Econet Wireless Chief Executive Officer Douglas Mboweni

ECONET Wireless is  introducing an airtime credit service via the EcoCash platform which will allow more than 5-million customers to borrow airtime.
The innovation, means that an Econet customer can use EcoCash or the EcoCash App to borrow airtime in denominations from 30c to 75c depending on a customer’s historical usage.
Explaining the service, EcoCash General Manager Natalie Jabangwe said given the recent cash shortages being faced in Zimbabwe, this service makes it possible for EcoCash airtime subscribers to quickly purchase airtime in the case of an emergency. Repayments can always be made from EcoCash airtime purchases.
Customers will be required to have an active line for three months and a minimum airtime balance of 5c at the time they want to borrow airtime. However, she stressed that an EcoCash balance at the time a customer wants to borrow airtime is not a requirement to benefit from this service.  “All credit airtime advanced attracts 10 percent service fee which is payable within seven days, on next airtime recharge,” she said.
Econet Wireless Chief Executive Officer Douglas Mboweni, said the airtime credit service has been introduced to assist its customers who may sometimes be in urgent need of airtime to make calls.
“Understanding our customer behaviour and meeting their needs allows us to introduce trust based services that deliver value and unparalleled convenience,” said Mboweni.
He said the Airtime Credit Service on EcoCash provides a one-stop shop for all mobile money services Ecocash, EcoSure insurance, EcoCash loans and now EcoCash airtime credit service, amongst others. Ecocash channels provide greater and improved customer experience and convenience.

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The High Court of Zimbabwe

MORE than 2000 Zimbabweans have had their houses auctioned by the Sheriff of the High Court of Zimbabwe as banks try to recover some of the over US$700 million they are owed by thousands of people who gambled with their immovable assets as to borrow money which, due to the worsening economic climate prevailing in the country, later found themselves unable to service the loans, an investigation by the Financial Gazette reveals.
A research by the newspaper revealed that in the past two years alone, more than 2 000 Zimbabweans have lost their immovable properties — most of them their only family homes — as their creditors pounced on them to recover the vast amounts of money they borrowed.
The number of houses and other immovable properties sold off to meet judgment debts against individuals could be as high as over 3000 since the country moved to use a multi-currency regime.
The courts are currently clogged with cases of borrowers who are unable to repay the various amounts of money they borrowed from the country’s over a dozen financial institutions, amid indications that if this trend is left unchecked, several thousands more families could end up being homeless in the next few years as the bulk of the over US$700 million in banks’ stock of non-performing loans have been secured by these private homes.
Those who have been repaying have been doing so at erratic rates, so much that virtually all their payments only go to service the interest component only, not the principal amounts, keeping them in a vicious circle of poverty.
Some of the properties being sold now involve some banks that closed shop several years ago, as the court processes drag for many years after which these properties that would have been used as collateral, are by the Sheriff either through public auction or through private treaty.
When the Reserve Bank of Zimbabwe set up the Zimbabwe Asset Management Corporation (ZAMCO) — a special purpose vehicle established in 2014 to undertake cleansing of the banking sector by taking over secured bad loans in order to free funds to productive sectors of the economy — non-performing loans had reached a record 18,5 percent of all loans (about US$700 million).
As of December 2015, ZAMCO had acquired US$242 million worth of the bad loans extended to businesses, reducing the ratio to about 13 percent.
It appears like many Zimbabweans — still confused from the Zimbabwe dollar era — were tempted to stampede into borrowing from banks even when they had no viable business projects in which to invest the money.
This week alone, nearly 70 properties were due to be sold at three public auctions, two of them in Harare, and one in Bulawayo.
An auction by Choruma Marias Valuation and Estates Executives on behalf of Agribank, was due to take place today where 16 immovable properties were set to go under the hammer, while tomorrow Ruby Auctions will be putting 53 properties on sale from around the country on behalf of several banks and other creditors, around the same time that Bulawayo Real Estate would be selling 10 properties at an auction to be held at St Patrick’s Hotel in the city.
In February, Drew & Fraser International Auctioneers put on sale 36 properties on behalf of the Sheriff’s office. Another 20 were sold by Bulawayo-based Hollands Real Estate through private treaty.
On April 1 this year, the Sheriff through Livingking Realtors auctioned 36 properties around the country on behalf of several creditors, mostly financial institutions.
Agribank has since mid last year been at the forefront of causing the auction sales, putting an average of 50 properties under the hammer every month.
In November alone, it caused the auctioning of 61 properties and on May 13, it will be putting another 21 houses on the auction floor.
Other financial institutions that have been actively pursuing their debtors include CBZ Bank, CABS, POSB, the Infrastructural Development Bank of Zimbabwe and ZB Bank among others.
However, there are few properties being auctioned by the country’s foreign-owned banks, among them Barclays Bank, Stanbic, Standard Chartered Bank, Ecobank, BancABC and MBCA Bank.
This could be because of the banks’ thorough vetting process when it comes to lending, as compared to their locally owned counterparts.
In 1998, Roger Boka’s United Merchant Bank (UMB) spectacularly collapsed as a result of imprudent lending practices, which saw several government officials and politicians literally looting the bank dry.
Since then, this has been repeated at several banks, many of which have since followed the UMB to the corporate graveyard.
Banks stand accused of not just charging very high interest rates, but some of them are also accused of being so unscrupulous as to deliberately choose to be unethical as to lend money even to individuals and businesses whose projects could patently be not bankable, for as long at the loans are secured.
Economist, John Robertson told the Financial Gazette this week that the economic situation coupled with imprudent lending decisions by banks had led to the current crisis.
“Many people thought that they could cope with the risks, but did not predict the market downturns that made their loans impossible to repay. Many others did not realise that dozens of others were starting similar businesses and the market they had identified was not big enough to support many suppliers. And many did not have the business experience needed to survive,” Robertson said.
“The bank managers should have checked all those possibilities and not lent the money to doubtful borrowers. Most cases should never end up in court. If the security was correctly valued, the bank should have been fully repaid by selling it. Needing a court case suggests that the banker was not careful enough.”
However, others blamed the scourge squarely on alleged predatory tendencies by some players in the financial services sector.
“Most banking and money lending institutions over-rely on collateral security ahead of cash-flows, capital and others. Interest rates are too high and in a harsh economy like ours, people end up losing their personal properties,” Christopher Mugaga, an economic analyst was quoted as saying in the media last year.
“Government is letting the people down by not protecting them against these vultures who charge strange and illegal interest rates for advances made.
“In fact, a Consumer Protection Bill must be put in place to protect the desperate masses who are falling prey to these vultures,” Mugaga said.
Economist and opposition politician, Tapiwa Mashakada, who was the minister for economic planning and investment promotion during the 2009-13 inclusive government, said it was unfair that the government — through ZAMCO — was taking over bad loans for all companies, leaving individuals borrowers at the mercy of their creditors.
“Most people borrowed during the inclusive government period as cash flows had improved drastically. The situation suddenly collapsed after 2013 and tight liquidity conditions erupted again,” Mashakada said, adding that in all fairness, the debt take-over by the central bank should be extended to all borrowers, both corporate and individual.
A number of prominent personalities in Zimbabwe have had their properties sold, leaving some of them homeless.
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Environment, Water and Climate Minister Oppah Muchinguri-Kashiri

Tabitha Mutenga and Andrew Kunambura
A HUMANITARIAN crisis is looming countrywide amid revelations that Zimbabwe’s major dams are in urgent need of refurbishment which, if further delayed, could see them collapsing, the Financial Gazette can exclusively report.
A survey commissioned by the Zimbabwe National Water Authority (ZINWA) has revealed that the country’s major dams have not been inspected for over a decade, with government citing lack of funds as the major reason. It says at least US$33 million is now required to maintain and refurbish the dams since they now pose a serious danger to human life and infrastructure.
Dams are supposed to be thoroughly inspected and maintained after every five years.
The survey was conducted by a South African consultancy company known as ARUP, with funding from the World Bank.
It was carried out on a sample of 25 major dams located on the country’s seven catchment areas.
Zimbabwe has a total of 10 000 dams.
The survey disclosed that three of the 25 dams in the sample needed urgent attention, critically the replacement of valves.
Half the dams have inadequate spillways.
Seventeen dams, including Osbourne (Mutare), Ruti (Gutu) Smallbridge (Mutare), Manjirenji (Chiredzi), Muzhwi, Bangala (Mwenezi) are on the red list with antiquated valves and crumbling inlet spillways, which need immediate attention while Mutirikwi, Langwalala, Rusape, Manyuchi and Ngezi have walls or embankments that are in serious danger of collapsing.
Ngezi and Langwalala walls are in a state of emergency, which means human life is in immediate danger. The walls are leaking.
The report also warns of horizontal cracks developing on the Mutirikwi dam in Masvingo.
“Lungwalala Dam left and right bank seepage is significant and needs more detailed geotechnical investigations followed by urgent remedial works,” reads part of the report.
“Mechanical maintenance at all dams has been significantly neglected, mainly as a result of insufficient budgeting and funding. Funds should be urgently made available for both the critical replacements and for the routine annual maintenance,” it says.
ZINWA oversees the operation and maintenance of all the major dams under the Water Act (Chapter 20:24) of 1999, which compels it to carry out five-yearly inspections of the dams. However, all of Zimbabwe’s dams except Kariba were last inspected in 2005.
The dam safety budget has not received any fiscal support over the years, making it difficult for ZINWA to comply with the requirements under the Water Act.
This violation of safety procedures, warns the survey report, could result in dams collapsing and triggering massive disasters.
Sensing possible dangers, government has devised a user pays policy whereby ZINWA carries out dam safety inspections as well as the required maintenance and repairs through revenue collected from users who include industry, mining companies and farmers.
But the model has dismally failed to work as users heavily default on payments. This means dams continue to wane and could give in if maintenance is not done urgently.
ZINWA dam designs and construction manager, Taurayi Maurukira, responding to the survey report, said the situation should not be allowed to continue.
“There is a human price to pay for it,” he said.
“Dams serve as water terminal storage facilities and when they fail, water can come rolling down homes,” added the water engineering expert.
“When you let loose water, it’s a deadly weapon. It’s a battlefield but unlike in war where you can hear guns from a distance and you can run to safety, this time, you won’t hear anything. You will be struck suddenly. So we need to maintain them all the time,” he warned.
ZINWA board chairman, Michael Tumbare, said there was a real danger of the dams bursting.
“Twenty-five dams were sampled and out of these came the grim statistics. The worst possibility is they can burst and we risk losing the dams and many lives,” he said.
“Right now, what we need to do is for all of us to understand that there is infrastructure that needs to be maintained. We need to start to adhere to maintenance plans because at present, the country is in a sorry state,” said Tumbare, a University of Zimbabwe civil engineering lecturer.
In the event of dam failure, tonnes of water could crash through entire towns and villages, leading to loss of human life and destruction of infrastructure. Wildlife and livestock would also be under threat.
This is because of the destructive power of the flood wave that would be released by the sudden collapse of a large dam.
Dam failure can be caused by a weakening wall (also known as embankment in civil engineering terms), malfunctioning spillways and, more significantly, ageing valves.
Research indicates that two thirds of all recorded dam failures have been due to hydraulic inadequacy.
While equipment malfunctioning and operating errors have been to blame, inadequate spillway capacity leading to overtopping was the principal cause.
There are many previous cases where damn failure has proved to be catastrophic.
The Johnstown dam failure of May 31, 1889 in Pennsylvania, United States, is considered the worst case of dam failure disaster in history.
The water crashed down the valley, sweeping trees, rail cars and entire houses in its path.
By the time the 20 million tonnes of water reached Johnstown, it was carrying even more debris. The mass hit the city, flattening everything in its path and killing 2 200 people.
Another example is the Bento Rodriguez dam disaster which struck Brazil in November last year when an iron ore tailings dam collapsed in the city, causing massive flooding and 17 human deaths.
It also triggered a massive environmental crisis which needed international response.
A subsequent inquest found that authorities had been warned about the possibility of the dam collapsing as far back as 2008 but did not act.
In 1972, in West Virginia, a coal slurry dam with an inadequate spillway collapsed during a period of moderately heavy rain.
This resulted in the death of 125 people in Buffalo Creek Hollow.

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Bulawayo mayor Martin Moyo

BULAWAYO — Council has received over 40 applications for the vacant position of town clerk, which was advertised last month.
City fathers are hopeful that the country’s second largest city would have a substantive town clerk by the end of next month.
Residents are keenly interested in finding out who will emerge as the top candidate for the job, especially after the controversy surrounding by the recent appointment of James Mushore, a former bank executive, as the town clerk for Harare.
Mushore’s appointment has triggered a political furore, with the ruling ZANU-PF party expressing clear dislike for the ex-banker.
That appointment, made after a rigorous selection process involving independent experts, resulted in the suspension of Harare mayor, Bernard Manyenyeni for defying government’s directive.
Mushore’s appointment has been nullified by Local Government Minister, Saviour Kasukuwere, who also suspended the mayor.
Kasukuwere argues that the appointment violated the Urban Councils Act, but has ignored the fact that it was made in terms of the new Constitution, adopted in 2013.
The Constitution is the supreme law in the country.
Martin Moyo, the Bulawayo mayor, said a number of applications had been received and were now being processed by the general purpose committee, which has oversight on the recruitment.
“We have upwards of 40 applications which we received for the town clerk position. We are still looking at these and we will soon be in the process of short-listing candidates. I cannot say exactly when the entire process will be completed, but by the end of May, we hope to have a replacement,” he said.
The post of town clerk fell vacant in September last year after the death of Middleton Nyoni.
Sikhangele Zhou, the chamber secretary, has been the acting town clerk since Nyoni’s death.
The general purpose committee is composed of eight persons and Moyo chairs it.
After selecting the top three candidates, the committee could forward these to the Local Government Board, which later appoints the town clerk from the list, with the Minister’s blessings. However, in terms of the new Constitution, council might decide to proceed with the appointment of the winning candidate, but court the ire of Kasukuwerere who still insists on the application of the Urban Councils Act.
The responsibilities of the town clerk include oversight of six units.
These are public relations, city economic development, audit, work study, human resources and training.
The new town clerk would have to spearhead the city’s development; the city is currently experiencing dwindling financial resources in the wake of de-industrialisation, which has  diminished residents’ ability to pay their bills.
In addition, council is owed millions of dollars by ratepayers who are failing to meet their obligations to the local authority.     newsdesk@fingaz.co.zw

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Finance Minister, Patrick Chinamasa

ZIMBABWE is to receive a US$900 million bailout from Algeria for arrears clearance, ahead of a crucial International Monetary Fund (IMF) board meeting on the country scheduled for Monday.
The IMF board meeting is expected to pave way for a debt clearance strategy, which government said this week would be completed between September and October.
Zimbabwe is working on a plan to clear at least US$1,8 billion in arrears to the IMF, the World Bank and the African Development Bank (AfDB).
An Algerian embassy official confirmed the deal with Zimbabwe, but said this was being handled in Algiers, the Algerian capital.
Government sources said Zimbabwe had turned to Algeria because it could give cash. They indicated that the so-called all-weather friend, China, did not lend cash to extricate its allies from debts.
China, which has signed multi-billion dollar deals with Zimbabwe, has refused to commit itself to any form of balance of payments support to Harare, which is grappling with an acute liquidity crunch.
Support to Zimbabwe for clearance of debt arrears would enable the country to reintegrate into the international community, but such a prospect may not augur well with China, which would face competition in the exploitation of resources from Western countries who banished the country in the early 2000s after falling behind in loan repayments.After clearing arrears to the three international financial institutions (IFIs), it is expected that a new round of talks would start with other multilateral and bilateral creditors, with a view to agreeing on a settlement plan for outstanding debts.
The initial plan had been to clear all arrears with the IMF, World Bank and AfDB by April.
By June 2016, Zimbabwe was expected to start engaging other creditors, such as the European Investment Bank and Paris Club and non-Paris Club members. But Finance Minister, Patrick Chinamasa, said this week they were now working on getting an arrears clearance strategy in place by September after taking a cue from the IMF board which is meeting to discuss Zimbabwe on Monday.
The IMF board will meet to discuss the country’s debt situation as well as its economic circumstances at the meeting, which will be guided by a report by an Article IV Consultation Mission which was in Zimbabwe from February 24 to March 11. The mission also reviewed a 15-month Staff-Monitored Programme (SMP) approved by the IMF management in October 2014.
In its report, the mission, which was led by an IMF executive, Domenico Fanizza, said Zimbabwe had “met all quantitative targets and structural benchmarks under the third and final review of the SMP”.
“Moreover, they have started to develop a medium term economic transformation programme, in line with the broader reform agenda presented at the Lima meetings on arrears clearance in October 2015,” said the report.
Zimbabwe presented its debt clearance plan to international creditors on the sidelines of the IMF and World Bank annual meetings in Lima, Peru, which was reportedly well supported by stakeholders.
“We are encouraged that the authorities plan to clear the outstanding arrears with international financial institutions, as outlined at the Lima meetings. The successful resolution of Zimbabwe’s external payment arrears will be an important step towards normalising relations with the international financial community and will allow the country to eventually seek a Fund financial arrangement,” the IMF mission said.
It noted that clearance of arrears would “send strong signals to the international community, reduce the perceived country risk premium, and unlock affordable financing for government and the private sector”.
“This, together with policy reform, will help to achieve sustained economic development through economic transformation, to improve living conditions for the people of Zimbabwe, and to reduce poverty,” the mission’s report said.
In terms of the Lima plan, Zimbabwe made arrangements to clear arrears to the tune of US$1,8 billion owed to the three IFIs. It indicated that it would use its special drawing rights from the IMF to repay US$110 million to the Fund.
A bridge loan of US$819 million from the African Export-Import Bank would be used to repay US$601 million to the AfDB and US$218 million to the World Bank’s International Development Association.
Algeria would provide a US$900 million loan to repay the International Bank of Reconstruction and Development (IBRD).
IBRD is an arm of the World Bank which was created in 1944 to help Europe rebuild after World War II.
Today, IBRD provides loans and other assistance primarily to middle income countries. It works closely with the rest of the World Bank Group to help developing countries reduce poverty, promote economic growth, and build prosperity.
The country has an external debt stock to the tune of about US$10 billion. The debt includes arrears with several offshore lenders.
Chinamasa said this week that they were working “feverishly to come up with a financing programme on the basis of which we hope, if we clear our arrears in tandem, in reciprocation we hope to get new financing to support those sectors of our economy which have a transformative impact on the recovery of our economy and primarily we are looking at agriculture and private sector growth”.
He said they were going to put in place the documentation for consideration by the IFIs “to get into a position where the respective boards of the three multi-lateral institutions can sit down and hopefully by November to adopt or accept or strategy for arrears clearance.”
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MDC-T leader Morgan Tsvangirai

LOCAL Government Minister Saviour Kasukuwere has threatened to evict Movement for Democratic Change (MDC-T) leader Morgan Tsvangirai from a State mansion in Highlands, Harare over the appointment of Harare town clerk, James Mushore, which is being fiercely contested between ZANU-PF mandarins and officials from the country’s main opposition party.
Kasukuwere, who doubles up as ZANU-PF’s national political commissar, had given the MDC-T leader an ultimatum to ensure the dismissal of the former NMBZ Holdings chief executive officer from the Harare City Council (HCC), failure of which he would be chucked out of the property acquired for him during the era of the Government of National Unity (GNU), which ended in 2013.
The Financial Gazette can exclusively reveal that government “inspectors” have visited the property on two occasions to assess the mansion, reinforcing fears of an imminent eviction of the MDC-T leader who served as Prime Minister during the subsistence of the GNU.
The development has prompted a flurry of activities within the opposition party, as MDC-T heavyweights sought to prevent their party leader from being humiliated by Kasukuwere, whom they said has directly communicated with Tsvangirai about Mushore’s appointment.
Tsvangirai was given the mansion, which was mired in controversy after allegations he had bloated costs for the renovation and upgrade of the property in 2012.
The MDC-T leader has lived in the mansion for the past six years, despite calls from opposition party allies that he should move out to avoid being compromised by the ZANU-PF government.
The eviction threat by Kasukuwere is seen within the MDC-T as evidence that with the 2018 general elections beckoning, ZANU-PF may be planning to go for broke to secure re-election.
It is said that high ranking MDC-T officials are unhappy with Tsvangirai’s continued stay in the State mansion but they do not have the guts to confront him.
The former trade unionist, who has a number of personal properties in the capital that he could occupy, has stayed put in the government property, insisting government still owes him substantial amounts in pensions and other perks which he can use to pay for the property.
With the MDC-T leader presently financially crippled, government is aware that Tsvangirai would not be able to raise the cash required to pay for the loan used to buy the property as well as the interest.
The feeling within the MDC-T is that Tsvangirai might not be able to stand up to ZANU-PF as long as he continues to stay in the Highlands mansion at the benevolence of President Robert Mugabe, who has the final say on the issue.
He is already seen prevaricating on the Mushore deadlock, an indication that ZANU-PF is well aware that Tsvangirai could do anything to prolong his stay in the up-market property.
Sources in the MDC-T this week said a day before Kasukuwere suspended Manyenyeni, he had sent communication to Tsvangirai, warning that he would have him evicted from the house unless he forces his councillors to dismiss Mushore.
Following Kasukuwere’s threat, a panicky Tsvangirai called for an emergency caucus meeting, which was held at the party’s headquarters at Harvest House in Harare on Saturday. The meeting was attended by MDC-T secretary general, Douglas Mwonzora; party spokesman, Obert Gutu; shadow minister for local government, Jameson Timba; MDC-T Harare provincial chairman, Erick Murai; and HCC councillors led by acting mayor, Chris Mbanga.
Mbanga was imposed acting mayor by Kasukuwere following the suspension of Manyenyeni. This, apparently, gave a sense of déjà vu: former Harare mayor, Elias Mudzuri, was fired by former local government minister, Ignatius Chombo, in 2004 and was replaced by Sekesai Makwavarara, who later defected from the MDC-T to join ZANU-PF.
Tsvangirai himself did not attend the caucus meeting. He is, however, understood to have instructed the caucus to direct Mbanga that Mushore, who had been reporting for duty, should go on indefinite “voluntary leave” on full salary and benefits.
Sources said Tsvangirai was regularly updated about proceedings over the phone by his lieutenants in the meeting, with MDC-T insiders saying party bigwigs were initially reluctant to accept his directive, and had attempted to convince him that the party’s position that Mushore remained the legitimate Harare town clerk was the correct one at law.
Some party members felt that the former Prime Minister was holding them to ransom for selfish reasons. This is likely to expose the jittery Tsvangirai as a very weak leader easily cowed by ruling party members.
“This created a deadlock which necessitated us to meet again on Sunday to resolve the matter,” said a senior MDC-T official who attended the meeting.
Another source said: “They spent the whole day on Sunday trying to persuade him (Tsvangirai) to accept that the party was keen on defying and standing up to Kasukuwere but he would not listen, and at the end of the meeting, Mbanga was tasked to go and relay the message to Mushore.”
According to sources, Mbanga on Monday called Mushore to his office in the company of councillor Herbert Gomba and two other unidentified councillors and officially requested Mushore to go on voluntary leave.
Mushore, sources said, asked Mbanga to explain if the decision to send him on leave was a council decision or an MDC-T decision.
“He openly told Mbanga that if it was a party decision, then he would not oblige since he was not a party employee; if it was a council decision, he would want it communicated to him in writing and he would comply,” a source close to proceedings said.
Mbanga, who had not expected Mushore’s reaction, was reportedly taken aback by the former banker’s demands and asked Mushore to call Tsvangirai himself if he needed any further clarification, clearly exposing the MDC-T leader as the source of the directive.
Mbanga is also said to have declined to commit himself to any written communication.
Mushore then called Timba, but the former minister failed to give a satisfactory answer.
Timba was not available for comment.
Gutu confirmed the caucus meetings this week but said the official party position remained that Mushore was the legitimate HCC town clerk.
“I can confirm that the caucuses did take place and the official party position is that James Mushore’s appointment as the town clerk of the city of Harare was done in a lawful and above board manner,” he said.
He, however, appeared to cautiously skirt issues related directly with Tsvangirai.
“What I have told you is the official party position. Anything else different from this is really something I cannot substantially comment upon,” he said.

Local Government Minister Saviour Kasukuwere

Tsvangirai’s spokesman, Luke Tamborinyoka, ignored questions sent to him on the issue.
Mbanga, who is understood to have travelled to Bulawayo for the Zimbabwe International Trade Fair, was not answering calls to his mobile phone. Councillors are entitled to hefty allowances for such travels.
He also did not respond to messages sent to his mobile number.
However, sources said Kasukuwere had developed a very cordial relationship with Mbanga.
They allege that on the night of mayor Bernard Manyenyeni’s suspension, the two had dinner at a local restaurant where Kasukuwere reportedly asked him to act on Mushore.
Mbanga would assume the mayoral office the following day, April 22, and immediately ordered Mushore out of town house, triggering an outcry from colleagues who called him a sell-out.
Kasukuwere denied meeting Mbanga for dinner when contacted by phone on Tuesday.
“That’s sub judice comrade. Dinner with Mbanga, why and where?” he asked.
He declined to entertain further questions.
The Financial Gazette understands that some MDC-T executive members were beginning to question Mbanga’s loyalty. There was a possibility that they could move a motion in the National Executive Council for disciplinary action against him.
Mushore was appointed last month after a rigorous selection process involving reputable consultancy firms as well as councillors and stakeholders.
Harare had been without a town clerk since the sacking of Tendai Mahachi in June last year.
But the appointment of the former banker to the US$10 000 per month job  triggered a political storm, with Kasukuwere demanding the reversal of the process on account of the fact that the Local Government Board had not been consulted in terms of the Urban Councils Act.
Council, dominated by members of the MDC-T, Zimbabwe’s main opposition party, had made the appointment based on provisions of the new Constitution which gives them the independence to make executive appointments without interference from government or any of its organs.
An embittered Kasukuwere had then moved to suspend Manyenyeni, after council defied his directive to sack Mushore.
Manyenyeni is challenging the suspension at the High Court; he is also challenging the Urban Councils Act, which he says is clearly ultra vires the Constitution.
High Court Judge, Justice Mary Dube, reserved judgement when she heard the case in her chambers on Tuesday.
Contacted for comment this week, Mushore said the impasse at Town House was due to the lack of clarity as to which laws to follow: Whether it is the Urban Council’s Act which gives sweeping powers to the Minister or the Constitution which devolves powers to the local authorities to manage their own affairs.
“I have an opinion as does the next man. Everyone is entitled to an opinion. Given the position I think that it is up to the judiciary to guide us as to which laws have supremacy. In the meantime, I have a contract with City of Harare which obliges me to tender my services at Town House. I will continue to do just that in fulfilment of my obligations,” he said.
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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 or 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.”
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 a 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 forced 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.
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 dwindling exports.
They said imports were likely to grow further this year due to a drought situation, which would 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 and minimise payment gridlocks.
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.               newsdesk@fingaz.co.zw

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AirZim will be flying to the east African capital midday on Tuesdays and Saturdays, with return flights in the evenings.

AIR Zimbabwe (AirZim) will introduce two weekly flights into the Tanzanian capital, Dar es Salaam from May 14, taking on low cost operator fastjet, which has established itself on the route after starting flight in 2014.

The Harare-Dar es Salaam route would be the third regional destination for the airline, which already operates flights to Lusaka, Zambia, and Johannesburg in South Africa.

In a statement released last week, AirZim said it would be flying to the east African capital midday on Tuesdays and Saturdays, with return flights in the evenings.

“With effect from 14 May 2016, the national airline will be resuming operations for Dar es Salaam, Tanzania,” AirZim said on Friday, unveiling a US$400 return ticket, free tickets for every five people travelling together and “generous baggage allowances”.

The east African capital has recently become an strong attractions for airlines and road transporters after a booming informal trade in second hand clothes and cars, which arrive on its port from overseas destinations.

The consignments are then shipped into southern African economies from there, a situation that has triggered high demand for transport services.

Once one of Africa’s leading air passenger carriers, AirZim has been struggling to return to its former status.

It has been affected by an ageing fleet, prolonged labour disputes and failure by its major shareholder, government to recapitalise the debt ridden former giant.

It was briefly grounded in 2011 before return into operation late 2012.

It immediately embarked on a programme to reintroduce flights on its traditional destinations starting with Johannesburg.

In June last year, AirZim reintroduced its Harare-Lusaka flights, four years after leaving the route.

In Dar es Salaam, it will compete with fastjet, which has been offering fares starting from US$50 for a one way trip, and will resume their old rivalry in the skies.

There is fierce competition for passengers between the two airlines on the Harare-Victoria Falls route, which fastjet entered last year.

On the domestic front, AirZim flies daily from Harare to Bulawayo.

It also flies daily to Victoria Falls from Harare, while it operates three weekly frequencies on the Harare-Kariba-Victoria Falls route.

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In Zimbabwe, four million people are facing starvation.

THE Parks and Wildlife Management Authority of Zimbabwe says it will reduce its stock of wildlife in the country to manageable levels after drought affected pastures and water sources.

Wildlife estates, which mostly lie in thedrought prone regions of the country, including the Zambezi Valley and the south eastern parts of Zimbabwe, are failing to cope with demand for pastures and water due to thedrought that has hit southern Africa and left 36 million people across the region requiring food aid.

In Zimbabwe, four million people are facing starvation.

Government says over 28,000 cattle perished this year across the country during the period leading to March, when the country received improved rainfall but not enough to rescue the season.

The move by the Parks authority to destock points to a desperate situation in national parks, which are home to scores of game, including elephant, buffalo, zebra, rhino, lions and many others, analysts say.

“In light of the drought that was induced by the El Nino phenomenon, Parks and Wildlife Management Authority, intends to destock its Parks Estates through selling some of the wildlife,” the authority said in a statement emailed to stakeholders on Tuesday.

“The authority is therefore inviting members of the public with capacity to acquire and manage wildlife to submit their expressions of interests.”

It did not say the number of animals to be moved to private management, whether the destocking would involve the export of animals, or which species had been most affected by the drought.

However, the country’s stock of 83,000 elephants far outstrips its carrying capacity, which is about half this number.

After being confronted by criticism for exporting elephants to China, Environment Minister Oppah Muchinguri-Kashiri said in January that lions, baboons and hyenas could also be exported as the country grapples with overpopulation and the crippling drought.

“We are going to increase the number of exports of elephants and other species, because they have done a good job in taking care of those (animals) they have already bought from us,” Muchinguri-Kashiri said then. The Source

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MDC-T secretary-general, Douglas Mwonzora

The Movement for Democratic Change (MDC-T) has said a proposed forensic audit of the Harare City Council (HCC) and its businesses ordered by the ZANU-PF political commissar was motivated by “political malice and utmost bad faith”.
MDC-T secretary-general, Douglas Mwonzora, said his party had carried out at investigation “into the whole forensic audit issue; its genesis, objective, focus and its intended outcomes” after a report by the Financial Gazette exposed the plot by Local Government, Public Works and National Housing Minister Saviour Kasukuwere to crack the whip on the MDC-T-run local authority through the intended audit.
Mwonzora said: “After thoroughly analysing the facts on hand, it was established that the audit called for was in fact a product of political malice and utmost bad faith (and) not an endeavour to promote transparency and good governance in council.”
He said the council official who wrote to the auditor-general (AG) at the instigation of Kasuwere, “had no council authority to engage an auditing firm to audit council and its private companies”.
Mwonzora, a practising lawyer, described the appointment of Price Waterhouse Coopers (PWC) to undertake the audit as “irregular, unprocedural and therefore a nullity at law”.
“We also established that some politically mischievous council officials may have deliberately misled the Minister of Local Government, Public Works and National Housing on the actual situation at City Parking or Easipark Harare in order to curry favour with the minister and to protect and promote their own personal and selfish interests,” he said.
He said the official description of the audit by the AG was classified as Harare City Council Comprehensive Forensic Audit (Tender OAG 08/ 2015) and was supposed to focus on the parking business but had been unilaterally widened to cover the whole council, including areas such as HCC and committees’ terms of reference; council minutes; HCC meeting attendance registers; HCC and committee members’ CVs; and HR policies and procedures, especially those relating to promotions, succession, compensation and benefits.
City Parking is a business unit wholly-owned by HCC. Easipark was disbanded after differences with a private partner.
According to documents seen by this newspaper, Kasukuwere wrote to the now-suspended mayor, Bernard Manyenyeni, on July 27, 2015 saying he was “disturbed by a number of reports emanating from various sources about issues of corruption at Easipark and City Parking”.
“It would appear that these allegations may be true due to the absence of any audit report for these entities in recent years,” said Kasukuwere in his letter to Manyenyeni.
He then ordered council to engage forensic auditors to provide a report on the operations of the two businesses within two weeks of receipt of his letter. Kasukuwere said he would want a preliminary report on the same issue within six weeks of engaging the auditors.
On September 21, 2015, Josephine Ncube, the acting town clerk, then wrote to the AG highlighting Kasukuwere’s demands. She noted that an official from her office had informally engaged the AG regarding the matter.
She said in the letter to the AG: “The minister in his wisdom has finally seen it fit that as originally intended Harare City Council should engage your office to appoint the forensic auditors following laid down procedures as prescribed by your office.”
She noted to the AG that it was Kasukuwere’s view that for purposes of clarity, the AG should “directly obtain the terms of reference from the secretary for the Ministry of Local Government, Public Works and National Housing”.
A follow-up letter on October 2, 2016 by Ncube had disclosed that the minister had authorised the appointment of the forensic auditor to undertake investigations on Easipark.

Suspended mayor, Bernard Manyenyeni

The AG was to later appoint PWC after going to tender.
But councillors were to later get the shock of their lives after Thompson Mucheki, of PWC, wrote to the HCC’s internal auditor, Joseph Danny Issa, requesting information for the “comprehensive forensic audit” that went beyond the original brief by Kasukuwere.
Mucheki said: “We would appreciate it if we can have all the information by April 11, 2016 upon commencement of the engagement. This is the initial request and we may request for additional information as work progresses, if required.”
PWC requested the historical financial information on Easipark and City Parking since dollarisation in 2009, including the profit and loss accounts, the balance sheets and the cash flow statements.
They also requested for year-to-date management accounts, budgets and forecast financial statement, board minutes for the past three years, proof of remittances of dividends, strategy documents for each arrangement, organisational strategy, structure and job descriptions, payroll extracts, salary structure and board charter.
The list had up to 39 items.
But it was the request for information on HCC and its committees that surprised councillors and turned the table, forcing HCC to turn away the auditors.
Mwonzora said council had a business ventures organ called Harare Sunshine Holdings, with a mandate to grow and manage council’s business enterprises.
“This is a private company that was established in 2013. On establishment, this company did not receive any financial assistance from council either in the form of working capital or seed capital. The company currently has only two council entities under its jurisdiction,” he said.
The entities, he said, included City Parking, which started operations in 2013.
“Its financial books are audited by a reputable international audit firm and positive audit reports for 2013 and 2014 are available. The audit for 2015 is nearing completion.
The other entity, Sunshine Meats, started operations in 2015 and its books are also being audited, he said.
The other business ventures owned by HCC remained under the control of council and its management .These, he said, were home industries (Siyaso) in all high density areas; retail and flea markets (Mupedzanhamo) in all high density areas; council houses under lease rental such as Trafalgar Court and other properties in the low density areas; council business properties in the CBD and high density areas such as Mbare, Mabvuku, Highfield and Mufakose; Hillside Nursery; the council quarry at corner Cripps Road and Joshua Mquabuko Nkomo Express Road; Rufaro Marketing properties; and halls, crèches, community centres and stadia.
He said Harare Sunshine Holdings had six joint venture agreements with private partners in the real estate development area. None of the joint venture projects had completed construction, with the majority of the projects at design stage.
“The arrangement in joint venture projects is that council offers land as its equity in the joint venture company whilst the private sector partner undertakes to construct the superstructure. Opportunities for partnership with the private sector are found on the council website, town clerk’s office, mayor’s office and at Harare Sunshine Holdings offices. The opportunities are also marketed at the ZITF (Zimbabwe International Trade Fair) and the Harare Agricultural Show events.
“All joint venture proposal reports are presented by the town clerk to council for approval. Approved proposals have joint venture agreements and shareholder agreements that are formulated by the chamber secretary and thereafter presented to council for adoption,” he said.
He said the process clearly showed that councillors were “not involved in securing, negotiating and formulating joint ventures with the private sector”.
On the audit proposal by Kasukuwere, Mwonzora insisted that City Parking had “clean external audit reports for 2013 and 2014”.
“City Parking was the only operational subsidiary company under Harare Sunshine Holdings at the time the minister wrote to council in July 2015. City Parking started operations in 2013 and did not receive any funding from the shareholder (HCC). In order to commence operations, the company secured a loan from a bank for both working capital and seed capital,” he said.
“At the time of our enquiry, the international audit firm was concluding the 2015 audit on City Parking. Accordingly, at the point the honourable minister wrote to council in July 2015, both 2013 and 2014 audit reports were available.
“It is therefore clear that the honourable minister was misled into believing that City Parking was not being audited.
“The chairman of the business committee made the copies of audit report available to the mayor in August 2015 to ensure that the honourable minister was fully briefed of the correct facts pertaining the operations of City Parking,” Mwonzora said.
He said the acting town clerk had acted without the authority of a council resolution when she wrote to the AG demanding the appointment of a forensic auditor, marking “a critical departure point in terms of corporate procedure, process and protocol and (shedding) light to the fact that there was or is a well-orchestrated strategy to carry out a sniffing and witch-hunt audit by ZANU-PF in order to do a hatchet job on councillors of Harare”.

Local Government, Public Works and National Housing Minister Saviour Kasukuwere

Mwonzora said the minister should have been told clearly that City Parking was being audited by an external audit firm and that audit reports for 2013 and 2014 were available.
“That should have put the matter to rest.”
He said City Parking was a private limited company governed by the Companies Act and the auditor general had neither mandate nor jurisdiction over private companies.
“The approach which was made to the auditor general by a council official did and does not have council sanction and resolution. It is a move to invite the minister to direct operations whilst hiding behind the auditor general and the appointed audit firm.
Mwonzora said the MDC-T party did not condone corruption and would disown any official found to have acted corruptly.
“What we are against is playing political games aimed at reversing the gains of the MDC-T as the ruling party in all major cities and towns in the country. The engagement of audit firms to act as bloodhounds in strategy to unseat elected councils must be resisted.
“We are clear in our minds that ZANU-PF is the author and defender of corrupt activities in the country. President Mugabe came out in the open recently to reveal that a staggering US$15 billion vanished without trace in Chiadzwa. This amount is enough to finance the country’s annual budget for about five years.
“We want to understand from Minister Kasukuwere as to whether it is not true that council businesses such as home industries, farmers markets, and Mupedzanhamo are not viable businesses because these entities are supervised not by council but by ZANU-PF cartels.
He said the MDC-T had information about five properties owned by the City through Rufaro Marketing which were being leased to a well-connected and powerful ZANU-PF politician in Mbare. The politician, he said, was not paying lease rentals and had refused to vacate the premises.
“Is the minister unaware of this or he chooses to turn a blind eye?” he asked.
“Can the minister deny that a lot of low density area residential stands were, during the (Tendai) Mahachi era and currently, allocated to ZANU-PF elites through the influence of the Ministry and friendly council officials and that recent beneficiaries are Sarah Mahoka, Shadreck Mashayamombe, and Valeria Chizema?”
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Local Government Minister Saviour Kasukuwere

BULAWAYO –Local Government Minister Saviour Kasukuwere has unleashed investigators to look into claims of impropriety in council in what is being seen as the build up towards the purging of the Movement for Democratic Change (MDC-T) dominated municipality.
The investigation has been spurred by claims of corruption by the Bulawayo Progressive Residents Association (BUPRA) in the allocation of residential stands.
BUPRA has called for the prosecution of councillors found guilty of parcelling out vast tracts of land to themselves.
Last month, BUPRA petitioned Kasukuwere; the Minister of State for Provincial Affairs in Bulawayo, Nomthandazo Eunice Moyo and the National Assembly to investigate the city fathers for land deals which it said were suspicious.
The city has 100 000 residents on the waiting list for housing stands.
“Indications are that there is a clique of councillors amassing properties while others are not benefiting. There are also indications that companies affiliated to councillors have been awarded land and leases,” Rodrick Fayayo, the BUPRA co-ordinator said.
On Tuesday, Kasukuwere dispatched the probe team, saying he would “not sweep anything under the carpet”.
Bulawayo City Council is led by mayor Martin Moyo.
“The issue is when concerns are raised, I can’t sweep them under the carpet. So we have tasked engineer Hungwe to lead the team. I haven’t had a chance to speak to the Bulawayo mayor, but I will find some time to speak to him this week and we shall identify the issues.
Once the allegations are found true, we will have to take action and we will have no option,” said the ZANU-PF political commissar in an interview with the Financial Gazette.
Moyo said he was aware that an investigation team had been dispatched to Bulawayo and that his office would fully co-operate with the investigators.
“There is a team from local government sent to investigate and we would want to co-operate with them as fully as possible. We have not been suspended by the minister, so we will work alongside them [investigation team] and we will open our offices and they will be free to ask questions as we go along our business,” he said.
Moyo said he has no reason to suspect that the investigation could be a veiled political attempt to push him out of office.
“I don’t see it that way and I don’t think there are any sinister or ulterior motives. These rumours are emanating from BUPRA, so let them verify and check if there is any truth in them. I can’t speculate on what the future will be, but since the investigation is motivated by genuine and benign concerns, we have nothing to hide,” he said.
Until now, Bulawayo had been spared from Kasukuwere’s interference but that appears to be a thing of the past as he seeks to extend his grip to Bulawayo, the country’s second largest city which is reputed for being the best run local authority in the country.
The Gweru City Council and most recently the Harare City Council have both so far had conflict with Kasukuwere who has suspended the mayors from the two respective cities.
Hamutendi Kombayi, the Gweru mayor was suspended last month for alleged misappropriation of council funds alongside members of his executive.
The Bulawayo High Court, however, dismissed Kombayi’s suspension, but he still remains out of office after Kasukuwere declined to allow him back and appealed the High Court ruling.
Bernard Manyenyeni, the Harare mayor, was suspended last month for appointing James Mushore to the post of town clerk without the approval of the Local Government Board and Kasukuwere.
Kasukuwere has indicated that he would not hesitate to give marching orders to Moyo, should the team of seven investigators unearth anything that points to gross abuse of office by the city fathers.
According to section 278 of the Constitution, mayors, chairpersons and councillors can only be removed from office by an independent tribunal.
They can only be removed from office for inability to perform the functions of their office for a range of specific reasons which include mental or physical incapacity, gross incompetence, gross misconduct, conviction of an offence involving dishonesty, corruption, abuse of office and the wilful violation of the law.
Media reports suggest that Moyo may have fallen out with Kasukuwere over his resistance to award 20 000 housing stands to youths on grounds that the city was failing to clear its housing backlog.
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The notes to be backed by US$200 million Afreximbank Nostro-support facility

IN an effort to ease the current shortages on cash, the Reserve Bank of Zimbabwe will introduce bond notes, convert part of all US dollar foreign exchange receipts to rands and euro and also limit daily cash withdrawals as well as reduce further the cash to be moved out of the country.

RBZ governor John Mangudya told journalists on Wednesday that Zimbabwe needs to go back to basics and restore the fundamentals of the multicurrency system which was adopted in 2009. He noted that Zimbabwe had gradually moved to being a single currency economy following the appreciation of the US dollar against other major currencies.

“Currency utilisation at the moment is currently skewed in favour of the US dollar in spite of South Africa making up 60 percent of the imports in South Africa,” he said.

Over 40 percent of Zimbabwe exports are to South Africa and around 60 percent of imports are from South Africa while 70 percent  of tourists come to the country through South Africa. However since dollarisation the skew of utilisation had moved towards the US dollar. In 2009, US dollar use was at 49 percent and rand use and 49 percent while other made up the remaining two percent. However in 2013 the use was at 50-50 while there was a gradual move towards the US dollar from 2014 at 60 percent, in 2015 70 percent and 95 percent in 2016.

Mangudya said in order to go back to the basics of restoring the fundamental principles of the multi-currency system, the central bank would increase the availability and usage of other currencies within the basket.

With effect from today onverted by the central bank at the official exchange rate to rands and 10 percent  to euros.

“This policy measure is designed to ensure that we spread the demand for cash amongst a wide range of currencies and in order to mitigate concentration risk.”

He however said that the framework shall not apply to diaspora remittances and non-governmental organisations where the receipts will continue to be treated as free funds in line with the existing framework.

Mangudya also said the RBZ had also established a $200 million foreign exchange and export incentive facility which is supported by the Afreximbank to provide a cushion on the high demand for foreign exchange.

However the facility will only come as bond notes and will have an incentive facility of 5% on all forex receipts, including tobacco and gold sale proceeds,

In order to mitigate against possible abuses of the facility through capital flight, funds shall be granted to qualifying exchange earners in bond coins and notes which shall continue to operate alongside the currencies at par with the US dollar.

“The Zimbabwe Bond Notes of denominations of $2, $5, $10, and $20 shall therefore be introduced in future,” he said without giving a timeframe.

“I do not have a timeframe for the introduction of the notes as we are still at the design stage but possibly in the next two months. The notes, just like the bond coins, will be printed outside the country.” Mangudya emphasised that the bond notes did not however signal a return to the Zim dollar.

He said the US$200 million facility shall also be used to discount trade related paper in order to provide liquidity for business trading operations.

Mangudya also set new cash export and withdrawal limits,. Daily cash withdrawal limits from within the branch and ATMs are now at US$1000, Euro 1000 and R20 000 with immediate effect.

Maximum cash allowed to be taken outside the country has been revised downwards to US$1 000, Euro 1 000 and R20 000 from the previous US$5 000.

As a multi-currency policy measure, Mangudya said the framework shall require the enforcement of multi-currency pricing of goods and services.

“This means that product pricing in shops and other service providers would need to be reflective of the multi-currency system.”

Accordingly, he added, “In view of the fact that most products in Zimbabwean shops are from South Africa, it is pertinent that shop owners and businesses should think in Rand term as opposed to abstract USD prices.”

Other measures include displaying of international exchange rates in all banking halls, wholesale and retail outlets. Also, all retailers, wholesalers, businesses, local authorities, utilities, schools, universities, colleges, service stations informal sector among others are with immediate effect required to install and make use of the requisite POS machines in order to reduce demand for cash.

Payment system providers are encouraged to further improve efficiency and interoperability of the systems which will go a long way in enhancing usage and stability to the transacting public. The players are also encouraged to undertake consumer education and awareness.

He said the central bank will at first use moral suasion for retailers but would be forced to use the Money Laundering Act against those who didn’t follow the directive.

Furthermore, Mangudya said the country should benefit from SADC regional payment systems. He said the process to reconfigure the RTGS system into multi-currency is already underway and the system will go live on 13 June 2016.

Mangudya said the central bank is happy with financial inclusion efforts and the Banking sector should promote the savings culture.

“With immediate effect, all banking institutions are required to open special savings products.”

The savings products shall have a minimum balance of $10 000 or Euro 10000 and ZAR 20 000, minimum term structure of six months, annual interest rate of 5% on UD and Euro balance and 10% on Rand deposits and tax free.

In addition to the measures, Mangudya said the RBZ and Business representative bodies have come up with a foreign exchange priority list which will guide banks in the distribution of foreign currency towards competing demands. FinX

A total of US$1,8 billion was externalised in 2015, of which US$1,2 billion was siphoned by corporates and US$684 million by individuals, thus exporting liquidity.

AS the liquidity crunch bites deeper into the country’s economy, banks have stopped making international payments in United States dollars, indicating that they can only make the payments in currencies of the recipient countries.
Last week, CABS became the second bank, after MBCA, to advise its clients of the new development.
In a notice sent to its clients, CABS managing director, Simon Hammond, said all cross border payments destined for countries whose currencies are freely tradable on the international foreign exchange markets, would be settled in the currency of the destination/receiving country, effective June 1.
“As such, we will require that all invoices presented as supporting documents for cross border payments be in the relevant currency of the country from which the invoice has been issued. Currencies in this category that we are currently able to clear include USD, ZAR, GBP, EUR and BWP,” the notice said.
“We further advise that payments to Southern African Development Community (SADC) countries, other than South Africa, can also be paid in ZAR through the SADC Regional Electronic Settlements System, which is a more efficient payment system. In the circumstances, we encourage you to consider this option for payments destined for the SADC region, by being invoiced in ZAR. The countries that are currently on this regional payment platform are South Africa, Namibia, Zimbabwe, Zambia, Malawi, Lesotho, Swaziland, Mauritius and Tanzania.”
Hammond encouraged the bank’s clients making local payment transactions, to make use of Point-of-Sale machines as well as the mobile and Internet banking facilities.
On March 31, MBCA issued a similar notice to its clients, which notice came into effect this month.
In his Monetary Policy Statement for the first quarter of this year delivered on February 4, Reserve Bank of Zimbabwe (RBZ) governor, John Mangudya, highlighted an unsustainable situation of money flowing out of the country, thereby dwindling the economy’s liquidity position, and said urgent attention is required to remedy the problem.
According to Mangudya, a total of US$1,8 billion was externalised in 2015, of which US$1,2 billion was siphoned by corporates and US$684 million by individuals, thus exporting liquidity.
He called for prudential measures to plug illicit financial out-flows.
The severe cash shortage that the country is facing has seen some retail shops insisting that shoppers who want to use their cash-back facility should buy goods worth a certain percentage of the amount of cash they would need to access, a survey by the Financial Gazette revealed.
In most of the cases the percentage is as high as 30 percent.
“I was told that if I wanted a US$50 cash-back, I had to buy items worth US$15, so I had to leave because at this rate, I would have ended up spending most of the money on buying things that I don’t need,” said Collet Ndiraire, a Harare man who was running around to access his salary to pay his rentals, school fees for his children as well as meeting other day-to-day needs of his family.
The cash shortages are also affecting international money transfer agents.
A Zimbabwean based in Australian told the Financial Gazette about how his family was stranded in Masvingo  since last week after travelling from Mwenezi in order to collect the money he sent them, as the local agent of the international money transfer agency had no cash to make pay-outs.
Cash barons have emerged on the local market where they are selling cash at rates of up to 10 percent.
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MDC-T leader, Morgan Tsvangirai

THE Movement for Democratic Change (MDC-T) is moving to forestall Local Government Minister Saviour Kasukuwere’s attempts to weaken its influence on the remaining urban strongholds under its dominion as the country’s political parties brace for a gruelling encounter at the 2018 general elections.
Since his appointment to the ZANU-PF commissariat and as Minister of Local Government, Kasukuwere has wreaked havoc in urban areas that are still dominated by the MDC-T, at times in ways criticised as unconstitutional.
So far, he has scored a succession of victories in his war with the MDC-T, having dismissed the entire Gweru council and shaken the Mutare municipality to the core.
Only last week, he seemed to have succeeded in blocking the appointment of City of Harare town clerk, James Mushore.
In a bid to silence MDC-T leader Morgan Tsvangirai, Kasukuwere last week went for the jugular, threatening to evict the former trade unionist from a government mansion in Highlands, Harare, if he fails to influence his party members to capitulate to his demands at Town House.
While Tsvangirai’s spokesperson this week denied any eviction threats against his boss, MDC-T insiders said Kasukuwere’s threats had resulted in jostling within the party.
Tsvangirai has found his entire MDC-T national executive defiantly resolute in supporting the appointment of Mushore.
Radicals in the MDC-T have now successfully cajoled their leadership to confront Kasukuwere.
The MDC-T dominates the Harare City Council which employed Mushore without Kasukuwere’s approval, triggering the confrontation which saw the Local Government Minister suspending mayor, Bernard Manyenyeni.
The Financial Gazette can now report that Tsvangirai has since somersaulted and given in to pressure from his lieutenants, led by the now-increasingly aggressive secretary general, Douglas Mwonzora.
Sources said the country’s main opposition party tasked Mwonzora last week to lead an all-out assault on Kasukuwere in the battle to retain control of Harare.
Mwonzora’s first action was to call for a meeting of the party’s top brass which was held at the MDC-T headquarters on Saturday.
The meeting was meant to discuss several issues, among them Mushore’s appointment and the audits which Kasukuwere has ordered in Harare, Bulawayo and Chitungwiza.
The meeting, source said, came up with four resolutions: to stand by suspended Manyenyeni, noting Kasukuwere had no power to suspend the mayor; to stand by Mushore’s appointment; to direct acting mayor, Chris Mbanga, to stop victimising Mushore; and to block Kasukuwere’s proposed audit of the City of Harare.
They also resolved to file an urgent Constitutional Court  (ConCourt) appeal seeking to repeal at least 12 provisions of the Urban Councils Act (UCA), particularly section 314, which compels councils to consult the Minister of Local Government when making senior appointments and section 114 which gives the minister power to fire mayors.
Both these provisions are inconsistent with the new Constitution, adopted overwhelmingly at a referendum in 2013, and therefore are invalid. They are only applicable when read with the discarded Lancaster House Constitution of 1979, the MDC-T said.
Mwonzora confirmed the development in an interview with the Financial Gazette this week.
“Kasukuwere must be stopped,” he charged, saying he had filed the ConCourt application soon after the Saturday meeting which he chaired.
“I filed the application on behalf of the party. We are asking the court to nullify all the offending provisions of the Urban Councils Act to cover the whole country because we know Kasukuwere’s strategy is to go from municipality to municipality. After Harare, he plans to go to Chitungwiza and then Bulawayo making spurious allegations against our councillors,” he said.
“The application is now before the court and we are seeking to have about 12 provisions of the Urban Councils Act nullified,” he added.
He also confirmed that he had taken charge of the anti-Kasukuwere crusade.
“I chaired the first meeting on Saturday where we came up with several resolutions. I am happy that everyone in the party is now of the same opinion that we should stand by the appointment of Mushore and that we stand by Manyenyeni.
“The so-called audits which Kasukuwere has ordered will also be blocked. It’s not an audit targeting money or abuse of money but it includes looking at our councillors’ curriculum vitaes, looking at the educational backgrounds of our councillors and their personal suitability. We said no to that. It is our duty as a party to do those assessments. We held primary elections and presented them to the electorate and were voted for. Now he says he wants to audit their skills. They can audit the skills of ZANU-PF councillors, not ours. If it was an audit of finances, it can always be done, we have got no problems with that but he should not touch our councillors,” he retorted.
Tsvangirai’s spokesperson, Luke Tamborinyoka, this week appeared to confirm that his boss was now moving with the rest of the party leadership.
“We reiterate our position that Kasukuwere must stop his continued interference with autonomous councils as that is no longer permissible under the new Constitution. President Tsvangirai’s position on the saga at Town House is a matter of public record where he even took it upon himself to chastise the excitable Kasukuwere for his unconstitutional interference in the affairs of an autonomous council,” he said in response to a report in the Financial Gazette last week suggesting that Tsvangirai had been cowed into supporting the dismissal of Mushore by Kasukuwere.
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Bankers Association of Zimbabwe (BAZ) president, Charity Jinya

•Withdrawal costs up 570pc

BANKS have taken advantage of the prevailing cash shortages by hiking their transaction costs by as much as 570 percent, leaving the bulk of depositors who are already living on the margins of poverty poorer, the Financial Gazette can report.
This has infuriated long-suffering depositors who strongly, and rightly so, feel that cash should be made available at affordable charges, on demand.
It is now being feared that the punitive bank charges could further diminish confidence in the turbulent financial services sector, which is critical in allocating resources in an economy.
The situation has even led workers who are gainfully employed in the formal sector to start contemplating receiving their salaries through other electronic platforms such as EcoCash, One Wallet and TeleCash whose charges are much lower.
Zimbabwe is presently grappling with an unprecedented shortage of notes, which has forced banks to limit daily cash withdrawals.
Considering that a depositor who used to make a single trip to the bank now has to make multiple withdrawals in a week because of the daily cash withdrawal cap, the punitive charges are translating into jaw-dropping margins for the banks, and significantly huge costs for depositors.
Before the cash crisis, most banks were charging withdrawal fees of about US$3 for withdrawals made in the banking halls and US$2,50 for withdrawals done on Automated Teller Machines (ATMs) for cash of up to US$1 000.
But now, a depositor is now parting with US$20 for a withdrawal of US$1 000 made over several days because of the cash limits, implying a hike of between US$17 and US$17,50 or nearly 570 percent.
Some banks are charging slightly less, but overall, all have increased their withdrawal charges by huge margins.
Even international payment charges have gone up because of the high costs of settling international card transactions. For instance, the cash withdrawal fee for international debit cards has gone up from three percent to five percent per transaction, with a minimum charge of US$3,50 per transaction for those using Mastercards.
Bank executives argued this week that the harsh operating environment has increased costs of keeping their units viable, which overheads could only be recouped from the banking public.
For example, most foreign-owned banks are being forced to import cash with the cost of doing so being passed onto the customers.
Bankers Association of Zimbabwe (BAZ) president, Charity Jinya, yesterday said the workload for the banks has increased, which also follows that the cost of processing transactions has gone up.
She said this was not of the banks’ making.
“It’s a situation none of us want to be in. It’s a sign of the times. (But) things can’t be done for free. Since we are now repeating transactions, just look at the amount of work bankers are now getting to do. Labour wants to be paid for it,” said Jinya.
Economist, Brains Muchemwa, said the on-going cash crisis has plunged banks into a tight corner with regards to funding their nostros and cash importation requirements. Inadvertently, the associated costs are being, to some extent, passed on to consumers so as to share the national burden.
“The resolution entails largely allowing banks higher retention levels on their nostro balances so that they better forecast funding cash requirements,” he said.
A nostro account is a bank account held in a foreign country by a domestic bank, denominated in the currency of that country.
It is used to facilitate settlement of foreign exchange and trade transactions.
The Consumer Council of Zimbabwe has described the situation confronting depositors as “very distressing”.
The executive director for the consumer watchdog, Rosemary Siyachitema, was this week frantically trying to secure meetings with the Reserve Bank of Zimbabwe and BAZ to highlight the plight of depositors.
“It’s a difficult time for consumers,” Siyachitema told the Financial Gazette on Tuesday.

Consumer Council of Zimbabwe Executive Rosemary Siyachitema

“They (banks) have been putting too much pressure on consumers to use plastic money, but our capacity for the usage of plastic money is not good. We are ill prepared; schools don’t have facilities for plastic money; the city councils don’t have the capacity. If we are to go the plastic money way, retailers should be automated to welcome many people to use the plastic money. “The facilities should be spread all over the country to enable ease of doing business,” she added, in response to the central bank’s calls on Zimbabweans to start using plastic money.
Indigenous banks seem to be the worst hit by the crisis as the majority of them have switched off their ATMs, with long queues being the order of the day in their banking halls.
The government-owned People’s Own Savings Bank (POSB) and Agribank did not have cash in their banking halls and ATMs, but depended on deposits and were dispensing a maximum of US$100 per day per customer or account.
At one of these institutions, a depositor said he had failed to get a single cent from his account over three days despite queuing daily.
FBC Bank was charging two percent per withdrawal and allowed a daily withdrawal limit of US$200 per day, translating to US$20 for US$1 000 over five days.
CBZ Bank and ZB Bank were charging US$3 for a maximum withdrawal of US$200 per day, implying a charge of US$15 per US$1 000.
Steward Bank was charging US$5 for a withdrawal of US$500, which is the maximum withdrawal limit for the bank. This translates to US$10 per withdrawal of US$1 000.
NMB Bank’s withdrawal limit was pegged at a maximum of US$300 at US$3 per transaction, or US$12 for US$1 000.
The country’s largest building society, CABS appears to be the only foreign-owned institution battling with cash shortages, and faced almost similar circumstances as POSB.
But most of the foreign-owned banks, which get liquidity support from their parent companies abroad, have benefitted in a big way from their ownership, with cash availability unmatched by the other players.
Depositors with Barclays Bank of Zimbabwe and Stanbic Bank Zimbabwe were able to withdraw up to US$9 999 per day, but were forking out 1,5 percent for any withdrawal, which brought the charge for the maximum withdrawal to about US$150 per transaction.
Standard Chartered Bank of Zimbabwe is allowing depositors to withdraw up to US$10 000 a day but charging 1,55 percent for a transaction per day. This means if a depositor withdraws the maximum amount of US$10 000, he or she will be charged about US$155 per transaction.
MBCA was allowing depositors to withdraw up to US$10 000 per day, charging one percent of the withdrawn amount. The withdrawal charge in the banking hall  for maximum cash translated to about US$100 per transaction per day.
Ecobank, apparently the only bank that had no cash withdrawal limits for inside-the-bank transactions, was charging one percent of the amount withdrawn. To that end, if a depositor withdraws US$10 000, the pan-African bank charged US$100 per transaction.
BancABC, another pan-African bank that was recently bought by former Barclays Plc chief executive officer, Bob Diamond, had restricted maximum withdrawals at US$500 a day over the counter and not more than US$250 per day from its ATMs. Its bank charges were pegged at US$5 for every withdrawal, implying an aggregate charge of US$20 for a withdrawal of US$1 000.
Foreign-owned banks were allowing withdrawals of between US$500 and US$2 000 from their ATMs, charging a minimum of US$3 per transaction.
But the banks were not feeding the ATMs with cash, forcing depositors to withdraw cash from the banking halls where withdrawal charges were higher.
Analysts warned this week that the situation could undermine efforts to encourage domestic savings and rebuild the shattered economy as the astronomical charges were eating into depositors’ already low incomes, hence leaving them poorer.
Economist John Robertson this week said the scarcity of money was hurting everybody, banks included.
He said the withdrawal limits, payment difficulties, falling incomes and falling business activity, were a result of deeper causes that needed to be dealt with, but have been ignored by the authorities.
“This deeper cause is the loss of productive capacity that used to produce all the food needed by the whole country; used to run factories that produced most of the consumer goods we needed; and used to offer the full range of services, including retail, transport, construction, banking, maintenance, education and health. All of these used to employ tens of thousands of people who were paid regularly and could support the shops as well as the banks in ways that gave the businesses enough business for them to pay their wages and taxes,” said Robertson.
“We have now lost that capacity, so we are importing our food and consumer goods, our transporters are carrying other country’s goods and our employees are fewer in number. Businesses pay less profits tax, less Pay As You Earn and less Value Added Tax to government, so government is also very short of money now. The banks know that many who want to borrow money will have difficulty repaying the loans, so they are lending only to the few safe borrowers still in business. But the banks still need a good income as they have to pay good salaries to retain good employees. That is why transaction charges have been put up: to bring in the income needed to stay in business,” he added.
Robertson said the charges may come down once the policy environment has improved.
“Bank clients need to accept that it is in their interests to keep the banks afloat,” he said.
“When things improve, bank charges will certainly go down because, with much safer borrowers recovering their ability to repay loans, the banks will see their preferred income, their interest income, increasing steadily.”
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RBZ governor John Mangudya

ZIMBABWE  is negotiating with the Preferential Trade Area (PTA) Bank and the Development Bank of Belarus for funding to capitalise the recently established Zimbabwe Consolidated Diamond Company (ZCDC), central bank governor John Mangudya told Parliament on Monday.

Government this year established ZCDC after it shut down diamond companies operating in the country’s Marange diamond fields after they refused its proposals to nationalise the industry.

Mangudya on Monday told Parliament’s committee on finance that government was negotiating lines of credit to fund ZCDC and other mining activities.

“We have been negotiating facilities with the PTA Bank, Afrexim Bank, Development Bank of Belarus and we have found some lines of credit that we are providing to the artisanal miners and the bigger mining firms. We have raised $250 million towards the mining sector but it is not sufficient,” he said.

“We are organising funding so we can get some equipment for the Zimbabwe Consolidated Diamond Company for then to expand their production. ”

Last week, mines minister Walter Chidhakwa told The Source that about 270,000 carats of diamond have already been auctioned under ZCDC. Government intended to eventually increase ZCDC’s monthly output to a million carats, he added.

Mangudya said the central bank’s latest measures to boost export income — a five percent export incentive backed by the $200 million Afreximbank facility to be paid out to exporters in bond notes — would go a long way to promote exports and curb the smuggling of the minerals from the country. The bond notes would also only circulate in the country, to prevent cash flight from the country which has left the country in the grip of a liquidity crisis.

“We need to put more money in the mining sector that is why we are putting an incentive because we want to promote exports.” The Source

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A tobacco farmer attending to his crop.

TOBACCO processor Boost Africa says it expects a 47 percent increase in tobacco deliveries after increasing the number of farmers under its outgrower scheme by 50 percent.

The local company, which started operating in 2010, is one of 16 contract buyers licensed by the Tobacco Industry and Marketing Board (TIMB).

As of Monday this week, the company had bought 5,4 million kg of tobacco worth $14,2 million at an average price of $2,62 making it the third top buyer.

Chinese firm Tian Ze remains the top buyer, having bought 8,1 million kg of the crop worth $30,3 million followed by MTC which had bought 7,6 million kg of tobacco worth $20, 1 million.

Gordon Cannon, Boost Africa’s agronomy manager, said the company’s target this year was 14 million kg up from the 9, 5 million kilograms last year.

“We have had an increase in farmers of about 50 percent to 8,564 so we are expecting to get more tobacco by about as much as 47 percent compared to last year,” he said.

Cannon said up to 20 percent of the farmers they contracted last year had defaulted on loans.

“Last year was not a good year in terms of defaults but our target this year is to recover from between 90 and 95 percent of the farmers. It is still early in the season to tell how we will perform, but our preliminary assessments from the fields shows that we will do better than last year.”

Tobacco is Zimbabwe’s biggest export earner, far outpacing receipts from platinum or gold. Last year the country produced 189 million kg of the golden leaf, earning $855 million.

This year production is seen falling 15 percent to 160 million kilogrammes after an El Nino-triggered drought caused long dry spells that forced farmers to delay planting, affecting output.  The  Source

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Zimbabwe’s daily average generation is currently at 964MW according to ZPC

The Zimbabwe Electricity Transmission and Distribution Company (ZETDC) says it will re-commission a new 30 megawatt turbine at the Harare Thermal Power Station, as the company seek to ensure stable power supply in winter.

ZETDC managing director Julian Chinembiri told a press conference that power demand is currently low owing to the use of prepaid meters, while the mining sector, a large consumer of power, has reduced demand due to lower production caused by weak commodity prices.

“We will be recommissioning a new 30 megawatt turbine at Harare Power Station in line with ensuring stable power supply in winter where demand is usually high,” he said.

According to the Zimbabwe Power Company (ZPC) daily power generation update, HPS is currently producing 30MW, while theMunyati thermal power station is producing 27MW. Bulawayo thermal is currently not in production as it awaits renovations.

Chinembiri said power supply in the country has been stable since December last year a due to the importation of 300MW from South Africa’s Eskom.

Zimbabwe’s daily average generation is currently at 964MW according to ZPC. The Source

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Finance Minister Patrick Chinamasa

SEVEN officials from government’s human resources arm, the Public Service Commission have been suspended from duty for allegedly engaging in corrupt activities.

The Financial Gazette has it on good authority that those implicated in the corrupt recruitment process are Patrick Jachi, Brighton Tembo, Tendai Chizhanje, Nancy Chinyoka, Vengai Dembure, Munyaradzi Marume and Joseph Ziera.

The seven were part of a scheme in which members of the commission solicited for bribes from unsuspecting members of the public looking for jobs in government.

“There were seven members of the Commission who were corruptly selling jobs, “said Betty Dimbi, the Commission’s general manager in charge of communications.

They were suspended and their cases are now before the courts.

She added: “The commission has a standing policy of zero tolerance to corruption. (We) do not charge a fee at any stage of (our) recruitment process. The Commission wishes to advise the public and all government employees not to engage in any form of bribes or solicitation in cash or kind and to report any such practices by anyone.”

The commission’s managing director, Clifford Matorera  also confirmed  that there were other several officials in line ministries whom he could not name who were suspended as part of investigations into the corrupt recruitment process.

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RBZ governor, John Mangudya

RESERVE Bank of Zimbabwe (RBZ) governor, John Mangudya, yesterday came face to face with business executives and entrepreneurs disturbed by plans to introduce bond notes in the country.

The bond notes, meant to be used as an incentive to exporters, are seen as a backdoor attempt by government to bring back the Zimbabwe dollar.

Scores of company executives and business owners told the RBZ governor at a no holds barred breakfast meeting in Harare that he had to shelve the plans for bond notes.

There has been unprecedented public loathing over any form of domestic currency in Zimbabwe since the country ditched its free-falling unit in 2009, after it had been eroded by hyperinflation, which reached 500 billion percent at the end of 2008.

A week after Mangudya said he would introduce ZW$200 million bond notes, backed by a US$200 million facility from the African Development Bank, business executives took an opportunity presented by a Zimbabwe National Chamber of Commerce (ZNCC) meeting to express their disdain for the proposal.

Business warned that this would trigger a fresh wave of quantitative easing, or money printing, one of the problems blamed for the near collapse of the economy in 2008.

Instead, business rallied behind proposals by economists that the RBZ should introduce a levy on imports to fund the export incentives.

The RBZ sees the export incentive as the cornerstone for rebuilding exports to resolve trade imbalances, highlighted by trade deficits of about US$3 billion per annum.

The country is importing more goods than it is exporting.

Economists warned that Mangudya would be forced by government to print more bond notes in order to fund a myriad of commitments that have been giving the State headaches.

These include foreign travel and a bloated civil service.

If the country takes that route again, it would be sowing the seeds for another economic catastrophe, the central bank boss was warned.

At the core of the crisis that has paralysed Zimbabwe have been substantial cash shortages in banks.

Consumers have been limited to US$100 maximum withdrawals by most banks as the financial system grapples to cope with dwindling currency stocks blamed on externalisation.

This week, a top banker was hauled before the courts over allegations of externalising US$320 million.

A Chinese diamond mining firm, Jinan, was said to have siphoned US$500 million to foreign accounts, sparking resentment in a country estimated to be losing between US$1,8 billion and US$2,3 billion per annum through illicit financial outflows.

Mangudya revealed yesterday that there had been controls over importation of cash into Zimbabwe.

Correspondent banks had questioned the reason behind a sudden spike in demand, amid fears of potential money laundering in the country.

“The bond note is not the way to go,” said Ashok Chakravach, one of the officials helping government with ease of doing business reforms in Zimbabwe.

“We can put a three percent import levy across the board and raise US$2 billion for export incentives. I believe the bond notes are not necessary,” he said, to overwhelming response by company representatives.

“Countries have to compete for relevance,” said Brains Muchemwa, chief executive officer at Oxlink Capital.

“The bond notes must not be imposed,” he said.

“We must not print any money before we agree that this is the right time to do,” said Mukonitronics director, Lovemore Mukono.

The RBZ boss said industries were not in the right shape for an import levy, while duty evasion by importers made it difficult to raise enough funding.

The country risked facing a fresh round of price hikes if such a levy is introduced and the cost of doing business would rise, he said.

It is a vicious cycle for the economy, which slipped back into slow growth in 2012 after growing by double digits between 2009 and 2010.

An import levy would reduce the flow of cheap foreign products and spur domestic production.

Mangudya said at the core of the crisis were cash leakages by foreigners.

“They are not coming here because they love us,” Mangudya said. “They are coming to grab and go.”

He said he has received a report that foreign firms had moved US$20 million in bags through the country’s porous borders.

President Robert Mugabe recently said about US$15 billion was stolen from diamonds mines in Chiadzwa.

“There is much externalisation in this economy. These unscrupulous businesspeople are taking money. We are feeding the looters. You take money from a poor country to a rich country,” Mangudya said

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