CZI calls for tripartite negotiations

Confederation of Zimbabwe Industries president Anthony Mandiwanza called for the reopening of tripartite negotiations involving the government, business and labour saying the environment had never been more positive.

The talks broke down after the labour body, the Zimbabwe Congress of Trade Unions, pulled out saying the negotiations were not addressing the workers’ diminishing buying power.

Mandiwanza who was optimistic about the new measures by central bank governor Gideon Gono also said his organisation was pressing for the central bank to forsake its withholding of 25 percent of export proceeds.

He admitted that some of Gono’s policies created new distortions but he said as industry he could not complain because some of their members were benefitting from the cheap money that Gono was providing.

United States embassy officials said though Mandiwanza was a dynamic, persuasive face for Zimbabwean industry he was not an independent player because he had deep sentimental and financial ties to the ruling ZANU-PF.

Full cable:

Viewing cable 04HARARE278, Industry Wants New Tripartite Dialogue

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This record is a partial extract of the original cable. The full text of the original cable is not available.

170813Z Feb 04

UNCLAS SECTION 01 OF 02 HARARE 000278

SIPDIS

STATE FOR AF/S

NSC FOR SENIOR AFRICA DIRECTOR JFRAZER

USDOC FOR AMANDA HILLIGAS

TREASURY FOR OREN WYCHE-SHAW

PASS USTR FLORIZELLE LISER

STATE PASS USAID FOR MARJORIE COPSON

¶E. O. 12958: N/A

TAGS: ECON EINV ETRD ELAB PGOV ZI

SUBJECT: Industry Wants New Tripartite Dialogue

¶1. Summary: Confederation of Zimbabwe Industries (CZI)

President Anthony Mandiwanza told us he is lobbying the

GOZ to restart the Tripartite Negotiating Forum (TNF)

between government, industry and labor. Mandiwanza

acknowledged that CZI is unlikely to oppose macroeconomic

distortions flowing from unrealistic exchange and

interest rates since importing firms belonging to the

organization are enjoying cheap access to forex and

credit. More encouragingly, CZI will continue to push

for more rational fiscal policy and an end to the GOZ’s

25 withholding on export proceeds. End Summary.

¶2. CZI President Mandiwanza and acting CEO Farai Zizhou

called on Amb Sullivan on Feb 12 to exchange ideas about

Zimbabwe’s sinking economy. Mandiwanza expressed

interest in the African Growth and Opportunity Act

(AGOA), Millennium Challenge Account (MCA) and U.S.

policies in the World Trade Organization (WTO). (Note:

Although Zimbabwe does not qualify for AGOA, there is

growing industry interest in the policy. Post plans to

address this with a series of seminars about AGOA in

March.)

¶3. Turning to Zimbabwean policy, Mandiwanza made the

following points:

– CZI wants to reengage government and the Zimbabwe

Congress of Trade Unions (ZCTU) in a new round of

Tripartite talks. They broke down early last year after

the exit of ZCTU, which believed negotiations were

failing to address workers’ diminishing buying power.

– CZI continues to support Reserve Bank (RBZ) Governor

Gideon Gono’s more innovative monetary policy. However,

Mandiwanza says he is lobbying government to address

fiscal policy as well. The ever-optimistic Mandiwanza

believes the “environment has never been more positive or

more open to change.” CZI will continue to press the GOZ

to forsake its withholding of 25 percent of export

proceeds.

– Mandiwanza conceded that Gono’s policies are opening a

new set of macroeconomic distortions. However, he said

CZI could not oppose sub-market exchange and lending

rates since many member firms benefit from these

initiatives. Mandiwanza praised the RBZ’s support for

banks’ dispersing of Z$878 billion (US$231 million)

through low interest loans to the private sector. Yet

since these loans carry low 30 percent interest rates

(versus 100-200 percent at market rates), the CZI chief

admitted that the “temptation for speculation is

extremely high.” On the other hand, he recognized that

pension funds – the source for many loans – are depleting

assets of their participants.

– Mandiwanza agreed that farmers resettled under the

GOZ’s fast-track land reform will have to be granted some

form of title-deed or land tenure. He considers it a

positive signal that the recent cabinet reshuffle appears

to transfer responsibility for land reform from hardline

Agriculture Minister Joseph Made to John Nkomo.

Comment

——-

¶4. Mandiwanza is a dynamic, persuasive face for

Zimbabwean industry. He is the CEO of Zimbabwe’s most,

almost only, successful parastatal, Dairiboard. At the

same time, he is hardly an independent player, since he

has deep sentimental and financial ties to the ruling

ZANU-PF. He has partnered with Mashonaland East Party

Chairman Ray Kaukonde, State Security Minister Nicolas

Goche, Minister Without Portfolio Eliot Manyika and

businessman Kenneth Musonhi to form Takepart Industries,

a consortium that has gained a stake in many businesses.

(Acting CEO Zizhou, who accompanied Mandiwanza and

oversees the day-to-day operations of CZI, is a large

beneficiary of land reform.) Thus we do not expect

Mandiwanza and CZI to attack the GOZ’s counterintuitive

economic policies as fervently as a truly independent

industry rep. Our hope is that a significant number of

ZANU-PF heavyweights like Gono and Mandiwanza are,

through their own business experience, developing a taste

for a more rational commercial environment.

Sullivan

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