Gono sells his bank to Germans

Central bank governor Gideon Gono approved in record time the sale of 54 percent of Premier Bank to German investors in a deal worth $6 million unilaterally fast-tracking a waiver on the country’s stringent banking and indigenisation laws.

But it turned out he owned the bank together with his colleague, Reserve Bank of Zimbabwe supervision chief Norman Mataruka.

Gono and Mataruka reportedly owned 50 percent of the bank with the other 4 percent belonging to Mataruka’s brother-in-law.

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TAGS: PGOV PREL ASEC PHUM ECON ZI

SUBJECT: ZIM NOTES 01-08-2010

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¶1. SUMMARY

———–

Vacations Delay Negotiations…

Diamond Sale Announced Then Cancelled…

MDC-T Investigating Corrupt Ministers…

Zim Ambassador Invades Malaysian-Owned Farm…

Teachers and Mine Workers Threaten Strikes…

Michael Jackson’s Ghost Sighted in Zimbabwe…

Counterfeit US$50,000 Found in Toilet…

Gono Sells Own Bank to German Investors…

Electricity Utility Seals a Deal with Botswana Power Company…

Mobile Phone Giant in Talks with State-Owned Mobile Operator…

Economic Woes Take their Toll on Redcliff Town…

———————————

On the Political and Social Front

———————————-

¶2.   Most Zimbabweans remained on vacation this week. President

Mugabe is rumored to be in Asia and Prime Minister Tsvangirai has

been in Dubai and the Seychelles. The principals are expected to

return mid-January at which point they and their negotiators will

attempt to resolve the remaining outstanding issues: the

appointments of Gono, Tomana, Bennett, and the governors. Parliament

will also re-open mid-January.

¶3. On Thursday The Herald announced that Mbada Diamonds, one of the

companies currently digging in the controversial Marange diamond

fields, was planning to sell 300,000 carats (approximately 60 kgs)

of diamonds in an auction on January 7 to international buyers. This

came as a surprise since the Kimberley Process action plan on

Zimbabwe that was signed in November stipulated that no diamonds

could be exported without approval of a monitor, who has not yet

been designated. In a quick about-face, announcements late Thursday

cancelled the sale, with the Deputy Minister of Mines Murisiwi

Zwizwai explaining that the government was not aware of the sale and

had not approved it.

¶4. The MDC-T announced that it has set up a 13 member team to

investigate reports of alleged corruption by three of its (unnamed)

cabinet ministers, several law makers, and councilors and vowed to

dismiss those found guilty. Recently the party took drastic measures

to weed out corruption from its ranks and dismissed the mayor and

suspended a councilor from Chitungwiza. The party announced that it

will adopt a code of conduct that will require its ministers,

legislators, and councilors to declare their interests and assets as

a measure to fight corruption.

¶5. On Tuesday, Zimbabwe’s Ambassador to Tanzania, Edzai Chimonyo,

was ordered by the High Court to vacate a banana plantation he

occupied over the festive season in Manicaland, but the retired army

general refuses to leave the farm. The property, Fangundu Farm,

southeast of Mutare, is owned by a Dutch and Malaysian company and

is protected by a Bilateral Investment Promotion and Protection

Agreement (BIPPA). Chimonyo has reportedly ordered armed soldiers

onto the property and has begun harvesting bananas in spite of

Tuesday’s High Court order. A Lands Ministry official in Mutare

described the High Court ruling as “just a piece of paper.”

Qdescribed the High Court ruling as “just a piece of paper.”

¶6. Demanding increased salaries, teachers’ and mine workers’ unions

are threatening to go on strike. Teachers from both of the major

teachers’ unions have reiterated their demand, which they’ve been

making for the last year, for a wage that complies with the poverty

datum line, most recently estimated at US$600. The next semester is

scheduled to begin on Tuesday January 12. Like other civil servants,

most teachers make US$150 per month. Similarly, the Associated Mine

Workers’ Union of Zimbabwe is threatening to strike after failing to

reach an agreement with the Chamber of Mines. The Chamber said they

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were only prepared to pay a minimum wage of US$80, a reduction from

the previous minimum wage of US$100, while the mineworkers were

demanding a minimum wage of US$200.

¶7. Just when we thought we’d heard it all, we learned this week

that The King of Pop has chosen a Catholic girls school in Harare as

his preferred haunting grounds. According to press reports, during a

nativity play at St Mary’s Mission School, children dressed as Mary,

Joseph, and the Wise Men were on stage when suddenly the lights went

out, then a “ghost-like being” appeared on stage waving a

white-gloved hand. The terrified students emptied the hall along

with the supervising nuns. Almost all students later agreed that it

was Michael Jackson. “It definitely was MJ” noted Theresa, a student

at the school. “It was his face and his clothes. He smiled and waved

at us.” We’re not convinced, but this is Zimbabwe, where anything is

possible.

¶8. In other “even we can’t make this up” news, a Harare man was

arrested after he was found hiding fake bills totaling US$50,000 in

a toilet at a stationery shop, according to The Herald. This is one

of several recent arrests of producers and dealers in counterfeit

currency.

———————————–

On the Economic and Business Front

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¶9. In a rare spasm of efficiency, Reserve Bank of Zimbabwe (RBZ)

Governor Gideon Gono approved in record time the sale of 54 percent

of a local financial institution, Premier Bank, to German investors.

It happens that Gono and an ally were Premier Bank’s main

shareholders. The deal worth US$6 million saw the RBZ unilaterally

fast-tracking a waiver on Zimbabwe’s stringent banking and

indigenization policies to allow foreigners a controlling stake in

order to facilitate recapitalization. Gono and his crony, RBZ

supervision chief Norman Mataruka, reportedly owned 50 percent of

Premier Bank, with a further 4 percent belonging to Mataruka’s

brother-in-law.

¶10. The Zimbabwe Electricity Supply Authority (ZESA) has entered

into a contract worth US$8 million with the Botswana Power Company

that will see it revive the Bulawayo Thermal Power Station.

According to ZESA, the deal will enable the company to produce 90

megawatts of electricity with 40 megawatts being exported to

Botswana while the remainder will be consumed locally, thereby

reducing load shedding.

¶11. According to a report in the Financial Gazette, MTN has set its

sights on acquiring a significant stake in Zimbabwe’s state-owned

mobile phone provider, NetOne. Although NetOne executives have

refused to comment on developments, officials from MTN have been

camped at NetOne’s offices for nearly a month now. Many analysts

believe that a deal is imminent.

¶12. The town of Redcliff in the Midlands has reportedly collapsed

following the closure of the town’s main industry, Zimbabwe Iron and

Steel Company. Most companies operating in the town have stopped

QSteel Company. Most companies operating in the town have stopped

paying local taxes to the Redcliff council, citing viability

problems, while residents are also not paying because of difficult

economic conditions. As a result of these problems, the Town Council

is failing to settle its bills with electricity and telephone

services providers ZESA and TelOne.

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Quotes of the Week

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¶13. “The entire process of mining, transportation to marketing is

being done in compliance with the requirements of the Kimberley

Process.” — Robert Mhlanga, Chairman of Mbada Diamonds, The Herald,

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January 7, 2010.

¶14. “The due process for selling diamonds produced in Zimbabwe

involves the Minerals Marketing Corporation of Zimbabwe, ZRP

Minerals Unit, the Ministry of Mines and Mining Development, and

Zimbabwe Mining Development Corporation where diamonds from Marange

are concerned… In the case of Mbada Diamonds, this process is yet

to happen.”

— Ministry of Mines Permanent Secretary Thankful Maskukutwa,

The Zimbabwe Independent, January 8, 2010.

RAY

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