Fool me once, shame on you, fool me twice, shame on me. So, what’s my point here? The point is we can’t be conned twice the same way in 10 years and blame the conmen. It won’t be amnesia but sheer idiocy.

Look around! Does everything that’s happening in Zimbabwe look familiar? It should because it’s happening all over again. If you have not realized, the very loud signs of the pre-2008 period are illuminating so brightly in the dark, and we really have to be blind not to see them. It’s happening all over again, the bank queues, cash shortages, some filling station queues, some goods fading out of the shelves in the supermarkets, a rampant parallel market and so forth. The tale-tell signs are all over the place. The frightening part is that it’s happening at a time when we don’t even have our own currency.

Ignore the clutter as well as sideshows and dig deeper, you start seeing the frightening reality. Let’s look at a typical example: Econet Wireless Limited, a Zimbabwe Stock Exchange (ZSE) listed company declared a 0.386 cents dividend per share amounting to $10 million for the first quarter ended 31 May 2017. To my knowledge, this is the first time the company has declared a quarterly dividend since the death of the Zimbabwe dollar. The question is – how does this listed company, which was clamoring for tariff increases just a few months ago afford such a quarterly dividend? Add to that the reality that quarterly dividends are very rare in Zimbabwe.

If you peel the veil and even dig deeper, you will discover that early last year, Econet Wireless Zimbabwe collected daily revenues of around $2 million dollars a day. Today, the figure has grown three to five-fold to between $6 million to $9 million a day. How is this possible when in January, it earned the wrath of Zimbabweans after it tried to effect a tariff increase? Miracle money? The answer is partly yes. Its miracle money because the government has been creating money from thin air at a time the economy is declining. I will come back to that later.

The Econet scenario is found across all mobile networks. This is because when the cash shortage started, smart dealers quickly realized that the most enduring cash source was the airtime business. As such, they would transfer an RTGS balance to a mobile operator, get airtime, sell it at cost on the street for cash, flog that cash on the parallel market, make massive returns and repeat the cycle. This is how some airtime vendors are able to sell airtime at less than it’s face value. Clever, isn’t it? It’s an arbitrage opportunity created by clueless policy makers and fortune seekers jump on it. Mobile operators have found themselves with massive liquid bank balances. Since they can’t pay foreign suppliers with it, what better way to use it than reward their local shareholders!

Recently, a friend reminded me of how we used to apply the Old Mutual Implied Rate during the hyperinflation era. It is basically based on purchasing power parity – the same way the Big Mac Index published by The Economist does. If you don’t know, here is how it works. Old Mutual is listed on the ZSE, Johannesburg Stock Exchange and London Stock Exchange (LSE). The shares are fungible and should theoretically have the same price. As of now, the price of Old Mutual shares on the LSE is £1.96 (or $2.64) per share. That would be the theoretical price of the same shares in Zimbabwe. However, the current price for Old Mutual shares on the ZSE is $7.72.

So instead of trading for around $2.64, the fungible shares are available in Zimbabwe at 292% more. In other words, you pay almost three times more for Old Mutual Shares in Zimbabwe than you would in the UK. What does that tell you? It simply means the currency we use in Zimbabwe, whatever we call it is no longer the US dollar (USD). That local unit has depreciated three times against the real USD. This helps to explain why the revenues for Econet in my example about have gone up threefold. To explain this using two sides of the same coin, the heads is inflation and the tails is currency depreciation.

The above examples simply show that what we call a dollar in Zimbabwe are not equivalent to the real USD. The USD on the parallel market is currently trading at a 50 percent premium. Put differently, our local unit is 50% less valuable than the real USD. If you compare this rate and the fundamentals I have shown above, it’s clear the worst is yet to happen and the local unit will be getting severe battering. You can see this everywhere, from the massive rally on the ZSE not supported by any improvement in business to price increases taking place in the supermarkets.

So, what really happened? On one hand there is a temptation by laymen to bash bond-notes. On the other, naïve folks in our midst gullibly thought bond notes would solve the cash problem. It’s understandable, but when they were introduced, bond notes were an aspirin to a body afflicted by a dangerous virus. Mangudya was trying a wrong solution to a wrong problem after a wrong diagnosis. Part of the problem is that besides Mangudya and the deputy governors, the rest of the team at the Reserve Bank of Zimbabwe is essentially the same team Gono had.

Why are we back where we were ten years ago? How did we fall in the same ugly pit one more time? Why did we not have cash problems from 2009-2013? Why did the cash problem start from the time Zanu PF took sole control of government? The answers must be pretty obvious from the way I have framed my questions. Simply put: left to its own devices, ZANU PF started creating money with reckless abandon.

To reflect on this let us take a step back. Remember in 2009, all civil servants were paid $100. In fact, due to hard currency shortages, they were paid using vouchers which they redeemed at banks. That was a sign that USD reserves were thin. At that time, civil servants were estimated at 130 000. Over the years, both the number of civil servants and their salaries have increased in multiples. For example, President Mugabe earned $1750 in 2010. He revealed in April 2014 that his salary had increased to $4000 per month, a more than 200% increase. In 2015, he complained that his new salary of $12000 was too little. At that point it had increased by 685%.

We also know that Minister Patrick Chinamasa budgeted for a salary increase for the President and his deputies in February 2017. At this point you should be getting the gist of my argument. Between 2010 and 2015, Zimbabwe economic growth averaged no more than 5% per year. That’s significantly far less than the growth in multiples of salaries of politicians and civil servants. Apply the same math to the private sector and you get a terrible picture. Since Zimbabwe only earns United States dollars from exporting goods and services as well as foreign direct investment and other minor inflows, apply the same math to the growth in earnings by locals vis-à-vis growth in exports and you discover a shockingly gloomy picture.

During the government of national unity, Tendai Biti used to rein in expenditure and take a more austere approach to balance the budget. This restricted the local creation of money – keeping it in close tandem with exports. Still the country had a negative balance of trade and a current account deficit, but it was manageable. Once ZANU PF took sole control of government all gates were opened. The government went on an expenditure spree, buying luxury cars, flying to every meeting they could and awarding salary increases among other things. They think money grows on trees. Even though Chinamasa was faced with the reality given that numbers don’t lie, President Mugabe kept telling him to find the money.

For example, flanked by Jonathan Moyo and George Charamba at a press conference on 13 April 2015 at Munhumutapa Building, Chinamasa announced that the government was suspending the payment of bonuses. This of course was informed by the reality of the situation. A few days later, Mugabe publicly trashed Chinamasa at an Independence Day celebration. Naive civil servants celebrated Mugabe’s move, but they didn’t realise that such a move would invite the current problems.

Rampant spending of money took place in 2014. From that time, Chinamasa started running large budget deficits. Government was funding the reckless spending by creating money. How did they do so? They created IOUs, borrowing extensively in the local market through instruments like treasury bills, assuming old debts such as the $1 billion RBZ debt, and downright creation of digital balances wired via the RTGS system. This was just on the part of government – meanwhile banks were also creating money through lending (Note: assumption is that the reader understands how banks create money). All this money created locally could not match the real United States dollars generated through the exports of goods and services. From this basis alone and from that point on, the country was no longer using proper United States dollars.

The symptoms started showing in March 2014 when the government failed to pay its workers on time. It was the start of serial shifting of pay dates which has gotten chronic over the years. In the first quarter of 2015, the Government failed to remit civil servants deductions for payments like medical aid. It was at that point that Chinamasa announced the scrapping of bonuses which Mugabe promptly reversed. The worse the problem became, the more government created money through borrowing, worsening the economic challenge and creating a vicious cycle.

As things got worse, citizens became disenchanted, and by July 2016 when the “This Flag” movement called for a successful shutdown, the government had its back to the wall, especially after civil servants heeded the stayaway. From that time on, more local money was created to take care of this problem. The consequence was that the cash shortage that had started in December 2015 became more pronounced as created local balances could not match actual United States dollars created through exports, foreign direct investment, diaspora remittances and other avenues.

That Zimbabwe is still using the United States Dollar as currency is pure fiction. Zimbabwe abandoned the USD as currency way back in 2013 after the elections. The government did it nicodemously when we all weren’t looking. This was partly driven by greed, partly by ZANU PF’s cluelessness and partly by the party’s perpetual electoral mode – it campaigns more than it governs.

What does this all mean? It simply means that we are back on the same road as we were from 2006 to 2008. The ghosts of shortages and inflation are creeping in. For the first time, the state-controlled Herald admitted as much about this headache. All Mangudya and his principals can do is just patch holes and react the same way Gono did, albeit with less subterfuge. That my friends, is what we are facing. There is no point in sugarcoating reality because there is no Sugarcandy Mountain anywhere near.

Robert Mugabe is the only President with the unique distinction of battering two different currencies in his lifetime and within a space of fifteen years. He did not just ruin the Zimbabwe dollar, but also tore apart the United States dollar as we knew it 2009 to 2013. So what needs to be done? It is beyond the scope of this article. But we must deal with the fundamentals.

We have to make Zimbabwe attract national and international capital, re-kit our industries and produce for export, reopen redeemable parastatals and close the irredeemable ones, trim the public service, invest in infrastructure and transform our work ethic completely for the better. The present government has proven, not once, but twice that they are clueless and cannot address the fundamentals. In its current configuration, the government will never change our trajectory. Serious inflation is coming and so are all the problems we have experienced before.


The author is a former banker and a current equity investor in small start-up companies in Zimbabwe, Botswana, Zambia and South Africa. He holds a business postgraduate qualification from an Ivy League university in the USA, where he carried out research on code driven versus regulated corporate governance issues in the late 90s. He can be contacted on This email address is being protected from spambots. You need JavaScript enabled to view it.

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 brutalities

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.

Unique dataset

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.

The remains of a victim of the massacre. Anonymous/Supplied by author

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.


Hazel Cameron, Lecturer of International Relations, University of St Andrews

This article was originally published on The Conversation. Read the original article.

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.

It is widely believed that the current government does not represent the people. Electoral fraud has been common over the years and the country’s socio-economic crisis continues.

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 Electoral Act should align with the new Constitution.

  • 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

  • Biased state media

  • Regulations and laws that allow citizens to take part freely in the electoral process such as the Public Order and Security Act

Progress made

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.


Enock C. Mudzamiri, DLitt et DPhil Student in Politics, University of South Africa

This article was originally published on The Conversation. Read the original article.

The Grain Millers Association of Zimbabwe (GMAZ), which represents the country’s major milling companies, is struggling to pay off $88 million in outstanding invoices for wheat and maize imports since August last year.

In its sector update, the Confederation of Zimbabwe Industries said GMAZ revealed that it was failing to clear the outstanding invoices due to foreign currency challenges. 

“The grain millers have reported that the current wheat stocks are fairly good. The expected harvest for wheat is between 150, 000 and 180, 000 tonnes against a demand of around 400, 000 tonnes,” reads the report in part.

“Most of the crop is reportedly good although some farmers were affected by electricity supply challenges. The GMAZ has been engaging government seeking a suspension on the mandatory food fortification.”

“They say it will cost the sector a lot of money to be fully compliant with the requirement of food fortification. The increase in cost is an added burden in that they are still owing $88 million for wheat and maize imports from August 2016,” it said. Recently, GMAZ filed a High Court application seeking to block the government from implementing mandatory food fortification.

The mandatory food fortification was effected at the beginning of this month and is intended to add minute levels of vitamins and minerals to foods during processing. It entails addition of one or more micronutrients during processing regardless of whether the nutrient is present or not in the said food to increase micro-nutrient intake in a population.

In terms of the government regulations, sugar will be fortified with vitamin A, cooking oil with vitamins A and D and wheat flour and maize meal with vitamins A, B1, B2, B3, B6, B12, folic acid, iron and zinc before packaging.


- The Source

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.


Stephen Chan, Professor of World Politics, SOAS, University of London

This article was originally published on The Conversation. Read the original article.

By barring Kwese TV, the Zimbabwe government has shown a trademark tendency: for political reasons, it will jealously hold on to a business it does not know how to run. This week, Econet Media announced the rollout of its Kwese TV in Zimbabwe. The Broadcasting Authority of Zimbabwe (BAZ) immediately announced that Kwese was not authorised in the country.

This was not surprising — Government has too much to lose, both commercially and politically. Apart from its refusal to allow alternative voices, the Government has commercial reasons; it holds shares in the dominantStriveMasiyiwa player in satellite TV, MultiChoice, and has been planning, but failing, to launch its own digital broadcasting services.

Government has for years been trying to control digital broadcasting. In 2002, it arm-twisted MultiChoice Africa into ceding shares in its Zimbabwe operation to the State. That was just the start. In 2013, when MultiChoice launched GOtv, a satellite service for the low-end market, Government again came knocking, demanding and getting a 30 percent stake in the new venture.

GOtv was “a giant step in the right direction”, then Information Minister Webster Shamhu said at the launch of the service in 2013.

GOtv charged just $6.50 per month for its 26 channels, and was soon gaining market share. Still, Government wanted more. It demanded that part of that subscription fee be handed to Transmedia, to fund the digitization programme.

There was, inevitably, a dispute, and soon GOtv transmitters were knocked off air in January 2014. Meanwhile, elsewhere, the establishment was deepening its foothold in the ICT industry. In 2013, an Ernst & Young analysis of the shareholding of telecoms firm Africom revealed how some of the firm’s shareholders could not be traced at the Registrar of Companies.

It only emerged later that a company that had become the majority shareholder, Fernhaven, was the investment arm of the Ministry of Defence. This only came to light after Anhui, a Chinese partner of Fernhaven in the construction of Longcheng Plaza, went to court to protest the use of the mall as security for an African Export-Import Bank loan to Africom.

Why is this relevant? Because Africom has been quietly involved in the launch of a video-on-demand platform, Nhaka TV. The service, the company said in 2016, would have 34 channels that would focus on “Afro-centric content that is grounded on African heritage”. It planned to buy content and distribute it online, and to ZBC and other platforms. The project never flew.

Kwese, in the meantime, was looking for a route into the Zimbabwean market. It was never going to be easy. In 2016, it agreed a deal with ZBC under which the state broadcaster would show the 2016 Rio Olympics and one live English Premier League match every Saturday.

It never lasted, as Information Secretary George Charamba ordered ZBC to cancel the deal. The government, Charamba revealed, saw Kwese not just as content provider, but as a competitor.

“I have differences with ZBC management’s view to introduce a competitor. I don’t sit here to mould a competitor riding on our national broadcaster’s platform. We don’t work like that. We can’t abuse a national institution by carrying a competitor. Hazviite izvozvo (That won’t happen),” Charamba declared to the Financial Gazette.

Already, Kwese had been denied entry into Zimbabwe.

“We really wanted Zimbabwe to be on the launch schedule for next week. More resources have been expended to getting the approvals in Zimbabwe than in all the countries put together. I remain hopeful that one day the approvals will be granted,” Econet owner Strive Masiyiwa wrote on Facebook in January.

It now appears that, in its impatience, Kwese got a bit careless. Unable to get their own license, they decided to ride on the back of a company, Dr Dish, that already had a licence to offer satellite services in Zimbabwe.

Dr Dish, owned by Nyasha Muzavazi, had been awarded a licence in 2012 to offer satellite services on behalf of My TV Africa. The latter however later lost its content rights for the Zimbabwe territory and migrated elsewhere.

This left Muzavazi without a partner. His company’s attempt to launch BOStv was slapped down by BAZ, which said it was contrary to the terms of his licence. In 2014, hoping to curry favour and have the terms of his licence altered, he invoked the magic word “ZimAsset”, saying he had confidence BAZ would authorise BOStv “in line with the social and economic interests of Zimbabwe and our government’s economic blueprint, ZimAsset”. It didn’t work.

In the end, it appears, there were two desperate entities; Kwese had the content but no licence, while Dr Dish had the licence but no content partner. It was soon announced that a deal had been struck between the two. This, obviously, would have raised eyebrows at BAZ and inside Government.

This week, BAZ announced that Dr Dish’s licence had, in fact, been cancelled back when it failed to launch services under MyTV. Dr Dish, on its part, insists that its licence, which it says was valid for 10 years, was never cancelled.

“We notified our regulator that we were partnering with Kwese, and gave them the full details of the channels we were going to bring to the nation, together with a whole host of other technical information,” Muzavazi said this week.

Media and entertainment is big business in Africa. Naspers, owners of DStv, makes annual revenue of over $3 billion from its TV business. Government, and its associates such as those at Africom, obviously know this. They will work hard to keep the competition away, even when they themselves have no idea how to exploit the space. There is a lot of evidence to show that the Government only wants broadcasting for political control, but has no idea how to exploit it commercially and create real jobs.

The digitisation programme has remained an illusion, the subject of hollow speeches to content creators at endless seminars.

Government claims digitization will create 12 new TV stations, six of which will go to ZBC, which is already failing to run just one station. ZBC does not have enough content to fill its 24 hours, according to CEO Patrick Mavhura recently. This is because it has no money to pay producers for their content. At times, ZBC actually expects to be paid for content, as it did when the local PSL tried to sell rights to the local premiership. The PSL sold them to SuperSport instead.

Even government’s own producers are struggling for an outlet. Zimpapers TV Network, which has piled up many hours of content waiting for a licence, has recently had to sell material to a Zambian TV station, Fresh TV.

Many other Zimbabwean creatives have had to find outlets for their content elsewhere, especially on DStv’s Zambezi TV. If Government was sincere about promoting local content, they would allow broadcasters to compete, and compel them to buy some of their content from the many talented Zimbabwean creatives that right now have no local outlet for their craft.

Instead, it’s an indictment on Government that central bank now complains that over $200 million left the country in the last half of 2016 to pay for DStv. It is an industry that could create jobs; real jobs, not the ones made for political promises. Such as those by Information and Broadcasting Minister Chris Mushohwe, who recently claimed digitisation would create four million jobs and rake in $1.5 billion per year.

For perspective; four million jobs would mean a third of the economy working in TV and film, and a four million workforce would also be twice the size of that of Hollywood, a $600-billion industry. As for Mushohwe’s $1.5 billion a year earnings, it is plausible that a third of the national budget would come from entertainment. But not knowing anything about an industry has never stopped the Government from wanting to control it. It is enough for them just to know there is money in TV, and that nobody else should make it. It is case of “if I can’t have it, nobody else should.”

Broadcasting is a business that the Government will always fight to control, even though it doesn’t know what to do with it, except to keep it to itself. Above everything, Government does not want independent voices on air. Political control, without economic benefit for all, has always been its hallmark.


- The Source

The Zimbabwe Stock Exchange (ZSE) has experienced capital flight during the year to July 31, as foreign sales amounting to $60,9 million outweighed foreign purchases of $33,5 million, resulting in a net capital outflow of $27,4 million.

Participation on the local bourse by foreigners has however, been generally lower compared to last year, registering 33,8 percent of the trades in the seven months to July 31, down from the 62,36 percent achieved in the same period last year.

Total foreign purchases amounted to $33,5 million compared to $48,7 million recorded in the same period last year, while equity disposals as of July 31 equalled $60,9 million relative to $77,4 million achieved in the comparable period last year.

Foreign portfolio flows, from equity purchases by foreign investors, provide both liquidity and stability on the market which is positive for not only listed firms but the country at large, but now the market seems to be dominated by local investors, as foreigners lose appetite for local shares.

A leading research firm and stockbroker, MMC Capital, in its latest economic report this week, expressed concern over capital flight , which has become a characteristic of the local bourse. “The difficulty in remitting sale proceeds, driven by Nostro pressures, resulted in some foreign investors opting to sell and reserve better positions in the remitting queue. The trend is worrying given that attracting foreign capital inflows has an overall positive impact on economic growth,” MMC Capital said.

MMC Capital said the current bull run on the ZSE is driven by local institutional investors who a opting to hold equities in order to hedge their investment portfolios from inflationary expectations.

“Our view is that the surge in equities has largely been driven by local institutional investors seeking real growth component (inflation hedge) that is provided by equities. Monetary developments namely; increasing RTGs balances relative to USD cash and Nostro balances, which have pushed up premiums on USD notes, continue to drive inflationary expectations,” MMC Capital added.

The research firm also said that equities are presenting attractive returns relative to other investment alternatives. “Given the minimal investment asset classes on the local market (equities, fixed income and real estate), equities remained the better asset class, given unattractive returns in the other asset classes,” MMC Capital said.

MMC Capital said according to their valuation metrics, the local bourse is currently overvalued and also prime for a reversal, but the growing premium between the greenback and the RTGs defies the odds. “Despite the overvaluation picture that is being postulated by the RSI and the P/E valuation metric, the growing premium between the USD notes and RTGs premium points to a persistent rise in equity prices,” MMC Capital said.

In a year to date, both the industrial index and the mining index advanced 42,05 percent and 24,99 percent to 205,3 points and 73,13 points respectively.

The central bank is establishing a Zimbabwe Portfolio Investment Fund to the tune of $5 million , to facilitate the efficient repatriation of portfolio related funds to foreign investors invested specifically on the Zimbabwe Stock Exchange (ZSE).

In his mid-term monetary policy last Wednesday, Reserve Bank of Zimbabwe (RBZ) governor John Mangudya said the central bank is very concerned over delays in repatriation of foreign exchange for securities related transactions processed by banks, despite such transactions being on the first category of the priority list for the allocation of foreign exchange.

As at June the country had a backlog of $75 million in dividends and proceeds from sales that are owed to foreign investors. “The Bank shall place an initial seed capital of $5 million in this Fund to kick-start the repatriation mechanism and improve investor confidence,” Mangudya said.

The fund will focus on the collection and repatriation of foreign funds related to portfolio equity purchases and sales, with the scope of the fund to include the repatriation of dividends at a later date, Mangudya said.

The fund shall be put in place with effect from September 1, with the central bank having an oversight role for monitoring purposes and maintaining integrity and transparency in the functioning of the fund.

Two commercial banks shall be used to ensure that all incoming and outgoing portfolio funds, shall be collected and pooled into the fund, with payments made on a first-in-first-out basis and, if required, on a pro rata basis in line with funds available in the fund post contribution. Excess funds raised will be allocated to clear the backlog with capital gains prioritised over dividends.


- The Source

The Zimbabwe Electoral Commission (ZEC) says it has submitted a $274 million funding proposal to enable the southern African country to hold polls next year, a development seen loading more debt on the struggling economy.

“The responsibility of funding for the whole electoral process lies with the Government of Zimbabwe. A consolidated budget requirement has since been submitted to Treasury for funding in the sum of $274 million,” ZEC chairperson Justice Rita Makarau told the Parliamentary Portfolio Committee on Women Affairs, Gender and Community Development.

Makarau said ZEC is confident that Treasury would avail the funding as it has funded all the past by- elections. Latest available figures show that government overspent by $230 million in the first quarter of this year after gobbling $1,1 billion against revenue of $869 million, signalling accelerated expenditure ahead of the polls.

Treasury has projected a budget deficit of $400 million this year after overspending by $1,4 billion last year — from an initial projection of $150 million. President Robert Mugabe’s government is heavily borrowed on the local market to the tune of $4 billion and owes international lenders $7 billion, most of it in arrears.

Makarau also said Treasury had funded the acquisition of the Biometric Voter Registration (BVR) kits. The country is for the first time using BVR system and will establish a new voters’ roll ahead of the polls. The system uses of unique individual identification techniques such as fingerprints and iris to identify voters.

Previously, voters just used their national identification documents to register.

ZEC is expecting to register about seven million voters ahead of the elections. The ruling ZANU-PF party has already endorsed Mugabe, who will be 94 next year, as its candidate. Mugabe could face a packed field of opposition leaders, including his long-time nemesis, Morgan Tsvangirai, leader of the Movement for Democratic Change party with whom he formed a coalition government disputed election in 2008.

Mugabe’s former deputy, Joice Mujuru, who was sacked from the party in 2014 for allegedly plotting to unseat the long-time ruler, former ministers Nkosana Moyo and Tendai Biti are also likely to contest the polls.

Makarau said Laxton Group of Companies, which operates out of China, South Africa and the United States, has been awarded the tender to procure biometric voter registration kits (BVR), which will be delivered to the commission in the next three months.


- The Source

The High Court of Zimbabwe on Tuesday ordered the state-owned Zimbabwe Consolidated Diamond Company (ZCDC) to stop diamond mining activities in Chiadzwa with immediate effect until it has been granted an Environmental Impact Assessment (EIA) certificate.

The High Court order comes after ZCDC was dragged to court by community lobby group, Marange Development Trust (MDT), supported by the Zimbabwe Environmental Law Association (ZELA).

MDT filed a court application in February this year seeking a court interdict to stop ZCDC from operating without an EIA as prescribed by law.

In terms of section 97 of the Environmental Management Act, as read with the First Schedule of the Act, all mining activities cannot commence without the issuance of an approved EIA certificate. ZCDC had argued in its notice of opposition papers that it should be allowed to continue mining operations in Marange pending the approval of the EIA report submitted to the Environmental Management Agency (EMA) in 2016.

However, Justice David Mangota said ZCDC had approached the court with dirty hands because it was fully aware of the legislative provisions.

“The first respondent is hereby interdicted and ordered to desist from conducting any mining operations in Marange District until it has conducted an environmental impact assessment process in accordance with the law and obtained an environmental impact assessment certificate from the second respondent,” Justice Mangota said in his ruling.

ZCDC was also ordered to pay costs of the suit. Deputy Mines minister, Fred Moyo told The Source he was not aware of the judgement. “I am surprised, the management of ZCDC should have known and abided by the law,” he said.

ZCDC was formed after President Robert Mugabe kicked out eight mining firms operating in the Marange fields last year, consolidating their assets and operations into a single firm.

At least two of the closed mines, China’s Anjin and Mbada Diamonds, which government wanted to take up 50 percent shareholding in ZCDC, are contesting the asset seizure in the Constitutional Court while a third, Jinan, pulled out of the country in April this year.

The miner expects to produce 2,5 million carats of diamonds this year after acquiring equipment for its state-owned Zimbabwe Consolidated Diamond Company. Mines Minister Walter Chidhakwa said last month that ZCDC had produced 1, 039, 925 carats in the five and a half months to June 18 this year, against 961, 000 carats produced in the whole of 2016.


- The Source

Zimbabwe’s Steward Bank has suspended payments to the pay-TV subsidiary of South Africa’s Naspers, citing unavailability of foreign currency, in a sign that dollar shortages are worsening in the southern African nation.

Local banks have been forced to limit withdrawals due to cash shortages while importers face long delays in paying for goods they bring in, forcing some businesses to buy dollars on the parallel market. Steward Bank, a unit of mobile telephony operator Econet Wireless, said in a statement that it was suspending payments to Multichoice, Africa’s largest pay-TV company, which is popular in Zimbabwe.

“To assist in effective allocation of foreign currency reserves at this critical time, we would like to advise that with immediate effect, the bank has suspended DStv (digital satellite televison) payments for all account classes (except premium),” the bank said.

Last year in May, the central bank set priorities for imports, imposed limits on cash withdrawals and introduced a bond note currency in a bid to ease the acute shortage of money. The International Monetary Fund in a report on Friday estimated that between $600-800 million was in circulation in Zimbabwe. Economic analysts say most of the money was outside the official bank sector.

Most Zimbabweans, who still vividly remember the 500 billion percent hyperinflation that wiped out their savings and pensions in 2008, are holding on to U.S. dollars as a store of value, worsening the currency shortages.


- Reuters

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  1. Opinions and Analysis


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