http://www.theindependent.co.zw/
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.
http://www.theindependent.co.zw/
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
networks.
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
said.
“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.
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
later.
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
assault.
The convention project is being supervised by Midlands
Development
Association chaired by Mnangagwa ally and Zvishavane-Runde MP,
Larry
Mavhima.
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
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, 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
unsuccessful.
Political
parties and civic leaders have called for an investigation into
the opaque
funding of Zanu PF activities.
http://www.theindependent.co.zw/
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.
http://www.theindependent.co.zw/
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
Raftopoulos.
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.
http://www.theindependent.co.zw/
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
issues.
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
parliament.
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
nonsense!
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.
http://www.theindependent.co.zw/
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
said.
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
http://www.theindependent.co.zw/
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.”
http://www.theindependent.co.zw/
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
price.
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
millions.
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
mining.
“The scale of
illegality is mind-blowing,” the report says.
http://www.theindependent.co.zw/
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
House.
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
resources.
“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.
http://www.theindependent.co.zw/
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
questionable.
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.
http://www.theindependent.co.zw/
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.
http://www.theindependent.co.zw/
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
picture.
“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.
http://www.theindependent.co.zw/
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
currencies.
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
Independence.
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.
http://www.theindependent.co.zw/
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
initiatives.
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
2013.
http://www.theindependent.co.zw/
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
industry.
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
literacy.
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.
http://www.theindependent.co.zw/
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
headquarters.
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.
http://www.theindependent.co.zw/
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
disintegration.
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
change.
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
evolve.
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.
http://www.theindependent.co.zw/
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
press.
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
relations.
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
themselves.
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
Zimbabwe.
Ruhanya is a PhD candidate and
director of Zimbabwe Democracy Institute.
http://www.theindependent.co.zw/
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
patterns.
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
investment.
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
Manicaland.
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
devolution.
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: mdcpolicyguru@yahoo.co.uk
http://www.theindependent.co.zw/
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
inputs.
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
businesses.
Yet another state enterprise which, despite major efforts
to do so, cannot
fully address national needs is the Zimbabwe National Water
Authority
(Zinwa).
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
operations.
It would also
afford them access to the technology and know-how needed for
revival.
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.
http://www.theindependent.co.zw/
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
mindset.
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
Zambia.
In just over a decade they have raised
their GDP from less than four billion
to US$20 billion. Why not us?
http://www.theindependent.co.zw/
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
deficits.
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
11,7%.
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
Treasury.
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.
http://www.theindependent.co.zw/
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
economy.
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
stabilised.
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
recovery.
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.
