President Jacob Zuma said South Africa and Zimbabwe must implement their 2009 agreement aimed at cutting the massive delays characteristic with the Beitbridge border post by having a one-stop border post at the busy international gateway.
“I wish to underscore the strategic significance of a one-stop border post at the Beitbridge border. This border post is the busiest border post on the continent. Much of our goods and services go through it. We cannot afford to continue to have unnecessary delays at that border,” Zuma said while addressing the second session of the neighbouring countries’ Bi-National Commission (BNC) in Pretoria.
“It is therefore important and urgent that we start in earnest the process of establishing a one-stop border post. Our two countries took a decision to do so as far back as 2009. In this regard, we direct the relevant ministers and officials to move with speed and report progress at the next BNC [to be hosted in Harare next year].”
After a closed door meeting between the delegations of the two countries, a joint communique read out by South Africa’s International Relations and Cooperation Minister Maite Nkoana-Mashabane at the conclusion of the BNC said resolved to speed up the development of legal framework for the one-stop border post.
“Having noted the developments on the one-stop border post (OSBP) at Beitbridge, they [the two heads of state] welcomed the establishment of a joint technical committee whose mandate, among other things, will be to develop the necessary legal framework for the project. The two heads of state reaffirmed the strategic importance of the OSBP and directed the relevant ministers to fast-track its operationalisation,” she said.
On Monday, of Zimbabwe’s Foreign Affairs Minister Simbarashe Mumbengegwi, also said the two governments should wrap up issues which have long been on their agenda, particularly the establishment of a one-stop Beitbridge border post.
“Our two countries stand to benefit immensely from the smooth movement of people and goods through the Beitbridge-Musina border post. A one-stop at the busiest border post in the African continent will bring harmonised processes, improved infrastructure and smiles to many of our compatriots and others who regularly traverse through this border. It will produce impacts that will extend beyond our two countries and region,” said Mumbengegwi.
“The establishment of the one-stop border post at Beitbridge-Musina is an urgent issue that needs our dedicated attention.”
South Africa and Zimbabwe have good bilateral political, economic and social relations underpinned by strong historical ties dating back many years. The two countries do not only share strong historical relations but also economic cooperation. Zimbabwe is one of South Africa’s top five trading partners on the continent, with trade statistics showing annual growth.
In 2016, South Africa’s exports to Zimbabwe amounted to approximately R29.3-billion.
There are over 120 South African companies doing business in Zimbabwe in various sectors including mining, aviation, tourism, banking sector, the property sector, the retail sector, construction sector, and the fast food sector and many more.
At the BNC hosted at the Sefako M. Makgatho Presidential Guesthouse in Pretoria on Tuesday, Zuma was supported by several ministers including Nkoana-Mashabane, Defence and Military Veterans Minister Nosiviwe Mapisa-Nkqakula, Trade and Industry Minister Dr. Rob Davies, Labour Minister Mildred Oliphant, Minister of Telecommunications and Postal Services Siyabonga Cwele, and Transport Minister Joseph Maswanganyi.
Visiting Zimbabwean President Robert Mugabe, who co-chaired the BNC with Zuma, was accompanied by his officials including Mumbengegwi, Defence Minister Sydney Sekeramayi, Health and Child Care Minister David Parirenyatwa, Home Affairs Minister Ignatius Chombo and the country’s Public Service, Labour and Social Welfare Minister Prisca Mupfumira.
Source: African News Agency
Zimbabwe on Thursday gazetted a new law criminalising unlicensed currency trading in an attempt stem out a thriving parallel market for bank notes in the country.
The southern African nation is grappling with a severe cash shortage which has given rise to informal trade for currency. Last November, the country introduced, bond notes, a surrogate currency which was pegged at par with the US dollar. The bond notes have however been devalued by up to 80 percent on various platforms.
Finance minister Patrick Chinamasa told Parliament on Thursday that President Robert Mugabe on Thursday gazetted the Exchange Control Amendment Regulations (Statutory Instrument) which provide for jail terms of up to 10 years.
“These regulations will empower the police to arrest anyone trading in currency without a licence. Further it will allow the police to seize the cash found on the person suspected to be dealing in currency,” said Chinamasa. ‘Where we establish that the transactions were done through bank accounts, the regulations empower the freezing of those accounts.”
Chinamasa said the bond notes have helped boost exports and production besides providing a medium of exchange which can not be externalised. However, there is a thriving trade of the bond notes in neighbouring countries.
“To the allegation that bond notes have failed, I categorically state that this is not the case. The problem is low circulation of currency because of lack of discipline and confidence. What is required is to enhance productive capacity so as to increase exports.”
Chinamasa said there was enough money circulating in the economy, with $1 billion physical cash — $180 million in bond notes, $20 million in bond coins and $800 million in United States dollar notes.
“With respect to the $200 million Afrexim Bank export incentive facility $180 million has already been issued which means the facility is about to be exhausted. RBZ is negotiating for a further $300 million to continue boosting exports which have grown by 12 percent to $2,334 billion as at September 8 compared to $2,086 billion last year,” said Chinamasa.
He added that $2,5 billion Treasury Bills were issued out as at June 30, with $127 million going towards the RBZ debt and $263 million towards recapitalisation of State Enterprises and Parastatals.
- The Source
In January 1983 Robert Mugabe’s government launched a massive security clampdown in Matabeleland. It was led by a North Korean-trained, almost exclusively chiShona-speaking army unit known as the Fifth Brigade. They committed thousands of atrocities, including murders, gang rapes and mass torture.
Mugabe’s government called the operation Gukurahundi. This is chiShona for “the rain that washes away the chaff (from the last harvest), before the spring rains”.
It is estimated that between 10 000 and 20 000 unarmed civilians died at the hands of Fifth Brigade.
An analysis by the author of official British and US government communications relevant to the Matabeleland Massacres has shed new light on the British Government’s wilful blindness to Operation Gukurahundi, including its diplomatic and military team on the ground in Zimbabwe during the atrocities. The information was obtained via Freedom of Information Act requests to various British government ministries and offices and to the US Department of State.
The unique dataset provides minutes of meetings and other relevant communications between the British High Commission in Harare, Prime Minister Margaret Thatcher’s office, the British Foreign and Commonwealth Office, the Cabinet Office and the Ministry of Defence in London, as well as the US Department of State and the US Embassy in Harare.
The attacks’ ramifications continue to be felt by survivors and their families. The children born of rape at the hands of the Fifth Brigade face ongoing discrimination and generally find themselves in hopeless situations.
The catalogue of brutalities committed by the Fifth Brigade include:
One man learned that his child was abducted from school by the Fifth Brigade and forced to catch poisonous black scorpions with his bare hands. He was stung and died before being buried in a shallow grave (interview with survivor TH, 2017). His only “crime” was to be Ndebele.
Entire families were herded into grass-roofed huts, which were then set alight (interview with survivor AN, 2017).
In Mkhonyeni a pregnant woman “was bayoneted open to kill the baby”. Also, “pregnant girls were bayoneted to death by 5th Brigade in Tsholotsho”, killing the unborn babies.
Young Ndebele men between the ages of 16-40 were particularly vulnerable. They were frequently targeted and killed or forced to perform demeaning public sex acts.
The data provides a unique insight into the British government’s role in Gukurahundi. It also establishes what information was available to the British government about the persistent and relentless atrocities; what the British diplomatic approach was in response to this knowledge; and what the British government’s rationale was for such policies.
The data evidences, for example, that the British Foreign and Commonwealth offices were aware that:
there was much talk – and evidence – of widespread brutality by the Fifth Brigade towards [Ndeble] villagers.
In a cable forwarded to the US embassy in Maputo and Dar es Salaam, then-US Secretary of State George Shultz stated:
what we are addressing is not simply a bad policy choice by the GOZ [Government of Zimbabwe] to deal with a difficult security situation in a section of their country. What is involved is the very fundamental issue of relations between the two parties, between the Ndebele and the Shona.
The West German ambassador to Zimbabwe, Richard Ellerkmann, thought it “ominous” that “Mugabe, in his latest speech in Manicaland, had used the Shona equivalent of ‘wipe out’ with reference to the Ndebele people, not just ZAPU people, if they didn’t stop supporting the dissidents”.
However, “most poignant for Ellerkmann was the remark of a German Jewish refugee in Bulawayo who said the situation reminded him of how the Nazis treated Jews in the 1930s”. (Cable American Embassy, Harare to Secretary of State Washington DC, 11 Mar. 1983).
There could be no doubt in the minds of the British that Gukurahundi was Zimbabwean government policy. On 7 March 1983 Roland “Tiny” Rowland, a British businessman and chief executive of the Lonrho conglomerate with heavy economic commitments in Zimbabwe, met Mugabe. The documents indicate he subsequently reported to the American ambassador in Harare that he was convinced Mugabe was:
fully aware of what is happening in Matabeleland and it is Government policy. Mnangagwa (Zimbabwean Minister of State Security) is fully aware and he was in the meeting when they discussed the situation in detail.
The author’s analysis provides clear evidence that the British diplomatic and military teams in Harare during Gukurahundi were consistent in their efforts to minimise the magnitude of Fifth Brigade’s atrocities.
It is indisputable that this is the general theme of the available cables that were forwarded from the British High Commission in Harare to London during the period analysed.
The analysis also clearly proves that, even when in receipt of solid intelligence, the UK government’s response was to wilfully turn a “blind eye” to the victims of these gross abuses. Instead, the British government’s approach appears to be have been influenced solely by consideration for the white people who were in the affected regions but were not affected by the violence.
Rationale for realpolitik
The rationale for such naked realpolitik is multi-layered. It is expressed clearly in numerous communications between Harare and London. One cables notes that:
Zimbabwe is important to us primarily because of major British and western economic and strategic interests in southern Africa, and Zimbabwe’s pivotal position there. Other important interests are investment (£800 million) and trade (£120 million exports in 1982), Lancaster House prestige, and the need to avoid a mass white exodus. Zimbabwe offers scope to influence the outcome of the agonising South Africa problem; and is a bulwark against Soviet inroads… Zimbabwe’s scale facilitates effective external influence on the outcome of the Zimbabwe experiment, despite occasional Zimbabwean perversity.
One can but assume that “occasional Zimbabwean perversity” refers to Gukurahundi.
In a more general sense it is quite clear that, apart from the immediate perpetrators, external bystanders also have to be held accountable at least to some extent for the unbridled atrocities that took place in Zimbabwe.
With the end of Mugabe’s long reign drawing ever closer, it is imperative that the international community help develop strategies to help Zimbabweans address the prevailing impunity and lack of accountability for the crimes of Gukurahundi. That is critical for the establishment of truth, justice, and accountability for the victims, survivors and their families.
Zimbabwe’s Constitution requires it to hold elections by July 2018. It seems unlikely that the country’s political system will be reformed in time to ensure the election is free and fair. The opposition will therefore be at a disadvantage again. It seems to have abandoned its calls for reform and is focusing on building coalitions.
In South Africa and Namibia, former liberation movements have maintained their dominance through credible elections. The polls have met legal and internationally accepted criteria. But in Zimbabwe, the ruling ZANU PF has dominated by abusing the country’s political and electoral systems. Elections have often been deadly for the opposition there.
Zimbabwe’s election history
ZANU PF, which has been in power since independence in 1980, has applied any means necessary to hold on to this position. Elections or no elections, the party is ready to defend its power.
The party manipulated the electoral process in 2000, 2002, 2008 and 2013.
It lost elections to the main opposition Movement for Democratic Change (MDC) in March 2008 but refused to concede defeat. Contrary to earlier practice when presidential, parliamentary and local government elections were conducted separately, the harmonised elections combined all the elections and the ones in 2008 were the first. This led to a bloody presidential run-off in June 2008. The incumbent ZANU PF president claimed to have won again.
A coalition government was formed in 2009 and the parties negotiated a new Constitution, which was approved in 2013. ZANU PF won the 2013 elections. Although there was no evidence of political violence in 2013, forms of electoral chicanery were evident, compromising the legitimacy of the results.
Calls for electoral reform
After its 2013 “defeat”, the MDC resolved not to contest any elections until the system was fair. Together with other (smaller) opposition parties, it boycotted all by-elections for both the local government and the legislature from 2013.
These parties and certain civil society organisations gathered under the umbrella of the National Electoral Reform Agenda (NERA). The group aimed to address problems that compromise the credibility of elections in Zimbabwe.
Why Zimbabwe needs electoral reform
There are four main reasons why electoral institutions in Zimbabwe are in urgent need of reform.
Municipal law should align with conventions such as the African Charter on Democracy and Governance.
The consistently flawed electoral process has created a crisis of legitimacy.
Manipulation of the electoral process prevents a transfer of power in Zimbabwe.
Who must reform
The National Electoral Reform Agenda (ZEC) should be the primary target for reform. It has no credibility and has long been considered independent on paper only.
Other targets for reform include:
The judiciary. Most judges are perceived as sympathetic to the ruling party’s interests because they are part of its patronage network
The security sector. The military, intelligence and police are widely considered partisan
The bureaucracy, especially senior appointments. These are subject to manipulation by the ruling party
Regulations and laws that allow citizens to take part freely in the electoral process such as the Public Order and Security Act
In line with the new constitution of 2013, the Zimbabwe Electoral Commission (ZEC) made some changes. Some were voluntary and others were required by the new Constitution. Voluntary reforms are mostly administrative. For example, voter registration is now based on polling stations and on biometric information.
Mandatory or legal reforms include the creation of a new voters’ roll, keeping it secure, giving it to candidates in time and improving voter education. The (ZEC) has also been working more closely with political parties, to stimulate confidence in the electoral process.
These specific achievements are important. But they are probably not enough. They fall short of NERA’s calls. And elections are still threatened by political violence, abuse of state resources by the ruling party and vote buying. The ZEC’s reforms must take place within the framework of other systemic changes outlined above.
Constraints and opportunities
ZANU PF has managed to delay the debate on electoral reforms and the reform of the electoral act. There will not be enough time to make the changes before the 2018 elections.
The opposition’s “Grand Coalition” is not likely to challenge ZANU PF successfully.
That party sees itself as having brought democracy to Zimbabwe. It will not reform itself out of power. Individuals in government and the security apparatus are loyal to the ruling party. This thin line between the party and state has a direct bearing on the political culture of militarisation of government business, fear and repression. In practice, no distinction exists between government and ZANU PF officials especially in the security sector. The party and state are heavily conflated.
The Ministry of Justice controls the finances of the Election Management Body (EMB). The government can get the EMB to waste time so that reforms will not threaten the stranglehold of ZANU PF in the 2018 elections.
Unless civil society sustains its pressure for reform and succeeds, the 2018 elections will only serve to legitimise continued authoritarian rule in Zimbabwe.
Before she landed herself in hot diplomatic water by allegedly attacking a South African model with a power cord, Zimbabwe’s notoriously ill-tempered first lady, Grace Mugabe, joined the clamour for her aged husband Robert to name a successor.
Curiously, she also called for a female vice president, stirring up rumours that she’s positioning herself for a presidential bid in 2023, not next year. That may take her name off a growing list of potential successors to one of the world’s oldest presidents.
Mugabe still plans to be his ZANU-PF party’s presidential candidate in 2018, but were he to win and complete a full term her would be 99 years old. A new potential candidate to succeed him is political veteran Sydney Sekeramayi, seemingly endorsed by the Generation 40 group long associated with Grace. As with his rival presidential hopeful Emmerson Mnangagwa, the septugenarian Sekeramayi does not represent a new generation. What both men stand for is the liberation generation’s last chance to redeem itself after Mugabe, before the “born frees” or “young frees” finally get to build a future their elders seem unable to imagine.
At the start of August, Robert Mugabe took a call from an emeritus of another liberation movement: the former South African president, Thabo Mbeki. Rumours abounded that Mbeki semi-officially endorsed Mnangagwa as South Africa’s preferred successor.
South Africa needs guaranteed stability on its northern borders. Pretoria can be expected to throw its lot in with the man who out guns the others, and Mnangagwa’s strong historical links with the military make him perhaps the strongest contender.
The frenzied speculation over the future of Mugabe’s ZANU-PF was matched only by the almost surreal clumsiness of opposition politics. Attempting by command and fiat to form a coalition of opposition parties, Morgan Tsvangirai only succeeded in alienating his own party lieutenants, trading away their parliamentary seats as inducements to others to join a new alliance under the banner of his MDC party.
Curiously, MDC thugs beat up those party lieutenants who seemed to be protesting against the giving away of their seats. And the alliance did not include such key figures as former ZANU-PF vice president, Joice Mujuru, and former ZANU-PF ministers Simba Makoni and Nkosana Moyo.
Despite the efforts at a coalition, the alliance is brittle. The seat-trading exercise has riven Tsvangirai’s reliable base with faultlines, and long-running quarrels between Tsvangirai and his new partners are still only papered over. Still, Tsvangirai is at last attracting the support of key war veterans already at odds with Mugabe. They will lend him and his alliance a smidgen of liberationist credibility for the first time.
Most bizarre of all, of course, was the political storm Grace Mugabe stirred up on her visit to Johannesburg, when she allegedly used a power cord to strike a South African model who had been partying with her sons.
Grace Mugabe promptly disappeared, and border alerts were issued to stop her absconding from South Africa altogether. Zimbabwe sought to secure her diplomatic immunity. Robert Mugabe arrived early for a regional meeting. After three days, immunity was granted, and she slipped back across the border.
The South African leadership had been in two minds about what to do. On the one hand, they were keen to avoid unnecessary diplomatic tension, not just with Zimbabwe but with other African governments who still see Zimbabwe as a complicated but real icon of African nationalism. But on the other hand, this was a chance to improve Mnangagwa’s chances by leaving a Mugabe in public ignominy.
Zuma’s former wife and preferred successor, Nkosazana Dlamini-Zuma, said that Grace Mugabe must answer before the law – but if it had come to that, Grace Mugabe’s own sons would have had to testify in the case. The embarrassment and mileage in the cross-examination would have been profound, and even in Zimbabwe, it would have made her permanently unelectable.
Grace Mugabe escaped that particular humiliation – but where she previously seemed temporarily reconciled to biding her time, she may now have no choice.
Dollars and disaster
Set against a severe economic meltdown, of course, this all looks like soap opera. As things stand, the country’s greatest accomplishment is its pretence of relative normality in a time of deep crisis.
Zimbabwe is highly dependent on imports, including for food. There is no liquidity; a parallel market has developed between the US dollar (widely used in cash form) and the Zimbabwean central bank’s bond notes, and the Zimbabwean currency is increasingly at a disadvantage.
Despite the introduction of bond notes, more and more electronic money transfers are denominated in dollars. If all those electronic dollars can’t be backed up on demand with physical dollars, that will create a dangerous bubble. As soon as a large company seeks to reclaim its electronic dollar deposits but is given only bond notes, the game will be up. And ultimately, Zimbabwe needs to service its gargantuan debts in dollars: if those dollars run out, prices will rise, raising the prospect of severe food shortages.
What will the nonagenarian president say on the campaign trail? Will he really try and convince people he can print bonds faster than they lose value? Can he really keep blaming the West for wrecking his own economy? He may be counting on the fractious, chaotic opposition to fall apart – but the economy could still make retaining legitimacy harder than ever.
There is a rush by President Robert Mugabe’s lieutenants to salvage his legacy, and the latest ploy in that race – a university named after him – may cost the taxpayer at least $1 billion.
Higher and Tertiary Education Minister Jonathan Moyo announced on Wednesday that the Robert Gabriel Mugabe University is to be built in Mazowe, where Mugabe and his wife, Grace, already run an exclusive private school, an orphanage, a large estate and a dairy.
Education has always been seen as one of the early successes of the Mugabe administration. However, over the last 20 years, he has rolled back what success he had achieved in education, as school dropout numbers soared and the quality of education collapsed.
Now, amid a scramble by his officials for a place at Mugabe’s feet, Government has promised $1 billion in taxpayer funds to please Mugabe and cheer the First Lady in her dream to build an empire in the Mazowe valley.
While few will argue against a new university, it is the cost of the proposed university, and how it will be funded, that is raising controversy. “Cabinet has approved a grant of $800m towards the construction of the Robert Gabriel Mugabe University, and a grant of $200m towards the establishment of the University’s Endowment Fund for Research and Innovation,” Moyo announced in a statement.
There is no detail as to how this money will be raised. To put the size of the grant in context; at $1 billion, the grant would take up a quarter of the nation’s entire annual budget. The Government would be spending more on a single university than the $800 million that it allocated for primary and secondary education this year.
The $1billion grant would leave the heads of other state universities scratching their heads. The figure is about a thousand times more than what Lupane University gets in fees. “My enrolment is only 2 500 students and with payments of $500 per student per semester, it is almost impossible to operate a university with a gross figure of
$1,2 million that we get per year,” Lupane University chancellor Pardon Kuipa told MPs earlier this year.
Government is already struggling to fund construction of planned new universities. This year, Treasury disbursed $45 000 for Gwanda State University, $45 000 for Manicaland State University of Applied Sciences, and just $25 000 for Marondera University of Agricultural Science and Technology.
These are funds enough to build a basic rural classroom block, but nowhere enough for a modern university. The $200m grant pledged towards the Robert Gabriel Mugabe University’s “Endowment Fund for Research and Innovation” matches the entire $200m budget allocation for the Ministry of Higher Education. There is not much research the Ministry will support with that allocation, as $172.5 million of it will go to salaries.
What makes the grant even more surprising is that Government has been sweeping corners and lifting sofa cushions searching for coins to refurbish decaying colleges. The Government has leaned on banks such as CBZ and IDBZ to float bonds and help source cash to build student hostels and other infrastructure.
An 18-page, 3000-word “incubation plan” for the new university lays out grand plans but provides no concrete strategies on funding, beyond the grant. What it does, however, is reveal how Government is prepared to spend a billion of tax dollars to fund what is really a private university.
“In order to ensure that President R.G. Mugabe’s legacy is preserved and passed on to future generations, the international R.G. Mugabe University will have a Responsible Authority under the auspices of the Robert Mugabe Foundation whose Founding Trustees are His Excellency President Robert Gabriel Mugabe and the First Lady, Amai Dr Grace Mugabe,” the document says.
In real terms, the President is paying himself a billion from state coffers to run a private university. The college will lead in the “industrialisation and modernisation of the country”, the document says. “RGMU” will have a capacity of at least 15 000 students. A Finance and Revenue Working Group will be set up to “explore potential for the state to provide funding for construction costs”. The group will also “determine financial resources that might be sourced from potential friends of the R.G. Mugabe University”.
The working group has until the end of the year to come up with “fundraising strategies required for start-up and (the) first 10 years of operation of the new University”. The college will “create comfortable, attractive, and stimulating environments that support collaboration and diverse learning styles and opportunities”. According to Finance Minister Patrick Chinamasa in this budget, poor funding of the education operations and capital budgets, “meant that challenges remain outstanding with regards to improving access and quality of education on account of inadequate infrastructure, shortage of teaching and learning materials”.
Government cannot pay salaries, is begging for an arrears clearance plan on the $1.4 billion it owes to the World Bank and AfDB, has a $1.4 billion deficit, can’t support the 24 000 graduates that leave college each year, and cannot provide basic healthcare.
Yet, somehow, it has found a spare billion dollars to try salvage Mugabe’s legacy, and to bring the First Lady’s grand schemes in Mazowe to life. This is the sort of economic management that they don’t teach at conventional universities.
This article was originally published on The Source
Zimbabwe’s President Robert Mugabe last week officially launched the start of work on the dualisation of the Harare-Beitbridge highway for $984 million.
The highway is Zimbabwe’s busiest and most economically significant, it 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.
Mugabe called the rehabilitation ‘a game changer’ with a multiplier effect for the economy. “This ground breaking ceremony is a major breakthrough as Zimbabwe forges ahead with the implementation of ZimAsset, our economic blueprint since 2013,” said Mugabe in Chirumanzu, central Zimbabwe.
Austrian contractor Geiger International was last year awarded the tender for the 580 kilometres road, which will be built under a Build-Operate-Transfer model.
Transport minister Joram Gumbo, however, said government signed a memorandum of understanding for the contract with Geiger International (GI) in 2012 but the absence of a legal framework until 2016 delayed the deal. This is despite the deal being officially announced in June last year, when government named GI and China Harbour Engineering Company (CHEC) as the tender winners for the Harare-Beitbridge and Harare-Chirundu roads.
GI vice-president Eric Geiger said the negotiations for the deal had taken six years, ‘punctuated by tenders and legal issues. “Geiger International has mobilised resources for the design and construction of the road and will be responsible for collecting maintaining the toll gates during the concession period,through a company in which government will have shares,” said Geiger.
“Proceeds from toll operations will be used to meet operating costs, loan repayments, interest, dividend payments to investors, and shareholders including the government. At the end of the concession period, Geiger will hand over the road to government, which would have to be responsible for its maintenance. Actual work on the road will start after three months if the designs are approved, he said.
Local companies will participate in the construction project to the tune of 40 percent of contract value. The project is expected to take up to 3 years under the terms of the contract. Geiger said the government had guaranteed the safety of its investment. The road was the beginning of more business deals with government, with more to follow, he added. Gumbo said more toll gates will be added on the route as Geiger seeks to recoup their investment.
Negotiations for the loan to fund the Harare-Chirundu road are not yet complete, Gumbo added.
- The Source
President Robert Mugabe’s government announced a late Monday afternoon deal to hand its employees $180 million in 2016 bonuses, only just managing to head off a planned strike.
With an election due next year, the Mugabe government is keen to keep a lid on passions, at whatever cost.
As news of the bonus deal broke, statutory pension fund National Social Security Authority (NSSA) announced the government had given it treasury bills worth $181 million, primarily to clear arrears for the three years when the state could not remit its contributions to the fund as an employer. It is no secret that government has been struggling to meet payroll and, equally, not surprising that it has defaulted on its employees’ pension contributions and medical insurance.
Last year, it took government six months to eventually pay off all 2015 government bonuses. Even so, this came at a price as government defaulted on the June payroll, triggering a civil servants’ strike that was seized upon by some anti-government activists to create the biggest protest against Mugabe in recent years.
The situation is similar this year, with payments staggered over five months to August. There are compelling arguments against the payment of automatic bonuses to a bloated workforce of a government whose fiscal position is, at best, fragile. But that’s not an argument a wasteful government which splurges on luxury cars and avoidable foreign travel can make.
Finance Minister Patrick Chinamasa, who has fought a losing battle to at least suspend the bonuses over the past two years, put on a brave face on Monday as he told reporters “government will certainly mobilise the resources.”
Recent history points to one obvious source of funding: paper. Government paper.
Money on trees. Literally.
As it has done with reckless abandon since 2012, government will issue treasury bills, mop up cash from the domestic financial market and crowd out the productive sector, as Chinamasa himself admitted during his 2016 mid-term budget statement. At the time, the Treasury chief had also warned about a runaway budget deficit as government was a third into $1.2 billion budget deficit for the year.
For a government which had virtually no domestic debt between 2009 and 2011, the explosion of local borrowings from around $300 million in 2012 to $3.7 billion by October 2016 is alarming.
The bulk of the debt is in the form of government paper which, according to central bank governor John Mangudya, currently stands at $2.1 billion. Analysts have criticised the government for going into overdrive with its treasury bill issues, worsening a liquidity crisis that has hobbled the economy.
Not that government will listen to any advice to curb its appetite to spend, or institute the necessary reforms that will see it moving away from the current ridiculous situation where 97 cents out of every dollar the state raises go towards employment costs. Last year, Mugabe’s Cabinet publicly rebuked Chinamasa for proposing 25,000 job cuts and suspending bonuses among other cost-reduction measures which he said would save $355 million over two years.
As Zimbabwe heads to next year’s election, government’s instinct will be to spend more, not less. And, over the years, Mugabe has shown that he is not averse to making bold, costly promises to segments of the electorate he views integral to his electoral ambitions. But there are limits to kicking the can down the road each time you’re faced with difficult decisions.
This is why Zimbabwe’s current path to financial ruin is worryingly familiar.
The economic meltdown which reached its peak in 2008 was the outcome of a series of poor decisions — price controls, unrestrained money printing — by a government which insists on turning economic orthodoxy on its head.
- The Source