Chris Mutsvangwa

THE ruling ZANU-PF party has  failed to contain worsening fissures within the 53-year-old movement, rocked by the deterioration in internal cohesion due to escalating bickering over President Robert Mugabe’s succession, the Financial Gazette can report.
With two years remaining before crunch polls in which the veteran ZANU-PF leader will square off against his former deputy, Joice Mujuru, the governing party has never been this badly fractured.
Across its main wings, discord  has interrupted a wobbly restructuring that was set in motion after the party’s 2014 congress in an attempt to rejuvenate party structures affected by the brutal ouster of Mujuru and her followers.
Despite calls for unity by President Mugabe in the aftermath of Mujuru’s expulsion, forces eyeing the top office in the event that the ageing ZANU-PF leader retires from active politics have not relented.
The party’s youth wing and the Women’s League have been turned into battle grounds by the two factions — Generation 40 (G40) and Team Lacoste — that are vying for influence within the now-crisis-torn party.
The latter faction is rooting for Vice President Emmerson Mnangagwa to succeed President Mugabe while the former is adamant that ZANU-PF should have President Mugabe as the only centre of power and anyone harbouring ambitions to succeed him should be viewed as treacherous.
The infighting has spread to ZANU-PF’s affiliates such as students’ unions, workers’ unions and civic society lobby groups.
At the centre of the storm is the Zimbabwe National Liberation War Veterans Association (ZNLWVA), once seen as the vanguard of the party, whose leader, Chris Mutsvangwa, was suspended and sacked as minister of war veterans’ affairs last month.
In the Youth League, seven leaders — Godfrey Tsenengamu (Mashonaland Central), Godwin Gomwe (Harare), Vengai Musengi (Mashonaland West), Washington Nkomo (Matabeleland South), Khumbulani Mpofu (Bulawayo), Edmore Samambwa (Midlands) and Tamuka Nyoni (Matabeleland North) — were suspended last month for undermining President Mugabe and his wife, the First Lady Grace Mugabe.
The Women’s League, which is led by the First Lady, is equally ravaged with conflict, and its secretary for information and publicity, Monica Mutsvangwa, who was also a deputy minister, and secretary for administration, Espinah Nhari, were suspended for similar offences.
Several other provincial leaders were also suspended last month. These include Kizito Chivamba from Midlands, Ezra Chadzamira from Masvingo and Joel Biggie Matiza from Mashonaland East.
President Mugabe is now battling to resolve the factional conflagration, amid indications that he might have left it until too late.
Yesterday, the party held a Politburo meeting to discuss what party national secretary for administration, Ignatius Chombo, described as “important issues affecting the people”. The Politburo meeting will be followed today by a crunch meeting of the war veterans. The war veterans had been baying for a meeting with President Mugabe, who is their association’s patron, after an earlier meeting was pitilessly wrecked by police in February.
After the meeting with war veterans, the party will convene a meeting of its central committee on Friday, at which several disciplinary issues are expected to be dealt with and finalised.
Sources said party members, split along factional lines, were now irretrievably at odds that unity was no longer possible.
“We’ve been set up against each other. Unity is no longer possible,” a party insider said, suggesting there was now mass disaffection by Team Lacoste members, which he said could lead to “a breakaway that could essentially become a split”.
President Mugabe has told disaffected members of the party to lodge their grievances through official party channels.
But Team Lacoste members believe that getting justice from a system superintended by their opponents was completely impossible.
In the line of fire from Team Lacoste are perceived G40 members who include the secretary of the commissariat, Saviour Kasukuwere.
The Mnangagwa faction has also lost confidence in Vice President Phelekezela Mphoko, who is the chairman of the National Disciplinary Committee.

New war veterans Minister Tshinga Dube

ZNLWVA, currently led by Mnangagwa’s allies, has since passed a vote of no confidence in Mphoko, who has presided over the expulsions or suspensions of Team Lacoste members.
Speculation yesterday deepened that today’s meeting of the war veterans could again seal Mutsvangwa’s fate.
War veterans have reportedly been told to steer clear of contentious issues that may “undermine the President”.
The war veterans were supposed to organise the meeting and President Mugabe was only expected to attend as their patron. A patron is chosen as a special guardian, protector, or supporter of an organisation and is not necessarily a member of the association.
The war veterans had wanted President Mugabe to attend their earlier meeting aborted by riot police. At that meeting, they wanted to raise concerns over G40 members, whom they said were belittling their role and place in society and hijacking the party.
But soon after the meeting was ruthlessly crushed by police, President Mugabe gave a State of the Nation address at which he criticised Mutsvangwa, saying he took “exception to” his plans to mobilise war veterans.
“This irresponsible manner brings the name of the party and head of government into disrepute. People are beginning to wonder whether in fact we are governing properly in accordance with the rules,” President Mugabe charged.
President Mugabe again warned less than a week ago that the liberation war fighters had no right to tell the party how it should be run, saying ZNLWVA was a charitable institution like many others.
Branding Mutsvangwa and his team “weevils” who could be exterminated using gamatox, President Mugabe said they were free to excuse themselves from ZANU-PF.
Apparently, those remarks will set the tone for his indaba with the war veterans. About 10 000 war veterans are expected to attend the meeting.
But sources indicated that President Mugabe’s political statements did not imply that he was unconcerned with the possible demise of ZANU-PF, which looks inevitable given that Mujuru, who now fronts Zimbabwe People First (ZPF), left with thousands of committed cadres who have started mobilising for her party using the same structures they had before being sacked from ZANU-PF.
When Mujuru was fired, the ruling party also dismissed provincial and district committees which they alleged were aligned to her.
To highlight the fear of a surging ZPF, the party’s central committee meeting tomorrow is expected to allow the readmission some suspended bigwigs who were linked to Mujuru. These include former minister of State Nicholas Goche and former party political commissar and minister of transport, Webster Shamu.
These have been wooed back to stop a flourishing ZPF, whose political rallies have already shown promise of huge support from the populace even in instances were these have been addressed by unknown political entities.
The current expulsion of Mnangagwa’s allies, while sure to give G40 champions unfettered influence in ZANU-PF, will surely weaken the party itself.
Political scientist, Eldred Masunungure, said President Mugabe was faced with a situation that had “become very complex and unprecedented in the history of the party”.
“His control is kind of slipping, sliding, and I think this will be a test of his capacity to hold the party together, especially the war veterans sector. That is the most difficult test that he can either pass or fail, depending on how he handles it, and depending on the outcome of that meeting (with war veterans today),” said Masunungure, a professor at the University of Zimbabwe.
“His control is under severe test and I think it’s the sternest test since he took over control of the party in 1977,” said Masunungure.
Masunungure said the factional battles had become a “pendulum situation” and it was not clear any particularly faction had been vanquished.
“One day G40 appears to be gaining ground, the other moment it’s Team Lacoste. You cannot say with confidence that this faction is on top,” said Masunungure.
Political scientist, Ibbo Mandaza, who leads the Southern African Political Economy Series (Sapes) Trust, said President Mugabe was still in charge.
“(President) Mugabe is the one in control, however, tenuous that control may be. So far he is controlling the factions. It’s the factions that have lost control,” said Mandaza.
He said through his meeting with war veterans, President Mugabe had clearly “managed to contain the war vets”.
“The agenda setting (for the war veterans meeting with President Mugabe) is being done from somewhere,” said Mandaza, who also suggested that the veteran leader was also trying to “contain the Mnangagwa faction”.
“The G40 faction are in control at the moment but we don’t know for how long,” said Mandaza

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Victoria Chitepo

WIDOW of the late liberation war icon, Herbert Chitepo, Victoria, has died.

She was 89.Chitepo passed away at her home in Harare on Friday morning.
President Robert Mugabe has since confirmed her death.
He announced the news in his opening remarks to the ZANU-PF Central Committee meeting at the ruling party’s national headquarters in Harare this afternoon.
President Mugabe said Victoria collapsed and died at her home while she was preparing to go for the Central Committee meeting.
She was a member of the rulinga party’s key policy organ outside congress.
“We received the sad news of the death of cde Victoria Chitepo this morning. We heard she was preparing to come for this meeting when she just collapsed and passed away. Apparently, we are told she was alone when it happened and was found by her daughter who had gone there to pick her to this meeting,” said President Mugabe.
Her husband died in a  bomb blast in March 1975 in Lusaka at the height of the Rhodesian guerilla war. He was blown to pieces after a bomb planted underneath his Volkswagen Beetle car exploded outside his home in Lusaka.

Turnover for the period of approximately US$43,3 million was also 37,39 percent lower compared to the US$69,74 million

INVESTORS on the Zimbabwe Stock Exchange (ZSE) lost over US$400 million in the first three months of the year as investor sentiment on the equities market continued to weaken.

Market capitalisation fell 14 percent to end the quarter at US$2,626 billion, down from US$3,054 billion as at 31 December 2015.

The main industrials Index dropped by 15 percent to reach 97.61 points on March 31, while the mining index closed 17 percent to lower at 19.53 points over the same period.

Turnover for the period at US$43,3 million was 37 percent lower compared to the US$69,74 million achieved in the comparative period last year.

Foreign investors, who have been the mainstay of the market, were net sellers during the period, with foreign sales at US$36,4 million compared to foreign buys of US$19,6 million.

A total of 33 counters ended the quarter in the negative, while only 15 traded positively.

Beverage manufacturer Delta was among the notable stocks to fall in the quarter, shedding a fifth of its value while Barclays declined 34 percent and FMCG counter Innscor pared 37 percent.

Econet and Old Mutual closed the period on the upside with gains of 15 percent and eight percent respectively. The Source

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President Robert Mugabe

THE Zimbabwe government has announced a major shift in its controversial empowerment laws, softening its local empowerment demands on foreign mines and banks.

In a statement after a Cabinet meeting on Tuesday, Mugabe said he was prepared to amend the law “forthwith” to comply with the new policy. Mugabe’s statement comes after public disagreements by his ministers over the implementation of the law.

While government would continue to insist on 51 percent local ownership of mines for new business, it would allow existing mines to operate if they retain 75 percent of their earnings in Zimbabwe.

Foreign banks can retain control of their institutions, Mugabe said, striking down recent hardline remarks by his indigenisation minister, Patrick Zhuwao, who is also his nephew. The Source

More to follow…

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Prophet, Uebert Angel…”Never abuse your right to question”.

CONTROVERSIAL prophet, Uebert Angel (UA), has been something of an enigma. His departure from Zimbabwe has been mired in controversy, as has been his lifestyle and prophetic ministry. The Financial Gazette’s Online Editor, Paul Nyakazeya (PN), spoke to Angel from his base in England on these issues.

PN: I will cut to the chase. I know you have a well-documented portfolio of businesses globally but, how much are you really worth?
UA: If you want to know my value, I would ask: How much time do you have? Given that you don’t have much time, I will give you the short version and here it is: You can’t put a value on something already paid for. Jesus paid for me so do the mathematics.

PN: You have a media blackout policy and you do not respond to the media. Why is that?
UA: Never abuse your right to question; the fact that someone makes accusations or makes allegations against me does not mean I owe them an answer no matter how well-intentioned they, as an enquirer, may be. The privilege of a real open dialogue springs from a real genuine relationship.
PN: In as much as you say you have a media blackout policy, why is it that you are always in the news headlines yet you say you do not speak to the media?
UA: We are more concerned about our vision and mission, whereas others are more concerned about our day-to-day lives than they are about our mission and vision. Thus they are fixated on the life of Uebert Angel yet Uebert Angel is fixated on the life of Christ.
PN: You say a lot of wrong things have been written about you, how do you deal with bad publicity?
UA: I personally love bad publicity because to me it’s part of our charitable exercises. We consider it part of our Good News Aid charity arm. You need to understand that some rogue journalists can never put food on the table until they invent and sell a bad story about Uebert Angel, so we are helping a few journalists feed their families. It’s all charity.
PN: Uebert Angel is known as a very public figure yet most would say you are an enigma. Would it be right to say you are an enigma?
UA: The rationale is I have never found a companion that is so companionable as solitude. It is in those moments of solitude that I can be intimate with the divine, the world we live in is starved for solitude, silence and privacy.
PN: So are you saying you want to be alone?
UA: You missed a profound point. I never said I want to be alone. All I said is I want to be alone with God. Therein lies all the difference, because with him I am a crowd.
UA: We have semi-autonomous chapters across the world with pastors who follow the Good News vision. This has allowed for growth all over the world. The Good News message is gaining traction because its scope is built on the very basic, but fundamental message found in the word of God that empowers people to realise their God given potential to prosper. The Good News message breaks the yoke of poverty and it sets free all those who believe and follow the precepts of Jesus Christ.
PN: Around the world, you were known as the leader of the modern-day prophetic movement, but now you are being referred to as the Good News man, a leader of the Good News revolution, why the shift?
UA: In the Perpetual Calendar of Inspiration by Vera Nazarian she says “In the kingdom of glass everything is transparent, and there is no place to hide a dark heart”. God awakened me to the fact that perfection eludes all mankind, and that birthed in me a desire to embrace the Good News of God’s grace. Come to think of it that’s the fundamental difference between Christianity and all the other religions, that word (is) grace.
PN: You mentioned the word grace. You said it is what makes Christianity different. Could you expound a little more on that?
UA: During a British conference on comparative religions, experts from around the world were discussing whether any one belief was unique to the Christian faith. They began eliminating possibilities. Incarnation? Other religions had different versions of gods appearing in human form. Resurrection? Again, other religious had accounts of return from death.
The debate went on for some time, until C.S. Lewis wandered into the room. “What’s the rumpus about?” he asked, and heard in reply that his colleagues were discussing Christianity’s unique contribution among world religions. In his forthright manner, Lewis responded, “Oh, that’s easy. It’s grace.”
PN: We have heard what CS Lewis argued, but what is your definition of grace?
UA: Religion says because I am flawed I am unacceptable and grace says though I am flawed I am acceptable. Now you have my definition.

I want to be known or remembered in the same vein that Charles H Spurgeon, described John Bunyan.

PN: Ok but what is the difference between grace, mercy, and love? Are they the same thing?
UA: It’s facile, but let me simplify it even further using a judiciary example or precedent. If you commit a serious crime and you are before a judge and the jury finds you guilty and the judge says you are forgiven go home, you are free. That’s mercy. But love goes further in that the same judge tells you to go home and buys you a mansion; you are not only free but the judge buys you a mansion as if your crime is being rewarded. However, when it comes to grace, the jury finds you guilty and you are sentenced to death but no sentence is removed. You see, grace does not remove the sentence; in fact it intensifies it. But it gives you the mansion then the judge himself stands up and confirms that the sentence still stands and goes and takes the death sentence on your behalf and you walk free. Now that is grace. That is why we call it the Good News (Euagellion). It is almost too good to be true.
PN: The Good News revolution has gained traction the world over, we have read you preaching to the poverty stricken, but your critics have picked on instances such as your interacting with celebrities in Hollywood, and spoken against that. So the question is: Who is the real target of this Good News?
UA: I can indubitably say on the authority of the inherent word of God (that) anyone who is turned off by this Euagellion, the Good News of God’s grace, is not ready for heaven. Good News is not homogenous but heterogenous; it accommodates all, no matter what shape or size you are. It is a one size fit all message!
PN: As mentioned earlier, there are a handful of critics your people say oppose your every move. How do you handle that criticism and opposition?
UA: The servant is not higher than his master. If they opposed the master, they will oppose his servant. It is clear in the biblical text that the devil seeks to hit the shepherd in order to scatter the flock. So when you see people opposing the leader, their main target is to scatter the sheep and therein lies the truth about who their boss is. That is why I don’t respond or waste my words on people who deserve my silence. God acts but the devil reacts so answering makes me the servant of the latter when I am of the former.
PN: Your character has been besmirched in some sections of the media not only in Zimbabwe yet the church is still reportedly growing and spreading its wings to different countries.
UA: I have the media to thank this for. They assassinate my reputation but you see reputation is what people say about you but integrity is what God says about you and you see God anoints integrity and not reputation. Furthermore, the beauty of the Good News is that, it is not about me; it’s all about Jesus Christ. Jesus said if I be lifted up, I draw men unto me. Then he said, I will build my church and the gates of hell will not prevail. Here at the Good News Church we are not lifting ourselves up. It is Christ who has built the Church through his grace and the gates of hell will not prevail. You can fight Angel but you cannot defeat the grace upon him.
PN: Do you have anything that you regret doing in your life and ministry?
UA: Did I have that effect on you, that you thought I was Jesus all this while? I am an imperfect servant of a perfect master so do the math. Of cause I have regrets, show me a man of God who says I have no regrets and I will show you a liar who is headed for hell.
PN: Give us an example of something you regret?
UA: I became too successful in public and a failure in private. I have raised a lot of people to the knowledge of Christ. Some became millionaires, by the grace of God. I have raised a whole range of people from mediocrity to changing social and economic stratification. I raised men of God, and in that same vein I also let some people down, prime among those is my immediate family. I realised that crowds come and crowds go. Thus I decided to spend more time with my family and I advise every man of God to do the same. It starts from the house before it goes to the church but I had my priorities mixed up but that is the Angel of yesteryears. I am still not perfect but I am perfectly me.

PN: How would you like to be remembered?
UA: I want to be known or remembered in the same vein that Charles H Spurgeon, described John Bunyan. He said of him, “If you cut him, he’d bleed Scripture.” Let it be known of Uebert Angel that when you cut him, he bleeds Good News.
PN: What is your greatest accomplishment so far?
UA: My greatest accomplishment is to be myself in a world that is constantly trying to make you somebody else.
PN: We have seen you with celebrities and business tycoons in the business world but one in particular is what our readers want to know how you met him: Nat Rothschild, whose family is believed to control world economies?
UA: I think repeating oneself is a clear sign of old age. I am young and so I won’t repeat myself because you dealt with this in your last publication. By so saying, I think the interview is over. Thank you for having me.
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The greenback anchors the country’s multiple currency regime.

A CASH crunch that has forced banks to reduce withdrawal limits is worsening, despite assurances from the Reserve Bank of Zimbabwe (RBZ) that the crisis would abate.
Analysts warned this week that the situation was likely to intensify, blaming a catalogue of economic circumstances for aggravating the situation.
The cash crisis, which initially hit smaller banks but has spread to bigger financial institutions, has been blamed on the increasing demand for cash as well as the reluctance by Zimbabweans to use plastic money.
Imports, which have skyrocketed against the backdrop of a shrinking export base, are also to blame for the depletion of cash in the economy.
Zimbabwe ditched its own currency in 2009 to escape hyperinflation that afflicted the economy after the demise of the country’s agricultural sector which followed a chaotic land redistribution exercise.
“This situation is likely to be with us for a long time to come; it’s far from over,” an executive with a financial services group told the Financial Gazette last week on the sidelines of the opening of a Green Zone centre in Bulawayo.
The country’s trade deficit last year hit US$3 billion, as imports continued to surpass exports despite a raft of measures put in place by government to bridge the gap.
Foreign direct investment, which could result in the injection of capital to boost liquidity in the economy, has been too low due, largely, to government policies, which have discouraged foreign capital.
The mining sector has been afflicted by low international commodity prices, resulting in lower-than-expected export receipts from the sector.
Independent economic consultant, John Robertson, said a firming United States dollar had compounded the country’s cash woes due to the fact that tourists from South Africa and other countries with weakening currencies were now finding costs in Zimbabwe too high.
The greenback anchors the country’s multiple currency regime.
“The State has watched over the collapse of agriculture, while its indigenisation policy is discouraging foreign investment. Its mining policies are hard-line. What is left is what we can earn from tourism, but we have a strong US dollar-driven economy, and that makes it difficult for tourists to come here as it is expensive,” said Robertson.
Last month, Youth Development, Indigenisation and Economic Empowerment Minister, Patrick Zhuwao, gave foreign-owned companies up to April 1, 2016 to transfer majority ownership to blacks, saying firms that failed to comply would be forced to close.
Although his directive has failed to get support from Cabinet colleagues, it nonetheless triggered investor fears and battered confidence in the frail economy.
President Robert Mugabe’s threats last week to kick out the remaining white farmers from their land and give it to ex-liberation war fighters may worsen confidence in the economy and affect bank deposits, analysts said.
The Commercial Farmers Union estimates that there are only 300 white commercial farmers remaining in the country, after over 4 500 of them were forced off their farms by a controversial land reform, which started in 2000.
Japhet Moyo, the secretary-general of the Zimbabwe Congress of Trade Unions, said workers were suffering most from the cash crunch.
“It is our members who are most affected, as it appears that we are sinking and are sinking very fast as a country,” he said.
“It’s a very unfortunate situation. In fact, it is a double-edged sword for our members who go for months without salaries and when they do receive the salaries, they find (withdrawal) limits. The cash crisis is a problem we are likely to have for the foreseeable future,” Moyo said.
Zimbabwe Banks and Allied Workers Union secretary-general, Peter Mutasa, agreed with Moyo, saying: “It’s a crisis of huge magnitude and its more than panic that is taking place behind the scenes even though authorities may present a straight face to the public.”
“The problems don’t come from the banks alone; they are entwined with the high import bill, low aggregate demand and low capacity utilisation in the country. So no one person has the capacity to address all these issues,” Mutasa said.
“Indications are that with the start of the tobacco season, the situation may ease, but after the tobacco season things will deteriorate again…”
For the banking public, the current cash crisis gives them a sense of déjà vu; the hyperinflationary crisis saw many failing to withdraw money from banks due to a severe cash shortage that was worsened by the daily erosion of the domestic currency’s value.
This was despite the fact that the RBZ had the capacity to print the currency, which it no longer has now.
In fact, printing more notes exacerbated the situation as it fuelled hyperinflation even further.
The RBZ tried to contain the crisis by taking off multiple zeros from the currency, but this failed to contain the situation.
The central bank and local banks have injected nearly US$270 million in US dollar bank notes since the beginning of this year, but this has not been enough to satisfy the high demand for cash in the country.
To contain the crisis, banks have suspended use of Automated Teller Machines (ATMs), with the few ATMs still operational now imposing daily withdrawal limits of US$500 or less, while the real-time ZimSwitch service, which allows depositors to withdraw cash from other banks besides their own, has been switched off.
Long winding queues have surfaced at most banks as depositors wait patiently to get cash from their banks, which often rely on deposits from other customers for cash withdrawals by others.
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Mines Minister, Walter Chidhakwa

MUTARE — Government has resumed the relocation of villagers residing in Chiadzwa to Arda Transau Resettlement Area as it moves to secure the vast diamond concession.
The exercise is being spearheaded by the Ministry of Mines through the Zimbabwe Consolidated Diamond Company (ZCDC).
Government is relocating all families residing in a concession previously owned by Diamond Mining Company (DMC) while awaiting court processes to finalise pending cases involving other miners that were kicked out of Chiadzwa early this year.
The villagers will receive maize and beans to carry them to the next harvesting season as well as US$1 000 to cater for miscellaneous expenses.
Arda Transau, which measures 12 000 hectares, has capacity to accommodate only 1 800 of the 4 300 families in the Chiadzwa diamond concession.
Close to 1 000 villagers have been relocated from the Chiadzwa fields since 2010.
Anjin relocated 466 families while Jinan Mining moved 129 families.
Mbada Diamonds resettled 102 families while Marange Resources and DMC moved 44 and 40 households respectively, according to 2014 figures.
The relocation had stopped following the reluctance by the former Chiadzwa diamond companies to fund the exercise.
The situation had exposed those residing in the concession to a hazardous environment prone to lung infections from the dust they were continuously exposed to as well as malaria outbreaks caused by water settling in alluvial mining pits, which have become breeding grounds for mosquitoes during rainy seasons.
Mines Minister, Walter Chidhakwa, who recently toured Arda Transau, said government was resuming the relocation exercise to secure the fields as well as provide a habitable environment for the villagers.
He said there were currently 71 houses that had been constructed and 35 that were at various stages of construction.
“There are villagers who are still living in Chiadzwa and it is imperative for us as government to make sure that they are relocated, not only as a security measure but as a matter of prioritising the welfare of our people. We need to remind them that we have not forgotten them by making sure that they are awarded decent accommodation,” he said.
Chidhakwa said government, through ZCDC, was now responsible for the relocation after kicking out the previous claim holders from the vast diamond concession after their licenses expired.
“We will start with villagers under DMC despite the fact that they have initially relocated few people than anticipated. Anjin and Mbada villagers should have been relocated first but we are still waiting for the court outcome since they took us to court,” said Chidhakwa.
“But what is clear is that the process will begin immediately. We will make sure that each household is given maize and beans that will last them until the next season. They will also get US$1 000 for them to settle in Arda,” he added.
The Mines Minister was, however, not pleased with the state of the newly-built houses and those already occupied, which are substandard.
Chidhakwa tasked ZCDC to evaluate the number of the sub-standard houses before government summons the contractors.
“It’s clear that the job was hurriedly done; some of the houses that have just been built and yet to be occupied are already developing cracks. We will have ZCDC to look into it but what is also clear is that whoever did the job was paid in full but short-changed us.
“So, as government, we will simply look for the contractors and ask them to show us the houses they built, and answer for that.
“We can’t just let them go,” he said.
Permanent secretary in the Ministry of Mines, Francis Gudyanga, who accompanied Chidhakwa on the tour, did not mince his words and boldly declared that job done was “a total rip off”.
Arda Transau villagers have over the years raised concern over the poor standard of the houses. The walls and floors of the houses have been cracking, posing a threat to dwellers.
Several reports have indicated that rooftops succumbed to storms on numerous occasions.
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Local Government Minister Saviour Kasukuwere

Andrew Kunambura

LOCAL Government Minister Saviour Kasukuwere has finally had his way after the Harare City Council capitulated to an order compelling the cash-strapped municipality to have its books looked into by forensic auditors.
The development is seen preparing the ground for Kasukuwere to crack the whip on the local authority, as the last bastion of power for the opposition Movement for Democratic Change (MDC-T).
The audit was first mooted in 2014 at the height of a salary scandal whereby Town House management was exposed for earning hefty salaries and perks while presiding over chaotic service delivery.
It, however, did not materialise amid reports that the city fathers were digging in their heels for fear of playing into ZANU-PF’s hands.
Since the formation of the MDC-T in 1999, ZANU-PF has struggled to penetrate the capital.
Following the decision by the MDC-T to boycott all national polls citing an uneven electoral playing field, ZANU-PF has been given a free rein to recover some lost ground through by-elections.
Kasukuwere, who doubles up as ZANU-PF’s political commissar, has also been making use of his position as Local Government Minister, to capitalise on the MDC-T’s shortcomings in running local authorities under its dominion.
Where similar audits have been conducted at the behest of the Local Government Minister, they have opened cans of worms.
In Gweru, the mayor and nearly 20 councillors are currently on suspension on allegations of gross misconduct and mismanagement of council funds.
Despite their court victories, the Gweru city fathers have struggled to get reinstated.
Gweru is currently being run by a caretaker commission appointed by Kasukuwere.
In Mutare, the town clerk Obert Muzawazi had to resign from his position in a huff after an audit sanctioned by Kasukuwere unearthed rampant rot at the municipality.
Having succeeded in arm-twisting Harare city fathers to engage forensic auditors, Kasukuwere is seen capitalising on any finding that could point to sleaze at Town House to weaken the MDC-T hold on the municipality.
Last Friday, the city fathers approved the audit by Price Waterhouse Coopers at a full council meeting at the recommendation of council’s audit committee.
The audit, kicked off on Monday, with its main targets being the city’s business units, including those it operates in partnership with outsiders.
Companies that are under the audit spotlight include EasiPark, City Parking, Sunshine Meats, Mabvavazuva Village, Shawasha Business Complex, High Glen Textile Factory, Peal City, CC City and Sunshine Development (Private) Limited.
Some of them are no longer operating.
Ideally, these business units were meant to augment income from rates paid by residents and companies, but most of them have been bleeding due to mismanagement.

Harare Town House

Mayor, Bernard Manyenyeni, confirmed the audit this week.
He said: “The directive came from the minister who I believe is looking for comfort and assurance that council is conducting its business at its best. It is being conducted by internationally acclaimed audit firm, Price Waterhouse Coopers, who won the tender”.
Kasukuwere had written to mayor, Bernard Manynyeni, on July 27, 2015 instructing him institute the audit.
Council, through acting town clerk, Josephine Ncube, then wrote to the auditor general, Mildred Chiri, three months later in September, asking her to engage a suitable auditor on behalf of council.
Acting on the matter, the auditor general then invited interested audit firms to submit bids for the audit, with Price Waterhouse Coopers emerging as the successful winner.
Council has since written back to Kasukuwere informing him of the latest development.
“Price Waterhouse Coopers firm of auditors have been appointed by the auditor general in terms of the Audit Office Act (Chapter 22:18) to carry out the forensic audit which will commence on 11th April 2016,” reads the correspondence in part.
Price Waterhouse Coopers would be paid US$160 748 for the audit, which will be completed in eight weeks.
According to the terms of reference set out by council, the auditor is supposed to examine the city’s governance, performance and operational issues as well as its organisational structures.
The auditor will also obtain and review all arrangements and contracts signed between each company and service providers or other parties to the business.
“For each arrangement, the auditor will review the procedures followed, including a review of whether all necessary board or council approvals were sought before the contracts/agreements were signed. This will help ascertain the relevance of each agreement or contract entered into in enhancing the value of the business,” minutes of the audit committee in our possession said.
The lucrative parking business has of late been under the spotlight for the wrong reasons, with an internal investigation conducted last year showing the city was losing thousands of dollars to its corrupt parking marshals.
Council had to terminate an arrangement with a South African partner after realising that it was not benefitting from the arrangement.
Harare services an estimated three million people, including those from metropolis such as Chitungwiza, Norton and Ruwa.
Service delivery has been compromised huge default rates by residents and companies, with several political bigwigs from the ruling ZANU-PF party having been implicated before for non-payment of rates.
The city has lost its financial self-sustainability status as it has resorted to borrowing to finance its day to day operations, including for salaries.
It has also reported huge budget deficits at the end of each financial year for a long time.
As evidence of this shortage of funds, council employees have gone for five months now without receiving their salaries, while the local authority has also failed to provide basic services such as refuse collection and regular supply of treated water into homes.

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The collapse of the federation could deal a body blow to the MDC-T led by former Prime Minister Morgan Tsvangirai, which counts the union among its key constituents.

Shame Makoshori
ZIMBABWE’S main labour federation, the Zimbabwe Congress of Trade Unions (ZCTU) is in financial dire straits, with debts to the tune of US$1,4 million threatening to destroy the country’s oldest trade union movement which gave birth to the main Movement for Democratic Change (MDC) in 1999.
The Financial Gazette can exclusively reveal that the labour union has already raised the red flag in the hope that it may receive a shot in the arm to avert collapse.
Documents in our possession indicate that ZCTU’s plight is a result of the general crisis afflicting the country’s economy.
Unemployment has spiralled out of control, with estimates suggesting that 90 percent of Zimbabwe’s able-bodied are out of formal employment.
The catastrophic closure of companies coupled with widespread retrenchments have forced many into the informal sector, thereby starving unions, including ZCTU, of the much-needed income to fund their activities.
Sectors worst affected by the job carnage include agriculture, which has lost 280 000 jobs in 16 years.
Only 20 000 workers are still gainfully employed in the agricultural sector, from 300 000 in 2000 when government embarked on controversial land reforms that decimated crop output.
The clothing and textile industries’ unions have seen their membership drop to about 8 000, from about 35 000 in the mid 1990s. The unions are affiliates of ZCTU
ZCTU relies partly on subscriptions from affiliates, with much of the funding coming from donors.
In fact, 85 percent of its revenue is from donors, with only 15 percent coming from subscriptions.
Donors provided US$5,7 million in grants and donations to the ZCTU between 2011 and October 2015, against US$1 million in membership subscriptions from affiliates.
Impeccable sources said LO Norway, FNV Monial of the Netherlands, the American Centre for International Labour Solidarity and FOS of Belgium have either withdrawn or scaled down funding to the ZCTU.
Other ZCTU donors include Olof -Palme Centre of Sweden, LO/FTF, IF Metal, APHEDA, International Labour Organisation, OATUU, ITUC of Belgium, ITUC Africa and FES, which are, however, also facing their own challenges.
ZCTU secretary-general, Japhet Moyo, reckoned in a report presented in October last year that should the situation persist, it poses “a serious threat to the existence of ZCTU”.
Poignantly, the mismatch between its income and expenditure is taking a toll on the trade union.
ZCTU’s annual income retreated to US$366 077 during the 10 months ended October 31, 2015, from US$1,8 million in 2011.
It generated US$1,7 million in 2011 and spent US$2,1 million during the same year, creating a US$337 416 deficit.
ZCTU achieved a surplus in 2012 and 2013, before plunging back into the red in 2014 and 2015, when deficits reached US$358 711 and US$236 922 respectively.
The accumulated deficit was US$1 million at the end of September last year.
Another major worry is ZCTU’s rising debt, which has ballooned from US$78,000 in 2011 to US$1,4 million.
In the event that the deterioration goes unchecked, ZCTU risk losing its assets, including its most prized possession, the multi-storey Gorlon House in Harare.
The taxman, cumulatively owed US$99 764 as of October 31 last year in Pay As You Earn, is one of ZCTU’s main creditors.
As of October 31, 2015, workers were owed US$116 331 in unpaid salaries; Fidelity (US$65 996 in unremitted pensions), the National Social Security Authority (US$17 652), while provisions for gratuity amounting to US$215 692 were outstanding.
Mobile telecommunications firm, NetOne was owed US$53 173, the report indicated, noting that law firm, Mbidzo Muchandehama was owed US$65 780.
Moyo said unless the situation was resolved urgently, “we are nailing the last nail to the ZCTU coffin for burial”.
“The ZCTU realises the time bomb it is sitting on and is therefore keen to move from this current situation to a sustainable one although it is faced with harsh national situations which may result in its extinction,” observed Moyo in the October 2015 report.
Reports also confirm the flight of donors, itself compounded by a liquidity crisis that has crippled its 34 affiliates, 75 percent of whom have failed to remit subscription fees since July 2011.
Emotions have been running high within the federation, with Moyo accusing at least 25 affiliates of throwing the 108 000 member trade union into “distress” and driving it towards “insolvency and extinction” due to non remittance of subscriptions.
During boom times in the mid 1990s, ZCTU’s membership was estimated at 585 000.
Moyo said while some unions were genuinely in the red, many had received substantial grants and donations from international donors, but were failing to pay their dues to the ZCTU.
Attempts to assess affiliate unions’ accounts by the ZCTU have ran into serious complications after many of them refused to allow officials into their offices, raising fear of fraud, financial mismanagement and corruption.
The formation of rival unions such as the Zimbabwe Federation of Trade Unions has also resulted in the cannibalisation of membership.
ZCTU admits that unions “propped up by the ruling party to directly challenge the ZCTU by unorthodox means”, had seriously undermined membership growth and dealt a blow to revenues.
“Other affiliates are also receiving direct financial support from partners. However, almost all the affiliates being directly supported are among the unions not remitting subscriptions. The funding levels from cooperating partners also reflect a decrease which is an indicator of things not being well in their funding consortium. Membership continues to decline erratically as a result of retrenchments, company closures and dismissals including the effects of July 17 Supreme Court judgment (which) added fuel to the already burning house where over 38 000 workers were dismissed in one month and more are still being dismissed,” said Moyo.
In July 2015, the Supreme Court passed a ruling that empowered companies to fire workers on notice without compensation, sparking unprecedented dismissals.
“Some of the affiliates last paid their subscriptions to the (ZCTU) centre…before the last congress in 2011. This is an indication of lack of commitment to their responsibility. Verification of the challenges facing some non paying unions was done in 2013. It is unfortunate that no deliberations were done on the report’s findings. Some unions had no information such as bank statements, income and expenditure statements, membership registers…large amounts were being spent on leadership monthly allowances and travel and subsistence costs yet nothing was being paid to ZCTU.
ZCTU is currently taking measures to remain afloat, including relocating its head office to Gorlon House in Harare, which is owned 100 percent by the labour body.
It is also working towards reducing its administration and staff costs.
The collapse of the federation, according to ZCTU insiders, would deal a body blow to the MDC-T led by former Prime Minister Morgan Tsvangirai, which counts the union among its key constituents.
The ZCTU was formed in February 1981, bringing together 52 unions that had existed separately.
At the time, unionists that were closely associated with the ruling ZANU-PF party took over the reins of the labour movement.
Thus, during the first five years of independence, the relationship between ZANU-PF and by extension, government and the ZCTU was largely paternalistic.
It was only after the collapse of the then executive of the ZCTU, and its second congress held in 1985 that a more independent leadership, largely drawn from the larger and more professionally run unions that the relationship between the ruling party and the ZCTU was reduced to arms-length.
Thereafter, the ZCTU steered a more independent and increasingly confrontational position.
The divide between the ZCTU and government widened when the former opposed attempts by the latter to introduce a one-party state in Zimbabwe in the late 1980s following the merger between the two parties, ZANU (PF) and ZAPU in 1987.
The relationship was further strained following the introduction of the Economic Structural Adjustment Programme in 1991.
As the hardships arising from the market-based reforms deepened, government increasingly resorted to draconian measures to shore up its waning political support.
As issues of governance deteriorated, the ZCTU increasingly became the torch bearer for alternative governance.
Together with 40 other civil society groups, the ZCTU spearheaded the formation of an alternative party, the MDC, whose top leadership came from the labour movement.

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Environment, Water and Climate Minister, Oppah Muchinguri-Kashiri

THE wet spell that has swept across the country over the last three months has rescued a potential wildlife crisis caused by drought which wreaked havoc in southern Africa between October and January.
The drought was brought about by the El Nino weather phenomenon which, according to meteorologists, has now given way to La Nina.
The El Nino effects include reversal of wind patterns across the Pacific, triggering drought in Africa, Australasia, and unseasonal heavy rain in the Americas and Europe.
La Nina does the opposite.
Since the beginning of Zimbabwe’s traditional rain season in October last year, the country has received below normal rainfall across the country.
The country also experienced unprecedented heat levels, which broke previous records, with some areas registering temperatures as high as 48 degrees Celsius.
The drought, which has also caused a famine, was threatening to wipe out the country’s wildlife resources, with pastures vanishing and water sources drying up.
Although the crop situation can no longer be rescued, with government conceding that at least three million people already require urgent food aid, wildlife has been given a new lease of life.
Environment, Water and Climate Minister, Oppah Muchinguri-Kashiri, first raised the red flag in January, warning that there would be disaster if water sources continued to diminish in the country’s national parks and conservancies.
She appealed to corporates and the international community to assist government drill boreholes in wildlife sanctuaries to help the animals survive.
While these boreholes would provide drinking water for the animals, government had no solution to dwindling pastures for animals like elephants, buffaloes, rhinos and other endangered species.
Depleting water sources were also seen as helping poachers since the animals would be severely vulnerable.
The country has recently struggled to contain the poaching crisis, highlighted by the massacre of hundreds of elephants through cyanide poisoning.
Elephants are now on a red list after being identified by conservationists as facing extinction due to a combination of human activity, such as poaching, and natural effects.
Poachers normally operate during the drier periods between August and November.
And with most of Zimbabwe’s wildlife areas being located along borderlines where countries are separated by rivers, whose levels recede during the period.
Poachers easily cross the rivers during this period, raiding animals in such prime wildlife sanctuaries like Hwange and Gonarezhou National Parks.
These are Zimbabwe’s largest wildlife zones which flourish with various species of animals.
In an interview with the Financial Gazette this week, Muchinguri said government was satisfied with the current wet spell as it had brought life back to these areas.
“Generally, we have received adequate rainfall over the past weeks, which has helped revive the situation in our national parks,” she said.
“I would like to report that 60 percent of the country now has received above normal rainfall and we are very pleased because it gives a signal that there is life now in our national parks. I have since shared with Cabinet that the situation in those parks has improved a lot,” she added.
Figures from the meteorological services department show that Hwange National Park, Mana Pools and Gonarezhou have all recorded an average of 60mm rainfall per day over the past week.
Muchinguri said: “We are very happy with that because the rainfall will help improve the water levels and pastures, which means animals will have enough food and water to drink.”
Government, she said, has since shelved its plans to drill at least 60 boreholes to add to the current 65 that exist in the national parks.
“The pressure that we were under of wanting to drill 60 boreholes to add to the existing 65 in our parks is a situation we are evaluating to see if we still require them since we have received so much rainfall which has been forecast to continue,” she said.
Research has proved that prolonged drought conditions can negatively affect wildlife.
One study done by United States National Wildlife Health Centre shows that drought conditions can affect wildlife populations in many ways — from changing homeland ranges in an effort to find water and food to creating conditions that can impact their health.
As drought conditions worsen, wildlife will seek alternative habitats where conditions are more favourable for them to raise their young, seek shelter and get water supplies.
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The Zimbabwe Congress of Trade Unions (ZCTU) wants the ILO to mediate in talks with government.

ZIMBABWE’S main labour federation has approached the International Labour Organisation (ILO) to intervene in the pay dispute between the National Railways of Zimbabwe (NRZ) and its 6,000 workers who are on strike over non-payment of salaries for 15 months.

The Zimbabwe Congress of Trade Unions (ZCTU) wants the ILO to mediate in talks with government, the 100 percent shareholder in the troubled rail monopoly, to pay the salaries.

NRZ workers, who went on strike on March 29, say NRZ owes a total $87,5 million in unpaid salaries from January 2015 to March this year. Workers have rejected an offer by NRZ to pay part of their salaries for January this year, prompting the company to approach government to declare the action illegal.

In a letter to the ILO last week, ZCTU told the United Nations agency that the crisis at NRZ was caused by “misplaced priorities (and) both government and management incompetence to turn around the parastatal.”

“The dispute is of nonpayment of wages for the period January 2015 to March 2016, a period of 15 months.  The company owes about $87,5 million in salary arrears. On 29 March 2016 the workers engaged on a strike to force the employer to pay their salaries which are overdue,” said ZCTU secretary-general Japhet Moyo in the letter.

“This failure to pay salaries has also affected the trade unions in terms of subscriptions not remitted to the unions. The unions are now incapacitated to conduct their activities. Following the strike, management have invoked the law by approaching the Minister of Public Service, Labour and Social Welfare to issue a show cause order whose effect is to terminate a legitimate strike and may have consequences of dismissing employees who have a legitimate cause.”

He requested the ILO to approach government and demand full payment of salaries to NRZ workers.

He said the ILO must also demand that workers do not become victimised for undertaking the industrial action.

“The government must not invoke its law to deal with the striking workers, which law is inconsistent with the Constitution of Zimbabwe and principles of freedom of association and protection of the rights to organise, to which it is a party. The government must also ensure trade union subscriptions are remitted to allow these organisations to function properly,” Moyo said. The Source

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Farmers owe Zesa close to US$100 million. In total, the utility is owed over US$1 billion.

ZIMBABWE has managed to save 110MW of electricity, the size of a small power station and about a tenth of current output, since pre-paid meters were introduced in 2012, the country’s power utility has said.

The southern African country’s current output, including imports from regional electricity suppliers, was 1,190MW as of Tuesday, against peak demand of 2,200MW. The power deficit has affected industry and households, which often go for hours without electricity.

In a statement, Power utility Zesa’s distribution unit said paying upfront for electricity has seen consumers consciously scaling down on use, resulting in energy savings.

“Customer habits have changed as they now avoid wastage and use electricity efficiently,” Zesa said.

“Capacity in the range of 110MW was released as a result of deployment of prepaid meters.”

To date, Zesa has managed to install 563,000 pre-paid meters. An additional 120,000 meters for residential users are expected to be installed by the end of 2016, Zesa said. An additional 40,000 installations are targeted for the commercial, industrial and farming sectors.

Zesa has secured $130 million from the African Export Import Bank for the procurement of 130,000 prepaid meters.

The installation of pre-paid meters in the commercial, industrial and farming areas is expected to begin in the last quarter of 2016. There has been resistance to the installation of meters on farms, with farmers arguing that their seasonal income is better suited to the current post-paid system.

Farmers owe Zesa close to $100 million. In total, the utility is owed over $1 billion.

Apart from the savings from the pre-paid metering project, Zimbabwe has managed to stabilise its power supply situation through the imports of up to 400MW from regional suppliers such as South Africa’s Eskom, which has a discretionary agreement with Zesa for off-peak supplies. Zimbabwe also imports power from Mozambique. The Source

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Finance Minister Patrick Chinamasa

AS the trade deficit continues to widen, Zimbabwe has retreated to the age-old debate: to ban or not to restrict imports.
On the one hand, are those prodding government to protect domestic industries from foreign competition as way of giving them the breathing space needed to recover from nearly two decades of economic turmoil.
A section of traders who are making money from imported goods is obviously baying for a free market system in which the State should leave everything to market forces.
Consumers, attracted to the relatively lower prices of imported products, are throwing their weight behind the latter.
Naturally, economists are torn between the two arguments.
A large number of them believe that while it is noble to shield local industries from competition, the country must strike a balance between re-industrialisation and adhering to existing trade agreements.
Authorities in Harare are worried by high imports, which have resulted in the exportation of large amounts of cash in a liquidity strapped market.
At the same time, high imports, against declining exports have triggered sustained current account deficits, estimated at about US$3 billion per annum.
There seems to be consensus between the Ministry of Industry and Commerce and that of Finance that the only way to close the gap would be through tougher restrictions on imported goods.
Imports make up 70 percent of goods available on the local market.
Buy Zimbabwe Trust, an initiative encouraging locals to buy products made locally, says the high current account deficit was unsustainable.
“We cannot exist as a country with a high current account deficit,” said Munyaradzi Hwengwere, chief executive officer at Buy Zimbabwe Trust who warned that every form of restriction must be temporary.
“It means at one time we will crash. We have spent a cumulative US$15 billion in the past five years importing goods, which is higher than our national debt. We must protect local industries but we must always bear in mind that we must not protect mediocrity. We must not protect failure,” Hwengwere told the Financial Gazette.
He said careful consideration should be given to assisting companies and industries with the capacity to help the country recover, than protecting everything as this could also end up hurting the markets.
In a key note address to a Buy Zimbabwe conference in March, Finance Minister, Patrick Chinamasa, emphasised the need to protect infant domestic industries from competition from multinationals exporting into Harare.
He said due to hard hitting global sanctions placed on Zimbabwe for over a decade, domestic industries have been competing at a disadvantage and therefore cannot be left to compete without government leveling the playing field for them.

Buy Zimbabwe Chief Executive Officer Munyaradzi Hwengwere

Chinamasa said he was happy with the quality of goods coming out of the domestic market, but was worried that higher production costs in Zimbabwe placed them at a disadvantage on the regional scale when it comes to pricing.
The minister said if the troubled firms were to recover, they must be able to exercise patience.
This means Zimbabweans must accept the higher prices, and even ignore poor quality, in order to give the firms a “gestation period”.
“We have to train our people so that these companies go through a gestation period. In terms of quality, our products compete globally. Where I have a problem is on pricing,” Chinamasa said.
“We have said we are under sanctions; we need to protect the local industry and assist those which show capacity to expand to other countries to avoid de-industrialisation. I will go on to protect local capacity to produce goods (but) convince me that you can produce a product that is worth protecting, then I give you protection,” he added.
Since a biting domestic economic crisis that cut Zimbabwe’s gross domestic product by 50 percent between 2000 and 2008, all of the country’s industries — food, car assembly, clothing and furniture manufacturers — have been forced to undergo painful restructuring.
But their mortality rate has continued to rise.
Government has been under pressure to find ways of restricting imports, which have forced companies to scale down production and cut close to 100 000 jobs in the past three years.
Over 4 000 companies have shut down.
The country now imports everything, including eggs, beans, meat, toothpaste, cooking oil, flour, fridges, beds, and several products that used to be manufactured in Zimbabwe.
The Zimbabwe National Statistics Agency says the country imported US$6 billion worth of goods last year.
Exports in 2015 amounted to US$2,7 billion resulting in a trade deficit of US$3,29 billion.
Imports are expected to rise further due to the effects of a drought, which will see the country importing more food.
Local producers have been agitating for controls on imports because they fear that cutthroat competition would cause more firm closures.
There are hurdles to be negotiated along the way.
The country has several trade agreements that it has to adhere to.
Zimbabwe has violated some of its trade agreements already, courting controversy.
In 2010, the Germany Embassy in Harare wrote to government protesting against the violation of investment protection agreements and warned that this could affect aid.
Industrial bodies are of the view that some of these agreements must be reviewed.
“Noting the trade imbalance between South Africa and Zimbabwe, the South Africa/Zimbabwe trade agreement should be reviewed,” says the Confederation of Zimbabwe Industries (CZI).
“This review will seek to improve Zimbabwe’s access to South Africa market and to stop fraudulent certificates of origin. The government should consider adoption of tariffs and other measures that level the playing field for local producers compared to external producers on a sector by sector basis,” says CZI.
South Africa has complained to government over import restrictions, following an upsurge in imports from that country since the rand lost traction against the United States dollar from last year.
The complaint came after Zimbabwe imposed a raft of taxes that have undermined South African products on the local market.
In September 2014, MAQ, the South African producer of a washing powder that was popular in Zimbabwe, ceased exports to Harare after government introduced a 40 percent surtax charge.
The effect of the increase was to raise the price of South African powder brands in Zimbabwe, which violated the Southern African Development Community Protocol on Trade.
Zimbabwe argued that “our industry has gone through a bad patch and we want them to grow”.
Industry and Commerce Minister, Mike Bimha, has warned that government would only protect domestic industries until a certain period.
After that, they would have to fight it out with foreign firms.
“We cannot continue to protect you,” he said.
“Competition is here to stay. We will only protect you for a certain period. You must develop competitive measures instead of always lobbying. We cannot compete if we have low quality goods and high prices,” he added.
Recent studies analysing international behaviour in imperfect competitive markets suggest that protection may not lead to increased domestic production. For example, foreign producers of products that compete with similar domestic products incurred substantial costs in setting up distribution and service systems abroad.
When temporary protection increases their costs of selling abroad, these foreign firms may decide that the best policy is not to raise prices, which will see them suffer declining market share.
They then accept lower profits and maintain market positions.
This is one of the issues that local producers have had to contend with in the face of competition from South African products.
But the Confederation of Zimbabwe Retailers (CZR) says the trend of imports is worrying because in the event of negative market fundamentals in countries from where goods are imported, Zimbabwe would run into deeper troubles.
The best way to save the economy, says CZR president Denford Mutashu, is for domestic retailers to devise ways of promoting local producers.
“In the long run, if we sorely rely on imports, what will we do if fundamentals change in those countries? We must try as much as possible to revive local production,” said Mutashu.
“But we need to look at their (companies’) problems on a case by case basis to see why some of them closed. Some of them were mismanaged and we must not waste national resources on them. For retailers, the advantage of using imported goods are higher profit margins. Stock turnover is higher in imported products than local goods. But we want to play our role in building domestic production by procuring local products. It is a deliberate strategy that we have taken,” he said.
Zimbabwe has been in deflation. Demand for products has been declining.
Many economists feel that industries, especially in developing economies, must be protected from competition from long-established foreign players during the early stages of their development.
Proponents of this argument say for infant industries, start up costs are high.
The country’s industries can easily fall into the category of infancy, as they have only been rising after a decade of turmoil that ended in 2008.
“They cannot compete with established foreign exporters,” said one economist.
“This is particularly true of a country that is attempting to initiate industrialisation,” he argued.
“By imposing a tariff on imports, the domestic price is therefore raised sufficiently to allow the high costs of domestic producers to maintain themselves,” he added.
PreserveArticles.com, a website that analyses economies, says almost every industrialised country has had to protect its industries against foreign competition for a temporary period to consolidate its position.
“And now it is considered entirely legitimate for economically backward countries to protect their industries in the early stages to enable them to grow to their full stature without any mishap,” the website says.
“However, the exponents of the infant industry argument emphasise that protection should be temporary and should be removed immediately after it has performed its function of ‘nursing.’ In this regard, ‘nurse the baby, protect the child, and leave the adult’ is a well-known saying,” notes the website.

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Commuter omnibuses have become one of the largest sources of employment in the informal sector.

COMMUTER omnibus drivers and conductors have applied to register their own trade union.
According to General Notice 69 of 2016 published in the Government Gazette of April 8, 2016, an application has been made to the registrar of labour in the Ministry of Labour and Social Welfare for the registration of the Zimbabwe Union of Drivers and Conductors.
The union seeks to champion the labour interests of workers in this sub-sector which has always been regarded as informal.
In the notice, registrar of labour, Grace Kanyayi, said interested parties in support or opposition of the application had 30 days within which to lodge their concerns.
The proposed union would represent an estimated 60 000 workers within this section of the transport sector operating on the country’s roads.
Commuter omnibuses have become one of the largest sources of employment in the informal sector.
Employers in the sector can currently hire and fire the workers at will.
The major areas of concern among workers in this sector include very high targets set by the kombi owners, the low commissions paid to the drivers and the conductors, as well as arbitrary wage deductions in cases where they get arrested and fined by police even for offenses related to defects on the omnibuses.
Last year, Ngoni Katsvairo, the secretary of the Greater Harare Association of Commuter Operators, told the Financial Gazette that there were over 60 000 omnibuses in Zimbabwe.
With each bus having two crew members, this would translate to about 120 000 workers, making it one of the biggest worker constituencies in Zimbabwe.
“At the moment there are over 60 000 omnibuses in Zimbabwe and each employs two people who have about four dependants each,” Katsvairo said then.
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Bernard Manyenyeni

COMBATIVE Local Government and National Housing Minister, Saviour Kasukuwere, has suspended Harare Mayor, Bernard Manyenyeni, over the controversial appointment of a new town clerk.
Harare has been without a substantive town clerk since the sacking of Tendai Mahachi in June last year.
Top banker, James Mushore, landed the job following a rigorous selection process.
Council then went on to appoint Mushore without consulting Kasukuwere and involving the Local Government Board (LGB) as stipulated by the Urban Councils Act. The council acted on the basis of the new Constitution, which states that local authorities are free to make appointments without consulting the minister or the LGB.
In matters of law, the Constitution is always superior to any statute.
Kasukuwere had instructed the Harare City Council to rescind its appointment of Mushore, who has been reporting for duty daily since his appointment this month.
This forced Kasukuwere to suspend the mayor.
In a letter written to Manyenyeni yesterday, Kasukuwere said he was suspending him for violating provisions of the Urban Councils Act.
Kasukuwere also barred him from exercising any of his duties as a councillor.
Manyenyeni is councillor for ward 28, which covers portions of Mt Pleasant and Vainona in Borrowdale.
“I wish to inform you that in terms of section 114(1) of the Urban Councils Act, that you are hereby suspended from carrying out the functions of the office of mayor and councillor.
“The grounds for your suspension are that you have, without legal basis, made an employment offer to a person for the position of town clerk without the necessary approval of the Local Government Board as required by the Urban Councils Act, as read with section 265(b) of the Constitution of Zimbabwe. You went further and defied a lawfully given instruction implementing a resolution that had been rescinded in terms of the Urban Councils Act section 314,” said the letter.
The letter further stated: “You will be brought before a competent authority to answer the allegations above in due course. During the period of your suspension, you shall not receive any allowance and you shall not carry out any council business within or outside council.”
Section 265 (b) of the Constitution states that local authorities assume functions conferred to them by the Constitution and an Act of Parliament.
Apparently, the Urban Councils Act is now ultra vires the Constitution which was overwhelmingly adopted in 2013.
Harare residents, through their associations, have since filed an urgent Constitutional Court application seeking to bar Kasukuwere from interfering with council operations and to confirm the constitutional position on the appointment.
The Financial Gazette understands that Manyenyeni immediately vacated the office as soon as Kasukuwere’s letter was delivered to him.
He told the Financial Gazette immediately after receiving the letter: “I am very much at peace with myself over the letter.”

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President Robert Mugabe and his Chinese counterpart, Xi Jinping. File Pic

RELATIONS between Zimbabwe and China could sour after revelations nationals from the Asian country are mopping hard currency from the economy, creating a cash crisis that has triggered panic in government, the Financial Gazette can exclusively report.
China is considered an all-weather ally by President Robert Mugabe’s government, which has been rocked by Western economic sanctions for nearly 15 years.
The cash crisis has been compounded by a dollar drain in the economy, created by an escalation of imports that has diminished the stock of money in the country.
Exports have been shrinking at a time imports have been soaring, forcing government to come up with a raft of measures that appear to have failed to make an impact in the wake of the alleged clean up of cash to offshore banks through the country’s porous borders.
“They are taking the cash outside the country and depositing it with their bank in South Africa,” a bank executive said this week.
His claim was corroborated by at least three other bankers who declined to be named.
George Guvamatanga, the managing director of Barclays Bank Zimbabwe, one of the largest importers of United States dollar notes in the country, said it was true “someone was taking the cash out of the country”, but declined to say if it was the Chinese.
“We are bringing brand new notes into the country, but these notes are not coming back into the banking system as deposits. I can argue that someone is keeping these brand new notes, or taking them somewhere,” Guvamatanga said.
Guvamatanga insisted the cash imported by banks and the central bank in the first quarter of this year was “adequate for our cash requirements”.
During the first quarter of this year, the Reserve Bank of Zimbabwe (RBZ) imported US$145 million worth of notes, while banks imported an additional US$118 million in notes.
This, said Guvamatanga, was enough for Zimbabwe’s “transactional purposes”.
“The cash shortages are a reflection of a deep-seated problem; someone is taking the imported, brand new notes somewhere,” he said.
RBZ governor, John Mangudya, said he was not in a position “to confirm the amounts or the nationalities of those hoarding and exporting cash from Zimbabwe,” saying it was imperative to deal with the issue of cash externalisation “from a national perspective”.
“The temptation of challenge of externalisation of cash or foreign exchange is high in economies like Zimbabwe that use foreign exchange as its domestic currency, especially at a time when business sentiment is low coupled by a strong US dollar and low productivity,” Mangudya said in response to question from the Financial Gazette while attending the World Bank and International Monetary Fund Spring meetings in Washington.
He said as highlighted in his monetary policy statement in January, the country needed to come up with a “plug the leakages strategy” to enhance efficient utilisation of hard-earned foreign currency and ensure it did not “go out of the country on foot, transferred or remitted through banks or carried on person by people”.
“On our part, we are putting in place measures to plug the leakages so that the cash we are importing to address the cash shortages remains or is retained in Zimbabwe. Other players like ZIMRA (Zimbabwe Revenue Authority), for example, would also need to play their part,” he said.
A bank executive who declined to be named told the Financial Gazette: “This is no longer a secret. We have seen the Chinese from Zimbabwe with suitcases depositing cash with a Chinese bank in Johannesburg.”

Reserve Bank of Zimbabwe governor John Mangudya

The Chinese bank in South Africa offers a full bouquet of products and services. It is also a deposit-taking institution.
Last month, a Chinese national with a bookstore in Murehwa was arrested at the Harare International Airport trying to externalise US$32 000 to China. The businessman, who was convicted by the courts, had hidden US$10 000 around his waist and US$20 000 inside his hand luggage. Only US$2 000 was in the wallet. He was fined US$200.
Mangudya said the fine imposed in this case did not help to address the challenge of externalisation.
“We also advocate the re-establishment of an Economic Crimes Court to deal with such matters,” he said.
Chinese entrepreneurs have penetrated all economic sectors in Zimbabwe’s fragile economy. They make bricks, bottled water, operate bookshops, and are also extensively involved in mining and the buying of precious minerals.
A source from the RBZ indicated that although there were many Chinese nationals operating gold mines, very few sold the minerals to Fidelity Printers and Refineries, an RBZ-owned gold buying company.
“It’s not just the currency that you are talking about; it’s also ivory and precious stones. A few of them have been arrested but the fines have not been deterrent,” said the RBZ official, who spoke on condition of anonymity.
Last year, Chinese diamond mining firm, Jinan Mining, was said to have externalised US$546 million through an offshore transaction. Although the matter was reported to police for investigations, it was quickly swept under the carpet.
Bankers said the Jinan case was “just the tip of an iceberg”.
As a result of the current cash crisis, banks have been limiting daily cash withdrawals, damaging public confidence in a sector the RBZ and other stakeholders have been working hard to restore.
Public confidence had been eroded by a spate of bank failures, as well as worsening cash shortages that resulted in depositors failing to withdraw their money during a hyperinflationary crisis that forced government to ditch the domestic currency in favour of a multiple currency regime in 2009.
Although a few more banks twisted in the wind following dollarisation of the economy, the banking sector was slowly regaining public trust.
Sources indicated that there was political concern over the cash shortages which emerged against the backdrop of growing restlessness in the country, battling high unemployment caused by company closures and job losses.
“This has disturbed the political system,” a ruling party source said.
President Mugabe was last week to take the unprecedented step to invalidate an indigenisation and economic empowerment campaign led by Youth, Indigenisation and Economic Empowerment Minister, Patrick Zhuwao, in a bid to calm investors and banks, whom he sought to reassure after months of speculation.
Zhuwao, who is President Mugabe’s nephew, had given foreign-owned companies an ultimatum to close if they failed to comply with the country’s Indigenisation and Economic Empowerment Act by March 31, 2016.
The Act compels all foreign-owned firms to cede at least 51 percent of their shareholding to indigenous blacks.
But Mangudya had moved to protect banks, saying he was satisfied with the level of compliance in the sector. He had then been publicly supported by Finance and Economic Development Minister, Patrick Chinamasa, prompting a row with Zhuwao who publicly scolded Chinamasa and Mangudya, accusing them of ignorance.
Bankers said the economy was also facing cash shortages emanating from a rising import bill, which has not been matched by rising exports.
They said imports were likely to grow further this year due to a drought situation, which will result in increased purchase of grain from other countries to feed the nation. Electricity shortages also meant that the country’s power utility would import more electricity to meet demand.
“This will create much higher demand for Nostros,” said one banker. “We’re obviously consuming much more than we can produce.”
Nostro accounts are bank accounts held in a foreign country by domestic banks; they are used to facilitate settlement of foreign exchange and trade transactions.
Nostro accounts are funded by export proceeds, Diaspora remittances, offshore credit lines and foreign direct investment, among other things.
Mangudya said the country needed to embrace the ‘Make and Buy Zimbabwe’ drive “to reduce import dependence and move away from the consumptive philosophy”.
“We should not continue to abuse hard-earned foreign exchange from tobacco, gold and platinum to import trinkets,” he said.
In his monetary policy statement in January, Mangudya had increased financial institutions’ nostro limits from five percent to 10 percent of a bank’s total deposits, saying this would improve liquidity.
He also highlighted that illicit financial flows (IFFs) and other capital flight remittances constituted a major threat to the development of the economy.
IFFs, he said, included trade mispricing and bulk cash movement and these caused “heavy losses in government revenues, foregone investment, financial fragility and lost output”.
“In the case of Zimbabwe, the financial haemorrhage from capital flight is exacerbated by the openness of the economy which is susceptible to regional disruptive arbitrage activities (as businesses in the region scramble to get access to US dollars from a dollarised Zimbabwe),” he said.
He said bank statistics showed that between January and December 2015, a total of US$684 million was externalised by individuals “under the auspices of free funds for various dubious and unwarranted purposes”.
“This rampant export of liquidity is not sustainable,” he said, before announcing limits on physical cash export by individuals.

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MDC-T leader, Morgan Tsvangirai

THE Movement for Democratic Change (MDC-T) has abandoned coalition talks with other opposition parties ahead of decisive 2018 elections, as it prepares a final assault against President Robert Mugabe’s ruling ZANU-PF party, the Financial Gazette can exclusively reveal.
This is despite a joint Independence Day statement by the opposition parties, which many thought gave a cue that a grand coalition against President Mugabe’s ZANU-PF was close to being realised.
Sources within the MDC-T, led by former prime minister Morgan Tsvangirai (pictured), said they believed their party would win Zimbabwe’s forthcoming elections, notwithstanding their defeat at 2013 polls many allege were massively rigged by the ruling party.
Tsvangirai staged an unprecedented election victory against President Mugabe in 2008 harmonised elections, but failed to garner enough votes to be declared a winner after getting 47,9 percent of the vote against President Mugabe’s 43,2 percent.
In terms of the old constitution, a winner required 50,1 percent of votes to be declared President.
Simba Makoni, of Mavambo/Kusile/Dawn (MKD) movement, had garnered eig-ht percent of the presidential vote.
That election went into a run-off, from which Tsvangirai pulled out citing violence and the alleged murder of at least 200 of his supporters.
President Mugabe went on to win the run-off election, but an unprecedented economic and political crisis forced him into talks that resulted in the formation of a government of national unity (GNU), which included Tsvangirai’s party and a breakaway MDC formation then led by Arthur Mutambara but now headed by Welshman Ncube.
Elections that were later held in 2013 gave ZANU-PF and President Mugabe an unexpected landslide victory, which astounded ZANU-PF members and rivals alike as it had been largely unexpected.
But ever since that election victory, which resulted in the termination of the GNU, ZANU-PF has been plagued by internal fights, which resulted in the sacking of former vice president Joice Mujuru and several of her allies, most of whom were bigwigs in ZANU-PF.
Mujuru now leads the recently formed Zimbabwe People First, said to be part of a planned grand coalition of opposition parties.
The opposition parties had in recent months been reportedly making strides towards the formation of the grand coalition, whose major purpose would be to confront President Mugabe and ZANU-PF at 2018 polls.
Their major achievement to date had been to narrow their areas of conflict, while working closely in areas of common interest, such as electoral reforms.
The other opposition parties in the planned coalition were MKD, ZAPU led by Dumiso Dabengwa, Lovemore Madhuku’s National Constitutional Assembly (NCA), People’s Democratic Party ed by former finance minister, Tendai Biti and Ncube’s MDC party.
Dabengwa, Makoni and Mujuru broke away from ZANU-PF while Biti and Ncube broke away from Tsvangirai’s MDC. Tsvangirai had been a founder chairman of the NCA, which was a lobby group for constitutional reforms before it was turned into a political party by Madhuku.
The grand coalition was also expected to rope in civic society groups and churches for a final assault against what may now be a weakened ZANU-PF.
Information reaching the Financial Gazette suggests that the MDC-T is now pulling in a different direction, with its National Standing Committee (NSC) having already decided not to pursue the coalition agenda.
Sources at Harvest House, the MDC-T’s headquarters, said the NSC had met at the end of last month and made the decision.
The NSC comprises of six heads of departments. It also includes Tsvangirai and his deputy, Thokozani Khupe.
MDC-T secretary-general, Douglas Mwonzora, confirmed when contacted for comment that they were no longer pursuing coalition talks but were instead focusing on their programmes.
He said the party, which made a huge political statement after a well attended protest march in Harare last week, had decided to concentrate on rebuilding structures.
Mwonzora said their decision was informed by the realisation that the MDC-T still had enough support to see it through any election.
“I can confirm that the party has decided to shelve any coalition plans. We have carefully analysed the situation and realised that other opposition parties do not have much to give to the coalition in terms of following.
“They do not have any significant following and so we have said let us concentrate on rebuilding our party and strengthening it,” said Mwonzora.
He said they hoped the other opposition parties were “also on the ground strengthening their own parties so that they can come forward to say we have this to offer”.
Mwonzora said the MDC-T’s standing committee had resolved to “carefully study” any overtures for coalition by other parties and would report regularly to the National Council.
“We won’t plunge blindly into a coalition without carefully analysing the merits and demerits of such a move. The president’s office has been given that task and will report regularly to the National Council,” he said.
He added: “We have always said we are prepared to work with any progressive parties but we are not going to rush into anything.”
Asked if he thought the party had the capacity to topple President Mugabe’s party in 2018 through the ballot, Mwonzora said: “We have won elections before and we believe we are strong enough to win any election.”
Zimbabwe’s opposition parties have significant ideological differences, and simply agree on removing President Mugabe from power.
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Finance Minister Patrick Chinamasa

FINANCE Minister Patrick Chinamasa says government has engaged private audit firms to undertake forensic audits of 10 key parastatals targeted for transformation as it seeks to turn around loss-making state owned enterprises.

Zimbabwe has 91 state owned enterprises, many of which are underperforming. At their peak, state enterprises contributed up to 40 percent of the country’s gross domestic product (GDP), but they have been dragged down by legacy debt, corruption and mismanagement.

Addressing a Public Accountants and Auditors conference in Harare on Friday, Chinamasa admitted that government needed the assistance of private audit firms to undertake sound audits, and has already comleted the exercise for four of the parastatals.

“There is a lot of slack in our financials and we expect the accountant’s board to play a leading role in highlighting these anomalies.  There has been a lot of bad corporate governance in the state owned enterprises,” said Chinamasa.

“We have isolated ten key institutions which, if we successfully turn around, will have a transformative effect on the economy. Out of these, three or four audits have already been completed and we will soon be making them public.”

Asked why government had taken long to reform state enterprises, Chinamasa said “transformation of parastatals has always been a priority, but we did not have the energy or the resources. We were preoccupied with reengagement, but now that our reengagement strategy has been accepted I am convinced this is the hour to take it on.”

Chinamasa said government was also in the process of crafting a corporate governance law which will be applicable to parastatals and local authorities. The Source

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Central bank Governor John Mangudya

THE Zimbabwe government did “the right thing” in shutting down diamond mining companies in the east of the country as they were not remitting taxes to the fiscus and were operating under a cloud of secrecy, central bank Governor John Mangudya has said.

Government ordered all diamond miners in Marange to cease operations on February 22 after they declined its proposals to nationalise the industry. The government said the miners’ licenses had expired and accused them of failing to account for revenue from their operations.

The mines had resisted a plan by the government to bring them under one firm in which the state would own 50 percent.

There are eight miners in Marange; Anjin Investments, Diamond Mining Company, Jinan, Kusena, Marange Resources, DTZ-Ozgeo and Mbada Diamonds. The government holds 50 percent shareholding in all the firms.

Mangudya said on Friday that the move to shut down the mining firms was necessary because they were not remitting revenues to Treasury.

“In 2009, before we put those companies there, when we had artisanal miners who did not have the appropriate equipment, we could see the value. But after bringing companies which were mining 24 hours a day all these years, we don’t see the value….nothing was coming to the coffers, we were being abused,” he said on Friday.

“If it disturbs other investors that we are doing the right thing, I think it’s OK. If it is right for Zimbabwe, let it be that way. Enough is enough, we have to do what is right for this country. We cannot be blaming ourselves for doing the right thing”.

Anjin has since challenged its eviction in the High Court arguing that the move contravened bilateral trade agreements between Zimbabwe and China.

Another miner, Mbada Diamonds, was granted a court order allowing it to return to Marange to secure its equipment, but it remains banned from mining activities.

The Marange fields are regarded as one of the world’s richest alluvial diamond deposits, but its resources are depleting, experts say.

It was estimated to have produced around 17 million carats in 2013, which was 13 percent of the global rough diamond supply, according to the Zimbabwe Mining Development Corporation.

Marange produced 12 million carats in both 2012 and 2014, while production figures for 2015 are not yet available.

Earlier this year, Mines Minister Walter Chidhakwa said government had received $637,3 million in revenue from the miners since 2010. The Source

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Zimplats reports US$6,7 million profit in Q3

ZIMBABWE’S largest platinum miner, Zimplats, on Tuesday reported a net profit of US$6,7 million for the three months to March 31 from a US$1,8 million loss in the previous quarter after revenue rose by nearly half.

Revenue grew 44 percent to US$138,5 million from US$100 million in the previous quarter after the company sold 136,575 ounces of platinum group minerals (4E) during the period, with 41,757oz coming from its stockpile.

“Revenue increased by 44% from the previous quarter mainly due to the export of stockpiled concentrates and a 6% increase in 4E converter matte sales volumes. In addition, there was a 4% increase in total revenue per 4E ounce sold,” said Zimplats in a trading update.

Compared to the same period last year, revenue was 26 percent higher. Profit after royalties was one percent down on the $6,766 million achieved last year.

Operating costs rose by 28 percent in comparison to the previous quarter due to the increase in sales volumes while royalties increased by 41 percent from the previous quarter in line with the increase in revenue.

Cash cost per 4E ounce fell 10 percent from the previous quarter largely due to the higher production volumes and tighter cost control measures.

Zimplats said local spend in Zimbabwe, excluding payments to government and related institutions,dropped by a fifth to $52 million mainly due to the reduction in capital expenditure. Taxes dropped 12,5 percent to $7 million. The Source

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