Commerzbank’s decision has also affected offshore cash holdings for most banks, whose situation has not been helped by the worsening liquidity crisis afflicting the country.

THE cash crunch that has wreaked havoc in Zimbabwe’s crisis-torn economy could worsen after the Germany-headquartered Commerzbank cut off ties with local financial institutions due to sanctions placed on the country by the United States government.
This development has largely affected US dollar transactions, with reports suggesting that many businesses and individuals were finding it difficult to move greenbacks in and out of Zimbabwe.
Commerzbank’s decision has also affected offshore cash holdings for most banks, whose situation has not been helped by the worsening liquidity crisis afflicting the country.
It is proving to be even more difficult for companies trying to move cash outside the country for imports and other payment obligations, as they are being turned away by banks despite having their own cash for the payments.
Banking industry executives said Commerzbank, which has a footprint in 50 countries and a network of 1 050 branches and 90 advisory centres across the globe, had been the major correspondent bank for almost all local financial institutions.
A correspondent bank is a financial institution that provides services on behalf of another, and helps facilitate international transactions through nostro accounts, which are held by domestic banks with foreign financial institutions for the purposes for paying for imports.
Bankers said many of the affected banks were now seeking support from the Bank of China, which has agreed to take over all correspondent bank functions for US dollar offshore transactions.
Others were said to be in discussion with Pan African bank, Ecobank International.
This week, bankers said there was already a gridlock of international payments due to Commezbank’s pullout.
There have been fears that the high demand for cash by local banks could fuel money laundering, and Commerzbank had become nervous with any exposure to Zimbabwe after being slapped with a US$1,4 billion fine for processing transactions that violated US anti-money laundering regulations and Washington’s economic sanctions regime on a number of countries and their leaders.
Zimbabwe is among countries affected by US sanctions, which have been targeted against President Robert Mugabe and members of his inner circle.
A week after the Reserve Bank of Zimbabwe (RBZ) announced new monetary policy measures to stabilise the cash crisis about three weeks ago, central bank governor, John Mangudya, said importing cash into the country was now difficult as foreign banks had started querying the high demand for notes in Zimbabwe.
He said the global financial system was careful not to promote money laundering.
“There are limitations in importing cash,” Mangudya told a breakfast meeting organised by the Zimbabwe National Chamber of Commerce to discuss cash shortages.
“They are now saying what has happened to that country. You cannot just wake up and say I want to import US$100 million, US$300 million. The bank is also a customer (somewhere) and there is something called customer due diligence. What we are seeing now is a market failure,” he said.
This week, a number of importers told the Financial Gazette that they had failed to pay for imported goods despite having funds in their accounts.
One importer said he had sort answers from the RBZ, but was told that the situation was being addressed.
He said he would be shutting down operations as soon as a pending transaction was processed.
International payment cards have been affected as well, while millions worth of imports have failed to be paid for, according to sources in both the banking industry and the manufacturing sectors.
To highlight the gravity of the sanctions regime on Zimbabwe, in February, Barclays Plc agreed to pay a US$2,5 million fine after its local subsidiary had processed transactions for government-backed entities in Zimbabwe that were subject to US sanctions.
Standard Chartered Bank has, as a result, made a decision to stop processing all US dollar cross-border transactions in and out of Zimbabwe.
NMBZ Holdings’ chief executive officer, Benefit Washaya, whose group owns NMB Bank, said the bank moved to establish accounts with alternative correspondent banks after Commerzbank closed its accounts.
“We moved quickly to establish agreements with Ecobank International and the Bank of China in Johannesburg to ensure that we can still transact business internationally on behalf of our clients and that their foreign transactions are not disrupted,” said Washaya.
One banker said Ecobank and the Bank of China were still new players in the correspondent bank market, where they were still trying to establish their brands, hence they could accept some transactions shunned by the big players.
The bankers said the US government was looking at ways to further tighten screws to force President Mugabe to accept political reforms and compensate dispossessed white farmers whose land was expropriated to resettle landless blacks.
But most of the beneficiaries turned out to be politicians and their cronies, some of whom acquired multiple farms since land reforms began in 2000.
newsdesk@fingaz.co.zw

Follow us on Twitter @FingazLive and on Facebook – The Financial Gazette

President Robert Mugabe

PRESIDENT Robert Mugabe’s administration could be preparing for a major security sector shake-up after gazetting new defence regulations that set fresh retirement ages for personnel serving in the uniformed forces, the Financial Gazette can report.
The Ministry of Defence, working in consultation with the Defence Forces Service Commission, has recommended amendments to the Defence Act, which will see all soldiers now retiring at the age of 50 years, down from the previous 60 years, unless if one has been asked to continue serving at the recommendation of the defence minister.
That ministerial approval only comes at the request of the commander of the defence forces.
This is likely to affect scores of top army chiefs and their subordinates who are still serving after attaining the new retirement age.
Last week, government gazetted Statutory Instrument (SI) 50 of 2016 titled Defence (Regular Force) (Officers) (Amendment) Regulations 2016 (No. 7).
The SI repeals the Defence Regulations SI 135 (No.6) of 2014.
The SI serves as much as the law for six months, subject to its renewal or annulment.
It’s gazetting could be one of the many cost-cutting measures being employed by President Mugabe’s financially hamstrung administration.
Government is currently grappling with an unsustainable wage bill taking away more than 80 percent of its income.
The civil service is seeking to lay off a significant chunk of its bloated workforce, totalling an excess of 550 000 employees, at the advice of the International Monetary Fund (IMF).
IMF Zimbabwe chief of mission, Domenic Fanizza, has warned government that it would need to balance its primary accounts, chiefly by cutting the wage bill to below 52 percent of expenditure.
Government has responded to the advice by instituting a civil service audit to weed out ghost employees.
Public Service Labour and Social Welfare Minister, Prisca Mupfumira, claimed last week that the audit was already bearing fruit, with government now expected to save about US$300 million this year from job cuts.
Until now, government has ca refully avoided tempering with the security sector, preferring to hit softer targets such as teachers, nurses and other organs of the civil service.
But it appears there would be no sacred cows this time around for a government desperately seeking fiscal space from anywhere to wiggle out of the socio-economic muddle it finds itself in.
Reads the notice published in the Government Gazette: “The Defence (regular force) Regulations, 1988, published in Statutory Instrument 152 of 1988, is amended in section 15 (retirement) by the repeal of subsections 4, 5, 6 and 7.”
The amendment to subsection 4(a) reduces the retirement age for all army officers to 50 from 60.
“A permanent service officer shall, whatever the length of his or her pensionable service, retire on attaining the age of 50 years. If the minister (of defence), on recommendation of the commander, considers that it is desirable in the public interest, he or she may allow that officer to continue for a period of five years until she attains the age of 55,” reads the amendment.
Thereafter, the officers would serve at the mercy of the commander and the minister and can be dismissed on notice immediately after being reappointed.
“If that officer is allowed to continue to serve, the commander may, on giving 12 months written notice to the officer of his or her intention to do so, require him or her to retire before he or she has served that period,” it further reads.
Those who would have attained the age of 55 will only be allowed to continue serving on presidential approval.
An amendment to subsection five of the Defence Act reads: “A permanent service officer who has continued to serve in terms of subsection 4(a) (that is after attaining the age of 50) shall retire on attaining the age of 55 years unless if the President, on recommendation of the minister, considers that it is desirable in the public interest. He (the president) may allow that officer to continue to serve for a period of five years until he or she attains the age of 60 years.”
Under the new regime, only war veterans will be allowed to serve after attaining the age of 60.
“If the President, on recommendation of the minister, considers that it is desirable in the public interest, he or she may allow an officer who is a war veteran as defined in the War Veterans Act (Chapter 11:15) to continue to serve for a period of five years until he or she attains the age of 65 years.”
newsdesk@fingaz.co.zw

Follow us on Twitter @FingazLive and on Facebook – The Financial Gazette

Transport and Infrastructural Development Minister Joram Gumbo

BULAWAYO – The government plans to cull National Railways of Zimbabwe (NRZ)’s work force by up to 70 percent citing poor business environment and the parastatal’s low capacity utilisation.

Transport and Infrastructural Development Minister Joram Gumbo told a conference to discuss the ZimAsset economic blueprint at the weekend that NRZ presently employs about 5,700 workers, much higher than the company can support while operating at the current level of 30 percent of capacity.

“At the moment, NRZ is overemployed with about 5,700 workers and this figure is high compared with the capacity at which the railways company is operating. There is need to embark on a staff rationalisation programme in relation to the business NRZ is generating,” he said.

The parastatal owes its employees over 15 months’ worth of unpaid salaries, amounting to a total of $87 million. The workers have been on strike since March, demanding to be paid their dues.

At its peak, NRZ employed about 20,000 workers and moved 18 million tonnes of freight annually. NRZ now moves less than 100,000 tonnes per week, the effects of industry collapse and poor rail infrastructure.

“Industry in Bulawayo has scaled down considerably due to various economic factors. We hope all stakeholders will work together to revive industry, and hence revive the NRZ and indeed all other sectors of our economic environment,” said Gumbo.

NRZ is one of the 10 strategic parastatals targetted under a transformation programme designed to aideconomic recovery.

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

“I’m aware of the nation’s expectations on the need to reverse the downward trend of the NRZ over the past decade. My ministry is working flat out to secure funding for the recapitalization of the institution,” said Gumbo but declined to elaborate, saying the negotiations were “very delicate.”

Last year, the government said it was in discussions with the Development Bank of Southern Africa for a $650 million loan facility to rehabilitate NRZ infrastructure.

The company says it needs least $2 billion in the long-term to restore full viability. The Source

Follow us on Twitter @FingazLive and on Facebook – The Financial Gazette

Central bank governor John Mangudya

RESERVE Bank of Zimbabwe (RBZ) on Tuesday conceded that the multi-currency system adopted in 2009 was effectively dysfunctional with the economy trading solely on the United States dollar, which has resulted in spiking cash demand, fuelling shortages.

Early this month, the central bank announced the introduction of bond notes as part of a raft of measures to promote exports and ease cash shortages.

But the notes, which central bank governor John Mangudya said will come into circulation in October, are viewed by a sceptical public as a backdoor return of the hated local currency.

Long, winding bank queues and revised bank withdrawal limits, once a feature in the hyper-inflation era of 2008, have returned to haunt Zimbabweans as cash shortages bite.

Zimbabwe six years ago dumped its inflation ravaged local currency, adopting a basket of foreign currencies expanded over time to nine, among them the US dollar, South African Rand, Botswana Pula, Japanese yen, and the Chinese yuan.

But central bank governor Dr John Mangudya said the multi-currency system, as it was envisaged, only worked for a short while.

“There has been a shift from the multi-currency in 2009 to the US dollar in 2016. We have put all our eggs in one basket now which is why the demand for the US dollar has increased,” Dr Mangudya said at a meeting organised by the Roman Catholic Church to discuss pressing economic issues.

“In the southern region they used to use more of South African Rand but they are now using US dollars so it means where we used to import $20 million a month, we are now importing $40 million because there has been a shift from the Rands to the US dollar.”

Mangudya said externalisation of the greenback was largely to blame for current shortages, while blaming Zimbabwe’s “too open economy” for promoting the unscrupulous behaviour.

He said the country’s had failed to manage its foreign currency as imports, which were almost at par with exports between 1990 and 2009, had to date doubled while exports trailed, leading to an average deficit of about $2,5 billion annually.

Mangudya said most Zimbabweans were unaware that exports, primarily tobacco and minerals such as gold, platinum and diamonds were the major source of foreign currency circulating in the country.

“Some of you laugh at the farmers sleeping at the tobacco auction floors but those are the people bringing in the foreign currency,” he said.

The RBZ, Dr Mangudya said, would begin paying exporters the five percent bonus in the form of bond notes in October.

He reiterated the bank would not re-introduce the Zimbabwean dollar in the near future.

Mangudya said the central bank was also encouraging use of plastic money by government institutions and public utilities to reduce demand for cash.

Roman Catholic Church Vicar General for the Harare Archdiocese, Father Kennedy Muguti told the central bank boss that people no longer had trust and confidence in government policies.

“People are still nursing wounds from the past,” he said, alluding to loss of savings when use of the Zimbabwe dollar was discontinued overnight.

Barclays Zimbabwe managing director, George Guvamatanga proposed that the central bank should introduce a maximum withdrawal limit of $500 per week.

He backed introduction of bond notes, arguing that the US dollar was being abused.

”Why should tomatoes that have been produced in Mutoko be paid for in foreign currency, why must workers be paid in foreign currency,” Guvamatanga questioned.

“We need a means of transacting that is not going to be abused. We cannot keep on bringing money into the economy that is disappearing.”

Guvamatanga appealed to bankers to slash charges to encourage use of plastic money. His appeal follows the announcement by Steward Bank chief executive, Lance Mambondiani said his bank would effective Wednesday slash money transfer charges by 50 percent. – The Source

Follow us on Twitter @FingazLive and on Facebook – The Financial Gazette

Barclays Bank Zimbabwe managing director, George Guvamatanga

ZIMBABWE’S bankers, long criticised for the high bank charges often cited as obstacles to promoting savings and use of plastic money, on Tuesday confessed to overcharging their customers.

The confession, appropriately came at a funding raising business meeting hosted by the Roman Catholic Church.

The controversial bond notes, externalisation and cash shortages were among the topical issues the meeting discussed, but it came as a surprise to most guests when top bankers, in a rare public admission, chastised each other while admitting that current bank charges were against efforts to promote financial inclusion.

Zimbabwe’s banking institutions make the bulk of their profits from bank charges when ordinarily, they are supposed to be making money from interest income, which is their core business. Lending has declined as the economy stalled and defaults rose.

The Reserve Bank of Zimbabwe (RBZ) has had to intervene and force the banks to reduce charges and interest rates on loans.

Barclays Bank Zimbabwe managing director, George Guvamatanga, who said he is Catholic, was the first “come clean,” admitting that charges for using plastic money were too high.

In the face of current cash shortages, the public has been encouraged to swipe at point of sale machines.However, most prefer cash due to the high charges levied for swiping.

“We are encouraging everyone to swipe but at the moment the challenge is thatthe cost of swiping is too high, and as bankers in this room we certainly need to look at that urgently,” said Guvamatanga.

“It does not make sense to walk in to buy Ibuprofen (an anti-inflammatory drug) for $2, you swipe and then you are charged (an additional) $2.50. It does not make sense to me as a banker. It does not make sense, my fellow bankers.”

He said the minimum of $10 that bankscharge for Real Time Gross Settlement (RTGS) transactions was “ridiculous.”

“When we say customers must use RTGS, it does not make sense when we charge them $10. That is ridiculous. This is also targeted at the Barclays stable. That $10 is too much,” Guvamatangasaid to applause.

Steward Bank chief executive, Lance Mambondiani, also took to the podium having “seen the light.”

“I share your outrage, it does not make sense that members of the public are charged the extortionate amounts that are charged by some banks, including ourselves. It doesn’t make sense,” he said.

Mambondianiannounced that Steward Bank, a subsidiary of mobile operator Econet Wireless, would effective Wednesday reduce RTGS charges by 50 percent.

“What I want to say to my colleague George (Guvamatanga) is you need to put your money where your mouth is,” he said, challenging Barclays Bank to also slash bank charges.

The Steward Bank boss challenged the RBZto reduce the $2,80that it charges banks for processing each RTGS transaction.

“Why does the Reserve Bank, that is trying to promote use of plastic money, impose a residual fee of $2,80 as a minimum charge?” Mambondiani queried.

“Bankers need to review their charges in as much as the central bank that is providing that platform needs to review its owncharges. We need to make sure that we carry the burden together.”

Infrastructure Development Bank of Zimbabwe chief executive, Thomas Sakala criticised bankers for the high charges, which he said were used to finance perks for executives.

Banks have long argued that investing in the infrastructure required to allow efficient electronic payments will cost money, and have unsuccessfully pleaded with government to share the burden. The Source

Follow us on Twitter @FingazLive and on Facebook – The Financial Gazette

Minister of Health David Parirenyatwa

…as import restrictions backfire

By Tendai Makaripe
GOVERNMENT’S decision to impose restrictions on a range of imported drugs and medicines earlier this year to protect the local drug manufacturers has badly boomeranged as the country could soon face a serious drug shortage, the Financial Gazette can reveal.
In February this year, government, through Statutory Instrument 18 of 2016, placed import restrictions on 23 drugs in order to save domestic producers, who had petitioned the powers-that-be to protect them from external competition.
Among the restricted medicines were Asprin and Caffeine tablets, Contrimoxazole, Ibuprofen tablets or capsules, Paracetamol tablets, Amoxicillin tablets and Sodium Chloride.
While Zimbabwean producers, across all sectors of the economy, have been campaigning for protection against cheaper imports, the pharmaceutical industry is in quandary after the restrictions failed to improve their situation.
Locally produced drugs and medicines have remained uncompetitive due to high costs of production, while lack of access to capital has further hamstrung manufacturers.
While defending the drug restriction regime, the Pharmaceutical Manufacturers Association (PMA), this week, said it would import drugs to cover for any shortages.
“The local manufacturing industry is capable of providing for the market and the restriction was put in place after necessary consultations were made. It is not something that was done haphazardly. But, in cases where the shortages are encountered we will import,” said PMA chairperson, Emmanuel Mujuru.
Investigations by the Financial Gazette revealed that there is a serious price disparity between imported and locally manufactured drugs and medicines meaning that the restrictions have largely been ineffective.
For example, a box of imported 500 ibuprofen tablets cost US$12,50 while the same product made locally is going for US$28,50.
Pharmacists who spoke to the Financial Gazette said such kind of price disparities, in the wake of import restrictions, would affect supply.
“The restriction has affected supply of certain medicines in the sector because our local industry does not have full capacity to meet demand. This has affected our operations as an organisation because we are also failing to meet demand due to unavailability of some drugs which results in revenue dips as most clients would prefer to fill a prescription at one shop,” said one pharmacist who spoke on condition of anonymity.
Pharmaceutical Working Group chairman, Nigel Chanakira, in October last year revealed that the country imports over US$400 million worth of basic drugs which was threatening operations of the local industry.
The pharmaceutical industry, which currently employs over 1 000 people and comprises of about nine companies, has, however, been facing operational challenges due to the current economic woes ravaging the country.
Several pharmaceutical companies collapsed in the past two years, with more than 2 000 people losing their jobs. More drug manufacturers are expected to fold.
Before 2000, the local pharmaceutical industry used to supply more than 75 percent of the country’s essential drug requirements, through the government-owned National Pharmaceutical Company of Zimbabwe (NatPham), but this has since dropped to about 35 percent and could be even lower given the current low capacity utilisation in the industry.
Due to lack of funding, NatPharm has virtually stopped procuring from local manufacturers.
Some pharmaceutical firms allege that NatPharm still owes them large amounts of money for drugs supplied during Zimbabwe’s hyperinflationary era of 2007 and 2008.
Because of the increased demand for drugs due to the import restriction coupled by financial challenges, there are now growing concerns that the industry would be incapable of producing essential drugs for the country’s requirements resulting in serious drug shortages.
Industry and Commerce Minister, Mike Bimha, said the industry requires US$80 million to fund operations to boost capacity utilisation.
A Kadoma-based pharmacist observed that: “Besides the looming shortage, they should have put into consideration the end user cost of the imported drugs against the locally made ones. We would want a situation where medication is available both in public and private sector at an affordable price for even the low income earners.”
Stakeholders in the health sector also fear that the looming shortages would result in smuggled drugs flooding the market and further destroying a sector that is already constrained by economic challenges. The situation would also endanger the health of many patients.
About 100 000 deaths a year in Africa are linked to the counterfeit drug trade, according to the World Health Organisation.
A British think-tank, International Policy Network, estimates that globally, 700 000 deaths a year are caused by fake malaria and tuberculosis drugs.
Knowing their financial challenges, some countries in the Southern African Development Community region have prioritised the importation of drugs to enhance their health delivery system.
Zambia has, for example, increased the country’s national healthcare budget by 72 percent from 2012 to 2015 and its imports of pharmaceuticals have also been on an upward trend since 2010, increasing by over 90 percent from US$115 million in 2010 to US$220 million in 2014.
newsdesk@fingaz.co.zw

Follow us on Twitter @FingazLive and on Facebook – The Financial Gazette

GMB owes the workers about US$4 million in unpaid salaries.

By Alois Vinga
THE situation at the loss-making State granary, the Grain Marketing Board (GMB), has taken another turn for the worst amid revelations that the parastatal is failing to make pension pay-outs to its ex-employees, the majority of whom are wallowing in poverty.
The situation is most likely to trigger a second wave of demonstrations against GMB’s management by hundreds of its ex-employees, whose contracts of employment were terminated last year, taking advantage of a July 17, 2015 Supreme Court ruling that allowed employers to get rid of their workers on three months’ notices.
GMB, one of the State-run enterprises dependent on the fiscus for support, made headlines early this year when over 400 former workers, including women and babies, camped outside the parastatal’s headquarters in Harare for over a month demanding 10 months’ salary arrears after their employment contracts were terminated on notice.
The ex-employees only dispersed after the High Court ruled in their favour.
In terms of the High Court ruling, the workers are to be paid the outstanding salaries in batches of US$350 000 every month until the arrears have been cleared.
GMB owes the workers about US$4 million in unpaid salaries.
Now, the Financial Gazette can reveal that the parastatal’s pension fund has pleaded with some of its ex-employees to be patient while their payments are being processed.
Information gleaned from GMB documents by the Financial Gazette indicates that the parastatal has not been remitting contributions to the fund despite deducting the dues from employees.
A letter dated January 11, 2016 by GMB Pension Fund (GMB PF) finance and administration executive officer, a B Matsilele, informed one pension claimant (name withheld) that the fund’s coffers were empty.
“Kindly be advised that your pension benefits will be processed as soon as we have received arrear pension contributions. The Grain Marketing Board did not remit pension contributions deducted between October 2013 and January 2015,” reads part of the letter.
GMB insiders allege rampant maladministration at the State-run granary.
Former employee and trustee at the GMB Pension Fund, Boveni Mutsanura, said it was improper for top managers at the parastatal to sit as trustees of the pension fund.
He said their involvement with the pension fund was unethical because they were earning lucrative perks and draining a large chunk of the money meant for pensioners.
“GMB managers must not be part and parcel of the pension fund because their allowances are milking the contributions that are made by employees. Since GMB managers are representative of employer interests they will not prioritise the viability of the fund, which is driven to protect employees’ interests. Government must quickly move in to correct this anomaly and protect employees,” he said.
Mutsanura also explained that the situation at GMB Pension Fund has been worsened by the lack of a format to calculate pension pay-outs for employees whose contracts of employment were terminated on notice.
He said the law does not have a provision on how those whose employment contracts were terminated on notice should be paid.
Most employees are expecting to receive their pension pay-outs in full because they left employment at the discretion of the employer.
GMB Workers Union president, Steven Machaya, warned that the employees might stage a second wave of demonstrations should they fail to receive their pension pay-outs.
He dismissed claims that the GMB PF is broke, hinting that all properties that were purchased since the establishment of the fund should be sold to meet the pensioners’ demands.
Efforts to get a comment from GMB’s communications department have been fruitless for the past two months.
A bid to get the GMB PF chief executive officer, Taona Munzvandi, to comment was also futile after he indicated that he needed to get clearance from the relevant officials before commenting on the matter.
GMB’s mandate includes trading in cereals and oil seeds, the provision of logistic services to the agricultural industry as well as processing of products. Its main function is, however, that of ensuring national food security through production, procurement and management of serials.
Just like most parastatals, it has been crippled by a myriad of problem ranging from failure to pay workers and alleged corruption.
GMB has often failed to pay workers leading to lack of confidence in it.
Since 2013, GMB has also struggled to pay farmers, thereby undermining their ability to go back to the farms.
newsdesk@fingaz.co.zw

Follow us on Twitter @FingazLive and on Facebook – The Financial Gazette

Local Government Minister Saviour Kasukuwere

By Malcom Nyathi

VICTORIA FALLS — The United Touring Company (UTC) — a business in which Local Government Minister Saviour Kasukuwere and former labour minister Nicholas Goche are shareholders — has been liquidated, dealing another body blow to efforts to indigenise the country’s economy.
A leading tour operator and travel agent during its heydays, UTC went belly-up a few months ago after failing to navigate the country’s harsh economic terrain, characterised by declining tourism and a tight liquidity crunch.
Among the litany of problems, UTC owed its workers nearly half a million dollars in outstanding salaries and terminal benefits. Other notable creditors include the National Social Security Authority (NSSA).
The workers are now hoping to salvage something out of the liquidation process.
Liquidation refers to the process by which a company (or part of a company) is brought to an end, and the assets and property of the firm are redistributed among its creditors.
It is also sometimes referred to as winding-up or dissolution, although dissolution technically refers to the last stage of liquidation.
It may either be compulsory or voluntary whereupon shareholders will file for the winding up of the business on their own having assessed that it can no longer be revived.
In the case of UTC, Cecil Madondo of Tudor House Consultants has been appointed to preside over the company’s liquidation.
Madondo is said to be in the process of reconciling claims by different creditors against the company, which used to be the torchbearer among tour operators in the country until it fell into indigenous hands.
The collapse of UTC has re-ignited debate about the efficacy of the indigenisation policy through which government is seeking to redress past historical imbalances by thrusting the majority blacks in the mainstream economy.
In the agriculture sector, where former white commercial farmers were chased away from their properties in 2000, vast tracks of land now lie fallow because the majority of the indigenous people, mostly ZANU-PF elite, who inherited them lack both the resources and knowledge to become productive on the farms.
In industry and commerce, several companies acquired by indigenous people have been run down, resulting in scores of employees losing their jobs, while the taxman has also lost out in taxes.
Among the companies run into the ground by the indigenous people are Express Motorways, Jaggars Wholesalers, Apex Corporation and Kondozi Farm etc.
UTC’s troubles started when it was acquired from its former white owners by a consortium linked to Kasukuwere in 2001.
In July 2011, UTC decided to retrench all the workers and pay them terminal benefits by October of the same year in a bid to streamline costs, especially the payroll.
This did not happen, leading to winding court battles after the workers initiated court proceedings to recover money owed to them by the company.
In 2014, some of the company’s former workers were granted an order by the High Court to attach property to recover about US$186 000 in terminal benefits.

Former labour minister Nicholas Goche

This resulted in the attachment of property that included a fuel service station, a depot and a house in Victoria Falls, which were meant to go under the hammer.
More properties were to be attached elsewhere in Bulawayo, where there was a garage and some offices in order to recover US$400 000 owed to former workers.
An administrator of the defunct UTC, only identified as Seckam, said the company was put under liquidator a few months ago.
“We wanted to sell some properties, but we had challenges with buyers which is why workers haven’t been given their money. The company was put into liquidation and so the best person to speak to is the liquidator at Tudor House,” said Seckam.
Contacted for comment this week Madondo’s secretary said her boss was out of office.
“He (Madondo) is the one handling the issue and you can only talk to him when he comes back,” she said.
It is understood that there is growing disquiet among the former workers, who are growing impatient after some of the properties were sold but they have not been paid yet.
“They have on several occasions promised to pay us our money, but they keep reneging. We were stopped from attaching the property when they produced documents showing the company had been liquidated, but it’s not helping us at all,” said a workers’ representative, Danisa Tshuma from Victoria Falls.
Some of the attached properties include a depot along Pioneer Road, offices and houses on 292 and 297 Rumsee Road, 193 Sopers Arcade and 378 Square Cummings, all in Victoria Falls. The others are at George Silundika and 14th Avenue in Bulawayo.
Another workers’ representative, Davidson Mwariwanjepo, said meetings with the Master of High Court had been held and were now waiting for direction from the liquidator.
“There is nothing we can do now since the company was liquidated. We had meetings with the Master of High Court as creditors and they are waiting for a possibility of more claims coming in like NSSA (which presented its claims late) and the company is in the process of reconciling all claims,” he said.
UTC is not the only company owned by Kasukuwere to go under.
The politician, who doubles up as ZANU-PF’s national political commissar used to own a stake in Genesis Investment Bank, which collapsed in 2012.
Genesis voluntarily gave up its licence because its directors had since 2009 been trying to convince close to 20 local and foreign potential partners to recapitalise the bank without success. Eventually, the board of directors of Genesis met and resolved to voluntarily surrender the institution’s banking licence in line with Section 14 (4) of the Banking Act [Chapter 24:20].
newsdesk@fingaz.co.zw

Follow us on Twitter @FingazLive and on Facebook – The Financial Gazette

From left, Vice President Emmerson Mnangagwa, President Robert Mugabe, First lady Grace Mugabe and VP Phelekezela Mphoko at ZANU PF headquarters (File pic)

DESPITE the internecine infighting flaring up in the ruling party, ZANU-PF will remain a formidable giant in the country’s body politic, analysts said this week.
Analysts canvassed by the Financial Gazette this week spoke as the former fighters of the 1970s liberation struggle have pitched their political tent in Vice President Emmerson Mnangagwa’s camp, daring a rival group that goes by the moniker Generation 40 or simply G40.
The current upheavals in ZANU-PF, which has presided over the country’s affairs since independence in 1980, have prompted many to question if the party still commands significant electoral authority, more so with 2018 elections beckoning.
Political analysts believe that the party’s seemingly careless behaviour stems from its dominance of the political field, aided by the weaknesses of the opposition parties.
Opposition parties in Zimbabwe are largely fragmented as to pose a significant threat to President Robert Mugabe’s party.
Previous efforts by the opposition parties to form a grand coalition against ZANU-PF have not been successful because of their divergent ideologies and reluctance to make concessions during negotiations.
University of Zimbabwe political science professor, Eldred Masunungure, told the Financial Gazette this week that ZANU-PF will continue to reap huge rewards from the fragmentation among opposition parties.
“I have little doubt that ZANU-PF remains a formidable political force given that all its electoral rivals are down, and are severely weakened,” he said.
“It (ZANU-PF) might be hopelessly divided and President Mugabe’s calls on factions to close ranks will not be listened to, but due to the fatal weaknesses of the opposition, it will continue to stand tall and will win elections by hook or crook,” added Masunungure.
He, however, opined that ZANU-PF could fragment in the aftermath of President Mugabe.
“This factionalism will continue but the party might not break apart in the foreseeable future because of President Mugabe. The post-Mugabe era is a big unknown, but I will speculate that in that period, there would be a weaker version of ZANU-PF than we have today. He is all what remains as a unifying force and after him, all hell would break loose and the party would disintegrate into small fragments,” said Masunungure.
Unlike the MDC, which has split into several formations since its formation in 1999, ZANU-PF remains intact although raven by internal discord.
Of late, many people are beginning to see signs of the party disintegrating especially after it expelled and suspended more than 200 members for supporting former vice president Joice Mujuru, who was accused of plotting to topple President Mugabe unconstitutionally. Mujuru, who was booted from ZANU-PF because of the allegations, is now interim leader of a new kid on the block, the Zimbabwe’s People First.
Among those to speculate about the possibility of ZANU-PF breaking up has been Cephas Msipa, a former ZAPU stalwart, who played a prominent role in negotiating the 1987 Unity Accord signed between President Mugabe and Joshua Nkomo (now late) to end the disturbances that rocked the Midlands and Matabeleland provinces in the mid 1980s.
This week, political scientist, Ibbo Mandaza, said there was a real possibility of an implosion in ZANU-PF before 2018 which might seal its fate.
Mandaza said the message by President Mugabe when he addressed the million-man march in Harare last week was that no one should talk about succession “and here we have people talking about it immediately afterwards saying Emmerson Mnangagwa was the natural successor.”
He said such open confrontation could see the party implode before the make-or-break polls in 2018.
Mandaza hinted that the former liberation war fighters would not be an easy pushover since they enjoy the backing of some in the army.
Last year, President Mugabe warned the military to stay out of politics.

newsdesk@fingaz.co.zw

Follow us on Twitter @FingazLive and on Facebook – The Financial Gazette

Vice President Emmerson Mnangagwa

… as war vets, youth and women’s leagues go separate ways

By Andrew Kunambura & Idah Mhetu

WARRING ZANU-PF factions are sharpening their swords once again after weeks of low-key ructions as they ignore President Robert Mugabe’s passionate appeals for them to unite and re-direct their energies towards securing another victory at the 2018 polls that are promising to have all the ingredients of a nail-biting encounter, the Financial Gazette can report.
Last week, President Mugabe (92) ordered his jockeying lieutenants to stop congregating themselves into factions for purposes of wresting power from him under the false hope that he may retire from office now that he is in the twilight of his political career.
The ZANU-PF leader described the shenanigans as treasonous. In Zimbabwe, treason-related crimes are punishable by death except if committed by a woman. The new Constitution enacted in 2013 exonerates women from capital punishment.
President Mugabe also reminded those gunning for his job that he was going nowhere. He said this while admonishing the factionalists in his address to thousands of party supporters who had gathered at the Robert Mugabe Square in Harare last week to show solidarity with him, marking the conclusion of the million-man-march.
In the past, the ZANU-PF first secretary has been scathing in his criticism of ambitious cadres who are canvassing for the top job. Regardless, the jockeying has moved a gear up notwithstanding the fact that there is no vacancy at Number 1 Chancellor Avenue.
President Mugabe was re-elected President and first secretary of ZANU-PF at the party’s 2014 congress, which means he will be the party’s presidential candidate in 2018.
At the polls, he is likely to face his long-time rival, Morgan Tsvangirai of the Movement for Democratic Change.
For the first time in the country’s history, the veteran politician is also likely to get inside the ring with an aspiring female presidential candidate, Joice Mujuru, his long time deputy until they fell out in 2014.
Until December 2014, the infighting in ZANU-PF was between Mujuru and Emmerson Mnangagwa.
And when Mujuru was sent packing from the party and government following allegations that she was plotting against her boss, ZANU-PF celebrated prematurely, thinking it had buried factionalism six-feet under.
But not-so longer after the 2014 congress did factionalism reared its ugly head again, this time pitting the Mnangagwa camp, on the one hand, and Generation 40 (G40), on the other.
G40 is pushing for President Mugabe to become life President and that only in his absence through natural causes should the party seize itself with the succession question.
Even after President Mu-gabe is gone, G40 wants the high-pressure job to be landed by a young Turk.

Former vice president Joice Mujuru

Team Lacoste — the group propping up Mnangagwa’s presidential ambitions — believes the Vice President should be the heir- apparent by virtue of being the most senior politician within the ranks of ZANU-PF at the moment.
War veterans, who have aligned themselves to Team Lacoste, are leading the fight in this new factional dispensation which has begun in earnest.
The former freedom fighters retreated to Gweru on Sunday where they fired a series of salvos at G40; only days after President Mugabe had ordered a stop to factional activities by any grouping, singling out the ex-combatants whom he ordered to raise their concerns within party ranks.
While in Gweru, they declared themselves immune from expulsion from ZANU-PF and immediately renewed their calls for the heads of ZANU-PF national political commissar Saviour Kasukuwere; secretary for ICT Jonathan Moyo; deputy secretary for women’s affairs Eunice Sandi-Moyo and Manicaland Provincial Affairs Minister, Mandi Chimene.
Sandi-Moyo is a trusted lieutenant of First Lady, Grace Mugabe. By targeting the ZANU-PF Women’s League deputy secretary, the war veterans seem to have renewed their attacks on the First Lady.
The Gweru meeting was held under the guise of giving feedback on the war veterans’ meeting with President Mugabe in April where they made various demands to the country’s leadership.
The indaba was addressed by the chairman of the Zimbabwe National Liberation War Veterans Association (ZNLWVA) and top Mnangagwa ally, Chris Mutsvangwa as well as the organisation’s secretary general, Victor Matemadanda.
Ousted ZANU-PF Youth League boss, Pupurai Togarepi and controversial Kadoma businessman, Jimayi Muduvuri, were also given the floor to address the meeting.
The war veterans’ provincial leadership  from all 10 provinces of the country as well as all former liberation war fighters from the Midlands region attended the meeting.
According to minutes of the meeting leaked exclusively to the Financial Gazette this week, war veterans want Mnangagwa declared the most senior ZANU-PF member after President Mugabe, therefore lining him up for presidency.
They claimed that this was in line with the 1987 Unity Accord at which it was agreed that the most senior member from ZAPU and ZANU would succeed in the event of an incumbent vacating office.
At present, Mnangagwa, who is the only remaining member of President Mugabe’s first government formed in 1980 along with Defence Minister, Sydney Sekeramayi, is not officially recognised as the second most senior ZANU-PF member.
According to minutes of the Gweru meeting, Mutsvangwa urged war veterans to fight so that Mnangagwa is accorded the status.
“He said the party leadership is not following the ZANU-PF constitution by not recognising the VP (Mnangagwa) as the only senior left after the President,” reads the minutes in part.
Moyo and Kasukuwere were accused of planning to destroy the name of the revolutionary party, with the war veterans saying the only person suitable to replace President Mugabe was Mnangagwa as he was the only man known in China.
Mutsvangwa allegedly also sensationally claimed that President Mugabe had told Chinese people that Mnangagwa was his preferred successor.
He is quoted in the minutes as having said: “He (President Mugabe) was asked by the Chinese business people when he went there to look for investors to name the person who was supposed to take over when His Excellency leaves office and he had mentioned VP Mnangagwa as the successor in order to attract the Chinese business people.”
Mutsvangwa is also said to have told the war veterans that there would be bloodshed if anyone attempts to derail that succession plan.
“If anyone derails this aim of succession he or she will cause bloodshed in the country,” said Mutsvangwa, according to the minutes.
Mutsvangwa also accused G40 of trying to influence President Mugabe to replace army chiefs with new blood, concluding his speech by declaring that G40 was a dead outfit.
Sources who attended the meeting said Matemadanda went further than Mutsvangwa by calling on all war veterans to rally behind Mnangagwa, whom he claimed was the only suitable candidate to take over from President Mugabe.
“He told the meeting that war veterans have power to handpick a President of their choice for the party, even without an internal election,” said a source.
Togarepi and Muduvuri claimed they were sent by Mnangagwa on a fact-finding mission aimed at establishing whether anyone had been sent to campaign for him so that he can remove the President from power.

Former war veterans minister Christopher Mutsvangwa

“They both told the meeting that they had concluded their tour of the country and had come to the conclusion that no one had been sent by the Vice President for that purpose,” another source said.
The meeting, according to the minutes, resolved that the three provincial chairmen who were suspended from the party, Joel Biggie Matiza (Mashonaland East) Kizito Chivamba (Midlands) and Ezra Chadzamira (Masvingo) must be reinstated with immediate effect.
They also resolved that the position of the Women’s League secretary for administration   should be occupied by someone from the Midlands province. The post is currently being held by Letina Undenge of Manicaland province who took over from the late Espinah Nhari after she was booted out for chanting the slogan: “Down with G40!”
Nhari died in a car accident two weeks ago.
The war veterans also want President Mugabe to appoint a commission of inquiry to investigate circumstances surrounding the missing diamond revenue amounting to US$15 billion.
President Mugabe stunned the nation early this year when he disclosed that diamond revenue amounting to US$15 billion – more than three times the size of the country’s National Budget – had been salted away through under hand dealings in a televised interview on the eve of his 92nd birthday in February.
Contacted by phone on Monday, Matedanda confirmed the authenticity of the minutes gleaned by the Financial Gazette.
“This is the last in a series of meetings we have been holding in the provinces,” he said and added: “War veterans are of the view that the party should have a clear succession plan. We salute our comrades from the former ZAPU side who have a clear succession plan in which the most senior member takes charge. We in the ZANU side do not have that.
“I, of course told the meeting that it is time the ZANU side makes that clear. On the ZAPU side, when vice president Joshua Nkomo died, they selected Joseph Msika to take over and when he too died, they put up John Nkomo. When John Nkomo died, President Mugabe had to appoint (Vice President Phelekezela) Mphoko who was not known after cadres identified him as the most senior member. However, when vice president Simon Muzenda died, the most senior member, Cde Mnangagwa did not take over and instead a woman was chosen, only for him to take over the position he had defaulted years back. What we are saying is that Cde Mnangagwa should be formally declared the most senior former ZANU member… for a clear succession plan.”
ZANU-PF spokesman, Simon Khaya Moyo, was not available for comment as his mobile phone was unreachable.
President Mugabe has, however, said he is not leaving office unless asked to do so by his party, effectively closing the door on any succession talk within ZANU-PF.
Last week, the ZANU-PF youth and women’s leagues — considered the bedrocks of the party — called on him to remain in office until death.
With the two main wings of the party flexing their muscle last week by mobilising record crowds through the million-man-march staged on Africa Day, members of Team Lacoste have a mountain to climb.
The Women’s League made it clear last year that they would want one of their own to be appointed Vice President before the end of this year, which means that one of the two vice presidents must make way for a woman should the resolution sail through.
This was captured in their resolutions presented at the party’s annual conference held in the resort town of Victoria Falls last year.
With ZNLWVA coming out in the open with regards their preferred candidate to succeed President Mugabe, it remains to be seen if the party’s youth and women’s leagues would hold sway.
But as the infighting continues, the country’s economy has been left badly bruised and battered.
Symptomatic of the economic crisis, the country is currently experiencing serious shortages of bank notes, with long and winding queues being the order of the day at retail banks.
Fears are that the liquidity crunch could result in basic goods varnishing from supermarket shelves as retailers struggle to restock owing to the shortage of foreign currency.
Zimbabwe migrated to the use of multi-currencies in 2009 after the local unit lost the battle for existence to hyperinflation.
Currently, the multi-currencies are thinning within the banking system, with nostro accounts running dry.
A nostro account is a bank account held in a foreign country by a domestic bank, denominated in the currency of that country.
Nostro accounts are used to facilitate settlement of foreign exchange and trade transactions.
Because of the depletion of nostro accounts, companies are struggling to replenish their imported raw materials and re-stock, hence fears that shortages reminiscent of the 2007/8 era could resurface.
newsdesk@fingaz.co.zw

Follow us on Twitter @FingazLive and on Facebook – The Financial Gazette

IMF deputy spokesman William Murray

THE International Monetary Fund (IMF) says it is assessing the impact of Zimbabwe’s plans to introduce local bond notes, a measure that has caused a run on banks amid fears of the return to a local currency.

Zimbabwe expects its first loan since 1999 from the IMF later this year, after meeting targets under a 15-month IMF staff monitored programme, an informal agreement between a government and IMF staff to monitor implementation of economic reforms.

However, Zimbabwe’s response to a deep liquidity crunch now threatens what progress Zimbabwe has made, with companies reporting a sharp slowdown in businesses as spending collapses.

IMF deputy spokesman William Murray said on Friday the institution would engage Zimbabwe on its latest measure to introduce local bond notes, which are to circulate alongside a basket of foreign currencies.

“We are currently assessing the implications of the measures on the economy, including the more recently announced issuance of bond notes; and we’ll engage in further discussions with the authorities with regard to their strategies. So, we’re going to have more discussions with the Zimbabweans on this strategy,” he said at a press briefing in Washington.

Zimbabwe’s cash shortage is the result of weak external inflows and a decline in commodity prices, Murray said. The food import bill had made the situation worse, he added.

“More recently the situation has been aggravated by the drought afflicting Zimbabwe. The Government had to increase its food imports to mitigate the impact of crop failures on its people and the strengthening of the multi-currency system through the conversion of export earnings to euro and rand.”

The Reserve Bank of Zimbabwe (RBZ) has drawn criticism for its handling of the cash crisis. Governor John Mangudya announced the introduction of the bond notes on May 4 which are scheduled to start circulating in October, saying they were part of a package of measures to boost exports and increase cash inflows.

However, a strong public backlash has seen RBZ make at least three subsequent tweaks on the measures, further denting confidence. The five-month gap between the bond notes announcement and their planned October introduction has also left banks open to a run on deposits by clients who fear the return of a local currency unit, despite RBZ’s assurances this would not happen. – The Source

Follow us on Twitter @FingazLive and on Facebook – The Financial Gazette

Bankers Association Zimbabwe President Charity Jinya

ZIMBABWEAN banks have called for the adoption of the South African rand as the main currency of exchange arguing that use of the United States dollar was no longer sustainable.

Zimbabwe dumped its hyperinflation-ravaged local currency in 2009, adopting a basket of foreign currencies, mainly the US dollar, South African Rand, Botswana Pula and Euro.

Use of the US dollar has, however, surpassed all other currencies as the greenback gained against all major currencies.

The central bank pits use of the US dollar in Zimbabwe to be currently around 95 percent from 49 percent in 2009.

The southern African country is currently in the throes of a deep dollar shortage, blamed by government on an ever widening trade gap and the collapse of domestic production.

The central bank on May 4 announced the introducion of bond notes to tackle the cash shortages, but the five-month gap between the announcement and their planned October introduction has left banks open to a run on deposits by clients who fear the return of a loathed local currency.

Businesses are facing a slowdown in activity as spending collapses.

Bankers Association Zimbabwe (BAZ) president Charity Jinya on Monday told a parliamentary committee on finance that use of the South African rand would be prudent given the level of trade between the two countries.

South Africa is Zimbabwe’s largest trading partner, accounting for about 70 percent of imported goods on the local market. Zimbabwe’s exports on the other hand have tailed off due to the strength of the greenback against regional currencies which rendered them more costly.

“It is not sustainable for the US dollar to continue as the major transacting currency so we would recommend that the South African rand be used as the main transacting currency. This would reduce concentration of risk on the US dollar,” said Jinya, who heads MBCA Bank, a subsidiary of South Africa’s Nedbank.

“We also recommend that the US dollar be reserved to make off shore payments and local electronic payments that will reduce the amount of US dollars likely to leave the borders of Zimbabwe through unofficial means.”

The International Monetary Fund last week said Zimbabwe’s cash shortage is the result of weak external inflows and a decline in commodity prices, made worse by a high food import bill due to drought.

Cumulatively, the country has a $20 billion trade deficit since dollarizing. The Source

Follow us on Twitter @FingazLive and on Facebook – The Financial Gazette

The World Bank banned CCCC after another of its subsidiaries was accused of “collusive practices” on a World Bank-funded road tender in the Philippines.

THE company that won a lucrative US$2 billion contract for the construction of Zimbabwe’s most important highway is under a World Bank ban for tender rigging and fraud.

Zimbabwe recently named Chinese firm China Harbour Engineering Company Ltd (CHEC) as the main contractor of the Beitbridge-Chirundu highway dualisation project. An Austrian firm based in China, Geiger International, was named as the financier of the project.

However, according to a World Bank listing of firms that are ineligible for contracts that it finances, state-owned China Communications Construction Company (CCCC) Limited, CHEC’s parent company, is banned until 2017. According to the World Bank, companies that it places on its blacklist would have been found in violation of its “fraud and corruption policy”.

China’s largest port construction and design company with annual revenues of nearly $60 billion in 2014, Hong Kong-listed China Communications has 34 subsidiaries involved in port, terminal, road, bridge, railway, tunnel, civil work design and construction, among other infrastructure projects. The Company is also the world’s largest container crane manufacturer.

The World Bank banned CCCC after another of its subsidiaries was accused of “collusive practices” on a World Bank-funded road tender in the Philippines. The subsidiary was involved in further bribery and corruption allegations in the Cayman Islands, Jamaica, Bangladesh and Uganda.

According to the World Bank, the ban on CCCC is “in respect of contracts under a World Bank Group‐financed or executed project related to roads and bridges and extends to any firm directly or indirectly controlled by China Communications Construction Company Limited in respect of such contracts.”

In recent years, the World Bank has also banned major global brands, including UK publisher Macmillan Limited and Siemens’s Russian subsidiary. Siemens AG agreed to pay $100 million in a settlement to support the global fight against corruption.

CCCC’s ban means CHEC cannot be awarded any contract funded by World Bank, but it is still free to access other funding elsewhere for separate contracts. However, a ban by the World Bank, which funds major infrastructure projects around the world, raises fresh questions about the credibility of Zimbabwe’s tendering process.

“There is no due diligence,” a senior government official familiar with the road tender said. “Where there is some (due diligence), decision makers are ignoring evidence that some of the companies getting the big contracts need more scrutiny.”

The World Bank ban would only be lifted once the company “has put in place an effective corporate compliance program acceptable to the World Bank and has implemented this program in a manner satisfactory to the World Bank.”

Not much information is publicly available on Geiger International, the company that is supposed to raise the $2 billion for the Beitbridge-Chirundu highway. On its website, Geiger lists the manufacture of military goods, textiles and vehicles among its key businesses. The company also says it constructs roads and other infrastructure with “some very competent and very powerful companies as joint partners.”

Transport Minister Joram Gumbo was recently quoted as saying Geiger and CHEC were “now busy putting together the finances and equipment so that they can come to Zimbabwe” to sign an MoU with the Zimbabwe government.

While CHEC has not responded to emailed questions from The Source, it has previously insisted it has itself never been investigated for fraud by World Bank.

The Beitbridge highway has been in use for over 55 years, way beyond its design life of 20 years. Efforts to rehabilitate the highway, whose state of disrepair has cost many lives in car crashes, have been held back by claims of corruption and bribery.

In 2003, government awarded the contract for the dualisation of the road to Zimhighways, a consortium of 14 firms that included Murray & Roberts, Costain Africa, Kuchi Building Construction, Tarcon, Bitcon, Joina Development Company and Southland Engineers.

However, the project never took off as bickering erupted between the government and the consortium. Government accused the contractors of failing to put up the money for the project, while Zimhighways accused government officials of demanding bribes.

The consortium also accused government of going behind its back to negotiate a separate deal with the Development Bank of Southern Africa (DBSA), with which Zimhighways had agreed on a funding plan.

In 2013, after government announced plans to hand the project to a new contractor, citing Zimhighways’ failure to start the project, the consortium took the government to court. Zimhighways only dropped its lawsuit in 2015, allowing government to float a new tender, won by Geiger International.

The highway is Zimbabwe’s busiest and most economically significant, and is part of the North-South Corridor that directly links landlocked Zimbabwe and Zambia with access to the Indian Ocean ports of Durban and Richards Bay in South Africa.

According to Zimbabwe’s transport ministry, a feasibility study completed in June 2013 established that US$1,3 billion would be required for the rehabilitation and dualisation of the Beitbridge-Harare stretch, while an additional US$883 million (according to a 2011 study) would be required for the link between the capital and Chirundu on the border with Zambia, bringing the total project cost to nearly US$2,2 billion. The Source

Follow us on Twitter @FingazLive and on Facebook – The Financial Gazette

Mavambo/Kusile/Dawn (MKD) leader Simba Makoni

Idah Mhetu
LAST week, five fringe opposition parties announced the formation of the Coalition of Democrats (CODE), an alliance that seeks to bring all opposition parties in Zimbabwe under one roof for purposes of wresting power from ZANU-PF.
While those that are part of this initiative are buoyant about its future prospects, analysts are not convinced that the grouping has what it takes to change the status-quo.
While to a lot of Zimbabweans, CODE’s launch represents a step in the right direction, it remains a herculean task for the alliance to go beyond that first stride.
There seems to be a meeting of minds among Zimbabwe’s opposition political parties that previous attempts to break ZANU-PF’s stranglehold on power have failed because of the disunity among them.
Like water and oil, the country’s opposition parties have found it difficult to come together to present a formidable challenge against ZANU-PF.
As a result, ZANU-PF has been in power for 36 years since April 1980, when Zimbabwe attained its independence from Britain.
With the 2018 polls less than two years away, opposition parties in Zimbabwe are frantically trying to find each other in order to increase their chances of dethroning ZANU-PF.
On Tuesday last week, five small opposition parties formed CODE.
These are Mavambo/Kusile/Dawn (MKD) led by Simba Makoni; Welshman Ncube’s Movement for Democratic Change (MDC); the Renewal Democrats of Zimbabwe (RDZ) led by Elton Mangoma; the Democratic Assembly for Restoration and Empowerment (DARE) headed by Gilbert Dzikiti and Farai Mbira’s Zimbabweans United for Democracy (ZUNDE), .
By any stretch of the imagination, these are fringe political players.
A grouping of politcal midgets is therefore unlikely to unsettle ZANU-PF, unless subsequent steps succeed in drawing bigger opposition parties into the tent.
Two key opposition parties that are currently outside the discussions, are the MDC-T led by Morgan Tsvangirai and Zimbabwe People First (ZPF), fronted by former vice president Joice Mujuru.
These are the parties Zimbabweans think should form the heart of the coalition as they have a groundswell of support, especially at grassroots level.
However, Mujuru’s party claims it needs more time to enable it to hold its elective congress where a substantive leadership would be ushered into office.
ZPF is scheduled to hold its inaugural congress in October this year, where Mujuru is expected to emerge as the elected leader of the movement to face President Robert Mugabe of ZANU-PF in the 2018 elections.

MDC leader Welshman Ncube

Indications are that ZPF would prefer engaging in discussions to be part of a collation once it has mobilised enough numbers at the grassroots level to bolster its bargaining muscle once at the coalition’s negotiating table.
Without the numbers, the feeling in ZPF is that they would not be able to secure the leadership of the coalition since they would be regarded as political upstarts with no visible support base.
ZPF is also convinced that Mujuru should lead the coalition as she is alleged to enjoy the support of some within the security establishment as well as the former liberation war fighters.
In the past, the country’s security sector has made it clear that the office of the President and Cabinet could only be occupied by a person with liberation war credentials.
Obert Gutu, spokesperson for the MDC-T was quoted recently saying his party was not invited to CODE’s signing ceremony, although it is willing to work with all pro-democracy parties and groups in a grand coalition that would challenge ZANU-PF’s rule, come 2018.
Indications are that the MDC-T’s executive is split right through the middle over the idea.
On the one hand, there are members of the MDC-T’s executive who have given their thumbs up to the idea saying it was only through an alliance that the opposition parties in Zimbabwe could stand a better chance of toppling ZANU-PF from power.
But there is also another group which is fiercely resistant to the coalition, arguing that the MDC-T should go it alone to avoid the prospect of a hybrid government of ideologically incompatible parties that would have been brought together by the grand coalition.
Analysts say somehow, this group has been excited by the recent turnout at the MDC-T’s demonstrations in Harare and Bulawayo meant to put pressure on the ZANU-PF government to fulfill its election promises and account for the US$15 billion revenue lost through leakages in the sale of Chiadzwa diamonds.
MDC-T insiders said some of Tsvangirai’s lieutenants were against the coalition for selfish purposes.
These do not want to be deprived of top positions in any set up that could emerge out of the coalition talks.
The only way they can secure their interests is if the MDC-T goes solo.
Apart from ZPF and the MDC-T, there are other smaller parties that are still to append their signatures on the CODE pact.
Tendai Biti’s People’s Democratic Party and ZAPU led by former ZIPRA supremo, Dumiso Dabengwa, said they still need to consult their members before joining the coalition.
Despite the absence of some of the key players in the opposition, those behind CODE are confident that they are on the right track.
Dzikiti, who was appointed the first chairperson of CODE said the coming together of the five opposition political parties was an important milestone in the struggle for democracy in Zimbabwe.
But before the ink has even dried on the agreement, questions are being asked whether the coalition would go the distance.
The identity of those fronting the coalition is also under the spotlight.
The cast includes familiar faces that have been on the political scene for the past two decades namely Ncube and Mangoma — both infamous for their divisive politics which saw them break ranks with Tsvangirai.
Makoni, a former ZANU PF Politburo member, is also part of the new coalition.
Having broken away from their former political parties over issues of ideology, would these figures succeed in putting their differences aside?
Is this not just a coalition of political desperados seeking relevance in a country that has completely lost its bearings?
The other characters are basically unknown quantities in Zimbabwe’s political scheme of things.
University of Zimbabwe political science professor, Eldred Masunungure, believes the coalition does not have what it takes to draw popular support to win elections.
“It’s premature for the 2018 election, maybe for 2023 or subsequent elections, and frankly speaking on the strength of the opposition parties and their numbers, I don’t think they would succeed even if ZANU-PF was to continue with the factional fights,” Masunungure opined.
“A functional democracy works best when you have strong political parties, so you need a strong ruling party and strong opposition parties; it will be ideal if strong opposition parties were to combine forces. But then in their present state of individual weakness even combining would not make a significant difference to an electoral outcome in 2018, maybe in other elections. The opposition parties should get their houses in order because the opposition landscape is so fragmented that I don’t see any viable grand coalition in the foreseeable future,” he added.
Political analyst, Alexandra Rusero, also believes that CODE, despite having taken two years to come to life, is a rushed job.
Rusero said it would be interesting to see how CODE would subsist given the fact that the leaders of the various political parties to the coalition are currently mired in leadership squabbles in their own backyards.

Renewal Democrats of Zimbabwe (RDZ) President Elton Mangoma

“It is a little bit rushed because already there are leadership squabbles within their parties which they should address first before they start thinking of joining hands; there is a lot in terms of solidifying party structures. There is need for these party leaders to push for an electoral reform since it is a coalition of people with big egos, who at one time moved from other parties. This further makes it an uneasy coalition,” he said.
CODE might also suffer serious financial problems given that it, according to its founders, does not have any cash injection to allow it to kick-start its programmes.
Asked about the sources of their funding, Dzikiti, the chairman, said: “CODE survives on the funding from our political parties.”
Mangoma said: “We are renewed democrats and we fund ourselves.”
But one wonders what amounts these parties can afford given their insignificant following at a time when all of them are virtually broke.
Another interesting element of this coalition is that its chairmanship will be rotated every two months, which means that continuity under the circumstances can become problematic.
Dzikiti’s tenure ends at the end of July upon which another person from any of the political parties in CODE is chosen.
By the time the country conducts its next general elections in 2018, CODE’s chairmanship would have rotated 11 times.
If CODE membership remains as it was at the signing ceremony on Tuesday last week, then each of the leaders would lead the coalition at least twice before the next plebiscite.
CODE, which shall have nine committees — one of them being the finance and administration committee to source funding among other roles — shall be run by a governing council comprising all the presidents or principals of the member political parties.
In the meantime, one may just give the coalition the benefit of the doubt given that CODE’s mission is merely to: “Be the democratic platform where like-minded political parties, bound by common values and objectives, collectively take responsibility for providing leadership and opportunities which address the multiple and complex challenges facing our nation.”
In his speech Dzikiti said: “Every one of the leaders present, have put self-interest aside, to work with others to resolve the crisis in Zimbabwe.
Indeed, the deepening levels of poverty, hunger, man-made economic depression, lack of jobs, unprecedented corruption, lack of care, deprivation, exclusion and many other ills, have touched their conscience and are a clarion call for unity of purpose … Zimbabwe today has a leadership crisis and vacuum which has eroded national institutions, failure to respect the Constitution and dangerous encroachment on civil liberties. CODE is the answer to a better Zimbabwe.”
As they say, a journey of a thousand miles begins with one simple step.
In CODE’s view, they have made that first step.
What follows will put to test the commitment of opposition parties towards bringing political change to Zimbabwe, come 2018.
newsdesk@fingaz.co.zw

Follow us on Twitter @FingazLive and on Facebook – The Financial Gazette

Home Affairs Minister, Obedingwa Mguni

Mandla Tshuma

BULAWAYO — Government has no intention to construct a second border post between Zimbabwe and South Africa to help ease congestion at the Beitbridge Border Post.
This was revealed by the deputy Home Affairs Minister, Obedingwa Mguni, in response to calls for a new border in the wake of the congestion at the country’s busiest point of entry.
“Where can that border post be situated, considering that our boundary with South Africa is not even more than 200km long; it is not just feasible to have it,” he said.
“These other border posts that we share with Botswana can be utilised by those travelling to South Africa especially by people living in the southern parts of the country in order to minimise congestion at Beitbridge. I think we need to educate our people on that. Those from Manicaland instead of coming to Beitbridge should also use Chikwalakwala Border Post and travel to South Africa via Mozambique,” he said.
Instead, government is contemplating building an additional bridge at the Beitbridge Border Post to ease congestion at the port of entry, to allow vehicles to use different bridges to enter and exit the country.
Plans mooted some years ago to establish a one-stop border post in Beitbridge to ease congestion have meanwhile also progressed at a snail’s space.
Beitbridge caters for at least 25 000 travellers and 10 000 cars during its peak operating period of the Christmas festive season.
In comparison with neighbouring Botswana, there are now four ports of entry between Zimbabwe and Botswana namely Plumtree/Ramokgwebana, Maitengwe, Mphoengs/Matsiloje and Mlambapheli/Mmamabaka.
Zambia and Mozambique both have more than one border post each with Zimbabwe.
South Africa’s ambassador to Zimbabwe, Mphakama Mbete recently told the Financial Gazette that it would be better to turn Beitbridge Border Post into a one-stop border post.
Mbete admitted that the work to reconfigure Beitbridge had progressed at a snail’s pace and it was important for significant progress to now be made in turning it into a one-stop border post.
“We are working very hard on that, as a matter of fact not long from now there will be a delegation from senior officials from the (South African) Department of Home Affairs led by the director-general who will come here to meet their counterparts. Among other things, is the discussion on how to move forward the work on Beitbridge towards making it a one-stop border post. We are working on that and are hoping that the agreements that will be reached between this senior delegation of our Ministry of Home Affairs will feed into the bi-national commission later in the year towards making this very important port of entry of Beitbridge, towards being a high level, efficient and effective port of entry,” said Mbete.
Mbete also noted that it would be the prerogative of the Bi-National Commission, between Zimbabwe and South Africa, to pronounce a specific timeline on the plans to turn Beitbridge into a one-stop border post, after the two Heads of State have met.
Beitbridge Border Post, the region’s busiest inland port of entry, has been constantly flagged down for bottlenecks that hamper trade activities, as delays in processing the movement of goods, human and vehicular traffic are lasting several days during peak periods.
The prolonged delays at the Beitbridge border post have seen a new trend develop among travellers in transit, who are now preferring to use the Plumtree border post which is less congested.
— Additional reporting by Assistant Bureau Chief.

newsdesk@fingaz.co.zw

Follow us on Twitter @FingazLive and on Facebook – The Financial Gazette

Suspended ZANU-PF Member of Parliament for Chimanimani West, Munacho Mutezo

Kenneth Matimaire
MUTARE — Suspended ZANU-PF Member of Parliament for Chimanimani West, Munacho Mutezo, has become a talking point in the country’s murky political waters as the ruling party and newly established opposition outfit, Zimbabwe People First (ZPF) both claim his membership.
On the one hand ZPF claims that Mutezo has crossed the floor, while on the other hand, ZANU-PF is arguing that the former politburo member was merely suspended hence he is still their card-carrying member.
As the two rival political parties clash over Mutezo’s membership status, the Chimanimani West legislator has been reluctant to set the record straight.
Several phone calls and text messages to his mobile phone have not been responded to.
Mutezo last made public comments during an interview with the Financial Gazette last year and has remained low-key ever since.
A recent ZANU-PF Manicaland provincial coordinating committee (PCC) meeting, for the umpteenth time, recommended that Mutezo be recalled from both the National Assembly and the party over his association with ZPF.
The recommendation cited Mutezo’s public appearance at a ZPF Manicaland inaugural inter-constituency meeting, where he was allegedly seated at the front row, strategically reserved for the opposition movement’s inner circle.
This further armed a faction within the ruling party that is reportedly rooting for Vice President Emerson Mnangagwa to succeed President Robert Mugabe when he decides to retire from politics, to have the embattled MP axed from the party during the recent PCC meeting.
Ironically, Mutezo was suspended and stripped of his Cabinet post after the December 2014 congress for his alleged links with former vice president Joice Mujuru who now leads ZPF.
ZPF founding members and former ZANU-PF bigwigs Rugare Gumbo and Didymus Mutasa have openly claimed Mutezo’s membership status.
Mutasa categorically stated that Mutezo was part of their new political party.
“He (Mutezo) has been a member of People First right from the beginning,” said Mutasa in his short response.
Gumbo, however, chose to be diplomatic in his approach regarding the matter.
He indicated that Mutezo supported their cause, ideology and founding principles.
“We know that he is still an (ZANU-PF) MP, but he supports (Zimbabwe) People First. He has indicated that he supports us, he supports People First. We have already welcomed him and he is working with us,” said Gumbo.
Questioned over the declaration by ZPF, Mutezo’s appearance at the opposition’s meeting, ZANU-PF national spokesperson, Simon Khaya-Moyo, said the legislator is still their card-carrying member after confirming with the ruling party’s national administration.
“I have checked with the administration and they confirmed that he is on suspension, but still a National Assembly member for Chimanimani West. But check with the (Manicaland) provincial executive office. The chairperson (Samuel Undenge) must be in a position to give you Mutezo’s current membership status,” said Khaya Moyo.
Undenge could not be reached for comment and he was not responding to both telephone calls and text messages.
However, Undenge is on record as having indicated that the province has resolved that Mutezo be recalled from the party. Undenge even indicated that Chimanimani West no longer supports their legislator and signed a petition, which was forwarded to the party’s headquarters, to have Mutezo recalled from both government and the party.
Khaya-Moyo, however, said he had neither come across such a petition nor had the Politburo deliberated on Mutezo’s fate.
Observers reckon that Mutezo’s predicament could be linked to the ongoing factional fights rocking the ruling party whereby his ouster is believed to be largely spearheaded by Team Lacoste, the faction that wants Mnangagwa to be the country’s next leader.
The camp is battling against another faction known as Generation 40 (G40) which is against Team Lacoste’s wishes.
The G40 camp is said to be blocking any further purging of Mujuru loyalists whom they are courting to boost their numerical advantage to fight the Mnangagwa-led faction.
newsdesk@fingaz.co.zw

Follow us on Twitter @FingazLive and on Facebook – The Financial Gazette

Mines Minister Walter Chidhakwa

… as govt targets ZimAlloys claims

GOVERNMENT this week moved to confiscate half of the mining claims held by one of the country’s largest chrome miners, Zimbabwe Alloys Limited (ZimAlloys), triggering fears of a wave of expropriations targeted at the mining sector.
The move follows an impasse with government over a proposal for the mining company to cede at least 50 percent of its mining claims to the State, which has now formally written to ZimAlloys indicating that the claims would now be acquired at the Ministry of Mines and Mining Development’s “discretion and without notice”.
ZimAlloys had been given until Tuesday this week to surrender 50 percent of its mining claims, according to information obtained by the Financial Gazette.
Another mining concern, the Zimbabwe Iron and Smelting Company (Zimasco), owned by China’s Sinosteel Corp, had also been requested to surrender half of its mining claims to government. It ceded the claims to government over a month ago.
Zimasco and ZimAlloys — both once owned by Anglo American — control about 80 percent of all chrome mining claims in the country.
They had been asked by government to release ground for distribution to new investors last year.
A letter to the ZimAlloys’ acting managing director, Kuda Mahobele, by the permanent secretary in the Ministry of Mines, Francis Gudyanga, reiterated government’s position that it would be acquiring 50 percent of all mining claims held by the company “in line with government policy to increase the number of players in the chrome mining industry”.
The letter, dated May 30, 2016, said: “Despite repeated efforts to have a common understanding, you have remained evasive with regards to this matter. Therefore, we will be giving you up to the 7th of June 2016 to present the claims to be handed over to the Ministry or risk the claims being acquired at our discretion and without notice.”
The threat has unnerved markets, as it suggests that having failed to achieve what it wanted through negotiations, government was gravitating towards expropriation of assets in violation of property rights.
This might sound a death knell on the country’s efforts to scout new investment to escape the prevailing illiquid market conditions.
But its very nature, capital is shy, and tends to run-away from establishments that violate property rights and rule of law.
In the mining sector, claims owned by other renowned resource giants have previously been targeted for seizure by government.
Fears are that these have been awarded to investors fronting for the elite in the ruling ZANU-PF government, such as platinum claims taken from ZimPlats a few years ago.
ZimAlloys, which is currently under judicial management, is said to be arguing that there is no relationship between the land area and the distribution of the chrome ore resource and that letting go of half their claims will affect the going concern of the company and may result in its liquidation.
The threats might also result in potential investors in ZimAlloys turning their backs on the Midlands miner.
Having received the letter from Gudyanga, ZimAlloys is expected to convene a creditors and members meeting to appraise them while at the same time fulfilling other legal requirements such as informing the Master of the High Court and High Court of Zimbabwe.
Gudyanga told the Financial Gazette yesterday that the planned seizure of the mining claims did not amount to expropriation but was part of government policy to broaden ownership of chrome mining and allow for beneficiation of the mineral in the country.
“We want to bring other players; we want ZimAlloys to release the ground to our people and other companies that can do the beneficiation of chrome,” said Gudyanga, who indicated that ZimAlloys was currently not mining due to funding problems.
“The large claims held by these companies (Zimasco and ZimAlloys) are too big and are blocking other investors interested in chrome mining,” said Gudyanga.
He indicated that Zimasco held 2 530 claims covering 68 655 hectares, while ZimAlloys held 1 052 claims covering 39 175 hectares.
“ZimAlloys will take a very long time to fully utilise the 50 percent that they will remain with at the rate at which they are exploiting the resources. Right now they are not mining. They have failed to finance the operations hence the need for other investors,” said Gudyanga.
Asked if the move against ZimAlloys would not affect foreign investment in the mining sector, Gudyanga said: “This should not be cause for concern. Zimbabwe has the best grade of chrome. This will open ground for more investors, more so those who want to go further in value addition of chrome.”
In an earlier offer to government made to Mines and Mining Development Minister Walter Chidhakwa in September, ZimAlloys said it could release blocks measuring 5 285 hactares to government, and wanted to be allowed to retain the claims targeted for use in future ferrochrome production as indicated in its 50 year mine plan.
It also proposed that government should compensate it for the ground released.
This, the company reasoned, was for capital compensation for developmental work and other commitments made anticipating recoupment through future production and trade; compensation for claims with immovable equipment particularly designed for underground mining; mining rights which formed part of the equity price on the sale of ZimAlloys by Anglo to indigenous shareholders; and use of the precedence set on similar transactions for platinum claims held by foreign owned companies.
ZimAlloys argued that the resource measure from its latest competent persons report indicated “a largely depleted lumpy surface resource of 2,5 million tonnes out of a combined lumpy resource of 42,3 million tonnes”.
“The bulk of the remaining resource is accessible through underground mining. The currently depressed market conditions do not support underground mining operation and reliance will have to be placed on open cast resource. It is ZAL’s (ZimAlloys) intention to utilise surface resources as furnace feed to a point where either the market price supports underground operations and/or upon commissioning a sintering plant to process concentrates into competence furnace feed,” said the report.
It added: “It is imperative to note that most chrome ore reserves indications for the country are conceptual evaluations based on inferences which may not relate to actual resource available. Reliance on such information can only be improved by further exploration work. ZAL has therefore relied on numerous exploration work done to date on claims held.”
newsdesk@fingaz.co.zw

Follow us on Twitter @FingazLive and on Facebook – The Financial Gazette

MDC-T leader, Morgan Tsvangirai

… as Kasukuwere goes for broke

Nelson Chenga and Ray Ndlovu

URBAN councils under the dominion of the Movement for Democratic Change (MDC-T) are headed for more chaos as the ruling ZANU-PF government escalates its agenda to place them under its functionaries ahead of make-or-break general elections in 2018.
The Financial Gazette can report that between now and the 2018 plebiscite, city fathers in MDC-T dominated municipalities essentially have only two options open to them – either to play ball or fall by the wayside.
Either way, it is a zero-sum game for Morgan Tsvangirai’s party, which has been on the back foot ever since it came close to gaining power in 2008, when ZANU-PF lost its majority in Parliament to the MDC-T for the first time since independence.
ZANU-PF has found a wily enforcer in the form of Local Government Minister Saviour Kasukuwere, whose other hat is that of national political commissar for the ruling party.
As the party’s head of the commissariat, Kasukuwere’s performance objectives include aiding and abetting ZANU-PF’s power-retention strategies by mobilising grassroots support at the polls.
In order to achieve the party’s objectives, he is using his other hat as Local Government Minister to ensure that none amongst MDC-T functionaries stand in his way.
Those who dare to frustrate his moves will get their marching orders, creating room for ruling party apparatchiks who will go along with him.On top of ZANU-PF’s agenda is the fulfilment of 2013 election promises, as captured in the Zimbabwe Agenda for Sustainable Socio-Economic Transformation (Zim-Asset) blueprint.
One of Zim-Asset’s objectives is to rollout affordable housing for home seekers across the country.
Already, ZANU-PF has promised to make available land in urban centres to clear the backlog on the housing waiting list which stands at over two million people.
Tied to that, the party is also hoping to roll out vending stalls for informal traders and small to medium size enterprises to absorb thousands of people on the job market.
Through Zim-Asset, ZANU-PF is looking at creating 2,2 million jobs.
MDC-T-run councils are being viewed as an impediment to the achievement of these and other objectives.
So far, the country’s largest opposition party has been exploiting the new Constitution, which has devolved powers to councils, to sidetrack the Local Government Minister.
To dribble his way past the new charter, Kasukuwere is in the process of amending the Urban Councils Act (UCA) to support his agenda.
With ZANU-PF enjoying a clear majority in the National Assembly, the courts might soon offer no sanctuary for the MDC-T, hence assertions that its officials might soon be at the mercy of Kasukuwere.

Local Government, Public Works and National Housing Minister Saviour Kasukuwere

Legal and parliamentary watchdog, Veritas, this week said Kasukuwere’s law amendment manoeuvres could best be deemed as unconstitutional.
“It is apparent…that the Bill is unsatisfactory, and quite probably unconstitutional, in several respects,” said Veritas.
Ever since the Constitution came into operation three years ago, the country has been waiting for the Rural District Councils Act (RDC Act) and the UCA, among other statutes, to be amended so as to devolve powers to local authorities and accord them the independence they are entitled to under Chapter 14 of the Constitution.
Veritas said the Local Government Laws Amendment Bill, which government gazetted on May 9, should have provided for this, but it didn’t.
“All it does is to amend the two Acts to allow for the setting up of a tribunal to deal with the removal from office of mayors and councillors,” argued Veritas.
“Local authorities need oversight from the central government, because both in this country and elsewhere some of them have proved to be incompetent, extravagant and corrupt. Nonetheless, the powers given to the Minister under the UCA and the RDC Act are excessive and unconstitutional. The Local Government Laws Amendment Bill does nothing whatsoever to remove or even limit the Minister’s powers.”
Ever since his appointment last year, Kasukuwere has set the cat among the pigeons by stoking fires in Gweru, Harare, Bulawayo, Mutare, Chitungwiza and Gwanda.
By 2018, Kasukuwere is set to create a record number of commission-run councils in the country’s history if his will prevails.
Despite outcries over his machinations, he has thrown caution to the wind, at times running afoul of the country’s Constitution.
Soon after getting into office, the combative minister announced that he would clean up all the local authorities where corruption and poor service delivery had become the order of the day.
While his mission appeared noble, the grand plan has been to destroy the MDC-T’s influence in its urban strongholds and re-establishing ZANU-PF control through the back door.
Gweru is already being run by a commission after its mayor and 16 councillors were sent packing over allegations of corruption.
Increasingly, Harare is slipping out of the MDC-T’s control.
Harare mayor, Bernard Manyenyeni was suspended on Tuesday after returning from yet another suspension for allegedly violating the UCA by appointing James Mushore as town clerk without first seeking approval from the Ministry and the Local Government Board.
Tuesday’s suspension stemmed from fresh allegations of failure to cause an audit of the city’s EasiPark and City Parking subsidiaries following alleged corruption in the entities.
Kasukuwere is also moving to shake-things-up in Gwanda where he is trying to reverse the appointment of Hlupho Mhlanga as town secretary.
His efforts have, however, suffered a temporary setback after Mhlanga successfully appealed to the Bulawayo High Court to strike down a directive he had issued in which he ordered the Gwanda municipality to re-advertise his post.
In Bulawayo, city fathers are awaiting with bated breath the release of findings of a seven-member investigative team dispatched by Kasukuwere earlier this month to establish if there was any wrongdoing in the allocation of stands and prime land to councillors.
The Local Government Minister has also dispatched chartered accountants, Ernst and Young to audit Bulawayo’s accounts for 2013 and 2014.
Any indications from both findings that may suggest corruption on the part of the city fathers, is likely to give Kasukuwere a perfect excuse for him to give Bulawayo mayor, Martin Moyo, and all the councillors marching orders.
The removal of Moyo would mean that the country’s two largest cities of Harare and Bulawayo might for the first time run concurrently without mayors, setting the ideal stage for ZANU-PF to regain control of the cities, which the party lost in 2000.
Analysts said service delivery can only get worse.
Dzimbabwe Chimbga, the programmes manager for the Zimbabwe Lawyers for Humana Rights, said the will of the people was being violated by the strong centralised power of government.
“The citizens suffer when a mayor is suspended for 90 days. There is paralysis of service delivery,” said Chimbga.
Academic and political commentator, Ibbo Mandaza, said the whole drama signaled that preparations for elections have started in earnest.
He said: “The only thing I can say at the moment is that it’s now election mode in place. They (ZANU-PF) are using service delivery as an excuse to do their things, but we don’t know whether this will translate to that”.
Former Harare mayor and lawyer, Muchadeyi Masunda, said what is conspicuously absent in the “tragicomic” battle for the control of Town House is emotional intelligence on the part of the two warring parties namely ZANU-PF and the MDC-T.

Former Harare mayor and lawyer, Muchadeyi Masunda

“It could well be that both parties are blissfully unaware of what it really takes to run a metropolis like the City of Harare whose operations: 1) affect the livelihoods of over 9 000 employees plus their dependants of at least six per employee; 2) are equivalent to almost 15 government ministries put together; 3) affect the basic needs of almost 4,5 million residents of Greater Harare comprising Harare, Chitungwiza, Epworth, Ruwa, Caledonia and Norton in terms of the obligation to supply potable water and provide health services; 4) include running two infectious diseases hospitals Beatrice Road Infectious Diseases Hospital and Wilkins Infectious Diseases Hospital which also double up as nerve centres for HIV/AIDS related ailments, TB and Ebola; 5) include running 14 polyclinics where over 2 200 babies are delivered every month; 6) include running 32 primary health care centres which provide ante and post-natal to womenfolk from all over the country; 7) include running 32 primary schools in the main high-density suburbs; 8) include running two major sewage reticulation plants at Firle and Crowborough; 9) include running three farms with a head of between 5 000 to 7 000 cattle at any given moment, with a potential to increase the head to between 11 000 to 13 000 if the farms are properly paddocked; 10) include maintaining and rehabilitating a network of tarred and paved roads in excess of 7 500 kms which is more than what you will find in the whole Democratic Republic of Congo; 11) include providing refuse removal services to over 28 housing estates ranging from the sublime to the ridiculous i.e. Borrowdale to Mbare!,” he said.
Masunda said the irony of it all was that central government contributes a big fat zero towards the cost of running the city’s multi-faceted operations.
“That has always been the case even well before the advent of uhuru in April 1980. In spite of that phenomenon, we have had and still have a plethora of Local Government Ministers who are control freaks. What we desperately need are men and women with lots of emotional intelligence and goodwill at the helm of the City of Harare as well as the Ministry of Local Government so that they can focus on the bigger picture issues as opposed to the puerile power games which are no good for man or beast,” noted Masunda.
 newsdesk@fingaz.co.zw

Follow us on Twitter @FingazLive and on Facebook – The Financial Gazette

Finance Minister Patrick Chinamasa

FINANCE minister Patrick Chinamasa says Zimbabwe will not sell its gold on the London Bullion Market Association (LBMA) despite having met the 10 tonne production requirement, but would consider other markets.

Zimbabwe was ejected from the LBMA in 2008 after gold output plunged to three tonnes. Since then, Zimbabwe has been exporting its gold through South Africa’s Rand Refinery.

Fidelity Printers and Refiners, the country’s sole buyer of gold and a unit of the Reserve Bank of Zimbabwe, was re-opened in 2013 following years of redundancy resulting from undercapitalisation and the liberalisation of gold exports in 2009.

Gold production in the country has been on a growth trajectory since authorities decriminalised artisanal mining in 2014, achieving 15 tonnes that year.

Last year, the country produced 20 tonnes of gold.

“There is no problem with marketing gold. We can sell our gold through the London bullion market but there are many markets from all over the world coming to us demanding to purchase our gold,” Chinamasa said during a tour of a recent alluvial gold find in Gache Gache, Kariba, last week.

“We already have qualified for the London market but we will not be selling there yet for reasons that I’ll keep to myself right now.”

Industry officials say the country is on course to meet its 24 tonne target after statistics from the Chamber of Mines showed a 21 percent increase in production to five tonnes in the first quarter. The Source

Follow us on Twitter @FingazLive and on Facebook – The Financial Gazette

Samuel Mumbengegwi

FORMER Minister of Finance Samuel Mumbengegwi has died.

Mumbengegwi died at Avenue Clinic in Harare this morning.
He alsp served as Higher Education minister, Minister of Industry and International Trade and minister of Indigenisation and Empowerment.
At the time of is death he was a lecturer in the Faculty of Education at Great Zimbabwe University in Masvingo.

Samuel Mumbengegwi arriving to present the 2008 national budget at the parliament in Harare, on November 29 2007.

More to follow…

Follow us on Twitter @FingazLive and on Facebook – The Financial Gazette