a closer look at inflation and regime change

To stay or to relocate, that is the question

2007-05-22T17:11:00.000+02:00

Recently I did some soul-searching on my personal situation and also took a real hard look at the state-of-affairs in our country. It was quite a depressing period really...but it made me realize that I had a stake in this quest for positive change in our country’s situation more than I had cared to admit in the past. It actually does directly affect my future – the difference between moving ahead and going backwards.

Objectively speaking, the history of our country since 1990 points to a very gloomy future. In all probability, things are likely to get worse than get better and, therefore, to have a chance at a successful and stable future, I would probably have to relocate to another more secure place.

However, I have not completely lost hope in the future so I have decided to stay in the short-term and fight to reclaim the future. I now have understanding: we can complain all we like about the lack of equity and sense of fairness in our society but we should not expect those complains to get us anywhere. We must be willing to do something about it. We have to create new paths to overcome, to succeed regardless of obstacles and potholes along the way. People who say they have no time to attend to politics are simply saying that they are unfit to live in a free community. There is not a major evil of which we are complaining about in Zimbabwe that is not due to bad and irresponsible government. Not one major evil.

My assessment is that positive change in Zimbabwe will never come about through Mugabe bashing and going into party politics. This only serves to maintain the status quo because it defines issues narrowly and prevents Zimbabweans from uniting to deal with deeper questions of the day that need answers. In truth, the current situation has disillusioned, alienated and paralyzed most Zimbabweans who have simply tuned out even though we are all in agreement that we are heading for disaster.

Are there any Zimbabweans interested in the third way. Check this out

http://www.ourzimbabwe.org-a.googlepages.com/home.htm

Update

2007-04-02T15:30:00.000+02:00

It's highly likely that no new information will be available on this blog for a week. Firstly, there is a two day nationwide strike which starts tomorrow so I will not be going to the office. After that we have the Easter Holidays and I will be visiting family in Bulawayo.

Next week I will be focusing on the following topics

Predictions for the coming months

New Inflation figures

The politics of regime change in the wake of Robert Mugabe being endorsed by his party to run for another term

Reasons to leave Zimbabwe vs Reasons to stay

Yours

zimblogger@gmail.com

P.S I thank everyone who has been reading this blog.
Am flattered by the amount of support I have received

Deadly news from the Agriculture Front

2007-03-29T10:47:00.000+02:00

Agriculture Minister Rugare Gumbo says Zimbabwe has potential to regain breadbasket status. Of course, we do. Potential is enough. Zambia has potential too. Regaining the breadbasket status is the hard part.

Anyway, according to newspaper reports, 95% of the entire crop planted in Matabeleland South for this season is a write off. (pause…95%) Compound that with this: Government need to import 400 000 tonnes of mealie-meal this year alone to cover up for disaster in the fields.
Zimbabweans used to have droughts before the Agrarian reforms. It is nothing new but at least the droughts were not back-breaking. We almost used to have a good plan B in the form of food reserves. What is new is the harshness of these droughts and their frequency. (Which reminds me, Tazzen Mandizvidza once claimed on national TV that the Americans were messing with our weather systems to fix the government. Was not that such a silly thing to say?

So what does this latest crop failure mean for Zimbabwe? Well, it’s all bad news:
· If aid is not forthcoming, there will be a famine in most parts of Zimbabwe. People and livestock will die of hunger and this will exacerbate our already dire situation.
· Inflation will sky rocket. The government will have to ‘manufacture’ funds to buy grain to feed a starving and restless nation. I estimate that the government will need to come up with at least US$230million for food imports alone. This figure is based on the government’s appeal to humanitarian agencies.
· There will be a general shortage of mealie-meal. (speculators’ dream)

I guess it never rains but pours for Zimbabwe. (Excuse the pun). If the government survives this year, it would be a miracle to rival any.

ZBC and Herald nonsense about programming

2007-03-28T16:25:00.000+02:00

Beginning this April, Zimbabweans living abroad will have access to ZBC-TV and radio programmes live on the internet. That is if you are gullible enough to believe some of the things covered in the Herald. Apparently, Zimbabwe Broadcasting Holdings has signed an agreement with Jump TV International, a Dubai-based company, which will have exclusive licence to commercially distribute and rebroadcast ZBC-TV programmes worldwide via Internet TV and Closed Network Internet Protocol TV. The programming will be accessible via the ZBC-TV website or Jump TV’s website.

According to Henry Muradzikwa, the ZBH Chief Executive, the benefits to ZBC-TV and Zimbabwe are as follows:

· ZBC-TV will receive a share of the revenue generated by Jump TV through subscriptions and advertising.
· This is an opportunity to speak directly to those who are receiving distorted information and a time to correct the misrepresentation of issues in Zimbabwe.
· Zimbabweans living abroad will now be able to see on their own, through ‘visual technology’ – whatever that means, the truth about Zimbabwe.
· Revenue generated will provide ZBC-TV with much-needed foreign currency to purchase equipment such as tapes and cameras that the broadcasting requires.

Now dig this: This agreement is of noble intentions but right now it does not make any sense. One gets the feeling that this Henry Muradzikwa fellow has no idea what he is talking about except for what he got from the marketing brochure. I suspect he was just excited that some people from Dubai were interested in doing business with ZBC. Who really are these people anyway? I think I will check out their website once I get the time.

Like I said before, there is nothing wrong with the idea in principle. It would probably work in economies more advanced than ours. Even is such economies, broadband TV is only just starting to take off. By the way, when did ZBC put in place the technology required to supply broadband content on its websites? How many Zimbabweans have broadband connection and, perhaps even more importantly, how many Zimbabweans out there are interested in streaming programming from ZBC-TV onto their machine? How many programmes are owned by ZBC and what about the quality? Which advertisers are they targeting? In a nutshell, there really is no viable market available for ZBC to start dreaming big.

This Henry Muradzikwa guy needs a talking to. How do people like him end up getting these important jobs anyway? ZBC would be better advised to work on improving the quality of programming for now. It’s just common sense since most of what they produce locally is crap.

The biggest question of them all: How do people survive?

2007-03-28T16:21:00.000+02:00

It is common knowledge that the amount of money that Zimbabwean workers earn hardly lasts them one week. Yet Zimbabweans still go to work every day for the remaining three weeks. How do they do it? Does anyone know? I suspect that Gideon Gono, the Reserve Bank Governor, was onto something when he said that the harsh economic environment has criminalised Zimbabweans or something to that effect.

Is 80% Unemployment realistic?

2007-03-27T14:41:00.000+02:00

Zimbabwe has not been keeping credible official records of just about everything since the mid-nineties. So when political, economic and social commentators are drafting their reports they mainly rely on guesstimates for their statistics. Naturally, one has to take any figures being thrown about with a huge pinch of salt. It is always important to know not only the intended audiences of these reports, but also the intended responses.

One piece of statistics that is hugely and extensively quoted is the ‘80% unemployment’ rate. Everyone seems to have taken it up. BBC and CNN have used it continuously in the last two weeks. But is 80% unemployment feasible in our society? Who carried out the survey? Does that mean that only 1 in 5 Zimbabweans has a steady source of income? I think everything depends on what definition of ‘unemployed’ is being used.

Personally, I think this figure is just crude propaganda. I’ve seen the figure steadily rise from 30% unemployment in the year 2000 to 80% in 2007. The problem is that 80% unemployment has been there since 2005. Why has the figure stopped rising considering that things have become even more desperate in Zimbabwe? For once, the government of Robert Mugabe is justified in disputing these figures. However, their figure of 25% unemployment is ludicrous too!

Nothing but a total collapse of Zimbabwe should occur at 80% unemployment or higher. Does anyone out there disagree with me that it is not possible to have unemployment of 80% in a country like Zimbabwe? I would love to hear from you.

Wage Slavery: Are we not just as horrible as government

2007-03-27T14:22:00.000+02:00

Every man for himself and God for us all. If you live in present day Zimbabwe, I am sure you know what I mean by this. It is amazing how much things have changed in the last seven years. People used to care a lot about other people. It mattered how everyone survived. Beggars were still a nuisance but at least back then they were treated with human dignity. Do we have that nowadays? I just do not know.

For example, it’s amazing how some business people still pay their workers a monthly salary of $200 000 ( US$10) without even feeling bad about it. Honestly, who survives on $200 000 a month these days? That money does not even meet my basic needs for one week and my needs are not fancy at all. I use about $50 000 (US$2.50) for my expenses everyday. I guess I am lucky that I do not have to purchase the fuel that I use. That really would put me in a fix.

If a lot of workers are still getting salaries that are around $200 000, imagine what domestic workers or house-keepers must be getting? My mother is now a retired teacher and she used to pay her domestic help a paltry and indecent sum of money at the end of each month. She could not afford to pay her enough to subsist on. I remember that she used to justify the situation by pointing out that it was not really her fault since, as a civil servant, she earned peanuts herself. However, these days her domestic help must be one of the lucky few since my sister and I are now responsible for her wages. We pay her $250 000 a month but it’s still hardly ideal. These people have real needs too that require money just like all of us.

I suspect that many domestic workers only settle for such low pay since they usually get free food, free lodgings, toiletries and other stuff like that in return for their services. They usually get exposed to the vagaries of the economy when they are travelling or doing some personal shopping. But what happens to those domestic workers who have families of their own to take care of?

For Zimbabweans, wage slavey has been one of the harshest side effects of hyperinflation. Since there is a social stigma associated with not being employed, many a Zimbabwean will sell his or her labour power, submitting to the authority of an employer, in order to merely subsist. People not in formal employment, even though the financial returns are more attractive these days, are looked upon with disdain.

A lot of people all over the world do not understand how Zimbabweans have managed to survive seven years of appalling economic and social conditions without rebelling against the government. I think the answer is very simple. Zimbabweans survive by transferring and perpetuating injustices. The government has stripped the people of their human dignity and the people in turn do it to each other. The golden rule in the Bible states that we should treat others the way that we want to be treated. Perhaps this is the reason why the gods continue to curse us.

Mugabe is going but….

2007-03-26T14:58:00.000+02:00

Fellow Zimbabweans,

Evil days are upon us with a vengeance.
Today we find ourselves a nation at risk. Our experiment with Independence is in great danger of failing.
Today all of us are refugees of a future that never happened. So we ask ourselves: Where did we go wrong?
The war, the heroic struggle, it was terrible. For death was not an adventure to those who stood face to face with it.
What about the dreams and visions of all those men and women who lost their lives in defence of freedom? Have we not failed them?
It’s high time for every one of us, man and woman, to do some real soul-searching and to weigh our consciences as to the manner in which we have performed our duty to Zimbabwe. Have we guaranteed a better and dignified future for our children?

To be poor and independent is an impossible dream. Let us not fool ourselves that we shall remain independent and free now that we have run down our country. NO.
Once again, to survive we shall have to mortgage our souls to more prosperous nations. Let us hope it will be only for a short while.

The Leadership have failed. Twenty-seven years of economic malaise have shown us that they were more talented as freedom-fighters. To be sure, let us not be quick to place all the blame on their shoulders. Who else was available to lead the young nation of Zimbabwe? However, today demands a new direction for our country. For the sake of our posterity, it is time that they should quit.

Men reach and fall. Robert Mugabe is going. Soon…very soon. It is as inevitable as sunsets. Foreign powers are gathering their forces for one final onslaught. Domestic failure has rendered Robert Mugabe impotent. No great army of Zimbabweans shall come to his aid.

Whatever happens after Robert Mugabe leaves office, Zimbabwe must not become another Iraq or Somalia. Neither a Zambia nor a Kenya even. These past twenty-seven years have taught us many lessons. These are the ten commandments that each one of us must take to heart:

Small countries like ours cannot afford to behave irresponsibly for very long; their currencies lose value and their governments cannot borrow from the international community.

We have found out that responsible government is in great jeopardy as soon as too much power gravitates to one man.

We have found out that if the government becomes the lawbreaker, it invites everyone to become a law unto oneself. It invites anarchy.

We have found out that keeping our citizens poor and redundant makes them vulnerable to subversive foreign influence.

We have found out that big government means increased power of the authorities to enforce their prejudices and increased power to control people’s minds.

We have learnt that the responsibility of ever citizen is to ensure that the voice of liberty and truth is always and consistently heard in our legislature, courts, work-places and homes.

We have learnt that government’s chief responsibility is protection of the citizenry and the production of laws and regulations which give freedom for people to go about their daily business and create wealth.

We have learnt that human capital will go where it is wanted, stays where it is well-treated, and multiplies where it is allowed to earn the greatest.

We have learnt that if we fail to make productive use of the creative energies of our young people, other countries will make use of them.

Finally, we have learnt that evolution demands that we survive through adaptation. We need to recognize, in changing times, that today is different from yesterday, and tomorrow from today. It may well be that the rules which are perfectly applicable today may become the fallacies of tomorrow. As time moves on we may need to discard some of our most cherished principles.

Change for change’s sake is not an option and true patriotism is of no political party. Of that generation of men and women, those still leaving and those long dead, to whom subsequent generations of Zimbabweans owe so much, posterity will forever be grateful. Do not be afraid for us. It is okay to soften the suffocating grip you have on this country. Because we believe in the principles of sovereignty and independence that you fought for, we can confidently declare that it will always be our desire and duty to defend them whenever they are threatened. We love our country as much as you do and we will do our very best to preserve the memory of that period for our children and their children’s children.
However, every one of you still desperately clinging on to power is not doing it out of great love for Zimbabwe. When it is time to go it really is time to go. Emulate Nelson Mandela. You are of the golden generation. Noone should tell you that maybe it is time that you should quit. Have some pride and self-respect. The writing is on the wall.

To the young men and women of Zimbabwe, your generation is not the most challenged generation of Zimbabweans. Our forefathers had it worse. However, there is still so much work that needs doing. We are at loggerheads on profoundly important political, social and economic questions. Sadly, too many of you are not rising to meet the challenges our country is facing.

Today we are at a turning point. To all of you who feel helpless, who despair, who are cynical and who do not feel like they can make a difference, we want to remind you that there are only two kinds of people who tell you that you cannot change the world. Those who are afraid to try and those who are afraid that you may succeed.
You are young people in a young country with the best days ahead.

Zimbabwe needs heroes for out time. The time has come to renew our faith and our hopes for the future. We can start dreaming heroic dreams again. It is possible. If only all of us play our part. Let us crush the tyrants wrong. Stand up tall. Speak your mind and tell them…tell him, “Zimbabwe can do better!” It is not a challenge to patriotism; it is the heart and soul of patriotism.

A dynamic people, by rolling their sleeves up and getting government off their back, can achieve economic renewal. We can slay the beast of hyperinflation and break record books when it comes to sustained economic growth. We can create a million new jobs and show a watching world that all is not lost in Zimbabwe…in Africa. We are the crown jewel of Africa, it is our duty.

Please circulate this message to every Zimbabwean you know. A lot of things are happening behind-the-scenes that will change our country forever. Things that will influence our chance of getting good jobs, a long life, a dignified future for your children – a secure Zimbabwe. In the coming months, keep watchful eyes on President Robert Mugabe, Morgan Tsvangirai, all our politicians and including foreign powers. This is no longer the time to be spectator Zimbabweans. Too much is at stake!!!!!!

Four Most Powerful Politicians in Zimbabwe

2007-03-22T14:55:00.000+02:00

So who really does call the shots in Zimbabwean politics? Remember, what perpetuates Zimbabwe’s economic and political crisis is that the big four are in disagreement about who should succeed Robert Mugabe as president of Zimbabwe.

Following is a list of who I think are the main players in Zimbabwean politics:

1. Robert Mugabe – He is president of Zimbabwe and its long time ruler. He has also been for a long time the compromise leader of the various Zanu PF factions. To this day, he continues to have a love-hate relationship with the people of Zimbabwe. In the on-going battle for control of Zanu PF and, therefore Zimbabwe, he heads the faction of politicians and business leaders from his home area. His faction would want him to stay in power until he dies. They do not seem to have an alternative candidate.

2. Solomon Mujuru – Thing is, Robert Mugabe first became president of Zimbabwe through the efforts and influence of this man. But that is hardly the source of Solomon Mujuru’s power. He is powerful precisely because, as the first Commander of the Zimbabwe Defence Forces, he still commands extensive influence in the armed forces even though he is now retired. Word on the street is that the armed forces will never expressly intervene in Zimbabwe’s political and economic crisis without his endorsement. This does make him the ultimate king maker. He is also a member of the ruling party’s politburo and does not hold an ‘official’ post in government. Widely feared and revered in Zimbabwe, he heads the faction of politicians and business leaders with similar entrenched interests. His wife, Joyce Mujuru, is a vice president of Zimbabwe and until recently she seemed destined to be Mugabe’s successor. Another member of the faction, Dr Sydney Sekeremayi, is the Minister of Defense. It is not clear who this faction wants to succeed Mugabe.

3. Emmerson Mnangagwa – He has liberation credentials that rival those of Robert Mugabe and Solomon Mujuru. Zimbabwe’s first Minister of State in the Prime Minister’s Office, he has been Robert Mugabe’s right had man for decades. In fact, he is just one of three people to feature consistently in Mugabe’s cabinet in its various shapes and sizes over the years. This excludes the time he was Speaker of the Parliament of Zimbabwe. The other two are Joyce Mujuru and Sydney Sekeramayi.
For many years it was expected that it was automatic that Emmerson Mnangagwa would succeed Mugabe. In 2005 he almost successfully orchestrated a daring political coup inside Zanu PF that would have placed him out in front in the race for the presidency. The other factions disrupted his attempts to take power and while his backers received retribution for their part in the plot, he was not even touched. Emmerson Mnangagwa heads the faction of the south – potentially Zimbabwe’s most volatile region. His faction is a faction that believes that its turn to call the shots in Zimbabwe has arrived.

4. Morgan Tsvangirai – Frankly, I had initially not included Morgan Tsvangirai on this list until reports on CNN, Sky news and BBC changed my mind. Apparently, Tsvangirai is the international community’s choice for the individual to succeed Mugabe as president of Zimbabwe. However if Robert Mugabe, Solomon Mujuru and Emmerson Mnangagwa manage to arrange a successful truce in Zanu PF before the population reaches boiling point, expect Morgan Tsvangirai to be less relevant in shaping the next government. Morgan Tsvangirai first accumulated power as the leader of the combined Zimbabwe labour unions. He is the most recognizable face of the opposition even though his party has lost some of its lustre because of internal divisions rocking it/

Personally, whenever I try to predict how events are going to shape up in the future, the above individuals are the ones that I watch. Does anyone have a different list to share on this topic?

Why Mandela, Mbeki, Kaunda, Nujoma, Chissano will never publicly condemn Mugabe

2007-03-22T14:29:00.000+02:00

Recently the African Union’s representative in Brussels denounced European Union “double standards” in taking action against Zimbabwe’s President Robert Mugabe while ignoring abuses by other African leaders. While the EU might have been expecting a ‘favourable’ response from African leaders, after Robert Mugabe’s widely publicized crackdown on opposition leaders, I do not think it was ever going to come.

I think the EU has messed up their handling of Zimbabwe when seen through African eyes. Western critics of Robert Mugabe must be careful that their response to Zimbabwe crisis should not be construed as camouflaged racism. Trust me, the Darfur Crisis is far more deadly and threatening than the Zimbabwean crisis.

Western Ambassadors to Zimbabwe who publicly flouted diplomatic etiquette in their support of the opposition leaders following their arrest went to far and exposed the opposition’s vulnerability. Tsvangirai’s position is not enhanced among African leaders precisely because he is seen as a stooge of western governments. The thinking in most of Africa is that Zimbabwe’s crisis gets more attention than it deserves because President Robert Mugabe had the nerve to take farm land from white people without economic compensation. Zimbabwe’s economic meltdown is seen as retribution against Zimbabwe for going through with its land repossession programme.

Therefore, for as long as the perception is that the western governments are directly meddling in Zimbabwean affairs, expect that old school politicians like Nelson Mandela, Thabo Mbeki, Kenneth Kaunda, Sam Nujoma, Joachim Chissano and others like them in the SADC region will never publicly condemn Mugabe for his heavy-handed clampdown on the opposition. It would be taboo to do such a thing. Remember people, it is personal, these people were victims of racism for decades. Unlike other parts of Africa, Southern Africa had to fight for its freedom.

Gono does not have power to change things but he has the power to make them worse

2007-03-21T15:53:00.000+02:00

The Reserve Bank Governor has finally realised, albeit belatedly, that he does not have real power to check Zimbabwe’s spiral downwards. He has failed to make positive impact on the people that he ultimately needs to influence before any economic turnaround policies he proposes can have a chance of succeeding.

However, I am not so sure that he realises that what he actually has, because of his position as the Governor of the Reserve Bank, is the power to worsen the situation. In fact, he has done that a few but very significant times in the past. Gideon Gono works hard to keep Zimbabwe’s economy from declining further. He really does try. But sometimes he tries too hard…and that is the problem.

In 2004, when he was first appointed Governor of the Reserve Bank of Zimbabwe, Gideon Gono strayed from his job of cushioning the economy and dabbled in quasi-fiscal policies. He printed money that he lent to industry and government at ridiculously low rates. He hoped that Industry would use this money to boost productivity. Naturally, things did not work out as he envisioned because we all know what happens when good money chases bad money and we all know what bad people do with easy money. Gideon Gono’s quasi-fiscal policies inadvertently fuelled inflation and speculation.

Gideon Gono did not stop there. He hoped that the country would start receiving balance of payments support once Zimbabwe cleared its arrears with the IMF. He therefore printed more Zimbabwe dollars that he used to purchase foreign currency to pay the IMF. It is said that some cabinet ministers were against making any payments to the IMF because they felt that it would still not change the IMF’s position on Zimbabwe. Personally, I am inclined to believe that there were right because Zimbabwe’s status in the IMF did not improve with the payments. I think Gideon Gono demonstrated a bit of naivety in not understanding that Zimbabwe’s beef with the international community is largely political and therefore can only be handled politically. Ultimately, history will judge whether he did the right thing or not by paying the arrears but his policy did not produce the desired result. It only managed to fuel inflation

In his latest monetary policy statement, Gideon Gono announced that the Reserve Bank would now stop all quasi-fiscal policies and concentrate on monetary issue. However, in the same policy statement he proposed the establishment of a social contract that he says is required to lay a solid foundation for sustainable economic recovery. Because he does not have the power to make things happen at the pace that he wants them to, this is where he should have stopped. Unfortunately he went on to propose a timetable for the implementation of the social contract. One of the requirements of the social contract is a price freeze across the board for a period of three months or so. Naturally, business responded typically to his pronouncements. Zimbabwe has over the past few weeks witnessed unprecedented price hikes. The rate at which prices are going up now has been higher than that witnessed late last year. Economists have described the spiral as an attempt by industry to attain high price levels before a price freeze is effected but the result has been a tighter squeeze on the consumer while inflationary pressures continue to mount.

We all know that no positive change is going to come out of Zimbabwe, no matter how good the suggestions are until Robert Mugabe, Solomon Mujuru and Emerson Mnangagwa and their various followers reach some kind of agreement for a truce. For now, Gideon Gono’s latest utterances have once again only served to fuel inflation.

A speculator’s dream: Zimbabwe’s stock market unstoppable

2007-03-21T15:52:00.000+02:00

Conventional wisdom states that the performance of a country’s stock exchange mirrors real economic output. Therefore it should hold that since our economy is performing dismally, our stock exchange’s market capitalisation should also be on the decline.

I started following proceedings on our stock exchange in the year 2003 and I have noticed that year on year returns always manage to beat high inflation. The Zimbabwe Stock Exchange is probably the easiest bourse to invest in if one is just interested in making paper wealth. This is because individual stock performances are not usually driven by the economic fundamentals faced by each stock counter. What has determined the appreciation of stocks for a time now are depressed interest rates, higher inflation expectations and a weakening local currency. Speculators have prepared a rough valuation about what each company should be worth in US$ terms. What they then do is to push up the share price of the counters until the valuation in local currency matches the valuation in US$ terms on the parallel market. This formula has been applied consistently over the past few years.

‘Analysts’ continue to attract many investors onto the stock exchange because “equities present the only other best form of investment in a hyperinflationary environment.” Their argument is bolstered by the fact that the majority of companies appear to produce results that manage to beat inflation, year after year, in spite of declining markets and reduced volumes.

Obviously, the top market participants – investment bankers, stockbrokers and other investment professionals – have managed to stay on top of the situation. But like I pointed out earlier, what seems to be driving the market right now is the perception that “equities present the only other best form of investment in a hyperinflationary environment. It would seem that the underlying economic fundamentals faced by the companies have been largely discounted in the valuation of these companies. Just how risky is this strategy?

Right now macro economic fundamentals are skewed but, assuming that the environment gets back to normal, is there going to be a market correction of some sort and what would be the effect?

Is there a complicity of big business in the chaos and looting of Zimbabwe?

2007-03-21T15:50:00.000+02:00

Yesterday I was looking at the boards of directors of companies listed on the Zimbabwe Stock Exchange. The first thing that stood out for me is that a small clique of business leaders is in control of around eighty percent of all the companies listed on the stock exchange through their presence on various boards. The other thing that stood out for me is that most of this small clique has very strong business ties with individuals from the ruling party. That in itself was an eye opener for me.

Thing is, I have always wondered why there seems to be an undecided response from business leaders on the ever deteriorating business environment. Week after week the operating environment deteriorates further and yet real cries of distress are limited, particularly from the largest companies in the country. The majority of small businesses have already been forced out of the formal business market because of the harshness of the operating environment. However, the apparent silence from big business is starting to make sense to me.

Here is what I know:

· A great number of company directors are also beneficiaries of the Zanu PF patronage system. Companies like Dairiboard, Cottco, FBC Corporation, Rainbow Tourism Group, Fidelity, ZB Financial Holdings, Zimre, Astra Industries and CBZ Holdings among others were acquired from government or with huge financial support from government.

· A number of company directors are also beneficiaries of the Land Reform Programme, having been given A2 farms.

· Most companies still depend on government contracts for business…or need approval from government before pursuing business deals.

· I know of some company directors who are strong business partners with the big men of Zanu PF. It is how individuals on international sanctions lists have managed to bust these sanctions.

Anyway, I feel I need to look further into this issue because it definitely does help clarify what doing business in Zimbabwe really entails. Is there a business complicity in the chaos and looting of Zimbabwe and should business leaders be included on sanctions lists? By the way, does anyone have anything to share on this?

Quarterly treasury reports are a push in the right direction – for once

2007-03-21T15:48:00.000+02:00

The Herald of 6 March 2007 reported that the Ministry of Finance has re-introduced quarterly treasury reports. Quarterly treasury reports give a summary of government capital expenditure and revenue for the period. Market participants therefore can now easily access information on government domestic debt, the budget deficit and tax collections.

This development is good for the economy. It helps develop a common knowledge of data and information on public sector activities that are critical to investors’ decisions. The government’s position can be further enhanced if it also starts disseminating clear statements of macroeconomic and financial policies, while also making itself available to provide clarification to investors when it is needed.

No problems with Gideon Gono buying forex on the parallel market

2007-03-21T15:45:00.000+02:00

The Zimbabwe Independent reports that the Reserve Bank of Zimbabwe is aggressively buying foreign currency on the parallel market. As a result, the local currency has taken a huge plunge on the parallel market.

Personally, I have no problems with the Reserve Bank purchasing the currency even though it fuels inflation. I think it will be good for the country in the medium term. Everyone in Zimbabwe knows where we are headed and the sooner we get there the better. A confrontation of some sort is inevitable before things can start improving. Inflation may be hurting my pocket real bad but I am also loving the havoc it is inflicting on Zanu PF. Inflation is governments ultimate enemy. The good thing about it is that Robert Mugabe cannot send the riot police or army to deal with it decisively.

Hyper-inflation forces even the most hardened politician, political zealot, political parasite, and political prostitute to reform. It is inevitable. White farmers said Mugabe must go. He refused. The opposition said Mugabe must go. He refused. Western governments said Mugabe must go. Africa said Mugabe must go. He resisted. Inflation will ask Zanu PF to tell Mugabe that he should go. This time he will go.

Robert Mugabe- Crisis Chief

2007-03-19T17:01:00.000+02:00

The Zimbabwean government may be incompetent in a lot of things but crisis management is not one of them. Infact, I would declare that they are proving to be talented in handling crises. (However, I wouldn’t say the same about their sanctions busting talents). Since year 2000, the year generally considered to have set Zimbabwe on the crisis path following very controversial land ownership reforms, that at present have no end in sight, I've marvelled at how the government of Robert Mugabe has managed to parry crisis after crisis. I doubt that many of Mugabe's critics all over the world imagined that he would last this long when things started going south. He has.

I've always said that it would take something extraordinary for the people of Zimbabwe to finally gather enough stamina and courage to launch Robert Mugabe back to his Kutama Village. Moreso when considering that, in one way or another, those who are able to lead any change process in Zimbabwe have been bought cheap over the years. A lot of would-be saviours engage in financial prostitution with Robert Mugabe's Zanu Pf on a daily basis.

Anyway, that something extraordinary may have arrived. Inflation in the hundreds proved to be just ordinary. But four digit inflation territory? It's the equivalent of the Trojan Horse. The Zanu PF wall can only but be breached finally. If Robert Mugabe comes out of this crisis unscathed, then expect that only an act of God or voluntary retirement will make him vacate the presidency.

Why is Zimbabwe so important in Africa?

2007-03-19T16:38:00.000+02:00

Donald Kaberuka, the President of the African Development Bank, recently told Reuters in an interview that the rest of the world should not judge Africa on Zimbabwe. He is not the only person to have made such remarks in recent times but, just like everybody else who has made the same remarks, he does have a point.
Why do Zimbabwe’s economic and political woes deter foreign investors from responding to good news elsewhere in Africa? Or is it just a flawed perception. Why is the lack of progress on New Economic Partnership for African Development also blamed on Zimbabwe? Cannot the rest of Africa move forward without Zimbabwe if Zimbabwe does not intend to move forward with the rest of Africa.

International Monetary Fund Africa Director Abdoulaye Bio-Tchane suggested the same thing just this past week. He claims that Zimbabwe is not only holding the subregion back (SADC), but also holding back the whole African region. What’s all the fuss about?