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Biti presents paltry US$3,8bn budget

November 16, 2012 in News

FINANCE Minister Tendai Biti yesterday presented a paltry US$3,8 billion
“developmental budget”, describing it as the most difficult to construct in
the short life of the inclusive government.

Report by Clive Mphambela

Biti’s budget is smaller than South Africa’s retail chain supermarket group,
Pick n Pay whose average annual turnover is R55,3 billion (US$6,1 billion).

However, he said numerous downside risks, including potential political
instability, threatened his budget.

Biti said the multitude of challenges facing the economy required a
fundamental re-think of the state, economics and development in Zimbabwe.

“In this regard, the 2013 national budget seeks to offer leadership and
direction on the bold structural measures that must be taken to unleash
Zimbabwe’s growth potential in pursuit of the MTP’s vision of constructing a
modern democratic developmental state,” said Biti.

The Finance minister proposed a 15-point roadmap which would in the
short-term seek to reverse the current slow-down and refocus the economy on
a higher growth trajectory.

The plan is anchored on consolidating the gains of the last three years by
guaranteeing a stable macro-economic environment, projected domestic
inflation would remain low at 4,5% in 2013, up from 4% this year.

Biti revised GDP growth for 2012 to 4,4% from the 5,6% he set during his
mid-term fiscal policy review in June after the initial 9,4% forecast.

The minister said he intended to deepen revenue measures at the same time
expanding the revenue base. He will also tighten expenditure controls after
it emerged government ministries had this year accumulated arrears of more
than US$260 million.

Other elements of the plan included attraction of Foreign Direct Investment
in partnership with local investors and promoting local industrial
competitiveness to facilitate production for both domestic and export
markets. This should lead to a reduction of the current account deficit.

Biti’s agenda also hinges on creating an environment for the mobilisation of
domestic savings, affordable resources and lines of credit to modernise and
protect existing industry, and implementing financial sector reforms.

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Storm over Zanu PF’s US$6,5m hall project

November 16, 2012 in Politics

A STORM is gathering over Zanu PF’s estimated US$6,5 million
state-of-the-art conference centre — expected to be the biggest in the
country — currently under construction in the Midlands province ahead of the
party’s annual conference in Gweru, amid growing speculation on who is
funding the project.

Report by Elias Mambo

The project — widely condemned and now labelled “Zanu PF’s Hall of Shame” —
and the party’s US$20 million 2012 presidential agricultural input scheme as
well as the US$14 million splashed on 500 campaign vehicles, have raised
suspicions over where the money is coming from.

This comes at a time speculation is rife the funds being used to finance
these activities are part of Zanu PF’s secret war chest built from diamond
revenues to contest the next crucial elections. At least US$2 billion in
diamond revenues is said to have been plundered by official corrupt

The conference centre, discussed at last week’s politburo meeting in Harare,
has divided the party as some members of the decision-making politburo are
opposed to the project spearheaded by Defence minister Emmerson Mnangagwa
who harbours ambitions of succeedingPresident Robert Mugabe.

Sources said members of the rival faction led by Vice-President Joice Mujuru
view the development as a structure designed to serve Mnangagwa’s succession
ambitions more than Zanu PF’s campaign agenda in the next elections.

“The project has now become political and very controversial because the
(two main Zanu PF) factions are divided on it. The issue was discussed at
the politburo meeting last week in the context of the forthcoming annual
conference and one could see that some people view it with suspicion,” a
senior politburo member said.

Another politburo member said the project was being funded by the Chinese
and was probably a “money laundering scheme” as its promoters sought to take
advantage of the conference to launch it even though the complete
development, including chalets, would be finalised later.

The construction of the huge convention hall, along the Gweru-Mvuma road, is
not only expected to be a monument to the “positive” legacy of Zanu PF, but
of Mnangagwa in particular.

The centre, officially being funded by the Midlands Development Association,
is expected to have offices for the Zanu PF presidium, a gigantic stage,
amenities, state-of-the-art public address system and modern electronic
gadgets and a 5 000-seater convention hall.

“We expect the centre to be complete on time for our annual conference from
December 4-9, although there are some suggestions that we can postpone the
event to December 9-14 if it has not been completed,” one party official

“It’s an imposing project because we expect it to be in the mould of the
Durban International Convention Centre in South Africa, one of the most
advanced conference facilities in Africa and in the world.”

A Zanu PF committee is said to have been appointed after last week’s
politburo meeting to assess progress and see whether it would be necessary
to delay the conference if construction is not completed on time.

Controversy is growing over the source of funding for the project. Some say
the money came from diamond proceeds, while others say it was from the
Chinese and local donors, including banks.

A Canadian non-profit-making human rights organisation, Partnership Africa
Canada (PAC) says in its latest report titled, Reap What You Sow: Greed and
Corruption in Zimbabwe’s Marange Diamond Fields, at least US$2 billion in
revenues had been lost through corrupt activities in the past four years.

It was “the biggest plunder of diamonds since Cecil Rhodes”, PAC said,
referring to a British colonial mining magnate who was the founder of
Rhodesia, now Zimbabwe. The “theft” at the Marange diamond fields was
perpetrated by Zanu PF officials, international gem dealers and criminals,
the report says. It says the scale of looting was “mind-blowing illegality”
although authorities have described this as “totally false”.

“Conservative estimates place the theft of Marange goods at almost US$2
billion since 2008,” the report insists. Finance Minister Tendai Biti has
been complaining that diamond revenues were being pillaged.

As the Zimbabwe Independent has consistently reported, Zanu PF is preparing
for massive election campaigns and its mobilisation committee has been
meeting to come up with plans for development projects, while the military
has been manoeuvring in the countryside to lay the ground for the electoral
assault. The convention project is being supervised by Midlands Development
Association chaired by Mnangagwa’s ally and Zvishavane-Runde MP, Larry

Mavhima is currently in China where he is shopping around for the centre’s
furniture, microphones, headphones and transcribing equipment. However, it
is the source of funds for building such a modern conference centre that is
baffling many people.

Zanu PF is refusing to divulge the source of funding for its activities and
its spokesperson Rugare Gumbo yesterday said the convention centre is a
provincial project and no funds were disbursed from the party towards its
construction. “The centre is a Midlands Development Association project and
nothing was disbursed from the national structures towards its
construction,” Gumbo said.
Sources said CBZ, BacnABC and FBC were asked to raise US$1 million. However,
FBC MD John Mushayavanhu said his bank did not make any donation to Zanu PF.

“We did not donate anything to Zanu PF and whichever branch that could have
been approached by the party did not send the request to us,” he said.

BancABC’s head of marketing, Cynthia Chizwina said: “Our policy as a bank is
that we do not finance any political party. Therefore, if such a request
were received we would be guided by this policy in our actions,” she said.

Efforts to get comment from CBZ group CEO John Mangudya were unsuccessful.

Political parties and civic leaders have called for an investigation into
the opaque funding of Zanu PF activities.

From Page 1
promoters sought to take advantage of the conference to launch it even
though the complete development, including chalets, would be finalised
The construction of the huge convention hall, along the Gweru-Mvuma road, is
expected to be a monument to the positive legacy of Zanu PF, but Mnangagwa
in particular.
The centre, officially being funded by the Midlands Development Association,
is expected to have offices for the Zanu PF presidium, a gigantic stage,
amenities, state-of-the-art public address system and modern electronic
gadgets and a 5 000-seater convention hall.
“We expect that the centre will be complete on time for our annual
conference from December 4-9, although there are some suggestions that we
can postpone the event to December 9-14 if it has not been completed,” one
party official said.
“It’s an imposing project because we expect it to be in the mold of the
Durban International Convention Centre in South Africa, one of the most
advanced conference facilities in Africa and in the world.”
A Zanu PF committee is said to have been appointed after last week’s
politburo meeting to go and assess progress to see whether it would be
necessary to delay the conference if construction had not been completed.
Controversy is growing over the source of funding for the project. Some say
the money came from diamond proceeds, while others say it was from the
Chinese and local donors, including banks.
A Canadian non-profit-making human rights organisation, Partnership Africa
Canada (PAC) says in its latest report titled, Reap What You Sow: Greed and
Corruption in Zimbabwe’s Marange Diamond Fields, at least US$2 billion in
revenues had been lost through corrupt activities, including
parallel-pricing and price manipulation of Zimbabwe’s gems in international
markets in the past four years.
It was “the biggest plunder of diamonds since Cecil Rhodes”, PAC said,
referring to a British colonial mining magnate who was the founder of
Rhodesia, now Zimbabwe. The “theft” at the Marange diamond fields was
perpetrated by Zanu PF officials, international gem dealers and criminals,
the report says.
It says the scale of looting was “mind-blowing illegality” although
authorities have described this as “totally false”.
“Conservative estimates place the theft of Marange goods at almost US$2
billion since 2008,” the report insists. Finance Minister Tendai Biti has
been complaining that diamond revenues were being pillaged.
As the Zimbabwe Independent has consistently reported, Zanu PF is preparing
for a massive election campaigns and its mobilisation committee has been
meeting to come up with plans for development projects, while the military
has been manoeuvring in the countryside to lay the ground for the electoral
The convention project is being supervised by Midlands Development
Association chaired by Mnangagwa ally and Zvishavane-Runde MP, Larry
Mavhima is currently in China where he is shopping around for the centre’s
furniture, microphones, headphones and transcribing equipment. However, it
is the source of funds to build such a modern conference centre that is
baffling many people.
Zanu PF is refusing to divulge the source of funding for its activities,
particularly the US$20 million presidential input, the purchase of 500
vehicles worth about US$14 million and now the conference hall.
Zanu PF spokesperson Rugare Gumbo said the convention centre as a provincial
project and no funds were disbursed from the party towards its construction.
“The centre is a Midlands Development Association project and nothing was
disbursed from the national structures towards its construction,” Gumbo
Sources said CBZ, BacnABC and FBC were asked to raise US$1 million.
However, FBC MD John Mushayavanhu said his bank did not make any donation to
Zanu PF.
“We did not donate anything to Zanu PF and whichever branch that could have
been approached by the party did not send the request to us,” he said.
BancABC’s head of marketing, Cynthia Chizwina, could neither confirm nor
deny that her bank was approached. “Our policy as a bank is that we do not
finance any political party. Therefore, if such a request were received we
would be guided by this policy in our actions,” she said.
Efforts to get an official comment from CBZ group CEO John Mangudya were
Political parties and civic leaders have called for an investigation into
the opaque funding of Zanu PF activities.

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Violence: MDC-T drags feet on action

November 16, 2012 in Politics

MDC-T has delayed sanctioning party heavyweights implicated in the Trust
Manda Commission report on violence amid fears any decisive action could
further widen fissures in the party ahead of next year’s crucial elections.
Report by Staff Writer

The commission investigated intra-party violence that rocked MDC-T in
Bulawayo, Chitungwiza, Midlands North, Masvingo and Mashonaland West in the
run-up to the party’s congress last year.

MDC-T vice-president Thokozani Khupe, Bulawayo provincial chairman Gorden
Moyo and Mzilikazi senator Matson Hlalo were named by party leader Morgan
Tsvangirai as instigators of violence in Bulawayo.

MDC-T national chairperson and chairperson of the disciplinary committee,
Lovemore Moyo, said there were discussions within the party’s standing
committee about the disciplinary action, but no concrete steps have been
taken as yet.

“The committee is still to receive the formal complaint and charge sheet
against those accused from the secretary-general (Tendai Biti) for us to
institute the proceedings,” Moyo said. Party spokesperson Douglas Mwonzora
was not available for comment.

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MDCs reject Mugabe early polls push

November 16, 2012 in Politics

THE two MDC formations have rejected President Robert Mugabe’s plot to
railroad the nation into elections in March next year, saying the polls were
only feasible by September.

Report by Staff Writer

The two parties told the South African parliamentary portfolio committee on
international relations in Cape Town last week moves by Mugabe to push for
early polls would be resisted.

South African President Jacob Zuma is the mediator to the Zimbabwean
political logjam and his facilitation team has been battling to unlock the
crisis with scant results.

MDC-T spokesperson Douglas Mwonzora and MDC director for policy research
Qhubani Moyo told the South African legislators Zimbabwe was not ready for
polls in March due to a raft of outstanding reforms, including completion of
a draft constitution.

Zanu PF was invited but snubbed the indaba which was also attended by civil
society representatives, among them Zimbabwe Lawyers for Human Rights
executive director Irene Petras, Zimbabwe Election Support Network national
director Rindai Chipfunde-Vava and political analyst Professor Brian

Mwonzora and Moyo said their parties demanded a clearly defined roadmap with
signposts guaranteeing free and fair elections by September. Moyo said
Mugabe wanted to hijack a parliamentary process to write a new constitution
using his imperial powers in a frantic bid to restore his sweeping powers as
enshrined in the current Lancaster House constitution but whittled down in
the draft constitution.

“We told the South African parliament how Mugabe and an impostor (Deputy
Prime Minister Arthur) called Mutambara are planning to wrestle a
people-driven process to suit their political agendas. The
constitution-making process was driven by parliament and should be concluded
by Copac and not a dubious forum called principals,” said Moyo.

The MDCs believe security sector reforms are urgent as security forces
chiefs have brazenly violated the constitution and Defence Act by “declaring
a coup even before elections”.

Military chefs have repeatedly warned they would not allow anyone except
Mugabe to rule Zimbabwe.

The parties say ample time is needed after the referendum to create new
institutions provided for by the new constitution and that would require
more than six months before polls, thereby ruling out Mugabe’s March 31
date. The referendum is only expected in the first quarter of next year.

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Mugabe, PM in cahoots –– Ncube

November 16, 2012 in Politics

AS the country prepares for elections President Robert Mugabe insists should
be held in March next year after a constitutional referendum, Zimbabwe
Independent chief reporter Owen Gagare (OG) spoke to MDC president Welshman
Ncube (WN) on the next make-or-break polls, possible alliances, his
relationship with Prime Minister Morgan Tsvangirai and Mugabe, among other

Below are excerpts of the interview:

OG: Are you standing in the presidential elections?
WN: I’m going to stand as a candidate in the presidential election whenever
that election is held.

OG: Your critics claim you are using a tribal card, even in your campaigns.
WN: At no time have we ever carried a tribal card, in our campaigns, in our
words, in our actions or in anything we have done.

OG: Where do you think these allegations come from?
WN: It is those who have tribal blinkers who see a tribal card the moment
they see a person like me who comes from the southern region involved in
politics. Our agenda remains a Zimbabwean national agenda.

OG: Are you looking for alliances? Some are concerned the two MDCs will
split the vote to the benefit of Zanu PF.
WN: What we should be concerned with is what the political parties are
offering to Zimbabweans in terms of their programmes for rebuilding the
country. For me it’s about having a new generational politics which will
ensure we can once again bring prosperity to our country.

OG: Does this mean an alliance with MDC-T is totally out?
WN: We are working on marketing ourselves and asking the people to vote for
us. In 2008 we spent a lot of time hunting for alliances to defeat Mugabe
but we were abandoned at the church door. We won’t make that mistake again.
OG: You mean talks with MDC-T again?
WN: Yes. We had an agreement which we adopted but they then rejected us. We
were even left without a candidate of our own because we had endorsed
Tsvangirai which is why we ended up literally clinging to someone like Simba
Makoni as a candidate.

OG: There is belief that you are calculating to getting a certain number of
seats to be kingmaker given the strong possibility of another hung
WN: We have seen the disasters of a hung parliament. Trust me we have no
appetite for it by design.

OG: How far are we from elections given the processes we still have to go
through? Is March 2012 feasible?
WN: Mugabe has been saying there will be elections every year for the last
two years. This is simply to say if I’m having elections around the corner,
there is no issue about who is the Zanu PF candidate. It also means you are
basically sending a message to investors to adopt a wait-and-see attitude.
This is a cruel strategy to make sure the economy does not recover, so you
can go into elections and say all these others have also been in government
with me but they also failed.

OG: So when can elections be realistically held?
WN: We know that realistically the processes that have to be undertaken to
have elections will take longer than March.

OG: Have the principals hijacked the constitution-making process?
WN: There appears to be an agreement between Mugabe, Tsvangirai and (Deputy
Prime Minister Arthur) Mutambara that after the stakeholders’ conference
government must take over the process to expedite it. We know they put this
proposal to the Minister of Constitutional Affairs (Eric Matinenga): he has
confirmed it publicly and rejected the move, saying it is a violation of
Article 6 of the Global Political Agreement (GPA).

OG: How do you relate to Tsvangirai?
WN: We worked together in the National Constitutional Assembly. In the
united MDC post congress he was the president, I was the secretary-general.
So I can say historically we worked together closely and well. In the
government we have worked together closely and well. But we lead different
political parties and therefore we believe in different things
ideologically, policy-wise.

OG: Has your relationship been strained by allegations Tsvangirai has
allegedly sided with Mugabe on the issue of Mutambara’s principal status
WN: Well, that was not unexpected.

OG: Why was it not unexpected?
WN: Because I know Mugabe would always oppose me and my party. In fact he
will seek to destabilise and destroy the party and I know Tsvangirai would
support Mugabe’s agenda. If they really didn’t want to interfere in the
internal affairs of the MDC they would have accepted our communication to
say the MDC had its congress and it elected so and so as its president.

OG: Given the divergent views between Zanu PF and MDC-T, one would think you
would relate better to Tsvangirai. What makes you a common enemy?
WN: Is it Winston Churchill who coined the expression ‘there are no
permanent enemies or friends in politics but permanent interests’.

OG: Is the PM really siding with Mugabe on Mutambara?
WN: Yes he is and his refrain is exactly what Mugabe has been telling us for
one-and-a-half years. Oh there is a legal case, oh this matter is pending in
the court; yes Mutambara is a principal, he signed the agreement. What

OG: How do you relate to Mugabe?
WN: We have been able to find the comfort zones to be able to work together.
We are however in complete disagreement and have had numerous conversations
and I have said to him you are wrong you are abusing the law.

OG: Who is benefiting here? Is it Mugabe or Tsvangirai or both and what are
the benefits?
WN: I cannot see any benefits for Tsvangirai or the MDC-T. The only person
who benefits from this and a dysfunctional inclusive government is Mugabe.

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Govt flouting international regulations

November 16, 2012 in News

ZIMBABWE is flouting international regulations on illegal immigrants by
forcing immigrants to fund their own deportation resulting in most of them
spending more than two years in detention.

Report by Staff Writer

Human rights lawyer Jeremiah Bhamu said while the United Nations Conventions
on Refugees place the obligation of funding deportations on the host
country, deportees in Zimbabwe are forced to foot the bill to avoid
indefinite detention.

“Unfortunately, Zimbabwe’s Immigration Act doesn’t specify how long a person
should be kept in remand awaiting deportation and this leaves desperate
immigrants with little choice but to fund their own deportation,” Bhamu

Justice deputy minister Obert Gutu said: “We may be violating international
conventions on the issue of illegal immigrants, but this is because of
scarce resources which force us to use the limited funds from Treasury to
provide food, clothes and other resources to better prisoners’ lives.”

He urged embassies in Zimbabwe to assist in the deportation of their
nationals. Twenty-three Somali nationals have been in detention for over
three years

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Zim to engage in mining explorations

November 16, 2012 in News

GOVERNMENT is negotiating with Germany, Japan, North Korea and Chinese
companies to conduct mineral exploration and aero-magnetic surveys across
the mineral-rich country, including at the Chiadzwa diamond fields.

Report by Staff Writer

Mines deputy minister Gift Chimanikire said in a recent interview most
mining activities in Zimbabwe, including diamond mining in Chiadzwa and
Chimanimani, are being done without extensive exploration or surveying.

“Most of the mining activities taking place is accidental. We do not have
maps, exploration and survey reports confirming the quantities and quality
of minerals at each mining site,” said Chimanikire.

He said it was difficult to monitor and track mining activities at Chiadzwa
since there is no recent exploration report for the area surrounding the
diamond fields.

“The exploration and surveying of the remaining 40% of the country would
allow government to know which minerals are where, and their qualities.”

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Blaming diamond leaks on sanctions debunked

November 16, 2012 in News

A NEW report on diamond mining says Zimbabwe has lost billions in revenues
through illicit parallel market activities, including price manipulation and
pillaging, deflating official feverish claims at this week’s World Diamond
Conference in Victoria Falls that Western sanctions were the main reason for
rampant leakages.

Report by Tendai Marima

President Robert Mugabe told more than 3 000 delegates at the conference on
Monday sanctions had mainly negatively impacted on Zimbabwe’s diamond sales.

“The diamonds have been marketed at depressed prices owing to a negative
buyer perception resulting from these illegal sanctions. I do not even know
why they exist,” Mugabe said.

However, a Canadian non-profit human rights organisation, Partnership Africa
Canada (PAC) released a report titled Reap What You Sow: Greed and
Corruption in Zimbabwe’s Marange Diamond Fields, saying at least US$2
billion in revenues had been lost through corruption and a parallel-pricing
of Zimbabwe’s gems in international markets in the past four years.

“Conservative estimates place the theft of Marange goods at almost US$2
billion since 2008”, the report says. It notes although the drop in global
prices could partly explain why diamond revenue has declined, there is a
sophisticated parallel market in Surat, India, selling diamonds for a higher

The majority of the Marange diamonds are sold in India for less than
US$100/carat while on the parallel market the stones fetch more than
US$100/carat for the benefit of Zimbabwe’s political elite.

“In recent years the average price of legal Marange goods dropped from
US$80-$90/carat in 2011 to between US$50-$60 in late 2012. Some of this may
be legitimately explained by a worldwide drop in rough prices, yet the same
goods have been noticed miraculously exiting Dubai trading houses for
sister-owned factories in Surat with an average value of US$100-$105/carat.”
the report says.

PAC says price fluctuations have affected diamond revenues, but also
underscores a sophisticated price-manipulation scheme, run by Indian buyers
and their Zimbabwean partners-in-crime, is depriving the country of

PAC further alleges in 2010 government signed an exclusive US$1,2 billion
deal with an Indian company, Surat Rough Diamond Sourcing India Limited, to
supply diamonds under shady circumstances.

According to the report, the deal was overseen by Mines minister Obert Mpofu
who is said to be good friends with Asit Mehta, the head of Surat Rough
Diamond Sourcing. Mpofu was unavailable for comment.

“Asit Mehta is the driving force behind the Surat Rough Diamond Sourcing
India Limited (SRSDIL), a consortium of companies, which signed a US$1,2
billion deal with the Government of Zimbabwe in October 2010 to obtain
exclusive access to Marange diamonds,” the report says.

“The deal signalled Surat’s willingness to court Marange diamonds, despite
the Kimberly Process (KP) ban and associated reputational risks. Mehta is
known to have visited Mpofu in Zimbabwe at least six times between September
2010 and April 2011, and personally chaperoned the minister around Surat on
several of his trade missions there.”

PAC report also draws attention to discrepancies in tax and royalty
structure paid by Zimbabwe’s diamond mining companies.

According to the report, firms should pay up to 33% in mining taxes.

“Technically, the tax and royalty structure in Zimbabwe requires mining
companies to pay 15% royalties, plus an administration fee of 0,875% to the
MMCZ (Minerals Marketing Corporation of Zimbabwe) (not Zimbabwe Mining
Development Corporation ‘ZMDC’ or Zimra) prior to export. All other taxes
(corporate and withholding taxes for example) are only due at the end of the
fiscal period, after calculating a company’s net profit. When all is told,
however, deductions would amount to approximately 33%,” it says.

Finance minister Tendai Biti told parliament early this year Zimbabwe ought
to get at least 75% in taxes and revenues from firms, in which government
has a 50% stake, operating in Marange.

He complained of under-remittances by firms such as the Chinese-owned Anjin
Investments (Pvt).

ZMDC chairman Godwills Masimirembwa last week said the diamond industry is
this year expected to contribute only a quarter of the US$600 million
Treasury had projected.

While 2012’s US$4 billion budget was based on projected diamond revenues of
US$600 million, Biti was forced to revise it downwards to US$3,6 billion
during the fiscal policy review in June as a result of low remittances.

PAC says US$600 million could have been lost through small scale miners and
estimated that a further 60 000 carats/month are lost through illegal

“The scale of illegality is mind-blowing,” the report says.

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Speaker bemoans composition of Standing Rules committee

November 16, 2012 in News

SPEAKER of parliament Lovemore Moyo has bemoaned the composition of the
legislature’s Standing Rules and Orders Committee (SROC) which is dominated
by members of the executive, saying this stifles the independence of the

Report by Paidamoyo Muzulu

The SROC is the supreme committee that runs parliament and currently
comprises 12 members of cabinet out of its composition of 25.

Among cabinet members who sit in the SROC are the two vice-presidents Joice
Mujuru and John Nkomo, Prime Minister Morgan Tsvangirai, and deputy prime
ministers Arthur Mutambara and Thokozani Khupe.

Other cabinet members in the SROC include Defence minister Emmerson
Mnangagwa, Finance minister Tendai Biti, Justice minister Patrick Chinamasa,
Transport minister Nicholas Goche and Constitutional and Parliamentary
Affairs minister Eric Matinenga.

Moyo told the Zimbabwe Independent in an interview this week that in other
legislatures such as in Uganda and South Africa, the SROC is dominated by
backbenchers thereby guaranteeing parliament’s independence.

“We have to change if we are to adhere to the separation of powers as it is
difficult for backbenchers to stand up to their political leaders at
meetings,” said Moyo.

He said the executive’s dominance was untenable and undemocratic for the
smooth operation and independence of the House.

“It’s a misnomer to have the SROC dominated by executive members. That is
not a normal situation in parliamentary democracies the world over.”

Moyo said he hoped the proposed new constitution would address this anomaly
by allowing only two members of the executive to sit on the SROC. He
suggested the two be the Finance and the Constitutional and Parliamentary
Affairs ministers.

Zimbabwe’s legislature, usually a rubberstamp, has largely been emasculated
by the executive since the formation of the coalition government in February
2009. It has sat mostly on an ad hoc basis and generally has had superficial
debates as the executive routinely whips it into line on critical issues.

Moyo said parliament sits on an ad hoc basis because it is poorly resourced
to carry out its constitutional mandate. He said the legislature needs a
ring-fenced budget to protect its independence and allow it to fulfill its
mandate without having to queue with other departments at Treasury for

“We need to have a dedicated budget to run parliamentary programmes. The
House has to sit between 60 and 70 days per session for it to effectively
discharge its mandate,” Moyo said.

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SADC opposed Zim land grabs-Mbeki

November 16, 2012 in News

SADC leaders were opposed to the chaotic “revolutionary” land grabs by
President Robert Mugabe and Zanu PF-sponsored war veterans which displaced
thousands of white commercial farmers and workers, preferring an orderly
reform process, former South African president Thabo Mbeki has revealed.

Report by Brian Chitemba

Addressing delegates to the Zimbabwe Diamond Conference in Victoria Falls on
Monday, Mbeki said Sadc leaders argued at length with Mugabe over the
violent land seizures which were “strategically and tactically ill-advised”.

Sadc leaders, Mbeki said, wanted Zimbabwe to respect market-based
compensation of land owners for improvements on the seized farms.

“We were convinced and argued this with President Mugabe that, rather,
Zimbabwe should indeed confront the matter of the land question, but address
it through a process of reform rather than through revolutionary means,”
said Mbeki.

“We understood very well that the process of the reform rather than the
revolutionary transformation of the inherited colonial system of land
ownership meant the Zimbabwe government and people would have to respect the
principle of market-based compensation of land owners for improvements on
the farms they would have to forfeit.”

Mbeki said despite criticism of the land reform programme, fundamentally, it
corrected the historical imbalance although the process remained

He also attacked the West for failing to provide funds to compensate white
farmers even though it promised to do so in 1979 in London, and in 1998 in
Harare. After the land reform chaos, Zimbabwe plunged into a basket case as
the country’s new inexperienced and poorly-funded farmers failed to produce
enough food.

Mbeki said regional leaders had hoped the agrarian reform would address food
shortages, poverty and help foster economic recovery.
“This arose because of both our concern for the welfare of the sister people
of this country and our knowledge of the level of regional integration, as a
result of which our countries could not isolate themselves from important
developments in this country and vice versa,” he said.

Mbeki emphasised the need to upgrade rural infrastructure, intensify
agricultural extension services, provide the necessary credit lines to
enable new farmers to access farming equipment, fertilisers and create ready
markets for produce. Most new farmers are still struggling to produce a
decade after getting the land while others own multiple farms contrary to
government policy.

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Violent polls to hurt economy, Biti warns

November 16, 2012 in Business

FINANCE minister Tendai Biti has painted a gloomy outlook of the economic
situation, warning the economy could slide into recession if the
make-or-break elections next year turn out to be violent.

Report by Chris Muronzi

Apart from the threat posed by electoral violence to the economy, Biti said
the projected 5% GDP growth next year depended largely on whether the
country receives normal rainfall and benefits from firming commodity prices
on the international market.

Should the country receive poor rains and commodity prices fall, growth
would be lower than the targeted 5%.

“The 2013 national budget is predicated on an active policy scenario which
projects overall GDP growth of 5% in 2013 and levels of above 6% in 2014 and
2015, mainly driven by mining, agriculture, manufacturing, tourism and
construction,” Biti said in his budget speech.

“A good agricultural season, together with improved preparations, is
anticipated to underpin agriculture, while improved investment and supply of
power are expected to support operations in the mining sector.”

He added: “The above growth and investment projections assume a stable
macro-economic and political environment accompanied by a consensus on
credible and consistent policies.”

Government revised downwards the country’s economic growth projection for
2012 to 4,4% from an initial 5,6% as stated in the mid-term review. The
target was originally 9,4%.

Biti said in the event electoral violence similar to that of 2008 recurred,
the damage to the economy would be worse. The economic gains achieved since
then would be like two steps taken forwards against 20 backwards.

Biti bemoaned the lack of fiscal space, saying of the total revenues of
US$3,8 billion anticipated in 2013, translating to 34,5% of GDP, recurrent
expenditures of US$3,3 billion, representing 86,4% of the total budget left
only US$500 million, or 13,6% of the budget, for capital development.

Biti sees inflation being contained within the single digit levels on
account of prudent macro-economic management through fiscal austerity,
improved supply and competitiveness.

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Zim industrial sites now ghostly

November 16, 2012 in Business

THE hum of heavy machinery, once a defining feature of the city, is long
dead in Harare’s Graniteside industrial area.

Report by Paidamoyo Muzulu

The city’s industrial hub sounds quiet and looks desolate, as some of the
once-smoking chimneys last puffed several years ago.

One is usually struck by the eerie silence which now envelopes the
once-bustling Graniteside industrial zone as incessant power cuts and
load-shedding take their toll on the country’s manufacturing sector.
Thousands of companies have closed in the last decade due to a myriad of
problems dogging Zimbabwe.

If one thinks Harare is now industrially dead, they have not been to
Bulawayo or heard about the crisis there in recent years. Bulawayo —
Zimbabwe’s once renowned industrial centre — is now deathly silent as the
wheels of industry have ground to a halt.

The city’s industrial heartland, Belmont, is now like a cemetery. Gweru,
formerly home to thriving businesses like Bata shoe company, has not been
spared the same fate. The situation is the same in Kwekwe, Redcliff, Mutare
and Masvingo, among other towns.

The latest Confederation of Zimbabwe Industries (CZI) paints a gloomy

“Contrary to what happened in the last three years, the manufacturing sector
is now at best in a state of stagnation with many companies in decline or
closed,” CZI president Kumbirai Katsande said recently.

“Capacity utilisation has gone down from 57,2% in 2011 to 44,9% in 2012.
Export sales are static. And business confidence is very low. Manufacturers
believe the economy will not improve in 2013. Our labour laws are inflexible
and are now a hindrance to business performance,” Katsande said. “Labour law
reform is unavoidable. It is time for Zimbabwe to directly resolve these
fundamental problems. There is no way out.”

Analysts say while multifaceted economic problems have led to company
closures, shortages of power have made the situation worse as energy is key.

The country’s industrial capacity utilisation has suffered huge knocks from
the energy deficiency whose solution remains elusive. According to Treasury,
capacity utilisation plummeted to below 50% in 2012 after initially showing
an upward trend last year.

Only the wood and furniture industry is booming with the highest capacity
utilisation of 95,5%, while the clothing and footwear sector has the lowest
at 9,7%. Other sectors like drinks, tobacco and beverages are operating at
63,3%; paper, printing and publishing 19,2%; while chemicals and petroleum
limp at 33,5%.

Zimbabwe’s energy needs are largely met by imports from the region. The
country’s power generation plants, some of which have outlived their
economic lifespans, have been operating at just above 50% capacity,
resulting in debilitating load-shedding schedules lasting up to over 10
hours in some cases.

Zimbabwe is producing an average 1 200 megawatts a day against a demand of 2
100MW, a scenario blamed on the lack of significant investment in the energy
sector since Independence in 1980.

Finance minister Tendai Biti says the country needs at least US$4,3 billion
investment in the energy sector to generate sufficient power between now
and 2020. This amount is almost 120% of the country’s revised 2012 national
budget of US$3,4 billion.

Government is mulling the Kariba South expansion and rehabilitation of the
Hwange Thermal Power Station to increase production. However, progress has
been slow because of lack of funds.

Authorities recently awarded Sino Hydro, a Chinese conglomerate, the tender
to carry out the Kariba South expansion project in a bid to add an extra
600MW to the national grid.

Zimbabwe is however still to start work on the Batoka Gorge hydroelectric
plant as it battles to clear US$70 million it owes Zambia before the project
can commence. The debt was inherited from the federation era of between 1953
and 1963. Batoka would produce about 1 000MW.

To alleviate the energy problem incapacitating the economy, the Zimbabwe
Energy Regulatory Authority last week licenced 11 independent power
producers (IPPs).

The CZI last week won a case in the Administrative Court to have Zesa’s 2009
tariff increases declared illegal, although the company is still trying to
hike charges despite consumer protests.

Economic Planning and Investment Promotion minister Tapiwa Mashakada
confirmed on Monday while presenting a review of the Medium Term Plan
Zimbabwe had missed its target on power generation.

“We are 10 to 15 years behind Sadc. We must run this distance over the life
of the MTP,” said Mashakada.

Industrial and domestic consumers hope government would deliver on energy
supplies so factories can reopen and more jobs are created, while households
would be spared frequent, unscheduled power outages.

Reliable energy supplies would also arrest the problem of deforestation
which has increased at an alarming rate as people chop down trees for
firewood. But for now energy deficits remain one of the biggest problems
facing Zimbabwe’s battered economy.

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A crisis crying out for a solution

November 16, 2012 in Business

Last week the Confederation of Zimbabwe Industries published results of its
2012 manufacturing sector survey.

Report By Kumbirai Makwembere

The results were not surprising at all and they only confirmed the view that
manufacturing remains in the doldrums and is proving difficult to revive.

Capacity utilisation dropped to 44,2% from 57,2% against government’s set
target of 70%. Some companies in the leather and allied sectors are even
operating at lower capacity utilisation levels of 27,5%.

However, there are some firms in the beverages sector, like Delta, that are
operating at levels close to 80%. The lagers unit, for instance, is running
at 88% capacity.

The challenges besieging the sector are not new but the same the country has
been trying to address for long, particularly since the adoption of multiple

Results from the survey indicate shortage of working capital remains the
biggest constraint to capacity utilisation, with a score of 32,3%. This has
resulted in some companies recording losses regardless of the good business
models they employ, as most profits go towards servicing debt. Both the cost
of funding and tenure remain unfavourable. Lending rates average 16%, whilst
tenures for most facilities remain below one year.

Turnall, for instance, relies on imported fibre which it sources from as far
afield as Russia. The raw material is paid for in advance and deliveries
have a lead time of three months. This forces the company to borrow to fund
its working capital cycle.

Business should therefore be allowed to explore all possible financing
avenues. In this regard, the authorities should be flexible on issues
relating to ownership of companies.

Indigenisation and economic empowerment regulations should be applied on a
case by case basis. If a company secures capital from an offshore investor
in exchange for equity, then the 51% indigenous ownership requirement in
companies should be waived. Existing shareholders must also be prepared to
cede some shareholding in exchange for money.

The challenge with most local shareholders is they are obsessed with control
to the extent that they are not willing to bring new shareholders on board,
even if this is the only way to rescue the company from collapse.

Inconsistent supply of utilities was also advanced as the other reason for
inefficiencies in our local industry. Provision of electricity and water in
the country is unreliable. Furthermore, the pricing of these utilities is
steep. Business has been forced to put in place back-up plans which
obviously come at a cost.

Use of generators to power operations as well as installation of water
purification units are some examples of these measures. This, however, is
both expensive and unsustainable.

Government should speed up liberalisation of the energy sector. Media
reports indicate that 10 power producers were licensed in the current year;
hopefully these companies will bring long-lasting solutions.

Local firms are also suffering from low product demand as they are failing
to compete with imports that land in the country at lower costs. Respondents
to the survey indicated most of the competition is from South Africa.
Inefficiencies are in the form of high repair and maintenance costs due to
the use of aged plant and machinery.

While the hyperinflation that prevailed in the country is the excuse
advanced for having frequent breakdowns, we also feel some company
executives are to blame. This is because up to now, some firms are still
making use of machinery that came into the country second-hand before

The inefficiencies in these local companies have availed opportunities to
foreign firms that are flooding the market with their products.

Our cost structures locally are again on the high side when matched with
other regional players. For instance, labour costs currently average US$150
locally against US$100 in the region. This scenario is compounded by the
fact that production volumes are low, resulting in high production costs per
unit. Perhaps firms should start matching remuneration with the level of
production taking place.

Coming up with a solution for local manufacturing companies is always a
difficult task. Some are of the opinion companies should be shielded from
external competition, which they view as unfair. This has problems in that
it makes consumers settle for substandard and higher-cost products. The Buy
Zimbabwe campaigns have not yielded the desired results as consumers will
always opt for the best products with the best quality and optimum price.

The best solution going forward will be to provide business with cheap
funding to retool production facilities as well as working capital. This
money again has to be long-term, and judging by the loans available locally,
this will be difficult. The only other way out is foreign money, which again
might not flow in due to the ongoing implementation of Indigenisation and
Economic Empowerment laws.

It is inevitable the country will only be left with manufacturing companies
with comparative advantage. We are better off importing products that we
cannot produce competitively and channelling our limited resources to areas
like mining and farming, where we have the potential to do well.

We can attract foreign investment in areas like mining by being
investor-friendly and then building on that by developing downstream
supporting industries whose costs and prices are competitive.

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KP to re-define conflict diamonds

November 16, 2012 in Business

OUTGOING Kimberley Process (KP) chair, United States’ Gillian Milovanovic,
plans to ignore previous contestations to the definition of conflict
diamonds and will push for amendments to the definition at the organisation’s
plenary discussion scheduled for November 27 in Washington DC.

Report by Taurai Mangudhla

She said this at the inaugural Zimbabwe Diamond Conference held in Harare
early this week.

The initiative, which is being promoted by Canada, the European Union and
the US, was in October shot down by African member states of the KP,
including Botswana, South Africa and Zimbabwe, as well as major diamond
buying nations like India, Russia and the United Arab Emirates, on the basis
it was specifically targeting Zimbabwe in order to prevent its Marange
diamond industry from competing fairly on the global market.

Milovanovic said desirable attributes of an updated definition should
maintain the previous focus on ensuring rough diamonds were free from armed
conflict and armed violence while addressing human rights, financial
transparency, economic development and other important questions that impact
on the diamond sector through the exchange of best practices and voluntary

The move comes as the Zimbabwean government, accused of looting US$2 billion
worth of diamonds, has publicly announced it is against full disclosure of
diamond operations as a sanctions-busting move.

“Additional certification standards beyond the current definition should
apply only to armed conflict and/or armed violence that is demonstrably
related to rough diamonds and independently verified.

“They should not apply to isolated, individual incidents or to circumstances
or situations in which an armed conflict exists, but is unrelated to the
diamond sector,” Milovanovic said, adding failure to comply with the new
definition would lead to exclusion.

She said the KP safeguards should be implemented on a site-by-site basis in
line with systems for other conflict minerals, such as that undertaken
within Africa by the International Conference on the Great Lakes Region.

The proposed new definition, which is aimed at ensuring KP successfully
provides enough assurances to diamond consumers in future, includes any
violence related to the production of diamonds, even if it is not connected
to the activities of a rebel movement.

“Of course, needed evolution in the diamond sector will not come solely
through definitions. The subject of integrating development into the KP
deserves to be highlighted, because it affects those workers within the
diamond sector who are the most vulnerable and because it can make a
broader, lasting contribution,” said Milovanovic.

Incoming KP chair, South Africa, is expected to take up the initiative in

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‘Credit crunch, bankruptcy loom’

November 16, 2012 in Business

The unchecked growth in non-bank credit in the economy may trigger a credit
crunch and a wave of company insolvencies and bankruptcies stemming from
defaults, economists have warned.

Report by Clive Mphambela

In an interview with businessdigest this week, Bulawayo-based economic
analyst Eric Bloch said the currently unregulated informal credit market was
causing people to spend far more than they could afford, leading to
excessive indebtedness. Businesses would soon suffer major losses, with some
going into bankruptcy, once consumers started defaulting, he said.

The absence of a functional credit reference mechanism in the economy made
the situation worse, Bloch added.

“A functional credit bureau would enable businesses to effectively assess
counterparty risks and hence improve the efficiency of their credit
processes. It also allows for the accurate pricing of risk and therefore
will allow for the wider availability of credit and a greater volume of
sales in the credit retail industries.” he said.

Bloch’s comments come at a time when bankers and other lenders have been
calling for the establishment of a credit bureau framework for assessing
credit risk of borrowers in the economy.

Recent discussions between Transunion and the Bankers Association of
Zimbabwe broke down after parties failed to agree on an operating model.
However, in an interview with businessdigest, Bankers Association President,
George Guvamatanga confirmed the banking sector was back on the market in
search of a technical partner to operate a credit bureau.

Chairman of the Zimbabwe Association of micro finance Institutions, Clive
Msipha, told businessdigest this week significant progress had been made
towards setting up a credit reference checking system in the microfinance

Analysts say Zimbabwe needs a moral code of conduct to combat reckless
lending. Whilst there is no evidence of a systemic crisis in the banking
sector as a result of the growing unsecured lending, government and banks
and other stakeholders must act soon to protect consumers from abuse by
credit providers and intensify efforts to educate consumers on financial

Unsecured credit differs from home loans or motor vehicle loans which are
asset-based. These types of loans are better-yielding in terms of interest
than (home) mortgage loans.

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Local not so lekker for the Mugabes

November 16, 2012 in Opinion

Those countries that imposed sanctions on Zimbabwe are “dirty filth”
President Robert Mugabe declared in Bindura last week when launching the
Mashonaland Central Community Share Ownership Scheme.

Report by MuckRaker

Zimbabwe should be wary, he said, of British companies that showed an
interest in investing in the country saying when supping with the devil, use
a long spoon.

This is a fascinating glimpse of how Zanu PF goes about making policy. Here
is Walter Mzembi doing all he can to create a welcoming climate for tourists
and investors ahead of the Victoria Falls UN tourism conference next year
while Mugabe is throwing a spanner in the works.

Winning friends and influencing people, Dale Carnegie wrote in his book. But
not in Zimbabwe it seems. Mugabe appears to think sanctions were entirely
undeserved. But the human rights abuses that led to them are
well-documented. As the president and his party have not mended their ways
and continue to behave like dictators they can expect an unwelcoming
reception from the rest of the world.

What will the Swiss visitors who were prosecuted for making unflattering
remarks about Mugabe which allegedly undermined the authority of the
president when they were held up at Kariba a couple of months ago say?

It certainly will not be glowing. In any other country except perhaps North
Korea Iran or Equatorial Guinea, these remarks would be dismissed as
inconsequential. But not here where they touched upon royal authority!

Cruelty begets cruelty

Zimbabwe Lawyers for Human Rights reported a flood of people prosecuted in
recent months for calling Mugabe names in frustration at economic
conditions. What does this tell us about the character of the regime?

Then we heard of motorists assaulted for not getting out of the way of the
presidential motorcade fast enough. One poor woman got her window smashed
and a fist in her face.

In his Bindura speech Mugabe bemoaned the death of Libyan leader Muammar
Gaddafi saying if he was guilty of anything he should have been tried rather
than killed in cold blood.

Indeed, he should. But Gaddafi was killed by an angry population not a court
of law. He lived by the sword and died by the sword. His people had had
enough of his cruelty.

Can’t be choosers

As noted above, Mugabe advised that Zimbabwe should be wary of British
companies that showed interest in investing in the country.

“Sometimes I wonder if these are the people who brought the Bible to us,” he
remarked. “If God listens to their prayers then he is different from the one
who we think we pray to.”

Is this the sort of language we should expect from a head of state? He made
it crystal clear that Zimbabwe is not an attractive destination.

“Some of us are saying even the 49% for foreigners is very generous, we
should reduce it even further. But for now they shall remain with that.”

He evidently hasn’t heard the expression “beggars can’t be choosers”. And
you can imagine what Sadc leaders think of these remarks that chase off
investors not just in Zimbabwe but throughout the region.

Cosmetic renewal

We carried a story in last week’s edition in which Zanu PF provincial
chairpersons who recently went to China, were told by the Communist Party of
China (CPC) to embrace change or die. The Zanu PF officials were frankly
told without leadership renewal and reform, their party was going nowhere.

You know things are bad when the party of Chairman Mao tells you to change
your ways.

In typical fashion, Zanu PF did not heed this invaluable piece of advice.

Instead, party spokesman Rugare Gumbo revealed Zanu PF had embraced an
emerging crop of professionals who have “expressed interest” in running for
parliamentary seats in next year’s elections.

This was Zanu PF’s response to the call for renewal.

Referring to them as “Young Turks”, Gumbo said there was need to inject new
blood so as to invigorate the party.

“All the young guns have to do is to show commitment, loyalty and support
the policies of the party,” Gumbo said.

Meanwhile sixty-something year-old Zanu PF youth secretary Absolom Sikhosana
and 88-year old President Robert Mugabe retain their positions.

Once again Zanu PF chooses to make cosmetic changes instead of tackling the
glaring issues. And we can trust no one is buying this latest stunt!

Degrees in violence

Zanu PF youth chairman Jim Kunaka last week said his party will not tolerate
any form of violence perpetrated in the name of the party.
Kunaka urged youths at Domboramwari in Epworth to respect individual
political views, ZBC reports.

“President Mugabe has spoken against violence … violence is retrogressive,”
Kunaka said. “As the youth, let us respect our President’s call.”

Kunaka’s calls rang hollow, however, as chaos rocked the youth wing’s
Bulawayo chapter after an outbreak of violence at the party’s Davies Hall

NewsDay reports Zanu PF was forced to negotiate with parents of victims of
those injured during the skirmishes so they would withdraw their cases from
the police.

Contacted for comment, Sikhosana could only say the skirmishes were “nothing
to write home about”.

So much for not tolerating violence!

Obama’s ‘top priority’

We were amused by the warm welcome with which the re-election of US
President Barack Obama was received by Zanu PF mandarins.

Zanu PF hailed “democratic” America, reports the Daily News, with party
officials claiming Obama’s win over his Republican challenger Mitt Romney as
a “victory against racists”.

Said Zanu PF secretary for administration Didymus Mutasa: “Well, I think it
is a very positive thing that has happened in the US and the fact that the
racist Republicans have been defeated is a very important indication of what
democracy should be about.”
Herald analysts went as far as urging Obama “to do more in normalising
relations with Zimbabwe”.

The curiously named Goodwine Mureriwa described Obama as a “lesser devil”
compared to Romney.

“From a Zimbabwean perspective,” Cde Goodwine opined, “I feel he should do
more to normalise relations between the two countries and that should start
with the repealing of the sanctions imposed on the country.”

Charity Manyeruke, always charitable in her comments about Mugabe and Zanu
PF, boldly declared the repeal of sanctions “should be Obama’s top priority
where Zimbabwe is concerned”.

“We expect him to re-visit the sanctions on Zimbabwe and work towards their
removal,” asserted Manyeruke.

No mention was made of what brought about the sanctions in the first place.

The Herald capped with its oft repeated whopper that “Zimbabwe has always
made it clear that it had no quarrels with the West, but just a bilateral
dispute with London”.

If anyone believes that they will believe anything.

Local not so lekker

First Lady Grace Mugabe said Zimbabweans should not waste their money
visiting foreign prophets but should instead seek cheaper salvation locally.

“I really don’t understand why scores of people are putting their faith in
foreign preachers,” Grace said. “They are having to raise a lot of money to
visit them when in Zimbabwe we are blessed with anointed people of God who
are able to do even greater things,” she said.

“Believe in our prophets and stop wasting money visiting faraway countries,”
she said.

The same could be said of the Mugabes’ incessant trips to the Far East
supposedly for “routine” medical check-ups.

Last month Mugabe used the World Energy Forum in Dubai as a ruse for another
stopover in Singapore.

In her interview with the Sunday Mail in June, Grace revealed she had to
rush to Singapore after injuring her back in the gym. If the Mugabes are for
all things local, why do they outsource all their healthcare needs?

Grace would do well to heed her own advice.

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Zanu PF must change or die

November 16, 2012 in Opinion

ONE of the main reasons why the ruling Chama Cha Mapinduzi (CCM), the former
liberation movement which brought independence to Tanzania in 1962, has
remained in power for 50 years is its ability to adapt to shifting political
and socio-economic circumstances, as well as changing leaders and course.

Report by Owen Gagare

Formed in 1954 under the leadership of one of Africa’s liberation struggle
movers Julius Nyerere, CCM, formerly Tanganyika African National Union
before being initially renamed Tanzania African National Union (Tanu) in
1964, merged with the then ruling party in semi-autonomous Zanzibar,
Afro-Shiraz Party, to form the new party in 1977.

Over the years CCM — party of revolution in Swahili — has undergone
fundamental changes in a bid to survive.

Initially, CCM ideologically pursued Nyerere’s African socialism model,
ujamaa — a Swahili word which means familyhood as the basis of Tanzania’s
social and economic development policies.

Some of the features of the ujamaa concept included the creation of a
one-party state to help solidify the cohesion of the newly-independent
Tanzania; institutionalisation of social, economic and political equality
through the creation of a centralised democracy and nationalisation;
villagisation of production through collectivised local productive capacity;
fostering Tanzanian self-reliance; free and compulsory education and the
creation of a collective Tanzanian rather than tribal identity.

After clinging to its failed socialist experiment and one-party state model,
CCM later changed leaders and course following the collapse of the Berlin
Wall in 1989, which marked the end of the Cold War and preceded Soviet Union

Although Nyerere maintained his grip on power for decades, clinging onto the
leadership of the party from 1954 to 1990 and the presidency from 1962 to
1985, CCM eventually changed leaders and has been doing that almost every 10
years since his departure.

The party also adapted to changing circumstances and abandoned its socialist
agenda to embrace market economy principles and democratic reform.

While CCM has managed to revitalise itself and survive, in Zimbabwe Zanu PF
is facing serious survival threats.

President Robert Mugabe has remained at the helm of Zanu PF since 1977 and
is resisting change of leadership and policies. Every conference and
congress is merely held to reaffirm his continued leadership despite growing
internal discontent and resistance.

Mugabe — who seems to have ambitions to be president for life — claims if he
goes his party would disintegrate. Although analysts agree with him, they
point that this is a self-serving argument merely designed to justify his
continued reign. Mugabe clearly does not care if he goes down with Zanu PF.

Fears are mounting that Mugabe’s unrelenting hold on Zanu PF would
eventually ensure the party follows the path of other liberation movements
like Unip in Zambia, Malawi Congress Party (MCP) and Kenya’s Kanu, not CCM
or other parties in the region like Frelimo, the ANC and Swapo.

Like CCM, Frelimo, the ANC and Swapo have also managed to ensure change in
leadership, policies and direction.

Zanu PF’s waning fortunes are partly attributable to its failure to embrace

Although Zanu PF has abandoned its one-party state model and socialist
posturing, it continues in practice to behave as if Zimbabwe is a one-party
state and a command economy. Its policies are largely blamed for the
socio-economic morass the country is mired in.

Under Mugabe, Zimbabwe has moved from being one of the strongest,
highly-industrialised and working economies in sub-Saharan Africa to being
one of the basket cases. The country’s current paltry budget of US$3,6
billion — which is smaller than the turnover of some supermarkets or
companies in South Africa — shows how much the country has regressed in the
past 32 years.

Zanu PF’s support base has been dwindling over the years and thus it came as
no surprise when it lost its parliamentary majority during the 2008
elections for the first time since Independence in 1980.

Mugabe lost the first round of the presidential election to Prime Minister
Morgan Tsvangirai and had to be rescued by the military through a brutal and
bloody campaign prior to the run-off. Mugabe, who would be 89 when the next
elections are held next year, would once again be the Zanu PF presidential
candidate, which bears testimony to how the party has failed to learn from
its counterparts in the region. Once formidable parties like MCP and Kanu
are now weak opposition, while Unip faces extinction due to failure to

MCP was founded by Hastings Kamuzu Banda in 1960 and it won all seats in the
legislature in the 1961 before leading the country to Independence in 1964
but it’s now battling for survival. Unip is almost dead. Kanu is struggling
to come back to power.

By contrast, CCM, Frelimo, the ANC and Swapo have adapted and are still
strongly in charge. Unless Zanu PF learns from these experiences — including
from its allies abroad like the Communist Party of China (CPC) — it will
soon be facing its demise.

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Public media regulation: Hallmark of dictatorship

November 16, 2012 in Opinion

AT the heart of liberal democratic governance and journalism lies the
principle of self-regulation and consequently the existence of the free

Where state regulation is imposed on the media as is the case in Zimbabwe,
it becomes the hallmark of authoritarianism. Media practitioners must resist
this while offering plausible alternative frameworks.

Historically, apart from security laws such as the repealed Law and Order
Maintenance Act, the State of Emergence powers discarded in 1990, the
Official Secrets Act, Public Order and Security Act as well as defamation
and libel laws, there were no laws specifically crafted to regulate the
media until 2000.

Only the Zimbabwe Broadcasting Act, a relic of colonialism, was fashioned
specifically for regulating the airwaves to maintain the monopoly of the
state broadcaster, the Zimbabwe Broadcasting Corporation, formerly Rhodesia
Broadcasting Corporation.

In the area of the print media, before the introduction of the Access to
Information and Protection of Privacy Act, newspapers would only register
with the General Post Office without any restrictions.

The political and socio-economic situation, particularly the crisis of the
late 1990s and consequently the emergence of an organised civil society
under the leadership of the National Constitutional Assembly, which brought
together labour, women and student groups as well as the eventual formation
of the Movement for Democratic Change, fundamentally changed state-media

Newspapers such as the Standard, the Independent, Financial Gazette and the
Daily News helped to marshall, give form and coalesce all these disparate
groups fighting for democratic reforms. These newspapers, among other
sources of information and news, also gave the groups above alternative
platforms and voices to channel their discontent against the government led
by the Zanu PF.

In response, Zanu PF responded by building an arsenal of security and media
laws to regulate the media with a view to maintaining cohesive and
consensual leadership which was being eroded by the forces of civil and
political activism that used the privately-owned media as the launching pad,
besides other means of expressing discontent.

It is critical therefore to note the current debates on statutory media
regulation is not new at all. What is happening under the recently
established Zimbabwe Media Council is an entrenchment of the media
regulatory framework by the state that is very undesirable in a society
trying to go through a transition to democracy.

Past experiences through the work of the now defunct Media and Information
Commission lead us to believe state media regulation has a chilling effect
on journalism and journalists, thus limiting free flow of information and
news. Arrests, harassment of journalists and closure of newspapers became
part of the state’s reaction to the rising tide of discontent and demands
for democratic reform and change.

The limited democratic space and environment currently prevailing in
Zimbabwe is a result of decades of struggles for freedom of expression by
forces of change, with national newspapers such as the Independent, Daily
News, Financial Gazette and Standard, as well as magazines like the now
defunct Parade, Moto and Horizon, leading the campaign for democracy, at
least at the level of ideas and debate.

That is why the state has responded viciously with repressive media and
security laws calculated to frustrate democratic reform and change.

What is now needed is an organised thought leadership in the media.
Subcontracting leadership, sometimes to impostors and gatecrashers, will not
help much as some of these intruders are just driven by economic, not
professional, interests.

It is ironic statutory media regulation has been enacted by the inclusive
government to serve the political interests of the elite, not the
professional and ethical demands of the media. Media self-regulation in
Zimbabwe should be built around the promotion of ethical codes by the
journalists themselves, not by a self-serving norm-violating regime allergic
to democratic reform.

In democratising countries, media self-regulation could be the solution and
counter proposal to the blatant state interference in the operations of the
media. This model has been regarded as a vehicle of fostering media
professionalism by the journalists themselves.

This kind of self-regulation requires lobbying MPs and the executive branch
to craft such a regulatory framework. Should that fail, then the media must
just have self-regulation.

In Western democracies, self-regulatory codes first emerged in the first
decade of the 20th Century in Poland and the United States as part of
general moves towards professionalisation of the media by journalists

In Europe, such codes were adopted gradually after World War I in UK, Sweden
and France. In the case of the US, many newspapers have their own customised
codes, watched over by an ombudsman (Alpha Media recently appointed one, the
first such initiative in Zimbabwe).

Apart from the UK, where self-regulation has failed in many respects, there
are many other examples of models to look into, for instance, the
Netherlands, Germany and Norwegian frameworks. This is a critical call for
editorial independence and thought leadership that is glaringly lacking in

Ruhanya is a PhD candidate and director of Zimbabwe Democracy Institute.

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Unitary state hegemonic

November 16, 2012 in Opinion

THE recent confirmation by Local government minister Ignatius Chombo that
Zvimba district in Mashonaland West province — where President Robert Mugabe
and himself come from — will play host to the new seat of government is an
important disclosure in various ways.

Since 1980, there have been growing complaints, now intensifying as evidence
of systematic regional hegemony and resultant marginalisation mounts, that
the unitary state arrangement in Zimbabwe is being abused by those in power
to entrench an unequal distribution of national resources and development

That is besides ensuring the state virtually becomes a colony of one
regional expanse which has benefitted more than other areas in terms of
development projects, tenders, licences, official appointments and

In that regard, Chombo’s recent remarks that the new seat of government
project, including a new parliament building, will go to Mt Hampden Kopje —
which falls under Zvimba district and curiously where colonialists wanted to
build their capital — instead of other areas, raises a lot of issues.

The first and rather obvious one is that it confirms Mugabe’s grand strategy
of developing his home province at the expense of others, while
consolidating the plan that Mashonaland West, which has controlled the
executive for over three decades and is now even shifting parliament to
within its boundaries, should remain hegemonic.

The second observation is that it confirms the current skewed patterns of
development are a result of deliberate strategies to use national resources
to serve the interests of a narrow section of the society and the country,
not the wider population.

The third one shows Mugabe and his cronies now think that Zimbabwe is
Mashonaland West and that Mashonaland West is Zimbabwe and therefore calls
for equitable development must be ignored.

Professor Welshman Ncube, among other leaders, has urged government to
relocate parliament to Bulawayo or any other place to ensure state
institutions are situated around the country to help national cohesion and
unity. National institutions must capture and reflect the diversity of
society to identify with the people in their collectivity.

Fourth, it shows the current leaders are hopeless regionalists who have no
national interests at heart at all, except villagising government
operations. This balkanisation process has polarised and divided the
country, while explaining why Zimbabwe is failing to manage its
socio-political diversity.

Lastly, these moves to shift the capital to Mashonaland West — from where
the executive has been controlled for 32 years without a break — shows why
Zimbabwe needs devolution of power. In fact, this is the clearest
substantiation of complaints of lopsided development and why this country
needs devolution to address the anomalies.

The reason why calls for devolution are growing louder across the country is
that it has become evident there is a clique in power and at the helm of the
national leadership abusing the state to perpetuate inequitable and even
discriminatory development policies.

Mugabe and his cronies have not only failed to manage the country and the
economy but are also fuelling divisions through their regional agendas. What
is coming out is that the clique in power is supported by a security cabal
which has interests in maintaining the status quo as it is benefitting from
such nakedly misaligned development policies.

Also linked to that same clique is a coterie of business people who are
monopolising economic opportunities for the collective benefit of those in
political leadership; those protecting the establishment with guns and those
occupying the commanding heights of the economy in a system geared to
protect regional and ethnic control of power, politics, security and the
economy. And now they want to normalise the abnormal by pretending their
attempts to shift the capital to their Mashonaland West backyard is merely
an attempt to decongest Harare.

The question is why Zvimba district? Are there no other places outside
Zvimba that could host the seat of government? What message is Mugabe and
his cronies sending to other regions by doing this?
Also picture this situation of monopolisation of national wealth; the
biggest diamond fields are in Marange in the Manicaland province yet the
diamond polishing company is in Zvimba district.

Simple logic dictates that the economic proceeds from natural resources of a
particular area should be used first and foremost for the benefit of those
communities and then cascade to other areas. This means the diamond
polishing company should have been located in Mutare or somewhere in

There is no logical explanation on why the Zvimba district was chosen to be
the site for government and the diamond polishing project except that it is
part of the grand plan to monopolise national resources and then use the
resultant economic muscle to exert political control over other regions.

That is the problem with unitary states. They are usually hegemonic. And
this further explains why Mugabe and Chombo have come out openly opposing

The truth is that in the same manner the people of Mashonaland West should
benefit from their rich soils and the agricultural produce that comes from
there, people from Manicaland must benefit from their diamonds. The same
applies to other regions.

During the recent diamond conference in Victoria Falls, Mugabe said there
should be local beneficiation of at least 10% of the diamonds. This means
Mugabe and his Zvimba crew want to make their area the economic hub of the
country. Shifting the seat of government there is part of the plan.

This whole Zvimba project feeds into Mugabe’s personality cult crusade and a
bid to salvage his wretched legacy.

Chombo confirmed this. Against this backdrop, it is time for Zimbabweans to
stop Mugabe’s abuse of power and national resources.
Moyo is the director of policy and research in the MDC led by Professor
Welshman Ncube. E-mail:

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Govt needs to privatise parastatals without delay

November 16, 2012 in Comment

AMONG many pressing issues to be addressed if the economy is to be fully
resuscitated is the revitalisation of parastatals and state enterprises.
Their provision of essential utilities and services falls far short of the
country’s basic needs.

Report by Erich Bloch

Chief among key service providers unable to meet national needs is Zesa.

The power supply authority is appallingly under-capitalised to fund its
day-to-day operations, let alone modernise and expand its
electricity-generating capacity.

As a result, Zesa cannot adequately maintain and operate its
electricity-generating infrastructure, or source sufficient supplementary
energy supplies from neighbouring countries.

Its funding constraints have also precluded modernisation and enhancement of
its generation facilities as well as transmission networks, let alone the
development of additional power stations.
Those financial constraints have also motivated many of its
technically-skilled personnel to seek employment abroad.

Electricity is a key requisite for the manufacturing and commercial sectors,
service providers, the mining industry and agriculture.
In addition, recurrent non-availability of electricity is also a major
discomfort and demotivant for residents, compounding their economic
demoralisation. It is yet another factor in Zimbabweans seeking residence in
other countries.

It also hampers other infrastructural operations, such as traffic control
lighting, resulting in innumerable road accidents at busy intersections.

Moreover, because of its parlous illiquidity, Zesa recurrently hikes its
tariffs to levels above economic viability for consumers.
Similar circumstances afflict many other parastatals and state enterprises.

Among them is AirZim, the so-called “national airline” which for a long time
now has not been functional. The carrier has since resumed flights which are
all too often cancelled or delayed.

Moreover, AirZim has accumulated debt, including arrears in remuneration for
its workers extending to more than a year.

Consequently, it cannot modernise and enhance its aircraft fleet, has lost
its International Air Transport Association registration, thus negatively
impacting the business community and the tourism sector.
Similarly, National Railways of Zimbabwe is in dire straits. Its inability
to meet railroad transport requirements results in greater demand on road
transportation services.

This has led to clogged border posts, lengthy delays in delivery of goods to
foreign customers as well as in receipt from foreign suppliers of essential

Inevitably it has prejudiced the viability of industry. With the worldwide
escalation of fuel prices, utilisation of road transport is progressively
becoming costlier. This has a correlating effect on the pricing
competitiveness of exports, and increases the operating costs of Zimbabwean

Yet another state enterprise which, despite major efforts to do so, cannot
fully address national needs is the Zimbabwe National Water Authority

Zinwa is constrained not solely because of adverse climatic conditions, but
because government cannot avail enough funding to enable the development of
new water resource access, conservation and maintenance necessary to meet
national needs.

In fact, all too often Zinwa does not even have sufficient resources to
maintain its existing infrastructure such as the boreholes at the
Nyamandlovu which, if fully operational, could service almost 15% of the
water needs of the city of Bulawayo.

It is thus overdue for government to recognise the only viable solution to
the difficulties of the parastatals and state enterprises in meeting
essential national needs is privatisation. The privatisation might not
necessarily be 100%, but must accord private sector investors with a
majority holding of equity.

Many international companies and other ventures have progressively intimated
interest in acquiring control of parastatals. Their coming on board would
provide considerable funding for development, upgrading and maintenance of

It would also afford them access to the technology and know-how needed for

Concurrently, privatisation can relieve government of much of its vast
accumulated debt, and of the recurrent calls upon it for further funding.

Government needs to move away from its policy of “it’s mine, and no-one else
can have it”, and instead recognise the immense economic benefits that would
flow from constructive privatisation of its enterprises.
Government needs, without further delay, to appreciate that privatisation is
a “must-do” for Zimbabwe’s economy, and for the comfort and well-being of
the people.

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Candid Comment: When will we have a real budget?

November 16, 2012 in Opinion

AFTER listening to Finance minister Tendai Biti’s budget statement Friday
one felt very sad indeed.

Comment by Itai Masuku

It’s a Mickey Mouse affair. An estimated 12 million-plus people pinning
their hopes on US$3,5 billion, the same amount that can be earned by a
single Hollywood blockbuster movie or half of what the Pick n’ Pay retail
chain across the border in South Africa generates in a year?

The budget just shows how poor we are and paradoxically, in a country so
blessed with abundant resources. At the diamond conference this week it was
revealed Zimbabwe has a quarter of the world’s diamond resources.

That means we have a quarter of the world’s wealth in terms of those stones
that are forever. And yet we are forever poor.

Elsewhere in this edition we have a story that focuses on Unki Platinum
mine. That mine in that obscure part of the world called Shurugwi is home to
what was initially thought to be the world’s largest platinum deposits.

This has variously been revised to second and third largest resource in the
world. Host to such magnitude of the world’s most precious metal and yet we
are still poor? This causes cognitive dissonance of immense proportions!

In addition we do have significant amounts of gold deposits, the time-tested
precious metal and store of value.

Zimbabwe also has a myriad of base metals such as chrome and nickel in
viable quantities. As for the organic deposits, there are vast, exploitable
quantities of coal and gas. Some have even thrown in oil for good measure.

So why are we still so poor?

Notice, we have only dealt with the mining sector. Our potential for
agriculture is immense; one Canadian investment expert says this country
could solely live off contract farming for the Western nations, because of
the ideal climate and soil qualities it has for an array of crops.

Still, others say we could make a mint from our education legacy, service
industry etc.

The question remains: Why then, are we still poor?

In short, the causes of our poverty go beyond our Mickey Mouse budget.

The answer is because we fail to leverage on the endowments and potential we
have. Poverty, therefore, is not out there, but in here; in our minds. We
have a poverty mindset.

Thus the comparatively pea-sized budget is a result of our poor mindset and
poor governance in both the public and private sectors.. And as for the
budget itself, there is nothing really new.

It’s the same old story; we need to cut our expenditure and thereby reduce
the budget deficit. Do we really need a 200 000-plus civil service,
especially with the advent of IT?

If we assume our population is 12 million, this means one civil servant per
60 people. It would be better if that was the national doctor to patient
ratio. Do we need to retain the loss-making parastatals? We need a new

Sceptics have dismissed the CEO Roundtable’s notion of a US$100 billion
dollar economy. The Business Council of Zimbabwe has now thrown its weight
behind this vision. Cynics question where we will get the wherewithal for
this target.

Like I said; in our minds. Singapore is 550 times smaller in area than
Zimbabwe, has next to zero minerals and yet has a GDP of nearly US$300
billion, about 30 times larger than Zimbabwe’s. What demonstrates that a
change in mindsets unleashes wealth is our friends across the border in

In just over a decade they have raised their GDP from less than four billion
to US$20 billion. Why not us?

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Comment: Budget: Back to deficits era

November 16, 2012 in Opinion

THE budget presented Friday by Finance minister Tendai Biti revealed what
many feared: we have slipped back into the bad old days of incurring budget

Comment by Editor

After having started off well and maintaining a balanced budget for the bulk
of his term in office, Biti has dropped the baton towards the finishing
line. We have once again begun to live beyond our means –– spending more
than we earn, and to use Biti’s own words, we are “killing a rat and eating
an elephant”.

That is most unfortunate. Admittedly, Biti’s hands were tied with the
never-ending story of the disappearing diamond revenue on which he had
pinned the nation’s hopes. From close to US$600 million earned by the
diamond industry, Treasury has only received a paltry US$40 million.

This in spite of the fact that out of this global figure there was not only
various amounts of tax revenue expected but more importantly dividend
revenue since government has more than 50% shares in four of the major
diamond–producing companies in this country in Chiadzwa: Marange, Mbada,
Anjin and DMC.

The $64 000 question remains: Why is the diamond revenue apparently not
reaching the Treasury in full? If this conundrum is solved, it will
certainly go a long way in addressing the deficit issue.

Biti also needs to plug the leakages from Zimra, where we are only receiving
a paltry 4% of expected revenue from our huge import bill, as he said we
only export US$1 for every US$3 we spend on imports.

However, let us note the main drain of our resources; civil servants’ wages,
accounted for 73% of the expenditure, up from of 60% last year.

If the budget outturn for 2012 will indeed be US$3,5 billion against a
US$300 million shortfall that means we have overshot our expenditure by

That’s way above any average provision for contingencies. However, as a
percentage of GDP the deficit would be 2,6%, fairly reasonable if we knew
how we would finance the deficit.

Prior to 2000, most budget support was in the form of grants and subsidies
from the international community. Biti lamented that much of international
support now went directly to specific projects and would be channelled via

Biti may be pinning his hopes on his October 21 discussions with the IMF and
World Bank in Tokyo where the world’s two leading financial institutions
lifted moratoriums on financial support to Zimbabwe.

On controversial issues, Biti has proposed playing hard ball with the
banking sector, in a manner reminiscent of the Gideon Gono era. In
particular he accuses foreign-owned banks of being outward looking and
detached from the development needs of their host country.

Intervening in the markets for the first time, Biti has compelled a 4% per
annum interest rate payment for deposits above US$1 000 over three months.
He has also decreed that salary deposits less than US$800 must not attract
bank charges.

He has also played hard ball with miners, whom he will compel to source
goods and equipment locally available. But he should be commended for the
stimulus packages to industry, particularly tourism where he extended
duty-free status for capital goods imports.

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Editor’s Memo: Sustained stability key to recovery

November 16, 2012 in Opinion

FINANCE minister Tendai Biti Friday presented a US$3,8 billion 2013 national
budget, maintaining a hopeful line while painting a gloomy picture of the
situation as he rang the alarm bells about the downside risks facing the

Report By Dumisani Muleya

Given the current environment, it was a decent effort by Biti but, as we
discussed in our newsroom just before the minister’s delivery, our budget is
so paltry that it is smaller than the allocation of one ministry in South
Africa or the annual turnover of some individual companies there.

Although Biti tried his best, there was nothing really surprising, except
for a few interventions here and there, for instance new measures in the
banking sector, and other actions.

Biti and Reserve Bank officials, as well as organised economic groups, have
throughout the year given us information through fiscal and monetary policy
reviews showing the overall picture and direction of the economy.

After a prolonged period of economic and political meltdown, Zimbabwe’s
economic stabilisation and recovery began with the end of hyperinflation in
2009 following the formation of a coalition government.

Given a favourable external environment, the adoption of the multicurrency
system and resultant exchange rate stabilisation, cash-budgeting and
discontinuation of quasi-fiscal activities, the macro-economic situation

The country made substantive progress in economic recovery. Policy reforms
implemented after the hyper-inflation period, supported by significant
off-budget grants, fuelled recovery.

Although the economy rebounded strongly, posting growth rates well above
those of other countries in the region, it was coming from a low base and
there was always a need for a more durable base to sustain fast and
inclusive growth, undermined by dysfunctional state enterprises key to

While real economic growth in 2011 remained robust at an average of 9%,
mainly sustained by strong external demand for key minerals and continued
recovery in domestic demand, the outlook began to turn gloomy during the
course of the year.

Biti was forced to revise downwards his growth projections from 9,4% to 5,6%
during his mid-term fiscal policy review. His budget was cut from US$4
billion to US$3,6 billion, and again yesterday to US$3,5 billion. Growth
targets were further cut to 4,4%, stretching the negative trend.

To his credit, Biti is however clear on serious downside risks facing his
2013 budget. He said these included the threat of another poor rain season;
the collapse in international commodity market; further external shocks in
the context of current limited buffers; the “wait and see” attitude from
investors; slow pace of reform in government; continued discord and
cross-talk particularly on the issue of investment and indigenisation; lack
of proper revenue inflows particularly from diamonds and fiscal slippages
and overruns, especially emanating from referendum and election costs.

All these downside risks are significant, but the two main threats to the
outlook are the possible resurgence of political instability ahead of
elections next year and a global economic downturn. In particular, a sharper
recession in Europe and deceleration in China would significantly affect
commodity prices as well as activity in South Africa, Zimbabwe’s major
trading partner.

But the real problem is what Biti touched on in passing when he said: “The
biggest risk to this economy in 2013 remains that of violent, contested
state elections. Any reproduction even on a small scale of the fraticism
(fratricide) and friction we saw in 2008 will virtually collapse the nascent
foundations we have tirelessly re-laid in the last 45 months. A case of two
steps forward and 20 steps backwards.”

Political crises place a premium on development, as he said. Indeed, we
cannot afford to carry-on along these cyclical paths of permanent conflict
temporarily suspended by short periods of peace. We need sustained stability
to ensure recovery.

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