Air Zimbabwe was losing US$4 million every month and could not meet its operating costs, its then chief executive Peter Chikumba told the Parliamentary Portfolio Committee on Transport and Infrastructure.
The airline was operating at 40 percent capacity and had a foreign debt of US$28 million.
This did not include the US$50 million to suppliers of its Chinese MA60s aircraft.
The Civil Aviation Authority of Zimbabwe was reported to be US$150 million in the red.
Full cable:
Viewing cable 09HARARE467, ZIM NOTES 06-05-09
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|
Reference ID |
Created |
Classification |
Origin |
VZCZCXRO2690
RR RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN
DE RUEHSB #0467/01 1561440
ZNR UUUUU ZZH
R 051440Z JUN 09
FM AMEMBASSY HARARE
TO RUEHC/SECSTATE WASHDC 4569
INFO RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE
RUEHUJA/AMEMBASSY ABUJA 2299
RUEHAR/AMEMBASSY ACCRA 2866
RUEHDS/AMEMBASSY ADDIS ABABA 2985
RUEHRL/AMEMBASSY BERLIN 1424
RUEHBY/AMEMBASSY CANBERRA 2248
RUEHDK/AMEMBASSY DAKAR 2615
RUEHKM/AMEMBASSY KAMPALA 3033
RUEHNR/AMEMBASSY NAIROBI 5474
RUEHGV/USMISSION GENEVA 2157
RHEHAAA/NSC WASHDC
RHMFISS/EUCOM POLAD VAIHINGEN GE
RUZEJAA/JAC MOLESWORTH RAF MOLESWORTH UK
RHEFDIA/DIA WASHDC
RUEAIIA/CIA WASHDC
RUCPDOC/USDOC WASHDC
UNCLAS SECTION 01 OF 03 HARARE 000467
SIPDIS
AF/S FOR B. WALCH
ADDIS ABABA FOR USAU
ADDIS ABABA FOR ACSS
NSC FOR SENIOR AFRICA DIRECTOR MICHELLE GAVIN
TREASURY FOR D. PETERS
STATE PASS TO USAID FOR LDOBBINS AND JHARMON
COMMERCE FOR BECKY ERKUL
E.O.12958: N/A
TAGS: PGOV PREL ASEC PHUM EAGR ECON EFIN ZI
SUBJECT: ZIM NOTES 06-05-09
—————————-
SUMMARY – Topics of the week
—————————-
– Some Issues Resolved, SADC Asked to Help
– Another MDC MP Charged With Rape
– The Herald Spins Secretary ClintonQs Comments
– Political Violence Resurface
– Not Your Average American Farm
– WOZA Trial Start
– 2 Protest Marches, 0 Arrests
– Germans Announce Humanitarian-Plus Package
– More Indications of Return to Economic Normalcy
– Government Urged to Get Mining Policy Right
– Cereal Shortage Projected for 2009/10
– Business Uptick
– But Credit Scarce
– Air Zimbabwe Struggling
– Quote of the Week
—————————–
On the Political/Social Front
—————————–
¶1. Some Issues Resolved, SADC Asked to Help… On May 21 Prime
Minister Morgan Tsvangirai announced the three parties had
resolved some of the outstanding issues, including governorships,
permanent secretaries, and ambassadorships. However, Reserve Bank
Governor Gideon Gono and Attorney General Johannes Tomana continue
to be sticking points, and the MDC-T
has called on SADC to review their appointments. See Harare 431.
¶2. Another MDC MP Charged With Rape… Kwekwe Central MP Blessing
Chebundo was arrested on May 19 on accusations of raping a
13-year-old girl in January. Chebundo has been an MP since 2000 and
is a member of the MDC executive council. At least two other MDC MPs
have been arrested on rape charges in the last year; none of the
cases have held up in court. Separately, MP Mathias Mlambo remains
in jail in Chipinge pending a bail hearing that was rescheduled from
May 15 for May 22.
¶3. The Herald Spins Secretary ClintonQs Comments… In an interview
earlier this week with South AfricaQs SABC news, Secretary of State
Hillary Clinton said that MugabeQs departure would be Qin the best
interests of everyone.Q The ZANU-PF mouthpiece paper, The Herald,
put a positive spin on the story with a front-page article titled
QU.S. acknowledges GovernmentQs progress.Q The article included the
SecretaryQs remark that QweQre encouraged by the new unity
governmentQ but omitted her quote on Mugabe.
¶4. Political Violence Resurfaces… ZANU-PF supporters attacked MDC
followers in two separate incidents this week. In Bulawayo, 15 MDC
youths were arrested after ZANU-PF youths attempted to violently
block elections to the Provincial Youth Council. ZANU-PF youths
expected to win numerous seats to the Youth Council, officially part
of a youth advisory council to government, but reportedly launched a
violent campaign to stop the election when they realized they were
outnumbered and likely to lose. Riot police arrived at the
Mhlanlandlela government complex where the fighting broke out and
arrested 15 MDC youths. Separately, about 60km north of Harare,
several MDC supporters were taken from their homes on May 18 and
beaten by suspected CIO operatives after attending a memorial
Qbeaten by suspected CIO operatives after attending a memorial
service. One victim was hospitalized for his injuries. The service
commemorated the one year anniversary of a brutal incident of
election violence in May 2008 that killed five MDC supporters.
After the ceremony on May 16, 2009, a suspected CIO agent ordered
everyone who had attended to surrender their MDC t-shirts.
HARARE 00000467 002 OF 003
¶5. Not Your Average American Farm… Senate President Edna Mazongwe
recently seized a productive multi-million-dollar-a-year citrus farm
in central Zimbabwe and has reportedly turned the farm over to her
daughter, who is an American citizen by birth. During the violent
seizure, several farm workers were seriously injured, including one
who was shot in the knee. See Harare430.
¶6. WOZA Trial Starts… On May 19, eight women and two lawyers with
Zimbabwe Lawyers for Human Rights (ZLHR) faced trial for
allegedly disturbing the peace on February 10. All were arrested in
downtown Harare during Women of Zimbabwe Arise (WOZA)Qs annual
ValentineQs Day march. During the trial, police Superintendent
Lawrence Chinhengo testified that none of the
women were hit when they were arrested because officers QdidnQt have
time.Q The trial will continue on May 28.
¶7. 2 Protest Marches, 0 Arrests… On Monday, over 1000 members of
Women of Zimbabwe Arise (WOZA) and Men of Zimbabwe Arise (MOZA) held
a march in Bulawayo to articulate their demands from the
transitional government. On Tuesday in Harare, 50 lawyers marched to
the Ministry of Justice to present a petition to Minister Chinamasa
to protest government-sponsored intimidation and harassment of
lawyers. The protest followed the arrest of Alec Muchadehama, who
was granted US$100 bail on May 15. To both groupsQ pleasant
surprise, police did not interfere and no one was arrested in either
march.
¶8. Germans Announce Humanitarian-Plus Package… On May 19, Germany
announced 10 million eurosQ5 million for water and
sanitation, 2 million for human rights, conflict, and
democratization, and 3 million for other projectsQin new support to
Zimbabwe. The water and sanitation assistance will include
infrastructure repair in urban centers. Also this week, various
newspapers have reported that the World Bank has approved US$22
million in small grants for Zimbabwe. The World Bank has refuted the
report.
————————–
Economic and Business News
————————–
¶9. More Indications of Return to Economic Normalcy… British
American Tobacco (BAT) noted that the local market has moved
back from QstickQ sales of individual cigarettes that prevailed in
the last couple of years to the Qpack marketQ in an early indication
of slightly rising disposable income. In a further signal of the
return of normalcy, several oil companies are recalling their fuel
coupons, as fuel is now adequately and legally available for hard
currency cash. Fuel coupons had become a surrogate currency as the
Zimbabwe dollar swooned in value last year.
¶10. Government Urged to Get Mining Policy Right… Presenters at a
conference organized by the Chamber of Mines of Zimbabwe
on May 7 urged government to implement prudent policies to attract
investment in mining and restore the sector to its former position
Qinvestment in mining and restore the sector to its former position
of contributing close to 7 percent to GDP and over half of total
exports. Speakers advocated pursing indigenization through joint
ventures with foreign investors rather than through legislation.
However, even under good policies, ZimbabweQs mining industry faces
the immense constraint of electric power shortages. See Harare 417.
¶11. Cereal Shortage Projected for 2009/10… Preliminary results
from the Crop and Food Supply Assessment Mission (CFSAM)
conducted by FAO, WFP, and the Ministry of Agriculture from May 3-11
reveal a cereal shortage of 0.47 MT for 2009/2010 (based on a
population of 12 million). Field work confirms an estimated national
HARARE 00000467 003 OF 003
yield of 1.51 million MT of maize and small grains, short of the
projected requirement of 2.18 million MT. Although seed houses are
well stocked, there are few buyers due to lack of liquidity
especially in the A2 and large-scale farming sector. On the positive
side, maize cereal prices have dropped
from $.50/ kg a few months ago to $0.12 to $0.23/kg. The final CFSAM
report will be released in early June.
¶12. Business Uptick… CFI Holdings reported improved availability
and falling prices of stock feed since the liberalization of grain
marketing. Capacity utilization at its major miller Victoria Foods
has crept up to 30 percent with the wheat line running at 50
percent; at its stock feed manufacturer Agrifoods, capacity
utilization is 24 percent and rising. Cement manufacturer Lafarge is
running at 70 percent capacity, up from 62 percent last year with
output evenly split between exports and domestic sales. Retention of
100 percent of export
proceeds and the end of price controls hugely benefitted the group.
However, the liquidity crunch continues to suppress demand.
¶13. But Credit Scarce… Working capital remains scarce as
individuals and companies fail to maintain significant bank account
balances due to a lack of disposable income/reserves, as well as
weak confidence in the banking sector. The Zimbabwe
Independent reported today that the bulk of bank deposits in
Zimbabwe, which total only US$263 million, was only available
short-term at a time when industry sorely needs long-term credit.
¶14. Air Zimbabwe Struggling… The national airline is incurring
US$4 million in losses every month and cannot meet its operating
costs, according to Air Zimbabwe CEO Peter Chikumba in oral evidence
before the Parliamentary Portfolio Committee on
Transport and Infrastructure. The airline, operating at 40 percent
capacity, has a foreign debt of US$28 million, not counting US$50
million to suppliers of its Chinese MA60s aircraft. The Civil
Aviation Authority of Zimbabwe is reported to be US$150 million in
the red.
¶15. Quote of the Week:
QOn several occasions, the distinguished minister (Tendai Biti) has
accused me of killing this economy through printing money…I have
suffered and continue to suffer abuse and ridicule at a time when
you as prime minister have been telling the nation that by-gones are
by-gones and that we need to move forward
— Reserve Bank Governor Gideon GonoQs plea to Prime Minister Morgan
Tsvangirai in a 15-page letter dated May 11 in
which he also asked for immunity from future prosecution. On May 21,
TsvangiraiQs office said they had never received the
letter, which was first published in the Zimbabwe Times. The entire
letter is at: http://
www.thezimbabweindependent.com/index.php/loca l/
22666-biti-has-personal-vendetta-againsts-me- gono
MCGEE
(26 VIEWS)
