- Zimbabwe's economy heads for meltdown
Angus Shaw | Harare
Restaurant customers in Zimbabwe pay with thick wads
of local currency
bulging in their bags and pockets. Real estate
buyers hand over deposits of
millions of Zimbabwean dollars stuffed into
suitcases and car trunks.
Newspaper advertisements have begun offering
currency counting machines
for sale. With inflation out of control and a
massive shortage of hard
currency, the value of the Zimbabwe dollar has
imploded in the
latest sign of the nation's economic collapse.
One local commentator said the country's economic
approaching the levels of Germany's 1920s Weimar
"We are looking at total meltdown. It could in the
next few months push the
country into absolute collapse," said Harare
political analyst Brian
On the black market, the value of the Zimbabwe
dollar fluctuated wildly on
Monday. By the afternoon, $1 bought 1 800 Zimbabwe
dollars, down from
Friday's 1 500 to 1 rate and up from 2 100 to 1
earlier in the day.
"The rate is changing by the hour," said one black
market dealer on
condition of anonymity. The fixed official rate
stands firm at 55 to 1.
Meanwhile, exasperated officials at the central bank
are running out of local
currency as black marketeers and money launderers
amounts of untraceable bank notes to buy hard
The central bank officials said they would monitor
large cash withdrawals
from banks of more than 500 000 Zimbabwe dollars in
a bid to trap them.
The government has repeatedly refused to devalue the
trading has been spurred by a severe hard currency
shortage stemming from
political instability that has disrupted the main
hard currency earning
industries: tobacco, tourism and gold mining.
Independent economists say the black market exchange
rate has been
pushed up by desperate state enterprises seeking
hard currency at
unofficial rates to pay debts for oil, imported
electricity and external fees and
debts owed by the state airline. Many of those debts
face foreclosure and
the termination of supplies and services.
The central bank said last week it deferred a
decision on issuing a 1 000
Zimbabwe dollar bank note until after the retirement
at the end of the year of
Leonard Tsumba, the bank's governor.
The highest existing bill is 500 Zimbabwe dollars.
With official inflation at a
record 140% and forecast to rise to at least 500%
early next year, the
biggest Zimbabwe note, red in color, has become
known as a Ferrari.
Thousands of cars were not going anywhere in Harare
on Monday. Biting
gasoline shortages disrupted commuter transport and
left long lines of cars,
buses and trucks snaking around city blocks and side
streets in the capital
and most other urban centers.
Travellers reported no gas at stations along the 250
kilometre main route
from the eastern border town of Mutare to Harare.
Oil industry executives say the shortages have been
caused by the dearth
of hard currency to pay for state-controlled imports
and the near-collapse of
a deal with Libya that would supply 70% of the
country's monthly gasoline
The state National Oil Company holds a monopoly on
imports and has
pegged gas prices in a bid to stem inflation. Petrol
in Zimbabwe is the
cheapest in the region at about 15 US cents a litre,
half the price of locally
produced milk or beer. Gas imports are being heavily
subsidised by the
oil industry executives say on the open market gas
would be bought and
shipped into the landlocked country for up to about
$1 a litre, raising the
consumer price by 600%.
Without a heavy price increase, shortages will
continue, analysts say. Such
a hike in the crumbling economy would lead to more
and worsening unemployment, food shortages and
At least 6,7-million Zimbabweans, more than half the
hunger in coming months because of a sharp drop in
blamed on a drought and the government's seizure of
white-owned commercial farms.
The government's policy to freeze prices of food and
has mostly failed. Street dealers sell 10 kilograms
of scarce corn meal, the
staple food, for about three times the fixed price.
Bread and sugar fetch up
to four times the government's price.
Those who can't afford the black market prices wait
on long lines for price
controlled food. Often fruitlessly. - Sapa-AP
Libyan oil deal with
Zimbabwe's oil deal with Libya has reportedly
collapsed as the government prepares to
deregulate the country's oil industry.
Libyan ambassador to Zimbabwe, Mohammad
Azzabi, was quoted by a South African paper
as saying the deal was terminated for
commercial and not political reasons.
"It's a matter of supply and demand," Mr
Azzabi told the Sunday Times.
"It's not political but maybe it appears
semi-political in a way because we are not
taking out the money which Zimbabwe pays
since we are investing it here," he said.
Economically troubled Zimbabwe has relied on
Libya to supply 70% of its oil for the last two
Libyan leader Muammar Gaddafi has offered
president Robert Mugabe political and
economic support in the face of Western
criticism of Zimbabwe's land redistribution
Officials at the state National Oil Company of
Zimbabwe (NOCZIM), which imports the bulk of
the country's fuel, and the government have
not reacted to the report.
The $360m (*226.4m) deal with Libya's Tamoil
was renewed in September but Zimbabwe has
failed to keep up payments, owing an
Zimbabwe pays Libya in local currency which is
then used to invest in land and the banking,
tourism, fuel, meat processing and
The reported failure of the key trade deal
comes after Zimbabwean president Robert
Mugabe indicated that the government was
preparing to end the state monopoly of fuel
Zimbabwe has suffered fuel shortages for over
three years and most petrol stations in the
capital Harare are reportedly shut due to
The southern African country's economic crisis
and lack of foreign currency has led to the
erratic fuel supplies.
Earlier this month Mr Mugabe said foreign oil
companies operating in Zimbabwe should
import their own supplies because the
government was "foolishly helping" them earn
huge profits while taking the blame for
Energy and Power Development Minister Amos
Midzi confirmed last week government was
working on deregulation.
Oil imports are heavily subsidized by the state,
with petrol selling for 15 US cents per litre, the
cheapest in the region.
Industry estimates put the cost of delivering a
litre of oil to the landlocked country at $1.
Zimbabwe has maintained a state monopoly
over the country's oil industry since
independence in 1980.
U.S. Probes Zimbabwe Border Shooting
By Angus Shaw
Associated Press Writer
Tuesday, November 12, 2002; 9:00 AM
HARARE, Zimbabwe –– Border
police in Zimbabwe shot and killed
a Connecticut man who was on a
humanitarian mission in Africa, the
U.S. Embassy said Tuesday.
Richard Gilman, 58, a computer
consultant and former teacher from
Torrington, Conn., was shot near
the border with Mozambique on
Monday after allegedly speeding from a police
roadblock, police and state
"The circumstances of the death remain unclear," a
statement from the U.S.
Embassy said. "We have sent people there to talk to
anyone who can help us
understand what happened."
Gilman had been visiting his brother in the border
town of Mutare, about 160
miles east of Zimbabwe's capital, Harare. He donated
supplies and helped
with nutritional programs at a local school where
his brother was a teacher.
The state-run Herald newspaper reported Tuesday that
an American driving a
Toyota Corolla with South African license plates was
stopped at a roadblock.
The man's visa was valid until January, but the
car's temporary import permit
had expired Oct. 28.
According to the newspaper, the American became
uncooperative and drove
off at high speeds, forcing officers in front of him
to jump out of his path. One
officer fired at the car's left rear wheel.
A second bullet went through the car's rear license
plate, ricocheted and
struck Gilman in the shoulder, The Herald said.
He was taken to a medical facility, where he died
three hours later under
Police headquarters in Harare said the shooting was
being investigated. No
further information was immediately available from
police on Tuesday.
On Monday, Zimbabwe police told the Waterbury
Connecticut newspaper, that Gilman argued with
border officers about his
passport and travel papers.
"He tried to run away and that's when he was shot,"
officer John Nahanda
was quoted as telling the newspaper.
Gilman's wife, Mary, said from her Torrington home
Monday that her
husband was returning from a round of golf. She said
she found it difficult to
believe he had argued with an authority figure in a
foreign country he loved
and had visited before.
Gilman had been in Mutare almost three weeks, and
was to return to
Connecticut in 10 days, the newspaper reported.
"He went there to help children and get food," his
Even before his trip, Gilman had sent food and
supplies, including books and
clothing, to the school at his own expense, his
longtime friend Art Perret said.
"I went hiking with him just a few weeks ago,"
Perret said. "We talked about
his planned trip. I asked him about the volatile
situation. He described the
people in the area as friendly. He wasn't worried
about his safety at all."
- Zim police raid churches, round up displaced
21 July 2005 04:25
Police raided church halls in Zimbabwe's second city of Bulawayo, rounding up people who had been sheltering there since their homes were destroyed in a so-called urban renewal drive, a human rights lawyer said on Thursday.
Wednesday's raids came just days before the release of a United Nations report on Zimbabwe's controversial Operation Murambatsvina.
On Thursday, some of the hundreds of thousands left homeless were allowed to return to the demolished township of Hatcliffe, on the northern outskirts of the capital, Harare, state media reported.
Police have torched and bulldozed townships, informal markets and other structures deemed illegal since launching the demolition campaign on May 19. Vendors accused of black-market dealing have also been arrested or had their goods confiscated.
Independent estimates of the number affected range from 300 000 to more than a million.
Only a small number of people were removed in the church raids, said attorney Jenny Coltart.
"Many of the churches have already moved the people last week on to a farm they had negotiated for, but there were some who had not moved," she said. "The police came in late last night, loaded them on to trucks and drove off."
Church leaders were trying to locate them on Thursday.
An estimated 20 000 people had their homes destroyed in Hatcliffe, on the northern outskirts of the capital, in May. Many of them were given just 30 minutes to pack their belongings and were forced at gunpoint to tear down their own houses.
Late on Wednesday, Deputy Housing Minister Morris Sakabuya told Parliament about 3 100 plots have been demarcated in the township and are being allocated to "vetted" families, the national broadcaster and state-run Herald newspaper reported.
"Only those with lease agreements were allowed back, while those with receipts showing they had paid for their stands were also given lease agreements," Sakabuya was quoted as saying.
Local Government Minister Ignatius Chombo told Parliament the government will help the displaced rebuild but warned that any returnees who fail to meet state building standards will be evicted again.
Trudy Stevenson, an opposition Movement for Democratic Change lawmaker who represents the area, was not impressed.
"How will they all find out about this when some have gone to Mozambique, Malawi or [been] chased back to their 'rural areas' by police?" she asked. "What about the seven weeks schoolchildren have missed, the people on anti-retrovirals and other medication who have been without it? How many have died? Who is going to find the orphans and tell them?"
Many of the displaced also lost their livelihoods and do not have the means to rebuild, she added.
President Robert Mugabe's government has promised Z$3-trillion (R2,1-billion) for the reconstruction effort, but economists question whether the funds are available at a time of economic crisis.
The government defends the campaign as a clean-up drive in overcrowded, crime-ridden slums.
But the opposition says it is aimed at breaking up its strongholds among the urban poor and forcing them into rural areas where they can be more easily controlled by chiefs sympathetic to the government.
Last month, UN Secretary General Kofi Annan sent an envoy to assess the humanitarian impact of the campaign.
Anna Tibaijuka, the Tanzanian head of UN Habitat, submitted her report earlier this week. A copy was also sent to Mugabe for review before it is made public, expected on Friday or Monday. -- Sapa-AP
Zim defiant over loan conditions
Nic Dawes and Rapule Tabane
21 July 2005 11:59
If South Africa agrees to a loan request from Zimbabwe, one of its conditions would be an end to the Murambatsvina campaign to demolish illegal structures in urban areas. (Photograph: AP)
Zimbabwean President Robert Mugabe may well choke on the tough conditions attached to any loan package offered to him by the South African government -- despite Zimbabwe's worsening foreign currency crunch.
Mugabe's spokesperson, George Charamba, told the Mail & Guardian that Zimbabwe would not accept financial help tied to conditions, adding that South Africa was one of numerous countries Zimbabwe had approached.
"I don't understand why the South African media is treating the loan request as unique to South Africa. We have also made representations to the Indian government," Charamba said.
Mugabe is due to visit China this weekend and diplomatic observers believe China is the country most likely to step into the breach.
Beijing is anxious to secure access to minerals such as platinum and chrome, which Zimbabwe has in abundance, and may provide a way for Mugabe to acquire hard currency without making political concessions.
In the first clear sign that South Africa is prepared to use its economic leverage to break Zimbabwe's political logjam, President Thabo Mbeki's Cabinet was expected this week to discuss Mugabe's request for a $1-billion loan facility. The International Monetary Fund (IMF), meanwhile, is taking final steps in preparation to expel Zimbabwe for its persistent failure to pay a $295-million debt.
Government officials stress that no decision has yet been taken to extend a credit line, but that any help will be based on a South African assessment of what is appropriate for Zimbabwe's needs and will entail stringent terms.
These are understood to include the resumption of talks on constitutional reform between Zanu-PF and the opposition Movement for Democratic Change (MDC), an end to the Murambatsvina, or "drive out filth" campaign to demolish illegal structures in urban areas, and economic reforms.
Charamba, was adamant that Zimbabwe would reject conditions, particularly a call for new talks with the MDC. "We meet the MDC on a daily basis and dialogue with them in parliament," he said.
"Should the MDC request talks outside Parliament, it will be considered. But firstly, they would have to clarify their call for sanctions, which are now causing untold suffering to ordinary Zimbabweans. That would be our precondition."
He added: "I don't understand why South Africans will put a condition that we end Operation Clean Up when it has already ended. We are now at the next stage, Operation Hlalani Kahle (stay and live well), which will focus on housing delivery that goes beyond people affected by Operation Clean Up."
Nevertheless, the IMF's threatened withdrawal appears to have created a window of opportunity for the South African government to push ahead with plans for a "carrot-and-stick" package, which Finance Minister Trevor Manuel has been quietly punting for some time.
Zimbabwe needs hard currency to buy fuel, electricity and basic commodities. With its reserves exhausted, the government has been reduced to buying dollars on the black market to fund imports.
After a visit to Harare by Deputy President Phumzile Mlambo-Ngcuka and Deputy Finance Minister Jabu Moleketi, Manuel and Reserve Bank governor Tito Mboweni met officials, led by Zimbabwe Reserve Bank governor Gideon Gono, last Friday.
South African sources said that while the Zimbabwean delegation "painted a picture" of their currency crisis, any funding would be shaped by their own assessment of the situation. The credit facility was unlikely to amount to the reported $1-billion.
"It is far from a done deal," one official said. "The conditionalities will be tough and Mugabe isn't going to like them at all."
China is seen as Zimbabwe's most likely benefactor, as it makes no pretence of using aid to promote democracy and good governance.
Western and African diplomats are worried that the link between economic assistance and good governance, established by initiatives such as the New Partnership for Africa's Development (Nepad), may be undermined in China's drive for resource security.
In 2004 it agreed to a $2-billion line of credit for Angola after an IMF loan fell through when the MPLA government would not agree to anti- corruption conditions. The loan is backed by oil guarantees and commitments to employ Chinese construction firms in the rebuilding of infrastructure.
Mugabe has already concluded agreements to buy fighter jets and riot control gear from the Chinese government. Despite these concerns, observers in Harare are buoyed by what they see as a marked difference in pace and tone from South Africa and the African Union. MDC leader Morgan Tsvangarai embarked on a hectic round of African diplomacy ahead of the G8 summit at Gleneagles, meeting, among others, current AU chairperson and Nigerian President Olusegun Obasanjo to insist on the importance of linking democratic reforms and economic recovery.
Obasanjo and Mbeki, who split in 2003 over Zimbabwe's suspension from the Commonwealth, appear to have gone to Gleneagles united on that issue, even as Zimbabwe's urban demolition campaign refocused international attention on the crisis.
Chief government spokesperson Joel Netshitenzhe was reluctant to give details of the Cabinet discussions or the recent meetings with Zimbabwean officials. "The discussions have been about how we can assist in the Zimbabwean economic recovery programme as well as the normalisation of the political situation," he said.
"There is no agreement on a loan, but if the issue arises, it would be referred to Cabinet and a loan facility would have to be confirmed by Parliament."
Democratic Alliance leader Tony Leon, meanwhile, questioned whether South Africa could afford the loan, saying taxpayer funds should not be used to bail out a dictator.
In a speech in Cradock on Thursday, he said: "South Africa should not provide any assistance beyond emergency relief until the Zimbabwean government meets strict conditions, including, but not limited to: ending Operation Murambatsvina; opening formal, public negotiations with opposition parties under the supervision of the African Union and the United Nations; allowing international aid agencies to operate freely within Zimbabwe; and providing proof of all purchases made with money donated or loaned by South Africa."
UN condemns Zimbabwe slum blitz
A major UN report has called for an immediate end to Zimbabwe's slum clearance programme, declaring it to be in violation of international law.
Hundreds of thousands of homes in the country's shanty towns have been torched and bulldozed in recent months.
Zimbabwe says the demolitions aim to clean up urban areas and ensure building regulations are followed.
But the UN report, to be released in full later on Friday, says the policy is disastrous and inhumane.
The BBC's Susannah Price at UN headquarters in New York says the UK and US are likely to use the hard-hitting document to renew their calls for the UN to take immediate action.
To date, the Security Council has refused to call a meeting on the clearances.
Zimbabwe's President Robert Mugabe usually rejects any criticism, as coming from racists, or their stooges, opposed to his nationalist stance but correspondents say this will be more difficult with this report.
It was compiled by Kofi Annan's special envoy Anna Tibaijuka, a respected international diplomat from Tanzania, a country with close political links to Zimbabwe.
The report calls for an immediate halt to the slum clearances which it says have affected a total of two million people.
"While purporting to target illegal dwellings and structures [the operation] was carried out in an indiscriminate and unjustified manner, with indifference to human suffering," it says, according to an excerpt cited by the Associated Press news agency.
Zimbabwe says the policy - known as Operation Murambatsvina [Drive Out Rubbish] - is intended to crack down on black-market trading and other criminal activity in the slum areas.
But the report says, whatever the motive, the result is ill-conceived and inhumane.
Hundreds of thousands have been forced to seek shelter elsewhere as their homes are destroyed.
The opposition says the evictions are meant to punish urban residents, who have rejected President Robert Mugabe in favour of the opposition in recent elections.
The report has already been presented to Zimbabwe's government and will be presented to all UN members on Friday.