ZIMBABWE CRISIS REPORTS

Issue 16 ■ October 2007 Fresh insights into the Zimbabwean situation

CENTRAL BANKER DISSENTS OVER NATIONALISATION

The ZANU-PF administration presses ahead with a plan to take a controlling share in foreign-owned businesses, despite warnings about the consequences.

By Mike Nyoni in Harare

The Zimbabwean authorities are pressing ahead with a nationalisation scheme despite warnings from the country’s central banker that the economic effects will be ruinous.

The dispute highlights the schism Lazele Credit: between politicians who place Main branch of Standard Chartered Bank in Harare. Picture taken October 17. ideological policies above pragmatism, and the technocrats in the administration. Zimbabweans. After the upper Mangwana likened the planned chamber, the Senate, passed the law takeover of foreign banks, mining and On September 26, the lower house of on October 2, only President Robert manufacturing firms to the parliament passed the Indigenisation Mugabe’s assent is required for it to government’s seizure of commercial and Empowerment Bill, which will enter into force. farms which started in 2000 — a move compel foreign-owned firms, including which critics say has been mining companies and banks, to cede Defending the bill in the lower counterproductive, destroying farming 51 per cent of their shares to black chamber, Indigenisation Minister Paul and ultimately the wider economy.

NEWS IN BRIEF

■ Zimbabawe’s main opposition lobbying for a new constitution. At say Germany is opposed to the idea party, the Movement for Democratic least 20 students were arrested and while Nordic states agree with Change, said on October 15 that others were injured after being Brown. ongoing violence against its beaten by police at Masvingo supporters showed that President Polytechnic College during a peaceful ■ The mainly white Commercial Robert Mugabe and his ruling ZANU- protest to demand the release of a Farmers Union says it will continue to PF party were not committed to detained student leader. engage the government after a court dialogue. ordered white Zimbabwean farmers ■ Britain is at the centre of a to vacate farms earmarked for ■ On October 15, dozens of diplomatic row over Prime Minister resettlement. members of the Women of Zimbabwe Gordon Brown’s proposal to send a Arise group were arrested in Harare European Union envoy to Zimbabwe ■ A new satirical play titled for demonstrating against alleged — ahead of a landmark EU summit “Overthrown”, due to open in police brutality. The following day, with African states — to assess Bulawayo,was banned by police as several people were arrested when human rights abuses under President Mugabe arrived in the city to attend police broke up a march by activists Robert Mugabe. Diplomatic sources a university graduation ceremony.

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Mangwana said the new bill “Of particular concern to us as However, an economic analyst in represented a “political decision” monetary authorities would be any Harare said it was unlikely the central taken to correct the injustices of the attempts to forcibly push the envelope banker and his political masters would colonial past. of indigenisation into the delicate area be able to agree on the fundamental of banking and finance,” he said. issues. “They want to create white islands in a liberated Zimbabwe, but we will not Imprudent statements by politicians “Their imperatives are divergent,” said take that,” he said. “The 51 per cent is worsened Zimbabwe’s country’s the economist, who did not want to be only the minimum — we want 90 per sovereign risk factor and undermined named. “Mugabe sincerely believes cent. When you are carrying out a property rights, and this would act as we need price controls to cushion the revolution, you do not do it in half a deterrent to badly-needed foreign most vulnerable members of society. steps. Zimbabwe cannot be half investment, he said. He also wants to take over companies independent.” he believes are working in league with Gono warned that hasty decisions the opposition against his The minister scoffed at warnings that would have “unintended government.” partial nationalisation would prompt consequences”, just as he did in July, foreign investors to pull out of when the government to slash prices of Zimbabwe. goods and services in a bid to curb Powerful interest groups inflation. The result of that policy move want to use nationalisation was that basic goods disappeared from to get rich “in a starkly the shops in a rush of panic-buying. “The 51 per cent is only the greedy but irresponsible minimum — we want 90 Instead, the central bank chief manner” — Gono. per cent” — Indigenisation recommended that the indigenisation Minister Paul Mangwana. process should be managed in such a way as to ensure local people were The analyst said more of the same able to pay for shares. Thus, if a kind of populist rhetoric could be company had assets valued at 500 expected from the political leadership “If Standard Chartered Bank feel they million US dollars, it would take about as the March 2008 presidential and cannot continue their operations in 15 years for locals to acquire a 51 per parliamentary elections drew closer. Zimbabwe, they can simply go,” he cent stake. said, indicating that local banks would “People like Mangwana are more likely step in and fill the gap. to align themselves with the president Central bank chief warned before they are reined in by prudent A day before the Senate vote, against trying to impose advice from Gono, who better President Mugabe made it clear he indigenisation policy in the understands the implications of such agreed with this view when he reckless utterances on investor addressed ZANU-PF members at “delicate” area of banking confidence,” he said. “When Gono Harare airport on October 1 after and finance. said in his monetary statement that he returning from the United Nations was merely offering advice… he knew General Assembly meeting in New what he was up against. There will be York. Gono alleged that the present more wanton spending and even more nationalisation initiative was being economically damaging statements “The minerals are ours. We are offering backed by “well-connected cliques” until the elections in March. Any partners, good partners, friendly who wanted to use it to “amass wealth meeting of minds on policy issues can partners, a share, 49 per cent or for themselves in a starkly greedy but only be coincidental, although one thereabouts. If they won’t take it, hard irresponsible manner”. would expect government to luck — we will give it to our people,” appreciate the importance of getting he said, according to the DPA news In a pointed rebuke to Mangwana, into an election riding on a healthy agency. Gono challenged those who wanted to economy.” muscle into the banking and financial The same day, the governor of the sector to apply for operating licences Zimbabwe is in its eighth year of Reserve Bank of Zimbabwe, Gideon from the central bank. recession, with annual inflation put at Gono, adopted a very different line 6,600 per cent, unemployment at 80 on the issue. In a statement on Mugabe had a five hour meeting with per cent, and widespread shortages of monetary policy, he called for a “fine Gono on September 3, which fuel and basic foodstuffs. balancing act between indigenisation according to the Zimbabwe of the economy and investment Independent, resulted in a “temporary Mike Nyoni is the pseudonym of a attraction”. truce”. journalist in Zimbabwe. ■

2 ■ ISSUE 16 ZIMBABWE CRISIS REPORTS BANK CHIEF OUT ON A LIMB

Some say Gideon Gono is looking for a pretext to jump ship — if necessary by getting the president to push him.

By Hativagone Mushonga in Harare

For a senior Zimbabwean official, the central bank governor Gideon Gono has become unusually outspoken against the official line, condemning a new bill which will see foreign-owned businesses taken over.

Some analysts argue that as the

economy continues to implode and the Lazele Credit: latest government policies look more Central bank governor Gideon Gono presenting his mid-year monetory policy misguided than ever, the country’s top statement. Picture taken October 1. banker is looking for an exit route.

In the latest of several outbursts, the appropriated farms in the hands of the a June decision to force traders to Reserve Bank governor publicly rich and powerful, even though it was slash the price of basic goods and attacked the government for pushing advertised as a move to help the foodstuffs, in hope that this restrain the the Indigenisation and Empowerment poorest landless peasants. massive inflation rate. Gono predicted Bill through parliament. The bill would that the immediate effect would be to force foreign-owned companies, empty the shops and slash production including banks and mines, to — and he was soon proved right. surrender 51 per cent of their shares We must avoid schemes to indigenous Zimbabweans. that create perceptions of Gono has also been critical of the instant gratification continuing policy of land seizures, The lower chamber passed the law on through grab, take and run” urging the government to end the September 26; the upper house or policy and stop extending cheap Senate approved it without — Gono. credit to the big-time farmers and amendment the day after Gono made instead focus assistance on his comments, and the bill now only smallholders. needs President Robert Mugabe’s “As monetary authorities, we also call assent to come into force. upon government to ensure that the When Gono took over as head of the empowerment drive is not derailed by Reserve Bank of Zimbabwe in In an October 1 report on monetary a few well connected cliques, some December 2003, he famously declared policy, Gono warned, “We must avoid who are already making the most that “failure is not an option”. Since schemes that create perceptions of noise in ostensible support of this then, he has generally complied with instant gratification through grab, take initiative, who would want to amass Mugabe’s vision of how to manage an and run, and instead go into value-for- wealth for themselves in a starkly economy, but the most recent policy money, win-win types of acquisition. greedy but irresponsible manner, decisions have driven his free-market whilst the intended majority remain tendencies out into the open. He went on to suggest that powerful with nothing, as happened in the past members of the elite were backing the with respect to other government Some observers believe that there is nationalisation scheme so that they empowerment schemes,” said Gono. more to his new-found dissenting could profit from it personally, as many voice than just principle, and that he is had done from the seizure of white- It was the second time in less than now determined to leave the owned farms. That policy, launched in three months that Gono lambasted a administration even if he has to get 2000, left many of the newly- government policy. The first was over himself fired.

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commander General Solomon Mujuru told IWPR that Gono had finally realised it was time to go.

“He thought he was going to be prime minister and now he knows that was a mere dream,” said the ZANU-PF official, who asked to remain anonymous. “So what’s better — him leaving as a governor who failed and who presided over one of the worst economies? Or leaving with some reputation and the impression that it was not his fault, but the fault of government policies which he opposed and advised against?”

Credit: Lazele Credit: “How far will Gono go and National Constitutional Assembly chairman Lovemore Madhuku addresses a gathering how much more will he say in Harare. Picture taken August 8. in the next few months before the elections?” — Lovemore Madhuku, who heads the and considering his statement that National Constitutional Assembly, an failure was not an option, he wants ZANU-PF official. opposition-aligned group that lobbies out. for a new, more democratic constitution, told IWPR that he However, the source added that it was believed that Gono wanted to leave “I am sure he wants to be already too late, and Gono would have government while some of his remembered as a central no future in a post-Mugabe reputation was still intact, so that he bank governor who stood environment. could argue that he had done his best to turn the economy around but had up to Mugabe” — ZANU-PF “I am sure he wants to be been prevented from doing so by the official. remembered as a central bank ZANU-PF-led government. governor who stood up to Mugabe, the only one that dared criticise his “He has not been listened to. policies in public without fear. If he “He is trying to find a way Decisions are made in the [ZANU-PF] were going to have a political career, out; this could be by Politburo, and Mugabe is the author of that would have been his selling point. pushing to be fired or being those policies.” But unfortunately, he has made too many enemies and knows that after forced to resign” — Madhuku predicted that however keen Mugabe he will not have a place in Lovemore Madhuku of the Gono was to depart, “he will not be government,” he said. National Constitutional allowed to do that until after the [2008 Assembly. presidential and parliamentary] “The question now is how far will Gono elections”. go and how much more will he say in the next few months before the Although ZANU-PF presents a elections? And how long will Mugabe “He is frustrated. He is trying to find monolithic face to the outside world, tolerate his criticism?” a way out; this could be by pushing there are factions within it that quietly to be fired or being forced to oppose Mugabe’s plans to stay on as Hativagone Mushonga is the resign,” said Madhuku. “His president after next March. A senior pseudonym of a journalist in initiatives have not been working, official in the faction of retired army Zimbabwe. ■

4 ■ ISSUE 16 ZIMBABWE CRISIS REPORTS TEACHERS VOTE WITH THEIR FEET

As qualified teaching staff leave their jobs and flood out of the country, the schools are filling up with untrained teachers.

By Yamikani Mwando in Bulawayo

Zimbabwe’s schoolteachers once belonged to the elite who could afford houses and cars, but increasing numbers are now joining the exodus of economic migrants, leaving pupils in the hands of untrained replacements.

In the Eighties, when the country was still in euphoric mood after achieving Lazele Credit: independence, teachers looked Head offices of the Zimbabwe Teachers’ Association in Harare. Picture taken forward to a life of plenty. Today, October 17. however, they say they have been turned into paupers by the deepening Three weeks after the strike began, means the mass outflow of teachers to economic crisis. Like most however, the ZIMT — which neighbouring states is likely to Zimbabweans — especially others conducted its strike action separately continue. working in the large public sector — from the PTUZ — announced on teachers have found their salaries October 4 that it had reached a eroded almost to nothing by spiralling settlement with a pay offer of 14 million Teachers flock to schools in inflation, currently estimated at over ZWD a month. This was still below the other southern African 6,600 per cent year on year. official poverty line — set at 16.7 states which need million ZWD as of August — which Teaching staff in state schools earn a had been used as a negotiating anglophone staff. little over three million Zimbabwe measure, and also fell short of the 18 dollars (ZWD) a month, which works million ZWD which the PTUZ was out at about 100 US dollars at the seeking. Zimbabwean teachers are held in high official exchange rate and but only six regard in the region, and there is high dollars on the parallel market, which is demand for them in South Africa’s a better reflection of consumer prices. Teachers have found their expanding education system, as well salaries eroded almost to as in Botswana, Lesotho and Such is the level of anger at low Swaziland, and also in Mozambique, wages in the education sector that nothing by spiralling where there is rising demand for when the militant Progressive Teachers inflation. English-speaking staff. Further afield, Union of Zimbabwe, PTUZ, went on many have found teaching work in strike in September to press for higher Britain and even Australia. pay, it was joined by the Zimbabwe On October 10, the PTUZ leadership Teachers’ Association, ZIMTA, which is passed a resolution that its members The PTUZ says more than 5,000 seen as more closely aligned with the should return to work while the union teachers resign every month in authorities. decided what to do next. This did not frustration over the poor pay. amount to an acceptance of the pay PTUZ general secretary Raymond offer. According to Majongwe, many accept Majongwe said it was the third manual jobs if they cannot find industrial action this year, which was Whatever the outcome of the PTUZ’s teaching placements. “They find prompted by the government’s deliberations, the government is themselves as farm labourers in continuing failure to address teachers’ unlikely to offer teachers a significant neighbouring Botswana and South concerns. better deal in the near future. That Africa,” he said.

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To fill the gap created by this exodus, temporary contracts, are barred from little option but to take this low-paid the education authorities have hired taking industrial action. job, even though he sympathised with untrained relief staff, despite the striking teachers. complaints by both parents and “Because the unqualified teachers are qualified teachers that this is desperate for jobs, they take up these “Give me any job and I will take it, but compromising children’s education. posts,” he said. “And they cannot because there aren’t any, this is what I complain about conditions because will do in the mean time,” he said. there are no jobs in the country. They Trade union says at least are happy.” 5,000 teachers leave their Employing undemanding, jobs every month. unqualified teachers allows “Give me any job and I will the government to resist take it” — relief teacher in pay demands from the Unqualified staff have always been Bulawayo. unions. used to plug gaps in school timetables, but until economic crisis set in at the end of the Nineties, young people looked on these One student in Bulawayo preparing for Majongwe says his union plans to temporary stints as a transitional his Advanced Level exams, the final work with parents and pupils to phase while they looked for proper school qualification, said, “We are lobby the education ministry to stop jobs. being taught by people with mere recruiting untrained teachers. Advanced Levels, when we were told However, he fears it will be a futile In Zimbabwe’s second city Bulawayo, previously that we needed someone exercise, because having this the education department is now full of with a university degree to teach us. cheap and undemanding labour school-leavers desperate to find work But people with university degrees no force on hand allows the as relief teachers. longer want to work here any more, government to resist pay demands because of poor salaries.” from the trade unions. Majongwe believes the government is happy to take on more malleable An unqualified teacher in a Bulawayo Yamikani Mwando is the pseudonym of workers who, because they are on secondary school admitted he had a reporter in Zimbabwe. ■

The Zimbabwe Crisis Report is information provision, It also contributes to the an initiative of IWPR-Africa’s capacity building and development of regional policy, Zimbabwe Programme. dissemination and distribution. promotes dialogue and builds This programme promotes bridges within the region. It also democratization and good The key purpose is to increase raises the Africa wide and governance with Southern Africa awareness in the Southern African international profile of Zimbabwe and contributes to the region of the Zimbabwean in the context of the region. development of a culture of situation and the implications for Importantly it also builds the skills human rights and the rule of law. regional peace, security and and capacity of the media to Focusing on Zimbabwe the economic development. reliably and accurately report programme has three core political transition, governance and components — human rights issues.

The programme is managed by the Institute for War and Peace Reporting — Africa. For further details go to www.iwpr.net

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