Econet expansion aimed at keeping foreign competition out

Econet was to embark on a US$93.9 million expansion to increase its capacity from 1.2 million subscribers in June to 5 million by the end of 2009.

Reports said the move was aimed at keeping foreign companies like South Africa’s MTN, which was looking for a local partner, from gaining a foothold in Zimbabwe where mobile penetration was 10 to 12 percent.

The approval of the US$93.9 million investment from the parent company was queried after the company’s extraordinary meeting with reports saying auditing firm Deloitte had inflated ballots in favour of the parent company.

Full cable:

Viewing cable 09HARARE491, ZIM NOTES 06-12-09

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R 121151Z JUN 09

FM AMEMBASSY HARARE

TO RUEHC/SECSTATE WASHDC 4600

INFO RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE

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RUCPDOC/USDOC WASHDC

UNCLAS SECTION 01 OF 03 HARARE 000491

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 06-12-09

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SUMMARY – Topics of the week

—————————-

– The Herald Spins TsvangiraiQs Trip

– ZANU-PF MPs Stalling Constitutional Reform

– Human Rights Violations on the Rise

– TsvangiraiQs Amcit Niece Involved in Land Seizure

– Journalists Want Contempt of Court Charges against Minister

– AbducteesQ Case Delayed

– Human Rights Lawyer Summoned for Trial

– Furor Over Delayed, Questionable Exam Results

– Harare Ranked WorldQs Worst City

– COMESA Wraps Up

– African Development Bank President Briefs Donors

– Cost of Living Up 2 percent in May

– IMF Returning on Staff Visit

– Econet Expands

– Retailer Constrained by Lack of Working Capital

– Sales of Government Rag Up

– Quotes of the Week

—————————–

On the Political/Social Front

—————————–

¶1. The Herald Spins TsvangiraiQs Trip… With Prime Minister Morgan

Tsvangirai on an official visit to the U.S., Canada, and Europe the

ZANU-PF mouthpiece The Herald has been spinning his trip as a

solicitation for a lifting of sanctions and re-engagement in the

form of aid. This week, the front page has featured distorted

headlines that appear to set Tsvangirai up for failure, such as

QDutch govt turns down TsvangiraiQ and QPM, Obama clash looms.

Tsvangirai met with Secretary Clinton on June 11 and will meet with

President Obama on June 12.

¶2. ZANU-PF MPs Stalling Constitutional Reform… ZANU-PFQs

parliamentary caucus is forcing the postponement of public hearings

for the constitution-making process. They are demanding staggering

stipends of US$6,000 per month, twin-cab trucks, and travel stipends

to lead meetings to inform the public on the process. Hearings have

been delayed until at least June 24 while parliament continues

efforts to consolidate proposals to donors to help fund the

process.

¶3. Human Rights Violations on the Rise… Zimbabwe Human Rights NGO

Forum releaseda report documenting human rights abuses between

January and April 2009. The report revealed increases in violence

and repression Q evidence of the continued polarization in Zimbabwe.

In April, the forum recorded a total of 204 violations versus 155

in March. For more details, see: www.kubatana.net/html/

archive/hr/090606hrf.asp?sector=HR

¶4. TsvangiraiQs Amcit Niece Involved in Land Seizure… The press

revealed this week that American citizen and distant relative of

Prime Minister Tsvangirai, Dr. Arikana Chiyedzo Chihombori, is

attempting to take over a white-owned 70 hectare farm in central

Zimbabwe with a flawed offer letter. This is the same woman that

appeared with Tsvangirai in photographs at Jacob ZumaQs recent

presidential inauguration. Tsvangirai has affirmed they are

related, but denies having a personal relationship with her.

¶5. Journalists Want Contempt of Court Charges against Minister…

Q5. Journalists Want Contempt of Court Charges against Minister…

Four journalists have decided to sue Information Minister Webster

Shamu and his permanent secretary George Charamba for contempt of

court. Despite a High Court ruling on June 5 that declared the Media

and Information Commission defunct and no journalist should be

HARARE 00000491 002 OF 003

required to register with it, the journalists were barred from

covering the COMESA summit last weekend on the basis that they were

not part of a list supplied by the Ministry of Information.

¶6. AbducteesQ Case Delayed… The trial of four abductees kicked

off on June 9. In an impassioned recounting of events, defense

attorney Alec Muchadehama asked High Court Judge Tendai Uchena to

refer the case to the Supreme Court in light of the numerous

violations of rights the accused experienced when they were

abducted, tortured, and turned over to police and held in prison for

several weeks without ever properly appearing before the court.

According to Article 24 of the Zimbabwean constitution, the referral

must be granted unless the judge considers the questions raised

Qmerely frivolous or vexatious.Q Justice Uchena promised to give

his decision on June 22.

¶7. Human Rights Lawyer Summoned for Trial… On June 9,

Muchadehama was served with a summons to appear for trial on June 17

on charges of obstructing justice. Muchadehama was arrested last

month for obstructing justice; a lower court later removed the case

from remand for lack of evidence. Many believe the trial on these

trumped-up charges is pure harassment of one of ZimbabweQs most

renowned lawyers by Attorney General Johannes Tomana and lead

prosecutor Florence Ziyambi.

¶8. Furor Over Delayed, Questionable Exam Results… The Zimbabwe

Secondary Schools Examination Council (ZIMSEC) finally released

national Ordinary (O) Level exam results on June 5 — four months

late. Many results have either been recorded as missing or are

wildly inconsistent with school-predicted results for students.

Minister of Education David Coltart decreed that students currently

pursuing A Level studies who failed their O level exams must leave

school and repeat their O level courses. This will negatively

affect thousands of students whose parents already paid for uniforms

and school fees after the Minister first insisted that schools take

them and open A level courses without O level results.

¶9. Harare Ranked WorldQs Worst City… The Economist Intelligence

Unit ranked Harare 140 of 140 world cities based on stability,

health care, culture and environment, education, and infrastructure.

Six of the bottom ten are in Africa; Vancouver topped the list.

————————–

Economic and Business News

————————–

¶10. COMESA Wraps Up… The 13th Common Market of Eastern and

Southern Africa (COMESA) summit wrapped up in Victoria Falls this

week. During the meeting, COMESA Chairman President Mugabe commended

the launch of the COMESA customs union. Under the union, all 19

members will impose a similar tariff on goods from outside the

region of zero to 25 percent. Sudanese President Omar al-Bashir also

attended the summit, where he was warmly welcomed by Mugabe.

Qattended the summit, where he was warmly welcomed by Mugabe.

¶11. African Development Bank President Briefs Donors… AFDB

President Donald Kaberuka visited Zimbabwe for the COMESA summit and

spent a day in Harare where he briefed donors this week on his views

of the inclusive government and investment climate. He advised that

the time had not yet come to fully re-engage.   See Harare 488

¶12. Cost of Living Up 2 percent in May… The Consumer Council of

Zimbabwe reported that the monthly cost of living for a family of

six rose 2 percent in May to US$437 from US$427 in April, mainly due

to increases in rent and the cost of public utilities, health,

education and clothing. The cost of food fell by 0.5 percent in

May.

¶13. IMF Returning on Staff Visit… Following on its March 2009

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Article IV mission and the visits of technical assistance teams in

May and June, an IMF team is scheduled to arrive on June 21 for a

nine-day staff visit.

¶14. Econet Expands… Econet has secured US$93.9 million in funding

from its parent company, under the chairmanship of Strive Masiyiwa,

to increase capacity from 1.2 million mobile phone subscribers to 5

million by year end. By expanding its subscriber base, Econet is

seeking to keep foreign competition, e.g. MTN, from gaining a

foothold in Zimbabwe where mobile penetration is currently only 10

percent-12 percent. Since the introduction of U.S. dollar tariffs,

usage measured in minutes has dropped to 10 percent of

pre-dollarization levels; previously price distortions in

Zimbabwe-dollar tariffs had made mobile calls and texting dirt

cheap. EconetQs share price has risen 135 percent since the local

stock exchange re-opened earlier this year.

¶15. Retailer Constrained y Lack of Working Capital…

Wholesaler/retailer Red Star Holdings reported an improvement in

operating capacity from below 15 percent to 33 percent at its

branches since dollarization. It said that a further increase was

contingent upon accessing credit facilities for working capital to

increase stocking levels. Our contacts in the retail sector, on the

other hand, tell us that the extremely low level of disposable

income is dampening recovery in the sector.

¶16. Sales of Government Rag Up… Sales volumes of The Herald have

climbed to 30,000 copies a day from a low of 8,000 in December 2008.

Circulation for The Herald peaked in the mid-1990s with 100,000

copies.

——————

Quotes of the Week

——————

¶17. QHe must tell the U.S. leader that the blockade has directly

led to the death of countless children who could not get essential

medicines from public hospitals… With standards of living plunging

horribly, malnutrition killed many in this country and most of our

people were reduced to sorry hunters and gatherers… When this

happens on a large scale, it deserves theof genocide. In many

ways, the Western sanctions had the impact of genocide.

— From the editorial QWhat Tsvangirai Must Tell Brother ObamaQ in

the Bulawayo-based ZANU-PF mouthpiece The Chronicle on June 11,

¶2009.

¶18. “You can’t compare the President and Prime Minister. It is only

the President who gets coverage when he is out of the country. This

is because of protocol and resource constraints.”

— ZBC Chief Executive Officer Happison Muchetere on the Zimbabwean

government mediaQs refusal to provide PM Tsvangirai with a media

crew to cover his travel to North America and Europe.

MCGEE

(84 VIEWS)