Zim Independent
Clemence Manyukwe
ZANU PF has
roped in the Central Intelligence Organisation (CIO)
and the police to probe
corruption in its business empire as the succession
debate hots up in the
party.
The investigations follow an earlier internal inquiry
whose
findings were inconclusive but indicated that Zanu PF could have been
prejudiced of billions of dollars through corrupt
practices.
The investigations have widely been interpreted as
targeting the
ruling party's legal affairs secretary, Emmerson Mnangagwa,
who is in the
race with Vice-President Joice Mujuru to succeed President
Mugabe.
Mnangagwa was in charge of the ruling party's
finances when the
alleged graft took place.
In an
interview yesterday, Zanu PF's secretary for finance David
Karimanzira said
National Security minister Didymus Mutasa was chairing a
committee looking
into the matter in his capacity "as the party's secretary
for administration
plus Minister of (State) Security".
Karimanzira said he was
part of Mutasa's committee.
"We are working with his security
ministry and the police
anti-fraud squad. They have been questioning some
people. Every week they
come back to me for verification and I also tell
them, go there, go there,
since I worked on the first report," Karimanzira
said.
He said after the initial probe he had proposed that
investigations should be widened and be done by
"experts".
Karimanzira said details on the involvement of the
police and
the CIO must not be published as it was a top secret matter
likely to cause
"confusion" if not communicated by the party's information
department.
He said very few people in Zanu PF were aware of
the
investigations and referred to those being investigated as "big
people".
Apart from the initial investigations, Zanu PF
initiated another
probe which was done by external auditors, Kudenga &
Company, but its
findings have been kept a closely guarded
secret.
Asked to comment on the latest developments, Mutasa
yesterday
said: "I don't know anything of that nature. That work is being
done by
Karimanzira. I can't take his job."
The party's
spokesperson Nathan Shamuyarira said there were
various committees dealing
with the matter but could not identify them.
"There are
various committees currently looking into that
matter. I have no further
comment," Shamuyarira said.
Since last week efforts to get a
comment from police chief
spokesperson Assistant Commissioner Wayne
Bvudzijena were fruitless as he
said he was still verifying the
details.
In the first report, the ruling party's businesses
were said to
be in trouble as there were no records of transactions, with
arrangements at
their formation said to have been done verbally. The party's
companies said
to have collapsed include M&S Syndicate, Zidco Holdings
and Catercraft. On
Catercraft, the report said the firm had not been audited
for at least four
years and there were no board meetings for two
years.
Interests in other companies such as National
Blankets,
Woolworths and Ottawa Building that used to house ANC members in
Harare
before South Africa's move to democracy were disposed of in
suspicious
circumstances.
The report also raised concern
over a number of briefcase
companies which the parties used as investment
vehicles. These include
Segmented Investments, Sovereign, Hustonville,
Tescrom, Amelia, Ryobi,
Printfit, Smoothnest and M&S Investments, which
were formed to evade the
current European Union and American
sanctions.
A number of Zanu PF companies were at the time
under internal
investigation for corruption and possible fraud. Some of the
companies had
not been audited for years and their financial accounts were a
complete
mess.
Zim Independent
Dumisani Muleya
A FIERCE
conflict has erupted between the government-owned
Minerals Marketing
Corporation of Zimbabwe (MMCZ) - the sole marketing and
selling agent of all
minerals produced in the country - and a British-listed
mining company over
diamond claims in Marange district in Manicaland.
The fight
between MMCZ and Africa Consolidated Resources (ACR)
plc has sucked in Mines
minister Amos Midzi, his deputy Tinos Rusere, and
Manicaland provincial
governor Tinaye Chigudu.
Last week Rusere and Chigudu,
accompanied by MMCZ CEO Onesimo
Moyo, visited Chiadzwa area in Marange in a
bid to bolster government
manoeuvres to seize diamond claims from ACR. The
claims formerly belonged to
Kimberlitic Searches, a subsidiary of global
diamonds giant, the De Beers
Group of South Africa, whose EPO expired in
March.
Government is trying to come up with a law which
empowers it to
claim 51% shareholding in foreign mining companies, with 25%
taken for free.
The move has caused a stir within the mining sector amid
fears that
back-door nationalisation could be underway.
More than 5 000 villagers from different parts of the country
have invaded
Marange in the diamond rush which has seen people abandoning
homes and
formal jobs, as well as schoolchildren quitting classes to
prospect for
diamonds. The villagers got a boost last week when government
officials gave
them a go-ahead to illegally mine diamonds for sale to MMCZ
only.
The marketing of diamonds is regulated through the
elaborate
Kimberly Process Certification System which details the origins of
the gems
and other qualities. This is meant to stop trade in illegal or
"blood
diamonds" from conflict-ridden areas, especially in
Africa.
Roughly 49% of diamonds originate from central and
southern
Africa although significant reserves have been discovered in
Canada, India,
Brazil and Australia.
ACR is taking legal
action to stop the seizure of its claims by
MMCZ which, via its wholly-owned
subsidiary, MMCZ Management Services, used
its position to secure special
grants over an area incorporating the ACR
claims covered by claim
certificates issued in terms of the Mines and
Minerals
Act.
Information available shows ACR is arguing that MMCZ had
no
legal right to the claims because the Precious Stones Trade Act prohibits
any licensed dealers like MMCZ from engaging in mining activities. The
mining firm is also arguing that even if MMCZ might have special grants,it
is unlawful for it to acquire rights over ground not open to
prospecting.
"There is a clear conflict of interest in the
MMCZ engaging in
diamond production when it is also specified by law as the
sole marketing
agent," a legal source said.
"If the MMCZ
is a licensed dealer then it is committing a
criminal offence by holding
special grants because it is prohibited from
having any interest - direct or
indirect - in claims, special grants or
mining leases."
The battle for the Marange diamonds has been going since early
this year
after the expiry of the De Beers EPO on March 28. After De Beers
failed to
get its EPO renewed in time, ACR moved in and secured the claims
but on July
21 the assistant mining commissioner for Mutare advised ACR that
its claims
had been "invalidated" because De Beers had submitted an
application for an
extension.
ACR objected to this but got no official response
from the
authorities.
However, on September 19, the
Mining Commissioner sent a letter
to ACR confirming the validity of the
firm's claims. After that ACR started
extensive infrastructural development
and exploration activities, including
sample collection and preparations for
fencing an extensive area to protect
it from illegal miners and rampant
theft of diamonds.
On September 25, the MMCZ got actively
involved. Midzi visited
Marange three days later with ACR officials and
police to address a large
crowd of illegal miners. The same day police
pounced on ACR officials and
seized their diamond samples, which were later
returned but with an
instruction they should be taken to MMCZ for
registration. ACR was on
October 2 warned by police to cease all fencing and
clearing activities on
their claims.
This was a day after
MMCZ had got their first special grant that
it purports gives it the right
over the claims.
ACR is planning to contest this in court and
the fight is still
on.
Zim Independent
Dumisani
Ndlela
THE Paris Club has demanded that Zimbabwe pay its
outstanding
arrears to creditor countries and restore relations with the
International
Monetary Fund (IMF) and the World Bank for it to qualify for
debt
forgiveness.
The demand by the Paris Club, the first
from the organisation
since Zimbabwe defaulted on its external loan
repayments in 1999, comes
against a background of increasing resistance by
government to a planned
visit by an IMF mission for routine Article IV
consultations. Zimbabwe has a
foreign debt stock of about US$4
billion.
The Paris Club is an informal grouping of creditor
governments
from major industrialised countries.
The
Paris Club's demands are understood to have been
communicated to Finance
minister Herbert Murerwa in a letter dated October
4.
The
letter was signed by Ambrose Fayole, the co-chairman of the
Paris Club,
according to government officials in the Ministry of Finance.
In the letter, the IMF urged Zimbabwe to clear outstanding
arrears and
"normalise your relations with the IMF and the World Bank which
is a
prerequisite for Paris Club treatment".
Sources indicated
that the communication from the club
highlighted growing concern over
possible plans by Zimbabwe to give up its
membership of the IMF after
failing to win back voting rights.
The Zimbabwe Independent
reported in July that government was
planning to block an IMF Article IV
consultation mission to Zimbabwe
initially scheduled for September after
failing to reclaim its full
membership of the Bretton Woods
institution.
The mission failed to make the visit after it
was unable to
agree dates with Harare, but there have been reports
suggesting the mission
could visit at the end of the month before an IMF
board meeting in early
November.
The board meeting, meant
to discuss Zimbabwe's compliance with
IMF recommendations on the reform of
economic policies.
Zim Independent
Dumisani Muleya
BOARDROOM fights
and gross incompetence are partly responsible
for the current power outages
by the Zimbabwe Electricity Supply Authority
(Zesa) which lacks capacity to
generate enough electricity for the country,
a former general manager of
Hwange Power Station has said.
Noah Gwariro, currently
suspended as head of Hwange Power
Station, the biggest such facility in the
country, said in a High Court
application filed on October 5, infighting at
Zesa and incompetent
management were causing problems at the power
utility.
Gwariro said since boardroom conflicts started at
Hwange over
control of the station, leading to his suspension in May, the
station's
electricity generation capacity had diminished dramatically. He
said staff
morale has "hit rock bottom" due to poor management, hence the
current
problems.
"The station's performance has
drastically deteriorated under
the leadership of stand-in managers. There
has been an exodus of skilled
manpower at all ranks," Gwariro
said.
"As a result of the incompetent stand-in managers and
the
de-motivating environment and severe brain drain the plant performance
at
Hwange is below 40% of capacity. Electricity consumers have lost property
and incomes as a result of rampant load-shedding."
Gwariro said Zesa's corporate image has been "severely
tarnished" due to its
failure to deliver reliable service to customers. He
said insurers had
withdrawn cover on one of the station's units and the
situation had become
chaotic since he and other senior managers were
suspended.
"From mid 2001 to December 2002 the Zimbabwe
Power Company (ZPC)
had an operations and maintenance contract with Eskom of
South Africa for
the running of Hwange Power Station," he
said.
"At the end of 2002 only two out of six units at Hwange
Power
Station were insured. Units 1,2,4 and 6 were running. Units 2,3,5 and
6 were
not covered by insurance due to their unsafe condition. Unit 3 was on
extended forced outage due to a generator transformer failure which had
occurred in late 2002.
"Unit 2 was running with a
generator stator fault, which
precluded it from insurance cover. Unit 5 was
on a major overhaul and had
extensive damage which cracked low-pressure
turbine blades. Coal milling
plant and pulverised fuel pipe work on units 5
and 6 were worn out and
presented serious fire and explosion
hazards."
Gwariro said despite repairs and refurbishments
done beginning
2003, the situation has gone back to crisis
levels.
"When I was suspended all six units were running.
From an
average monthly energy sent out of 350 gigawatt hours (GWH sent out)
which
corresponded to the production of six units the performance of Hwange
Power
Station has dropped to a monthly average of only 160 GWH sent
out.
This is because two or three units are on average," he
said.
Zim Independent
Loughty Dube/Leslie Moyo
THE
Reserve Bank of Zimbabwe has not provided the Grain
Marketing Board (GMB)
with funds to buy wheat from farmers, a situation that
will impact
negatively on deliveries to depots throughout the country.
The RBZ has been funding grain purchases through the GMB but the
latest
delay in the disbursements of funds means that bread shortages
currently
dogging the country might persist as farmers withhold their
wheat.
GMB acting chief executive officer, Samuel Muvuti,
confirmed
this week that they had not received any cash from government and
the RBZ to
pay farmers who have delivered their crop.
"We
have so far received 2 000 tonnes of wheat and are waiting
for more
deliveries from farmers still harvesting their crop," said
Muvuti.
"The farmers have not yet been paid as government is
still
working on that. We will begin the payments once we receive the
money."
He could not be drawn to reveal how much the
parastatal would
need to pay for the wheat harvest.
"We
are still working on estimates, we will be getting some
money from the RBZ,
the government and other financial institutions and
after that we will be
able to buy wheat and pay farmers on the spot," Muvuti
said.
The statements by Muvuti however fly in the face of
those from
Agriculture minister, Joseph Made, who has told farmers that they
should get
paid for their grain upon delivery of crops to the GMB.
Government policy on
agriculture has led to a serious decline in
production.
Recently a report of the portfolio committee on
Lands, Land
Reform, Resettlement and Agriculture on the State of
Preparedness by the
Agricultural sector for the 2006/7 summer crop season,
has revealed that the
country will register a poor harvest unless government
moves with speed to
import fertiliser, fuel and spare
parts.
The government said this year's winter projections
were for 222
000 tonnes of wheat from 60 000 hectares under
cultivation.
The government in August increased the producer
price of wheat
from $9 000 to $217 913 a tonne.
Farmers
who spoke to the Zimbabwe Independent this week said
they were facing a
crisis as they needed the cash urgently so that they can
buy inputs and
implements in time for the summer crop.
"We supplied GMB with
wheat a long time ago but they have not
paid us as they allege that they
have no money. We need to buy inputs like
fertiliser and seed before the
summer planting begins," said a wheat farmer
from Nyamandlovu.
Zim Independent
Itai Mushekwe
THE Zimbabwe
Defence Forces (ZDF) has rung the alarm bell over
inadequate supply of
materials by the country's ailing textile firm, David
Whitehead, which is
having a negative impact on its ability to produce
uniforms for its
members.
ZDF spokesperson, Colonel Ben Ncube, this week told
the Zimbabwe
Independent that the issue of "inadequate material" was of
great concern to
the ZDF, calling for an urgent redress by "relevant
authorities" to ensure
continuity of strategic material
supply.
He however denied that the army was failing to supply
soldiers
with new uniforms due to the shortage of
materials.
"It is not true that the army is failing to supply
new uniforms
to its members," said Ncube. "All officers of the Zimbabwe
Defence Forces
are adequately kitted to meet the standard kitting
requirements.
"However, the issue of inadequate material as
was presented to
parliamentarians as a matter of concern to the ZDF needs
urgent redress by
relevant authorities to ensure continuity of strategic
supply of the uniform
material to the forces."
David
Whitehead is the sole manufacturer of the tough
canvas-type material that
the Zimbabwe Defence Industries uses to
manufacture military fatigues. The
company has however been facing serious
viability problems and is currently
under judicial management. Diversified
parastatal, Industrial Development
Corporation, is making moves to acquire
the textile firm.
Ncube could however not divulge what contingency measures the
army had
devised to deal with the problem or the volume and cost of
materials
required from David Whitehead at a given time.
Ncube said the
David Whitehead issue would be looked into by the
Parliamentary Portfolio
Committee on Defence and Home Affairs following
Defence secretary, Trust
Maphosa's presentation last month.
Army commander,
Constantine Chiwenga, also told the same
committee that David Whitehead was
undersupplying them and that "top
military personnel" would soon meet the
newly-appointed judicial manager,
Cecil Madondo, "to try and sort the
mess".
Zim Independent
Clemence Manyuke
THE Zimbabwe Revenue Authority is
investigating its own
irregular purchase of 33 vehicles from Croco Motors in
what could turn out
to be a major scam involving the flouting of tender
procedures and possible
corruption.
The $363 million deal
for the purchase of 33 Mazda 626 GLX
sedans in June has soured relations
between Zimra and the car dealer which
has in the past supplied vehicles to
the authority.
The Zimbabwe Independent last week established
that Zimra had
returned all the 33 vehicles to Croco Motors and wanted a
refund.
The revenue authority is also investigating its
senior officers
in the finance department in connection with the purchase of
the vehicles.
It has been established that around June this
year, Zimra wanted
to buy vehicles from car manufacturer Willowvale Mazda
Motor Industries who
had won the supply tender. But on making inquiries from
Wilowvale, Zimra was
informed that the manufacturer no longer had kits to
assemble the Mazda
626s. Willowvale was now phasing out the model and
replacing it with the
Mazda 6. Zimra was then referred to Croco Motors who
had the vehicles in
stock.
Zimra officers then placed an
order to buy the vehicles from
Croco Motors and the tax authority paid $363
billion then (now $363 million)
before taking delivery of the
vehicles.
Sources at Zimra said the purchase was never put to
tender,
raising suspicion that finance officers could have received
kickbacks from
the car dealer.
The executive chairman of
the State Procurement Board, Charles
Kuwaza, last Thursday told the
Independent that he had a discussion with
Zimra commissioner-general Gershem
Pasi concerning the vehicles.
Kuwaza said the Zimra boss had
said it "appeared" that
procurement procedures had been
violated.
"He explained that certain officials appeared to
have violated
procurement procedures, but at the time he was still
investigating. I am
still awaiting the report on these investigations,"
Kuwaza said.
He referred further questions to Zimra, but
efforts to reach
Pasi or the revenue authority's spokesperson, Priscilla
Sadomba, were
fruitless.
Sources said Pasi had directed
that all the vehicles be returned
to Croco Motors.
He
also demanded a refund of the purchase price with interest.
Croco Motors has
since refunded Zimra and the two parties are in discussion
over the payment
of interest. Sources at Zimra alleged that Pasi must have
been aware of the
purchase at the time as such a large transaction required
authorisation by
his office.
Zimra has reportedly widened investigations to
establish whether
Croco Motors had paid value-added tax in the transaction.
The taxman has
also called for an audit of all vehicle sales by Croco Motors
to establish
if they were above board.
Croco Motors has
in the past sold vehicles to Zimra which
include the latest Toyota Prado
SUVs, Toyota IMV trucks and Nissan Hardbody
trucks.
Zim Independent
Clemence Manyukwe
THE
prosecutor in the high profile trial of Justice minister
Patrick Chinamasa's
alleged attempt to defeat the course of justice has
resigned after presiding
over numerous cases involving Zanu PF members.
The Zimbabwe
Independent is reliably informed that Levison
Chikafu, the Manicaland area
prosecutor who joined the Attorney-General's
Office 10 years ago, tendered
his resignation last week, but was told to
give three months'
notice.
Other high profile cases considered hot potatoes
which Chikafu
has handled include the trial of heads of the Central
Intelligence
Organisation (CIO) in Manicaland and Rusape, Innocent Chibaya
and Dennis
Muzariri respectively, as well as those involving Zanu PF MPs
Enoch
Porusingazi, Fred Kanzama and the party's central committee member
Esau
Mupfumi.
Chikafu has also been involved in attempts
to bring to court
ministers accused of looting the once lucrative Kondozi
estate.
Sources said Chikafu, who ruffled feathers during
Chinamasa's
trial by saying National Security minister Didymus Mutasa's
"wings must be
clipped to the greatest extent", was being put under pressure
by some
individuals after presiding over cases of people deemed "sacred
cows" in
Zanu PF circles.
They said Chikafu now
considered prosecuting a "high risk job"
in a career that has been
characterised by threats and intimidation by war
veterans and those in high
office.
On Wednesday Chikafu refused to
comment.
Earlier this year Chikafu and other prosecutors were
intimidated
by members of the CIO for behaving like "defence lawyers" while
handling the
Mutare arms saga.
In his judgement freeing
six of the seven accused persons, High
Court judge Charles Hungwe lashed out
at the state agents and revealed that
Chikafu had abandoned his home for
fear of his life.
"Mr Chikafu, fearful of the threats by the
enraged state agents,
did not sleep at his usual place of abode that night,"
said the judge.
In April 2003 Zimbabwe Lawyers for Human
Rights issued a press
statement condemning seven suspected war veterans for
intimidating Chikafu
after he consented to bail for 17 Movement for
Democratic Change members
including MDC Mutare North MP Giles Mutsekwa,
constituency chairman Patrick
Chitaka and the party's provincial
spokesperson Pishai Muchauraya, who had
been detained for six days for
participating in a mass stayaway.
The lawyers said the group
confronted Chikafu at the magistrates
court in Mutare after forcing their
way into his office demanding to know
why he had consented to the
bail.
After that incident, there were also reports that then
Manicaland governor Oppah Muchinguri had summoned Chikafu to her offices
over the same issue but she denied the claims.
Mutasa has
also threatened Chikafu with a lawsuit over his
remarks in court including
claims that the minister would soon be taken to
court. He threatened to sue
the Zimbabwe Independent for reporting the
issue.
Zim Independent
Augustine Mukaro
HARARE'S
water woes will not be solved unless the Morton Jaffrey
Waterworks expansion
and computerisation started more than eight years ago
is completed, experts
have said.
Harare embarked on the expansion and
computerisation of the
waterworks in 1997 hoping to complete the project in
a year to boost the
plant's water purification capacity from 480 to around
700 megalitres a day.
An Israeli company, Odis, was contracted to carry out
the project with
Makonde MP Leo Mugabe's Integrated Engineering Group as its
local partner.
More than eight years on, the project in Norton just after
Manyame River
bridge on the Bulawayo highway, is still not
complete.
Contacted for comment yesterday, Mugabe said the
project was
abandoned following council's failure to pay the
contractor.
"We waited for sometime for council to make
payments but it was
prolonged until Odis, our technical partners, left the
country," Mugabe
said.
Harare's water management together
with the waterworks plant
have since been taken over by the Zimbabwe
National Water Authority (Zinwa).
"Just this year, we wrote
to Zinwa on the need to finish the
project. If Zinwa agrees to pay, even in
principle, we will invite Odis back
into the country to complete the
project," Mugabe said.
Mugabe conceded that completion of the
project would go a long
way in improving the water situation in the
capital.
"Having such a massive project lying idle is painful
to
everybody," Mugabe said. "We would want to finish it for the improvement
of
the water situation in Harare."
Mugabe said he could
not give specific details of the money owed
by council because he was out of
the office.
Fired Harare mayor Engineer Elias Mudzuri said
during his
short-lived tenure at Town House he had been fighting to bring
back Odis to
revive the project to improve the capital's water
situation.
"The Israelis never completed the project,"
Mudzuri said.
"Before leaving Town House, I had engaged the Israeli Embassy
to negotiate
the return of Odis to complete their
project."
Mudzuri said Odis was paid all the money for the
project but
that the company was asking for more money before coming back to
resume
construction work.
"Odis was paid the US$10
million they had demanded for the
project that time, but because of the
delay in completion, they were asking
for an additional payment," Mudzuri
said.
Water problems in Harare have been at the centre of
controversy
with Zinwa being the latest target of attack for failing to
improve the
situation.
This week the Combined Harare
Residents Association (CHRA)
called for the responsibility of supplying and
administering water in Harare
to revert to the municipality because Zinwa
had failed to provide services.
"No substantive benefits have
accrued to local authorities in
Zimbabwe since Zinwa came on board," CHRA
said in a statement.
"Persistent bickering between the City
of Harare and Zinwa over
accountability to residents in cases of quality of
water, leakages,
inadequate supplies and billing have put residents in an
unnecessary
dilemma."
CHRA said the absence of a
memorandum of understanding between
the City of Harare and Zinwa was
disastrous and a corrupt business
arrangement, which should be
rejected.
"Residents cannot be coerced to pay unreasonable,
unjustified
and unlawful water rates coming from a water body that is
unaccountable to
them but to the government," CHRA said.
Zinwa has proposed to increase water rates from the current $8
to $100 a
cubic metre, a move that has angered residents.
Zim Independent
Ray Matikinye
DRAMA in the
housing allocation scam at Whitecliff Farm took a
fresh dimension this week
with intended beneficiaries accusing Zanu PF
officials of coercing them to
sign affidavits absolving them of corruption
charges.
Former Whitecliff residents still living in shacks say the
officials are
bringing pressure to bear on them to withdraw charges after
swindling them
of huge sums of money on the understanding that they will
secure houses
built under Operation Garikai/Hlalani Kuhle.
Families who had
their homes demolished in a government blitz
last May have fingered a Zanu
PF party youth leader, Passway Mubaiwa, whom
they say fronts senior party
officials to swindle prospective home owners of
million of
dollars.
Each family was told to pay $30 000 to secure a
house.
The families claim Mubaiwa is working in cahoots with
Zanu PF
Sally Mugabe district chairlady, Nolia Ndhlovu, and Zvimba
councillor Frank
Sada.
More than 604 prospective
beneficiaries have petitioned State
Security minister Didymus Mutasa, Local
Government minister Ignatious
Chombo, Zanu PF secretary for information
Nathan Shamuyarira and Harare
Metropolitan governor, David Karimanzira over
the scam.
In July this year, Harare provincial administrator,
Justin
Mutero Chivavaya, and Harare West district administrator, Nelson
Mawomo,
were arraigned facing allegations of corruptly allocating 300 houses
and 115
stands to undeserving people.
Chivavaya is out on
$20 000 bail.
One of the victims, Ernest Nyakatawa, said
party officials were
holding meetings to intimidate the
complainants.
"They label us opposition MDC supporters who
are running away
from paying rents in Kuwadzana suburb. No party official
wants to take
action against such clear anomalies," Nyakatawa
said.
Another victim, John Kapito, said Mubaiwa would phone
demanding
"juice cards" (a euphemism for a bribe).
"After
persistent pestering for 'juice cards' I paid him $2 000
on June 25 and
another $4 000 four days later. I think he was using the
words 'juice cards'
so that the demands would not incriminate him," Kapito
said, pointing to
four hovels abandoned by people who were allocated houses
although they were
not on the initial list of beneficiaries.
Mubaiwa's mobile
phone which he used to demand the bribes was
continuously "not available",
on Wednesday and yesterday.
The families also say Mubaiwa
forged affidavits purporting that
they were withdrawing cases against those
who conned them.
One such affidavit states: "I have willingly
agreed to withdraw
my case against Passway Mubaiwa ID 63-977739-V-25 and
that I have done this
without fear or force."
A
Commissioner of Oaths, CP Mgijima, on September 13 2006
authenticated the
affidavits.
"We were herded into the commissioner's offices
and made to sign
documents already written out," said Kapito's spouse,
Fungisai, who was made
to sign on her husband's behalf.
Kapito recounted how the affected families only managed to get
police at
Dzivarasekwa onto the case after officials from the
Anti-Corruption
Commission forced them to take down statements.
Only last
week, Mubaiwa allegedly coerced four other families to
sign affidavits
exonerating him from the bribery charges by threatening to
sue them. A
compound affidavit shown to the Zimbabwe Independent reads: "I,
Passway
Mubaiwa, residing at 9525, Whitecliff, do hereby declare that due to
differences that ended in court with the following: Regina Nhengo, Shakemore
Mucharwa and Fungisai Kapito declare that I have no claims legally or
otherwise of whatever nature against the above."
Kapito
said the group was led to a commissioner of oaths, an S
Mukunguta on
September 3 to renounce their claims to being swindled.
"We
were surprised when passersby were called in from the
streets to append
their signatures as Whitecliff residents for $8 000 each,"
Fungisai Kapito
said.
She said Ndhlovu took the group to Zvimba North MP
Patrick
Zhuwao's office with the forged documents on the pretext that he had
sanctioned the withdrawal of the corruption charges, but the deputy minister
was not in his office.
The families cited in the
affidavit are appearing in court as
state witnesses on October 23 and 25 in
the case against Mubaiwa and two
local government officials out on
bail.
Sources said groups representing beneficiaries at
Whitecliff -
including the Zimbabwe Union of Journalists, the army and
teachers - had
visited Chombo's office seeking permission to develop stands
allocated to
them under Operation Garikai. Officials at Chombo's office
referred the
group to Karimanzira.
Karimanzira said he
was hamstrung as the issue had been referred
to the police. He said all
developmental work had been frozen to allow
police to investigate
anomalies.
While commemorating World Habit Day on October 2,
Chombo
announced that government would not repossess houses and stands
allocated
under Operation Garikai/Hlalani Kuhle because the allocations were
not done
on political grounds.
Zim Independent
Lesley Moyo
A DELEGATION sent
by Vice-President Joice Mujuru met management
at the ailing Cold Storage
Company (CSC) last Thursday to assess the
situation at the parastatal
following reports by this paper that it was
failing to pay its
workers.
The delegation from the Ministry of State
Enterprises,
Anti-Monopolies and Anti-Corruption, visited the company to
familiarise
themselves with the problems bedevilling the
parastatal.
CSC public relations manager, Patience Madambi,
confirmed the
visit but did not elaborate on its mission.
"I can confirm that we were visited by a delegation from the
Ministry of
State Enterprises, Anti-Monopolies and Anti-Corruption," was all
she was
prepared to divulge.
Although details of the meeting were
sketchy, workers who spoke
on condition that they were not named, said
management was taken to task
over mismanagement at the parastatal, which has
resulted in production
grinding to a halt and workers not being
paid.
"Workers have now gone for six months without pay yet
we were
promised a half salary for the month of July," said one
employee.
Investigations by this paper revealed that grade B2
workers get
a meagre $20 000 while grade B1 workers get around $25 000 to
$30 0000 a
month.
"I understand the delegation fired a
broadside at the management
who have been running the parastatal like a
tuckshop," said another employee
who requested anonymity.
"We go to work just to sit as there is nothing much to do," said
an
employee. "We resumed production after the arrival of cans from South
Africa. The slaughter department has been shut down because the parastatal
is failing to get the cattle. The reason being that they simply don't have
money."
The Reserve Bank availed funds under the
Distressed Companies
Fund but surprisingly CSC has not taken up the
fund.
Zim Independent
FIVE people have died of malnutrition-related
illnesses at
Ingutsheni mental hospital in Bulawayo due to biting food
shortages at the
institution, it has been learnt.
The
food situation has been worsened by a poor diet served to
patients as the
institution cuts on food costs due to financial contraints,
according to
sources.
Sources within the institution noted that patients
go for long
hours without being given food while medication is said to be in
short
supply, forcing relatives of patients to bring their own
supplies.
Deputy Health minister Edwin Muguti confirmed there
were
problems at the hospital due to budgetary
constraints.
A source who refused to be named for
professional reasons said:
"Some of the patients come from other provinces
and have no relatives in
Bulawayo to attend to them, forcing nursing staff
to buy some destitute
patients vitamin supplements needed to combat the
vitamin B6 deficient
disease."
Another said: "Many are
suffering from pellagra lesions, which
are wounds found in the areas of the
body not usually covered by clothing.
"One patient who was
admitted in Mzilikazi Ward 1 suffered from
a severe type of pellagra and
later had other infections before he died.
Four others from the same ward
suffered from pellegra and lost a lot of
weight before they died this
year."
Sources at the institution noted that most patients
had since
last year suffered from pellegra before developing other
complications that
contributed to their death. Pellagra is a nutritional
disease due to a
vitamin B deficiency.
A visit by the
Zimbabwe Independent to Ingutsheni revealed that
most of the patients
suffering from pellagra were being isolated from other
patients to avoid the
transmission of the disease.
Contacted for comment, Muguti
said Ingutsheni was facing serious
malnutrition problems.
"Ingutsheni has been facing problems and as you know it is
looking after
some of the poorest
and most mentally sick people in the
country," Muguti said. -
Staff Writer.
Zim Independent
Ray Matikinye
THE outcome of the just-ended parliamentary
by-elections and
rural district council polls did not escape the tedium of
predictability.
What could not be forecasted though was the margin between
contesting
parties, with both claiming strong support.
Like all other earlier polls, Zanu PF looked set to win and the
opposition
parties prepared the script of whimpering about irregularities as
they have
often done in the past.
While Zanu PF made sure its presence
in the constituencies was
felt by holding rallies, the opposition relied on
the perceived
dissatisfaction of an electorate menaced by endless economic
hardships.
What is becoming predictable as well is how
swiftly civic
organisations jump into the opposition's corner and join them
to commiserate
about lack of transparency or claim irregularities in the
elections.
Three weeks before the polls in Rushinga, the
Zimbabwe Election
Support Network (Zesn), a coalition of 35 civic
organisations, gave a
foretaste of what their reaction would be when it was
evident the opposition
was going to get a smarting
wallop.
"The network has observed low turnout in the last
elections that
were held in Budiriro and Chegutu and believes that the
responsible
authority is not putting much effort into increasing people's
interest in
the elections," Zesn said in a statement.
"In
this regard Zesn urges the Zimbabwe Electoral Commission
(ZEC) to embark on
a vigorous voter education campaign in order to ensure
increased citizen
participation in these elections and future elections."
Zesn
played the Cassandra role of warning about possibilities of
an apathetic
vote, charging that the electorate in some areas was still in
the dark about
impending polls. It took issue with the ZEC for failing in
its duties to
educate the electorate about the impending by-election as well
as the rural
district council ward polls.
ZEC on its part contested the
accusations, explaining that it
had deployed personnel not only in Rushinga
but all other wards in the
constituency where elections were
due.
The electoral body said it had complemented these
activities
with adverts in the print and electronic media in the form of
notices and
press releases.
ZEC voter education and
public relations director, Utloile
Silaigwana, said the commission would
appreciate it if Zesn played its part
in voter education.
"In terms of Section 14 (1) (b) and 15 (1)(b) (i) and (ii) of
the Zimbabwe
Electoral Commission Act, Zesn can provide voter education to
complement
that provided by ZEC," Silaigwana said.
The results rebut
earlier claims by opposition parties that they
had made significant inroads
into traditional Zanu PF strongholds even with
the odds tilted heavily in
favour of the ruling party.
Since the 2000 general election
when Zanu PF unleashed war
veterans on the electorate as coercing agents,
the opposition MDC has had
limited success in polls.
Observers point out that the political parties concerned should
play a role
by spearheading awareness campaigns in the areas they want to
contest.
Political parties have vested interests in the elections and should
therefore raise the pitch of the contest.
Denford
Beremauro, an election observation officer with Zesn,
said of the polls:
"Youths appeared uninterested in the elections, leaving
the task to the
elderly. It was evident both parties did not have money to
launch serious
campaigns."
Even when Zesn's complaint resonated with the
Zanu PF candidate,
Lazarus Dokora, who observed that "in the eastern section
of the
constituency some people in remote areas failed to inspect the
voters' roll
because they did not get information on time", political
parties could
excite voters' interest in polls. They have a lot at stake in
the contested
constituency.
Apparently, the opposition
continues to suffer comfortable
martyrdom, meeting with continuous defeats
in rural areas and blaming the
electoral process. The MDC appeared to seek
consolation in the outpouring of
sympathy from election monitoring
agencies.
For instance, in the 2000 parliamentary election
for the
Chikomba constituency, Zanu PF candidate Chenjerai Hunzvi polled 13
417
votes against Peter Kaunda of the MDC who garnered 6 776 votes. Other
opposition party candidates Julia Kunzekwenyika (Independent), Moses Jiri
(United Parties), Patrick Charles (Independent) and Leticia Mujeni (ZIP)
polled a total of 1 096 among them.
During a by-election
for the same constituency following Hunzvi's
death, the MDC seemed to lose
steam when its candidate, Oswald Ndanga,
polled 1 569 votes less than Kaunda
while Zanu PF increased its tally by 2
163 votes.
Pimiel
Kadengu fared better by polling the highest of all
previous MDC candidates
at 7 403 against the winner Tichaona Jokonya's 17
728 in 2005. In 2000,
Lazarus Dokora of Zanu PF polled 20 027 against Joel
Mugariri of the MDC's 2
483 for the Rushinga parliamentary election.
Five years later
in 2005 Sandura Machirori of Zanu PF polled 22
494 against Brainee Mufuka of
the MDC who scraped a mere 2 298.
On the rebound after
initially losing party primaries in
Rushinga, Dokora made short shrift of
opposition candidate Kudakwashe
Chideya winning by 13 642 to 1 801, while in
Chikomba Steven Chiurayi beat
Moses Jiri of the MDC with 11 247 votes to the
opposition candidate's 4 243.
More than 8 000 less people
voted for Zanu PF in the by-election
than those who went to the polls in
March 2005, with more than 10 000
ignoring the election completely, most
likely due to frustration that the
outcome would not bring about any change
in their lives.
This is the lowest an MDC candidate has
mustered since it
stormed the political scene almost seven years ago with
the potential to
unseat the ruling Zanu PF, in power for two
decades.
The statistics indicated the opposition losing steam
in its
crusade to appeal to the rural voter for support, most likely because
party
functionaries are hamstrung by fear to drum up support from grassroots
voters.
What appears to be the bane of the opposition is
its failure and
inability to appreciate the numbers game, vital for any
opposition to wrest
victory from the incumbent.
The
peasant and the working class are prepared to suffer severe
hardships almost
indefinitely provided they have some proof, in the mould of
courageous
leaders, that they will be better off and a better future lies
ahead for
them and their children.
The opposition MDC has basked in the
glory of working-class
support, much of which has been decimated by
joblessness and the slum
clearance exercise in May last year that dumped
most of their supporters in
rural areas. It has failed to follow up on the
masses evicted in the mass
removals to take advantage of their anger and
convert it to bolster its
standing.
Despite these two
resounding defeats spokesman for the Morgan
Tsvangirai-led MDC Nelson
Chamisa said his party would continue to contest
such elections even though
it is currently putting more emphasis on
organising what Tsvangirai has
termed "democratic resistance".
"Both constituencies have
been turned into war zones. They are
under siege. Our supporters are having
a torrid time there," Chamisa
complained on the eve of the elections. But
Zanu PF spokesman, Nathan
Shamuyarira, scoffed at the accusations: "They
know they will lose. That's
why they are making those allegations and I am
not surprised."
Zim Independent
Clemence Manyukwe
LOCAL Government
minister Ignatius Chombo was last Saturday
denied diesel by a fuel attendant
at Zupco's Belvedere depot on grounds that
it was an abuse of the
facility.
On Wednesday Chombo, whose ministry oversees the
operations of
Zupco, confirmed the incident that saw him getting the fuel
after about 20
minutes after the intervention of a senior
employee.
In an incident witnessed by the Zimbabwe
Independent, Chombo
arrived at the depot shortly after 7am in the company of
an elderly man and
demanded fuel saying he intended to travel to Marondera.
But an attendant
who said the minister did not have a voucher signed by a
Zupco stores
manager authorising the release, refused to serve
him.
The fuel attendant said in the absence of the voucher it
would
be difficult to account for the commodity.
"Vakuru
vangu vakanditi ndikapa munhu pasina voucher ndinobva
ndangonanga kumusha
(My superiors said if I give fuel to anyone without a
voucher, my job would
be finished)," the fuel attendant said.
Chombo had to call
for a duty inspector and said he would
guarantee their jobs by talking to
management at the bus company in the
event of any problem, resulting in the
fuel attendant giving in.
In an interview, Chombo said he was
entitled to the fuel because
"Zupco is government and local government is
government", adding that he
intended to travel on government
business.
On the initial denial of the fuel he said: "I wrote
a letter to
the management at Zupco for them to know that the young man is
doing a good
job by refusing to give fuel to some people if proper channels
are not
followed. I got the fuel because I ended up signing for it, that is
why I
told him that if any problems arise he should contact
me."
Chombo also said Zupco would be paid for its
fuel.
Zim Independent
Itai Mushekwe
SWEDISH envoy to
Zimbabwe, Sten Rylander, on Wednesday said
President Robert Mugabe should
deal decisively with his party's turbulent
succession issue which is
"complicating" possibilities of an immediate
turnaround of the country's
sluggish economy.
Rylander, who was speaking on the sidelines
of a press
conference where his embassy announced a US$500 000 donation to
the World
Food Programme (WFP), vowed "not to give up" on Mugabe in making
him see
reason through "building bridges" with the international
community.
He said it was imperative for the ruling party to
have clarity
on the hotly contested succession issue because the people of
Zimbabwe and
potential foreign investors wanted to know Mugabe's
successor.
Rylander said everybody expected to see stability
and normalcy
return to the country. Zimbabwe boasted a robust economy at
Independence in
1980 before being run down by Mugabe's botched land reform
exercise 20 years
later.
The power clash for the
presidency pitting those aligned to
retired army general Solomon Mujuru
against Rural Amenities minister
Emmerson Mnangagwa has left the ruling
party divided and at its weakest due
to the deep
infighting.
Rylander becomes the first envoy to speak out on
the succession
issue, revealing what appears to be the general feeling among
diplomats who
have distanced themselves from the issue preferring to remain
tightlipped.
"The whole debate about a transitional
government and Zanu PF
succession is complicating the possibilities to turn
around the economy,"
said Rylander.
"People are waiting
to see who is coming in as the new leader,
particularly foreign investors.
The sooner there is clarity on the
succession debate the
better."
He added: "It's up to the ruling party to resolve
the issue and
I don't want to interfere. It is very important to know what
is going to
happen, people are looking for stability and a return to
normalcy."
The envoy said contrary to media reports that he
had thrown in
the towel on Mugabe, he was going to soldier on with his
current diplomatic
initiative to promote dialogue as the Zimbabwe crisis is
of concern to him.
"There's no such thing as giving up on
Mugabe because I'm
concerned about the social and economic situation in
Zimbabwe. I only said I
was now less optimistic than when I first came here.
Efforts of building
dialogue suffered a major setback following the beating
up of trade
unionists by the police."
Rylander said his
government, as a committed humanitarian actor,
would continue prioritising
food aid to the "poorest groups of the
population".
"This
county used to be the breadbasket of the region. In order
to come back to
that state there is need for government to restore the rule
of law, stop
these land invasions and build confidence with foreign
investors," he
said.
"These are the big questions for us the international
community."
Rylander said although Stockholm had a new
government, Sweden's
foreign policy on Zimbabwe was unlikely to
change.
Zim Independent
Augustine Mukaro
THE eviction of two
highly productive white commercial farmers
in Karoi being charged with
defying Section 8 notices could prejudice
government of billions of dollars
in Agricultural Sector Productivity
Enhancement Fund (Aspef)
loans.
Information at hand shows that Daniel Nel and Gert
Terblanche
were protected by a memorandum of understanding between
government and CFI
Holdings which has a clause on zero-tolerance for
disturbances and eviction.
Sources privy to the MoU said CFI
contracted the two farmers to
grow key crops needed in its subsidiaries. The
contract was funded through
Aspef loans.
Nel confirmed he
is using Aspef funds to finance his operations
and has been selling the
produce to service the loan. He could not however
give details of the
loan.
"I am using Aspef funds to do 350 hectares of summer
crop and
180 hectares winter crop," Nel said.
"Last year
alone I delivered 2 400 tonnes of wheat and barley, 5
000 tonnes maize, 120
tonnes sugarbean seed and 400 000 kg of tobacco."
Nel, a
South African, bought Temple-Combi Estate in 1992,
responding to an
invitation by the government of Zimbabwe to come and
invest. He valued his
investments at US$3 million.
"The government advertised
Zimbabwe in 1991-2 through the
Zimbabwe Investment Centre and the Zimbabwe
International Trade Fair as the
country with the highest growth rate and
most stable economy in Africa and
that investors would be protected by the
investment laws," Nel said.
"As an investor I responded to
the advert and the president
signed my papers allowing me to invest. My
appeal to the president now is,
please allow me to continue with my
investment the same way you invited me."
He said Zimbabwe
must honour its laws of investment and allow
the country to
proper.
"My situation is similar to what a number of other
investors
throughout the country are going through and what we are asking
for is
nothing special but for the government to honour its laws," Nel
said.
Since the launch of Aspef in May last year, the
government
through the RBZ, disbursed $7 trillion (old currency) to the fund
but the
repayment has not been forthcoming.
Terblanche
and Nel, who appeared in court last Friday for
defying orders to vacate
their farms, had their case referred to the High
Court by Karoi magistrate
Archibald Dingani on the basis that they had
challenged the eviction notices
in a higher court.
The two were served with 90-day notices on
June 14, which
expired on September 14 and they were expected to have left
the farms.
Nel owns Temple-Combi Farm while Terblanche runs
Dandazi Estate.
The initiative to evict the farmers is
premised on the
provisions of the newly promulgated Gazetted Land
(Consequential Provisions)
Bill 2006 which stipulates that anyone on any
land that received a Section 5
notice sometime in the last six years, will
have 45 days to get out off the
property and wind up farming operation. A
farmer who does not have a lease
or offer letter, and defies evictions can
be imprisoned for up to two years'
if found guilty.
The
farmers' lawyer David Drury told magistrate Dingani that the
state's
application for the eviction of the Nel and Terblanche families from
the
Karoi district was "incompetent, illegal and an abuse of all sorts of
rules
and all sorts of laws".
Zim Independent
JUSTICE minister Patrick Chinamasa has proposed far
reaching
amendments to the Domestic Violence Bill now at committee stage
where it
will be debated clause by clause in the House of
Assembly.
In one of the clauses dealing with the meaning of
domestic
violence, Chinamasa has proposed the prohibiting of selling movable
and
immovable property by husbands as a way of punishing their
wives.
The minister has proposed the deletion of "household
effects or
other" from the Bill.
The minister proposed
the change after MDC Harare East MP Tendai
Biti said the initial definition
limited property not to be sold to
household goods. He called for the
definition to be worded more clearly, so
that it will also prohibit husbands
from punishing wives by selling
immovable property.
The
Bill, which was gazetted at the end of June, lists domestic
violence as
sexual abuse, emotional, verbal and psychological abuse,
harassment,
stalking, among others.
On emotional, verbal or psychological
abuse, Chinamasa has also
proposed to remove jealousy as part of the abuses,
leaving "the repeated
exhibition of obsessive possessiveness" as an
offence.
The minister's amendment appears to be taking on
board
misgivings expressed by Zanu PF Nyanga legislator Paul Kadzima who
said a
married man with a beautiful wife has a right to be
jealous.
Chinamasa has also promised to repeal a section
seeking the
establishment of an anti-domestic violence committee and to
replace it with
a board.
A new clause giving jurisdiction
to community courts to preside
and issue protection orders over stipulated
offences such as emotional,
verbal and psychological abuse, has also been
proposed.
The Bill this week saw women's groups demonstrating
against MDC
Mabvuku-Tafara legislator Timothy Mubawu after he said the Bible
says "women
are not equal to men".
Reports on Tuesday
said MDC leader Morgan Tsvangirai addressed
the demonstrators, telling them
that Mubawu's comments did not reflect the
position of his
party.
The reports added that Tsvangirai also urged the women
to be
impartial saying: "We did not see these kind of demonstrations when
other
women such as Lucia Matibenga were brutally assaulted by police while
in
custody. Violence is violence and it must be condemned." - Staff
Writer.
Zim Independent
Dumisani Ndlela
BANKING
institutions were this week preparing for the worst as
forecasts indicated
that financial stabilisation bonds created by the
central bank were likely
to plunge the money market into deficit.
Financial
institutions were likely to splurge about $55 billion
on the bonds, a
situation market watchers said was likely to expose them to
huge borrowings
from the central bank at rates in excess of 600%.
Gono, who a
few months ago drastically reduced statutory reserve
ratios for financial
institutions after key sector players indicated they
were facing imminent
collapse due to a combination of the high statutory
reserves and
accommodation costs, this week introduced the financial sector
stabilisation
bonds "to ensure that the financial sector further strengthens
its medium to
long-term position".
He also raised the accommodation rates
from 300% to 500% for
secured lending,and from 350% to 600% for unsecured
lending.
Evidently warning financial institutions to expect
payment of
hefty interest on central bank loans, Gono said the upward
adjustment was
not contestable in terms of the in-duplum rule, which states
that interest
on a loan should not be higher than the principal
debt.
"We discourage any bank intending to contest this issue
from
borrowing from the central bank," Gono said.
Financial institutions have until Monday to comply with the
central bank's
requirement compelling them to hold a prescribed amount of
stablisation
bonds on their balance sheets.
Gono said the holding
thresholds for the bonds would be
determined by an institution's balance
sheet size as at September 30, 2006.
Commercial banks are
expected to hold bonds amounting to 10% of
their balance sheet sizes, while
merchant banks will hold 7,5%, finance
houses 5%, buildings societies 5% and
asset management firms 2,5%.
The bonds will bear a five-year
tenor.
"This appears to be a statutory reserve in disguise,"
a market
commentator said yesterday.
Dealers said
indications were that a number of financial
institutions were likely to seek
recourse from the central bank's
accommodation window to meet prescribed
bond holding thresholds.
Rates began firming during the week
in line with the new policy
adjustments.
Dealers were
quoting seven to 14 day investments at between 75%
and 100%, from an average
of 15% before the adjustments.
Thirty-day investment rates
firmed to between 125% and 150%,
from an average of 25%.
"We're likely to see a bigger (rates) response on Monday," a
dealer said,
indicating that the market, which was in surplus to the tune of
$3,3 billion
yesterday, was expected to plunge into shortages on Monday when
subscription
to the bonds mops up market liquidity.
Maturities this month
are expected to amount to $50 billion,
just below the $55 billion expected
to be taken up by the central bank
through the new bonds.
Zim Independent
By
Prosper Chitambara
THE Mid-Term Monetary Policy update
indeed contained wide
ranging and radical measures that will have far
reaching consequences on
almost every facet of the Zimbabwean
economy.
It has to be said from the outset that the monetary
policy alone
is not the panacea to the economic ills currently bedevilling
the economy.
The monetary policy alone cannot single-handedly turnaround the
economy.
It would seem as if the Reserve Bank is fighting a
lone battle
while other crucial key government protagonists have gone to
sleep. Ideally
the monetary policy should be underpinned by a
nationally-owned development
vision and strategy for it to be
effective.
This however does not seem to be the case in
Zimbabwe as there
is no such nationally-owned development vision and
strategy for starters and
more importantly the monetary policy has been
reduced to a fire-fighting
instrument.
There is a need to
fully leverage the synergy and
complementarities between the monetary policy
on the one hand and the fiscal
policy and the National Economic Development
Priority Programme (NEDPP) on
the other hand.
At the
moment there is an obvious disconnection between the
aforementioned policy
and strategic instruments. It would appear as if the
policymakers do not
seem to be singing from the same hymn sheet as there is
an obvious lack of
esprit de corps and unity of purpose among the key
economic
stakeholders.
There also seems to be a lot of confusion among
most people as
to the scope and extent of the monetary policy. While
conventional and
classical economic wisdom would confine the jurisdiction of
the monetary
policy to interest rates, money supply and financial sector
stability, in
Zimbabwe the mandate of the Reserve Bank of Zimbabwe (RBZ) has
been extended
so that it fully gives expression to the developmental
aspirations of the
economy. While this is not wrong, this has unfortunately
created unnecessary
animosities and confusion as to who is ultimately
responsible and
accountable, especially where parastatals are
concerned.
The anti-corruption drive of the RBZ though
laudable has
unfortunately not been fully complemented by the
government.
While the government would claim that it set up
the
Anti-Corruption Commission as well as a government ministry responsible
for
anti-corruption in an effort to escape culpability, it would be helpful
to
note that to date the work of these two institutions has remained largely
academic and sterile as the incidence of corruption especially in "high
places" has exponentially risen while no major prosecutions have been
instituted.
It has also been realised that central bank
autonomy is very
crucial in dealing with the problem of hyperinflation. In
Zimbabwe, however
central bank autonomy has been seriously impaired by
government's
over-reliance on money-printing financing to defray its largely
consumptive
expenditure.
Countries that have managed to
arrest hyperinflation in the past
such as Argentina, Bolivia and Mexico,
among others, managed to achieve this
on the back of largely independent
central banks that were very strict with
the wayward expenditure patterns of
their governments.
Revoking licences for all the
MTAs
At face-value this measure would appear to be too
stringent not
least because of its big-bang nature and also the loss of
employment that
will result therefrom. It would appear as if this measure
was motivated by
the need to curb the prevalent high levels of illegal
activities some of
these MTAs were engaging in, defiance of the stringent
exchange control
regulations.
However, it would be
difficult to fully appraise the effects of
this measure especially since
there is a dearth of data and information as
to the benefits that were
accruing to the economy in terms of foreign
exchange inflows. It seems the
controlled and stagnant exchange rate has
discouraged most Diasporas from
transferring their funds via the MTAs.
Annual review of
banking licences
This measure has merit especially in view of
the need for
discipline in the financial sector. The financial sector is the
lifeblood of
the overall economy and if it sneezes the whole economy cannot
avoid
catching a cold. Therefore, there is need to ensure that the financial
sector remains stable, safe, and secure and engages in lawful activites. New
capital adequacy ratios and the rising incidence of money laundering in a
number of developing economies make it imperative for the central bank to
regularly review the activities of financial institutions. In addition the
introduction of a five-year financial sector stabilisation programme should
also provide a safety net to financial institutions.
Stringent monitoring of ZSE
It is important to note that the
Zimbabwe Stock Exchange is a
crucial player in the financial services sector
that can play a very crucial
role in the economic turnaround effort if it is
properly monitored and
supervised.
This is a positive
measure especially in light of the fact that
the ZSE has become a safe haven
for speculative activities that do not add
value to the real productive
economy and are stepped more on the verges of
illegitimacy.
It is therefore important to curtail these
speculative
tendencies on the ZSE so that it can play its crucial role of
mediating
between savers and borrowers effectively by becoming more
production-oriented.
However, this needs to be done in a
way that does not result in
the mass exodus of actual and would-be
investors.
Gold leakages
This can be
viewed as part of the anti-corruption drive. This is
positive, however the
cancer of corruption has become so endemic and
systemic that its elimination
can only be sub-contracted to a few
stakeholders. There is a need for a
multi-pronged approach that is properly
coordinated as opposed to the
largely disjointed measures that are currently
prevailing.
Government commitment which is a key
ingredient in the fight
against corruption has indeed been the missing link.
While the government
has introduced the Anti-corruption Commission and a
ministry responsible for
anti-corruption, these have however remained
largely toothless bulldogs as
the incidence of corruption continues to
increase.
Zimbabweans recall the way the National Housing
Scheme, the War
Victims Fund, the land redistribution exercise were abused
by well-placed
persons. With respect to these, Commissions of Inquiry were
set up and
reported on the abuses, yet no action has been taken against the
perpetrators.
The abuse of the land reform exercise
resulted in three
commissions being set up, one led by Flora Buka, the
second by the former
Chief Secretary to Cabinet, Charles Utete and the last
by Minister Didymus
Mutasa. These provided the names of the
culprits, and yet no
action has been taken to bring them to
book.
Export incentive scheme for
exporters
The RBZ needs to regularly review the exchange rate
to make sure
that it reflects the prevailing economic and market conditions
on the
ground. Without doubt the exchange rate is a major incentive for
exporters
and it needs to be regularly reviewed. For as long these exchange
rate
distortions remain then it is highly unlikely that there will be a
significant increase in the level of exports.
Overnight
accommodation interest rates are the benchmark
interest for the economy as
they have a direct impact on the other interests
that banks charge. The
increase in overnight accommodation will surely
affect the cost of
production for most business, especially those that are
highly leveraged.
This will likely further stoke the inflationary pressures.
Restriction of central bank financial support to parastatals and
local
authorities.
This has positive ramifications especially as
far as inflation
is concerned. A major source of inflationary pressures has
been excessive
money supply growth, especially with regards the financing of
government
consumptive expenditure as well parastatals and municipalities
funding.
The underlying problems of parastatals need to be
addressed in a
holistic manner, which goes down to the root causes of their
perennial woes.
The majority of our parastatals suffer from a
combination of
poor corporate governance, political interference by parent
ministries and
government and lack of accountability. Without addressing the
aforementioned
challenges once for all the problem of parastatals will
continue to recur.
Conclusion
While the
some of the measures that were announced in the
Mid-Term Monetary Policy
update are positive, they unfortunately fall short
of what is required to
revive the economy as they does not fully address the
underlying challenges
at the root of the crises.
There is need for a comprehensive,
holistic framework to reduce
money supply, aligning fiscal expenditures to
budgeted levels, enhanced
productivity across sectors of the economy,
enhanced agricultural
productivity to reduce food inflation, the signing of
a social contract,
addressing the perennial problems of parastatals as well
as reducing the
high levels of political polarisation obtaining in the
economy.
* Chitambara is an economist at the Labour and
Economic
Development Research Institute of Zimbabwe.
Zim Independent
By Son Rise
IT is saddening to
see the Reserve Bank governor continuing on a
self- destruction path. While
the governor has declared war against
speculators in both the forex and
stock markets, the man is guilty of
sparking off speculation of the greatest
magnitude such that one could
easily call him the "George Soros" of policy
formulation.
The governor announced in his discredited policy
statement
review that banking licences will be reviewed annually. This means
the
banking public will not be sure which banks will still be standing come
the
next year.
Speculative tendencies will manifest
themselves with the banking
public withdrawing cash outside the banking
system because they are not sure
whether that bank will still be in
operation the coming year.
When we all thought the banking
sector was beginning to solidify
the foundations shaken by the famous
banking crisis, the governor through
his wisdom, or rather, lack of it, fans
the flames of uncertainty through
ill-advised policies.
The governor's policies are fraught with inconsistencies one
wonders who
advises this man. While on one hand he is pushing the government
to grant
99-year leases (remember he is a farmer), the man is doing the
exact
opposite in the financial services sector.
In his policy
review statement, the governor pointed out that
banks should play an active
role in supporting the productive sector.
While banks may
want to do this, the policy framework clearly
militates against such
support. Most productive sector projects have a
gestation period in excess
of one year and surely which sane bank would want
to lend for such purposes
when they are not sure whether their licences will
be
renewed?
I really feel sorry for banks, which are caught
between the
proverbial "rock and hard place".
Industry
and commerce has also not been spared by the governor's
self-destructing
policies. Planning is an essential ingredient in the
success of all
turnaround programmes. This has tragically been taken away by
the governor
through his one year renewable licences for banks.
Gono has
accused the Zimbabwe Stock Exchange for "creating paper
wealth, without real
activities on the ground" yet he did exactly the same
through issuance of
the CPI linked Treasury Bills which saw unprecedented
levels of cash flowing
into the money market. Can anyone show me what
improvement in productivity
that has brought, rather than simply fund the
insatiable borrowing appetite
of the government.
Someone must put a stop to all this
madness. We continue to
watch and applaud self-destructing policies being
forced down our throats.
Someone must tell the governor that trying to close
15 holes with 10 fingers
will not necessarily reduce the amount of flow. It
may actually increase
pressure on the remaining five, make them bigger and
more leakage. His
militant approach to the forex market will not help but
worsen matters.
We must as a nation begin to ask ourselves
honest questions (I
wonder what happened to operation "Taurai Chokwadi",
Hope it applies to the
governor as well). Are we as an economy better off
than we were before Gono
took over? If not, what went wrong and can we
continue on this path and
expect to be better off?
It is
interesting to note that the Herald published just below
the governor's
statement a story where Zesa is said to have announced a
massive
load-shedding of up to 10 hours a day. One shudders to think the
effects
this will have on productivity as many productive hours will be lost
industry wide.
These are the pertinent areas which need
urgent attention not
wasting resources on addressing symptoms, rather let us
deal with the
issues. If these are indeed addressed, the governor will not
have sleepless
nights on how to tame the stock and forex markets, these will
self-regulate.
Up and until the governor realises that the
"Big Brother"
attitude does not work and until he stops having a "Veterinary
Surgeon"
mentality where he is the only one who knows what this economic
animal is
suffering from hence is the only one who can prescribe a solution,
then ours
is a case of running up a downward escalator.
*
Son Rise is a pseudo name for a bank treasurer.
Zim Independent
Shame Makoshori
THE
European Union (EU) has concluded investigations into
foreign companies that
fraudulently exported sugar to the EU market under a
local company's
quota.
Businessdigest reported last week that sugar producer
Hippo
Valley Estates had piled up pressure on the EU to wind up a three-year
investigation into the fraudulent imports of sugar into its
market.
The companies, believed to be domiciled outside
Zimbabwe, were
falsifying certificates of origin and taking up Hippo's quota
under the
African Caribbean and Pacific (ACP)
arrangement.
The fraudulent exports are believed to be part
of a
well-orchestrated scandal that has seen several other African companies
being robbed of their quotas by dubious firms generating fake certificates
of origins.
Businessdigest could not immediately
establish the identity of
the companies involved in the scam, believed to
have taken place over a long
period of time.
Responding
to businessdigest's questions on the issue, an EU
spokesman said the
organisation's anti-fraud unit had handed over the
document containing its
findings on the issue to its headquarters in
Brussels.
Staff at the head office were now studying the document before
acting on
it.
It is expected that the companies involved in the illegal
exports were likely to get a hearing first before any punitive measures were
taken against them
"The investigation has been closed by
the EC (European
Commission)'s anti fraud office and the findings have been
handed over to
the proper offices that deal with the sugar quota in EC
headquarters," a
spokesman for the EU delegation in Zimbabwe, Josiah Kusena,
told
businessdigest.
"Some final information has now been
requested from Zimbabwe and
the concerned exporting-importing companies,"
said Kusena, adding: "Zimbabwe
is presently working with the EU Delegation
in Zimbabwe, the specific EU
offices in Brussels and the embassies of the
concerned member states to get
the problem sorted out."
He indicated that once it was established that Hippo had lost
its quota
through illicit trade by the accused companies, the quota would be
restored.
Businessdigest understands that the sugar had
been exported via
a United Kingdom company.
Under normal
circumstances, the United Kingdom sugar importing
company that holds the
EU-Zimbabwe sugar import licences can only import
sugar through a board
known as the Zimbabwe Sugar Sales. The Zimbabwe Sugar
Sales oversees all
sugar exports to the EU.
The EU in a recent market update
admitted that there were
sporadic violations of export and import
policies.
The EU said in the market update that it
anticipated increases
in sugar output from Africa, particularly from
Zimbabwe and Swaziland, to
boost its import requirements.
Sugar output in the two countries was recently revised upwards
from 478 000
tonnes to 625 000 tonnes.
Hippo has indicated that it is
ready to supply all preferential
quota export markets to the EU, the United
States of America and other
bilateral regional export markets during the
current marketing season.
The fraudulent exports were direct
results of Hippo's failure to
meet its export quota to that region after A2
farmers invaded part of its
estates resulting in a slide in
production.
Hippo is, however, not the only African company
that has been
affected by the fraudulent transactions.
In
Mauritius, commodity companies are also facing similar
problems while in the
South American timber markets, companies regularly
lose potential export
revenue through the practice.
Zim Independent
Shame Makoshori
A
BRAZILIAN economist has urged Zimbabweans to put pressure on
President
Robert Mugabe to step down, saying they should not "watch
hopelessly" while
the country "turns into a desert".
Speaking to businessdigest
after a business meeting in Harare,
Caio Megale, an IBMEC University
Economics Professor brought into the
country last week by the American
Business Forum, said Zimbabweans had to
act to save their country from
continued decline.
"With a government that is not worried
about the problems facing
the private sector, it is either you challenge the
status quo and set the
tone for economic recovery, or you keep the current
situation and your
country turns into a desert," Megale
said.
"The people are not happy; they really want change, but
with
politicians not likely to talk to each other I see almost 100%
uncertainty
in Zimbabwe."
Megale said the stalemate
between the ruling Zanu PF party and
the opposition and the continued
interference by government in the pricing
of goods and services were a
recipe for further economic disintegration.
"Economic
recovery depends on the action that you take, but you
need dialogue between
government and the opposition, there must not be
someone imposing issues,"
Megale said.
Once one of Africa's most promising economies,
Zimbabwe has
degenerated into the continent's worst economy with four digit
inflation,
fuel and foreign currency shortages, persistent power cuts and
acute food
shortages which critics blame on corruption, economic
mismanagement and poor
international relations by
government.
Gross domestic product growth has slumped by
between 30% and 40%
in the last six years.
The World Bank
and the International Monetary Fund (IMF) have
withheld critical balance of
payments support since 1999.
Most major companies are
operating below 50% of their capacity.
Critics say the
country's economic woes were precipitated by a
government-backed land reform
programme that drove productive white farmers
from their land and replaced
them with landless black peasant farmers with
little or no farming
experience.
This had drastically reduced agricultural
output.
Megale said Brazil went through similar experiences
as Zimbabwe.
Inflation hit 6 000% at one time and government
slashed zeroes
from the country's currency more than 10 times in the last 30
years.
In the same period, Brazil had changed its currency at
least
seven times but was able to get over the bad spell by maintaining
sound
relations with international financiers.
The
difference between Zimbabwe and Brazil was that the latter
did not condone
land invasions, he said.
In Zimbabwe the violent invasions
were blessed by government,
sending wrong signals to the international
community and investors about the
country's potential as an investment
destination, Megale said.
Megale said those who had been
resettled on Zimbabwe's farms
felt insecure because they did not hold any
titles or leases on the pieces
of land.
"Farmers cannot
plant on land that they know government can come
tomorrow and say it is no
longer yours. Implement policies that give
assurance to the farmer that the
land is his to give him stability. In
Brazil government was careful in
identifying and buying land in a gradual
process," he
said.
During his brief stay in Zimbabwe, Megale had witnessed
the
arrest of management at bakery firms for hiking bread prices to remain
viable. Government had imposed a ban on any bread price
increases.
Megale said it was unfortunate government adopted
such a tough
stance against an industry that was struggling to survive under
spiralling
flour and wheat prices, widespread power cuts and a restive
labour force
agitating for regular wage increments to cushion them from
prices hikes.
"There is no reason to keep an official price
where the parallel
market has become the official (determinant for the
pricing system)," he
said. "People think of price controls as good for lower
income groups but if
you impose prices products vanish from the market. You
are subsidising fuel
in Zimbabwe but are you getting it? Free the prices and
let market forces
dictate prices," he said
Megale added
that it was surprising that a country with so much
infrastructure, natural
resources and specialised human capital with 90%
literacy levels was failing
to feed its people.
The problem, he added, was that the few
people who had money to
invest had shifted from manufacturing foreign
currency generating goods to
dealing on the stock market.
"You have the best infrastructure, better than the rest of the
region and
parts of Latin America. What you need is investment in plant and
machinery
for industrial production. A lot of investors are waiting to
invest but they
look for stable environments. No one can invest where
returns will come
after five
years."
"The first thing is to make
the economy stable in order to
attract foreign investment. The high rate of
inflation discourages investors
so you cannot wait for outsiders to solve
the problem," said Megale.
He said Reserve Bank of Zimbabwe
governor Gideon Gono should
stop his controversial quasi-fiscal
operations.
These created wide holes in the national budget,
which can only
be plugged by printing more money, leading to the increase in
inflation, he
said.
"Each economy presents peculiar
problems, but there are pillars
that must be similar whether you are in
Brazil, Nicaragua or Zimbabwe. One
of the pillars is that the central bank
must concentrate on the monetary
policy," he pointed out.
Zim Independent
Pindai Dube
ZIMBABWE'S dairy
farmers have called for a review of the
government's imposed milk prices,
saying they were facing huge operational
costs that could push them out of
business.
Ezra Ndlovu, chairman of the National Association
of Dairy
Producers in Matabeleland, said gazetted milk prices were too
low.
Ndlovu indicated that the association held a meeting on
Tuesday
to map strategies of how to push for a review of milk prices,
currently
pegged at $210 per litre.
Association members
are pushing for a review of the price to
$389 per litre.
Ndlovu said a price of $389 per litre would enable producers to
break even
at the same time improving dwindling milk supplies on the
market.
The last review of the price of milk was in
September, but
Ndlovu said inflation had pushed input costs up and eroded
margins.
"We are not satisfied with the price of milk because
some
manufacturers increased the stock feeds some weeks ago," said
Ndlovu.
"We are appealing to milk processors to review the
price because
the season we are approaching is harsh as we are preparing to
grow some
crops for the cattle. We also need to procure other raw materials
and we can
only do so when we have the capital."
The
country's national herd currently stands at 25 600.
Ndlovu
said that dairy farmers were encountering shortages of
stock
feed.
"Stock feeds are in short supply. The country produces
high
cotton output but there is a shortage of cotton cake, which is a
by-product.
The situation at hand is that middlemen are creating unnecessary
shortages,"
he said.
"We are calling upon the Government
to ban these people so that
the crop moves in the right channels from cotton
farmers to ginneries and
finally to the oil expressers."
Zim Independent
ZIMBABWEAN investment markets have the same kind of
drama
contained in television soap operas. On Friday last week the bank rate
was
300% for secured lending and the money market was awash with liquidity
such
that players were not taking any short term
deposits.
With regard to returns, sovereign assets with a
tenor of six
months and one year were attracting yields of 125,5% and 147%,
respectively.
On that day the stock market continued on a roll with the
bulls seemingly
unstoppable. The industrial index closed the week at an
all-time high of 488
026,69 points after gaining 2,51%, or 16 544,44 points,
on the day to cap a
really fine week.
Although the stock
market was at face value very firm, the eagle
eyed within the investment
community would have noticed that all of a sudden
the number of sellers had
increased. This was odd given that investors
normally and aggressively take
positions ahead of the release of the monthly
inflation data, which, at that
point, was only a few days away.
The conclusion grudgingly
reached was that something was about
to happen and that the well-informed
were quietly exiting the market. Come
Monday morning, the sellers seemed to
outnumber the buyers and the trend
firmly entrenched it self during the
afternoon trading session. By the end
of the day, the industrial index had
shed a marginal 1,16% to close at 482
360,93 points.
Soon
after the end of the final call over on the very day, heads
of financial
institutions received impromptu invitations to the Reserve Bank
auditorium.
The occasion being the presentation by the Governor of a
statement dubbed
"Governor's Memorandum to Financial Institutions:
Fine-tuning of monetary
policy".
The first fine-tuning came in the form of a
two-thirds increase
in the overnight lending rate from 300% to 500% per
annum for those
institutions which approach the central bank for lending cap
in one hand and
acceptable collateral security in the other. Those without
security would
compensate the Reserve Bank at a rate of 600% per annum, from
the previous
350%. These lending rates had been drastically reduced from
850% and 900% on
July 31 2006 when the governor presented his half year
monetary policy
review statement. It appears that, metaphorically the dial
had overshot the
necessary position last time around.
The
market started to anticipate that yields on treasury bills
would begin to
rise but they were in for another "fine-tuning" surprise. On
Tuesday the
central bank announced a tender for two-year treasury bills. All
banking
institutions have, understandably, shunned the tenders as those who
had
picked up six months treasury bills at a yield of 125,6% were kicking
themselves and are, in hindsight, not looking all that
clever.
The other reason for the stayaway was that banking
institutions
were making frantic efforts to subscribe for the new kid on
block, a 5-year
Financial Sector Stabilisation Bond (FSSB). Each licensed
institution will
be expected to hold the FSSB as a performing asset - we
wonder what else it
could be - in their books with effect from October 16
2006. The FSSB will
pay holders an annual coupon of 500% in its first year,
250% in the second,
100% in the third and 25% and 10% in years four and
five, respectively.
Commercial banks will, based on their
balance sheets as at
September 30 2006, hold 10% of assets in this bond
while the other siblings,
merchant banks, would invest 7,5%, with discount
houses, finance houses and
building societies having their compliance level
pegged at 5%. Asset
management companies had their thresholds set at 2,5% of
balance sheet size.
A small-scale gold miners' cost build-up
model was introduced,
which would track production costs. Under the scheme,
each producer will be
paid a cost plus 30% margin support price per gramme.
The said support price
was raised from $5 000 to $16 000 per
gramme.
The new price will only be available to small scale
producers
and will not apply to commercial producers who will continue to be
treated
like any other exporter. Our calculations, based on the
international gold
price of US$577/ounce, the new price gives an implied
exchange rate of $872
to the US dollar. In fact taking into account the 30%
margin on cost means
that the exchange rate will be higher than what we have
calculated.
Coming to the stock market the Governor hinted
that the RBZ, in
consultation with Zimra, will soon be insisting that
transactions above $50
000 contain the taxpayer's numbers. It was emphasised
that it would be
mandatory to capture the tax numbers as tax authorities
would reserve the
right to inquire. All transactions on the Zimbabwe Stock
Exchange are now
expected to identify the actual investors and, where
nominees are involved,
stock brokers must disclose the people behind
them.
With the statement not being broadcast live and a copy
not
immediately available on the website, incomplete and sometimes distorted
information was disseminated to the wider investing public through the
grapevine and duly caused consternation. The Herald's main, and eye
catching, headline the next day was "Gono strikes again", an announcement
which exacerbated the pandemonium.
Most investors reached
for the panic button and were screaming
"sell". Consequently, on Tuesday the
industrial index crushed 13,52% -
albeit on minimal trades - to 419 056,09
points, a record loss second only
to the 14,49% fall recorded on the
February 22 2006, when the market reacted
to the re-introduction of 91day
treasury bills.
On Wednesday, the Herald published what was
supposed to be the
full text of the memorandum, although it had some
sections missing. It was
only then when investors read for themselves, and
sought clarification and
explanations from the fundis that they realised
that they had been sold a
dummy. By the afternoon trading session, buyers
had started trooping back
into the market thus sowing the seeds of recovery.
Investors do not stay
fooled for long after all.
Zim Independent
Paul Nyakazeya
THE Reserve
Bank of Zimbabwe has announced that it would not
inject any capital into
parastatals, which had become heavily reliant on the
central bank for
cash-flow support, advising them to seek assistance from
their parent
ministries.
Announcing a memorandum to financial institutions
dubbed "Fine
Tuning of Monetary Policy" this week, Reserve Bank governor
Gideon Gono said
the central bank was no longer willing to put money into
non-performing
parastatals.
Gono said some parastatals
and local authorities were
"developing seemingly perpetual reliance on the
Reserve Bank for support,
unacceptably surrendering their cash-flow planning
and survival needs to the
bank".
"It has become necessary
to institute stringent measures that
restrict and forbid non-performing
parastatal and local authorities from
accessing central bank support," said
Gono.
Gono mentioned Air Zimbabwe, Zimbabwe National Water
Authority,
Zesa Holdings, Grain Marketing Board, Agriculture and Rural
Development
Authority and Zimbabwe Iron and Steel Company as the major
non-performing
parastatals that had bothered the central bank with requests
for funding.
"Parastatals and local authorities are hereby
advised that their
first port of call for financial assistance shall be
their parent ministry,"
Gono said.
"Parent ministries and
management responsible for these
institutions are hereby advised to
seriously take note of this position,"
Gono said.
The
Reserve Bank has pumped out large sums of money to
parastatals and local
government authorities under a quasi-fiscal operation
critics blame for
fuelling inflation and bloating government deficit.
Gono has
previously referred to parastatals and local
authorities as "the missing
link" in the country's efforts to turnaround a
struggling
economy.
Some analysts have pointed out that radical
transformation of
loss-making parastatals would help in the country's fight
against inflation,
currently sitting at 1 023,3% year-on-year for
September.
Zimbabwe's parastatals have been a major drain on
the fiscus.
Most parastatal heads remain unaccountable for
poor performance,
and the state-owned firms have been grossly inefficient
and lack
transparency in their operations.
Gono said the
National Railways of Zimbabwe and the Zimbabwe
United Passenger Company were
the only parastatals showing signs of
improvements due to support given by
the central bank.
Zim Independent
Dumisani Ndlela
RESERVE Bank
governor Gideon Gono this week said "inflation
reduction remained the
overriding objective of the central bank", a week
after a parliamentary
committee said his monetary policies had "evaded
tackling
inflation".
Gono this week made fresh adjustments to his
mid-year monetary
policy statement, targeting mainly the financial sector
and the equities
market in moves he said was meant to give additional
measures that would
"stabilise the economy in the
medium-term".
In its review of the monetary policy,
parliament's budget,
finance and economic development portfolio committee
said it had "noted with
concern the rising inflation", saying despite
Finance minister Herbert
Murerwa and Gono declaring the economic scourge
"the country's number one
enemy", both had dodged tackling
it.
"The highly inflationary environment has made planning
complex
for all sectors of the economy, including government," the committee
noted
in its report presented to parliament last week.
While Gono's fresh adjustments to monetary policy on Monday
indicated the
central bank's desire to reduce inflation, the governor failed
to give a
clear plan over how the central bank would deal with the problem,
which has
troubled the country's economy for the past six years.
He did
not mention any inflation targets or outlook for the few
remaining months of
the year.
Gono's review skirted details on excessive
government
expenditure, as well as the central bank's own quasi-fiscal
operations,
blamed recently for pushing inflation to record
highs.
The Central Statistical Office on Tuesday announced a
marginal
decline in inflation to 1 023,3% year-on-year to September from 1
204,6% for
August.
Earlier on in the year, Gono made a
rare admission that the
central bank had printed trillions of dollars to
purchase United States
dollars for repayment of International Monetary Fund
(IMF) arrears to stave
off the imminent expulsion of the country from the
Bretton Woods
institution.
Huge sums of cash had also
been printed to raise money for grain
and fuel imports, as well as for other
quasi-fiscal operations by the
central bank, fuelling huge money supply
growth.
Government, whose borrowings on the local money
market have been
breaking weekly records, also continues to be a major
source of inflation.
Printing money stokes money supply
growth that provides impetus
to soaring inflation.
Money
supply has been on an expansionary trend since the
beginning of the year
while inflation, which eased in the month of July,
rebounded to touch an
all-time high of 1 204,8% year-on-year for August.
The IMF
has forecast inflation to average 1 216% this year, and
to average 4 278,8%
next year.
The forecast suggests that inflation could breach
the 5 000%
mark next year.
During the current year, the
IMF predicts that real GDP will
contract by 5,1% and by a further 4,7% next
year.
The parliamentary committee said monetary and fiscal
policies
were simply labelling inflation the chief enemy "without proffering
solutions".
"Neither (fiscal nor monetary) policy set a
target that is being
worked towards," the committee said, noting that Gono
had said during the
committee hearings that it was every Zimbabwean's
responsibility to bring
inflation down.
Gono has
previously located the major inflation drivers in
government and monetary
operations, areas far beyond ordinary's citizens'
responsibility.
In his January policy statement, Gono
said major inflationary
pressures in the economy had arisen from high money
supply growth and supply
bottlenecks related to poor agricultural
production. Dwindling production
had adversely affected other sectors of the
economy like manufacturing,
still heavily reliant on
agriculture.
In a report last month, the Zimbabwe Independent
noted a
stampede on the parallel foreign currency market as both individuals
and
corporate institutions scrambled to buy foreign currency to preserve
their
wealth following grim inflation forecasts by the
IMF.
The inflationary cycle has made it unattractive to hold
the
local currency when costs of goods and services are increasing on a
daily
basis.
Put differently, people are now making sure
they spend their
little incomes as fast as they can on goods rather than
save.
The population, in order to avoid the inflationary
effect, flees
the domestic currency as a store of value, and instead shifts
their wealth
into hard currencies and durable goods.
That
problem has been compounded by serious shortages in the
economy. Scarcity,
by nature, generates inflation, and this adds impetus to
a problem the
government is already exacerbating through money printing.
Fuel is in short supply, as are maize meal, the country's staple
food, most
of the basic commodities such as sugar and cooking oil, as well
as foreign
currency. These shortages have invented informal markets for fuel
and
foreign currency. The parliamentary committee said stakeholders were
concerned by rising inflation, and expected measures from authorities that
would bring inflation levels down.
Such measures, the
committee said, included a reduction in
government expenditure, increased
productivity and the elimination of
speculative behaviour, itself caused by
inflation.
"Both the monetary and fiscal policies seem to
gloss over the
real challenges facing the economy," the committee
said.
"There is an urgent need to rebuild the country's
productive
sector by investing correctly in the two main pillars of the
economy, that
is agriculture and mining, which have a longer development
period, but
produce a sustainable income," the committee
said.
"There is need for government to live within its means
and to
put in place measures to advance development through
production."
In what appeared like a climbdown from his
aggressive
quasi-fiscal operations, Gono said he would "restrict and forbid
non-performing parastatals and local authorities from accesssing central
bank support".
Parastatals and local authorities, he
said, had to seek
financial assistance from their parent ministries rather
than the central
bank.
In trying to turn around the
economy, Gono has concentrated all
efforts on fighting inflation, itself one
of the critical forces driving and
fanning the economic problems Zimbabwe
faces.
"Some parastatals and local authorities have developed
seemingly
perpetual reliance on the Reserve Bank for support, unacceptably
surrendering their cash-flow planning and survival needs to us," Gono
said.
But unless he gets solid government support and
committment to
fight corruption, mismanagement and the intricate web of
patronage which
misallocates both human and financial resources away from
critical sectors,
he has a long, unwinnable battle ahead of him.
Zim Independent
By Tony Namate
"BUT in our case, we later realised that
non-violent and purely
political struggle, even when reinforced by boycotts,
strikes and
demonstrations, can never overthrow a regime which is armed to
the teeth.
"That regime is dependent on guns for its own
sustenance in
power. And only by arming the people and leading them through
political and
ideological direction can you eventually overthrow an armed
reactionary
regime."
The above words were uttered by one
of Africa's last liberation
war heroes, the first prime minister of
Zimbabwe, Robert Gabriel Mugabe
(Zimbabwe News, Vol 1 No 4, April 1986),
when South Africa was still in the
iron grip of
apartheid.
Sadly, 20 years later, lessons have still not been
learnt.
"Musatyisidzirwe nanaChibhebhe vane mazitumbu,
zidumbu rizere
mweya hapana nezvirimo. (Do not be intimidated by the
Chibhebhes, who have
big bellies with nothing in them). When the police say
move, move. If you
don't move you invite the police to use force," said
President Robert Mugabe
(Herald).
Civil war is not an
option in today's Zimbabwe, and we can still
avoid it.
The situation in our country gets worse by the day, and no
amount of
political whitewashing can stop the inexorable slide towards an
inevitable
and ugly conclusion too ghastly to contemplate.
Jamming radio
stations or banning newspapers will only succeed
to buy us enough time to
worsen the situation. War-talk like "Economy is the
land, land is the
economy"; "Failure is not an option"; "Look East"; "We
will soldier on" has
so far been impressive but has not fed empty stomachs.
Headlines like "Zimbabwe imports wheat from South Africa",
"Zimbabwe imports
maize from Zambia" and "Imported fertilizer arrives" are
not reassuring at
all in a country where agricultural land now "belongs" to
the
people.
Since our elections were fought on anti-Blair and
anti-Bush
platforms, what platform are we going to use for the next
elections, to be
held after Blair and Bush are gone? No matter how high
their ivory towers
are, those who live in cloud cuckoo land must come down,
eventually. And the
people will be waiting . . .
History
is littered with examples of "invincible" leaders who
behaved as if they
were gods until reality brought them down to earth with a
thud.
The time has come now for the ruling party's
apparatchiks to
tell their leaders to swallow the bitter medicine of
humility and involve
everyone in saving the sinking ship that is
Zimbabwe.
To everything there is a season.
Zanu PF will not die because it has opened talks with civic
society or the
opposition. No. It will emerge stronger from it and its
legacy will likely
be more intact than it is now if the party seeks advice
from all
stakeholders and solve the situation politically.
If need be,
they can hold a national cleansing bira.
And leaders from
across the political, religious, economic and
civic divide need to call for
dialogue now. If we have to have another
Lancaster House conference, so be
it. Zimbabweans do not want another war,
which Zanu PF is clearly itching
for.
Meanwhile, Zimbabweans of every hue -coloured, black,
Indian,
white - and political persuasion must talk loudly about the
situation in our
country. You have every right to discuss the worsening
economic and
political crisis in your country.
They must
not allow any intellectually challenged village idiot
to tell them that
because they are a vendor, cashier, garbage man,
hairsytlist, prostitute,
messenger, musician, artisan or cartoonist, they
"must stick to your
profession". Such dangerous narrow-mindedness is closely
linked to the
tribalist notion that one cannot be in certain situations
because one is an
Ndebele, Manyika, or Karanga.
Remember, among the people who
liberated us from Rhodesia's
apartheid were Grade 7 dropouts, coloureds,
whites, Indians, blacks,
farmers, farm laborers, schoolchildren, mothers and
fathers who contributed
to the liberation struggle.
Everyone needs to contribute to the ongoing intellectual
discourse that is
currently gathering momentum, without fear or favour.
Offer new solutions
even though the solutions that were proffered by others
before have yet to
be used. Just like teabags in hot water, a country's
people bring out their
best ideas when they are cornered. If you are
Zimbabwean, scream ourselves
blue until we are heard.
Even the domestic animals have been
affected, and they are
getting restless. They too, are joining the
debate.
Zimbabwe is dying. Our country, once the breadbasket
of Africa,
now has, according to some experts, the "fastest shrinking
economy in the
world for a country not at war".
But we
are at war. The government has been waging a one-sided
war against its
people, starting with the land invasions, which left almost
half a million
farm-workers destitute and brought the economy to its knees.
As if that was not enough, several banks were shut down in early
2004 and
ordinary people lost their savings overnight. The anti-people war
continued
in early 2005 as informal traders lost their source of livelihood
and homes
overnight during Operation Murambatsvina; with the insatiable
multi-headed
behemoth sprouting yet another head called Operation Sunrise in
mid
2006.
During this operation, most people who "could not
account for
their money" had it taken away from them in a continuing show of
vindictiveness.
And Gono, snarling menacingly like the
lead character in a Pulp
Fiction thriller, vowed: "I will be
back."
"The measure of a country's greatness is its ability
to retain
compassion in times of crisis." - Thurgood Marshall
(1908-1993).
Zimbabweans are 20 times poorer than they were
in February 2000.
The captain of the Zimbabwe Titanic is busy
throttling his
passengers while the ship is sinking. And both victor and
victim will soon
go down with it, since the lifeboats (farms) were destroyed
in a fit of
malice.
While we fight among ourselves,
African countries in the region
are prospering and making good use of our
fleeing professionals.
So far, the sabre rattling, fist
shaking and sloganeering
against the West has brought us nothing but misery.
Anybody who thinks that
Bush and Blair will one day go down on their knees
and ask us for
forgiveness doesn't need a reality check - they need a mental
checkup
instead.
To say that we are the laughing stock of
the world is an
understatement. We can't even see the wood for the
trees.
There are more Zimbabweans employed outside the
country than
inside, yet little of the foreign currency they send finds
itself onto the
official market. Since Gono became governor, more and more
Zimbabweans both
inside and outside have been avoiding the banking system.
Even those
officials who travel on presidential trips are reported to be
offloading
their allowances onto the lucrative black market whenever they
return from
their trips!
So who is fooling whom? Tazviona
ka kuti munogona kurova ma
demonstrators chef, so what? Has that brought us
forex, wheat or tourists?
Why do we allow such self-consuming
hate?
"Like an unchecked cancer, hate corrodes the
personality and
eats away its vital unity. Hate destroys a man's sense of
values and his
objectivity. It causes him to describe the beautiful as ugly
and the ugly as
beautiful, and to confuse the true with the false and the
false with the
true. " - Martin Luther King Jr.
The
greatness of a leader is not measured by police brutality:
"We have, I fear,
confused power with greatness." - Stewart L. Udall.
Brutality
is a sign of cowardice and panic.
The people's collective,
tinder dry anger is reaching its apex.
All it is waiting for is a spark to
set it off.
"Those who make peaceful revolution impossible
will make violent
revolution possible." - John Fitzgerald
Kennedy.
Waterloo is beckoning.
* Tony
Namate is an award winning Zimbabwean cartoonist.
Zim Independent
IT has been said that the battle for land is the
greatest single
cause of strife and warfare between human beings. I am sure
you can testify
to the truth of this. You will know that your parliament has
now passed the
Bill that aims to drive the last white man off the land as
well. We sit on
the eve of the senate ratifying this and you, Your
Excellency, signing it.
Before you do so I wish to give you some food for
thought.
I have listened to many history lessons on how
terrible the
white man is and how terrible colonialism was. Repeat something
often enough
and it becomes accepted; and all subsequent actions against the
white man,
whatever they may be even if he or his family had nothing to do
with
colonialism, appear to become justified.
The history
of colonialism is not quite the simple history that
it is often made out to
be. In 1930 the Land Apportionment Act was passed.
It was passed, as you
know, on the strength of the Carter Commission which
reported that
territorial segregation was what the black people needed for
purposes of
security of tenure.
The Act set aside 30 acres for every
black man, woman and child.
White men were then barred from buying land in
those areas. Contrary to the
repetitious propaganda, every serious farmer
knows that land in these
communal areas could be made to produce every bit
as well as other land in
Zimbabwe.
In the 1940s ownership
with title was given to the most skilled
black farmers in small- scale
commercial farming areas. Since that time
quite a number have done so,
including many high-profile people within your
party.
It
is regrettable that no serious move was made by Ian Smith, or
later by
yourself, to give the land to the people in the rest of the
communal areas
through the provision of title.
But the repeating of history
does not change the principle that
if a man buys a piece of land and
develops and uses it productively, he
should be able to continue to utilise
it; unless it is compensated for in
accordance with international norms,
some of which you have signed up to.
Over 70% of those that
have been chased off their land bought
their land under your government
since 1980. Your government had right of
first refusal on all land
transfers. Your government issued certificates to
say that they did not want
those specific pieces of land that were being
sold. Your government accepted
transfer duties from those that were
purchasing the farms and taxes from
those who were selling them. And now
your government has taken those farms
and not paid for them.
Zimbabwe whites reduced their land
holdings by over a third
between 1980 and 2000 - from over 30 % to 18 % of
Zimbabwe's land total.
This was all on a willing seller/willing buyer basis.
Unfortunately the land
that your government bought from the whites then,
that we as the taxpayers
paid for through our taxes in conjunction with the
British, was never given
by the state to the rural poor people. Much went to
your party hierarchy.
The rest was never actually given to the rural poor
because, I presume, your
party did not want to lose control over
it.
The rural poor who were allowed to go on to the land were
never
given ownership of the land. They could not develop and invest in land
that
was not theirs. The rural poor got poorer; and still, especially
because of
the last six years, they are getting poorer today. Conditions are
so poor
that the population is actually shrinking and the economy is
contracting
too.
We are now in the position where the
state, through the party,
has taken all of the land by vesting it in you Mr
President. Nobody owns any
of the land apart from you. There are a few
exceptions, like a few
well-connected people, who realising the importance
of title, bought their
farms while your government was still saying that it
did not want them
through certificates of no present interest. All land is
now yours Mr
President. If you do not like someone you can remove
them.
The last 400 of us whites are liable to be chased off
the land
any day now and there are many in your cabinet and your party that
covet
what has been developed by us. There is folly in this situation and
evil
motivation behind it. If we want the people to eat and prosper, it is
time
that a holistic legal system of individual ownership be put in place
and
respected.
What all right-thinking people should be
saying is that the 18%
owned by white farmers should be recognised as such:
they bought it and
developed it; and unless they are compensated for it, the
state through the
party has stolen it.
Many white men
won't come back; but at least pay them what they
are due so that the land
can be properly freed up for people that wish to
produce on it. The ones
that want to stay should be left alone.
On the 82% of
Zimbabwean land that the white farmers do not/did
not own, as well as much
of the rest that the whites will not come back to,
the rural poor need to be
given ownership. Only then will they have security
of tenure so that they
can buy and sell and lease it out and invest and
protect it as individual
owners will generally want to do.
It is giving the individual
ownership that counts. The ones with
a propensity to work and develop can
then do so. Not all people are
farmers - in most developed countries it is
less than 2% of the population
that are in agriculture - and because of the
economies of scale they have
large food surpluses. Why are you wishing to
perpetuate an inefficient
peasant feudal system based on subsistence
agriculture where food becomes
short and the towns begin to
die?
In Zimbabwe, do the young really want to break their
backs like
Cain, hoeing the land as peasants? Do they not want to be
professiona