The ZIMBABWE Situation | Our
thoughts and prayers are with Zimbabwe - may peace, truth and justice prevail. |
Trial of Zim murder
accused starts 09 September, 2005 | |
FRANCISTOWN - The trial of four Zimbabwean prisoners charged with murdering another inmate, Tshenolo Gabaitse, started on September 6 before Justice John Mosojane at the Francistown High Court. The four are Edwin Ngangezwe Sibanda, 39, Baalakani Maliki Chuma, 32, Dennis Nyathi, 39, and Charles Ambrose Ngwenya, 38. The accused are jointly charged for the murder of Gabaitse on January 19, 2003. The first witness Ranchi Ntaletsang, 42, who is also a prisoner, told the court that the murder occurred during a stampede involving Batswana and Zimbabweans on January 15. The stampede followed a quarrel over sugar between Nyathi (third accused) and Gabaitse. Ntaletsang told the court that as the quarrel between the two intensified, some inmates intervened. He said the second accused, Baalakani, then told Nyathi to slap Tshenelo, which he did. Thereafter, Ntaletsang said a fist fight erupted but was brought under control by other inmates. Ntaletsang further narrated that after the fight, Gabaitse conducted a church service, saying that church precedings were common in prisons. He said the fight took place at cell 11 courtyard. Ntaletsang said the Zimbabweans held a meeting at the opposite courtyard (front of cell 8). Court also heard that after the church service prisoners dispersed to their cells, but were prevented by first accused Ngangezwe from entering cell 8 courtyard. Ntaletsang further told the court that when the deceased moved from church service to his cell (2) he was confronted by Baalakani, Nyathi and Ngwenya. I realised that there was a fight and I moved towards the entrance gate with other prisoners, said Ntaletsang. Ntaletsang told the court that he saw Baalakani hit Gabaitse with a broomstick. The deceased then fell to the ground and both Nyathi and Ngwenya took a dustbin full of rubbish with which they hit Gabaitse thrice on the head. He told the court that Ngangezwe took a knife from his pocket and scratched the deceased on the chest. Ntaletsang said prison warder, a certain Marmano, opened the gate and many prisoners ran outside the courtyard. Ntaletsang mentioned so many cells that the arrangement of the prison was not clear to the court. State counsel Antoinette Kula then made an application to the court to have a geographical inspection of the prison. The request was granted. During cross examination, the defence counsel for first accused Ngangezwe, Lyndon Mothusi told the witness that he had inherent hatred of Zimbabweans. In other words you are xenophobic? asked Mothusi. Ntaletsang responded by saying that he could not hate Zimbabweans when his sister was married to a Zimbabwean. Ntaletsang told the court that a tense animosity between Batswana and Zimbabweans only started after Ngangezwes arrival, adding that before there was peace between the two nationalities. Ntaletsang also denied that the Gabaitse was a bullying prisoner. He described him as someone who loved peace as he used to attend ZCC services in prison. The second accused, Baalakani, is represented by Charles Tlaagae, McBain Kaang for Nyathi while Oganeditswe Marata intercedes for Ngwenya.The trial continues. BOPA |
ZIMBABWE is likely to experience more sugar shortages as Zimbabwe Sugar Refineries (ZSR), the country's biggest sugar producer, says they would not be able to produce to their normal capacity because of logistical problems.
ZSR, which produces about
40% of Zimbabwe's sugar requirements, is currently hamstrung by the shortage of
coal and foreign currency problems.
The company has a production capacity of 220 000 tonnes per year at its two
refineries.
In an interview with businessdigest, ZSR chief executive, Pattison Sithole,
said sugar production had been adversely affected.
"We are facing problems in moving raw sugar from the Hippo and Triangle
estates," Sithole said.
"This has been compounded by the shortage of coal," he said.
Sithole refused to disclose how much sugar they expected to produce this
year.
He said ZSR used to import coal from Botswana but they had since stopped due
to lack of foreign currency.
Sithole also said price controls introduced by government had a negative
impact on their business.
"The price of sugar has not been going up at the same rate as the cost of
production and this is affecting our margins," he said.
Sithole refused to comment on the effects on their business of the takeover
of part of their sugar estates under the land reform programme.
"You will need to ask Triangle and Hippo Estates on that issue," he said.
Sugar has become a scarce commodity and long queues have become a common sight
outside supermarkets where consumers expect supplies.
Meanwhile, the sugar crisis will be further exacerbated as cane producer,
Hippo Valley Estates (Hippo), says that the move by the Reserve Bank of Zimbabwe
(RBZ) to liquidate US$2,68 million from its Foreign Currency Account (FCA) will
severely undermine production.
On August 12, the RBZ directed that US$2,68 million be liquidated from the
company's FCA on the grounds that the company's banker had violated exchange
control regulations with respect to the liquidation of FCA balances within the
specified period.
"This development will adversely impact the company's ability to import
critical inputs and thus seriously undermine production," Godfrey Gomwe, the
chairman of Hippo, said.
Gomwe said this contention is rejected and the company has since lodged an
appeal with the RBZ for the reversal of this directive on the grounds that the
applications in question were indeed lodged with, and approved by the Exchange
Control Authorities within the stipulated retention period.
He said the monitored domestic sugar prices, which are grossly unviable and
uncompetitive when compared to the regional market, precipitated intense
speculative activities, thereby exacerbating shortages of sugar in the local
market.
"The economic improvements recorded during the greater part of 2004 and early
2005 in response to the RBZ monetary policy interventions have started to
reverse," Gomwe said.
He said Hippo remains listed for compulsory acquisition under Section 5
despite objections being lodged with the relevant authorities, and this has also
affected their yields.
In his annual report for 2004, Gomwe said the company achieved an overall
cane yield of 86,45 tonnes per hectare - a decrease of 18,7% from the prior
year's average yield of 106,28 tonnes per hectare.
THE government plans to raise $10,5 trillion for the new Infrastructural Development Bank of Zimbabwe (IDBZ)'s proposed authorised share capital in which it intends to hold 70% shares.
The money will be raised
through direct allocations from the budget.
Government is consolidating its shareholding in the former Zimbabwe
Development Bank (ZDB) after Fidelity, Zimre and other private investors pulled
out.
Government had a 67% stake in the ZDB, which now forms the core of the new
bank, but will have 70% in the new entity while the remaining 30% will be
offered to local and offshore investors. The 30% is valued at $4,5 trillion.
"The government will raise $10,5 trillion for the proposed authorised share
capital on a phased approach through direct allocations from the budget," said
the Minister of Finance, Herbert Murerwa, last week.
The new bank will have an authorised share capital of $15 trillion.
"Initially, the bank's paid-up capital will be a trillion dollars," Murerwa
said.
He said the amount had already been catered for in the 2005 budget.
"The initial capital injection," Murerwa said, "will trigger the mobilisation
of additional resources from both the domestic and international capital
markets."
The IDBZ was officially launched on August 31, about five months late due to
problems with funding although Murerwa said the delay was caused by "wider
consultation".
Murerwa said the bank would play a critical role in financing strategic
infrastructural projects.
He said the bank, through the Public Private Partnership initiative, would
also be expected to broker partnerships and come up with viable financing
options for the private sector to participate in infrastructure investment.
Three new divisions will be added to the current ZDB structure, comprising
housing, energy and amenities and utilities.
Murerwa said during the transformation phase, the ZDB would continue with its
existing business activities, but as a separate division of the IDBZ.
An interim management board chaired by the secretary for Finance, Willard
Manungo, has been put in place to manage the IDBZ.
Charles Chikaura has been appointed the chief executive officer with effect
from September 1 for a period of five years.
Chikaura retired from the RBZ as deputy governor in August last year.
The board will include Andrew Bvumbe, the permanent secretary in the Ministry
of Economic Development, engineer Ngoni Kudenga and Vincent Hungwe.
THE Supreme Court ruling on the Zimbabwe Allied Banking Group (ZABG) delivered by Justice Wilson Sandura this week is a direct assault on the integrity of the Reserve Bank of Zimbabwe (RBZ).
It raises questions of
credibility in the way the RBZ handled the banking crisis last year.
The ruling, delivered after six months of consideration, found that the sale
and transfer of Trust Bank and Royal Bank's assets to the ZABG was "null and
void, and of no force or effect".
The judgement said the RBZ acted unlawfully when it approved the sale of the
assets to the ZABG.
It also questioned the conduct of the curators who were instrumental in the
sale of the banks' assets to the ZABG.
"Accordingly, subsection (2) of Section 55 of the Banking Act does not
authorise a curator to dispose of all the assets of a banking institution. It
follows, therefore, that the curator acted unlawfully when he sold the assets of
Royal Bank to the ZABG. In the circumstances, the sale and transfer of the
assets were null and void, and of no force or effect," the Supreme Court ruled.
It made the same startling revelations in the Trust Bank judgement.
Justice Sandura said the central bank failed to comply with the provisions of
the Troubled Financial Institutions (Resolution) Act, a law that it instigated
to justify the takeover of troubled banks.
From government's point of view, the ruling might be one of many that it may
ignore to suit its motives and plan. It is likely to be treated like many other
court orders and rulings that the government has disobeyed in the past -
especially in land cases.
RBZ governor Gideon Gono is determined to see his project succeed at any
cost.
"Even if it means opening (the ZABG) on January 31 midnight, we will do so,"
Gono said before the bank was launched. But in the rush to open the bank he
forgot - maybe conveniently so - to follow the law.
He infringed the same principles of corporate governance that he has been
accusing bankers of breaking, calling it "corporate incest".
In practice the ruling does much damage to the integrity of both the central
bank and the ZABG.
It reveals double standards. It exposes the central bank and the curators'
deliberate sidestepping of tenets of corporate governance, which should, in a
normal economy, make the foundation of a central bank.
It portrays Gono as a governor who is determined to disregard the law to
achieve his plan. His plan was to set up a bank, and he did.
The ruling sets a crucial precedent in future cases dealing with troubled
banks and any other company. It also puts the curator's integrity into question.
Justice Sandura said in his judgement: "This is an appropriate case in which
this court (Supreme Court) should mark its disapproval of the unlawful conduct
of the Reserve Bank, (the) ZABG and the curators".
The ruling was critical of the conduct of the curators who instead of nursing
ailing banks back to life decided to bury them alive by selling their assets.
For the ZABG, the ruling removes its very foundation stone as it was set up
and operated using assets unlawfully seized from their legitimate owners. It
reminds Zimbabwe about property rights which for sometime have been wantonly
disregarded.
If the sale of the assets to the ZABG was unlawful, null and void, it means
the bank is operating on stolen assets and capital. If Zimbabwe was a country
that respects the law, the ZABG should have closed immediately.
The ruling stated clearly that the assets that the ZABG claims to own still
belong to Trust and Royal Banks. The employees working for the ZABG belong to
the two banks, so do the cars, offices and IT systems.
Financial institutions that continue to deal with the ZABG are putting
themselves at risk because they are trading with a technically insolvent bank.
According to the Supreme Court ruling, the ZABG is insolvent. It does not have a
loan book, offices or assets of its own.
The Treasury Bills, bonds and any instruments that the bank is using as
security in dealing with other banks do not belong to it. The court said all
that the ZABG calls its assets belong to Trust and Royal.
The judgement also has an implication on the profits that the bank claims to
have made in its first results. If it is true that it made $28 billion,
according to the court ruling, that money belongs to Trust and Royal being
benefits accruing from the use of the two banks' resources and assets.
The shareholders and depositors of the two banks can also sue for any loss
that the banks made because of the forced marriage.
By allowing the ZABG to continue trading, the central bank is telling the
market that one can walk into another's premises to take over the business and
start operating as long as the RBZ approves.
Worse still, given the emphasis that the Supreme Court put on the unlawful
transfer of assets, the RBZ could be found in contempt of court.
The Zimbabwe Independent has warned in the past that the RBZ is now playing
both roles of referee and player in the banking sector. It has a special
interest in the ZABG to which it played the midwife.
How can Zimbabwe woo local and foreign investors when the same institutions
that are tasked with supervising and monitoring good corporate governance are
the first to break the rules?
The wanton seizure of private property is however not peculiar to the
financial services sector.
It is the reason why Zimbabwe is begging for food when it has the capacity to
feed its own people.
Self-exiled businessman, Mutumwa Mawere, has lost diversified SMM Holdings
that he has been at pains to prove that he used personal funds to buy from
T&N plc.
The government has used yet another conveniently crafted law to grab the
company, just like it amended the Land Acquisition Act to legalise the seizure
of white-owned commercial farms.
What is of major concern is that the unlawful sale and transfer of Royal
Bank's assets happened with the full blessing of the RBZ, including the total
disregard of the Troubled Financial Institution (Resolution) Act and the Banking
Act.
That the central bank is found right in the thick of an illegal disposal of
private property is baffling. It's exactly 195 days since the Independent wrote
saying the launch of the ZABG would stir a legal furore.
ZIMBABWE Mirror Newspapers Group CEO Ibbo Mandaza, who is also editor-in-chief, has fired his deputy Alexander Kanengoni in the aftermath of the mediagate scandal.
Sources said Kanengoni was
fired last week after he failed to attend a disciplinary hearing following his
suspension last month in the wake of disclosures by the Zimbabwe Independent of
the takeover of three independent newspapers by the state security agency, the
Central Intelligence Organisation (CIO).
As has been widely reported by this paper over the past few weeks, the CIO
had a buy-out at the Financial Gazette and the Mirror group's two titles, the
Daily Mirror and Sunday Mirror. The CIO, who own the Financial Gazette through a
front, reportedly also wanted to take over other newspapers and communication
agencies.
"Kanengoni has been fired after failing to appear before a disciplinary
committee for a hearing to answer charges of insubordination," a source said. "A
letter of his dismissal signed by the CEO was sent to his Warren Park (Harare)
address last week."
Kanengoni was accused by Mandaza of insubordination, harassment of
journalists, shouting abuse, and causing chaos in the newsroom. He was initially
suspended on August 18 before his dismissal last week.
Before joining the Mirror, the Chivhu-born Kanengoni (54) was ZBC head of TV
services and a CIO media desk officer. He is also an ex-combatant and a short
stories author.
Kanengoni's dismissal came as further information showing CIO control of the
Mirror group has emerged. It was established this week there were four directors
on the Mirror's board who had CIO links and not two as at first concluded.
The Mirror's directors were Mandaza, Kanengoni, Thomas James Meke, Ambassador
Buzwani Mothobi, John Marangwanda, Charm Ndaba Mukuwane, Tendai Mangezi who has
resigned, and Jonathan Kadzura. Amy Tsanga was appointed later to replace
Mangezi. Musi Khumalo resigned.
Sources said four of the eight Mirror directors - Kanengoni, Meke, Mukuwane
and Marangwanda - worked for the CIO during different times and represented
their interests on the board. This puts beyond any reasonable doubt that the CIO
owned and controlled the Mirror group.
Kanengoni's dismissal follows dramatic clashes with Mandaza in the wake of
the mediagate reports. Sources said Kanengoni clashed head-on with Mandaza over
how to react to mediagate.
"There was drama at the Mirror after the first mediagate story," a source
said. "Mandaza wanted to react in the Daily Mirror a day after the story, on
August 13, but he was blocked by Kanengoni.
"In the process Kanengoni and Mandaza exchanged harsh words. But Kanengoni
prevailed for the first four days before Mandaza got his way after roping in
politicians."
After failing to publish a denial on August 13, 14, 15 and 16, Mandaza won
support from politicians and then managed to block Kanengoni and his camp's
attempted denial of the story on August 17. On August 18 Mandaza finally got his
way to run a denial the following day although the reaction failed to cover up
the issue.
This battle of wills, sources said, poisoned the environment at the Mirror
and created dangerous hostility between Mandaza and Kanengoni.
"The situation was explosive but what is interesting is how Mandaza wanted to
drag Kanengoni before a disciplinary committee when the guy didn't even have a
contract with the Mirror," a source said.
It was said Kanengoni had been seconded to the Mirror by the CIO and was not
accountable to Mandaza as a result.
Sources said although Kanengoni has become the first casualty of the media
scandal there would be more victims in the long run. Mandaza is struggling for
survival in the group but is still hanging on - at least for now.
ZIMPAPERS, which now operates almost exclusively as a government propaganda mouthpiece, has embarked on drastic cost-cutting measures by clearing sit-in correspondents and freezing recruitment of new staff.
Zimpapers' cost-cutting
strategy came amid rising concern over the use of the group's flagship daily,
the Herald, by President Robert Mugabe's spokesman George Charamba to attack
foreign heads of state and people he does not like.
Highly placed sources at Zimpapers - which runs 10 publications - said
management last week resolved to implement sweeping measures at a time when the
cost of producing newspapers is soaring. Sit-in correspondents, students on
attachment and stringers have been told to leave.
"Out of more than 14 students and sit-in correspondents at different
publications only two remain. The rest have left," an inside source said.
The source said management also resolved to freeze recruitment in all
departments, reduce the number of direct telephone lines, cut fuel allocations
to management by half and decrease the print runs of the stable's struggling
publications.
"The state of affairs is critical and management is trying to reduce costs.
The situation is worsened by the fact that a number of our publications have not
been making any profit," the source said.
"Some of the papers were being financed from profits generated by other
papers. The cover prices alone could not meet the increased printing costs."
Zimpapers has increased the cover prices of its flagship Herald, Sunday Mail,
Chronicle, Sunday News, Manica Post, Kwayedza, Umthunywa, New Farmer, Trends and
Zimbabwean Travel with effect from today.
Juts like other media houses, Zimpapers cited steep increases in input and
production costs, especially newsprint, inks, printing plates, labour and fuel.
Herald editor Pikirai Deketeke would not comment on the issue, saying he was
in a meeting.
Charamba has reportedly been using the Herald's anonymous Nathaniel Manheru
column to abuse those he does not agree with.
The most prominent victims of Charamba's vituperation have been Nigerian
President Olusegun Obasanjo, South African President Thabo Mbeki, Zimbabwe
Independent and Standard publisher Trevor Ncube, Zanu PF newspaper editor
Lovemore Mataire, and Independent MP Jonathan Moyo who, ironically, is said to
be the founder of the column.
Moyo recently said Charamba was the author of the column. He described the
presidential spokesman as Mugabe's "reckless and irresponsible wordsmith".
Charamba hit back against Moyo whom he linked with the debate on the "Third
Force", suggesting it was a hopeless initiative.
After attacking Obasanjo, Mbeki, Moyo and Ncube, Charamba last week took his
attacks to new levels against Mataire by insulting the journalist in vicious
personal terms.
Mataire said he would not respond to Charamba's "malicious attacks".
"I can't dignify those scurrilous remarks against me by responding to them as
if they were serious points of constructive engagement on an issue of public
interest and debate," Mataire said.
"But I find it obnoxious that a public and national paper like the Herald can
be used as a weapon for character assassinations. It's repugnant in the
extreme."
The issue, which is part of the battle for control of information between the
Zanu PF and government propaganda departments, has raised grave concern among
ruling party leaders who were said to have been angered by Charamba's attacks.
"There is serious concern about Charamba's conduct in government and Zanu PF
circles," a source said. "Officials are wondering how a presidential spokesman,
permanent secretary and senior civil servant could do such unprofessional things
like writing an abusive column with no information value whatsoever."
Observers say even under Moyo, the Manheru column was mostly about insulting
people, not raising serious debate on relevant issues. But some say it has now
got worse under Charamba who uses it as a platform for personal vendettas.
A ZIMBABWEAN delegation led by central bank governor Gideon Gono left for Washington on Tuesday in a bid to avert the country's expulsion from the International Monetary Fund (IMF).
The IMF executive board is
meeting today to decide Zimbabwe's membership of the Bretton Woods institution.
Although Zimbabwe last week made a surprise US$120 million partial payment,
it is still in danger of expulsion because of huge arrears.
The delegation's payments arrangement will seek ways of paying off over
US$174 million in arrears owed to the IMF.
Sources said although the country's arrears were long overdue, Gono and his
team would parade last week's payment as an indicator of a change of tenor to
meet Zimbabwe's international obligations.
The high-powered delegation, made up of senior staffers at the Reserve Bank
of Zimbabwe, also includes the two deputy governors, Charity Dhliwayo and
Nicholas Ncube.
Munyaradzi Kereke, an advisor to the governor who had been widely tipped to
make the trip, is said to have gone only as far as South Africa where the
central bank is negotiating a loan to service part of its external debt.
Minister of Finance Herbert Murerwa confirmed Gono had gone to Washington for
the IMF board meeting to be held today.
He however denied that Gono was going to make a US$50 million payment to the
IMF.
"No, in fact no one has asked for that amount," Murerwa said.
On the chances of the country being expelled from the IMF, Murerwa said if
such a decision was taken it would likely be a political decision.
"Remember that the last country was expelled from the IMF in 1954. Zimbabwe
is important in the region and if we are expelled, it would be because of
politics and nothing else," said Murerwa.
THE Reserve Bank of Zimbabwe is setting up a fully-fledged "Proudly Zimbabwean" foundation that will formulate standards for locally-manufactured products.
The foundation will also
vet, accredit and establish standards, according to bankers who said the
foundation was expected to be fully operational by year-end.
"The foundation will not be used by anybody. The Reserve Bank has started
drafting a document on the programme," a senior banker said this week.
"The foundation will set strict criteria of how companies that wish to adopt
the 'Proudly Zimbabwean' logo will apply to meet certain laid-down procedures."
The "Proudly Zimbabwean" concept is in line with the labelling of goods which
meet set guidelines in South Africa and is meant to promote locally made
products.
Industrialists said although the idea was noble, its implementation would
take time as firms were worried about their bottomline earnings.
There are concerns in industry that their products would be shunned owing to
"xenophobic feelings" about Zimbabwean products and the negative publicity the
country has attracted over the years.
Earlier this year, the Standards Association of Zimbabwe invited bids for
firms to monitor and control goods coming into the country.
Most of the sub-standard goods which have flooded the market originate from
West Africa and China.
Over the years, government has been lobbying business to shift attention from
traditional markets in the West and look East instead.
However, business leaders argue that they cannot focus on the East to the
exclusion of other potential markets as the practice was contrary to the spirit
of entrepreneurship.
THE Zimbabwe dollar continues to weaken on the foreign currency auction, hitting an all-time low of almost $25 000 against the US dollar this week.
Reserve Bank of Zimbabwe
governor, Gideon Gono, recently devalued the dollar from $10 800 to $17 500 to
the US dollar.
The devaluation came barely two months after a 45% adjustment that failed to
stem the thriving parallel market.
A fortnight after the devaluation, the US dollar surpassed the $17 500 rate
on the auction market.
As at September 5, the Zimbabwe dollar traded at US$1:$24 520 on the auction.
Analysts say the firming of the US dollar against the Zim dollar is a
response to market forces.
"It should have been recognised long ago that the exchange rate should be
determined by market forces," economist John Robertson recently said.
Meanwhile, the shortage of foreign currency on the auction has worsened, with
demand about 16 times the amount on offer.
On Monday this week, bids totalled US$206 955 565 against a fixed allotment
of US$12,5 million.
On the parallel market, major currencies like the US dollar and British pound
are trading at $40 000 and $70 000 to the Zimbabwe dollar respectively.
On August 1, 7 358 bids were rejected out of 7 418.
According to Finhold's monthly economic report for March, the amount of bids
surpassed the US$100 million mark on February 10 and 14 auctions, translating
into demand of nine times more than the fixed supply of US$11 million per
auction.
"The average rejection rate rose from 93% in January, to 97% in February,
reflecting the continued excess demand of foreign currency on the auction,"
Finhold said in its Economic Update.
ZIMBABWE, once a regional breadbasket, is facing its worst agricultural season since Independence in 1980, with shortages of seed, fertiliser and equipment threatening next year's harvest before it even has been planted, farmers and other experts said.
Some of those warnings
were issued in testimony before parliament's agriculture committee on Wednesday.
Fertiliser companies said their warehouses were empty.
The Zimbabwe Seed Traders Association said there were only 28 660 tonnes of
corn seed in the country - slightly more than half of what was needed.
The Agricultural Dealers and Manufacturers' Association has run out of plough
disks for the first time in its history. There also are key shortages of
irrigation piping, pumps, pesticides and other chemicals, suppliers said.
"The information you have given us simply shows that there is no season,"
committee chairman Walter Mzembi was quoted as saying.
The seizure of thousands of white-owned commercial farms for redistribution
to black Zimbabweans, on top of years of drought, has crippled Zimbabwe's
agriculture-based economy.
About four million people will need food aid before the next harvest, UN
estimates indicate.
"This coming season's production prospects are the worst since 1980 due to
inputs shortages and the lack of a strong message to allow all farmers to
produce with confidence," Doug Taylor-Freeme, president of the Commercial
Farmers Union, said on Wednesday. - AP.
LOW income earners already reeling under economic hardships now have to dig deeper into their pockets after a drastic increase in the monthly consumer basket to nearly $7 million, up from $6,1 million last month, a Consumer Council of Zimbabwe price survey has revealed.
Basic commodities for a
family of six now cost about $2 860 477, while transport costs covering 21
working days will chew up $336 000.
Rentals, health and education, combined with detergents and clothing take up
$4 097 375, giving a total of $6 957 852 in monthly expenditure.
However, analysts warned that Wednesday's fuel price increase would affect
the basket.
They estimated that a 10-15% adjustment in transport costs was inevitable.
This would raise transport expenses to $1 million, resulting in the basket
pushing close to $8 million.
Soaring prices and triple digit inflation have left consumer-buying power
enfeebled, putting basic goods and services beyond the reach of many households.
Inflation in 2000 stood at 55,9% and rose to 71% the following year. It rose
to over 600% in January last year before starting a downward trend for most of
the year. It was nearly 130% in March this year before reversing the trend to
around 254,8% now.
UNTIL last week, it seemed as if nothing could shake President Robert Mugabe's determination to destroy any dissent against his Zimbabwe presidency.
Somehow, the threat of
being kicked out of the International Monetary Fund has changed that - at least
a little bit.
As he flattened slums and allowed farmland to lie fallow in the midst of
racial violence, foreign governments' frustration with him was almost equalled
by their frustration with Thabo Mbeki, the South African president, who has
preferred to engage Mugabe rather than to isolate him and has sometimes appeared
to work at cross purposes with openly hostile politicians from Britain and the
United States.
Now, Mbeki seems to hold the key to saving Zimbabwe's membership in the IMF.
Apparently fed up with Mugabe's actions, Mbeki may finally be using his
influence to the advantage of the Zimbabwean people.
The strain in Zimbabwe's ties with the IMF date back to 1999, when arguments
about the value of the country's currency and its troops in the Congo caused the
fund to withhold aid.
Within a year, the African Development Bank and the World Bank had followed
suit.
By 2001, Zimbabwe had stopped paying back all foreign loans. In early 2002,
Zimbabwe's arrears with the IMF amounted to more than US$100 million, and the
government's own deficit was ballooning.
In 2003, the IMF suspended Zimbabwe's voting rights in the organisation.
Finally, in December of that year, the fund started the process of expulsion.
Of course, it is not as simple as saying: "You're out."
Last year, Zimbabwe began taking steps to placate the fund. It started paying
back its debts and undertook a new monetary policy aimed at denting annual
inflation of 600% and shoring up the shrinking economy. Inflation came down, to
slightly less than 400%.
The fund was mollified and decided in July 2004 to delay Zimbabwe's potential
expulsion by six months.
Meanwhile, the IMF closed its office in Harare. Though the move did not
affect the expulsion decision, according to the fund, it was an ominous portent.
Meetings with Mugabe ensued a couple of months later.
Then, last December, Zimbabwe's main opposition party, the Movement for
Democratic Change, stepped into the fray. Its leaders optimistically argued that
the IMF should allow Zimbabwe to remain a member so that any post-Mugabe regime
would have an easier time obtaining aid.
In February of this year, the IMF gave Zimbabwe another extension.
Now, another six months later, Zimbabwe again is trying to appease the fund.
On August 29, it paid US$120 million to the IMF, reducing its arrears to
about $174 million. An IMF team was in Harare to review economic developments
and prospects, and it will report to the IMF executive board, which meets today
to decide Zimbabwe's fate.
Clearly, Mugabe is paying attention. Zimbabwe has been pleading with South
Africa for aid. So far, no deal has been reached, a South African government
spokesman, Thabo Masebe, said on Tuesday.
A package from Pretoria would allow Zimbabwe to pay some, or all of what is
overdue - perhaps salvaging its relationship with the fund.
By itself, this is a remarkable development. Much like Kim Jong Il in North
Korea, Mugabe has seemed impervious to foreign pressure, even as his own country
has experienced extreme hardship and starvation.
That he should care about the IMF is intriguing. Perhaps he values the
prestige of membership in one of the few international groups that wields real
power in the form of cash, or perhaps he is hoping for new loans from which to
skim cash - something that Britain and the United States have accused him of
doing in the past.
Mugabe may even want the money just to keep the lights on in Harare. It
actually doesn't matter. The important thing is that the leverage is there.
The leverage, however, does not reside with the IMF. By allowing itself to be
placated mainly by repayment, the fund has limited its own ability to affect
policies in Zimbabwe. That may be for the best, since insisting on specific
changes would allow Mugabe to score political points by rejecting the IMF
altogether.
But the upshot is that the leverage sits solidly in Mbeki's hands. He seems
willing to bail out his northern neighbour, provided Mugabe makes some lasting
changes.
"Whatever we do," said Masebe, "be it a short-term loan to help them to pay
their arrears on their IMF debt or any other intervention that we do, should be
seen in the context of an economic recovery for Zimbabwe so that we don't give
them money now and find ourselves in the same situation in a year's time."
He added that while Mbeki has not made specific political demands, the
conduct of Mugabe's regime is under discussion.
"You can't remove economic issues from the politics," Masebe said. Besides
the insight into Mugabe's choices, there are two broader lessons to be drawn
from this episode. The first is that unconditional debt relief may be a bad
idea.
Anti-poverty groups have called for the IMF, the World Bank and major
creditor nations to scrap all of Africa's debts. If the presence of debt can
create positive changes in Zimbabwe, even indirectly, then it is surely a useful
thing.
The second lesson has worldwide implications. As any economist will tell you,
people will usually do what you want, as long as you give them the right
incentives.
For the past couple of decades, most attempts at persuading so-called rogue
states to shape up have relied on restraint of trade or military threats. It
could be time for a little more creativity. - The International Herald Tribune.
PITIABLE Zimbabwean spin-doctors have had their tails up over the past 10 days. They are getting their own back against the US government. Like all mean-spirited cowards, they have been celebrating the United States' failure to deliver humanitarian assistance to victims of Hurricane Katrina which struck New Orleans last week.
The Zimbabwean government
could not miss an opportunity to put the boot in on the fallen giant which,
despite its vast resources, reacted slowly in evacuating those trapped on
roof-tops and struggled to deliver food and water to thousands of refugees on
flooded streets.
Black activists saw streaks of racism in the handling of the tragedy by
President George Bush surmising that the response was slow because the afflicted
are mostly black. Critics of the war in Iraq say if more troops were at home,
they could have been mobilised to help move supplies and save lives.
Our presidential spokesman could not miss the fun.
"The US has experienced its own tsunami and we have seen the ineptitude of
their relief agencies in dealing with the situation," said George Charamba in an
article in the Herald on Saturday.
Then there was the paper's political editor Caesar Zvayi on Tuesday trying to
draw parallels between Hurricane Katrina and Mugabe's infamous Operation
Murambatsvina. "Do I hear sceptics say Operation Murambatsvina was man-made and
New Orleans is natural? Wrong," wrote Zvayi. "New Orleans is man-made as can be
seen from the way the US government settled over a low-lying area dangerously
close to the Atlantic coast that is always ravaged by hurricanes."
No sympathy here. And a striking ignorance of the city's history which had
more to do with France than the US government.
The difference between Operation Murambatsvina and Hurricane Katrina is seen
in the world's response to the tragedies. Both presidents Mugabe and Bush have
been pilloried for their handling of the crisis in their respective countries.
Bush appears to have taken more punches both at home and abroad. But is it not
amazing that America's foes like Iran, Cuba and Venezuela - whose president Hugo
Chavez has described American "neo-liberal capitalism" as "hell on earth" - are
among the list of countries that have offered assistance?
Not only has the crisis blurred longstanding ideological differences, but it
has also turned rich-poor politics on its head. Tiny nations like the Dominican
Republic, Guyana and Armenia are among three-score countries that have pledged
to send aid. Sri Lanka, which was last year hit by a tsunami, will also assist
the world's richest nation. The poor assisting the rich; this is how powerful
the forces of nature are.
"I hope that will remind Americans that we are all part of the same
community," Secretary of State Condoleezza Rice was quoted by AP as saying last
Friday. Are we, when in July President Bush resisted British prime minister Tony
Blair's ambitious goals for aid to Africa?
The United States has a history of financing international relief efforts in
the event of disasters. It however lags behind other rich nations in providing
aid commensurate with its fortunes. Bush has said the US will double aid to poor
countries to US$8,6 billion by 2010. After the gesture by poor nations to help,
there should be greater pressure on Bush to revise the figure upwards.
Rice said contributions from poor countries were being accepted because "it
is very valuable for people being able to give to each other and to be able to
do so without a sense of means".
Compare this statement by Rice to Zimbabwe's Ambassador to the United Nations
Boniface Chidyausiku's reaction to the UN's attempts to mobilise assistance for
victims of Operation Murambatsvina.
He said the countries the UN would seek money from "are the countries that
are very vocal in trying to bring a regime change to Zimbabwe".
Charamba supports this view. "Despite strained relations, the US was
clamouring to help Zimbabwe to gain cheap political mileage outside its
frontiers."
This is partly the reason why the international community, including
Zimbabwe's so-called friends, has not responded quickly and favourably to our
crisis. Those coming to help are frisked at the gate to ensure they are not
agents of regime change. All sorts of concerns are raised as to why they want to
help. The quest by Cuba and Venezuela to help the United States is testimony
that the world has long stopped operating on the basis of friend or foe,
especially in dealing with disasters. But our rulers just love to preside over
poverty in the name of sovereignty.
All the same, Zimbabwe has an obligation to help the multitudes afflicted by
Katrina. We await the swearing in of a team to mobilise assistance to help as we
did when the tsunami struck Indonesia in December. Come on George, get the
Tsunami Committee working again. Show us you're not just full of hot air!
IN a major climbdown, the Ministry of Finance has agreed to reduce the recently introduced capital gains withholding tax charged on marketable securities from the initial 10% to 5%, bowing to pressure from brokers who had boycotted trade on the Zimbabwe Stock Exchange (ZSE).
This move is expected to
restore normal trading on the bourse after 18 days of insignificant trade.
Brokers had stopped trading on the bourse in protest at the reintroduction of
the capital gains withholding tax on marketable securities at a rate of 10% in
the mid-fiscal policy review of August 16.
The introduction of the capital gains withholding tax resulted in serious
resistance by stockbroking firms, resulting in buyers boycotting the stock
exchange.
The new 5% will be with effect from October 1.
"To allow the ease of administration, the capital gains withholding tax on
marketable securities is now collected on a gross basis and at 5% that does not
compromise the revenue collection targets," a statement issued by the Ministry
of Finance, the Zimbabwe Stock Exchange (ZSE), and the Zimbabwe Revenue
Authority (Zimra) said.
When asked for comment on the developments at the bourse at a CZI conference
in Nyanga yesterday, Finance minister Herbert Murerwa blamed poor consultation
for the impasse.
"This was a regrettable problem. There was poor consultation from the
beginning," he said.
Murerwa said the issue would be adequately addressed in the coming 2006
budget.
"There will be fuller consultation and a team will be dispatched to South
Africa to see how the tax system works."
The Finance ministry has also agreed that insurance companies and pension
funds will apply 40% of their net monthly cashflows to purchase prescribed
assets. This will be with effect from November 1, but will be reviewed annually.
"In order to facilitate the implementation of the prescribed asset ratio, the
industry and the Ministry of Finance have agreed that insurance companies and
pension funds will apply 40% of their net monthly cashflows to purchase
prescribed assets," said a statement issued by the Ministry of Finance in
conjunction with stakeholders in the insurance sector.
In his mid-term fiscal policy review, Murerwa announced that the insurance
and pensions industry will have to hold prescribed assets of 25% for the
short-term insurance, 30% for the long-term insurance and 35% for pension funds
at market value.
Pension funds - the biggest investors on ZSE - have been calculating the 35%
based on book value.
Murerwa said pension funds must calculate these assets based on market value,
a move traders said would force companies such as First Mutual and Old Mutual to
offload shares to raise money to buy bonds and bills and meet the required
percentage.
After the announcement of the prescribed asset ratios, Emmanuel Munyukwi, the
chief executive of the ZSE, predicted that pension funds will be forced to sell
shares to meet the shortfall created by the new requirement, but added, no one
in the market has the capacity to absorb the shares.
LAST week, a friend and I drove back from South Africa, arriving at the Beitbridge border post at 2 pm. On the South African side, the authorities were as efficient as ever, but on arriving on the Zimbabwe side, we were met with the usual chaos.
The process of paying
one’s duty was more convoluted than ever, with scores of cars strewn all over
the place and literally over a hundred people milling around. The Zimbabwe
Revenue Authority (Zimra) customs declaration system had once again changed, and
as normal, there was no one and no printed information to tell you where to go
or what to do.
First we had to join the first queue to get our customs declaration stamped.
Then we joined another queue to have our duty calculated, as we were both
bringing in goods around the R4 000 mark each.
That is before being informed by our number written on it to join the duty
calculation queue. We did this, and struggled along in the queue with the other
50 or so people, most of who were moaning at the fact that there was only one
Zimra official doing all the calculations. Of the other two on duty, one was
handing out the numbers for the main queue and the other was taking the payments
for the duty calculated.
Why, I asked myself, could not all three have done the calculations, and
taken the duty money at the same time? Maybe I was missing something.
After two hours in this queue, we came to the front, only to be told by the
Zimra official that because we were each declaring over R3 000 worth of goods,
we had to get a clearing agent to do it for us. We asked why the threshold was
so low?
Using a clearing agent for goods worth say R10 000, we could understand, but
R3 000? Why had we not been told this two hours previously, and why were there
no leaflets, posters, or officials telling people that on arrival?
We were met with a blank stare, and then informed that it was the policy, and
that was that. Another rather rude and officious Zimra official also informed us
that if we did not use a clearing agent our goods would be impounded. At this
point, and becoming just a little exasperated, I informed the Zimra official
that we were after all customers and not criminals. This didn’t seem to help
much.
So, there we were at 4.30 pm stuck at the border, having to find a clearing
agent out of thin air, once again with no help from Zimra. Luckily, my colleague
phoned a friend who knew a clearing agent whom we made contact with. He met us
and went away for two hours to do the paperwork to clear our goods. This, in
fact, took three hours, so we had our paperwork back at 7.30 pm.
Off our agent went to find a Zimra official to clear our goods. Yes, we
thought, we would now be out of there in, say, an hour, having paid our duty.
Fat Chance!
Our agent was in another queue, and apparently there was also a problem with
the Zimra printer, which was adding to the delay. Another three hours went by,
10.30 pm.
We now felt like we were in prison, with no parole. I saw my life fading away
before me, forever entombed at Beitbridge Border Post!
My friend, having had enough of all this, managed to join our agent in the
said queue, upstairs in the Zimra offices. He says he found several Zimra
officials sitting around, looking as though they were half-asleep, and one in
particular, in a dingy half-lit office, doing the duty calculations.
Eventually, at 1.30am our paperwork was cleared, our goods were inspected,
and our duty was paid, which incidentally was just about the same amount as we
would have had to pay at the beginning.
Zimra has a duty to collect tax at the border. That is undeniable. However,
with just a modicum of efficiency and organisation on the front desks,
particularly during peak traffic hours, they would not only do this but also
make life tolerable for those entering the country.
All I can say is: welcome to Zimbabwe and God help any law-abiding resident
returning via Beitbridge who brings in and declares goods worth R3 000 or over.
By the way, I believe the Zimra motto printed on a board on one of their walls
is “We aim to serve”.
A Pickford,
Harare.
WITNESSING Zanu PF's well-nourished legislators singing and dancing "revolutionary songs" in celebration of their "historic" constitutional amendments, I didn't know whether to laugh or cry. What a surreal exhibition of remoteness from the reality of the lives of the struggling, suffering Zimbabweans they purport to represent.
The nation is in crisis.
The government is deep in debt. Many Zimbabweans - though obviously not Zanu PF
legislators - are starving. There are chronic shortages of many essential items.
So what does parliament do to address these issues? Absolutely nothing except
taking steps to further entrench themselves in power.
A senate is created to provide more patronage to more political deadwood.
Private property rights and redress to the courts are severely curtailed. The
right to a passport is under threat.
That some of these legislators claim membership of various religious
denominations made the whole sorry spectacle even more nauseating.
Vice-President Joice Mujuru comes immediately to mind, especially when just
last week she addressed an international gathering of the Salvation Army
assembled at the National Sports Stadium, proudly wearing her new Salvation Army
uniform.
I am surprised that no one has taken the Salvationists to task over their
total silence during the recent Operation Murambatsvina campaign by this regime
as the homes, livelihoods, and basic human rights of the poorest Zimbabweans
were disregarded and trampled upon.
When the vice-president dresses up in her Salvation Army uniform does she
have any idea of the origins of the Salvation Army - a concern to assist and
provide for the growing numbers of poor and destitute during the industrial
revolution in the United Kingdom?
Is this sorry band of Zanu PF parliamentarians even less connected with the
real world they have created than was Adolf Hitler in his bunker as the Second
World War came to an end?
Why does the MDC continue to waste its time participating in this mockery of
a supposedly democratic institution? Why engage in debate when there is not one
single Zanu PF member of parliament with the political courage or personal
integrity to ever do anything other than obey the dictates of his or her master?
Next time Reuben Barwe or any other media sycophant refers to this "august"
house please excuse me if I choke. For the benefit of the semi-literate who
purport to bring us the news, the word "august" means "inspiring reverence and
admiration", "venerable" or "impressive". Sycophant means "servile flatterer".
RES Cook,
Harare.