THE Congress of South
African Trade Unions (COSATU), stung by last week's humiliating deportation
of its top officials, is mobilising civic groups in the region to seal entry
points into Zimbabwe for four days - a move that could trigger a diplomatic
rift between the two countries.
The proposed blockade, being
coordinated in conjunction with Amnesty International in Johannesburg, South
Africa, is pencilled for December 4 to 8 2004, according to information
obtained by The Financial Gazette.
The organisers claim this would
be in protest at alleged human rights abuses, "bad governance, lawlessness,
lack of press freedom, and meant to demand change."
They said
they sought to close the Beitbridge border post at Musina, South Africa, and
other entry points into Zimbabwe from Mozambique, Malawi and Zambia,
effectively barring haulage trucks and other cargo from driving into
Zimbabwe.
Although Amnesty International could not immediately
comment on the envisaged four-day border posts blockade, notices advising
Zimbabwean and regional civic organisations, including the Zimbabwe Congress
of Trade Unions (ZCTU), which invited COSATU on a botched-up fact-finding
mission last week, have been sent to concerned groups.
COSATU,
the South African labour union, is a close ally of South Africa's ruling
African National Congress (ANC). The ANC leader Thabo Mbeki is at the centre
of a delicate mediation in the long-drawn political bickering between the
ruling ZANU PF and the Movement for Democratic Change (MDC).
This is not the first time the militant labour union, which President Robert
Mugabe's government accuses of having been infiltrated by shadowy apartheid
and Rhodesian forces, has tried to intervene in the Zimbabwean
crisis.
Mid last year COSATU threatened to mobilise its
affiliates in the northern provinces which border Zimbabwe to demonstrate
around the Beitbridge area to "highlight the plight of the Zimbabwean
people". The mass demonstrations however flopped.
It also made
demands for an interim government in Zimbabwe and the drafting of a new
constitution on the basis of which fresh elections should have been
conducted. This was after the MDC, born of the ZCTU, COSATU's local
counterpart, complained bitterly that ZANU PF had stolen both the
presidential and parliamentary elections.
The machinations by
COSATU could be a double-edged sword for both the Zimbabwean and South
African governments. Apart from putting its fragile alliance with the ANC
under considerable strain, it could also be a litmus test for Mbeki's much
criticised foreign policy on Zimbabwe. The Zimbabwean government sees Mbeki
as a key ally in the face of an increasing international backlash against
perceived human rights violations.
The planned blockage would
certainly anger the Zimbabwean government, which has since categorically
stated that COSATU can be "king-makers elsewhere and not in Zimbabwe", and
would want its wings clipped.
It was not immediately clear however,
how Mbeki would deal with the situation. Last year, the pipe-smoking South
African leader refused to budge to COSATU demands to force a re-run of the
Zimbabwean presidential elections. Instead, he pushed ahead with his policy
of quiet diplomacy when there was a chorus for a radical push to effect
regime change in Zimbabwe. Mbeki's position has always been that Zimbabwe is
not an extension of South Africa but a sovereign state.
Harare
yesterday indicated it will ruthlessly deal with anyone who joins the
blockade from the Zimbabwean side and promised to take up the issue with
Pretoria should COSATU maintain its defiance.
Kembo Mohadi, the
Home Affairs Minister who ejected the COSATU delegation last Tuesday night,
talked tough yesterday, warning that any Zimbabwean found participating in
the blockade would be dealt with according to the laws of the
country.
"If it is COSATU that wants to close the borders, we
wonder what they are desperate for. In any case, to close traffic into
Zimbabwe will be a violation of international laws of freedom of movement,"
said Mohadi in telephone interview.
"We are not going to allow
anyone to interfere with our borders internally. We will deal with whomever
tries. But if they close from outside, we will take it up with the
respective governments to deal with the issue," he added.
ZCTU
president Lovemore Matombo, although distancing his organisation from the
planned regional initiative, said the expulsion of COSATU had infuriated
many unionists in the region and abroad.
"We are not party to
anything that will cause problems for the country but the issue of COSATU's
deportation has caused a lot of anger. There are campaigns every where to
show that Zimbabwe is a pariah state. We are going to make some contact with
COSATU again as we have both agreed that there is a problem in Zimbabwe,"
said Matombo.
"Any move that we are jointly going to make will only
be taken after serious considerations. We are yet to do that as ZCTU and our
South African counterparts."
Matombo, however, hinted that the
closure of borders could be a COSATU initiative working with other aggrieved
parties that he did not name.
As the news of the intended closure
by the powerful COSATU and its allies filtered through, industry feared it
could affect the flow of fuel into the country at a time when the southern
region was already reeling from a resurgence of winding fuel
queues.
"We have trucks that come via Beitbridge from South Africa
but if Beitbridge is closed, we will look at other open avenues, " said
Masimba Kambarami, the president of the Zimbabwe Petroleum Marketers
Association.
Pattison Sithole, the president of the Confederation
of Zimbabwe Industries, a majority of whose members are on their knees, said
any day lost would not augur well for industry.
"I don't know
if it will succeed but any delay will impact on the movement of materials.
Any day lost in business has an impact," said Sithole.
ZIMBABWE'S Pay As You
Earn (PAYE) tax, arguably the highest in the world, is likely to be relaxed
anytime soon, as the government responds to competing demands from the
economic and political fronts.
Acting Finance Minister Herbert
Murerwa has been under immense pressure to ease the tax burden on the
suffering masses and boost aggregate demand for goods and services.
Highly-placed sources said the government was almost conceding to a review
of the PAYE tax amid expectation that relief could come on the presentation
of the 2005 national budget slated for November 25 2004. Analysts
said the government's move was intended to boost workers' aggregate demand
and give an electric jolt to the slump in industrial production, which has
been partially blamed for falling demand. Consumer demand has fallen
drastically over the past five years in line with a decline in purchasing
power. Massive job cuts and company closures have compounded the situation.
The high personal tax is pegged at 45 percent, while companies are being
taxed at 30 percent. Economic analysts this week said contribution from
personal tax had risen from 27 percent of the total revenue between 1990 and
1995 to 38 percent in 2001. In the 2004 national budget mid-term
review, Murerwa said individual taxpayers had contributed $1.2 trillion to
the national fiscus, nearly 39 percent of revenue, while that from the
corporate world was only $321.1 billion, or 11 percent of total
revenue. Zimbabweans, compared to other workers in the region, are the
most taxed. In South Africa, a worker earning up to R32 222 (Z$2.3 million)
per year is exempted from paying tax. For pensioners, the tax-free threshold
is R50 000 (Z$3.6 million) per month. The highest tax rate,
applying to workers earning more than R225 000 a year, is about 40 percent.
In Botswana, individual taxpayers contribute only 14 percent.
"Personal tax levels are lagging behind the inflationary trend. The minimum
tax should be based on the poverty datum line and no worker earning less
than $1.5 million should be taxed," said Godfrey Kanyenze, a labour
economist.
THE 18-month long
treason trial of Morgan Tsvangirai, leader of the Movement for Democratic
Change (MDC), gobbled up nearly $1 billion from the opposition party's
coffers.
MDC insiders said yesterday conservative estimates showed
that the country's main opposition party, whose leader was acquitted on
charges of high treason by the High Court last month, had spent 10 million
rands (about $800 million at the auction rate) on the trial.
Tsvangirai engaged celebrated South African lawyer George Bizos. Bizos also
represented South Africa's former president and icon Nelson Mandela at the
famous Rivonia trial in 1964.
A coterie of local and international
legal practitioners also assisted Bizos in the trial, which generated
regional and international interest.
David Coltart, the MDC legal
secretary, said that the trial proved very expensive for the party as its
financial coffers had been depleted by its numerous forays to the courts
against the government.
"It's thousands of millions. It could be
over a billion dollars. These are conservative estimates. We are yet to come
up with a definitive figure," said Coltart.
"There were other
costs involved apart from paying the lawyers. It was a very expensive trial
that took a lot of people's time."
Coltart said most of the funding
for Tsvangirai's trial had come from party members' subscriptions and
donations from well-wishers. "Of course we also utilised monies we got from
the Political Parties (Finance) Act," he said.
The government
has indicated it will appeal against Tsvangirai's acquittal by Judge
President Paddington Garwe within the next few weeks.
ZANU PF
political vultures are circling over the Chimanimani constituency, which is
soon to be declared vacant following Roy Bennett's arrest over contempt of
Parliament.
Bennett, the opposition Movement for Democratic Change
(MDC) legislator, was slapped with a one-year jail sentence for flooring
Justice Minister Patrick Chinamasa and Minister of Anti-monopolies and
Anti-corruption Didymus Mutasa during a heated parliamentary debate in May
this year.
It has emerged that eight prospective ZANU PF
candidates have lined up to fight it out, hoping for a soft landing pad
following Bennett's imprisonment.
Pro-government economic
analyst Samuel Undenge and Wankie Colliery Company board chairman Munacho
Mutezo and a member of the central committee, who lost the seat to Bennett
in the 2000 parliamentary race, are the main contenders in the looming
battle.
Other candidates jostling for the position are Misheck
Beta, a twin brother to Shadreck, a prominent business man in Manicaland,
retired Major Matsikinyere, Major Musabeya, Mutambara, Mugebe, a
vice-chairman for the Chimanimani council and a Mukono, a retired
headmaster.
Mutezo, one of the front-runners in the race for the
constituency, confirmed that he had been campaigning and working with the
people of the constituency "since 1998".
He said an earlier
parliamentary poll in the constituency had revealed that he controlled 67
percent of the electorate while the other combined seven would-be candidates
shared 33 percent.
Sources from Chimanimani said in the primary
poll Undenge, a vocal advocate of government policies but whose ZANU PF
credentials are not known, polled only one vote.
"I have been
campaigning vigorously and I am ready for whatever is going to come, even
for the MDC, assuming they want to field a candidate," Mutezo
said.
Undenge said he was anxiously waiting for the race for the
seat to be declared open but would not be drawn into divulging more of his
intentions.
He said: "I am waiting for that to happen but we will
talk about it when it happens. At the moment I am concentrating on the
monetary policy."
BULAWAYO-The Movement
for Democratic Change (MDC) is preparing for next year's elections though it
is still unclear whether it will participate or not. But time is running out
fast for both the ruling ZANU PF and the MDC as each is refusing to budge
from its present position.
ZANU PF insists that the elections will
not be rescheduled. They will be held in March to enable the country to mark
its silver jubilee after having defeated "British Prime Minister Tony
Blair". The MDC insists it will not participate in a sham. The
government has to level the playing field and abide by the principles and
guidelines set by the Southern African De-velopment Community (SADC) in
August. Voters and political observers are in a quandary. If the MDC,
the strongest opposition party Zimbabwe has ever had, boycotts the elections
it will sink into political oblivion. If it participates, it will legitimise
the ZANU PF government which has already rigged its way into power because
of several advantages of incumbency that it has. MDC leader Morgan
Tsvangirai, who was acquitted of treason charges last month but still faces
other treason charges, has been on a whirlwind regional tour to persuade key
leaders to put pressure on President Robert Mugabe to abide by the SADC
principles and guidelines which would usher free and fair
elections. He had talks with South African President Thabo Mbeki who
was tasked by the West to find a solution to Zimbabwe's crisis and Paul
Berenger of Mauritius, current chairman of the SADC. "The various
meetings that took place provided an opportunity to explain the situation in
Zimbabwe," Tsvangirai said in a statement from Johannesburg. "We explained
how the dynamics that currently exist on the ground, vis a vis the political
environment, are woefully inconsistent with the standards expected under the
SADC protocol on principles and guidelines governing democratic elections"
Tsvangirai said. He said the prominent deficits were the absence of the
rule of law, political violence, repressive legislation that curtailed basic
civil and political liberties and an inaccurate voters' roll. These
anomalies could not be tackled immediately prior to the elections. They had
to be addressed at least six months or more before an election to restore
public confidence and legitimacy in the electoral process. He said
though the MDC had resolved on August 25 to boycott all elections until the
government levelled the playing field, his party was still hopeful that the
government could be persuaded to implement political and electoral reforms
that would enable it to participate in next year's elections. "That
is why we are continuing to prepare for the elections. We look forward to
fighting in a free and fair election on issues of the day - food and jobs,"
he said. "These are the issues that really matter to Zimbabweans."
Though the decision to boycott elections was reached by the party's national
executive, the majority of the party's supporters are against it because
they feel the party is playing a crucial role in keeping ZANU PF on its
toes. They also argue that electoral reform is a process. "We support a
total boycott because participating in any elections when the playing field
is not level is legitimising the ZANU PF government," Reggie Moyo, regional
chairperson of the National Constitutional Assembly in Matabeleland
said. "You cannot have free and fair elections while AIPPA (Access to
Information and Protection of Privacy Act) and POSA (Public Order and
Security Act) are in place because the opposition cannot campaign
effectively," Moyo said. He said if there was a total boycott and
ZANU PF won all parliament seats, this would send a clear message that it
was imposing itself on the people, especially if the opposition parties
campaigned and held rallies that were attended by thousands of people prior
to the polls because this would show that they had support of the
people. Asked what would happen if there was no total boycott as some
of the smaller opposition parties could take advantage of the absence of the
MDC, Moyo said, right now, the MDC was the only opposition party that
counted. "In fact, it goes even beyond that. Our elections are between
two personalities. Mugabe and Tsvangirai. Period. You can put any other
person in their place but it will not be the same. "This is the
problem in Zimbabwe. We probably inherited it from the past, from the days
of the liberation struggle. You could not talk about ZAPU without Nkomo, the
Rhodesian Front without Ian Smith. Even today you cannot talk about ZANU PF
without Mugabe or the MDC without Tsvangirai. It is not about democracy per
se but about personalities." Moyo said the major problem at the moment
was that various actors tended to divide their energies. "We should
all be fighting AIPPA and POSA before we start fighting for electoral
reform. But of course, I understand why the MDC is concentrating on
electoral reforms. "The aim of any political party is to get into
power, but how they will rule after that is anybody's guess.
Political parties should therefore not be at the forefront of constitutional
reform because they will always craft something that will be in their
favour," he said. Gorden Moyo, executive director of Bulawayo Agenda,
said the MDC should gear themselves to participate in the elections because
without participating they would sink into political oblivion. He
said the acquittal of Tsvangirai on treason charges had been a diplomatic
goal for the government because the MDC "boycott gospel (was) no longer
sellable to the SADC region". "It is not so much an issue of neutrality
or impartiality of our judiciary system but rather a political goal by ZANU
PF in the 2005 elections in the eyes of the SADC," Moyo said. "The
best approach for the MDC is to declare in no uncertain terms that whatever
tricks may be employed by the ruling party, they are only going to
participate if AIPPA and POSA and other conditions have been eased," Moyo
said.
President Robert Mugabe recently
complained bitterly about the dismal performance of some of his ministers
which he said had resulted in the collapse of a number of
parastatals.
The 80-year old leader said these goings-on at
parastatals amounted to "sabotaging the economy" and blasted the ministers
concerned for inefficiency and lack of commitment to their "sworn duty of
serving the nation" He said he was even more frustrated with the
non-performing ministers because they had never been denied funding by
treasury but they had nothing to show for all the resources that had been
made available to them. Instead of taking decisive action, the ministers
were "just crying" "If I had my own way, people were going to be put in
jail. I would arrest the minister responsible for each parastatal, the
chairman of the board and the chief executive and lock them behind bars,"
the President fumed. This is a curious remark, raising the question
of why the President does not have his "own way" as far as dealing with
non-performers in his Cabinet is concerned? Would it not be easier to simply
fire non-performing and corrupt ministers and replace them with more
committed candidates? An examination of President Mugabe's track record
as a disciplinarian in the context of his cabinet ministers and other
government officials shows that he has tended to turn a blind eye on the
faults of his lieutenants. Although he has dropped some ministers from
time to time in cabinet reshuffles, he has rarely outrightly sacked someone
over a specific issue or incident. When the President breathes fire
over ministerial shortcomings, the public therefore tends to be sceptical
about his determination to deal with the culprits. This scepticism does not
seem unfounded. Apart from those dropped during cabinet reshuffles,
most ministers who have left government service in the last 15 years have
done so after resigning on their own accord. The largest number of
resignations occurred after the implication of a number of cabinet ministers
in the Willowvale car scandal in 1989. Cabinet ministers who tendered their
resignations over the scam were Dzingai Mutumbuka, Maurice Nyagumbo, Enos
Nkala, Frederick Shava, and Callistus Ndlovu. Jacob Mudenda, who was a
provincial governor, and Charles Ndlovu (Webster Shamu), who was a deputy
minister, also resigned. A year earlier Shuvai Mahofa, who was deputy
minister of political affairs, was the first woman to resign from President
Mugabe's government. She quit after she became embroiled in a party row in
Gutu South which involved her love life. Other ministers who
resigned of their own accord are Edmund Garwe, who was minister of
education, Nkosana Moyo, former minister of industry and international
trade, former finance minister Simba Makoni and Enos Chikowore, who quit as
transport and energy minister in 2000 over the fuel crisis. Garwe
resigned after his 14-year-old daughter had leaked a Zimbabwe Junior
Certificate Examination paper at the Dominican Convent High School in
Harare. Most of these resignations took place after President Mugabe had
assumed the Executive Presidency in 1988. The chronology of events
seems to indicate that when he was Prime Minister from 1980 to 1987,
President Mugabe was bolder and more decisive in dealing with errant members
of his Cabinet. All those he fired outrightly from government were shown the
door during the eight years of his tenure as premier. Ironically,
one of the first ministers to be sacked was veteran nationalist and late
Vice-President Joshua Nkomo. He was sacked in 1982 following the discovery
of arms caches on properties owned by PF-ZAPU, during what now passes as
Zimbabwe's darkest historical period. In 1984 President Mugabe
dismissed two more ministers who were members of PF-ZAPU. These were Cephas
Msipa, who was a minister of state for water resources and development, and
John Nkomo who was also a minister of state (deputy prime minister) in then
Prime Minister Mugabe's office. The first ZANU PF minister to be fired
by President Mugabe was the late Herbert Ushewokunze. He was relieved of his
post as minister of health in 1981. The ever-witty Ushewokunze complained at
the time that he was being cast as the "whipping boy" Alexio
Mudzingwa, who was deputy minister of labour, manpower planning and social
welfare, was next at the receiving end of President Mugabe's wrath. He was
fired in 1986 after being accused of drunkenness during the Non-Aligned
Movement Summit held in Zimbabwe that year. The pattern that emerges
from this track record seems to indicate that President Mugabe was bolder
and more willing to discipline his lieutenants during his eight-year tenure
as Prime Minister.
A PERFORMANCE
guarantee, estimated to be in excess of $900 million, granted to an audit
firm by a troubled bank has raised questions of possible conflict of
interest that could shift the spotlight on the role of accountancy firms in
the unfolding drama in the financial services sector.
It emerged
this week that the bank, which is one of the several financial institutions
to be placed under the management of a curator following revelations of
gross financial impropriety, had availed a performance guarantee to the
audit firm (name withheld), the banking firm's external
auditors.
A performance guarantee, like a letter of credit, is an
undertaking by the issuing bank to guarantee a contractor's capacity to
carry out a task for which it is contracted and attaches a degree of
liability on the part of the issuer.
The guarantee can be in
the form of cash, certified cheque, irrevocable bank letter of credit or any
other acceptable instrument.
The managing partner of the audit firm
confirmed the existence of such an arrangement with his firm's client, but
hastened to say everything was above board.
"We applied and
were provided, in September 2004, with a performance guarantee for an
assignment our firm was requested to undertake. As you are well aware, huge
contracts require a performance guarantee.
"The guarantee was
provided in the normal course of business and is in line with our ethical
rules as auditors and chartered accountants. There is nothing scandalous
about that, unless you mean all audit firms cannot enter into transactions
with banks," the partner said.
It is believed the guarantee was
made in favour of the Ministry of Finance and Economic Development prior to
the audit firm's appointment to carry out investigations on behalf of the
government.
The Institute of Chartered Accountants of Zimbabwe's
(ICAZ) rules of professional conduct take a dim view of financial
arrangements between auditors and their clients.
"Financial
involvement with a client will affect independence and may lead a reasonable
observer to conclude that it has been impaired."
However, the audit
firm, which declined to divulge the value of the guarantee, insisted there
was nothing wrong with the arrangement entered into with its
client.
"Our firm was assigned by the Reserve Bank of Zimbabwe to
carry out investigations into a number of banks, including the bank in
question."
ICAZ president Eric Bloch said there could be nothing
unprocedural about the arrangement between the audit firm and its
client.
"It would very much depend on the circumstances. If the
transaction was done within normal banking terms without any undue
interference then there is no problem, but our disciplinary committee would
have to look at the issue if normal banking terms were not
followed.
"There is no reason why an auditor cannot, for instance,
purchase items on account from Barbours simply because he does the Meikles
audit," Bloch said.
ANXIOUS and expectant Zimbabweans who had kept their powder dry
ahead of the third quarter monetary policy review, hoping to hear that the
worst was over must have felt badly let down when, on the eve of the
monetary policy review, news filtered through that yet another bank had been
placed under curatorship.
That another perennially struggling
financial institution has slipped on yet another banking banana skin at a
time when all and sundry hoped for calm after the violent storm in the
scandal-plagued financial sector, underlines the depth of the festering
financial wound wrought by the mess in the erstwhile seaworthy vessel in an
otherwise sagging economy.
If nothing else, it also underlines the
extent of the malaise in the sector where those running the affected banks
have shown that they are devoid of any notion of honour, integrity and
honesty. These are words they would not recognise except as clues in
newspaper crossword puzzles. They neither have sufficient conscience to
bother them let alone keep them straight. Put simply, the words honesty,
integrity and honour, in the mouths of some of these bankers are just like
the word love in the mouth of a whore!
Little wonder therefore
that a significant number of banking institutions were teetering on the
verge of collapse until they were thrown an eleventh-hour life-line by the
Reserve Bank of Zimbabwe. The central bank ordered a merger of the troubled
banks by January next year in an attempt to stave off what appeared an
imminent collapse and potentially Zimbabwe's biggest corporate failure.
While admittedly the temptation to become couples is as prevalent in the
corporate sector as the personal, this one is a forced marriage. This
option, other than an outright liquidation, was probably meant to make the
best out of a very bad situation as the central bank tries to clean up
potentially one of the world's messiest piles of financial
wreckage.
All this because some of the despicable things the
bankers did, if they had not been done, could never be imagined. Indeed who
could imagine the stupefying complex pattern of deceit, fraud and
criminality in the financial sector? Hopefully however the move by the RBZ
will provide an opportunity for a quick route to cost-cutting, profit growth
and the long-awaited consolidation in the overcrowded banking
segment.
Added to this, the mess and rot in the sector has seen
thousands of hapless investors burning their fingers after they lost
billions of their hard-earned cash - thanks to the natural born cheats who
masquerade as bankers. It is exceedingly costly to the investment portfolios
of people who must be dismayed that the long arm of the law has not been
long enough to reach some fugitive bankers. Not to mention how distressing
this is to the investors' psyches and the crippled national confidence in
banking. Thousands of people have suffered as employees and millions still
have suffered as depositors simply because a handful of top banking
officials undertook a string of dangerously fraudulent practices. It has
brought with it anguish, nightmares and bitterness among a multitude of
victims of the financial scandal, some of whose very livelihood is in
jeopardy.
It is against this background that we here raise the
issue of professional ethics and the role played by external auditors in
abetting and masking corruption in the banking sector and indeed elsewhere
in the economy. We raise the issue because external auditors, who risk
becoming corrupt to the very dregs of infamy, could be guilty of complicity.
It has just been brought to our attention that a firm of external auditors,
against the ethics of the profession, borrowed close to a billion dollars
from their client - a bank that has since twisted in the air - leaving
creditors in the lurch to the tune of a whopping $400 billion. There is
something untoward over this financial arrangement because it clearly puts
the auditors in a position where their professional judgment conflicts with
their personal business interest.
This is alarming coming as it
does after a legal minefield that erupted in the mid-1990s, when two
international accounting firms were issued with writs by Touche Ross, the
liquidators of the disgraced Bank of Credit and Commerce International
(BCCI) for alleged negligence, breach of duty and breach of trust. The
former managing director of the bank's Harare subsidiary, Bashir Shaik, was
later jailed for three years in the United States of America for assisting
deposed Panamanian strongman Manuel Noriega launder drug money.
What is disturbing is the flagrant disregard for the profession's ethics.
The rules of professional conduct of the Institute of Chartered Accountants
of Zimbabwe (ICAZ) categorically state that: Financial involvement with a
client will affect independence and may lead a reasonable observer to
conclude that it has been impaired. According to the institute, such an
involvement can arise in a number of ways, among others, by loans to or from
the client or any officer, director or principal shareholder of a client
company.
So, doesn't the auditors' actions give rise to conflict of
interest? Wasn't this inducement to paint a rosier-than-real picture of the
financial status of the bank which they knew had a full-blown liquidity
crisis, falling revenues insufficient to provide for adequate capital,
support for present and future operations and a run on the bank signifying a
deep depositor alienation? Moreso given that auditors must be independent in
fact and appearance. Doesn't it impair integrity, objectivity, independence
and indeed the reputation of the profession? A case of not wanting to risk
the ire of the hand that feeds them!
To what extent do these
accountants help their clients cook the books and shade the truth? Is it
within their professonal ethics to cover up for the misdeeds of influential
and powerful people? In the case pointed to above, should they have turned a
blind eye and let bank executives rob and deceive depositors by stashing
away huge sums of depositors' money? Or should they have blown the whistle
to enable the government to punish the criminals and not hurt legitimate
depositors as former New York District Attorney Robert Morgenthau once said
as the BCCI scandal unfolded. Lastly but not least, how widespread is this
problem?
We ask these pertinent questions because we believe that
it is the duty of outside accountants to, among other things, detect and
identify simmering problems and questionable financial dealings before it is
too late to correct them. This is more so in Zimbabwe where banks, for whom
transparency has been an alien concept, had erected "Chinese walls" that
kept the authorities from getting critical information about their
operations. This is why we feel that this is a ripe area for investigation.
The ICAZ and the powers-that-be need therefore to get to the bottom of this
issue, because we need a fresh start to restore credibility to local
business.
Historic? In our African culture, it
is agreed that it is not the done thing to recite a person's misdeeds after
their death. It is wrong. It is immoral. Uncouth.
Fine and
dandy. But there are some situations when we are forced to disregard this
age-old tradition. Moreso when some people try to deliberately distort a
straight forward history - the way ZANU PF seems to be adept at
doing. Last week former Harare executive mayor Cde Solomon Tawengwa
passed on. Every patriotic Zimbo felt as bereaved as the Tawengwa family . .
. until ZANU PF started distorting history. We started hearing that
Cde Big Solo had been Harare's first executive mayor until he resigned in
1999 . . . blah, blah! Jesu Kristo! Why do people just want to distort facts
at each and every twist and turn? It is a fact that the late ZANU PF
mayor was dismissed by Ignatius Chombo after Harare had gone dry.
And even this year, sclerotic apologists at the state media argued that
there was nothing eventful about the dismissal of Elias Mudzuri because even
before a ZANU PF mayor in Harare had been dismissed for non-performance. So
where does the resignation story come from? A lot was said, but nothing
was said about people who pegged their service stations at sports stadia . .
. and such other unbecoming acts! Cosmetic It is good to
notice that ZESA - which last year posted a loss of $163 billion - finally
has a new board. Remember the Great Uncle firing the previous board in a
graveside speech at the National Heroes Acre last year? Back to ZESA board
appointments. Nothing has, in actual fact, changed at all since the man at
the centre of the mess, our national brother-in-law, Cde Sydney Gata, is
still in his self-created position as executive chairman - and he still
answers to no one. It is said everyone is nepotic at some point in life
- and for altruistic purposes, it is sometimes important that we become
nepotic - but there are cases where some people tend to take this game too
far. And it is only within the realms of nepotism that one can explain the
perennial survival of Cde Gata at ZESA. Last year, we were told
that the entire ZESA board was being sacked because it had failed to
deliver, but what is surprising is that the same man who headed the board
that failed to deliver is again heading the cosmetic new-look
board. Our sages always advise us that a fish rots from the head
downwards . . . so what sort of fish is this ZESA one that not only rots
from the tail but whose head, in fact, never rots? It is because of
decisions like this nepotic one that we are ever in trouble! Gig of
the year?For months, we were told to gird our loins for a "Kongonya Dance
Party of the Year", courtesy of no one else but PaxAfro, that ambitious
musical outfit owned by the only Professor in this country. And guess what
it turned out to be? The mother of all flops! Yes, a flop of all flops! For
it turned out to be a real sorry apology for a "party of the year."
Ever since when has the market been flooded with free admission tickets on
the last minute? We mean ever since when have serious and well-organised
groups invited others to join them on the eleventh hour? Yes, this only
happened when it dawned on the organisers that the thing was going to be a
flop, dead cert! So that explains the many comps that were curiously
given to whoever cared to receive them . . . and the invitation of Tongai
Moyo and other musical groups to join in at the very last minute. It had
been realised that PaxAfro alone had no capacity, whatsoever, to lure even
half-a-dozen demented merry-makers. Zimbabweans were just not
interested in attending the show. Whether it was because of who is behind
the musical group, or just the craven dislike for gatherings over-attended
by some security operatives, Zimboz just did not get excited about this
so-called party of the year. And we are also told that even the double
CD is not selling. Whether the music is good or not, once they have made up
their mind on something, nothing changes their hearts. So this
explains the flop. Sorry Our commiserations to gospel diva
Fungisai Mashavave (nee Zvakavapano) for being the latest victim of the
(smart) travel sanctions slapped on Zimbabwe. The songbird is the latest
addition to the long list of those characters banned from setting foot in
the United Kingdom. Sorry Sister Fungisai.
ZIMBABWE'S commercial
timber production has shrunk by 50 percent, largely because of uncertainties
caused by changes in land tenure legislation, uncontrolled veld fires and
increases in production costs, players in the sector say.
Uncertainty brought about by the government's chaotic land redistribution
exercise has resulted in non-expansion of plantations over the past four
years. The industry has also been hit hard by declining consumer demand
for timber and timber-related products on the local market, while the lull
in the property sector has added to the industry's misery. The
construction industry, the major consumer of timber products, has been
operating below capacity because of high costs of building materials, mainly
imports. Bill Johnston, chief executive of the Timber Producers
Association, said output in the industry had been on the decline since 2001,
with no major expansion programmes taking place. Johnston told The
Financial Gazette: "(The) local market has shrunk by between 30 and 50
percent. The industry was on the brink of collapsing in 2003 when changes in
the banking sector occurred, which saw the mainstay of the industry
(Zimbabweans in the diaspora) shun the local property market. There is not
much we can do until the land resettlement programme is concluded."
The Reserve Bank of Zimbabwe earlier this year introduced managed foreign
currency auctions to curb a thriving parallel market that was central to a
booming property market. National annual timber statistics indicate
that 119 000 cubic metres of timber were produced in 2001and the figure
dropped by 10 percent in 2002 to 108 000 cubic metres. Figures for last year
are yet to be released. The timber industry has a long production
cycle. Pine trees, the major and common raw material in the sector, mature
after a period of up to 25 years and continuous replanting is
required. The government's land redistribution exercise displaced a
number of white farmers who were involved in timber production. Invasions of
the properties are still reportedly occurring throughout the country and
existing timber plantation owners are still uncertain whether to go ahead
with expansion programmes. The government's agrarian reform has led
to the expropriation of over 90 percent of the country's 4 500 white-owned
commercial farms for the resettlement of the landless blacks, many of whom
lack resources to farm on a large scale. Major timber-producing
areas were acquired for resettlement and most of the settlers reportedly
started depleting the forests for firewood and construction material. They
also allegedly overgrazed the land. Uncontrolled veld fires had also
contributed to the decline, Johnston said. The timber industry
contributes about four percent of Zimbabwe's gross domestic product and
earns the country much-needed foreign currency through exports to regional
and international markets. Johnston said players in the industry were
increasing export volumes as a survival tactic. But he said this was not
viable because there had been no major changes upward on the auction rate
offered to exporters by the central bank since the beginning of the
year. Reserve Bank governor Gideon Gono last week announced that the
foreign currency exchange rate had been upped from $5 600 to $6 200 against
the greenback, a move likely to change the fortunes of the timber industry
players. There have also been calls to give concessions to
communities in timber-growing to motivate them to look after trees.
own timber output Zhean Gwaze Staff Reporter
ZIMBABWE'S commercial timber production has shrunk by 50 percent, largely
because of uncertainties caused by changes in land tenure legislation,
uncontrolled veld fires and increases in production costs, players in the
sector say. Uncertainty brought about by the government's chaotic land
redistribution exercise has resulted in non-expansion of plantations over
the past four years. The industry has also been hit hard by
declining consumer demand for timber and timber-related products on the
local market, while the lull in the property sector has added to the
industry's misery. The construction industry, the major consumer of
timber products, has been operating below capacity because of high costs of
building materials, mainly imports. Bill Johnston, chief executive
of the Timber Producers Association, said output in the industry had been on
the decline since 2001, with no major expansion programmes taking
place. Johnston told The Financial Gazette: "(The) local market has
shrunk by between 30 and 50 percent. The industry was on the brink of
collapsing in 2003 when changes in the banking sector occurred, which saw
the mainstay of the industry (Zimbabweans in the diaspora) shun the local
property market. There is not much we can do until the land resettlement
programme is concluded." The Reserve Bank of Zimbabwe earlier this
year introduced managed foreign currency auctions to curb a thriving
parallel market that was central to a booming property market.
National annual timber statistics indicate that 119 000 cubic metres of
timber were produced in 2001and the figure dropped by 10 percent in 2002 to
108 000 cubic metres. Figures for last year are yet to be released. The
timber industry has a long production cycle. Pine trees, the major and
common raw material in the sector, mature after a period of up to 25 years
and continuous replanting is required. The government's land
redistribution exercise displaced a number of white farmers who were
involved in timber production. Invasions of the properties are still
reportedly occurring throughout the country and existing timber plantation
owners are still uncertain whether to go ahead with expansion
programmes. The government's agrarian reform has led to the
expropriation of over 90 percent of the country's 4 500 white-owned
commercial farms for the resettlement of the landless blacks, many of whom
lack resources to farm on a large scale. Major timber-producing
areas were acquired for resettlement and most of the settlers reportedly
started depleting the forests for firewood and construction material. They
also allegedly overgrazed the land. Uncontrolled veld fires had also
contributed to the decline, Johnston said. The timber industry
contributes about four percent of Zimbabwe's gross domestic product and
earns the country much-needed foreign currency through exports to regional
and international markets. Johnston said players in the industry were
increasing export volumes as a survival tactic. But he said this was not
viable because there had been no major changes upward on the auction rate
offered to exporters by the central bank since the beginning of the
year. Reserve Bank governor Gideon Gono last week announced that the
foreign currency exchange rate had been upped from $5 600 to $6 200 against
the greenback, a move likely to change the fortunes of the timber industry
players. There have also been calls to give concessions to
communities in timber-growing to motivate them to look after trees.
THE
Zimbabwe United Residents Association (ZURA) is consideringways to intervene
in the tug-of-war between the local government ministry and the Bulawayo
City Council, which is threatening service delivery.
ZURA
secretary-general Masimba Ruzvidzo said ratepayers viewed Local Government
Minister Ignatius Chombo's interference in the administration of Bulawayo as
persecution targeted at councillors from the main opposition party.
"The fighting between the mayor and the minister is affecting ratepayers in
terms of service delivery. The outcome of the political feud will have
implications on us (ratepayers), hence we have developed an interest in what
is taking place. "We are trying to make consultations and mediate in
the issue with a view to bridging the rift," Ruzvidzo said.
Ndabeni-Ncube faces dismissal for issuing reports that there were growing
incidences of deaths caused by hunger in the country's second largest city,
statements the government says were unfounded. The government insists
the deaths were caused by malnutrition, not hunger. Ndabeni-Ncube, however,
says he does not see the difference between the two. ZURA blamed
the wrangling on the Urban Councils Act, which gives Chombo leeway to
interfere in the running of municipalities. According to the provisions
of the Act, said ZURA, the minister can suspend councillors and appoint a
commission, which would not be answerable to ratepayers but to him.
This lopsided balance of power enshrined in the Act, said ZURA, compromised
transparency and accountability.
The hullabaloo that the visit of the
Congress of South African Trade Unions (COSATU) delegation to Zimbabwe has
sparked reminds me of a statement attributed to Winston
Churchill.
To underscore his abomination for one of the most evil
tyrants of the 20th century, Britain's great wartime leader is reputed to
have said that if Adolf Hitler invaded hell, he (Churchill) would say a
favourable word for the devil in the House of Commons. What
Churchill meant, in essence, was that he detested the Nazi leader so much
that he would support anything Hitler was against or vice-versa. Hitler
established Nazism, launched the Second World War and presided over the
Holocaust, during which six million Jews were killed. Through Joseph
Goebbels, he mounted the most ferocious and hate-filled propaganda campaign
under which freedom of speech and assembly came under relentless
attack. Churchill's disgust with this ruthless oppressor and his "if
you are against it, I am for it" stance was hardly surprising.
However, the "if you are a friend of my enemy, you are my enemy" philosophy
that seems to be at play in the controversy involving the COSATU delegation
is hard to understand and is indeed uncalled-for in a supposedly democratic
country. The official reason given for the deportation of the South
African trade unionists was that their mission was "political" and this was
anathema to the government. The heavy-handed action against the
visitors unfortunately betrays an increasing sense of government paranoia
characterised by a jumble of vague and contradictory suspicious and imagined
conspiracies. In a bid to justify the government's defiance of a court
order nullifying the delegation's deportation on the grounds that it was
illegal, officials fell back on a now familiar cop-out - claims that
relevant documents were not received in time to act. Far from
giving the impression of a country safeguarding its sovereignty, these
vindictive actions portray a nervous government that knows its clampdown on
the rights and freedoms of Zimbabweans cannot bear up to scrutiny and
investigation. One minister even fumed that COSATU, like the main
opposition political party in Zimbabwe, the Movement for Democratic Change
(MDC), was an agent of the government's favourite scapegoat - Tony
Blair. According to the twisted logic of some government ministers,
anyone who wants to have anything to do with organisations such as the MDC,
the Zimbabwe Congress of Trade Unions and the National Constitutional
Assembly, which are accused of being sponsored by the British, is, in turn,
a puppet of Blair. There can hardly be many organisations with
better African or revolutionary credentials than COSATU, which is a powerful
ally of South Africa's ruling African National Congress. To accuse such an
organisation of being under the control and influence of Blair is to take
the "macho" and combative propaganda that has become the order of the day in
this country to new levels. The counterproductivity of this
reality-defying propaganda, in which things are said to demonstrate false
bravado rather than persuade, was shown during the invasion of Iraq last
year. Saddam Hussein's energetic information minister provided an
entertaining sideshow when he persistently denied that Baghdad had fallen,
despite overwhelming evidence to the contrary. He often made these denials
when viewers could see for themselves on their television screens what the
reality was. The fact of the matter as far as the crude treatment
of visiting delegations is concerned is that it serves to confirm the
charges of human rights abuses and repressive governance levelled against
Zimbabwe by the international community. It is difficult to think
of any other democratic country that would be prepared to decree without any
sense of irony that the discussion of the political situation prevailing
within its borders is taboo and therefore a legitimate reason for the kind
of clampdown characterised by the kicking out of the COSATU
delegation. The government seems to have fallen into the trap of
believing its own relentless and virulent propaganda. But in this case, it
has not only scored an own goal. It may finally have issued the red card
against itself.