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Mugabe, Kabila’s US$1bn debt spat

November 23, 2012 in News

ZIMBABWE, still bruised by its costly involvement in the Great Lakes war
between 1998 and 2002 where it sustained heavy military and financial
losses, is not sending troops to the Democratic Republic of Congo (DRC) this
time despite the dramatic seizure this week of the main eastern town of Goma
by rebels amid threats of an assault on the capital, Kinshasa, it emerged

Report by Owen Gagare

Senior government officials told the Zimbabwe Independent President Robert
Mugabe, commander-in-chief of the Zimbabwe Defence Forces (ZDF), and his
Defence minister Emmerson Mnangagwa, were reluctant to intervene in the DRC,
mainly due to Harare’s frosty relations with Kinshasa over several issues,
including a US$1 billion debt fall-out.

Repeated efforts yesterday to get comment from Mugabe’s spokesperson George
Charamba and Mnangagwa were unsuccessful.

Army spokesperson Colonel Overson Mugwisi promised to answer questions, but
did not.

Officials say there is no loveFrom Pagelost between Mugabe and his DRC
counterpart Joseph Kabila following Zimbabwe’s failed bid to secure
compensation from the DRC for losses largely sustained between 1998 and

Since 2000 Zimbabwe has been demanding about US$1 billion from the DRC for
military and consumables expenditures incurred during the war. Harare has
written to Kinshasa insisting on US$1 billion compensation but its demands
have been resisted and ignored. Zimbabwe wants to be compensated for losses
of military equipment, supplies, and monies spent on operations and

“The aftermath of the DRC war on Zimbabwe has been very bad. First, the
country lost so much there as it spent millions on an unending war, fuelled
by longstanding ethnic tensions, regional and global rivalry and the
scramble for resources, away from its borders. Second, after its withdrawal
South Africa and other bigger powers moved in to do business.

Third, Zimbabwe’s mining contracts there were cancelled. Fourth, the DRC
refused to compensate Zimbabwe for war losses. And fifth, Kabila distanced
himself from Mugabe,” an informed source said.

“Given all this Zimbabwe won’t intervene. It would now only act within Sadc,
the African Union (AU) and United Nations (UN) frameworks. Its defence pact
with Angola and Namibia forged during the one war won’t be activated to
provide a joint intervention force,” the source said.

However, the main sticking point now complicating diplomatic relations
between Harare and Kinshasa is Mugabe and Kabila’s dealings. It is
understood they are now in each other’s bad books over several issues,
including Kabila’s deemed lack of appreciation of Mugabe’s help rendered to
his late father Laurent who was assassinated by his bodyguard in 2001, four
years after he toppled veteran dictator Mobutu Sese Seko.

Mugabe reportedly insulted Kabila over their sour relations in 2009 when he
visited Harare as Sadc chair to resolve a local crisis following Prime
Minister Morgan Tsvangirai’s withdrawal from the coalition government.

In a sensational United States diplomatic cable filed from Harare in 2009,
which was later released by WikiLeaks, DRC ambassador to Zimbabwe Mawapanga
Mwana Nanga told former American ambassador Charles Ray that Mugabe attacked
Kabila at the meeting after he had initially refused to meet him.

Kabila was holed up in South Africa for hours while Mugabe resisted the
meeting which only occurred after Sadc facilitator, South African President
Jacob Zuma’s intervention.

Mugabe is also said to be reluctant to intervene because of a number of
other reasons, including unpredictable geo-political dynamics in Sadc and
Africa, as well as globally, Zimbabwe’s internal politics, the state of the
economy, forthcoming elections and inevitable popular disapproval.

“The DRC issue has been discussed with security structures and with the
political leadership and the decision is that Zimbabwe is not sending troops
there to combat the renewed rebel menace,” a senior government official

The situation was widely discussed and carefully considered. There are
various reasons why Zimbabwe won’t be intervening this timein the DRC
despite the renewal of war.It is a complicated situation, worsened by the
frosty relations between Mugabe and Kabila.” Zanu PF spokesman Rugare Gumbo
said Zimbabwe would not intervene.

Kabila and Rwandan President Paul Kagame will attend a regional summit in
Uganda tomorrow after rebels seized the main eastern Congolese city of
Goma.African Union Commission chairwoman Nkosazana Dlamini-Zuma will also
attend the extraordinary summit of the 11-member regional bloc, the
International Conference on the Great Lakes Region.

Kabila and Kagame — whom the U N accuses of backing the M23 rebels who
seized the city of Goma on Tuesday, claims Kigali rejects — will come face
to face again at the Kampala summit.

After the fall of Goma, Kabila flew to Kampala for two days of crisis-talks
with Uganda’s President Yoweri Museveni and Kagame.
The three leaders issued a joint statement calling on the rebels to stop
their offensive “immediately” and to withdraw from Goma, which has a
population of one million.

But M23’s political chief, Bishop Jean-Marie Runiga, told Reuters that
Rwanda and Uganda had no authority to order them to give up the city.

“We’ll stay in Goma waiting for negotiations,” he was quoted as saying. The
rebels captured the small town of Sake, 27km west of Goma, on Wednesday and
threatened to march to the capital, Kinshasa, to overthrow Kabila.

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Govt pumps US$50m into DMC

November 23, 2012 in News

GOVERNMENT is consolidating its presence and activity in Zimbabwe’s diamond
industry, with the latest indication being the pumping in of US$50 million
into its newest company in the Marange fields, Diamond Mining Corporation

Report by Taurai Mangundla

DMC project manager, Ramzi Malik, told businessdigest his company had so far
invested US$40 million since it started operations last year and plans to
invest a further US$50 million by end of 2013.

The new money, he said, would be channelled towards capital equipment,
thereby increasing production threefold. DMC has capacity to produce 7 200
carats a day worth about US$300 000, Malik said.

“We are currently producing, tonnage wise, 50 000 tonnes per month. With the
modifications and updates, we are projecting we will be able to do an
average of hopefully 150 00 tonnes per month, which will give us an average
of hopefully 150 000 to 200 000 carats per month,” he said.

Currently,DMC is producing about 600 000 tonnes of ore a year and this would
go up to 2,4 million tonnes upon completion of the expansion exercise.

The increased production is in line with Zimbabwe’s plans to utilise its
Marange diamonds, which are said to account for 25% of global diamond
deposits and have potential to dominate world markets by 2015.So far, DMC
has conducted two local and two international auctions after receiving
Kimberley Process Certification Scheme compliance in January this year.

“We have achieved record sales figures to date with other sales scheduled
before the end of the year. These figures could have been significantly
higher if not for the downturn in prices on the international diamond
markets, restrictive measures of Office of Foreign Assets Control and
challenges sanctions imposed on us and our consumers,” he said.

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‘ZDI in secret diamond sales’

November 23, 2012 in News

LOCAL arms manufacturer and trader Zimbabwe Defence Industries (ZDI) is
allegedly selling diamonds worth US$50 million a month which are mainly
benefiting members of the Joint Operations Command (JOC), which brings
together army, police and intelligence service chiefs.

Report by Tendai Marima

According to a report titled Reap What You Sow: Greed and Corruption in
Zimbabwe’s Marange Diamond Fields compiled by Partnership Africa Canada
(Pac)and which Zanu PF officials have rejected.

ZDI is involved in diamond sales through its two Harare-based companies
Rusunuguko Nkululeko Holdings and Impetus Capital.

The report says: “They trade approximately US$50 million diamonds on an
average month, according to sources. The main beneficiaries of these trades
are members of the Joint Operations Command, the top echelons of Zimbabwe’s
military establishment.”

The Pac report says high-quality gems are regularly sold in ZDI’s secret
sales and exported from Harare to South Africa where they are allegedly
trafficked from Johannesburg to Dubai, with the involvement and or knowledge
of the Minerals and Marketing Corporation of Zimbabwe.

According to the report, the trafficking of diamond parcels to Johannesburg
was disrupted earlier this year after a business associate of the late
retired army commander General Solomon Mujuru tried to run a scam on
ZDI-linked traders by switching parcels of stones.

“In March 2012, a foolhardy white Zimbabwean courier, aligned to the late
General Mujuru reportedly shortchanged his military handlers by switching
the high value gems for lesser stones once in Johannesburg.

Since the scam, foreign dealers have been made to fly to Zimbabwe on private
jets and pay ZDI operatives directly,” the report says.
The report also says 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 also notes there is a sophisticated
parallel market in Surat, India, selling diamonds for a higher price.

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Parties reel from primary elections

November 23, 2012 in Politics

LOOMING primary polls are wreaking havoc in Zanu PF and the MDC-T, fuelling
infighting and divisions within the main two parties as they brace for
make-or-break elections next year.

Report by Brian Chitemba/ Herbert Moyo/ Elias Mambo

Primary elections — which narrow the field of candidates before general
elections — are critical in a democracy.

Those challenging sitting MPs, for instance, largely benefit from contested
primaries. A political Darwinian imperative applies: candidates who survive
tough primaries often become the best campaigners and benefit from the
publicity that such victories may provide.

Primaries are also a test run before main polls and usually give candidates
better appreciation of the skills and resources needed to win the general

However, primaries fuel infighting and divisions which almost inevitably
occur. Candidates are usually weakened by the vicious internal attacks
during primaries.

Their campaign war chests also get depleted by the costly preliminary polls.

Conventional wisdom about electoral politics has it that candidates who
barely survive close primaries are less likely to win in general elections.

These are the issues currently facing Zanu PF and MDC-T parties, largely
causing internal strife.

In a bid to manage internal contradictions, Zanu PF has adopted what some
say is an Animal Farm-like approach in which some animals are considered
more equal than others by bending its own regulations barring members who
have not served the party for at least five consecutive years from
contesting, in a move to accommodate individuals deemed “special cases”.

Tsholotsho North MP Jonathan Moyo recently said Zanu PF would bend the rules
to allow him to stand in primary elections after the party’s mobilisation
committee proposed to bar members like him who have not served in the party
for more than five consecutive years from contesting. But Moyo said it was
important to appreciate rules were “not dogma, but how they bend”.

This is widely seen as a recipe for divisions as those who will not benefit
from exemptions would unavoidably complain. Besides, there are some senior
Zanu PF officials who do not want primaries and want to be ring-fenced as
they fear losing to “Young Turks” pushing to replace them.

While primaries are giving Zanu PF headaches, the MDC-T is also in a similar
position as its officials are at loggerheads over which would be the best
method to choose candidates between open primaries, a proposed confirmation
process for incumbent MPs or a mixture of both.

The MDC-T is also trying to protect sitting MPs by exempting them from open
primaries, only subjecting them to a vague confirmation process strongly
opposed by low-ranking party members and supporters.

Party leader Morgan Tsvangirai, also prime minister, favours a blend of both
as this would retain experienced MPs while allowing an injecting of the
much-needed new blood into the MDC-T candidate list.

Tsvangirai has indicated not all sitting MPs would be subjected to open

“The party exists and has MPs and if they have the confidence of the people,
why not retain them? Some people want to tear the party apart. We have the
responsibility of managing the processes so that we don’t impose people or
start with a parliament full of new, inexperienced people,” he recently said
in an interview.
However, Tsvangirai told a rally in Buhera last weekend that no candidates
would be imposed. “The MDC does not believe in imposing candidates for any
reason. The people should choose the person they want to be their
candidate,” he said.

Besides Moyo, other Zanu PF officials set to benefit from the tweaked rules
include former Labour minister and Midlands governor July Moyo, former
Manicaland and Masvingo provincial chairpersons Mike Madiro and Daniel
Shumba, respectively, and tycoon Philip Chiyangwa. Madiro, July Moyo and
Shumba were expelled from the party for their role in the infamous 2004
Tsholotsho debacle which sought to block the ascendancy of Vice-President
Joice Mujuru to the party’s presidium.

MDC-T spokesperson Douglas Mwonzora says his party would prioritise
primaries in constituencies it does not have MPs to get the best candidates
and conduct confirmation exercises for sitting MPs.

However, some party officials and supporters claim the method is
undemocratic and open to abuse as it is likely to instigate vote-buying.
“There are high chances that the process will be abused by those with
financial resources as they could easily pay their way to ensure
confirmation even though they may not be popular,” said one official.

MDC-T national organising secretary Nelson Chamisa said the confirmation
process was being confused with imposition of candidates. “Confirmation is
being confused with imposition. Let it be clear that confirmation is a
process just like vetting and does not mean it will exempt people from
primaries,” he said.

Zanu PF wants flexibility in primaries as it is determined to win back seats
lost during its defeat in the 2008 general elections but this is causing
divisions, similar to those in MDC-T.

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Zanu PF factionalism: Masvingo clashes reveal deepening cracks

November 23, 2012 in Politics

THE chaos that rocked the Zanu PF Masvingo provincial meeting designed to
endorse President Robert Mugabe’s candidature for next year’s elections
exposed underlying divisions in the party ahead of its conference in Gweru
next month.

Report by Elias Mambo

The Masvingo meeting held last week was characterised by acrimonious clashes
between partyspokesperson Rugare Gumbo and former Masvingo governor and
politburo member, Josaya Hungwe, who are said to support the rival camps of
Vice-President Joice Mujuru and Defence minister Emmerson Mnangagwa,

According to sources who attended the meeting, Gumbo took a swipe at Hungwe
for proclaiming he is the party’s new leader in Masvingo following the death
of Higher Education minister Stan Mudenge. Mudenge died on October 4.

“The atmosphere was very tense as Gumbo attacked Hungwe for allegedly
declaring in the media that he is the new leader of Masvingo after the death
of Mudenge. Gumbo said those being labelled as belonging to the Mujuru
faction are in the right group because Mujuru is in Mugabe’s ‘faction’,” the
source said.

Gumbo advised Masvingo provincial members to revisit the party constitution
to verify who is senior in the province between Hungwe and politburo member
Dzikamai Mavhaire, aligned to the Mujuru faction.

Sources said Hungwe hastily hit back, describing Gumbo as coming from “a
clan of losers” who succumbed to the rival MDC-T in previous elections.

In his closing remarks Hungwe reportedly said: “The Gumbos originally come
from Gutu where they have been defeated by the MDC since 2000. We thought
his visit would bring peace as his name Rugare (peace) suggests, but it
appears he has brought further divisions.”

Gumbo had also poured scorn on Zanu PF T-shirts sourced by Hungwe for
campaigns in Masvingo, saying they were of cheap material. However, Hungwe
told the Zimbabwe Independent on Wednesday that most senior party officials
had failed to source T-shirts.

“I gave them T-shirts so that the Masvingo people may not look orphans who
have no one to provide for them,” said Hungwe.
The re-admission of former provincial chairperson Daniel Shumba has also
stirred more controversy as he would contest against Gift Orma for the party’s
Masvingo Urban primary elections.

Shumba belongs to the Mnangagwa faction while Orma is from the Mujuru
grouping. Gumbo warned those supporting Shumba are going against the party
because Shumba formed his own party after being expelled from Zanu PF and
contested against Mugabe.

“It was clear Gumbo is pushing Mujuru’s agenda because he was totally
against everything done by those belonging to the Mnangagwa faction,” said a
close source.

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Tsvangirai rally betrays widening affluence gap

November 23, 2012 in Politics

PRIME Minister Morgan Tsvangirai is stepping up his election campaigns,
taking his canvass for votes ahead of next year’s polls to his rural Buhera
village last weekend.

Report by Moses Matenga

His arch-rival, President Robert Mugabe has also been doing the rounds,
laying the ground for what promises to be a titanic election battle given
the high stakes for both candidates.

If Tsvangirai loses, it is likely to mark the end of his struggle to capture
to the presidency, while a defeat for Mugabe will sound the death knell for
his rule and long political career.

MDC leader and Industry and Commerce minister, Welshman Ncube, has also been
tirelessly campaigning in preparation for his maiden foray into the
uncharted territory.

Addressing thousands of people at the Buhera memorial rally last Saturday,
Tsvangirai touched on the upcoming elections, MDC-T primaries, the
constitution-making process, politically-motivated violence, diamonds,
source of funding for Mugabe’s input scheme and the economy.

In a bid to re-invigorate his base, the MDC-T leader said victims of
political violence have defined the path of the struggle and his supporters
must now finish the job.

“We suffered a lot, but the resilience of people, their commitment, and
their courageousness has stood the test of time,” he said.

The fruits of Independence, Tsvangirai said, have not cascaded to the
general population. “If you reflect back and ask yourself – has my life
changed from 1980? The answer is a strong No,” he noted.

Tsvangirai implored the party faithful to remain focused and fight as a
united force.

“We might have our personal differences but when it comes to party business,
we should all have unity of purpose. We should fight like a pack of lions.
We have beaten them the last time and so what can stop us now from repeating
history?” he said.

While Tsvangirai’s grassroots messages resonated with the bumper crowd, the
affluence gap between the visibly well-off senior MDC-T officials and poor
masses was glaring. On the side-lines of the gathering, some villagers noted
the rapid transformation of the MDC-T leaders from their humble days in 2000
when they started off to now after amassing wealth.

The vast difference between the villagers, desperately eking out a
hand-to-mouth existence and the lavish lifestyles of top MDC-T officials and
ministers who rolled into Tsvangirai’s home area of Humanikwa village —
about 200km away from their posh houses in Harare — in top-of-the-range
vehicles and swanky attire, was all too visible.

The poverty-stricken rustic folk, some of whom travelled on foot for long
distances to attend the rally for victims of political violence at the hands
of Zanu PF, looked at the luxurious cars, ranging from the latest Mercedes
Benz, Range Rovers and Land Rovers, to Land Cruisers and Prados with envy
and resentment as proved by their furtive chats in hushed tones among each

Apart from Tsvangirai, other MDC-T heavyweights who attended include
Thokozani Khupe, Lovemore Moyo, Nelson Chamisa, Theresa and Ian Makone,
Murisi Zwizwai, and Giles Mutsekwa, among others.

MPs from Manicaland were not to be outdone as they arrived in Isuzu
double-cabs and Madza BT50s — luxurious cars by village standards.

Tsvangirai’s mother, Lydia, clad in a deep red designer suit and cream
wedding hat, arrived in style in a black Isuzu accompanied by relatives, all
looking rather affluent.

Villagers started arriving at the venue around 8am, two hours before the
rally was scheduled to start. Tsvangirai arrived amid dramatic scenes with
his wife Elizabeth Macheka in a convoy of four cars shortly after 11am. As
he disembarked from his silver Land Cruiser clad in an exquisite blue, white
and red wide-striped casual shirt, dark blue trousers and a beige cap,
jubilant villagers burst into scenes of joy as women ululated and men
whistled amid a crescendo of shouts of Tsvangirai’s totem “Save, Save, Save.
. .”.

The rally was a microcosm of the widening gap between the poor and the rich
on a national scale.

This was made more conspicuous by the eye-catching Elizabeth who was
exquisitely clad in purple head gear and bright blue, red, yellow and purple
“African attire” with a turquoise blue lace over the upper top and arms. For
a moment, save for the sight of the gathered humble rural folk, looking at
the MDC-T officials in expensive attire, matching hats and shoes and their
luxury vehicles, the “ bling bling” made the memorial appear like a
high-society carnival event.

However, the jubilant supporters sang, danced, whistled and ululated under
the scorching heat of the sun which seemingly did little to sap their
energies. Although Tsvangirai and his colleagues later parcelled out small
quantities of groceries which included cooking oil, sugar, soap and
mealie-meal, his political show of benevolence could not to hide the reality
that MDC-T officials were an island of prosperity in a sea of poverty ––
something which diluted his somewhat mass-appealing delivery at the rally.

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Zanu PF bigwigs in election battles

November 23, 2012 in Politics

ZANU PF’s bigwigs in the party’s volatile Matabeleland provinces headed for
a bruising fight in tomorrow’s provincial elections to fill the contentious
chairpersons’ posts, amid reports nine officials are vying for the two
vacant positions.

Report by Staff Writer

Bulawayo and Matabeleland North have gone for several years without
substantive chairpersons as the leaders were suspended and sacked in the
long-running political cat-fights pitting party heavyweights seeking to
control the region.

The elections come ahead of Zanu PF’s December conference in Gweru following
a directive by the party’s national commissar Webster Shamu. A recent audit
of Zanu PF Bulawayo structures by a politburo team showed the structures had

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MDC-T to move Private Members’ Bills

November 23, 2012 in News

MDC-T chief whip Innocent Gonese and vocal MP Settlement Chikwinya are set
to make one last push to move the Private Members’ Bills seeking amendment
of the Criminal Procedure and Evidence Act (CPEA) and Access to Information
and Protection of Privacy Act (Aippa) when parliament resumes sitting next

Report by Staff Writer

Gonese and Chikwinya are adamant they would move the Private Members’ Bills
despite the executive previously blocking their efforts when it halted the
Public Order and Security Act Amendment Bill and Urban Council Act Amendment
Bill. Prosecutors have used the CPEA to keep accused persons incarcerated
despite being granted bail by courts once the state opposes (bail).

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Confusion grows over Khupe fate

November 23, 2012 in Politics

THERE is growing confusion over MDC-T Vice-President Thokozani Khupe’s fate
after her alleged role in the intra-party violence that rocked the party in
Bulawayo in the run-up to its congress last year as spokesperson Douglas
Mwonzora has absolved her of any blame.

Report by Herbert Moyo

Mwonzora said a disciplinary committee is summoning those fingered by the
Trust Manda Commission report on violence to answer charges. He, however,
said Khupe was not among those facing action as all allegations levelled
against her had been investigated and proved baseless.

The commission investigated intra-party violence that shook the MDC-T in
Bulawayo, Chitungwiza, Midlands North, Masvingo and Mashonaland West ahead
of the party’s congress.

Mwonzora’s comments contradict those of party leader, Prime Minister Morgan
Tsvangirai who in an exclusive interview with the Zimbabwe Independent
recently confirmed all those fingered in the intra-party violence, including
Khupe, would face disciplinary action.

Mwonzora however dismissed accusations the party is protecting high-ranking
party officials fingered in corruption and fuelling violence, saying the
party is in the process of disciplining all those implicated, including
national executive members.

Mwonzora’s comments follow complaints by Bulawayo officials who this week
accused the party leadership of letting vice-president Thokozani Khupe off
the hook.

Khupe is reportedly angry with Tsvangirai over the issue.

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Interfin bosses face criminal charges

November 23, 2012 in News

International audit firm KPMG has recommended the curator of Interfin
Banking Corporation (Interfin) to consider civil action and criminal charges
against the directors and shareholders of the bank — Farai Rwodzi, Timothy
Chiganze and Jerry Tsodzai — who presided over the collapse of the bank,
which had a capital deficit of more than US$100 million at the time of its
closure, the Zimbabwe Independent can reveal.

Report by Staff Writer

The recommendations are contained in a report submitted to the Reserve Bank
of Zimbabwe (RBZ), following a three-month investigation into the affairs of
the collapsed bank by KPMG.

“We consider it prudent to recommend that: The curator requests an attorney
to consider events at Interfin referred to in this report in light of the
civil code and precedent, and if deemed appropriate, depending on the
outcome of this exercise, the RBZ requests the Attorney-General to consider
events at Interfin referred to in this report in light of the relevant
criminal code and precedent,” reads part of the forensic report.

The investigation by KPMG unearthed four critical events that caused
Interfin Bank’s liquidity crunch.

The first was that, having failed to capitalise the bank, the directors and
shareholders forced it to borrow expensively from the market and on-lend
these funds to parent company Interfin Holdings. In turn, Interfin Holdings
used the borrowed funds to capitalise its subisdiary bank.

“Capital created this way was thus not sustainable as the risk of gain and
loss in the capital created was with Interfin,” the report says.

Second, the bank was exposed as its assets were used to back speculative
activities, for instance, in Art Corporation and Starafrica Corporation
where it lost a massive US$9,489 million. The bank also lost control over a
US$6,310 million speculative gold deal with Interfin Resources, a company
substantially controlled by founder Rwodzi.

The curator found that in the third instance, the bank lost US$17,396
million after it dipped into a government facility it was supposed to run
separately, the Zimbabwe Export and Trade Revival Facility.
Last, the bank, due to acute under-capitalisation, could not fund related
party loans from capital as stipulated by law. Instead, it resorted to using
depositors’ funds to the tune of US$62,066 million, resulting in a capital
deficit of more than US$59,073 million as at March 31 2012.

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Tough times ahead

November 23, 2012 in Business

The much anticipated 2012/2013 Fiscal Policy Statement was presented last
week by the Minister of Finance,Tendai Biti.

Report by By Kumbirai Makwembere

Policies presented since 2009 have left the market with hope that indeed we
are recovering from the trough.

By contrast, the policy presented last week depressed sentiment as it
confirmed that tough times are ahead. Growth for 2012 was officially trimmed
down to 4,4% from the mid-year revised target of 5,6%. The new growth rate
is less than half the 9,4% that government was projecting at the beginning
of the year.

Economic performance in 2012 was greatly constrained by a poor farming
season together with shortages of liquidity. Revenue targets for 2012 now
stand at US$3,5 billion from a revised target of US$3,6 billion. When the
year began government anticipated revenue inflows would total US$4 billion.
Diamond revenues have not been coming in as projected.

Agriculture is now projected to expand by 4,6%. Initially the sector was
estimated to contract by 5,8%. The positive outturn is due to the better
than anticipated tobacco crop output at 144 million kilogrammes against an
initial estimate of 130 million kilogrammes.

Manufacturing remains in the doldrums and a small growth of 2,3% is expected
this year, down from 13,9% registered in 2011. A host of challenges continue
to surround the sector, including shortages of funding and stiff competition
from imports.

A current account deficit for 2012 is likely to be at US$2,9 billion as
imports are projected to end the year at US$8 billion against exports of
US$5,1 billion.

Growth for the coming year is projected to come in at 5% with the mining
sector expected to grow by a massive 17,1%, buoyed by the resumption of
nickel and asbestos production. We nonetheless doubt that production of the
latter will resume as funding requirements for Shabanie and Mashava mines
are huge.

Agriculture, together with the finance and insurance sector are expected to
grow by 6,4% and 6%, respectively. These figures look ambitious in light of
evidence on the ground.

The 2012/2013 farming season may well be a disaster just like the 2011/2012
as preparations are already lagging behind. Agriculture remains under-funded
as the issue of security of tenure on land remains unresolved. There is need
to finalise ownership of land so that farmers can use their land as
collateral in accessing finance from banking institutions.

Finance and insurance sectors are unlikely to grow by 6% as anticipated by
government, as moves to control deposit and lending rates are likely to be
the main hindrance.

Biti outlined some measures to be adopted by BAZ and RBZ towards drafting a
memorandum of understanding that will guide operations of banks. These
include scratching of bank charges on deposits below US$800, a mandatory
interest rate of at least 4% per annum on deposits above US$1000 held for a
term above 30 days.

Essentially all civil servants will now be accessing banking services for
free. The minister believes that banks should make money from generating
loans which might not necessarily be true as lending is just one division
within banks.

There are other supporting services whose charges cannot be met from just

A ceiling on lending rates of 10% will restrict funding to the productive
sectors. Banks will not advance loans at rates lower than their cost of

Equally depositors will hold back their money if they perceive the rate on
deposits to be too low. Furthermore, we do not believe that deposits from
NSSA and Old Mutual are sufficient to lower the cost of funding in the
economy as appetite for cash remains high. Early this year NSSA introduced a
similar arrangement whereby it capped lending rates at 15% but the approach
did not lower lending rates.

The proposals from the Minister of Finance are in a way a form of price
control and history has shown that market forces cannot be controlled
without dire consequences. If anything, margins have been trimmed and this
will work against efforts being made by players to mobilise resources to
meet the new capital requirements set by the Reserve Bank.

There is a need to come up with a concrete solution to address our funding
needs which unfortunately the budget statement did not proffer. Unless
government comes up with a timeous solution, all the recovery recorded since
2009 is likely to dissipate.

Revenue targets for next year were set at US$3,8 billion, with US$3,3
billion of this going towards recurrent expenditure. This implies that only
US$500 million will go towards capital expenditure. If anything, the funding
challenges that engulfed the economy in the current year are likely to
persist in 2013.

The country needs external funding if it is to maintain the growth rates
that have been achieved over the past three years. It is unfortunate
government is incapacitated from borrowing because of the huge debt overhang
of approximately US$10,1 billion.

The solution therefore is to attract foreign direct investments which again
is difficult owing to the high political risk in the country. Elections
that are likely to take place next year will help determine the future of
the economy. A result that is accepted by the international community will
unlock liquidity that the country greatly needs.

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Agribank to disburse US$30 million from IDC

November 23, 2012 in Business

THE Agricultural Bank of Zimbabwe (Agribank) will next month start
disbursing the US$30 million loan facility it secured from the Industrial
Development Corporation of South Africa (IDCSA), director of marketing and
business development Joseph Mverecha said.

Report by Gamma Mudarikiri

Mverecha told businessdigest this week the bank had already received
approvals from IDC and from Export and Import Credit Insurance for the line
of credit.

The loan, would target companies in the agro-industry such as those in seed
and fertiliser production, horticulture, cotton and dairy.
Agriculture is among many sectors of the economy currently struggling due to
financial constraints.

Agribank received a similar facility last year which was disbursed to
several productive sectors. About a third of the funds were disbursed to
agriculture and this is expected to be the same case this year with the
US$30 million loan.

On the progress made on the privatisation of the bank, Mverecha said the
State Procurement Board had approved the appointment of a financial
adviser to the process and evaluation was expected to start by the first
quarter of next year.

The bank, which is to be privatised according to cabinet approval of May
2011, intends to maintain its bias towards the agricultural sector. The
privatisation exercise will see government, the sole shareholder, retaining
51% shareholding after disposing of the remaining stake to a strategic

The bank announced that privatisation was part of its plans to raise
capital to comply with the US$100 million minimum capital requirements
stipulated by the Reserve Bank of Zimbabwe this year.
Banks must comply by having minimum capital of US$25 million by end of
December this year and US$100 million by end of 2014. Agribank as of August
this year was capitalised at US$13,7 million.

In the half year ended June 30 2012, the bank recorded a loss after tax of
US$2,4 million, which it attributed to increased operating expenses.
Agribank last year invested US$2,7 million in ICT upgrade and branch
connectivity, which increased operating costs and resulted in the loss.

Mverecha said the bank had put in motion a process for comprehensive review
of all operating costs and was implementing a cost containment programme
that would yield visible gains to the bottom line in December this year.

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Mining growth hinges on exploration

November 23, 2012 in Business

Zimbabwe’s economic prospects for 2013 and beyond apparently hinge on the
success of its diamond industry and the country should embark on extensive
exploration activities to determine the size of its precious stone deposits,
industry experts say.

Report by Taurai Mangundla

While key diamond industry players may push for increased diamond activity
throughout the value chain in Zimbabwe with the profit motive in mind, this
dovetails with President Robert Mugabe’s exhortation for increased
exploration so that the ensuing data can enable the economy to stimulate
investment into the sector.

Mining has emerged as Zimbabwe’s major economic driver after agricultural
output fell as a result of the controversial fast track land reform
programme of 2000. For this year, Finance minister Tendai Biti had
anticipated to fund close to 20% of his fiscus from diamond revenues alone.

However, revenue collection from the Marange diamond operations was
inexplicably low owing to lack of transparency on the disbursement of
proceeds from the mines. Biti then had to revise downwards his budget from
the initial US$4billion to US$3,4billion.

Mines minister Obert Mpofu told the inaugural Zimbabwe Diamond Conference
last week that diamonds accounted for 45% of total revenue collected in the
first nine months of this year.

Industry experts say Zimbabwe’s diamond production could double the current
global output by 2015 and easily contribute 25% of the world’s supply by
value and 30% by volume.

Chaim Even-Zohar, president of the Telaviv Tacy Limited, said Zimbabwe
needed to know the major deposits of diamonds in the country for it to plan

“The problem with alluvial diamonds is that they can run out at any time so
there is need for exploration to know where the carrot is,” said Even-Zohar.

“Diamonds were first found in Zimbabwe more than a century ago and right now
they are being mined in Marange. They were also found a long time ago in
Somabhula,” he added.

Zimbabwe Mining Development Corporation (ZMDC) chairman Godwills
Masimirembwa said formation of new diamond mining companies to exploit
newly-discovered diamond deposits was on the cards.

In an interview with Zimbabwe Independent, Masimerembwa said his company,
which has a 50% stake in the four diamond companies at Marange – Anjin
Investments, Diamond Mining Corporation, Marange Resources and Mbada
Diamonds — has already done preliminary exploration which proved there were
more deposits of the precious stone in the 1,8million hectare area.

“We have done preliminary exploration which shows there are diamonds in the
area, so a full exploration is required to see the extent of the resource.
It doesn’t mean, however, that every square metre has diamonds,” he said on
the sidelines of the country’s inaugural Diamond Conference earlier this

Masimirembwa announced the country was seeking strategic partners to exploit
the newly-found deposits. He said the 1,8 million hectares were under ZMDC
control and highly prospective for diamonds
“We need partners with capital, technical expertise or those with access to
markets”, Masimirembwa said.

Mineral exploration is used in the mining industry to probe the contents of
known ore deposits and potential sites by withdrawing a small diametre core
of rock from the orebody. Geologists can analyse the core by chemical assay
and conduct petrologic, structural and mineralogic studies of the rock. In
cognisance of the importance of exploration, government has so far spent
US$4 million towards the revival of its mineral exploration company, Mining
Promotion Corporation (MPC).

Resuscitation of the MPC owned by ZMDC is almost complete.

The US$4 million was used to purchase equipment, which will be used in the
exploration activities as well as other expenses in running the company. MPC
ceased operations due to harsh economic operating conditions that prevailed
in the country.

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Tongaat Hullet seeks audience with Kasukuwere

November 23, 2012 in Business

JOHANNESBURG Stock Exchange listed Tongaat Hullet’s Zimbabwe operation,
Triangle (Pvt) Ltd is seeking an urgent meeting with Indigenisation minister
Saviour Kasukuwere to discuss compliance with the country’s Indigenisation
Act, businessdigest has learnt.

Report by Taurai Mangudhla

Triangle is apparently yielding to pressure to meet Zimbabwe’s
indigenisation requirements amid indications government could revisit the
sugar firm’s land lease agreements as well as revoke its operating licence
on account of its failure to respect the empowerment policy.

Highly-placed sources in the Indigenisation ministry say the company is
trying to schedule a meeting by end of this week to deliberate on an
acceptable compliance plan in terms of the law, which requires all
foreign-owned companies to relinquish at least 51% shareholding to
Zimbabwean locals.

“They have no choice but to comply,” said the source who requested not to be

The development comes at a time Triangle defied a National Indigenisation
and Economic Empowerment Board (NIEEB) order in October that the company
complies with the Indigenisation Act by November 6.

After taking into account challenges in the manufacturing sector, government
has approved a schedule which requires foreign- owned manufacturing
companies to dispose of 26% shareholding to indigenous Zimbabweans by end of
October 2012 and the balance by October 2015.

Currently, only 6,7% of Triangle is in indigenous hands.

As a result, government is pushing for the company to dispose of 43% of its
shares to indigenous Zimbabweans.Of this stake, 10% should be for the local
community trust and 5% for the employees trust.

“We request herein, as we have done before, that Triangle submit a compliant
plan to Ministry as soon as is possible and in any event not later than 14
days from receipt of this letter. We feel that we have afforded yourselves
sufficient time within which to align with the requirements of law,” reads
part of the October 23 letter.

“We would like to advice that the Ministry’s patience is running thin and
that should we not receive a proper compliant plan within the prescribed
period, Ministry and government would take it that the shareholders of
Triangle are not interested in continuing to do business in the country.
This may have serious consequences for the company. We trust that this
however will not be necessary and look forward to a mutual resolution of the
issues highlighted above.”

NIEEB argues Triangle has an obligation to participate in a community share
ownership trust as it is involved in the exploitation of natural resources.
Government intended to launch the trust by November 6, primarily through
the disposal of 10% shares.

Triangle has previously argued its US$30 million Successful Rural Sugarcane
Farming Community Project is part of empowerment compliance.

The company says about 670 private black farmers worked on 11 100 hectares
and employed more than 5 550 people in Zimbabwe alone under the outgrower

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Blanket mine projects 70% increase in output

November 23, 2012 in Business

CALEDONIA’s Blanket Mine forecasts a 70% increase in gold production by 2015
following the commencement of new exploration projects and approval of a
five-year development plan by board members.

Report by Gamma Mudarikiri

The company said it had started work at its number six Winze project to
access resources below 750 metres.

It said future improvements in production depended entirely on the outcome
of underground exploration and development which were expected to increase

The projects, which include the five-year development plan, will be financed
from Blanket mine’s internal resources.

The mine recorded a new all-time high in gold output of 12 918 ounces in
the third quarter of this year, 12% higher than the 11,560 ounces produced
in the quarter to June 30, and 33% higher than the 9 743 ounces produced in
the third quarter last year.

As a result, the company proposed to pay an initial dividend of 5US cents
per share as an appropriate way to optimise its capital structure and
enhance shareholder value.

Caledonia recently complied with the country’s indigenisation laws which saw
the appointment of a new board of directors for the company comprising
representatives of indigenous Zimbabwean shareholders.

The new board has already approved a capital investment programme for 2013
and a four-year growth strategy for 2014 to 2017.

In the nine months to September 30 2012, Blanket paid a total of US$19,7
million in royalties, taxation and other non-taxation charges to government
as well as payments to community and social projects not directly related
to the operation of the mine.

The mine’s gross profit in the third quarter surged 25% to US$12,6 million
compared to US$10,6 million in the quarter ended June.
Gold sales were at an average price of US$1 673 per ounce compared to an
average price of US$1 599 per ounce in the preceding quarter and an average
of US$1 737 per ounce in the comparable quarter last year.

Blanket has 18 brownfield exploration projects close to the current mine.
Immediate focus is on the GG satellite and Mascot project areas which are
7km and 42km from Blanket Mine respectively.

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Cracks in Bitis’s financial plan

November 23, 2012 in Business

FINANCE minister Tendai Biti’s 2013 Budget has exposed cracks in Zimbabwe’s
financial planning system, which are impacting negatively on the achievement
of the country’s short and long-term objectives.

Report by Clive Mphambela

Last week, the 2012 GDP growth forecast was revised downwards to 4,4% from
9,4%, with Biti saying “we are likely to witness a 5-year average of 5%
going forward.”

Biti also reviewed the GDP growth target for 2013 to 5%, and that of 2014 to
6,5%, dropping to 5% in 2015.

This means the country’s growth target as spelt out in the medium-term plan
(MTP) of 7,1% and 10% annual growth required to reach a US$100 billion GDP
by 2040 proposed by the Business Council of Zimbabwe and the CEO round Table
were not achievable.

“The vision of achievement of a US$100 billion economy by 2040 requires us
to grow at a minimum of 10% per annum. The MTP has a minimum target growth
of 7,1% until 2015 with the vision of ‘growing and transforming a socially
just Economy. The 2013 budget sadly misses both these targets. Zimbabwe
therefore needs to take stock and introspect on why it is missing its own
targets and hence put corrective measures to avoid our dreams going up in
smoke,” said Kenias Mafukidze, Chairman of the CEO Round Table.

“It must be said that on the budget, Honourable Biti made the best of not so
great a situation. According to the minister: ‘developments in 2012 were
slow and disappointing’. We could not agree with him more. His was a call
for us as a country to review our direction, dust ourselves up and become
more strategic in our efforts. The current path leads to doom,” Mafukidze

The notable points worrying industry leaders are the particularly high level
of consumptive expenditure in the economy by both the public and private

“In the words of minister Biti, of the US$3,8 billion (budget for 2013),
about US$2,6 billion would go towards the employment bill and government
would be left with nothing. In addition, imports are unsustainable and as at
October, were US$6,5 billion, indicating a 3 to 1 ratio of import to
exports,” Mafukidze added.

While the first annual MTP implementation progress report unveiled a
fortnight ago stated the GDP growth target was “on track” , Biti’s sobering
statistics show the medium-term plan is clearly off track.

Sadly, the MTP also makes a bold statement that total projected revenues of
US$3,640 billion will be achieved as total revenues of US$2,291 billion are
on track. However, a closer inspection of the outturn to September 2012 as
per the Ministry of Finance shows expenditures for the last quarter fell
short of the 2012 budget by US$1,214 billion, which is the amount that
government needs to collect by year-end if the revised budget is to be met.

Revenue collection experience for 2012 has seen a total of US$2319,4 billion
by Zimra in the year to September 30 2012. Revenues have therefore averaged
US$774 million per quarter while the demand for the last quarter is more
than US$1,214 billion. There is potentially a huge risk that government will
not earn the revenue required to sustain the remainder of the 2012 budget.

“Put simply, as a country we cannot expect growth when we are consuming more
than we are producing and importing three times more than we are exporting,”
Mafukidze said.

The above issues put together are a classic recipe for economic stagnation,
he said.

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Corruption: Zimbabwe’s cancer

November 23, 2012 in Opinion

WATCHING the recent congress of the Communist Party of China, I was
impressed by the main theme – “getting corruption under control”.

Comment by Eddie Cross

To emphasise this point they had just decided to sideline one of the new
leaders who had been a candidate for national leadership. I contrast that
with what happens here and our own horrendous record in this field.

One of the little acknowledged characteristics of the Rhodesian government
was its basic integrity.

It is no secret that Ian Smith retired with very little to show for a
lifetime of public service.

There were others in the ranks that did rather better and I can recall scams
over dam sites, public works and contracts and other things – but by
comparison with what we have seen in recent years, this was child’s play.

In the first decade of Independence, the basic integrity of the state was
retained and when corruption was found, those responsible were sidelined and
punished. We all remember “Willowgate” and how a cabinet minister committed
suicide and how others resigned, especially the then minister of Education –
a pity because he was otherwise an excellent minister, perhaps the best we
have ever had.

But after that, little real action and from then onwards it was downhill all
the way with the “fish rotting from the head”.
Recently I watched a programme on television where it was stated Africa
loses an estimated US$140 billion a year to corrupt practices. That is more
than US$250 per capita per year – enough to feed the entire population of

This sum vastly exceeds total aid to Africa which runs at about US$40
billion a year for the sub- Sahara region. It represents an astonishing 15%
of the total estimated Gross Domestic Product (GDP) of the entire continent.
Here in Zimbabwe corrupt practices take many forms. Perhaps the most
criminal were the use of the Reserve Bank exchange and price controls – all
nominally meant to protect the real interests of the country but in effect
being hijacked by a small, politically-connected elite.

Until 2008, corruption took many forms. First the state took over a third of
all foreign exchange receipts lodged with the Reserve Bank. In return they
deposited local dollars at the official exchange rate, in effect worthless
currency, into the accounts of the people generating the foreign exchange.

By these means the state had access to about US$1,5 billion a year,
virtually for nothing. These hard currency resources were then used to buy
luxury vehicles, make hard currency allocations to politically-connected
people in return for worthless local dollars bought on informal markets at
market exchange rates which were a tiny proportion of the official rates.

The printing of money to make these transactions possible, eventually led to
the near total collapse of the economy under the weight of billions per cent
inflation rate. In turn this inflation destroyed the private savings and
cash capital of the entire nation.

A state monopoly importing liquid fuels siphoned off at least 10 US cents a
litre on fuel imports – all of it banked outside the country.

On imports of 150 million litres a month this was US$15 million or US$180
million a year. Then there was National Social Security Authority –
collecting 6% of the salaries of all workers for their pensions and workers’

This was worth at least US$200 million a year. When we took it over in 2009,
there was less than US$200 million in assets left in the fund, accumulated
over the previous 23 years; some US$3 billion in workers social savings had

There were many other similar examples of state-sponsored looting of local
assets, but by any measure, through these “macro” corrupt practices,
Zimbabwe was losing at least US$2 billion a year up to 2008. If we add into
this all the corrupt deals done over state contracts, defence purchases and
the rest, corrupt losses must have been nearly US$3 billion a year – a huge
sum for a country with a GDP of about US$10 billion.

After 2008, having lost control of all of the above sources of funds to the
MDC, the Zanu PF elements in the inclusive government took control of the
diamond and gold trade. The diamond deals involve the output from the
Marange fields taken over by force in late 2008 and the gold deals involving
the production of perhaps as much as 10 tonnes of gold a year from local
small scale miners.

The diamond sales run to as much as US$4 billion a year. The minister of
Mines admitted US$2 billion in 2011 and it must be at least double that.
Gold sales must be running at US$500 million a year.

Nearly all of these revenues disappear. The diamonds are flown out of the
country and gold finds its way to the Rand Refinery in Johannesburg, South
Africa, where we now contribute 70% of its turnover. Once refined, the gold

You do not need to be a genius to see where some of this money is going.
Harare is awash with luxury cars and you can see even new Rolls Royce(s) on
the streets as well as all other luxury models. Drive around the country and
look at the houses going up — many covering over 2 000 square metres. Some
with tennis courts on their roofs, indoor heated swimming pools, elevators
and helipads.

The trade deficit is nearly US$4 billion – but no one gives us credit, it’s
all cash, where does this extra money come from? At least some of the
corrupt money here comes home.

You simply cannot develop a country carrying this sort of burden, no country
can. If we cannot get it under control, we will always be poor.

Remember that on top of all this, we pay taxes – at least another 25 to 30%
of total GDP. How in fact we can still be standing up and functioning is a
tribute to our innovative and energetic private sector and the wealth under
our feet. If we can stop this boat leaking, believe me we can show the world
a thing or two about growth.

Eddie Cross is MDC-T policy coordinator, national executive member and MP.

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How to get rid of Mugabe’s choking yoke of tyranny

November 23, 2012 in Opinion

THERE seems to be some convergence, though to different degrees and for
different reasons, within Zanu PF and the MDC parties ahead of the former’s
conference next month that President Robert Mugabe is now beyond his sell-by
date and must retire to save Zimbabwe from further regression and misery.

Comment by Itai Zimunya

Besides, many Zimbabweans across the political divide also agree that Mugabe
must peacefully quit for the sake of what remains of his legacy and the

So what does this mean or suggest? The political environment in Zimbabwe is
very fluid and the painting of future scenarios is one of the most difficult
things to do due to this current state of flux.

It must be remembered that the “Mugabe must go” mantra started within Zanu
PF and not MDC formations. It was Zanu PF officials who realised a long time
ago that for Zimbabwe to go forward Mugabe must step down to allow a younger
generation of leaders to take over the party and the country.

While there were many others from outside his party who saw the country was
heading for disaster and wanted Mugabe to quit much earlier after
independence, internally it was the late Edgar Tekere who first voiced
concerns before he was expelled, leading to the formation of his Zimbabwe
Unity Movement.

A decade later Dzikamai Mavhaire, then a Zanu PF MP and now a politburo
member, also made the famous or infamous, depending on one’s standpoint,
“Mugabe must go” statement which attracted a serious backlash against him
and his late mentor Edson Zvobgo, one of the most senior Zanu PF officials
who demanded change from within.

Even though demands in Zanu PF for Mugabe to go have now weakened following
the death of retired army commander General Solomon Mujuru, the bhora
musango (sabotage) approach mainly applied during the 2008 elections and
whispering campaigns in Zanu PF confirm the prevalence of the underlying
“Mugabe must go” sentiment.

However, since its emergence, the MDC usurped the mantra which became part
of its campaign to oust Mugabe. As a result Mugabe and Zanu PF lost to Prime
Minister Morgan Tsvangirai and the MDC-T as convergence between Zanu PF and
MDC voices that Mugabe must go grew.

As Zanu PF prepares for its conference next month ahead of elections next
year, the question remains whether or not Mugabe will face the same
political wave for him to retire spanning Zanu PF and MDC ranks and how that
would affect his re-election bid.

Although the environment and conditions have changed since 2008, there
remains a strong feeling that Mugabe is the main stumbling block to
progress. So this invites the question whether it is realistic to expect
Zanu PF and MDC interests to converge at some point before or after Mugabe’s
departure to create new re-alignments.

These questions, though complex, are interesting. It can be argued that
events are overtaking Mugabe in many ways and thus he is no longer the main
issue in Zimbabwe since there is this politically heterogeneous convergence
on the demand that he must go sooner rather than later. It is important to
qualify that this convergence is not settled and stable within and across
parties, but very fluid and uncertain.

In that context, it is critical to note that the “Mugabe must go” refrain in
Zanu PF is largely defined and influenced by the party’s explosive
succession battles.

The sentiment is strong, but the problem is that those engaged in this
campaign largely operate underground and within informal structures, thus
weakening their demand for him to quit as that fails to crystalise the move
and give it gravitas. It may be strategic to do so at initial stages but
there has got to be a point when the issue is tabled formally for it to
carry weight and gravity.

However, there is a serious problem on how to raise the issue formally as
party structures simply don’t allow such an engagement.

Those who have tried to be courageous like Tekere, Mavhaire, Dumiso
Dabengwa, Mujuru, Simba Makoni, the late Thenjiwe Lesabe, and the Tsholotsho
Declaration movers, were ruthlessly silenced. So it is a risky business to
openly campaign against Mugabe.

Externally, the MDC’s “Mugabe must go” slogan has been forceful, consistent
and aggressive, but there has been no systematic attempt by the party’s
leaders to establish common ground and make a connection between their
interests and those of Zanu PF officials making the same demands albeit for
different reasons.

In other words, Zanu PF and MDC officials who want Mugabe to go have not
been able to find each other and that has weakened the campaign as it lacked
cohesion and common vision. Until that happens Mugabe is likely to remain in
power as the forces of change fail to coalesce and develop a common agenda
and vision.

The lack of cohesion among the factions fighting each other over succession
in Zanu PF, the MDC parties, the business and military elite and other
groups that want Mugabe to go have resulted in him staying longer. As long
as there is no negotiation and convergence of interests on a cohesive
platform, Mugabe will remain in power as unpopular as he is.

If all these parties and interests cannot converge and act purposefully,
they will always find themselves at cross-purposes. That is why there is
need for a national interest-based convergence — not convenient
arrangement — to deal with this issue on a non-partisan, but broad basis to
rescue Zimbabwe from Mugabe’s choking yoke of tyranny.

Zimunya is a Mutare-based socio-economic researcher. E-mail:

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Budget realistic but politically poisoned

November 23, 2012 in Opinion

HEIGHTENED expectations were replaced with sobre realities in the aftermath
of last week’s national budget presentation by Finance minister Tendai Biti,
with business leaders and economists saying the reality of the country’s
dire situation has now been laid bare after a few home truths were told.

Comment by Clive Mphambela

Biti’s US$3,8 billion 2013 budget came as no surprise, although it showed
that not only is the county’s financial system in shambles and in need of
urgent fixing, but also that the political situation poses a serious threat
to economic recovery.

The minister said while the economy has stabilised and recovered
significantly, it was still dogged by grave downside risks which could
scuttle long-term recovery and stability.

Biti admitted serious downside risks facing his 2013 budget, a message which
overshadowed the positive signals he sent during his budget speech.

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.

While all these downside risks are significant, 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, Biti said, was political. “The biggest risk to this
economy in 2013 remains that of violent, contested general 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, he said, adding Zimbabwe
cannot afford to carry-on along these cyclical paths of permanent conflict
temporarily suspended by short periods of peace.

Analysts say government is failing to provide leadership and direction to
the economy because politics and self-interests have taken centre stage,
while corruption and rent-seeking behaviour are now deep-rooted.

This is crowding out national interest and the greater public good as
revenue leakages continue unabated, whilst the little that is being
collected seems to be funding little more than the material needs and lavish
lifestyles of those in government.

Economic analyst Professor Tony Hawkins told the Independent this week the
problem with the budget is not that of size, but of “allocative efficiency”.
“The budget is not small compared to the size of the economy, 34,5% of Gross
Domestic Product (GDP) is relatively large. However the real problem is that
we are spending more than we can afford,” Hawkins said.

“If we work out the deficit correctly, by including accumulated arrears on
the domestic and external front, you find that the deficit is much higher
than the US$260 million Biti has indicated.”

Hawkins said, however, Biti tempered his budget speech with a healthy dose
of realism. “In the past the minister has been overly optimistic in his
assumptions,” Hawkins said.

According to Biti’s financial plan, total revenue of US$3,8 billion is
anticipated in 2013, translating to 34,5% of GDP.

Of the total revenues, recurrent expenditures is set at US$3,3 billion
(86,4%), with only a balance of US$500 million (13,6%) left for the capital
development budget.

Hawkins said one of the critical problems with this economy is the
balance-of-payments position and an unhealthy fiscal position where 73% of
resources are being consumed in recurrent expenditures.

“Another critical issue is the sheer lack of realism on the part of those
parliamentarians and ministers involved in the Copac process,” Hawkins said.
“The debate over the constitution has been wasteful in its own right but
what is worse is that they want devolution, a bigger parliament and probably
a bigger cabinet which all have implications for the budget and economy.”

KM Financial solutions and past president of the Zimbabwe Economic Society,
Kenias Mafukidze, said the public sector is too big for the size of the

“The major problem with our budgetary process is that the budgets are all
too short-term in nature and are not speaking to a long-term strategy. It’s
almost like someone taking rapid steps in succession but going nowhere. Each
annual budget seems to nibble away at a few issues without making any real
impact,” Mafukidze said.

“The whole idea of our spending pattern is wrong and is influenced by
political considerations rather than the realities of the economy.”

Bankers Association of Zimbabwe president George Guvamatanga said the budget
for the first time had a large dose of realism.

“I am happy and can relate to the budget because we have tried to be
realistic with the situation we are facing,” he said. “However, what is also
very clear is that the economy will not go anywhere without external
financing and capital.”

Guvamatanga also said “internal politics is making the investment climate
relatively toxic”. With respect to the banking sector reforms, he said
bankers supported the minister and central bank authorities’ efforts.

Bulawayo-based economist Eric Bloch said revenue leakages were damaging the
economy. “Clearly the level of import taxes and duties being collected is
reflective of that taxation issue badly managed. It points to a lot of
bribery and smuggling going on at Zimra ports,” he said.

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Kunonga saga: Beware of vain politicians

November 23, 2012 in Opinion

THIS week’s Supreme Court ruling against “The Controversy” — as
tough-talking Nolbert Kunonga, head of the breakaway Anglican Church of the
Province of Zimbabwe once boisterously called himself — has closed the final
chapter of a sordid saga that leaves a durable stain on the country’s
religious conscience.

Opinion by Stewart Chabwinja

In a classic case of justice delayed amounting to justice denied, Kunonga,
for five years, bestrode the Anglican church like a colossus — to borrow a
Shakespearean line — after seizing control of the divided church through a
High Court order and hastily set about reducing a venerable church to a
seedy secular concern with the ostensible support, by acts of commission and
omission, of politicians and the police.

For good measure, Kunonga’s desecration left the church with hundreds of
thousands of dollars in unpaid bills and missing property.

As Bishop Chad Gandiya and his relieved Church of the Province of Central
Africa congregants survey the wreckage of Kunonga’s unholy reign while
slowly picking up the pieces, the Kunonga melodrama should serve as a timely
reminder, as we head towards critical elections, of the ramifications of men
of the cloth selling their souls and parishioners to self-serving
politicians in exchange for support and mortal power.

Wily Kunonga, who appeared to revel in his infamy, was ever quick to play
his trump card: his anti-gay stance and his support for Zanu PF policies
while dismissing opposition parties as puppets of the West.

In exchange Kunonga reportedly enjoyed protection from the police who on
numerous occasions disrupted the services of the Gandiya Anglican Church,
arresting priests and parishioners for allegedly conducting services without
their authorisation or that of a seemingly omnipotent Kunonga.

Zanu PF’s support for Kunonga’s much-reviled reign was subtle as the party
chose to ignore the numerous alleged and proved goings-on within the church
and the petitions sent to the party’s hierarchy even by Zanu PF supporters.

Granted, the matter was before the courts, but the party should have spoken
out against claims of vice within the church and the harassment of
parishioners at the hands of Kunonga which shocked the entire nation.

Instead, Zanu PF has been on a campaign to woo the church vote, with several
party heavyweights making whistle-stop appearances at religious gatherings.

In 2010 President Robert Mugabe swapped his designer suits for white
apostolic sect robes and staff, to join a Johane Masowe passover ceremony
where he endorsed polygamy, never mind the implications in this day of HIV
and Aids. This was after Prime Minister Morgan Tsvangirai had taken part in
a service of the apostolic sect ostensibly to encourage them to immunise
their children.

Many other Zanu PF bigwigs have beaten the same path including
Vice-President Joice Mujuru, Information minister Webster Shamu and war
veterans leader Jabulani Sibanda, all preaching the vote-Mugabe-and-Zanu PF

Zanu PF even tried to hijack the popular United Family International Church’s
“Judgment Day” all-night service in April, with Shamu taking to the stage to
strut his stuff with openly pro-Zanu PF gospel outfit, Mahendere Brothers.

Desperate politicians will no doubt continue to dole out lofty promises and
goodies as they seek endorsement and favours from the clergy and its flock.
By allowing them to politicise religion for selfish, short-term agendas the
church risks contagion as many of the politicians are in it only for the

While politics and religion are by no means always strange bedfellows, the
role some churches played in the country’s liberation struggle being a case
in point, the interface between the pulpit and the podium must not be
compromised by greedy politicians turned fly-by-night Christians in pursuit
of votes and power.

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Low investment hampers economic recovery

November 23, 2012 in Opinion

ECONOMIC recovery is being hampered by low levels of investment, especially
Foreign Direct Investment (FDI), despite huge interest from regional and
international investors, a report reviewing implementation of the Medium
Term Plan (MTP) crafted by Ministry of Economic Planning and Investment
Promotion indicates.

Report by Owen Gagare

Besides low investment levels, other major challenges facing the
implementation of the MTP – a five year development plan (2011-2015) whose
aim is to ensure the country achieves broad-based and inclusive sustainable
growth and development – include infrastructure bottlenecks, liquidity
crunch, debt, drought, shrinking fiscal space for capital expenditures, late
disbursement of funds from Treasury, delays by the State Procurement Board,
and policy inconsistences and uncertainties.

In the first annual MTP implementation progress report, released recently,
the ministry says FDI “continues to remain anemic at below 3% of GDP”, while
domestic investment levels of about 3% of GDP were lower than thresholds of
between 30-40% which are consistent with rapid and sustainable rates of
economic growth.

The Zimbabwe Investment Authority (ZIA) however approved investment
applications worth US$6 billion last year, although actual commitments
totalled only $387 million.

“This has been largely due to foreign investor concerns over implementation
of the indigenisation and empowerment regulations and general policy
inconsistences in the country,” the Economic Planning and Investment
Promotion ministry report says.

Policy contradictions also made it difficult for the country to attract
investment and credit lines while they increased the country’s risk and the
cost of doing business.

The dilapidated infrastructure, especially road and rail, as well as the
shortage of energy and challenges water and sanitation have also weakened
the country’s competitiveness, militating against meeting MTP targets.

Key productive sectors of the economy have also been affected by the
liquidity crunch, slowing down growth.

“The debt overhang has negatively impacted on the country’s credit
worthiness leading to limited offshore credit lines and FDI inflows,” the
report says.

The drought which hit the country in the last agricultural season
contributed heavily and was responsible for the downward revision of growth
in 2012 from the MTP target of 7,8% to 5,6%.

Further, implementation of the MTP was also being adversely affected by a
shrinking capital budget and constricted fiscal space.

“The resource requirement of the MTP of about $2 billion per year over the
five-year period, represents some 66% of the national budget. When combined
with government recurrent spending now reaching 85% of the budget, it
highlights serious budgetary constraints facing capital spending,” it says.

“There is need to contain high government operational costs, as well as, to
boost private investment in-order to generate higher rates of economic
growth that would help improve budget revenue inflows.”

Besides the budget underperformance, the late disbursement of ministerial
allocations by Treasury was also a major challenge, while bottlenecks within
the government tendering and procurement system is also affecting the
implementation of MTP flagship projects and programmes.

MTP flagship projects include the rehabilitation of Hwange Thermal Power
Station, Kariba Hydro Power Station construction of Tokwe Mukosi Dam,
Plumtree-Mutare Road, Lupane State University and Mtshabezi Water project,
among other projects.

“Delays within the tendering system have increased costs and affected the
completion of a number of MTP projects and programmes,” the report notes.

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New pay model overdue

November 23, 2012 in Opinion

We have discussed in this column that the remuneration structures in our
labour market are very paternalistic in nature.

Column by Sam Hlabati

Organisations try to keep talent through shouldering financial obligations
on behalf of their employees. The extended scope of these benefits gets
bigger as employees get higher into the organisational ranks.

In a recent discussion, a close associate quipped that the ever-growing
scope of benefits in our market will get to the extent of organisations
paying for the executive employees’ domestic helper’s father’s cousin’s
funeral costs. I believe that is stretching the fact a bit, but who knows,
some organisations may be getting closer to that situation.

These look-after-my-brother benefits, though they were always a part of the
Zimbabwe remuneration structure, got out of hand during the period of our
economic crisis. As discussed previously, companies increased what I would
call “life-comfort” benefits to serve as retention tools for the much-needed

The endemic systemic problem with the status-quo of the numerous benefits is
the very difficulty that the situation poses for benchmarking efforts. It is
impossible to compare these benefits in a real time perspective; making the
comparisons as at a particular point in time between different organisation
difficult. Consider trying to compare the actual remuneration value of a
vehicle benefit between two organisations.

Let us assume a situation where there exists congruency facts. We can assume
two organisations have a company vehicle scheme for managerial employees
that is similar to the extent there is similarity in terms of the make,
model, and year of manufacture of the vehicles. Let us assume a further
similarity is that the company-purchased vehicle is handed over to the
employee’s full ownership with zero residual value.

However, should the period that is required before the vehicle ownership is
given to the employee differ between the two organisations, then the value
of the benefit would differ between the organisations at a given time even
for vehicles purchased on the same day.

The financially-wise and learned colleagues would certainly concur.
The problem of incomparability is not just a hassle for organisations that
are seeking to get a view of the market benchmarks through salary surveys
service providers.

A number of survey reports that are being circulated in our local market are
circumventing the complex problem of incomparability by fleecing most of
these benefits from the actual survey. The tendency has been to concentrate
on remuneration elements, which have an easily ascribable cash value, such
as basic pay, and benefits with standard flat amounts across a particular
employee group in an organisation.

For complex benefits such as vehicles, these salary surveys scratch the
surface by considering minimal disclosure that may just indicate the
presence of the benefit or just the maximum purchase price.

Nevertheless, organisations need to access comprehensive realtime
information, such as remuneration packages that are comparable to their own
employees’ roles.

Such information is not readily available in the market as most of the
salary surveys are static; thus, they are done as at a particular date and
are not updated until the next survey is conducted and manual computations
are concluded. Consumers of such static surveys and entities that avail them
to the market may present that data-ageing argument; thus applying a change
factor to the old data to estimate the present values.

Estimation has its problems of the inclination towards “guestimation” (guess
and estimation fused), which is compounded by the incomparable nature of
benefits across organisations.

A comprehensive realtime survey, preferably one that is web-based and is
regularly updated by the service provider, would be better value for money.

In a previous instalment, I lamented the unsustainable nature of the
paternalistic employee benefits that characterise the remuneration package
structuring in our market. Some organisations have embarked on ambitious
projects of implementing a total cost to employer (TCOE) remuneration model.

TCOE is a pay model that entails stating any employee’s remuneration in
terms of all financial costs that are associated with the basic salary and
all benefits; thus adding up the total costs of benefits such as medical
aid, pension, and group-life assurance — incorporating the employer and
employee contributions.

As much as the conversion to TCOE has its hurdles, if an organisation bites
the bullet, it can implement this aggregated pay structuring. However, the
success of the TCOE will be at the risk of the labour market and economy

The economy does not yet have adequate structures that would support this.

Though credit provisioning by financial institutions is regaining momentum
after almost a decade of non-existence, the availability of affordable
funding is still out of reach of a sizeable number of remunerated employees.

It would be suicidal to compound costs for benefits such as
company-purchased cars into the guaranteed cash-based package. The employee
would have the cash benefit but no access to the vehicle; the same would
apply to the other paternalistic benefits.

One of the key strategies to retain talent is to reward employees in a way
that they perceive as fair. The perspective of fairness of reward for an
employee is driven by comparison of one’s own package with that of others
within the organisation and the offerings in other organisations.

The average employee would have to compare between an organisation’s TCOE
offering and the basic salary plus benefits. Offered by the competitor

In an unstable economic environment, employees would want stability, which
entails a basic-plus-benefits package, all else being equal, just to hedge
against economic volatility.

Our labour market requires a remuneration model that moves rewards to a more
sustainable level. The excessive benefits in our prevalent
basic-plus-benefits dispensation is not financially sustainable in the
long-term as the cost of remuneration is driven by third party service
providers who are at liberty to change their own prices and terms. On the
other hand, the state of our economy is not adequately conducive for a total
cost of employment approach.

Hlabati specialises in human capital business strategies advisory services.
E-mail: or join the discussions on the Zimbabwe
Business Leaders group on Linked-In.

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Mugabe taking Zim nowhere

November 23, 2012 in Opinion

REMARKS in yesterday’s NewsDay by Indian ambassador to Zimbabwe, Jeiteendra
Tripathi, that foreign investors are now scared of investing in the country
due to the mishandling of the multi-million-dollar takeover of Ziscosteel by
Essar Africa Holdings are instructive.

Zimbabwe Independent Editorial

Indian diplomats in Harare have been complaining about government’s clumsy
and incompetent handling of one of the biggest investment transactions
Zimbabwe has ever seen. Essar was expected to invest US$4 billion over four
years as part of the deal.

However, the deal has been stalled by disagreements within government over
Mwenezi iron ore concessions and other clauses in the agreement.

Although cabinet recently said the original agreement must be restored as it
was and an implementation mechanisms be developed, no progress has been
made, hence Tripathi’s bitter remarks.

“There are many potential investors, but they are now scared,” Tripathi
said, adding Zimbabwe was sending “wrong signals to investors”.

This is very enlightening, especially coming from one of the biggest
emerging economies in the world which invests billions in developing

Context is important here. Delhi is part of the grouping which includes
Brazil, Russia, India, China and South Africa (Brics), with large
fast-growing economies and significant influence in regional and global
affairs. These countries represent almost three billion people — nearly half
the world’s population — and have a combined nominal GDP of US$13,7 trillion
and an estimated US$4 trillion in foreign reserves.

Now if Zimbabwe is messing up with countries like India, then it is
definitely shooting itself in the foot. Such sort of unprogressive actions
flow from flawed political thinking, poor policy frameworks and lack of
vision from the country’s leaders.

Combine this with ongoing company seizures under the rubric of
indigenisation — the very altar on which the Essar deal is being
sacrificed — then it becomes clear what Tripathi is talking about. Zimbabwe’s
business environment is extremely hostile and unless this is addressed,
President Robert Mugabe and his Zanu PF cronies are taking us nowhere.

Instead of pursuing ignorant economic policies and frustrating investors due
to greed and self-serving interest, quite apart from corruption and
incompetence, Zanu PF economic illiterates must be fighting for investment
like in other countries — the only sure way to economic success and

They must be scrambling for investment, especially foreign direct
investment, to lift this country out of poverty and misery which they
largely authored.

Although there is no one standard formula for economic growth, leaders of
competitive economies have a clear vision and strategy about how to develop
their countries.

Unless we get serious and competent leaders — not confused and hopeless
demagogues — who understand how to run a democratic government and how a
modern economy works, then we are economically doomed as a nation.

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Biti attempts the impossible

November 23, 2012 in Opinion

LAST week the Minister of Finance, Tendai Biti tabled Zimbabwe’s 2013
national budget to parliament, the fourth one since the so-called “inclusive
government” was formed in 2009.

Opinion by Eric Bloch

In doing so he was confronted with a near impossible task, for the entire
nation craved for a budget that would transform a struggling economy into a
strong one, easing most of the populace’s pronounced poverty and other

Biti had to try to achieve that transformation whilst his hands were, to all
intents and purposes, handcuffed behind his back, his feet heavily shackled
with leg-irons, and his blood-flow constricted with an overly tight

All these immobilisers were to a major extent not of his making, but of the
political divide entrenched in Zimbabwe, exacerbated by the innumerable
policies which hinder substantive recovery of the economy.

Compounding the inability to stimulate desperately-needed economic changes
are the counterproductive political statements and actions of some of the
partners in the inclusive government, and the excessive and misplaced
expenditures of several governmental ministries.

This is reinforced by non-democratic statements in support of former ruling
party Zanu PF by the security sector. The harsh reality is that there
continues to be immense hindrances to any real economic well-being, so at
best only marginal economic recovery can be attained.

Biti deserves commendation for unhesitatingly identifying some of the
numerous obstacles to achieving economic recovery that could readily be
achieved, were it not for those hindrances. In particular, after making a
general but factual statement, he unreservedly focused on some of the
impediments to economic well-being.

Early on in his speech Biti said the last four years had been “an incredible
journey mired with hurdles, challenges, false starts, cul de sacs and all
kinds of potholes.” He added: “To put it simply, it has been an
exceptionally difficult, trying and tiring period.”

He amplified thereon, saying Zimbabwe had “meandered along a maze of
insurmountable challenges centred on an isolated economy, without any fiscal
legroom, with weak capacity, huge levels of poverty, debt and
infrastructural decay”.

He further emphasised the economic harm inflicted on Zimbabwe and its people
by “the pursuit of programmes and ideologies of exclusion, deligitimisation,
predatoriness, patronage, clientelism, self-seeking, and violence”, which
had “led to poverty, under-development, enclave mentality and

Biti highlighted that despite the commendable halt to the country’s worst
hyperinflation, the worst in the world ever, Zimbabwe experienced marginal
economic growth between 2009 and 2011. That “economic rebound clearly
decelerated in 2012, plunging the economy into … a long winter of despair,
characterised by low business and investor confidence, some disequilibrium
in the economy, little growth and employment, declining social indicators
and a generally lackadaisical business-as-usual mentality”.

Biti drew attention to the many constraints on the economy, including
erratic electricity supply, tight liquidity, fiscal revenue
underperformance, drought and continued de-industrialisation.

Moreover, he intimated “the 2013 outlook bleak, blighted by a miscellany of
factors that include a deeper global outturn, the continued capital deficit,
financial sector instability, a poor business climate, and other challenges”.
Moreover, depressingly but very correctly, he said “the fact of the matter
is that we have not entered into a sustainable path to recovery and, most
regrettably, is the overwhelming evidence of stagnation”.

Summing up his sadly correct evaluation of Zimbabwe’s economic
circumstances, he stated that “the sub-optimal equilibrium fuelled by low
aggregate demand and low productivity, underpinned by the five binding
constraints on our economy, namely electricity supply, finance, fragile
balance of payments, politics and poverty needs to be addressed.”

This, he said, accords Zimbabwe two options, the first being “the retention
of the status quo, characterised by uncertainty and the total subordination
of the economic agenda to predatory politics”.

This credible scenario, he said, “will entail a continued reproduction of
the enclave economy and further impoverishment of our people”.

Biti submitted to parliament that reversing these circumstances “requires a
major paradigm shift by all of us, and the pursuit of a united common vision
under a stable democratic political dispensation with strong leadership”,
including “graduation from the current status quo of vicious cycles of
exclusion into virtuous circles of inclusion among movers and shakers”,
which, he said, must include:
Facilitating innovation, entrepreneurship, rising living standards and
Facilitating growth in agriculture, manufacturing, services, SMEs, mining;
Creating jobs in villages, towns and cities for adults, youth, men, women,
and raising tax.
This, he said, could be achieved through “the pursuit of rigorous programmes
of public reforms that include payroll management, strengthening public
finance management systems, dealing with the infrastructure and
technological deficit, restoring the land market and securing property
rights and reducing financial sector vulnerabilities”.

He was similarly emphatic on the need to create an investment-conducive
environment, including ensuring that indigenisation and economic empowerment
policies and practices must not deter necessary investment.

Undoubtedly, many of Biti’s views were not well-received by some
parliamentarians as often “the truth will hurt”. But his courageous
enunciation of facts and realities can, in time, be a first tentative step
towards a meaningful, economic upturn (although, inevitably, there were also
various negative and counter-productive measures within the 2013 budget).

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Even Burma can teach Zanu PF to change

November 23, 2012 in Opinion

We were interested to read in the Weekend Post of November 16 Justice
Nicholas Mathonsi’s ruling in favour of human rights activist Farai Muguwu
who had been the victim of the seizure of his property when leaving the
country for a conference in Ireland.

Opinin by MuckerRaker

The judge ordered the CIO officers responsible to return his property since
the seizure was illegal.

Mathonsi described the minister responsible, Sydney Sekeramayi, as
untruthful and unhelpful.

The state argued that the CIO should not be held accountable as the
Department of State Security did not operate under any statute.
Justice Mathonsi described this as unfortunate.

“Zimbabwe is a democratic country which subscribes to the rule of law. The
applicant (Muguwu) is a citizen of Zimbabwe who is entitled to the
protection of the law,” the judge said. “He enjoys certain rights including
the right to property and free movement as enshrined in the constitution.”

Sekeramayi was described as “exceedingly unhelpful” when he asserted that
state agents do not operate under any law.

“The fifth respondent (Sekeramayi) has not been truthful in respect of the
items that were taken from the applicant. One cannot help observe as well
that all the valuable items which the applicant claims were seized from him
have been denied. The fifth respondent has been shown to be completely
unreliable on what was taken.”

“It is a principle of our law of evidence that where a witness has been
shown to be untruthful, as the fifth respondent has been demonstrably shown
to be, an adverse inference has to be drawn against such a witness.”

The judge was scathing about Sekeramayi’s definition of subversive material
which the state suspected Muguwu wanted to take to Ireland.

“We now know that the said documents were receipts which do not commend
themselves favourably as security threats,” Justice Mathonsi ruled.

“What is known is that the state agents admit taking a number of receipts,
insurance policy, bank transaction slips and two reports compiled by the

Mbeki on point
It was useful to have on record remarks by Thabo Mbeki who was in the
country for a conference on the country’s diamond management. He warned
Zimbabwe’s “predatory elite” to stop benefiting from diamonds at the expense
of economic development.

“Diamond production must not be governed by a predatory elite which is in
collusion with mining companies for its own benefit,” the former president
declared. Mbeki warned that unless Zimbabwe cleaned up its act, its attempt
to win regional support for the lifting of sanctions would not succeed.

This is all rather different to what we read in the Herald and Sunday Mail.

“As elections loom in Zimbabwe next year, the country must prove it is not a
rogue state,” he declared.

He was wrong on one point. He claimed Britain had refused to provide funds
for land reform. In fact, Britain provided 44 million and not all of it was

President Mugabe, again wide off the mark, said at Lancaster House the
Americans, led by Jimmy Carter, promised to fund land reform. We are not
aware of any such pledge. Carter’s term ended in 1980. He was succeeded by
Ronald Reagan who refused to give money to what he saw as a Communist

Mugabe forgot to mention that it was him who nearly walked out of the talks
at Lancaster House, looking for support from Cuba. But Samora Machel and
Julius Nyerere made it clear they would freeze logistical backing for Mugabe
if he abandoned the talks.

Blame sanctions
We enjoyed a report in the Herald last week which said Simon Khaya Moyo had
urged delegates to the Tanzanian Chama Cha Mapinduzi congress to support
Zanu PF’s quest for economic empowerment. The policies Zanu PF was pursuing
would free indigenous people from the bondage of poverty, he said.

At the same time he said Zimbabwe would need food aid if the rains did not
come on time.

And, would you believe it, he blamed sanctions for climate change!

Terrible twins
The terrible twins of the Herald’s opinion columns, Darlington Mahuku and
Bowden Mbanje, who appear unable to speak for themselves, had this to say
last week.

“We must be prepared to get rid of the white man in us if we are to be
victorious. We must unite as Zimbabweans in defending our heritage at all
costs because unity and security are incompatible (sic),” they sang in

“All we have to do is go forward with courage and determination knowing
fully well we have wolves, hyenas and vultures in our midst.”
What a shocking commentary on the current party leadership! This sort of
outspoken criticism can get them into trouble. Perhaps Mbanje and his
Siamese twin need to stop smoking for a while!

How else do we explain headings like “Uncloaking the neo-imperial diabolical

Chihuri loses it
Police Commissioner-General Augustine Chihuri has urged senior police
officers to reject the new constitution if it has provisions for devolution.

He was opening a senior officers’ conference in Harare. Those calling for an
alternative system were unpatriotic, he said.

“We know that there are foreign elements that are trying to infiltrate our
country,” he declared. “I urge you to throw away this notion of devolution
that is coming from some quarters in this country. Devolution means
division,” he said.

What nonsense. Who are these countries that want to “infiltrate” Zimbabwe?
Is it the same ones we go to with the begging bowl every year at about this
time? And don’t police officers have the right to vote according to their
conscience and not what their superiors ordain?

As we said with the army interventions, what is the point of voting if your
choice is prescribed to you? That is not democracy? It is dictatorship.

As for devolution, it is about increasing the parameters of self-government.
Many people in this country want a greater say over their affairs,
especially when they feel they are being marginalised. They don’t want to be
told what to think or do. They certainly don’t want to hear facile claims of
foreign infiltrators coming from elements in the losing party.

Nave editorial
The Herald on Tuesday published a nave editorial expecting new US
ambassador Bruce Wharton to normalise relations with Zimbabwe overnight.
Wharton pointed out this was something he could not do alone.

There was need to work with the people and government of Zimbabwe to paint
an accurate picture of the country, he said. The Herald agreed this would
help counter the “outright lies” peddled against Zimbabwe. There was even
talk of President Barack Obama visiting the country.
Coming in the wake of Chihuri’s remarks to police officers and statements by
Patrick Chinamasa and Douglas Nyikayaramba, this is all pie in the sky.

No US government will give its support to a regime that refuses opposition
leaders who win elections access to State House. Congress wouldn’t stand for

Zanu PF should take a leaf from Burma’s book. The military there have
understood the need for democratic change as a pre-condition for
normalisation of relations with the West. Zimbabwe should do the same. And
the captive public media should stop misleading people over the need for
root-and-branch reform.

Stay out of kitchen
Finally, a message for those self-important politicians who believe they can
muzzle newspapers which publish inconvenient stories: If you can’t stand the
heat, stay out of the kitchen.

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