Life is difficult these days for Zimbabwe's
professional classes, a dispiriting round of endless queues, power cuts and
perverse new layers of bureaucracy. But as novelist Ian Holding discovers,
his troubles are minor compared with those of the his black
employees
Friday August 19, 2005 The Guardian
My cellphone
illuminates the time, beeps at me. 4.45 am. I get up in the dark - the power
is off again - and fumble my way to the car, scooping up Jasper, my Jack
Russell, as I go. He's comfort, a slab of warmth across my lap as I wait.
There are rumours of petrol at some shack of a garage out on the fringes of
the industrial sites, owned by some crony with ties to the army. I ought to
have a conscience: I don't.
I drive slowly, through streets draped in
predawn darkness. Eventually I slip out of the suburbs and into the
wastelands where industry seeps on to the gravelled beaches of shanty towns.
I choose my queue, join the tail end of a snake of cars. It looks, at five
on a Saturday morning, longer than infinity. I glimpse the sneaky winter
heat ahead, the dust and dryness, the violent monotony of the wait. But for
liquid gold, one is prepared for hardships. And I'm desperate - my gauge
sulks below a quarter of a tank, and there's so much I can't do any more:
tennis, golf, boating with friends at the dam. But here's my chance. Today's
my day. So I kill the engine, I huddle Jasper to my chest. I am filled with
happiness. I've been unsettled all night - I spent most of it reading
Schindler's Ark - but now that I've secured my place in line, I find myself
dozing off. I set my seat back, ease Tosca up on the stereo and recline in
groggy discomfort. For five hours I veer between sublime nonchalance and the
jolting fear that some thug is going to slash my windscreen with a chain and
make off with my wallet. Odd bodies pass by, proffering trays of goods. I
wave them off moodily.
At noon I surface to a distant low groan that
suddenly becomes a booming roar, a plume of smoke and dust spills towards
me, and then a crash through corrugated iron and a violent shake in the
ground: the shanty town lies strewn across my bonnet. Stunned, I stare at a
windscreen piled with debris: a squashed tin pot, flung cutlery, shredded
clothing. I get out, leaving Jasper growling and puzzled on the seat. The
timber and metal sheets have buckled like twigs and tinfoil under the
bulldozer's charge. I look up, screening my eyes from the smoke and dust.
But I can see it all right: sitting fat and squat on the rubble, purring,
then backing away with an urgent jerk.
I bend down to access the
damage to my car: dents and scratches, nothing serious. I'm not angry, not
yet. It's most likely some kind of freak accident, a building operation gone
wrong. I stand, waiting for the foreman to come running forward to offer me
an explanation. No one comes. And something's not right. When I look back to
the queue, it has disappeared.
People don't vacate a petrol queue for
nothing. But I need an explanation. I pick my way through the wreckage,
towards the punctured shanty town perimeter. I wade in only three steps
before it happens again: 10 metres away the iron wall crumples, a hut folds
like a cardboard box, toppling to the dirt. The noise and shock shudder
through me, and I stumble, cutting myself on splintered wood and rusty,
jutting nails. I grapple for my footing, hop back towards the road. The
wounds are slight, the blood begins to ooze. When the bulldozer breaks
through yet again, this time to the chilling shatter of concrete slabs
exploding like glass, I rush forward and grope frantically to free my bonnet
from the debris, make my escape.
I drive home. I sit on the edge of the
bath and dab disinfectant at my cut legs. I'm shaken, but not enough to
subdue the anger that now comes, like a blast. It's not because no one told
me to move in time, or that I've had my car scratched, or I've been cut on
dirty planks. It's because I've wasted all that petrol. I'd been so sure I'd
be lucky today, that I'd wait my turn in the queue, fair and square, pay my
money, get my 20 litres. I'd have a life again. I throw the bloodied cotton
wool into the toilet bowl, flush hard and angrily.
I notice the
electricity's back. I go to make tea, give Jasper some biscuits. It's now
that I hear Agnes, my maid, sobbing in the laundryroom.
"What the hell's
wrong with you?" I ask.
She breaks down, weeping. Her son, his wife and
five children have had their home destroyed by the army, she tells me,
"commanding great big tractors". And her brother too, and his three sons,
their families.
"They just came, baas, no warning, no chance, just tear
down homes, one by one."
A dullness takes hold of me. It all makes
sense now. The fact that I had been there, just on the fringes, conveniently
mobile, able to drive away, extricate myself, makes me feel at once sick and
relieved.
But there's more. Agnes tells me that they've now all been
rounded up, piled into trucks and taken to an army "farm" where they're
being vetted and held in crowded tents until they're sent back to their
rural homelands, away from the city. "They lost everything, baas,
everything," she wails.
"Yes, yes," I tell her. "That's very
bad."
And then comes her request: can I take her to go and fetch them
all, from this "farm", and bring them here? "Just for a few days, baas,
promise."
This is all I need. I tell her we don't have enough space: her
kia [servants' hut] only has one tiny room, one bathroom.
"We can't
have 10 people staying here, we just can't. And anyway, where do you think
I've got the fuel to go all the way to this farm to fetch them all? It just
can't happen, I'm afraid."
I leave her and go to the TV lounge, moodily
settle on a cricket match. Jasper reclines at my feet, warm and loyal. Then
the phone rings. It's my mother, more frantic than normal.
"My God,
they're coming round shooting dogs with no licences."
She says they've
heard of two instances already: the police searching the suburbs, shooting
on sight any unlicensed pet. Jesus. I scramble for some cash and the car
keys, fly down to the nearest municipal office, and all the while the
thought of a gun aimed at Jasper savages my mind. Inside, the commotion of
dog owners complaining bitterly. A short, shifty civil servant explains over
and over that "we have no dog licences - we have no paper to print dog
licences. Try elsewhere."
I go back to the car, drive to the next
municipal office, the next suburb. Same story: yes, dog licences are
required by law, but we've run out. The next one: no dog licences for three
months. Eventually, frustrated and impatient, I drive into a police station,
demand to know what they expect us to do. "Just get one," the constable
retorts. "How and where are not our concern." I don't argue.
As I
leave, I unhook a slip of paper from under my windscreen wipers: Z$100,000
(£3) for "not possessing red reflective tape on rear of vehicle". My
existing reflectors are white, but white, it seems, isn't a good colour any
more.
I drive, dumbfounded, infuriated, nervous. I conjure up a quick
solution, I'll hide Jasper away, lock up his basket in the garage, deny I
own a pet. Has it come to this, this pettiness?
I look dismally at my
petrol gauge, at the needle tottering on the E. I'm going to have to ask for
a lift to work on Monday. But I throw that aside. I'm tired now. I slip in a
tape of Bach, look out at the sun sunk in the blue winter sky, the hills
lined with darkening firs. I'll chug on home slowly, conserve my petrol,
make a pasta dish, settle down with a glass of red, watch a black and white
movie on TV.
At home there's a not too unexpected surprise. As I walk out
to fetch Jasper's bowl, I see them: a crowd draped about, men, women,
children. My anger lurches, I scream for Agnes, demand an
explanation.
"They just come, baas, on their own. They can't stay at
farm, there no food, no shelter. It very cold at night, especially for
children."
An elderly man comes up to me, Agnes' brother. He greets me,
smiling through crooked teeth, and tells me, very calmly, what they've been
through, the bulldozing of their homes, the loss of their belongings, being
horded by the army against their will, being transported to this place,
being told to line up by the army commanders, being shoved and shunted
...
I stop him. "Look, I'm sorry, but you just can't stay. There's simply
no room here on this property. And it's not my problem, really it isn't." I
turn to Agnes. "Tomorrow they have to be gone - all of them.
Right?"
"Yes, baas," she says, quietly.
I storm back into the
house, go around the various rooms closing the curtains. My mood has
changed. I grab a beer, flick through the stations. I sit, not really
watching, my mind fuzzy and indignant, the culmination not just of today,
but every day of the past five years, every worry, every tension, every
dismay and disbelief, every thin gasp for survival comes up on me like a
sandstorm. I'm 27. But I'm old in this place, in this country where you
fight and fight, clawing and scratching at indefatigable deafness,
blindness.
I breathe in, breathe out. Sip my beer. Then the power
goes out. Fuck.
In the dark I grope for a candle from the TV cabinet,
light it. I walk to my bedroom, fiddle around for Schindler's Ark. I cuddle
up to the candle, strain to accustom my eyes to the print. Off the pages
roll descriptions, harrowing screeds of the Jews being rounded up, harassed,
their property looted, their rights stripped. I close the book. I lie
looking into the dark room, seeing the desolate farm that Agnes' family
fled, 10 to a tent, the stiff reek of sewer in dank puddles, the dead, deep
winter's nights.
I close my eyes, spread my presence throughout the
house, the empty bedrooms. I have everything. I have nothing. I'm cold. I'm
alone.
I walk now towards the bonfire where they all sit. I've draped a
blanket round my shoulders, Jasper trots at my feet. They welcome me into
their circle. I've brought a crate of beers from the pantry. They offer me
sadza and relish. I squeeze it into balls in my hand, take it to my mouth.
In the firelight their eyes dance, black pupils on gleaming white. The
spirit of survival, the will to endure. One man offers me his weed. I take
it, inhale the drug deep into my lungs. I huddle Jasper close to
me.
A while later, languid and light-headed, the old man starts singing a
traditional song, and the children listen as if they're hearing a sermon,
God himself speaking through the ages. Somehow, despite everything, I know
we'll all see tomorrow.
· Unfeeling by Ian Holding is published by
Simon and Schuster, price £10.99. Ian Holding will be appearing at the
Edinburgh International Book Festival on Saturday 20 and Sunday 21 August.
See www.edbookfest.co.uk for more
information
The Observatory for the Protection of
Human Rights Defenders, a joint programme of the World Organisation Against
Torture (OMCT) and the International Federation for Human Rights (FIDH),
requests your urgent intervention in the following situation in
Zimbabwe.
ZWE 002 / 0805 / OBS 068
Arbitrary arrests /
Releases on bail /
Judicial proceedings
Brief
description:
The Observatory has been informed by reliable sources about
the arbitrary arrest of two human rights defenders during a demonstration in
favour of constitutional reforms.
According to the information
received, on August 4, 2005, the National Constitutional Assembly (NCA), a
grouping of independent NGOs dedicated to the promotion of democracy and the
rule of law in Zimbabwe, decided to spontaneously organise a demonstration
in Harare in favour of a new constitution.
The police then called in
a riot squad in order to foil the public protest, which arrested Mr.
Lovemore Madhuku, NCA Chairman, along with Mr. Bright Chibvuri, a journalist
at The Worker, a newspaper published by the country's biggest labour
movement, the Zimbabwe Congress of Trade Unions (ZCTU).
Mr. Madhuku and
the other marchers planned to stage a demonstration outside the Harare
International Conference Centre, where the Parliamentary Committee on Legal
Affairs was holding a consultative public meeting on planned amendments to
Zimbabwe's Constitution. The planned amendments include barring individuals
whose land has been seized from making a court challenge except on the
amount of compensation, and also seek to re-establish a lower house of
parliament to be known as the Senate and to impose of travel restrictions on
Zimbabweans who are suspected of "engaging in terrorist training
abroad".
Mr. Lovemore Madhuku and Mr. Bright Chibvuri were charged under
section 19 of the Public Order and Security Act (POSA) (gatherings
conducting to riot, disorder or intolerance), according to which they might
be condemned to a fine not exceeding fifty thousand dollars or to
imprisonment for a period not exceeding ten years or to both such fine and
such imprisonment.
On August 5, 2005, both men were released on bail of
Z$ 250,000. Their trial date has not been set yet.
The Observatory
recalls that this is not the first time that Mr. Lovemore Madhuku is
subjected to acts of harassment and intimidation due to his activities in
favour of constitutional reforms. Thus, in 2004, Mr. Lovemore Madhuku was
arrested twice in February, and again in May and September 2004 (See
Observatory Annual Report 2004). The Observatory also recalls that freedom
of demonstration is regularly violated in Zimbabwe.
The Observatory is
deeply concerned about these events, which blatantly violate the provisions
of the Declaration on Human Rights Defenders, adopted by the General
Assembly of the United Nations on December 9, 1998, in particular its
article 5.a, which states that "for the purpose of promoting and protecting
human rights and fundamental freedoms, everyone has the right, individually
or in association with others, to meet or assemble
peacefully".
Actions requested:
Please write to the Zimbabwean
authorities and ask them to:
i. take all necessary measures to guarantee
the physical and psychological integrity of Mr. Lovemore Madhuku, Mr. Bright
Chibvuri, and all human rights defenders in Zimbabwe;
ii. ensure the
unconditional release of Mr. Lovemore Madhuku and Mr. Bright Chibvuri, and
that they be granted a fair and impartial trial so that the charges against
them be dropped, as they are arbitrary;
iii. end all forms of harassment
and ill-treatment of human rights defenders in Zimbabwe, and guarantee in
all circumstances that human rights defenders and organisations are able to
carry out their work without any hindrance;
iv. comply with the
provisions of the Declaration on Human Rights Defenders adopted by the UN
General Assembly on December 9, 1998, in particular article 1, which states
that "everyone has the right, individually or collectively, to promote the
protection and fulfilment of human rights and fundamental freedoms at the
national and international levels", above-mentioned article 5.a, and article
12.2, which states that "the State shall take all necessary measures to
ensure the protection by the competent authorities of everyone, individually
and in association with others, against any violence, threats, retaliation,
de facto or de jure, adverse discrimination, pressure or any other arbitrary
action as a consequence of his or her legitimate exercise of the rights
referred to in the present Declaration";
v. guarantee the respect of
human rights and fundamental freedoms in accordance with the Universal
Declaration on Human Rights and other international human rights instruments
ratified by Zimbabwe.
Addresses:
President of Zimbabwe, Mr.
Robert G. Mugabe, Office of the President, Private Bag 7700, Causeway,
Harare, Zimbabwe, Fax : +263 4 708 211
Mr. Khembo Mohadi, Minister of
Home Affairs, Ministry of Home Affairs, 11th Floor Mukwati Building, Private
Bag 7703, Causeway, Harare, Zimbabwe, Fax : +263 4 726 716
Ambassador Mr.
Chitsaka Chipaziwa, Permanent Mission of Zimbabwe to the United Nations in
Geneva, Chemin William Barbey 27, 1292 Chambésy, Switzerland, Fax: + 41 22
758 30 44, Email: mission.zimbabwe@ties.itu.net
Please
also write to the embassies of Zimbabwe in your respective
country.
***
Geneva - Paris, August 12, 2005
Kindly inform
us of any action undertaken quoting the code of this appeal in your
reply.
The Observatory, a FIDH and OMCT venture, is dedicated to the
protection of Human Rights Defenders and aims to offer them concrete support
in their time of need.
The Observatory was the winner of the 1998
Human Rights Prize of the French Republic.
To contact the
Observatory, call the emergency line:
White farmers
face eviction under 'apartheid-era' laws From Jan Raath in
Harare
THE Government of Robert Mugabe tabled
draconian laws yesterday to drive the last white farmers from their land and
crush dissent. The constitutional amendments debated in
Parliament will nationalise all agricultural land that has been listed for
seizure since 2000. Landowners will have no right to contest the
confiscations and will be barred from receiving
compensation.
Another clause in the legislation gives
the Government powers "in the national interest" to stop people leaving the
country. Lawyers said that this echoed apartheid-era South African laws that
stopped critics from travelling abroad to condemn white-minority
rule.
Another section will introduce an upper chamber in
Parliament, with 16 of the 66 senators effectively appointed by President
Mugabe. Also on Parliament's order paper is a Bill to put private schools, a
preserve of generally pro-opposition middle-class families, under state
control. Yet another amendment will ban civil servants from joining trade
unions.
The legislation comes after parliamentary elections
in March that the ruling Zanu(PF) party won amid accusations from Western
nations and the Opposition that they were neither free nor fair. The
legislative onslaught also comes after demolitions and evictions in mostly
urban areas that made 700,000 people homeless and jobless, according to the
UN.
The package comes as Mr Mugabe is negotiating with South
Africa for a loan, thought to be £279 million, to prop up the Zimbabwean
economy. It is believed that the loan is conditional on Mr Mugabe reversing
his crackdown on democracy that began in 2000 when the Movement for
Democratic Change (MDC) nearly won elections.
Brian
Raftopoulos, of the Zimbabwe in Crisis Coalition, said that the changes
showed Mr Mugabe's scorn for the hopes of President Mbeki of South Africa to
start political dialogue in Zimbabwe. "Mugabe will never accept political
conditionality," he said.
David Coltart, the MDC's legal
director, said: "Mugabe said the elections were meant to 'bury' the MDC. He
failed. Zanu (PF) didn't win a single urban seat. What we are seeing now is
an incremental approach to finish off the MDC."
After
five years of murder, assault and harassment of white-owned farms by state
agents, the Government has managed to confiscate legally only about 10 per
cent of the estimated 4,500 properties. All but a handful of white farmers
have had their property listed for "compulsory
acquisition".
However, most of them have kept the
Government at bay by fighting their eviction in court. About 450 farmers
have stayed on their farms.
Mr Coltart said: "These
constitutional changes are designed for once and for all to smash the white
farmers and to close any possible avenue for using the constitution to
protect human rights."
'Zim Needs to Revive Relations With IMF, World Bank'
The Herald
(Harare)
August 18, 2005 Posted to the web August 18,
2005
Harare
ZIMBABWE should re-engage the International Monetary
Fund and World Bank in its economic turnaround strategies as it continues to
foster economic growth, a senior Government official has said.
"We
need to revive the relationship with the WB and IMF so that we have support
in the balance of payments and access to foreign currency supplements," the
president of the Chiefs Council, Mr Fortune Charumbira, said.
He was
addressing delegates at the Zimbabwe National Chamber of Commerce breakfast
meeting to discuss the monetary policy and mid-term fiscal policy review
statements held in Harare yesterday.
"The country has been failing to
generate enough foreign currency to meet its requirements and in this
regard, we need to re-engage the multilateral financial institutions," he
added.
Zimbabwe has been facing a critical shortage of foreign currency,
resulting in its failure to import adequate supplies of fuel, raw materials,
capital equipment and other necessities.
The central bank has in the
last two years introduced measures that have improved foreign currency
inflows from US$301 million in 2003 to US$1,7 billion last year, but this
was still not enough to meet critical needs.
The situation has been
worsened by the rising international oil prices to more than US$60 per
barrel that have resulted in more money being pumped out for fuel
purchases.
Although it is still too early to quantify, the revision of
the exchange rate to US$17 500 by the central bank last month is also
expected to boost foreign currency inflows.
However, these
initiatives need to be complemented by balance of payments support from
multilateral institutions. Zimbabwe's economy needs about US$3 billion per
year to meet its requirements.
The ballooning of the domestic debt, Mr
Charumbira said, was a sign of inefficiency on part of Government ministers
who have not been producing the desired results.
This was evidenced
by a request for more than $31 trillion in the supplementary budget by all
the ministries, which the Ministry of Finance turned down as it was deemed
inflationary.
"The only problem is that our ministers do not want to
admit failure. They used to perform better before their elevation to
ministerial levels but that performance has disappeared.
"We are too
defensive and this is the time to admit our failure for the betterment of
the economy," said Mr Charumbira, amid applause from the
delegates.
He also took a swipe at industrialists who are taking the
advantage of the challenges which the country is currently experiencing to
engage in illegal activities which have proved costly to the
economy.
"We have seen several companies involved in shady dealings in
several sectors of the economy, such as mining.
"Farmers have also
been getting heavily subsidised fuel but that commodity had been diverted to
the black market, but they do not want to take the blame," he
added.
Mr Charumbira encouraged the Government and industry to work hand
in glove if the turnaround objectives were to be achieved.
He becomes
one of the few top Government personalities to challenge his colleagues to
start producing results.
Addressing the same seminar, Kingdom Financial
Holdings economist Mr Witness Chinyama said the economy could start
recovering if Zimbabwe exploited available global opportunities.
"The
Government has adopted the Look East policy, but we are saying let us also
look everywhere so that we can engage every country in the world in our
struggle.
"The increase in the interest rates also has a negative
impact on investors because they are not favourable for investment promotion
and foreign investors are not lured to invest in this country as well,"
added Mr Chinyama.
Economist Mr John Robertson said "companies have
been over-taxed and they will not be able to be productive as they require
more money to pay the taxes".
However, the mining sector commended
the exchange rate movement.
"The new development will bring positive
returns to the sector as the exchange rate will move in tandem with the
inflation movements," said Mr David Matyanga, an official with the Chamber
of Mines.
The delegates concurred on the need to have a uniform economy
and move away from situation were a multiple economy targeted at different
sectors of the economy.
Mozambique's Chissano Voices Regret at Zimbabwe Mediation Setback By
Simeao Pongoane Maputo 18 August
2005
Zimbabwean President Robert Mugabe's diplomatic snubbing of
former Mozambican president Joaquim Chissano is likely to further isolate
Harare and expand rifts in the Southern African Development Community and
African Union, observers say.
Under Western pressure for years, Mr.
Mugabe has enjoyed support from other African leaders. But one diplomat at
the SADC summit in Botswana this week said that South Africa, Mozambique,
Botswana and Mauritius all want to keep pressure on Mr. Mugabe for reform
because his policies are harming the region. These countries also want the
United Nations to follow through to ensure the recommendations made in the
report it issued on Harare's May-July slum clearance drive will be
adopted.
However, Zambia, Namibia and Malawi are siding with Mr. Mugabe,
the diplomat said.
Mr. Chissano, asked to serve as African Union
mediator in hoped-for talks between the Zimbabwe ruling party and its
opposition, confirmed Thursday to reporters in the Mozambican capital of
Maputo that Mr. Mugabe had told him in discussions at the SADC summit in
Botswana this week that he was not interested in mediation.
Mr.
Chissano expressed regret that his mission had come to an end in effect
before it started, but said everything now depends on Harare - though he was
ready to help.
Voice of America correspondent Simeao Pongoane spoke
with reporter Ndimyake Mwakalyele of VOA's Studio 7 for Zimbabwe about Mr.
Chissano's briefing.
Meanwhile, the International Crisis Group issued a
report this week calling for Nigeria and South Africa to assemble a team of
former African presidents to try to persuade Mr. Mugabe to retire gracefully
and agree to a transitional mechanism.
The ICG says the West must
maintain sanctions while stepping up aid to democratic forces in Zimbabwe to
strengthen civil society and develop the political culture.
Reporter
Blessing Zulu of Studio 7 asked Dr. Peter Kagwanja, ICG's director for
Southern Africa, why he thinks former heads of state can get the job
done.
However, another South African based analyst, Obri Mashiq,
argues that such an ex-presidential panel would be no panacea for the
complex crisis in Zimbabwe.
Despite the setback at the SADC summit,
the Movement for Democratic Change said it still believes opening talks with
the ruling party are the way to resolve the crisis.
Studio 7 evening
show host Ndimyake Mwakalyele reached MDC spokesman Paul Themba Nyathi who
outlined the opposition's stance at this juncture.
But officials of the
ruling Zimbabwe African National Union-Patriotic Front, or ZANU-PF, are
staying on message and accusing the MDC of trying to gain at the negotiating
table what it failed to achieve in the March general election (which the MDC
and a range of observers say was marred by voter intimidation and
ballot-rigging).
Expressing this viewpoint was William Nhara, ZANU-PF
district chairman for Harare, who spoke with Studio 7 reporter Ndimyake
Mwakalyele.
THE Land Bank has denied reports that it was engaged in talks to
loan the Zimbabwean government money for the country to import food, the
agricultural funding parastatal's marketing GM Herman Moeketsi said
yesterday.
He denied rumours yesterday that boosted maize futures to an
eight-month high on the JSE's agricultural derivatives division or
Safex.
"Those rumours are totally incorrect," the marketing GM
said.
The Land Bank was involved in agricultural development purely
within the borders of SA, Moeketsi said.
"There were rumours in the
market that came from a number of sources, with people putting the funding
amount for Zimbabwe at enough for 1-million tons to 1,5-million tons of
maize or food to be imported into Zimbabwe," a Johannesburg broker
said.
For the current 2005-06 marketing year, SA exported 299823 tons of
maize to Zimbabwe or 46,1% of total exports during the period.
In the
last financial year, the country exported 210335 tons of maize to
Zimbabwe.
Zimbabwe's annual consumption of maize is about
1,8-million tons, while the country's latest crop has been put at almost
600000 tons, leaving a shortfall of 1,2-million tons.
Zimbabwe's
ability to import food and maize has been hampered by the country's foreign
currency position, which has been deteriorating steadily since 1999, with
the position having moved to a deficit of more than $600m last year.
HARARE
opposition legislators planned an antigovernment march in Harare yesterday
and said they would not seek the state's permission - setting the stage for
possible confrontations with police.
Lovemore Zimuto, a spokesman for the
opposition Movement for Democratic Change (MDC), said the 41 MDC legislators
would march from party headquarters to parliament to protest the ruling
party's proposed overhaul of the constitution, its handling of the economy
and a crackdown on private schools.
He said that they would not
request police authorisation, arguing that the MDC legislators marching from
their offices to parliament do not require permission.
But Zimbabwe's
sweeping security laws spell out that police permission is required for any
political gathering. In the past, police have been swift to use batons and
tear gas to break up any gathering of critics of President Robert
Mugabe.
The antigovernment protest in Harare was planned the same day
the Central Statistical Office announced annual inflation had jumped from
164% to 254,8% in July. Moffat Nyoni, the acting director of the office,
told state media it was the largest monthly surge on record.
Finance
Minister Herbert Murerwa told parliament on Wednesday that while the
economic turnaround was not as fast as he had forecast, he still expected
economic growth of 2% and that inflation could be reduced to 50% by year's
end and drop below 10% by the end of next year.
He also announced new
revenue measures, including an increase in value added tax from 15 to 17,5%.
He said it would now be applied to a wide range of previously exempt basic
foodstuffs.
The constitutional proposals the opposition is also
protesting would establish a 40-seat senate, abolish all freehold title to
real estate, restrict landowners' right to appeal expropriation and allow
the state to refuse passports to critics.
Economist John
Robertson said the latest inflation figures showed "the government is now
the victim of its own policies".
"We are heading for 1000% inflation by
year-end if we do not start behaving better," he said
Mediagate deepens Dumisani Muleya THERE were
frantic efforts this week to contain the fallout from the biggest scandal to
rock the media industry since Independence in 1980 after revelations in this
paper that the Central Intelligence Organisation (CIO) had taken over three
major private newspapers.
The editors-in-chief of the papers that were
reported to be owned by the CIO, the Financial Gazette and the Mirror Group
titles, the Daily Mirror and the Sunday Mirror, made desperate efforts to
deny the story which has sent shockwaves in the media
fraternity.
Like his Mirror Group counterpart, Ibbo Mandaza,
Financial Gazette editor Sunsleey Chamunorwa yesterday tried to deny the
story broken by this paper last week with an opinion-editorial piece long on
words but short on substance.
Chamunorwa could only say the paper
was owned by "a credible shareholder". There were no names but descriptions
which raised the question of why the sponsors of the paper should remain
anonymous. The description of the main shareholder could match that of
Reserve Bank of Zimbabwe governor Gideon Gono, who has in the past denied
owning the paper but is a financial advisor.
It has been learnt
that Mandaza fuelled trouble on Wednesday after suspending without pay and
benefits his deputy editor-in-chief, Alexander Kanengoni, allegedly deployed
to the Mirror by the CIO. Last night the Zimbabwe Independent heard that
Kanengoni had been locked out of his office at the Mirror
Group.
The story roped in the CBZ (Jewel Bank) and, by implication,
its main shareholder, South African banking giant Absa, which provided $200
million for the take-over of the Financial Gazette in October 2001. The
take-over negotiations ran between October 2001 and November
2002.
Absa African division head Dana Botha said yesterday his bank
was not in a position to deal with the issue. "We have a board
representation but we don't have management and operational control over
CBZ," he said.
"The CEO Nyasha Makuvise should be able to deal with
that."
Marathon crisis management meetings at the media houses failed to
allay anxiety among staffers.
Sources said there was no decision
on what to do at the Financial Gazette after Chamunorwa tried but failed to
secure the support of Gono to deny the story. Chamunorwa had to come up with
the opinion article, which he wanted to pass for a company
statement.
On the main issue of the ownership structure, Chamunorwa
could only say his newspaper was owned by "a group of individuals with
impeccable financial, commercial and business credentials.
"They
are not CIO agents; neither does this newspaper have under its employ anyone
answerable to the state or any of its agents."
Then there was the
disclosure: "I have not checked with the major shareholder but for the
record, let me put this issue to rest once and for all. The major
shareholder is a prominent banker, Zimbabwe's best known turnaround expert,
farmer and businessman."
The description fits that of Gono, whom
Chamunorwa has in the past described as "Mr
Turnaround".
Observers and readers who called the Independent said
the fact that Gono could own a financial paper was in itself a
scandal.
"How ethical is it for a central bank governor to own a
business newspaper which has failed to criticise the failed policies of the
perceived shareholder?" said a manager with a commercial
bank.
The Mirror also ran into problems as management was divided on
what to do, while the CIO maintained a low profile to avoid fanning the
crisis.
Accusations and counter-accusations flew thick and fast
during the week.
Sources said Mandaza, who tried to deny the story on
foreign radio stations after he was shut out by the CIO, suspended
Kanengoni.
Mandaza told SAfm and Voice of America on Monday he was
the sole owner of the Mirror newspapers but sources maintained the CIO were
the real owners.
He did not deny there were CIO operatives in his
newsroom, but claimed he was not aware of it.
He said he had
launched an internal investigation to find out if CIO details were operating
in the group. Mandaza said if the probe revealed the CIO were there, he
would ask the authorities to withdraw them.
Government remained mum
as the furore intensified. Former State Security minister Nicholas Goche,
under whose charge the newspaper scandal occurred, refused to
comment.
"I am not the minister for the CIO," he said. "In any case,
I don't comment on such matters over the telephone."
Acting
Information minister Chen Chimutengwende said: "I'm not sure what the
situation is. I have not been briefed."
Mandaza, who is also the
Mirror Group CEO, was said to have written a letter to Kanengoni accusing
him of assaulting the news editor of the Sunday Mirror, harassing
journalists, shouting obscenities, insubordination and incompetence.
Kanengoni and his backers reportedly accused Mandaza of misusing funds and
failing to ensure the papers increased circulation to generate sufficient
advertising revenue.
Mandaza was said to be fighting for survival at
the company after a head-on clash with a powerful CIO-backed group led by
his chairman, Jonathan Kadzura. It was said the CIO had been angered by
Mandaza's antics and wanted him booted out. He was understood to have
accused the CIO of trying to destroy the Mirror, while the Kadzura faction
blamed Mandaza for leaking the story.
Before the scandal was
exposed, sources said Mandaza complained to political and business
associates about the presence of CIO operatives in his
newsroom.
Presidential spokesman George Charamba recently made
insinuations Chamunorwa worked with and for the powers-that-be in his
Nathaniel Manheru column in the Herald. Despite Chamunorwa's pretence that
he was not under political influence, sources said there were instances when
stories were given to him to publish directly from the President's
Office.
"We have many examples, including the false story the Fingaz
published in December last year claiming (former Information Jonathan) Moyo
had resigned," a source said. "It had come from the President's Office."
Battle for control rocks state media Ray
Matikinye/Augustine Mukaro THE recent storming of the newsroom at Pocket
Hills by Information secretary, George Charamba, constitutes an
unprecedented intrusion into the management of the public broadcaster by a
civil servant.
Charamba stormed the Newsnet newsroom after its "hotline"
allegedly went unanswered when he telephoned the newsroom. He wanted to find
out why the leading story on a news bulletin on Heroes' Day had failed to
capture the gist of the presidential speech.
Philliat Matsheza, a
former deputy director in the Ministry of Information, said during his
tenure no government official ever acted in such a manner as such issues
were "left to management".
"Our involvement in the affairs of the ZBC
as a ministry was minimal. Our role was the facilitation of budgets to ZBC
that had independent revenue collection of its own," Matsheza, now the
director of Southern Africa Human Rights Trust, said.
"We did not
conduct any surveillance over editors but gave the corporation operational
autonomy. The ministry's mandate has obviously changed."
Matsheza said
the information secretary's role then was to make information readily
available. Government encouraged a flow of information from grassroots to it
and not the other way round as became the norm under Jonathan
Moyo.
Charamba's recent actions appear as evidence of frustration by
both the ministry and Zanu PF's department of information over how to rid
the Zimbabwe Broadcasting Holdings (ZBH) of the remnants of Moyo's
legacy.
Sources say the current saga is partly due to a build up of
animosity between the party information department headed by Nathan
Shamuyarira and Information minister Tichaona Jokonya over
control.
While Shamuyarira wants the Ministry of Information to
effect changes in government-controlled media, Jokonya and his deputy Bright
Matonga seem too slow to act.
The turf war between the two
politicians has sucked in Charamba, who is still smarting from not being
appointed minister.
Charamba, alongside Webster Shamu and Ephraim
Masawi, was touted as a possible Moyo successor when the Tsholotsho MP was
expelled from Zanu PF over the Tsholotsho rift.
Charamba has been
unable to come to terms with not being appointed minister as evidenced by
correspondence between him and senior management at Pockets
Hill.
He has clashed with colleagues and ministers over policy
issues, particularly regarding the running of the state media ending up
embroiled in fights with ZBH workers over a report compiled by Policy
Implementation minister Webster Shamu.
Last month Charamba
clashed with ZBH head of national productions, Douglas Justice Dhliwayo,
over a number of issues, including the productions of jingles, videos and
footage to promote Zanu PF policies and programmes in the run-up to the
March general election.
The tiff ended up with Charamba accusing
Dhliwayo of "selling him out" to Shamu, Justice minister Patrick Chinamasa,
Attorney-General Sobusa Gula-Ndebele and Shamuyarira and his deputy
spokesman Masawi to solicit favours from them and sabotage his chances of
being appointed a minister in April.
Dhliwayo accused Charamba of
launching unwarranted attacks and insults against senior government
officials he described "as mere politicians" who can't do anything to
him.
The sources said Charamba subjected Dhliwayo to an hour-long
telephone tirade over the issue and Dhliwayo reacted angrily with an
eight-page letter accusing Charamba of being "malicious" and abusing the
President's Office to pursue personal vendettas.
They said
Dhliwayo then asked Charamba why he was angry that he was not appointed
minister if he thought being a minister was beneath him.
The sources
said the report that caused the infighting focused on the ZBH, Zimpapers,
New Ziana and Kingstons, and concluded "all is not well" in the state
media.
The latest issue of Zanu PF mouthpiece The Voice, viewed as an
impeccable source of party policy, reported eminent changes at Pockets
Hill.
Another source said Shamuyarira wanted the state media rid of
all the remnants of the Moyo era immediately but Jokonya has been resisting
this overbearing attitude. Party sources say Shamuyarira wants the business
units set up under Moyo disbanded and the broadcaster to revert to Zimbabwe
Broadcasting Corporation.
The sources say at one routine meeting,
Shamuyarira railed at Matonga, wanting to know when changes would be
effected. But Matonga replied that "his hands were tied and the onus to
effect the changes lay with the minister".
The broadcaster has
not been able to wean itself from Moyo's legacy that brought in
inexperienced journalists to replace veteran broadcasters who were elbowed
out because they could not qualify for Moyo's media decimation
programme.
Allegations of unprofessional conduct that have been
levelled against some staffers at Newsnet reflect the power struggles
between the Zanu PF information department and the Ministry of Information
over policy.
You've failed, Biti tells govt Ray
Matikinye OPPOSITION Movement for Democratic Change (MDC) secretary for
economic affairs Tendai Biti was on Tuesday booted out of parliament for
telling government to admit failure to steer the economy out of a
debilitating political and economic crisis.
Not wanting to lose
control, Speaker of the House, John Nkomo ordered Biti to leave the chamber
just after Biti said: "I say Zanu PF has a lot to learn from the sport of
boxing. When your boxer fails, you throw in your white towel to signify
surrender. I say to this regime please throw in the towel."
Biti had
earlier censured government for lack of planning and economic foresight by
crafting a mid-term budget that heavily taxes the poor.
Biti, the
member of parliament for Harare East and the MDC's shadow minister for
finance, accused government of destroying the informal sector through its
ill-conceived Operation Murambatsvina and now seeking to tax the poor
through more value added tax (VAT).
Contributing to debate on the
supplementary budget announced on Tuesday, Biti said government had failed
and become so desperate that it had to come up with a raft of taxes that
impinge on the livelihoods of the poor.
By destroying the informal
sector, which he said contributed between 40% and 60% to gross domestic
product, government had destroyed 60% of the economy.
"We have
failed. Now we want to squeeze the little income from already suffering
people of Zimbabwe," said Biti. "What we are doing is that 'tavakukorokoza
mari' from our own people to run the country. VAT is a direct tax that
affects the poor more than it does the rich," Biti said.
Finance
minister Herbert Murerwa announced, among other revenue measures, an
increase in VAT of 2,5 percentage points from 15% to 17, 5% in his $6,6
trillion mid-term supplementary budget. But he deferred reviewing individual
and corporate tax bands until the national budget in 2006.
Biti
said although government blamed inflation for the current economic crisis,
it clearly lacked competency to craft credible development plans in which
fiscal and monetary policies complement each other.
These measures
are essential for developing economies in the third world countries like
Zimbabwe and should deal with social formations that address structural
issues of poverty and underdevelopment.
Since 1990 development
blueprints have dealt with recurrent issues like inflation without touching
on reasons for poverty and underdevelopment
Biti censured government for
profligacy at a time when it is in dire financial straits by creating a
bloated bureaucracy. "We have created a situation where every other second
person in parliament is a deputy minister and seek to create a Senate with
60 members that is going to create yet another onerous burden on the
fiscus," he said.
The MP decried the dollarisation of the economy
saying it deepened poverty among 80% of the population that live under the
poverty datum line and have to buy products pegged against the
greenback.
Beginning this month, Zimbabweans who have access to
foreign currency are allowed to buy fuel at designated service stations
using hard currencies. "When we buy our products at international prices,
this increases the gap between the rich and the poor because the rich are
the ones who control the dollarised economy. Dollarisation of the economy is
an acknowledgement of failure," he said.
Africa scrambles for Zim farmers Augustine
Mukaro MORE than 20 African countries - in a bid to develop their commercial
agriculture - are scrambling to snap up Zimbabwe's farmers displaced under
the chaotic land reform.
The stampede for Zimbabwean farmers,
renowned for their skills, comes at a time when Zimbabwe is in financial
dire straits and cannot feed itself because of the failed agrarian
experiment that has put an estimated 4,3 million people at
risk.
A Commercial Farmers Union (CFU) report circulated to its
members at its annual congress two weeks ago shows that the success of the
farmers' venture in Nigeria has generated interest from African governments
keen to develop commercial agriculture.
"The Nigerian project has
opened many doors, and will continue to open more doors in other countries,
with private companies, and government departments approaching us, wanting
to put together similar projects," reads the report.
The report adds:
"Countries that have contacted us and with whom we are currently dealing
include Ghana, Cameroon, Sudan, Guinea Bissau, Benin, Central African
Republic and Namibia."
The CFU also said a team was currently working
on securing a project similar to that in Nigeria in Senegal. "Three trips
have been made to Senegal and proposals are being put together. All parties
involved are positive about this venture," the farmers' organisation
said.
Alan Jack, leader of the pioneering group that has relocated to
Nigeria, said up to 23 African countries had contacted his office with
propositions. Fifteen farmers and their families have already relocated to
Kwara State in Nigeria.
Most farmers who fled their farms at the
height of the land invasions have found new homes in African countries such
as Mozambique, Zambia, Malawi and Uganda.
Government continues to
harass white commercial farmers still on the land, creating a lot of
uncertainty about the future of commercial agriculture in the country. The
farmers say proposed amendments to the Land Act will nationalise all
land.
The proposed amendments and their possible ramifications fly in
the face of Finance minister Herbert Murerwa's call in his mid-term fiscal
review statement this week for stability in the agricultural
sector.
Justice for Agriculture chairman, John Worswick, told a
parliamentary hearing last week that the amendment would nationalise all
farmland, making it lose its market value.
"If the amendment
passes, land in Zimbabwe will be owned on the basis of patronage and not
one's productiveness or ingenuity," Worswick said. "While China has accepted
the need for individual property rights, Zimbabwe is moving completely in
the opposite direction," he said.
CFU president Doug Taylor-Freeme took a
swipe at the proposed amendment, saying it would speed up the collapse of
agriculture.
"It is extremely alarming to note that a new
constitutional amendment to the Land Act has been put to parliament which
proposes that all land gazetted for acquisition since 2000 cannot be
contested in court. As virtually every white farmer has been listed for
acquisition in some way or other this surely provides direct evidence that a
process of ethnic cleansing is taking place."
"If the objective of
the authorities, by introducing such draconian legislation, is to get
agriculture back to work, they are wrong. It is likely to increase the
conflict of ownership of the business on the land and reduce meaningful
investment in agriculture," Taylor-Freeme said.
Another transit camp opens at Hopley Estate Grace
Kombora ANOTHER transit camp in the mould of the disbanded Caledonia Farm has
opened at Hopley Estate where scores of people have been dumped in an open
space without any facilities despite government claims that it has closed
all transit camps.
Former Porta Farm residents who were evicted under
Operation Murambatsvina have been moved to Hopley Estate south of Harare,
where prison officers and police are keeping the inmates under armed
guard.
The detainees are not allowed to speak to the media and civic
organisations.
Security officers earlier this week prevented the
Zimbabwe Independent crew from interviewing residents at the transit
camp.
"You do not enter at your own will. You get clearance from the
Ministry of Information first before I can permit your entry," said one the
officers.
He said journalists and civic organisations were barred
entry into the area.
Ministry officials yesterday refused to comment on
the issue referring all questions to the Media and Information Commission
(MIC).
MIC officer Munyaradzi Nyamagodo however denied that the
commission had issued instructions to shut out the media.
Hopley
Estate is one of the three farms subdivided into residential stands to be
allocated to evictees under the controversial Operation
Garikai.
Living conditions at Hopley Farm, where the displaced have
been dumped for the past three weeks, are described by civic groups as
"inhuman".
People are living without shelter while food and water
supplies are erratic.
Unicef and the International Organisation for
Migration (IOM) have started providing aid to people at Hopley
Estate.
We are assisting these people with 45 000 litres of water
every day," said James Elder of Unicef. The IOM is distributing blankets and
food at the transit camp.
Most of the people at Hopley lost their
belongings during their displacements to Caledonia.
Caledonia
transit camp was closed during the visit last month of UN special envoy Anna
Tibaijuka to assess the impact and extent of Operation
Murambatsvina.
There are no latrines at the new transit
camp.
The Zimbabwe Lawyers for Human Rights' efforts to visit people
at Hopley were also blocked by military personnel guarding the area. US
Ambassador to the UN's FAO and WFP, Tony Hall, was barred entry into the
camp by the security officers. Hall also visited Hatcliff Extension where he
expressed concern at the situation there.
Govt yet to pay for Byo stands Susan
Mateko GOVERNMRNT has not paid a cent for the stands it was allocated by the
Bulawayo city council under Operation Garikai/Hlalakani kuhle, the Zimbabwe
Independent has established.
At the beginning of July government
announced it had been allocated over a thousand stands for the
reconstruction programme by the council but did not indicate whether the
stands were a donation or they were to be paid for.
However, it emerged
this week that the council allocated only 360 stands against 1 002 that
government said it would develop in Bulawayo.
The Bulawayo city
council's director of housing and community services, Isaiah Magagula,
confirmed this week that government had not yet paid for the 360
stands.
"We allocated 360 stands to government in line with Operation
Garikai/Hlalani kuhle, but government is yet to pay for the stands and we
are not sure when that will be," Magagula said.
Pressed to give
the estimated cost of each stand, Magagula said a single stand cost in the
region of $6 million but that this could be two-fold.
"Currently the
council does not have an exact figure but the standard price for a 200
square metre stand was $6 million for the last lot that we had. Now it might
have doubled or gone beyond that," Magagula said.
The latest
revelation follows government plans to channel trillions of dollars into
housing projects to resettle thousands of Zimbabweans displaced under its
widely condemned Operation Murambatsvina.
Magagula also revealed that
Operation Garikai/Hlalani kuhle would benefit only those people on the
council's housing waiting list when it comes to the allocation of
stands.
"Only those who had been living in illegal structures and
were on the council's waiting list will get stands," said
Magagula.
Operation Garikai/Hlalani kuhle is an ambitious project by
government to provide accommodation for thousands of people left homeless
countrywide by its clean-up exercise.
Medical exam ordered for assaulted MDC
activists Loughty Dube AS police harassment of opposition supporters
continues, a local magistrate has ordered that 12 MDC activists assaulted by
police while campaigning for Bulawayo mayor, Japhet Ndabeni Ncube, be
medically examined to determine the extent of their injuries.
The
activists, who were arrested last week in Emakhandeni suburb while they were
giving out fliers urging residents to vote for Ncube, were allegedly injured
when they were assaulted by police before and during their detention at
Luveve police station.
The 12 were visibly swollen in the face and
other body parts when they appeared in court last week on Friday to answer
charges of toyi-toying and blocking traffic.
A young woman in the
group had a broken arm hanging loosely by her side when she appeared before
Bulawayo magistrate, Kholwani Mangena.
After being briefed by the
lawyer representing the group, the presiding magistrate ordered that the
group be taken for a medical examination.
The lawyer, Josphat Tshuma
of Webb, Low and Barry, told the magistrate that his clients were assaulted
by police as they were being arrested and at Luveve police station where
they were detained overnight.
"The worrying part is that the group
was assaulted by police and each of the members in the group received
varying injuries, a case which should be investigated by the courts," Tshuma
said.
The 12 were remanded out of custody to August
25.
Beside the incident involving the police and the 12 MDC
activists, the Bulawayo executive mayoral elections were held in a peaceful
atmosphere with no incidents of violence being reported throughout the
city.
Bulawayo executive mayor Ncube retained his seat after he
routed Zanu PF's Dickson Abu- Basuthu by 29 575 votes to 5 509
votes.
Police have in the past been accused of taking sides with the
ruling Zanu PF party during elections and several opposition officials and
supporters have been arrested on the flimsiest of excuses.
Just
two weeks ago, Zanu PF supporters attacked and injured Mangwe MP in
Bubi-Umguza whom they detained at a homestead for the whole night and police
are alleged to have responded to the matter after 26 hours.
Last
month Mbare MP, Gift Chimanikire, was arrested on allegation of illegally
possessing a firearm after he had gone to a police station to report an
assault by Zanu PF supporters during a state function to commission a
vegetable market.
Stockbrokers on stay-away Thomas
Mutswiti STOCKBROKERS yesterday protested against Finance minister Herbert
Murerwa's latest fiscal policy measures by staying away from the
bourse.
There was no trading on the Zimbabwe Stock Exchange following a
major policy shift that requires pension funds to increase government bonds
and bills as a proportion of their portfolios, a ZSE official
said.
The directive on Tuesday includes a 10% tax on all shares sold
on the Zimbabwe Stock Exchange.
In tandem with this policy shift,
the industrial index lost its post-holiday exuberance, shedding 0,41% on
Tuesday, 6,5% on Wednesday with only 1,3-million shares changing hands. This
was a far-cry from daily averages of 20-million shares in the past few
weeks.
Yesterday there was no trade in both the morning and afternoon
call overs as brokers were just seated chatting away.
Pension
funds, the biggest investors on the ZSE, are required to invest 35% of their
total assets in government bonds and Treasury bills, but have been
calculating that percentage 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 to meet the required
percentage.
The bourse has remained one of the few areas notching a
positive return on investment in a crumbling economy. Inflation last month
raced to 254,8%, the highest in more than a year.
"What will
happen is that pension funds will be forced to sell shares to meet the
shortfall created by the new requirement, but no one in the market has the
capacity to absorb the shares. There has not been any activity today, the
afternoon session only lasted five minutes," ZSE chief executive, Emmanuel
Munyukwi, said.
"The market becomes a sellers' market. It's a
disaster, and there is a very high possibility that the market will
collapse. All is not well."
Rashid Mudala, a fund manager at First
Mutual Ltd, agreed. "As they rush to conform with the new requirements,
pension funds will have to sell shares to raise the cash."
Mudala
said the directive was most likely to cause a stock market collapse as
pension funds dispose of shares in a market with no takers.
Pension
funds have until October to meet the new requirements.
There are 79
listed companies on the bourse, including South African insurance firm Old
Mutual, Pretoria Portland Cement and tobacco giant BAT.
The ZSE's market
capitalisation stood at $37,6 trillion at the end of July.
Analysts
said government was desperate to raise funds to meet commitments after six
years of recession. Government is increasingly relying on the domestic
market for funds to finance budget shortfalls after a fallout with
multilateral lenders over President Mugabe's controversial land
policies.
"The government is trying to extract every last dollar that
might be out there, but by so doing it is making people poorer when they
retire," economist John Robertson said.
Analysts predicted an
upsurge in black market activities like forex dealing as investors seek
alternative avenues to realise real returns.
Government is trying to
satisfy its expenditure needs and at the same time violating its social
obligations. This development might see pension funds and insurance
companies raising premiums, analysts say.
An analyst with an
insurance company said the requirement will be taxing on pension funds as it
implies that every time properties are revalued they will fall short of the
prescribed asset ratios.
The equities market will suffer the most as
pension funds will have to liquidate shares to meet these ratios.
Airzim to pay $40 billion for leased plane Roadwin
Chirara AIR Zimbabwe is likely run a bill in access of US$2 million (about
$40 billion) in the next two months from the lease of a Boeing 767-300 plane
from PB Air of Thailand.
The plane, which comes into service today,
will be a relief for its Boeing 767-200 which is currently undergoing a
C-class service check by national airline engineers at Harare International
Airport.
The terms and conditions of the lease arrangement, which
have been kept a closely-guarded secret after its chief executive Tendai
Mahachi left Thailand to negotiate the deal, will see the national carrier
paying US$3 200 per flight hour.
The plane is expected to fly for
up to 70 hours a week for two months. There are also insurance costs and
minor services which are pegged in United States dollars over the duration
of the lease agreement.
The 245-seater plane, which was put into
service in 1999, is expected to cater for Airzim's Asian markets under
government's Look East policy.
The plane is expected to make its
maiden flight into the country tonight from Beijing and then make a return
flight to the Chinese capital.
The plane under the lease agreement
will also be expected to make two weekly scheduled flights from Harare to
Beijing via Dubai and Bangkok, Thailand while it retains its owners' PB Air
livery.
The flights to Bangkok will be Airzim's first after the
national carrier failed to launch the route as planned in July under its
Asian expansion plan.
Currently Air Zimbabwe is charging $25
million for a return ticket to the Chinese capital Beijing, and $12 million
for a return ticket to Dubai.
Travellers to Bangkok will be expected to
folk out $28,4 million for a return ticket.
Mahachi confirmed the
airline was folking out over US$3 200 for every hour the plane is in the air
under the Thailand lease agreement.
He however refused to disclose
further conditions of the deal saying the lease agreement was in favour of
the national carrier as the rate paid was far below the uniform IATA rate
which is in the region of between US$3 500-US$8 000 per hour depending on
the age and size of the aircraft.
"We are lucky that we found a
favourable deal which is charging us far below the normal IATA rates
considering the size of the plane," Mahachi said.
He said the
decision to lease the aircraft had been necessitated by the need to maintain
the airline's current routes while remaining consistent in new
routes.
"The decision to lease to plane has been mainly
influenced by the need for us as an airline to maintain our routes and
customer base," said Mahachi.
"You have to realise the Asian routes have
registered tremendous growth over the past few months," said
Mahachi.
The airline chief also confirmed the use of army engineering
personnel in its operations.
"Yes we do have army engineering
personnel working for us. This is under a secondment agreement we have
entered with the army as part of their training process," Mahachi
said.
He also said the airline was planning to train army pilots in
flying civilian planes in the near future.
"We are also looking
at training pilots to fly some of our planes such as the MA60 as these are
similar to some of their planes currently in service," said
Mahachi.
The Air Zimbabwe chief said the third MA60, which was
offered for free under the purchase arrangement of the initial two planes
with China, was due to arrive in December or early next
year.
"The free MA60 is due to arrive in December or early next year.
It will be used by the airline for routes such as Mutare and Buffalo Range.
Currently one of the MA60 is plying the Joburg route," Mahachi said.
Sting in the tail By The Tetrad Group WHILE most
analysts were still busy trying to come to grips with the somewhat dodgy
figures in Tuesday's mid-term fiscal policy review, the Central Statistical
Office (CSO) dropped an inflation bombshell behind them just a day
later.
If the Finance minister had any inkling of what was in store he
certainly gave little or no hint of it in his statement, citing only the
June figure of 164,3% and concluding with a repetition of his view that
"inflation remains a major obstacle to the realisation of the country's full
productive potential".
After the CSO's revelation that the July
figure leapt to 254,8%, with a month-on-month rise of 47,1%, 13,5%
percentage points above the previous record monthly increase of November
2003, all that can be said is that hardly anyone would dare contradict the
minister's sentiments in this respect.
However, projections in
the review did not appear to take into account a year-on-year rate of
inflation at the beginning of the second half of the year of 90,5 percentage
points, or 55%, above that at the end of the first half.
There will
be some really serious discrepancies to account for when the budget for 2005
as a whole comes to be compiled towards the end of the current calendar
year.
Even if the mid-term figures can be accepted as a half reliable
pointer to the likely outturn to the overall budgetary outcome for the year,
which looks unlikely, it is clear that the resurgence of inflationary
pressures are but one of several major problems impeding the realisation of
the economy's productive potential.
A major stimulant to the
spiralling prices is undoubtedly the fall in domestic production. Although
the minister still clings to the hope that there will be positive, albeit
lower than forecast growth in GDP in 2005, all the available evidence points
to yet another year of significant economic contraction.
This is
likely to take real national output down to nearly half what it was six
years ago. One reason for this downward trend is the inability of producers
to access more than a small fraction of the foreign exchange needed to
sustain output. The auction figures show that just over 7% of bids have been
met since the end of June compared with 27% in the corresponding period last
year. Output must be falling across the economy, yet supplementary estimates
provide increased public sector spending of $3,4 trillion although the
minister admitted that in the absence of foreign funding the widening budget
deficit had to be financed entirely from the domestic
market.
With falling real output and rising expenditure the budget
deficit for the first half of this year was put at $5,7 trillion compared
with the original estimate of $4,5 trillion for the whole year. This was
despite his refusal to provide any further funds to the line ministries this
year and the implementation of certain measures to increase revenue. The
after shock on output, income and employment is certain to be felt
increasingly over the next few months.
The reduction in revenues
is more a reflection of declining economic activity rather than failure on
the part of Zimra. Increasing VAT and surtaxes is counterproductive and will
not make up for the shortfall, nor will introducing new
taxes.
More than likely these will actually cause a reduction of the
total amount collected in the long-term. What is needed is a conducive
environment for doing business such that companies are profitable (more
corporate tax), workers are adequately remunerated (more PAYE), and thus
spend more which means more VAT.
Of more serious implication to
the financial sector, particularly the stock market, is the introduction of
a 10% withholding tax on the sale of marketable securities. At the moment
every trade attracts an additional 4% cost to both the seller and the buyer,
split evenly between the government and the stockbroker. From September 1,
on the sale of securities the government will get 12% (2% stamp duty plus
10% withholding tax) and the broker 2%; makes a lot of sense doesn't
it?
Whilst working for the development of one's country is what many
are expected to do, the above scenario means Zimbabwe probably scores
another first by being the only country in which the government earns more
on a financial transaction than the agent or intermediary. The logic has
left many so astounded that there hasn't been any trading on the stock
market in the past two days.
The other imponderable was the new
directive on the insurance sector and pension funds to calculate the
prescribed asset ratios of 25% for short-term insurance companies, 30% for
long-term insurers and 35% for pension funds at market value, which in any
case changes almost daily.
In essence, what this implies is that by
September 30, most pension funds would need to have liquidated at least a
third of their assets, which are not prescribed, mainly shares and
properties.
The insurance and pension fund sectors are the main
players in both the stock and property market, meaning that there will be no
buyers for the properties and shares, unless of course if foreigners seize
the opportunity to get these assets at basement bottom prices - unlikely in
current circumstances.
This again will be contrary to the spirit
of the statement which seeks to preserve the country's sovereignty by
directing that all foreign investment will be through joint ventures, in
which foreigners will own 40% and locals 60%. Thus for a US$100 million
project (Zesa coal project for example) the foreigner will inject US$40
million and the local partner will weigh in with US$60 million, in a country
as short of foreign currency as we are?
This comes in the wake of
local consortia, even a state institution like the Zimbabwe Investment
Trust, failing to raise funding for 15% of Zimplats and Mimosa. Make sense
of it if you can!
IN the
latest monetary policy review (MPR) the Zimbabwe dollar was adjusted against
US$1 to $17 500. Within a few days the parallel market rate moved to within
$40 000.
It is important to note that the rate had not moved materially
before the MPR, and from this it can be deduced that that movement was not
caused by sudden changesin the market forces of demand and
supply.
Prior to the MPR, the parallel market value of the US$ was
approximately $18 000 while the auction rate was $10 500. This comparison
demonstrates that the parallel market rate operates on a premium to the
"official" rate.
The problem of the parallel market is an issue that
seriously needs to be addressed as it has downstream negative effects for
the economy.
In the same vein, it must be understood that a
parallel/black market for any commodity exists when it is in short supply.
The way to destroy the parallel market is to strengthen the performance
ofthe official market and therefore devaluation or adjustments will
becomeunnecessary. Only four years ago the parallel market value of the Zim
dollar against the greenback was$300.
Back then it was generally
agreed that even at this parallel rate the local currency was undervalued,
but with the official rate at $55, the market was placing both a corrective
premium to adjust the rate to realistic levels as well as a risk premium -
in the event that if one got caught trading, it was the while.
By
July 2002 the official rate was still $55,04 while the parallel market rate
was $650. In three years the official rate is now $18 500,41 and the
parallel rate is $40 000. This clearly shows that there is a foreign
currency crisis.
Some technical and fundamental analysts are
predicting an auction rate of over $100 000by the end of the first quarter
of 2006.
But there must be a solution and such solution must be
actively pursued today. It would be a sad development if we nostalgically
look back at the past three years ofdifficulty as "the good old days". The
solution is there but it is not close at hand. In fact, it is moving further
and further away with each day of delay. Most of Zimbabwe's current problems
would be taken care of with a steady supply of foreign
currency.
Over the past few years we have moved so far from where we
were, which itself was far from where we were headed, that what we are going
through now will be with us for a while yet. What this calls for is action
now.
If action had been taken three years back we would be at a
different leveltoday. It is interesting to note that Zambia went through a
similar period when there were undue restrictions on foreign currency and
significantparticipation by the state in the economy.
When the
markets were liberalised and the government took a regulatory role there was
a crash of the Zambian kwacha against major currencies (from US$1:ZK60) but
that was 15 years ago!
In the ensuing period the government of Zambia
enforced bold market-based policies not dictated by the West, and today the
Zambian kwacha is one of the most stable currencies in the region, trading
both in Zambia and internationally at an average of ZK4 350 to the
greenback.
Today the kwacha is stronger than the Zimbabwean dollar!
Economic history, from our own Rozvi State to the modern G8 nations, has
demonstrated that there is nothing thatcan beat a free market, and free
market policies need to be actively pursued to correct the disparities
currently existing in our market.
It is the exchange rate that is
the country's number 1 enemy and all stops must bepulled out to fight it. We
remember well the abolishment of trade in US dollars in early 2004 because
the Zimbabwean dollar was the legal tender of the country. The private
sector's innovation had seen that dollarising was the only way to go and
real estate, fuel and other commodities were quoted in the US$, to give a
semblance of stability.
It appears we are now moving back to the days
of late 2003 with the introduction of the payments of PAYE in foreign
currency, fuel being purchased in foreign currency; the economy is slowly
dollarising and soon most key costs (electricity, water, toll roads) will be
charged in foreign currency.
As with fuel today, he who has
foreign currency, knows no shortage. Foreign Direct Investment (FDI) is one
way of ensuring that there is a steady supply of foreign
currency.
While the country has resources that could easily give it a
positive balance of trade, without capital equipment (which itself needs
foreign currency) we cannot convert these resources into the hard currency
we seek.
Over the past two years, private sector involvement in
national development has been relegated as the nation has monopolised the
salivation of our state to the Asian giants. While this might be noble, no
economic turnaround has succeeded with the involvement of foreign powers in
conjunction with the government alone. The local private sector needs to be
involved to safeguard the local interests.
We are not taking the
Asian model, but bringing the Asians themselves, whose interests are to
safeguard their own commercial interests. Soon we will bring them in to
resuscitatethe Feruka Refinery and to manufacture ethanol for us, all things
the private sector can do with a little help. Private sector innovation is
now regarded with suspicion in Zimbabwe, whereas foreign innovation is
hailed.
Skewed policies bad for investment Thomas Mutswiti/
Itai Mushekwe GOVERNMENT'S command approach to the economy has tainted its
investment promotion initiative which has seen Foreign Direct Investments
(FDI) dwindling to its lowest ebb since 2000 during the chaotic land
seizures.
President Robert Mugabe's call for 2005 as a year of investment
is proving to be pie in the sky.
Despite the increase in Zimbabwe
dollar terms in FDI levels, the country remains in dire need of foreign
capital injection amid calls for an improvement in the investment
climate.
Statistics indicate that levels of FDI have been increasing
with the US showing substantial interest in the tourism sector. It has
invested $4,9 trillion in the sector with China investing $620 billion in
the agricultural sector for the half year to July. Total foreign and joint
venture investment increased from $1,4 billion in 2000 to $5,8 trillion as
at July 31.
However, analystswho spoke to businessdigest doubted
these figures indicating that FDI has been falling due to a host of
political and economic problems in the country. Many spoke of the failure of
investment initiatives due to policy uncertainties.
Economist
Eric Bloch said: "My perception of Zimbabwe's investment promotion
initiative is that it is all talk and no substance and, therefore, of very
minimal effect. As yet 2005, which is supposed to be the year of investment,
has witnessed very little investment. There have been some specific
investment projects agreed with China, but most have yet to convert to
reality."
Bloch added that it was not correct that the economy
has endured massive capital flight, for the stringent exchange controls have
prevented repatriation of capital by foreign investors. The only major
capital flight has been externalisation of assets through the parallel
market. This has compounded the scarcity of foreign exchange and exchange
rate movement in the unofficial markets. Investors do not invest if there is
a lack of national credibility.
Dynamics of the SA rescue package By Alex T
Magaisa THE rescue package from South Africa to Zimbabwe has raised
considerable interest in the last few weeks.
Zimbabwe has the worst
performing economy in Southern Africa. Even the DRC, which has been involved
in conflict in recent years is recording positive growth. That Zimbabwe now
needs a bailout package is official acknowledgement of its precarious state.
No amount of denials will cover the fact that the country is in dire
straits. Not even the headlines and statements proclaiming that the country
is on the road to recovery.
However, the debate over what SA can do
for Zimbabwe and how it can achieve that result appears to overlook the
wider politics of international bailouts. In organising a bailout, SA is not
simply acting as a benevolent big brother, but is also acting to safeguard
its interests. Such rescue packages have been organised elsewhere
previously. SA must however realise that in the pursuit of its interests
present a moral hazard. To the extent that such moral hazard arises SA also
has at the very least, a moral obligation to account to Zimbabwean citizens.
They need assistance to survive these hardships but far more important is
that they need help to lay down a foundation for restoration of prosperity
in the long-term.
Bailouts are not new and we can learn a bit from
recent history. The two principal goals of bailouts are firstly, to prevent
total collapse of a country's economic system and enable it to meet its
international obligations and secondly, to prevent the spread of systemic
risk to other countries. The total breakdown of a country's economic system
has major social and economic implications on the region. It would mean mass
migration to neighbouring countries, breakdown in trade relations and loss
of major markets.
It would not have escaped SA's attention that
Zimbabwe is one of its major trading partners in Africa. Zimbabweans flock
to South Africa as economic migrants and political refugees. SA cannot
afford to have a total collapse in Zimbabwe because it would entail a huge
loss of market as well as open the floodgates of immigration. Total collapse
would negatively affect SA and other neighbouring countries.
In
organising a rescue package for Zimbabwe, SA is doing no more than the US
did in 1994-5 during the Mexican financial crisis. At that time the US led a
major financial rescue operation to save Mexico partly to safeguard its own
interests. In the end Mexico received almost US$50 billion from the US, the
IMF and a consortium of other countries. Similar responses were taken during
the Asian financial crisis in 1997-8. The international community took a
pro-active stance to safeguard the international financial system from the
threats posed by crises in the emerging economies.
There is a key
theme in all this: protection of self-interest. It is therefore not
surprising that SA would deploy its resources not so much for the sake of
Zimbabwe, but for its own interests. And that is where the problem lies: the
moral hazard created by such rescue packages and what SA could do to
minimise it.
The assistance that was given to Mexico and Asian
countries was criticised as giving rise to specific moral hazard in the
investment community. Besides the superficial picture of assisting the
country in crisis, critics argued that it was in fact assisting imprudent
investors who would otherwise have lost their money if the crises were to
persist. In other words, the interventions had the effect of encouraging
unwise and reckless behaviour of investors knowing that whatever happens
they would recoup their losses. Critics argued that the governments were
using taxpayers' money to bail out reckless investors who should have
carried their losses.
Now getting back to Zimbabwe, there is a large
number of SA business involvement in Zimbabwe. The South Africans who have
invested in Zimbabwe would suffer great losses as a result of economic and
political collapse in Zimbabwe. The package has the effect of cushioning
these investors and the question really is for South Africans to question
whether they would allow their taxpayers' money to be used to protect a
selection of businesses investing in Zimbabwe. But for Zimbabweans there is
also a further moral hazard and that is why SA should also be concerned with
their views.
The argument is that other than being a temporary
reprieve, the loan will not really solve the core problem affecting
Zimbabwe's economy. Further, it would be argued that far from rescuing the
country from economic malaise, the loan permits the government to pursue
skewed economic and political policies knowing that it has a cushion to fall
back on. It is this moral hazard that SA ought to consider in its relations
with Zimbabwe.
The question they ought to ask themselves is: Are we,
by advancing this rescue package to Zimbabwe permitting and encouraging
imprudent behaviour on the part of the Zimbabwe government? If the answer to
that question is yes, it does not necessarily mean that SA should not
advance the rescue package. As I have stated already, SA also has some
self-interest to safeguard. It means, however, that in making its decisions,
SA must balance the self-interest and the interests of
Zimbabweans.
The question that arises therefore would be: If by our
assistance we create such a moral hazard, what can we do to minimise it? It
is at this point where the issue of conditions to the loan arise. In these
circumstances, the principal purpose of the conditions should be to minimise
the moral hazard created by advancing the bailout package. The loan should
not simply have the effect of a temporary solution, but should be part of a
long-lasting transformation covering economic, political and social aspects
pertaining to Zimbabwe.
We ought to recall again that the issue
of conditions to rescue packages is not new. In accepting the rescue
packages, Mexico and most of the Asian countries had to also accept certain
conditions. These conditions had impact on both economic and political
matters in the respective countries. It has been said that Malaysia resisted
these conditions but most of the countries believed that they had no choice
and duly accepted.
Conditions do not always work in the anticipated
fashion and the IMF-led rescue packages have been widely criticised over the
years. The key, however, as far as Zimbabwe is concerned, is for SA to
identify and understand the causes of Zimbabwe's problems and negotiate
conditions that have the effect of dealing with those specific
challenges.
Now there is also some controversy regarding the genesis
of Zimbabwe's problems and care must be taken at this stage. In my view,
these causes may be both external and internal to Zimbabwe. All too often,
however, there is huge polarisation. On the one hand there are those who
argue that Zimbabwe's problems are internal but refuse to acknowledge the
external factors and on the other hand are those who argue that Zimbabwe's
problems are external but refuse to acknowledge the internal factors. There
is need to accept the reality that there is no single cause to the
problems.
Perhaps some are more prominent than others, depending on each
individual's platform but it would be a mistake, as we have seen over the
years, to adopt a narrow view and refuse to see the point from the other
side. So what's the point of all this?
The point is that in
debating SA's position in relation to the rescue package and how it can play
a role in helping Zimbabwe, we need to avoid a narrow approach. We should
take a wider and more comprehensive plan that addresses a wider
cross-section of issues impacting on the Zimbabwean economy. The more the
issues we place on the table, the easier it is to negotiate the major
obstacle.
The way I see it is that simply discussing the issue in
political terms has the effect of placing SA in a difficult position. We
have seen over the years that it is keen to avoid being seen as a bully by
the Zimbabwe government and its allies. Yet in being soft it has also risked
being called a poodle by its critics. The key however is that it must take
into account the long-term interests of Zimbabweans and realise that its
actions have an impact on their future.
In doing so SA has to
realise that the key question is not whether it gives Zimbabwe the current
loan request, but what it will do next time when Zimbabwe comes again
extending the begging bowl. This is because unless there is fundamental
overhaul stretching from political to economic systems in Zimbabwe, it is
more than likely that Zimbabwe will soon be broke again. In order to avoid
that, SA needs to assist Zimbabwe out of this by taking a more comprehensive
approach. In doing so it would also be assisting itself, because it has
major economic and political interests to safeguard by helping Zimbabwe to
be successful.
There are of course differences between the Mexican
and Asian crises on the one hand and the Zimbabwean crisis on the other.
Unlike the Mexican and Asian crises, the Zimbabwean crisis is not seen as a
major threat to the international financial system. If anything, its impact
is limited to the Southern African region, which explains why SA would be
interested in keeping systemic risk at bay.
Secondly, the other
crises took place over a relatively short space of time and were major
shocks to the international economic system at the time. Zimbabwe's crisis
has unfolded gradually and visibly over a period of time and its demise has
been predictable. The current liquidity problem is widely seen as an
opportunity to halt that crisis.
Third, the crises in Mexico and Asia
were largely perceived as threats to the model of the free-market economy,
which at the time was being largely promoted by the Bretton-Woods
institutions the World Bank and the IMF.
Rightly or wrongly, the
Zimbabwean crisis is largely perceived as political rather than a threat to
that model. In any event, as we saw in relation to the Argentinean crisis,
the criticisms of the rescue packages of the 1990s have discouraged
knee-jerk reactions on the part of the IMF in crisis
situations.
Hence, despite persistent talk about Zimbabwe and the
need for reform, it is unsurprising that there has not been much
international mobilisation to advance a rescue package.
Finally,
the key lies in the fact that financial injection alone will not solve the
problems in Zimbabwe. Zimbabwe and SA both need a clear plan on what needs
to be done. The message must be driven home that the idea is not to punish
Zimbabwe, but to help it out of its crisis. SA has a legal obligation to
account to its citizens for using their money.
But at the very least,
it also has a moral obligation to the people of Zimbabwe not simply to
assist them as neighbours but also to ensure that its assistance is put to
good use.
Zimbabwe needs more than a temporary solution. It requires
assistance that has long term implications on its political and economic
stability. SA is not doing anything new. All it needs to do is learn from
history to avoid making similar mistakes. It is free as a sovereign nation
to help its neighbour and also safeguard its interests. Its key challenge
however is to minimise the moral hazard that would arise from extending the
bailout package.
* Dr Magaisa is a specialist in Corporate and
Financial Services Law. He can be contacted at wamagaisa@yahoo.co.uk
Yet another body blow to consumers Godfrey
Marawanyika/Thomas Mutswiti FOR a government which claims to have the
economically disadvantaged at heart, the $6,6 trillion supplementary budget
presented by Finance minister Herbert Murerwa this week is a slap in the
face for ordinary citizens as they will now have to dig dipper into their
coffers.
Murerwa skirted any measures to curtail run-away government
expenditure, instead opting for deficit financing by raising $1,6 trillion
from the already squeezed financial markets.
This measure is
projected to raise the budget deficit to 8,7% of the gross domestic
product.
So desperate has been the government for quick cash that it
will now levy surtax on cellphone airtime, commuter and taxi
operators.
Apparently for political expediency's sake, government
continued with its jobs-for-the-boys approach. The Senate will be given $30
billion to conduct its elections.
The minister introduced a host
of taxes including widening the tax base to cover already cash-strapped
parastatals.
Parastatals have been called upon to review service fees
to economic levels in a bid to lessen the burden on the
fiscus.
The informal sector whose operations were almost blown to
extinction by Operation Murambatsvina are now regarded as a source of tax
revenue.
This was long overdue given that about 75% of the economy
was operating underground.
Small-scale miners were also not
spared and will have to pay 5% presumptive tax.
The levels of
corruption, particularly at the ports of entry, are a cause for concern but
Murerwa just talked of revision of strategies by Zimra to permanently deal
with it.
The Anti-Corruption Commission was sworn in last week and
all Minister Paul Mangwana has managed to do is gobble $300 billion of
taxpayers' money.
The Look East policy seems to be pinching the
revenue base - albeit mildly. To minimise forex pressures due to spare parts
need, Murerwa prescribed the use of yet another tax to address the
problem.
Car dealers who were complaining of low business levels will
now sing the blues as all vehicles five years old and above will now attract
a surtax of 25%.
In South Africa, used cars are completely
outlawed.
In a move that is set to hit mobile phone users hard, a
special VAT rate of 22,5% will be levied on airtime.
Speculation
is rife that Econet and Net*One have proposed 180% and 250% tariff increases
respectively, yet government rhetoric is the promotion of telecommunication
levels.
Imported beer and cigarettes now attract a surtax of 50%.
Surtax on other luxury goods has been pegged at 15%.
Given the
problems that passenger transport operators are facing due to lack of forex
to buy spare parts and biting fuel shortages, the introduction of
presumptive tax can only be the final blow to their survival.
In
continued dollarisation to harness the much-needed forex, Murerwa proposed
that PAYE be payable in the currency in which employees receive
remuneration.
In a bid to appease employees, the minister
proposed a $500 000 "windfall" by broadening the tax-free threshold from $1
million to $1,5 million per month though calls were for $2,5
million.
Further review of tax brackets has been deferred to the 2006
budget.
The overburdened taxpayer has however been guaranteed
continual payment of withholding tax on any investments made in marketable
securities.
For the local bourse, that's a slap in the face to the
investors, since they will now be levied a 10% capital gains tax on any
sale.
Zimbabwe National Chamber of Commerce president, Luxon Zembe,
indicated that he was relieved that government had recognised that the
country is in an economic crisis requiring implementation of tough
measures.
"Some positive things did come out of the budget. There was
general compliance with the monetary policy, particularly calls for a
conducive investment climate, showing convergence of thinking by both the
monetary and fiscal authorities," Zembe said.
Zembe added that
calls for order on the farms were very important and that what was now
needed was practical implementation with the help of law enforcement
agents.
He said calls for parastatals to charge economic prices where
possible were welcome, adding that strategies should focus on restructuring
as the problems the country is facing are structural.
Another
analyst said increasing tax the burdens had serious implications for the
business community with respect to both equity and efficiency of the
regimes.
Mawere decries abuse of property rights Eric
Chiriga EXILED businessman, Mutumwa Mawere, has said that the state takeover
of his firms clearly indicates that the government has no respect for
property rights.
Mawere's comments come in the wake of questions
recently posed in parliament by MDC St Mary's MP Job Sikhala to Justice
minister Patrick Chinamasa if he was aware that the Reconstruction of State
Indebted Companies Act was in breach of provisions of property
rights.
Sikhala also asked Chinamasa if he was taking any corrective
measures especially in the light of the state of affairs at Shabanie Mashaba
Mines.
However, Chinamasa dismissed Sikhala's claims.
"I can
state categorically that the Reconstruction of State-Indebted Insolvent
Companies Act (the Reconstruction Act) does not breach the property rights
enshrined under our constitution," Chinamasa said.
"The
constitutionality or otherwise of a piece of legislation or an
administrative action is determined by our Supreme Court in terms of the
constitution."
Chinamasa said there is a presumption of
constitutionality in the interpretation of our legislation and such
legislation is presumed to be constitutional until declared otherwise by the
Supreme Court.
Chinamasa said the Reconstruction Act referred to by
Sikhala was constitutional until the Supreme Court rules
otherwise.
"To my knowledge, SMM has not filed a constitutional
challenge of the Reconstruction Order, which was issued on the 6th September
2004," he said.
SMM has since filed an application in the High Court
seeking the setting aside of the Reconstruction Order.
Chinamasa
said it was difficult to understand the sort of corrective measures Sikhala
wanted, given that SMM was as of September 6 last year indebted to the state
to the sum of $115 billion and to other creditors to the tune of $22,4
billion and unable to repay.
He said SMM was also overwhelmed with
debts to the extent that the state could no longer lend it funds while trade
creditors and suppliers had ceased dealing with it for
non-payment.
He said business had ground to a halt and government was
forced to pay the creditors.
"All this was caused by the
externalisation of SMM foreign exchange earnings of US$18,5 million by South
African-based Mutumwa Mawere," he said.
" It (SMM) faced imminent
closure and thousands of jobs and livelihoods were at risk of loss. It could
not repay its trade creditors and the mining concern was literally insolvent
and incapable of proceeding."
SMM was placed under reconstruction in
terms of the Reconstruction Act, with government arguing that this was done
with a view to rebuilding it (SMM) and ensure it returned to viability
through a proposed Scheme of Reconstruction.
Chinamasa said in any
event, it was also in the public interest that SMM be placed under
reconstruction given the fact that it was owing public funds and was a
debtor of the state.
He said based on the facts on the ground, one
would conclude that SMM was indebted to the state and, therefore, the state
acted in the national interest to pass a new law to prevent the imminent
collapse of the company.
"The role of the state in relation to SMM
needs to be examined in order to determine whether the actions of the state
were justified," Chinamasa said.
"In addition, the conduct of the state
in relation to SMM and its shareholder are issues that the minister failed
to address."
However, speaking from South Africa, Mawere said SMM is
a private company beneficially owned by another private company, SMM
Holdings Ltd (SMMH), through shares registered in England.
He
said the ownership of SMM goes back to 1965 and there has been no change of
shareholding since then, adding that the shareholding of SMMH changed in
1996 when ARL, a company registered in the British Virgin Islands, owned by
himself acquired by purchase, all the shares owned by T & N Plc, a
company registered in England, but now in administration.
He
asked why the government did not allow the due process of the law to take
its course if the company was indebted?
Mawere said if the
relationship between the state and SMM was that of a debtor and creditor,
then the recovery or reconstruction of the company would certainly have been
a civil matter.
He said the protection of a debtor against a creditor
would be governed under Section 18(9) of the Constitution that states:
"Subject to the provision of this constitution, every person is entitled to
be afforded a fair hearing within a reasonable time by an independent and
impartial court or other adjudicating authority established by law in the
determination of the existence or extent of his civil rights or
obligations."
He said in the case of SMM, the indebtedness alleged by
the minister was not independently determined as provided for in the
constitution.
Instead, the state appointed its administrator who
dismissed the board of the company and proceeded to unilaterally determine
the indebtedness of the company.
"Even if SMM was indebted, the
minister would still have been obliged to give notice to SMMH as the member
most affected by the Reconstruction Order," Mawere
said.
"However, the minister chose not to inform SMMH although the
constitution provides no latitude. By failing to afford the shareholder a
hearing before issuing the Reconstruction Order, the decision to issue a
Reconstruction Order by the minister in respect of SMM was contrary to the
rules of natural justice. The minister did not address this issue in
parliament."
Mawere argues that Chinamasa failed to inform the House
that there was no legislative framework which allows the state to loan funds
to individual companies in Zimbabwe.
He said that the broadening
of the definition of the state in the Reconstruction Act not only undermines
the juristic persona of state institutions and the fact that it operates
retroactively offends all rules of natural justice.
"The SMM saga
illustrates the classic case of abuse of power by the executive on the
pretext of national interests. The minister alleges that there was no
ulterior motive in placing SMM under reconstruction," he said.
"In
the response of the minister it is clear that the government was in no way
involved in the ARL acquisition and yet now has effectively dismembered a
private company of its property rights in Zimbabwe."
Power licences: 4 in race Conrad Dube FOUR private
players have applied to the Zimbabwe Electricity Regulatory Commission
(Zerc) for licences to develop power generation plants in the
country.
Zerc was set up to create and preserve efficient industry
structures for the provision of electricity power. It also seeks to promote
competition and private sector participation in the power generation
sector.
The regulatory commission has invited applications for the
generation of electricity as the initial stage of demonopolising the
electricity industry.
Commissioner general Mavis Chidzonga said this week
Zimbabwe had a deficit of 240MW on total demand of about 2
070MW.
The country produces 1 330MW, with Hwange Power station
producing 550MW, Kariba 730MW while small thermal stations account for the
remaining 50MW. About 500MW is imported from Mozambique and South
Africa.
Chidzonga did not disclose the identities of the applicants,
citing client confidentiality.
The commission is looking for
other options to increase power generating capacity and is encouraging
small-scale hydro-electricity generators to reduce the current electricity
shortfall.
"New players have shown interest in greenfield investments
and they want to bring in a different type of technology from the existing
one that can enhance electricity generation," said
Chidzonga.
Among some of the conditions demanded in the application
is the technical capacity of the applicants.
The commission is
also looking at the availability of resources such as financial and primary
energy sources.
The executive commissioner responsible for technical
and economic regulation, Gloria Magombo, said the commission would eliminate
briefcase companies through a rigorous vetting exercise.
"We will
eliminate speculators because this has to do with the security of the
nation. We do not want a situation where new players destabilise existing
systems and infrastructure due to use of non-compliant equipment," Magombo
added.
WHEN in 1999 President Robert Mugabe threatened to seize land
owned by white commercial farmers without paying compensation, everybody
said it was impossible. Such an act of madness had no historical precedent
in modern times. It was against property rights and the international
community would not stomach such errant nonsense. After all the white
commercial farmers had title to the land.
Sure, such an abomination
had never been committed before. When the Bolsheviks and the Chinese did it,
it was against the kulaks and other remnants of the landed aristocracy from
the feudal era, not against the children of a former colonial power. It was
a typical "internal affair".
We all now know what Mugabe did soon after.
Unfortunately white landowners and the opposition in South Africa don't seem
to have learnt a lesson. They are still in denial about the need for speedy
land redistribution to avert a replay of the Zimbabwean tragedy. This became
stark clear in their reaction to newly appointed deputy President Phumzile
Mlambo-Ngcuka's vexatious "joke" about South Africa learning "how to do it
fast" from Zimbabwe's experience.
"We may need some skills from
Zimbabwe to help us," she said. The anger quickly crystallised around the
opposition Democratic Alliance's response when its spokesperson Kraai van
Niekerk warned Mlambo-Ngcuka to act "in a more balanced and responsible
manner" during public appearances. "Zimbabwe offers a textbook example of
ways in which land reform should not be carried out," the DA said. They are
right and wrong.
Just as happened here a few short years back, the South
African government was accused of not allocating enough funds to buy land,
as if it has limitless resources at its disposal. Farmers in SA should need
no reminding that whatever the shortcomings of Mugabe's disastrous method,
it was partly in response to the failure of the "willing seller, willing
buyer" approach to deliver as it was to Mugabe's fight with Tony
Blair.
More importantly, the land became Mugabe's biggest largesse yet to
stem a tide of discontent from the constituency of war veterans and the army
who had not benefited from the expensive DRC debacle.
While the
political imperatives for fair land redistribution should have been obvious
to all, farmers behaved as if government was to blame for lacking money.
Similarly, while South African farmers are keen to point out the legal
framework for land reform, they deliberately ignore the political pressure
on government and hope cynically that what happened in Zimbabwe cannot
happen there. It is very dangerous self-delusion.
We understand very well
how President Thabo Mbeki has tried to stick to the law and tread with
caution even on the Black Economic Empowerment programme. He may not have
Mugabe's petty vindictiveness, but there is a danger in making him feel like
an Uncle Tom in the eyes of poor blacks.
Mlambo-Ngcuka's gaffe may be a
timely warning against complacence by white commercial farmers and of the
restlessness among the poor agitating for Zimbabwean-style farm invasions.
There is a danger of the "right approach" frustrating Mbeki and his ANC
party into ultimately believing that there is in fact a "method to Mugabe's
madness". South Africa and the entire region will be the biggest losers from
the fallout.
There may be no skills to be learnt from Mugabe's approach,
but South Africans have had ample opportunity to know what can be avoided by
seeking compromise on the price of land. Their country has not yet gone down
the tubes but its farmers and the opposition are proving just how difficult
it is to learn from the mistakes of others, even when they are as close as
Zimbabwe is.
It should also be borne in mind that there are black
South Africans who regard Mugabe as a hero for tormenting whites. Mugabe
would like to infect such South Africans and those in the land lobby with
the fast-track virus.
The core group of potential hosts of the virus is
already there in the form of the Landless People's Movevement, the Northern
Province Land Rights Coalition and elements in the Pan Africanist Congress.
Merchants of terror in the country, notorious for murdering white farmers,
mainly with the motive to rob, can also be roped in to form an alliance of
convenience. The product will have a "made in Zimbabwe"
sticker.
Zimbabwe's mistakes can be avoided with some modicum of public
spiritedness and a genuine sense of equity. If South Africans can achieve by
moral suasion what Zimbabweans are trying to achieve through force,
they would have learnt something and can set a better example for other
countries in a similar conundrum.
Zim's rot: the face of Mugabe's humiliation By Chido
Makunike THE last several months have not been good for President Mugabe and
his regime. Many at home and abroad believe his party rigged the recent
parliamentary election. Operation "Destroy Homes and Livelihoods" was an
unmitigated disaster not only for the hundreds who were at its receiving
end, but for President Mugabe's already tattered stature as
well.
Then came the trip to China, from which it was hoped he would
return triumphantly laden with gifts, shaking his raised fist at the airport
as Zanu PF Women's League members wearing his face on the bosoms or buttocks
of their dresses ululated, cabinet members shuffling dutifully. Alas, it was
not to be!
No multi-billion dollar aid or investment package
materialised. Instead he was said to have been thrown US$6 million for
starving Zimbabweans.
I wondered whether this humiliation was why,
when inspecting a guard of honour alongside a relaxed looking Chinese
president, President Mugabe's face was locked in a grim, mouth-down turned
countenance. I felt so sorry that it has come to this for him.
He
has previously railed against the veto at the United Nations, but took cover
under Chinese assurances that they would use theirs to shield his regime
from Security Council scrutiny.
Rather than appearing to be the
leader of a proud, sovereign nation, this seemed to confirm how President
Mugabe is so desperate, frightened and cornered that he must find protection
wherever he can get it, whatever the cost and no matter how it contradicts
his rhetoric.
While China may be quite happy to sell us buses,
transformers and rickety old-tech technology like the MA 60 planes that the
government has embarrassingly been crowing about, they are clearly not
interested in extending any large scale injection to a regime that has
squandered Zimbabwe's wealth and potential.
The suggestion that
President Mugabe was playing off the Chinese and the South Africans against
each other in his appeal to both of them for a big rescue package was
laughable.
You must be in a position of relative strength to pull
this off and President Mugabe has ensured that Zimbabwe at the moment is the
weakest it has ever been.
Reports from South Africa say that
country's government is being very careful not to be seen to be
"humiliating" Mugabe in the negotiations over the terms of that country's
loan to Zimbabwe.
But what "humiliation" could be worse for him than
the state of Zimbabwe and what he has been reduced to, trying to stem the
rot?
The greatest humiliation to Mugabe is the mess he is presiding
over. All his rhetoric at the AU, UN and other summits that he so enjoys
pontificating at is neutralised and contradicted by the dysfunctionality of
the country he rules over.
He would be better off staying at home
and getting his country to be in a more respectable shape before he ventures
out to be cheered in front of his face while he is laughed at behind his
back.
The contradictions caused by his unenviable position just keep
coming. A big part of the South African loan is to pay off arrears to the
IMF. But countless times Mugabe has attributed many of the country's
economic woes to that organisation and suggested his government would get
along without it.
The scramble to make a part payment and avoid
imminent expulsion is an admission that his rhetoric was mere populist
posturing. The need for the loan and the arrears in the first place are also
signs of how the economy is not performing.
A borrower, even one
who is in good standing with the world, is not in a position to dictate the
terms of a loan even at the best of times. So whatever the public posturing
of both governments to protect a fragile ego, Mugabe and his regime will
have to swallow some unpalatable conditions to get South African
assistance.
No matter how it is explained, the fact of the loan, the
conditions and the fact that the lender does not trust the borrower enough
to give him direct cash are all very loud statements that say "mistrust,
lack of confidence".
If Mugabe says "go to hell" to the South Africans
over their conditions, it will cement the world's view of Mugabe as a
churlish despot who sulks easily and does not accept reality enough to
manoeuvre in the modern world for the benefit of his people. He would have
confirmed his growing reputation as a remote cold seeker of power with very
little regard and concern for the misery he has been responsible
for.
I wish I could think of some ways in which things were going
President Mugabe's way but I can't. This is a great pity because a person of
81 who has lived a privileged and eventful life should have the comfort of
his golden years filled with happy events, the respect and adoration of
those around him for a long life well lived.
Ideally, people
should be looking to your eventual exit with trepidation, not with joy and
eager excitement.
The bigger and more important story is the
destruction of a beautiful country. But a smaller, more personal
accompanying tragedy is how a man over several decades managed to replace
possible greatness with ignominy. It need not have turned out this
way.