mr Prescott should
use the occasion to make clear Britain's attitude to Mugabe's regime.

Mr Ancram said: "The British people are sick of John Prescott's junkets. It
is difficult to see how this visit will help those who are suffering in
southern Africa.

"It would be completely inappropriate for the Deputy Prime Minister to
appear alongside a tyrant such as Robert Mugabe at President Obasanjo's

A spokesman for Mr Prescott said the Deputy Prime Minister had no plans to
meet Mr Mugabe at the inauguration.

The spokesman added: "It is right that Britain should be represented at the
highest level at this event. The elections were the first

civilian-conducted elections in Nigeria for 20 years.

"They represent a landmark in the advancement of African democracy.

"Mugabe's presence should not prevent us attending. Why should Nigeria or
Africa suffer for one man's failings?"

Story filed: 20:29 Wednesday 28th May 2003
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            Consensus on Zimbabwe's Commonwealth suspension
            May 28, 2003, 20:30

            There was consensus among most of the Commonwealth members that
Zimbabwe's suspension from the body should be sustained until December, Don
McKinnon, the Commonwealth secretary general said.

            McKinnon is attending a three-day meeting of Commonwealth youth
ministers in Botswana.

            He said: "Now, that didn't meet everyone's best wish, but this
is a case of what is the best we can get from this situation because no
leader wanted to see the country nor the Commonwealth divided on the issue
of Zimbabwe."

            Zimbabwe has been suspended from the ministerial councils of the
Commonwealth since March last year.

            Last week Australia, which has been pushing for tougher
sanctions against Zimbabwe, issued a damning report to the Commonwealth on
human rights abuses in the southern African country. - Sapa
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This is a long item which I have placed on a separate page. Click Here
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Zimbabwe police arrest women at prayer meeting

HARARE, May 28 - Zimbabwe riot police arrested three women among a crowd
holding prayers on Wednesday ahead of planned opposition protests against
President Robert Mugabe next week, the party said.
       Movement for Democratic Change (MDC) leader Morgan Tsvangirai told a
rally on Sunday his supporters would embark on week-long demonstrations from
June 2 to try to force Mugabe from power and urged people to pray every day
in preparation.
       In a statement the MDC said police armed with batons and tear gas
ploughed into the lunchtime crowd in Harare and assaulted people to break up
the service, which was led by a clergyman.
       ''They also threw tear gas into the crowd (and) chased people in all
directions injuring at least 20 people...At least three women were
arrested,'' it said.
       A police spokesman could not confirm the report.
       Tough new security legislation which Mugabe signed into law last year
outlaws public gatherings without police clearance.
       Mugabe, who has ruled Zimbabwe since independence from Britain in
1980, hinted last Thursday for the second time in two months that he may be
ready to hand over to a successor amid a deepening political and economic
crisis many blame him for.
       But he vowed the MDC, which he calls a puppet of the West, would only
rule ''over our dead bodies.''
       The MDC and labour unions each called strikes earlier this year,
which were among the biggest protests against Mugabe since his controversial
re-election in March 2002 polls that both the opposition and several Western
countries said were rigged.
       Mugabe, 79, denies mismanaging the economy, saying it has been
sabotaged by the West in retaliation for his seizure of white-owned farms
for redistribution to landless blacks.
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Mail and Guardian

Zimbabwe runs out of blood


      28 May 2003 15:03

A shortage of blood and its by-products has hit Zimbabwe, the country's
blood bank said on Wednesday.

The lack of the vital health product has been precipitated by mass strike
actions and scarce fuel and foreign exchange, the National Blood Transfusion
Services (NBTS) said.

Blood, essential in surgical operations, for haemophiliacs and for
transfusions after major accidents, is the latest product to join the list
of shortages in the southern African country.

Among the basics in short supply so far has been petroleum-based fuels,
electricity and bank notes.

Zimbabwe's opposition blames the shortages on economic mismanagement, while
President Robert Mugabe says they are a result of a Western plot to topple

The NBTS said persistent fuel shortages had adversely affected its blood
collection activities, as have the nationwide anti-government work stoppages
staged in recent months.

NBTS mobile units normally move to schools, factories and commercial offices
collecting blood from donors, but the lack of fuel and work boycotts have
impacted negatively on the collection.

The combination of shortages and strikes "has led to shortages and
intermittent supply of blood and blood components to hospitals nationwide",
the NBTS said in a statement on Wednesday.

"The foreign currency shortage has put severe and enormous pressure on NBTS,
as the import of essential plasma derivatives is no longer possible," it

Plasma is essential for transfusion to haemophiliacs and is imported because
the country does not have the technology to extract it from donated blood.

A spokesperson for the NBTS said everything that is imported, including test
kits and anti-D, administered to Rhesus-negative mothers shortly after
giving birth, were in short supply.

The blood bank said donors were also feeling compromised because the
traditional "donor comforts" or refreshments given to them after donating
blood were not readily available. - Sapa-AFP
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Zimbabwe Opposition Tries to Force Mugabe to Negotiating Table
Tendai Maphosa
28 May 2003, 17:23 UTC

Zimbabwe's main opposition party, the Movement for Democratic Change, has
called for mass protests starting June 2.

There have been differing interpretations of the mass action in various
media, but the secretary-general of the Movement for Democratic Change,
Welshman Ncube, said ousting President Mugabe is not on the agenda.

"It has never been the removal of Mugabe from office, the objective is
always a re-run of the presidential election as far as we are concerned,
that election was conducted unlawfully and illegally and the objective of
the mass action is to return to legitimacy," he explained. "The MDC has
never wanted to walk to State House, the MDC has never wanted the
installation of its candidate as president; we want the president to be
properly elected."

The government has warned that it is going to be tough on anybody who
participates in the demonstrations. For the past few weeks there have been
police roadblocks on roads around the capital, but Mr. Ncube says his party
has no choice but to protest.

"We are painfully aware of the risks that are involved; we are dealing with
a regime, which is known for its brutality and for its lack of respect for
human life," he said. "But unfortunately there is no freedom which comes
without a price, if Mugabe wants to shoot peaceful people; unarmed, all they
will be carrying are placards and he wants to live with that in his
conscience, let it be."

The MDC called for a two-day general strike in March. That action was widely
observed, and the party threatened to follow it up with more action if the
government did not seriously start to address the political and economic
issues facing the country. The government dismissed the MDC's demands, but
the stakes are much higher now as the economy continues to deteriorate.

Mr. Ncube says he is aware that next week's demonstrations might not force
Mr. Mugabe to the negotiating table, but he adds that his party is prepared
to keep on looking for other ways to keep pressure on the president.
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National Post, Canada

Getting rid of Mugabe
Wednesday, May 28, 2003
According to every measure, Zimbabwe should rank as one of Africa's most
prosperous nations. Its 14 million people live in a land blessed with
plentiful fresh water, fertile farmland and a variety of valuable mineral
resources. The country also has a literacy rate close to 90%, a politically
engaged population and (until recently) an active press.

But Robert Mugabe, Zimbabwe's long-time President, is putting all this
potential to ruin -- and might even be driving the country toward the sort
of humanitarian tragedy currently on display in places like Sierra Leone and
Ethiopia. Last week, during a ministerial-level meeting of the Commonwealth,
Australia presented a report documenting the damage done to Zimbabwe in
recent years by Mr. Mugabe. It damns the man as an erratic dictator willing
to drive his country into chaos so he can retain power.

Thanks to Mr. Mugabe's demagogic campaign to wipe out Zimbabwe's white
farming class, the country -- once Africa's breadbasket -- cannot feed
itself. Displaced whites say Zimbabwe's annual corn production has fallen
80%. Three-quarters of Zimbabwe's commercial farms lie abandoned: The thugs
deployed by Mr. Mugabe's ruling ZANU-PF Party to force whites off their
property haven't the slightest idea how to cultivate crops. Nor do the
landless black peasants brought in by Mr. Mugabe. Lacking capital and
expertise, many have abandoned their new properties to the elements, and
have joined the 7.5-million Zimbabweans who face starvation.

The Australian dossier also exposes Mr. Mugabe's murderous efforts to
suppress political dissent. Over the past 18 months, the President's goons
have arrested and tortured nearly 50 members of the nation's largest
opposition group, the Movement for Democratic Change.

As Australian Foreign Minister Alexander Downer sees it, Mr. Mugabe's regime
will end in one of two ways. One scenario is for the President to be
violently overthrown in a "bloodbath." The other is for the senior members
of the "ZANU-PF to go and tap President Mugabe on the shoulder and say:
'Time is up. You are off.' " In December, the 54-member Commonwealth will
meet in Nigeria; the question of how to encourage the second option is
already scheduled for discussion.

Zimbabwe has already been suspended from all Commonwealth councils. And
Australia has made it clear that it will use the December summit to press
for the Commonwealth to slap Mr. Mugabe's government with economic sanctions
as well. We hope Canada will lend assistance to Australia with all the
necessary diplomatic spadework in this regard. The Aussies will need our
help, as many of the Commonwealth's African members -- especially South
Africa -- will likely side with Mr. Mugabe in a misguided attempt to
demonstrate pan-African solidarity.

Last year, Jean Chrétien flinched on the Zimbabwe file. During a
Commonwealth meeting in March, Britain and Australia sought to sanction Mr.
Mugabe's government. But the Canadian PM undermined the initiative by siding
with the African delegates, who were reluctant to ostracize the Zimbawean
President. This was an error on our PM's part. We expect he will not repeat
it in December.
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Zim turns to black market
28/05/2003 20:40  - (SA)

Harare - Zimbabweans this week turned to the black market to buy the local
currency as a two-month-old cash crunch deepened.

The demand for cash shot up even further in recent days coincide with
month-end pay time and the threat of a nationwide anti-government strike
expected next week.

Queues of thousands of people form daily at banks and stretching outside the
banking halls and automated teller machines (ATMs).

Many start queueing outside the banks early in the morning, hours before
they open, to secure first positions as the banks are limiting the maximum
withdrawals as little as $12.50.

At some banks near stampedes have been witnessed as clients are locked
outside due to the chronic shortages.

Commercial banks and other organisation desperate for cash have reportedly
resorted to buying money from retailers and individuals who are known to
have cash.

Banks have reportedly been approaching companies and individuals who are not
their clients to buy cash from them at commission rates of up to five

Commercial banks say the daily average maximum allocation of cash they are
receiving from the central bank has slashed from $112.5m to $37.5m.

Economists are warning that if the situation is not contained it could send
people onto the streets to coincide with the opposition protest called over
the country's crises.

The cash shortages have been caused by runaway inflation, lack of confidence
in the political situation and shortages of foreign exchange to buy paper
and ink to print the notes, economists say.

Zimvbabwe's official inflation rate stood at 269% last month and is expected
to continue on the upward trend.

Inflation has eroded the value of money such that people need to carry much
more cash to go buy groceries than previously.

"The value of our money has gone down dramatically over the past two months
and it required that the Reserve Bank print more money but the supply has
not been able to match demand," said James Jowah, chief economist of the
Zimbabwe National Chamber of Commerce (ZNCC).

The central bank does not have foreign exchange to import a special ink and
paper to print notes. Media reports say it cost the central bank between
Z$700 and Z$800 to print a $500-note, the highest demonination of the
Zimbabwe currency.

The central bank has not commented on the cash shortage.

Economists also blame the "hostile political environment" for cash

The country has since the beginning of the year seen two national strikes
called by the opposition and labour movement lasting for several days.

"Let the politics of it be resolved and we will have the confidence coming
back and restored in the system because right now people are hoarding money,
they are keeping their cash under the pillow rather than take it to the
bank," said Jowah.

Economists warned that people's patience has been running out with some
having to queue for days to cash their pay cheques.

"People are going to turn impatient and it might push everyone to the
streets, people are angry, people are going hungry not because they don't
have money but because they cannot get cash from the banks," warnbed
Jowah. - Sapa-AFP
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'Africa Reaps What the World Sows - With a Vengeance'

United Nations (New York)

May 28, 2003
Posted to the web May 28, 2003

Stephen Lewis
Washington, DC

Speech by Stephen Lewis, UN Special Envoy for HIV/AIDS in Africa, to the
Global Health Council's Annual Conference, Washington, Wednesday, May 28,

I sometimes think that the continent I love, and the continent to which my
UN role is devoted - Africa - is under some kind of other-worldly curse. So
many factors conspire against it that one could imagine inexplicable forces
at work, except that we know, we emphatically know, that every factor
haunting Africa has a quite straightforward explanation.

It's the relationship amongst the factors that we sometimes fail to
understand. What I therefore want to do in this speech is to make the
connections and attempt to demonstrate that Africa reaps what the world
sows, and with a vengeance.

In January of this year, along with James Morris, Executive Director of the
World Food Program, and a number of UN agency experts, I made a trip to four
countries in Southern Africa on the verge of famine: Lesotho, Zimbabwe,
Malawi and Zambia. The reason was to explore the link between food shortages
and HIV/AIDS. Morris had been there in September of last year and was
palpably stunned by the carnage exacted by AIDS. I was there in December of
last year, and I was equally aghast at the way in which AIDS was deepening
hunger and hunger was deepening AIDS.

The assumption, shared by many, was that drought and erratic rainfall were
the primary culprits leading to the food shortages, and that poor
agricultural policies and poor planning had made a bad situation desperate.
We came to a different conclusion. While there's no question that weather
played a powerfully destructive role, there's equally no question that
HIV/AIDS was the heart of the matter. We said so. Let me quote from our
report: "It has taken the loud emergency of a severe food shortage affecting
15.1 million people to demonstrate . the insidious potential of HIV/AIDS to
undermine entire societies and nations . HIV/AIDS is the most fundamental
underlying cause of the Southern African crisis . the link between food
security and HIV/AIDS must be fully recognized".

The shredding of the agricultural economy, driven by AIDS, has even spawned
a persuasive academic construct called the "New Variant Famine". It's based
on an analysis that argues that the presence of AIDS changes everything, and
that nothing is as it was before.

In previous episodes of hunger and famine, the toll was taken on the very
young and the very old. In this age of AIDS and food insecurity, it is the
productive age group in its twenties, thirties and forties who are paying
the ultimate price. In previous episodes of hunger and famine, there was
always a huge quotient of resilience which allowed beleaguered communities
to bounce back. In the present circumstance, even where sound policies are
in place, the coping strategies of communities and families are so mangled
and eroded by AIDS that full recovery simply isn't possible. In previous
episodes of hunger and famine, there was still time for the parents,
especially the agricultural workers, the mothers, to teach the children
about alternative agricultural techniques and foraging for food. Now the
parents are so often sick or dead that the transfer of knowledge between
generations cannot take place. Inevitably, the theory of the New Variant
Famine has its detractors. That always occurs with the pandemic: denial is
Pavlovian. But I must admit that I have little patience for it.

You need no more than empirical evidence, your own eyesight, your own
commonsense to understand what is happening. When one travels through those
rural villages and hinterlands, as I have done for the last two years, the
human toll is desolating. The immune systems of huge numbers of women
farmers are desperately weak; seven million agricultural workers have died
of AIDS since 1985, FAO estimates that another sixteen million may die by
2020; the household assets have been exhausted by attending to parental
illness; children have been pulled out of school to care for sick and dying
parents, losing, in the process, the one meal a day that might have been
available from a school feeding program; malnutrition is everywhere evident;
fields are left untended; crops aren't grown; food isn't taken to market,
and if it is, no one has money to pay for it . what we're talking about here
is the way in which this virus - the cause of the most appalling
communicable disease in human history - attacks the fabric of every sector,
making the interplay of health and agriculture but one more shortcut to

When the body has no food to consume, the virus consumes the body. That's
the essential meaning of the New Variant Famine. For millions of Africans
already infected by HIV, the onset of full-blown AIDS, and the rapid descent
to death is the inescapable finale of a shortage of food. And the shortage
of food, in its turn, opens up new pathways for the virus to spread.

To say that, however, is only part of the story. The other part is indeed
the destructive weather patterns which I referred to earlier on. This is
where the plot thickens.

The weather cycles for large swathes of Southern Africa are decidedly
unfriendly. Even while our mission was traveling, we witnessed violent
extremes in individual countries . intolerable heat and drought in one
region, massive downpours and flooding in another. There was something
eerily primordial about it: climate ricocheting like some biblical pox. In
Lesotho, the government even told us of hailstones and frost at a time of
year when hailstones and frost had never gone before. There were whispered
mutterings of the El Nino effect. Predictably, in combination with HIV/AIDS,
and agriculture in crisis, the weather became a bizarre roiling feature. I'm
surprised that no one has yet coined the term "New Variant Weather".

What we're dealing with in southern Africa, entwined with everything else,
make no mistake about it, is the most ominous environmental threat on the
planet: climate change.

What's happening should come as no surprise. Back in June of 1988, I found
myself chairing, in Canada, what became known as the first International
Conference on Climate Change. It consisted of visceral exchanges between
scientists and politicians, with the scientists ultimately prevailing. The
conference statement began with one of the starkest pronouncements yet
uttered about global warming; a pronouncement with which many would now
agree: "Humanity is conducting an unintended, uncontrolled, globally
pervasive experiment whose ultimate consequences could be second only to a
global nuclear war". The statement then went on to identify a number of
damaging consequences of climate change, amongst which two stand out: the
direct peril to human health, and the diminution of food security, as a
result of uncertainties in agricultural production, particularly in
vulnerable regions.

Let it be understood that the findings of that original conference have
since been confirmed time and again by the Intergovernmental Panel on
Climate Change, a multilateral consortium of several thousand scientists
whose words, carefully chosen, are seen - except by professional apologists
for corporate and political interests - as definitive positions on global

The 2001 "agreed statement" of the IPCC, in a section specifically devoted
to Africa, raises the following concerns: Quote: "Adaptive capacity of human
systems in Africa is low due to lack of economic resources and technology,
and vulnerability high as a result of reliance on rainfed agriculture,
frequent droughts and floods, and poverty". Quote: "Grain yields are
projected to decrease for many (climate) scenarios, diminishing food
security .". Quote: "extension of ranges of infectious disease vectors would
adversely affect human health in Africa". Quote: Increase in droughts,
floods and other extreme events would add stress on water resources, food
security, human health . and would constrain development in Africa".

On the one hand, then, you have the poisonous interaction of hunger and
AIDS, and on the other you have the debilitating interaction of agriculture
and weather. It is my contention that everything is related; it's a cyclical
pattern of Western neglect and self-centredness, juxtaposed with African
disasters and death.

These problems must be seen as global, in every sense of the word. So must
the solutions be global.

Just yesterday at the White House, there was a celebratory signing of the
President's laudable initiative to provide $15 billion over five years to
fund the fight against HIV/AIDS. It is no caviling on my part to point out
that only $200 million of that large sum is guaranteed, per year, to the
Global Fund on AIDS, Tuberculosis and Malaria. The Global Fund is the best
new international financial instrument in the last many years to confront
these annihilating communicable diseases, AIDS in particular. It was
fashioned by experts with a worldwide overview of this vast pandemic, and a
clear understanding of how to address it in a coordinated way. The Global
Fund has already programmed over $1.5 billion for 150 projects in 92
countries, and it's been programmed in response to proposals submitted by
the countries themselves, reflecting a government/public consensus on the
priorities within those countries.

And now the Global Fund is virtually out of money. According to the GAO, the
Government Accounting Office here in the United States, the Fund needs at
least $5 billion for 2003 and 2004 alone, and that money is nowhere in
sight. A third round of proposals for the Fund is to be held this October,
but you can't approve proposals without the dollars to make them real. The
G8 meets in three days' time. There is not a single G8 country which has
even pledged, let alone delivered, an equitable amount to the Fund. Will
that change next week? I very much doubt it, and even if it marginally does,
it will leave the Fund limping into next year, unable to deliver on its
promises, and on the huge human expectations which hang in the balance.

It's not possible to rescue the vulnerable countries in southern Africa
without the resources. The United Nations can appeal for and distribute food
aid to stave off starvation, and it has magnificently done so, but
everything is stop-gap, everything is ad hoc, unless the pandemic itself is
turned around. What is so intolerable about the continued funding crisis -
UNAIDS estimates that we will need, globally, $15 billion a year by 2007 for
AIDS alone - is not just the staggering loss of life, so much of it
completely unnecessary, but it's what it says about us, the donor nations,
and our lamentable, incomprehensible behaviour. Is it that the price tag is
simply too high for the world to bear? I think not. This week's Economist
gives us a clue to our priorities: the global perfumes industry is worth $15
billion - per year.

And that's what I mean about the cycle and the self-centredness. Our
collective refusal, thus far, to significantly reduce our dependence on
fossil fuels, and as a result of that refusal, to continue to blight the
planet with carbon dioxide emissions, plays itself out, yet again, at the
expense of Africa. We're responsible for climate change. We're responsible
for the extremes of weather. It's our greed which serves to compromise, in
significant part, food security in Africa, and stokes the pandemic in the
process. Even the Kyoto accord promises little relief, so ambiguous is its

When you're dealing with AIDS, every major international public policy has
an impact, and so far those policies are a nightmare for Africa. Official
Development Assistance has fallen to abysmal levels. Environmental
legislation is hostage to the insatiable lust for resources. North American
and European agricultural subsidies doom African agricultural trade. Debt
relief for developing nations is a profound disappointment. Despite what was
thought to be a breakthrough at Doha, access to pharmaceuticals remains
suffocated by patents and intellectual property rights.

We know what we're doing, and we do it anyway. It's as though we have chosen
to pursue and protect our own prosperity and comfort at all costs, and then
have dehumanized Africa so that we can live with ourselves. It's as though
the communities, families, women, children, orphans are figments, illusions,
abstractions. We're not barbarians; we don't choose willfully to kill and to
maim. But in watching and neglecting and allowing and, incredibly enough,
abetting the cumulative loss of life in Africa, which we know we could bring
to an end, we have become the latterday King Leopolds of the continent.
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      Board shoots down ZESA bid

      Sunsleey Chamunorwa Editor-In-Chief
      5/29/03 11:07:49 AM (GMT +2)

      THE Zimbabwe Electricity Supply Authority (ZESA)'s intentions to
borrow a staggering US$270 ($222.5 billion at the official exchange rate)
from Aiwana Manage International Funds (Labuan) PTE Ltd (Amil Bank) of
Malaysia to finance the huge capital burden of its projects, have come
unstuck after the board of directors flatly refused to give the nod to the
power utility's request to borrow.

      The request to borrow offshore loomed large on the agenda during last
Wednesday's special board meeting. It was however immediately shot down by
the board, which felt that the cost of the funds, which were scheduled to be
repaid over a 10-year period, were prohibitive.

      Instead, some board members said, it was suggested that ZESA should
look elsewhere for funds. The board members suggested that the power utility
could tap into a facility put in place by an Indian company, Water and Power
Consultancy Services (WAPCOS).

      Well placed sources said the ZESA board would meet Energy and Power
Development Minister Amos Midzi today to appraise him on why they refused to
sanction the Malaysian deal as well as discuss its position "on other issues
pertaining to the electricity sector reform".

      The Marketforce Business Solutions (MBS) issue, which was rejected by
the board when it was suggested that they be appointed consultants for the
power sector reform, is understood to have been sneaked onto the agenda for
today's meeting with the minister even though the board felt that this was
already water under the bridge.

      ZESA executive chairman Sydney Gata, who yesterday played down the
failure of the proposal, could only say "the board made some recommendations
and we will meet the minister tomorrow (today) over the issue."

      The board members sought to meet Midzi following an emergency meeting
convened on Tuesday this week to grill them on the leakage of the
deliberations of last week's special meeting to the Financial Gazette as
well as sniff out the suspected mole.

      At Tuesday's emergency meeting, some officials at ZESA wanted the
board to issue a statement in the press to among other things, deny the
Fingaz story and state that they had approved the appointment of MBS of
Australia to provide consultancy services on the electricity sector reform
programme, which is not however true. By last night board members were still
huddling over the contents of the statement meant to deny our story.

      This was despite the fact that Gata himself had early this week said:
"At first we thought that the story could have been leaked to you by
secretaries and the drivers who normally deliver papers to board members.
But then secretaries do not attend board meetings and the papers were this
time given to board members during the board meeting. This one could only
have been leaked to you by some one who attended the meeting because it was
based on our deliberations. I have tried to suppress the need for an inquiry
but I am under pressure and I suspect that the story was given to you by one
board member who refused to have lunch with us on the pretext that he was
going for a funeral although we later discovered that there was no funeral
at all. That is why the committee tasked with drafting the press statement
on your article asked him to sign. This was done for a particular reason,"
said Gata, in his tacit admission that indeed our story captured the essence
of the board's deliberations.

      Although Gata would not give details as to the recommendations of the
board after it rejected ZESA's request to borrow from Malaysia, the Indian
facility, some board members said, attracted less interest charges than the
Malaysian facility. Among other things, the Malaysian facility would attract
a four percent management fee, funding processing fees of four percent and
Amil Bank's two percent intermediaries fees. Collaterals for the facility
included a Prime Bank guarantee with a face value of twice the average
annual repayment amount of US$54 million.

      The funds ZESA sought to borrow could have been the first of a
US$1.718 billion tranche arranged by Metropolitan Bank of Zimbabwe between
ZESA and Amil Bank. It could not however be immediately ascertained whether
ZESA had been, as required by law, granted approval to borrow by the
Ministry of Energy and Power Development. This ministerial approval is also
required for purposes of application to the Reserve Bank of Zimbabwe's
External Loans Coordinating Committee for final approval.

      In fact, on May 13 2003, Jaison Mapillar, Metropolitan Bank's manager
for corporate finance and Gerald Chihota, the bank's assistant general
manger for legal services, wrote to Gata advising that there was need for
both ministry and board approval for the facility.

      ZESA's request was only tabled at last week's special board meeting
held at the Electricity Centre in Harare. The request by ZESA, which comes
just about a year after it waded into local capital markets to tap into its
usual Zimbabwe dollar investor base, where it passed the hat around to raise
$5 billion, follows a recent visit to Malaysia by Gata.

      Gata who last week suffered a bruising setback when the ZESA board
rejected his proposal to appoint an Australian firm to provide the Ministry
of Energy and Power Development with consultancy services with regards to
the electricity sector reform, went to Malaysia in February this year.

      During his visit, documents in our possession show, Amil Bank
expressed interest in financing some of the projects under ZESA's Power
Sector Development Plan. The Malaysian bank was particularly interested in
the field of generation expansion, the reinforcement and expansion of
transmission and distribution systems to provide adequate grid capacity and
grid access for rural development and expanded irrigation schemes.

      This development comes at a time when the nation remains transfixed by
the prospects of a return to normal power supplies amid intermittent power
cuts that have continued to further tighten the screws on the previously
robust economy which is now suffering ill health.

      Although Zimbabwe has just welcomed a sprinkling of better corporate
results from those companies with a half year end of March 31, most
companies are already beginning to feel the profit pinch resulting from load
shedding and biting fuel shortages. This will mostly be underlined by a weak
showing at the interim stage especially by those companies whose half year
end is on June 30.

      ZESA has been forced to implement load shedding, which has since
played its part in weighing down the already stricken economy because it
does not have the foreign exchange to service electricity import

      As a temporary relief option, board members who refused to be named
yesterday said ZESA last Wednesday requested for board approval to borrow
US$20 million from Standard Corporate and Merchant Bank of South Africa to
service electricity import requirements.

      This facility, which would be payable over 18 months in six equal
quarterly instalments of US$3.3 million, would be secured against the
proceeds of ZESA's exporting customers being billed in foreign currency. The
exporting customers will pay their bills into ZESA's Offshore Escrow Account
with Standard Bank Mauritius. The account whose number is 0111 040061314 is
administered by Stanbic Bank of Zimbabwe.

      The Minister of Finance and Economic Development, Herbert Murerwa, on
April 24 2003 wrote to Stanbic Bank managing director Pindi Nyandoro
confirming that the Exchange Control Department at the Reserve Bank of
Zimbabwe and his ministry had approved the offshore Escrow Account.

      ZESA has been having serious problems settling its power import bills
due to the severe shortages of foreign currency. This has resulted in the
curtailment of power supplies from Hidroelectrica de Cahora Bassa (HCB) of
Mozambique to the magnitude of 300MW and serious threats of similar action
by other regional utilities such as ESKOM of South Africa and Societe
Nationale d'Electricity (SNEL) of the Democratic Republic of the Congo.

      To find a way round this crisis, the government has among other
things, proposed the privatisation of some of the ZESA assets to allow for
the expansion of the country's electricity generating capacity. Those that
are immediately earmarked for a sell-off are Hwange and Kariba South
electricity generating assets in which government is prepared to dispose of
50 percent.

      ZESA is understood to be already casting around for possible strategic
partners in the Hwange and Kariba assets. However, although these are some
of the state assets that could easily be disposed of at an attractive price,
whatever the market conditions, ZESA could be compromised by the fact that
it is an anxious seller, which is not the easiest bargaining position to
start from.
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      GMB imports $15b wheat

      Hama Saburi Deputy Editor-in-Chief
      5/29/03 10:59:24 AM (GMT +2)

      THE Grain Marketing Board (GMB), moved in swiftly to avert the
collapse of the baking industry by importing 62 000 tonnes of wheat at an
estimated cost of $15 billion (US$18.9 million).

      The wheat, which has saved about 10 000 jobs that could have gone
under, landed through Mozambique last week.

      GMB officials are, however, still ironing out a few logistical issues
to get the wheat to major milling companies before the end of this week.

      State-run GMB still require at least 140 000 tonnes of wheat to offset
the yawning deficit between now and the next harvest, which is expected in

      Acting GMB chief executive, Samuel Muvuti, was not available for

      A senior GMB official told The Financial Gazette that the parastatal
would deliver imported wheat directly to millers without going through its
depot to ensure it gets to the market on time.

      The official said: "Our major problem at the moment is transport and
the unavailability of fuel as well."

      A tonne of wheat costs between US$240 and US$300 in major wheat
producing countries such as South Africa, Canada, the United States of
America, Argentina and Australia.

      The baking industry has been hit by a shortage of wheat blamed on the
controversial land reform.

      Disturbances in the commercial farming sector, which produces 90
percent of Zimbabwe's wheat, have made it difficult for 60 percent of
large-scale producers to plant their crop this year.

      Major bakeries are currently allocated about 6 000 tonnes of wheat a
week, which is not enough to maintain full production.

      Armitage Chikwavire, Bakers Association of Zimbabwe chairman, said GMB
had assured millers and bakers that the supply of wheat will improve soon.

      A major confrontation is already looming between bakeries and
government after the former took an unofficial stand to increase the price
of bread to $350 against the gazetted price of $250.

      Chikwavire, said production costs had gone up significantly,
overtaking the government-gazetted price.

      The association would be handing a letter to the Minister of Industry
and International Trade, Samuel Mumbengegwi, requesting an increase in the
price of bread from $225 to $350.

      Bakers are importing diesel at $1 500 a litre against the pump price
of $200, while flour is being sourced from millers at $147 000 a tonne
against the gazetted price of $102 000.
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      Zim MPs excluded from C'wealth/WTO S Africa meeting

      5/29/03 11:00:55 AM (GMT +2)

      LOCAL Members of Parliament (MPs) were the only legislators from the
54-membrer Commonwealth grouping excluded from attending the club's joint
meeting with the World Trade Organisation held in South Africa last week.

      Sources who attended the meeting said some MPs who questioned Zimbabwe
's exclusion were told that it was a result of the southern African country'
s suspension from the Commonwealth.

      Zimbabwe was suspended from the grouping in April last year for
alleged human rights abuses.

      The grouping upheld Zimbabwe's suspension early last month until the
Commonwealth heads of government meeting scheduled for December.

      Bernard Kuiten, the External Relations Division officer for WTO could
not be drawn to comment on the issue.

      The meeting was jointly organised by the Commonwealth Parliamentary
Association and WTO to come up with a common position ahead of the Mexico
ministerial meeting to be held in September this year.

      Zimbabwe's suspension has threatened to split the grouping along
geographical lines, with most African countries saying the country has no
case to answer.

      At the meeting, Botswana's Ambassador to Geneva, Charles Ntwaagae,
noted that there was a general lack of coherence in WTO discussion, among
southern African countries.

      Since the 2001 Qatar, Doha, there has been a number of outstanding
issues important to the region.

      They include specific issues on agriculture, trade in services and
public health.

      To date, only fairly modest progress has been made on the Doha
negotiations, but of major concern has been slippages on various deadlines,
which were set at the then Qatar ministerial conference.

      - Staff Reporter
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      High Court shifts ruling on privilege certificate validity

      Cyril Zenda Senior Reporter
      5/29/03 11:02:44 AM (GMT +2)

      THE High Court yesterday postponed to today the ruling on the validity
of a certificate of privilege blocking a key witness in the treason trial of
three MDC leaders from divulging information on covet operations of the
local spy agency.

      Judge President Justice Paddington Garwe, who is presiding over the
trial, did not give reasons for postponing ruling on the matter.

      The certificate issued last week by State Security Minister, Nicholas
Goche, is meant to gag Central Intelligence Organisation (CIO)
director-general Happyton Bonyongwe, from disclosing to the court activities
of the agency.

      Bonyongwe is the State's key witness in the treason trial of MDC
president, Morgan Tsvangirai, the party's secretary-general, Welshman Ncube
and its agriculture secretary, Renson Gasela.

      If convicted, the MDC officials face a possible death penalty.

      In issuing the certificate, Goche argued that devaluging information
on CIO's operations compromises the country's security.

      The defense team is interested in documents such as invoices, letters
and receipts, which were exchanged between the government and Dickens and

      It is also keen on knowing the services Zimbabwe got from the
Canadian-based political consultancy firm, for which it was to be paid over
US$1 million.

      Bonyongwe refused to give a break down of the services and the money
paid to the consulting firm.

      He said some of it was used to pay CIO's covet operations adding that
the agency was not legally required to account for the money.

      The defense team, headed by George Bizos is adamant that in the
absence of full information on CIO's role, it would argue that the money was
paid for Dickens and Madson to manufacture some 'evidence' and to secure the
conviction of MDC leaders.

      At the beginning of the trial in February this year, Goche issued a
similar certificate stopping the key witness in the trial, Ari Ben-Menashe,
from revealing details of his firm's contract with the government.

      Justice Garwe declared that the certificate, which was used to protect
what Goche called "classified" information was invalid.

      Dickens and Madson, headed by Ben-Menashe, exposed the alleged plot by
the MDC leadership to assassinate President Mugabe ahead of last year's
presidential poll.
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      Retail banks suspend issuing personal loans

      Godfrey Marawanyika Senior Reporter
      5/29/03 11:04:01 AM (GMT +2)

      TWO retail banks have stopped advancing personal loans to reduce their
exposure after drastic increases in minimum lending rates.

      Minimum lending rates firmed across the banking sector a fortnight ago
from around 55 percent to 75 percent, forcing risk-averse institutions to
halt loan facilities and digested the consequences of continued lending.

      No comment could be obtained from the Bankers Association of Zimbabwe
president, Washington Matsaira and his vice, Jerry Tsodzai.

      The deteriorating macro-economic environment has exposed the banking
sector to a number of risks.

      It is becoming difficult for clients to service debts in view of
rapidly declining disposable incomes.

      Zimbabwe's economy continues to shrink, contracting by an estimated 10
percent last year on the back of spiraling inflation, chronic foreign
currency shortages and declining savings.

      A number of banks have already collapse in the past few years because
of non-performing loan books.

      The late Roger Boka's United Merchant Bank was the first to go under
in 1998 followed by Universal Merchant Bank.

      The Zimbabwe Building Society had to be saved by the Reserve Bank of
Zimbabwe and has since turned around the corner under the leadership of Ben

      Problems facing the banking sector have been worsened by the liquidity
crunch characterised by the shortage of bank notes.

      An economist with a local bank, said that the suspension of personal
loans by the two commercial banks was not surprising at all.

      "Due to high interest rates, credit risk has increased. So by
withdrawing loan facilities, banks are trying to minimise their exposure to

      "Instead, banks would now be dealing with clients on a personal basis,
when it comes to loans," he said.

      Independent economist, John Robertson, said the banking sector has
also run out of money to on lend.

      Robertson said: "The only explanation is that some of these banks do
not have money to start with. Since interest rates are not encouraging, this
leads to people keeping their money at home. This also saves them the hassle
of having to queue for their money and at times failing to get it."

      Before the current increase in interest rates, banks were exposed to
the chaotic land reform, which saw most financial institutions getting
saddled with bad loan books.

      A number of banks are still to recover funds advanced to commercial
white farmers who were displaced during the fast-track land reform.
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      Black indigenous players dig into mining sector

      Hama Saburi Deputy Editor-In-Chief
      5/29/03 11:05:26 AM (GMT +2)

      INDIGENOUS black Zimbabweans, previously condemned to the sidelines,
are making inroads into the mainstream mining sector, where they have become
major players.

      Crafty indigenous entrepreneurs, inspired by the achievements of
fellow black South Africans in the capital-intensive sector, have found ways
of breaking through barriers that had kept them on the sidelines.

      They have either teamed up through consortiums in a bid to stiffen
their financial muscles or ventured outside Zimbabwe's borders in search of
foreign partners with both the technical expertise and solid balance sheets.

      Analysts said participation by indigenous people in the mining sector
was minimal because of heavy capital outlays required for new and existing

      The banking sector, which was externally controlled before 1990, was
tough on collateral, which not many indigenous people could provide.

      Of late, there has been a change of heart in the financial sector on
the back of the proliferation of competing banks.

      A local stockbroker said: "To a greater extent, most big mining houses
now have local interests in their share registers apart from the mere
presence of black faces on board."

      The government's policy of creating economic space in key economic
spheres ensured that foreign capital is augmented with investments from
indigenous groups.

      Early in the year, Mwana Africa acquired a significant stake in
Bindura Nickel Corporation, which is listed on the Zimbabwe Stock Exchange

      The consortium, linked to business magnate, Oliver Chidawu, pounced on
the opportunity presented by Anglo American Corporation Zimbabwe (Amzim),
when the South African-based natural resources group pulled out of the
nickel producer.

      Another consortium led by astute banker, Mthuli Ncube of the Barbican
Holdings Limited fame, recently wrestled control of a 30 percent
shareholding in Independence Gold Mine.

      Indigenous entrepreneurs will soon jostle for a 15 percent stake in
platinum group metals producer, Zimbabwe Platinum Mines (Zimplats),
following the National Investment Trust's (NIT) failure to purchase the

      A fierce tussle for ownership could also erupt in Unki Platinum Mine
near Gweru, where Amzim is offering a 20 percent interest to locals.

      Substantial shares have also changed hands on the ZSE with estimates
indicating that 20 percent of the net-worth in listed mining could be in the
hands of blacks.

      Chamber of Mines president, Abel Ntini, said the mining sector was
taking a cue from South Africa, where Mzi Khumalo and other top business
people have become major players.

      The South African government requires blacks to control a minimum
stake in all mines.

      Ntini said: "There are various scenarios through which empowerment can
be achieved. The scenarios should take into account the need to have
participants take a long-term view of the industry by appreciating the high
risks involved from exploration, through mine development, exploitation,
processing and beneficiation, and finally marketing of mineral products."

      Other countries have introduced "flow-through share schemes" to raise
funds for new mining projects. Investors who purchase shares benefit from
tax rebates on money used to buy the stock.

      More could be achieved if indigenous people gain access to affordable

      Mining projects take long to earn returns since much of the time is
spent on exploration and developing the infrastructure.

      Roy Pitchford, managing director of Zimplats, said production of
platinum picked after the introduction of fiscal incentives.

      The government can easily step up production and investments in other
minerals by extending incentives offered to platinum producers.

      "Investment incentives such as those granted to the platinum sector
are essential in developing countries in order to attract the large sums of
foreign investment required to develop mines," said the Zimplats boss.

      Mining is a key export earner in Zimbabwe.

      In 2001, the industry contributed 3.9 percent to the gross domestic
product from 4.3 percent in 1995.

      The harsh economic environment has rocked stability in the mining

      Inflation, which picked 269.2 percent last month, has progressively
increased production costs resulting in the closure of marginal producers.

      Major producer of inputs fed into the mining sector have been weighed
down also by the shortage of fuel, power cuts and the shortage of foreign
currency resulting in volumes of most minerals declining sharply in 2001 and
last year.

      Zimbabwe has seen a marked improvement in asbestos, black granite,
copper, fireclay, high carbon ferrochrome, limestone, slate and vermiculite.

      The production of gold, emeralds, kyanite and quarts rough has gone
down, impacting on foreign currency earnings used to import fuel and

      Up until 1998, Zimbabwe was the third largest producer of gold in
Africa after South Africa and Ghana. The entry of Mali and Tanzania into the
league of major gold producers, caused Zimbabwe to slip to number five.

      The Chamber of Mines president said there should be commitment in the
implementation of the new economic revival plan to rescue the industry from

      He said foreign currency should be made available to companies
supplying inputs to the industry such as Wankie Colliery Company (WCC) and
Buchwa Mining Company (BIMCO).

      WCC is the sole coal producer, while BIMCO produces limestone and

      "There is need to restore trust between business and government by
ensuring that transactions are transparent.

      "The mining sector has been erroneously accused of stashing away
foreign currency and yet it is the easiest sector to track since gold is
sold at the reserve bank and other minerals through MMCZ (Minerals Marketing
Corporation of Zimbabwe.

      "A recent assertion by ZESA (Zimbabwe Electricity Supply Authority)
that because mines are consuming more power without necessarily increasing
foreign currency inflows, they are stashing foreign currency abroad fails to
recognise the fact that because of poor grades, mines need to mill higher
tonnages to maintain same levels of production of metal and in the process
they consumer more power," he said
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      ZSE overheating?

      5/29/03 10:06:48 AM (GMT +2)

      THAT the Zimbabwe Stock Exchange remains the only seaworthy vessel for
local investors is beyond argument. Everyone has been waxing lyrical about
the phenomenal and largely uninterrupted rally.

      Despite the gloom that has enveloped the economy for a couple of years
now, the bourse has sailed through those years without encountering any
banana skins as it were. In short, the ZSE, arguably one of the best
performing emerging markets in the world, acknowledged even by the
International Finance Corporation, has defied gravity and continues to do
so. At least for now, if we might add!

      Even this year, when the economy seems to have reached the very deep
end, the market has been in fine form as it buzzes with activity on the back
of bargain hunting and frenzied speculation, among other factors. Indeed, it
defies logic. Even as the economy is faced with an uncertain outlook, the
bull market is still rampant and the equities remain broadly higher. There
is no telling when the shares could head south or when the bubble could
burst. But that is however inevitable!

      It is true that the short-end of the market is not as attractive. What
with inflation levels of 270 percent and interests of just about 75 percent.
Year-on-year inflation continues to rise adding to pressure for an interest
rate hike. But returns on the money market have remained largely
unattractive despite banks having increased their minimum lending rates over
the past couple of weeks.

      The after-tax returns on the money market are far less than the
inflation figure. Yet, all investors want is to keep ahead of inflation.
Clearly therefore, from an inflationary point of view, the key industrial
index has to keep on going up as investors look for a reasonable
inflation-beating return in the long term.

      But with the stock market being the only bright spot for investors,
the result is that we now have over-valued stocks in over-hyped counters.
There doesn't seem to be astute analysis, selective acquisition and disposal
on the part of investors. Under such circumstances caution is usually thrown
to the wind. We tend to overlook the need for diversification in our
portfolios and concentrate on the stock market. Although not always a
sure-fire recipe for investor success, diversification to a certain extent
cushions against volatility.

      And therein lies the danger for investors who could be easily left
nursing burnt fingers after they suffer breathtaking losses when the
over-due correction on the market finally happens - separating the real from
the fool's gold.

      The mystique associated with investment in shares notwithstanding, it
seems to us that the buying of shares on the ZSE has gone beyond the bounds
of rational investment and becoming something akin to a lottery. Lest we
forget, there is, within the investor crowd, a significant number of first
time individual investors who, unlike the experienced investor, have an
emotional attachment to their shares and could be hurt badly if the fortunes
of the market took a turn for the worse. They might not want to have
anything to do with shares again in their lives. It has happened elsewhere.

      We are not predicting an accelerated downward drift or free fall for
the market, which has thus far maintained its upward momentum against all
odds. No! We just want to underscore the potential for fissures on the
market given the shaky ground on which it stands! Admittedly it has been in
fine fettle but it could easily crater. Indeed for how long will the stock
market remain insulated from the effects of the economic melt-down?

      As surely as the sun rises from the east and sets in the west, the
market will move from this euphoria to depression. And market gyrations of
this nature are distressing to investors' psyches because they are
exceedingly costly to their portfolios.

      It is commonplace in the capital markets that there is always a very
dark and unpleasant side in runaway stock prices. Experts in equities have
since acknowledged that as the market over-heats, it becomes less tolerant
of even the slightest whiff of bad news. Rumours, no matter how far removed
from the truth, could wipe out millions of dollars of market value. We are
not there yet, but there is real danger that we could be over-heated.
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      . . . and now to the notebook

      5/29/03 10:09:31 AM (GMT +2)

      "Democratic" dictatorship of war veterans

      It seems like every-one who decides to disagree with the present state
of things have to consult war veterans first, otherwise they run the risk of
courting untold "military" consequences from these men and women whom, until
recently, we held in very high esteem.

      This is simply because these war vets took the lead in liberating the
country so that every one of us could enjoy basic fundamentals such as
freedom, democracy, human rights, you name it.

      But is there no problem when the same liberators start denying the
same citizens the same fundamentals that the colonialists denied them

      Judging by the behaviour of these brothers and sisters in recent
years, one would naturally wonder whether they still cherish the same
principles they used to wax lyrical about as they munched away on our
grandmothers' chickens during the war of liberation.

      Does freedom, democracy, human rights and other such chameleon words
still mean the same to them today as they meant during the Smith regime? Or
as chameleon words, they have naturally changed?

      As non-militarised ordinary citizens of this country who should be
enjoying freedom to the hilt resulting from the sacrifices made by our
brothers and sisters, we naturally get worried when we hear and see the same
brothers and sisters threatening us for enjoying the same freedom we should
be seen enjoying.

      We have repeatedly seen the violent behaviour of these war vets and we
have been threatened for time with no end, the latest of which is from
Patrick Nyaruwata and company that those who are not happy with President
Robert Mugabe's way of doing things should not show it.

      Their reason? Because they fought for this country. Simple!

      What is this called? "Democratic" dictatorship of war veterans? CZ

      The fact that they risked life and limb to set this country free does
not put them in any better stead to foist every zany and warped idea and
demand they might conceive on this extremely suffering hoi polloi.

      Notwithstanding the fact that they continue to be an unnecessary
burden to our ailing economy, these people are now denying us the most
minimal of rights simply because they liberated us. So where is the

      CZ would maintain that the gratuities, the pensions and the whole
cornucopia of featherbeddings these people are freeloading from treasury are
illegal. They are not entitled to even a single of these favours.

      The task of unshackling this country from the fetters of the
colonialists was a national duty that every self-respecting Zimbabwean had
to voluntarily perform on behalf of himself, his country and history. The
issue of reward was totally out of the question as it runs counter to
patriotic etiquette.

      By demanding and grabbing hefty gratuities as they did in 1997, these
people automatically changed themselves from being our swashbuckling heroes
to just mercenaries and since then their behaviour and attitude towards the
future of this country have never been different from that of any mercenary.

      This spiel, flimflam and bilge about war veterans being the only
people who have this country at heart is simply shallow posturing - like
that of a spawning toad.

      These people are no longer interested in safeguarding freedom,
democracy and human rights, but their newly acquired status as the new
nobility in the present day Zimbabwe.

      It is now very crucial for any truly patriotic Zimbabwean (patriotic
in both word and fact) to stand up and save this country from the
depredations of these people.

      Any self-respecting war veteran would agree to this.

      Visiting "counterparts"

      As a patriotic Zimbabwean, it's mind-boggling to note that agriculture
ministers from "brotherly" countries that are solidly behind our "very
successful" land reform exercise are being taken on tours to see for
themselves how really "successful" our land reform exercise is.

      These "counterparts" are taken to nearly the same established farms
and in one or two cases, even to farms owned by conglomerates, as if our own
A1 and A2 model farmers are not there.

      In rare cases when they are taken to the newly resettled farmers, they
are taken either to Reward Mafuru's farm or to another one owned by someone
who is close to someone who in turn is related to someone whose work address
is Munhumutapa Building.

      This is becoming monotonous because if these "counterparts" ask the
other "counterparts" who have already been here before them, there would be
nothing new for them to see as they would have been exposed to these
"lessons" vicariously.

      CZ would be too pleased to take a day off from his thankless job in
order to relieve Cde Dr Made and take the next visiting minister on a tour
in another direction so that they get the full picture.

      What these ministers have already seen amounts to nothing in toto. We
would not want to be cruel as to mislead these "counterparts" into repeating
the same scandal in their own countries. We have had enough shame as
Africans, and this should not be repeated anywhere on the continent.

      For Cde Manyika's attention

      As any other security conscious citizen of this country, CZ is really
concerned with the swelling army of street kids - or are they street-man as
some of them have grown busy beards while still on the street - who are now
posing a real menace to the security of urban dwellers.

      Every day we witness scenes of these hooligans snatching expensive
take-away food from hapless girls and women boasting that: "Zvatengwa nababa
vedu" (it's our father who has bought this) and wolfing the food without
even a vestige of compunction.

      These "street-kids"-some of them well over 20 years - harass,
embarrass and brow-beat mainly ladies and school girls into giving them
money and other valuables in broad daylight everyday as if there are no more
laws in this country.

      After noisome glue-sniffing escapades, they freely proceed to violent
gambling sessions in full view of the country's law enforcement agents as if
they are some small Somalian type warlords that are a law unto themselves.

      Surely all the government ministries and departments directly or
remotely responsible should take urgent steps to address this worrisome
development which has been left to grow unchecked as ordinary citizens no
longer move around freely. Dr Mahoso would only be too pleased to testify on
this one.

      As a suggestion, since these marauding "street-kids" are youths, they
naturally fall within Cde Elliot Manyika's portfolio, the Ministry of
Gender, Youth Development and Employment Creation, which is running National
Youth Training Centres throughout the country.

      We would not mind if Cde Manyika would bus the whole slew to the
Border Gezi Centre in Mount Darwin for whatever training he can find for

      Still on lawlessness, who are these people calling themselves rank
marshals and collecting money from commuter bus operators and commuters
alike? What do they collect the money for? To start with, they don't own the
ranks. Secondly, they don't own the commuters and thirdly, they don't own
the commuter omnibuses so for God's sake, what do they collect the
hard-earned money for?

      If the government is really serious about protecting citizens, then it
should outlaw this rank marshal business forthwith. These people are simply
criminals who should be in Chikurubi.

      Zimbabweans are a docile people who tolerate any nonsense for life!
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      Stiff resistance to fresh exchange rate review

      Dumisani Ndlela News Editor
      5/29/03 10:47:48 AM (GMT +2)

      PLANS by Finance Minister Herbert Murerwa to take swift moves to
review Zimbabwe's exchange rate by the end of this week are understood to
have met stiff resistance from Cabinet even before proposals had been put
before it, sources said this week.

      Murerwa, in a bid to placate a restive private sector calling for
another devaluation four months after the one made in February this year, is
said to have failed to sell the idea to fellow ministers, crucial in getting
President Mugabe's assent on an issue that cost former minister Simba Makoni
his Cabinet post last year.

      Industry sources said Murerwa had promised two weeks ago that he would
undertake an urgent review of the value of Zimbabwe's embattled currency
against major international currencies before the end of May.

      There were reports from industry that they expected this to be done by

      Anthony Mandiwanza, president of the Confederation of Zimbabwe
Industries (CZI), confirmed they had been given a promise by Murerwa for a
review, saying this was part of a comprehensive economic review package
hammered out by key stakeholders in February.

      Despite several calls to Murerwa's office, the Financial Gazette was
unable to get a comment from the minister.

      Although Financial Gazette sources said Ministry of Finance and
Reserve Bank of Zimbabwe (RBZ) officials had already started working out
modalities for a devaluation, a bank executive said they had been told by
RBZ governor Leonard Tsumba that export receipts had dried up since the

      "I therefore don't see prospects of that (another devaluation)
succeeding," the executive said.

      "Tsumba told us bluntly last Wednesday (May 14) that there were
virtually no receipts coming in since the devaluation. It's now a tricky
situation," he said.

      Exporters this week said even though they had suggested that a
devaluation from 55:1 to 824 Zimbabwe dollars to the US dollar would give
their ailing operations a reprieve, conditions that became attached to the
devaluation were unfavourable.

      The government announced that all export receipts would be held by the
RBZ, which would compulsorily take 50 percent for disbursement to NOCZIM and
ZESA for fuel and electricity imports, respectively.

      The other 50 percent would be made available to exporters on
application for approved import requirements or be remitted to the RBZ at a
rate of 824 local units to the greenback.

      This move meant that exporters who used to divert their excess
receipts to the parallel market at better rates were unable to do so.

      Export sector sources said many of them had withheld their foreign
receipts as a result, especially after failing to get the remaining 50
percent because their requirements were not considered a priority by the
RBZ, resulting in the forfeiture of all their foreign cash to the government
and parastatals.

      They said they would press their leadership to call for a review of
that arrangement otherwise there would be no motivation to liquidate their
receipts in the country even if another devaluation was effected.

      The government devalued the Zimbabwe dollar from 55 units to the
benchmark greenback to 824 units to a US dollar in February at the request
of the private sector which had been threatened by mass closures due to
viability problems.

      Under a tripartite deal that involved the government, labour and
business, the state had promised to review the exchange rate three months
after the devaluation on the assumption that exporters would have liquidated
their receipts into the interbank market.

      But the foreign currency situation had turned worse, as if the respite
given industry had triggered a flight of hard cash rather than attract it,
sources said.

      "There is no prospect that the government will succumb to any fresh de
mands for a devaluation," a source privy to Cabinet deliberations said.

      An RBZ source said even though officials were working on modalities
for a review, "this did not indicate that there is going to be a

      Sources said official foreign exchange inflows had slumped from a
weekly high of US$500 million last year to "weekly trickles". There were
suggestions that Zimbabwe could be receiving just over US$1 million each
month in export receipts.

      The situation had forced the National Oil Company of Zimbabwe (NOCZIM)
to fail to meet its international oil procurement obligations at the same
time the Zimbabwe Electricity Supply Authority (ZESA) was downgraded by its
traditional electricity suppliers - Hidroelectrica de Cahora Bassa of
Mozambique, Snell of the Democratic Republic of Congo and Eskom of South
Africa - for failing to pay its import bill.

      NOCZIM has been scouting for the scarce resource from the parallel
market over the past two weeks, triggering a run on rates from around 1 300
Zimbabwe dollars to a US unit to around 2 200 to the greenback
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      Milk output expected to plunge 44%

      Zhean Gwaze Staff Reporter
      5/29/03 9:49:51 AM (GMT +2)

      MILK output for this year is expected to fall by almost 44 percent
because of the decline in the national dairy herd, according to a top

      Industrial Development Corporation (IDC) chief executive Mike Ndudzo
told participants at a Zimtrade annual exporters conference that this year's
milk output was expected to be around 140 million litres compared to 250
million litres required to meet national requirements.

      "The national herd is declining and this has caused milk production
levels to decline by about 40 percent since 2000," Ndudzo said.

      The decline in the national dairy herd from 6.5 million two years ago
to an estimated 200 000 this year has been attributed to poor availability
and high prices of stockfeed and shortage of vaccines.

      Most farmers de-stocked owing to the government's often chaotic land
reform programme and lack of good animal husbandry skills.

      The remaining dairy herd has a capacity to produce 168 million litres
per annum.

      The government's land reform in 2001 displaced more than 4 500
commercial farmers, who used to produce 90 percent of the country's dairy

      Stock feed prices have gone up by between 24 to 84 percent, worsening
the crisis in the dairy industry at a time the country is battling to
rebuild the national herd.

      Producers of stock-feed have also scaled down output because of severe
input shortages and the state-imposed price controls.

      The cattle industry has also been affected by the persistent outbreaks
of foot-and-mouth disease since 2000 and the government has been battling to
fight the disease but has been overwhelmed by shortages of foreign currency
to purchase vaccines.

      The Food and Agriculture Organisation has since appealed to donors for
more than US$295 million to fight the disease.

      Indigenous Commercial Farmers' Union president Davidson Mugabe said
the lack of good animal husbandry practices by the new farmers also made it
difficult to boost the dairy herd.

      "Cross-breeding of local breeds should be done by people in the
research departments of animal breeding institutions to enhance milk
production," Mugabe said.

      He however, confirmed that a scheme had been launched to resuscitate
the dairy herd through funding from a local organisation.

      Dairy cows cost more than $300 000 each.

      Ndudzo said the low production of milk meant Dairibord Zimbabwe
Limited (DZL) would be operating below capacity as they could not meet
demand for processed milk products.

      DZL chief executive, Anthony Mandiwanza, could not be reached for
comment as he was said to be out of the office until next week.

      Last month DZL was fined $1.5 million by the government for
overpricing its products but Ndudzo said the government should review price
controls more regularly to retain sustainability.
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      Zimbabwe's economic slide, is it an end game?

      James Jowa
      5/29/03 10:06:05 AM (GMT +2)

      ZIMBABWE'S economic fortunes continue on their downward trend with two
major developments having occurred during the past week.

      The Central Statistical Office announced that the rate of inflation
had risen to 269.2 percent for the month of April 2003. This means that
between April 2002 and April 2003 prices of goods and services in Zimbabwe
increased by more than 269 times on average.

      The other related development has been the shortage of bank notes.
Large queues have been forming at banks as people scramble for scarcely
available bank notes. This has been a result of the printing capacity of the
Reserve Bank of Zimbabwe being unable to match the demand for notes brought
about by the deterioration in the value of money.

      These developments are largely a reflection of the lopsided economic
policies being pursued in Zimbabwe and the resultant confidence loss.

      The 2003 national budget, which should form the major thrust of the
government's short-term economic policy framework, contains major weaknesses
which are at the centre of the hyperinflation.

      For instance, the 2003 budget envisages that the government will raise
Z$250 billion from the domestic money market. This is however at a time when
the savings level is but only half that amount. This has resulted in massive
liquidity creation as the authorities attempt to fund the deficit. The
result has been uncontrollable inflation.

      As the inflation rate continues to reach new highs every month, the 96
percent inflation rate by year-end as projected in the 2003 budget by the
government has increasingly become a mirage.

      Another factor compounding the inflationary tendencies is that the
government has followed a self-destruct monetary policy by maintaining
hugely negative real interest rates. This policy has created an asset price
bubble because agents in the economy have lost confidence in the currency.
Firms and individuals have switched into the purchase of foreign currency,
real estate, vehicles and equities. The stability of banks has thus come
under serious threat and the pension fund sector has been seriously

      As it is the economy is in a Catch-22 situation. On one hand, if
credit is curbed and interest rates raised to restore the real return on
savings, the asset price bubble will burst. Moreover without credit on
give-away terms, the government's land resettlement programme will come
under severe strain. Added to this is the possibility that highly-geared
companies and individuals will default on loans, leading to the collapse of
financial institutions.

      On the other hand, if the government maintains its loose monetary
policy the hyperinflation will intensify, the decline of the dollar will
accelerate and the speculative asset price bubble will grow even more

      Therefore on the economic front there is no exit strategy from the
crisis - at least in the short-term - given that key issues relating to
foreign currency shortages, food scarcity, fuel unavailability, financing
constraints and the negative fiscal and monetary policy environment will be
impossible to address.

      Moreover, the New Economic Revival Programme (NERP) as a short- to
medium-term economic recovery programme lacks coherence.

      For instance, it has no funding mechanism for the implementation of
its various programmes and activities. The programme has also been crippled
by the withdrawal of the Zimbabwe Congress of Trade Unions, and business, as
the other social partner, is increasingly becoming lethargic towards its

      It is therefore difficult to see how the economy can survive these
challenges under the prevailing economic and political regimes. There are
already massive social, economic and political pressures on the ground.
There is urgent need for a change in both political and economic direction
if the current decline is to be halted, let alone reversed. It is a relief
that President Mugabe has hinted that he would now allow his party to debate
his succession.

      This should mark the beginning of a process of returning the country
to normalcy.

      Nevertheless, for economic recovery to take place, concerted effort
should be made to restore confidence in business and the economy through the
restoration of the rule of law in the country. In this respect the principle
of the rule of law should be observed - that everyone is equally subject to
the law, with no one being above it. In other words, the law must be upheld
under whatever circumstances and should not be altered willy-nilly otherwise
confidence will remain compromised.

      Related to the rule of law is the observation and protection of
private property rights. They form one of the central pillars of private
enterprise development and also ensure security of tenure and investment in
the eyes of both domestic and foreign investors.

      Once the rule of law is in place again, it should be possible for the
country to normalise international relations. The country should then be in
a position to seek for balance of payments support and an international
bailout under the Highly Indebted Poor Countries initiative.

      Tough fiscal and monetary policies should be put in place but the
return to prosperity should be a long and tedious one.

      James Jowa is a member of the Zimbabwe Economics Society
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