Finance Minister Tendai Biti told delegates to a mining investment conference that the Zimbabwe dollar was not going to make an early return.
He said re-introduction of the national currency would have to wait until the economy could generate sufficient foreign exchange for the country’s needs.
At one point Biti said the dollar was dead and buried and he was “putting a tombstone on the grave of the Zimbabwe dollar”.
Viewing cable 09HARARE754, ZIM NOTES 9-18-09
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COMMERCE FOR BECKY ERKUL
SUBJECT: ZIM NOTES 9-18-09
SUMMARY – Topics of the week
– Donors Pledge USD 70 Million to Education
– Constitutional Process Clears One Hurdle
– Hate Speech Intensifies in State Media
– ZBC Exec Blasts Embassy for Visa Refusal
– Another MP Arrested, Released
– Police Bar Labor Union March
– ZANU-PF Youths Beat Teacher
– Farm Attacks Continue
– Peace Returns to Once-Violent Mazowe Central
– Government Takes Control of Meikles Group
– BP and Shell to Exit Zimbabwe
– Zimbabwe Dollar Will Not Make an Early Return
– Another South African Firm Invests in Zimbabwe
– Good News That Isn’t
– New Digs for Gono
– Quotes of the Week
On the Political/Social Front
¶1. Donors Pledge USD 70 Million to Education… In a September 14
ceremony attended by the Charge and numerous other heads of mission,
the Educational Transition Fund announced it is investing USD 70
million in education. The fund will put textbooks and learning
materials back in schools and guarantee school fees for low-income
children. The initiative will increase the ratio of learning
materials from an estimated one textbook for every ten students to
one book for every two pupils within the next year. The U.S. plans
to contribute USD 1 million and to provide 100 sets of reference
books to secondary schools. Other contributing donors to the fund
that will be managed by UNICEF and the Ministry of Education include
the UK, EC, Sweden, Denmark, the Netherlands, Australia, New
Zealand, and Germany. Although Zimbabwe once had one of the best
education systems in sub-Saharan Africa, examination pass rates have
fallen significantly in recent years and more than half of primary
school pupils do not go on to secondary school.
¶2. Constitutional Process Clears One Hurdle… On September 11,
ParliamentQs Constitutional Select Committee on the Constitution
announced the 17 MPs who will chair individual thematic
sub-committees. The announcements broke a month-long delay as
ZANU-PF had failed to put forward their nominees. The chairs were
divided proportionately based on political party representation.
Next steps include choosing deputy chairs from civil society and
then rounding out the sub-committees with other MPs and civics.
Once completed, each sub-committee will be composed of 70 percent
civics and 30 percent MPs. The sub-committees will conduct
nationwide outreach efforts to elicit public feedback on key
¶3. Hate Speech Intensifies in State Media… This week the ZANU-PF
mouthpiece The Herald appeared to spew even more vitriol than usual.
On Tuesday the front page headline QMDC-T wants sanctions to stay
claimed Tsvangirai wants to use Western sanctions as leverage
against ZANU-PF. A page-two article quoted Army Commander Philip
Sibanda telling soldiers that QZimbabweQs detractors are using some
QSibanda telling soldiers that QZimbabweQs detractors are using some
NGOs and pirate radio stations to spread false and hate messages
that will lead to rioting, despondency and eventually cause war.
On Friday spin-doctor Tafataona Mahoso bashed the MDC in an article
entitled QHow MDCs Brought DisasterQ Q claiming that NGOs and MDC
formations have bribed street kids to mount urban riots disguised as
a labor movement. On Thursday the MDC called on the State media to
stop using newspapers to spread dissension and hate.
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¶4. ZBC Exec Blasts Embassy for Visa Refusal… This week, with
Department concurrence, we refused the CEO of the Zimbabwe Broadcast
Corporation a visa to attend UNGA. CEO Happison Muchetere, who has
led ZBCQs anti-MDC and undemocratic programming, read the refusal
letter on TV and criticized the U.S. government for allegedly Qnot
recognizing the inclusive governmentQ and for acting Qholier than
¶5. Another MP Arrested, Released… Makoni South MP (MDC-T) Pishai
Muchauraya was arrested on September 15 on charges of assaulting his
friendQs maid with a wooden plank and fracturing her arm in the
presence of the police at a police station. The assault allegedly
took place on August 13, but the woman did not file a complaint
until August 21, and her arm was not examined until September 7. On
September 16, Muchauraya was released on free bail. The three
police officers alleged to have witnessed the assault refused to
testify against Muchauraya, as they deny the assault ever took
place. After refusing to testify, the police officers were charged
with failure to protect a complainant in their presence.
¶6. Police Bar Labor Union March… On September 12, police in
Harare defied a court order and barred the Zimbabwe Congress of
Trade Unions (ZCTU) from holding a march commemorating the policeQs
brutality in crushing the unionQs 2006 protest for better working
and living conditions. Heavily armed police cordoned off the road
leading to the venue of the commemoration. Union official Japhet
Moyo said the police action Qconfirms that political freedoms are
¶7. ZANU-PF Youths Beat Teacher… A teacher in rural Manicaland
was beaten by a group of ZANU-PF youth for failing to heed the
Zimbabwe TeachersQ Union (ZIMTA) call to go on strike. Teachers
across Zimbabwe have reportedly been threatened or locked out by
ZANU-PF youth, war veterans, and sympathetic headmasters. See
¶8. Farm Attacks Continue… Attacks on white-owned farms continued
this week. Police detained an Al Jazeera film crew together with
Ben Freeth when they attempted to visit FreethQs farm in Chegutu.
South African citizen Louis Fick reported that thugs led by Reserve
Bank Deputy Governor Edward Mashiringwani overran his farm last
week, refusing to allow farm workers to give food or water to his
pigs and cattle. The police refuse to take action in these cases.
¶9. Peace Returns to Once-Violent Mazowe Central… During a recent
trip to Mashonaland Central, we were pleasantly surprised to see the
tangible improvement in security in a rural area that was wracked by
violence in 2008. See Harare 734.
Economic and Business News
¶10. Government Takes Control of Meikles Group… There was more bad
news this week for Zimbabwe’s business climate when the GOZ
intervened in a long-running local business dispute by appointing an
Qintervened in a long-running local business dispute by appointing an
administrator for Kingdom Meikles Limited, a blue-chip Zimbabwean
firm with interests in retail, agriculture, and hospitality.
Kingdom Meikles was about to disentangle itself from an unsuccessful
merger involving businesses owned by the Meikles family and the
Kingdom financial group. Under an anti-corruption statute that
allows the authorities to seize control of assets, the GOZ has
alleged that Kingdom Meikles violated foreign exchange controls
after the 2007 merger. The MDC’s co-minister for Home Affairs,
Giles Mutsekwa, reportedly signed the order, but the MDC later
released a statement criticizing the move.
¶11. BP and Shell to Exit Zimbabwe According to press reports, BP
and Shell will sell their Zimbabwean assets to Engen Petroleum of
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South Africa and KenolKobil of Kenya. The move will be the first
high-profile exit from Zimbabwe by a major foreign investor since
the inclusive government came to power in February this year.
¶12. Zimbabwe Dollar Will Not Make an Early Return Seeking to
encourage foreign investment, Minister of Finance Tendai Biti
assured delegates at this week’s two-day Mining Investment
Conference in Harare that the Zimbabwe dollar will not make an early
return. He said re-introduction of the national currency would have
to wait until the economy can generate sufficient foreign exchange
for the countryQs needs.
¶13. Another South African Firm Invests in Zimbabwe South African
commodities trader and investor Metmar said it had finalized a deal
to buy 40 percent of Zimbabwe Alloys and its subsidiary, Chromecorp
for R450 million. The money will be used to inject much needed
capital to restore the companyQs mining, processing and production
¶14. Good News That Isn’t… This week’s Financial Gazette proudly
reported that Zimbabwe has moved up a step in the World Bank’s
rankings of 183 countries on the ease of doing business. Zimbabwe
ranks at 159 this year, just ahead of Afghanistan, and came in at
160 last year. The newspaper helpfully notes that the number of
countries ranked below Zimbabwe has increased by two because the
World Bank’s survey now covers more countries.
¶15. New Digs for Gono… Elsewhere in the press, it was reported
this week that RBZ Governor Gideon Gono has moved into a new
112-room mansion on the outskirts of Harare. The Governor’s new
residence reportedly features an art gallery, a billiard room, a
swimming pool with three islands, and four helipads.
¶16. Quotes of the Week:
“We have not invited these bloody whites. They want to poke their
nose into our own affairs.Q –President Mugabe in his September 11
address to the ZANU-PF youth wing, the day before meeting with a
delegation from the EU.
QWe are not as rough and racist as some people regard us.
–President Mugabe at a Mining Conference on September 16.
QThis country is safe; this country has laws which are still
functioning. I assure you, if you went to someoneQs home and stole
you would certainly be arrested.Q –Minister of Youth,
Indigenization and Empowerment Saviour Kasukuwere addressing at a
Mining Conference on September 16.