Gono spins SDR allocation

Central bank governor Gideon Gono reportedly told The Herald that the International Monetary Fund had finally agreed to give Zimbabwe $500 million after months of behind the scenes interaction with the Reserve Bank of Zimbabwe when in fact this was a new allocation of special drawing rights to all IMF members.

“We have been in constant delicate discussions with IMF technical teams over the past few months and I am pleased to now say that we have gotten somewhere,” Gono told The Herald.

The United States embassy said after Gono’s spin-doctoring, Finance Minister Biti was likely to be pilloried by The Herald if he chose not to borrow the SDRs to fund a stimulus package.

Full cable:

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TAGS: PGOV PREL ASEC PHUM ECON ZI

SUBJECT: ZIM NOTES 09-08-2009

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¶1. SUMMARY

———–

Topics of the week:

– Codel Meets with Mugabe, Tsvangirai and MPs…

– Min. of Justice Withdraws Zimbabwe from SADC Tribunal…

– Fires Destroy Two White Homesteads…

– KP Chair Clarifies Zim Visit…

– Teachers Ignore Call to Strike…

– Mugabe Grants Amnesty to 1,500…

– S/GAC Visits Zim…

– Residents Angered by Council’s Profligacy…

– HRW: GPA Fails to Deliver…

– Gono Spins SDR Allocation…

– Cost of Food Basket for Family of Six Falls…- LonZim Mulls Secondary Listing in Zimbabwe…

– Industry Recovery a Curse for Power Utility…

– CZI Goes Zzzzz…

—————————–

On the Political/Social Front

——————————

¶2. Codel Meets with Mugabe, Tsvangirai and MPs… A five-member

Congressional delegation led by Rep. Greg Meeks (D-NY), and

including Rep. Melvin Watt (D-NC), Rep. Sheila Jackson-Lee (D-TX),

Rep. Marcia Fudge (D-OH), and Rep. Jack Kingston (R-GA), spent two

days in Harare meeting separately with President Mugabe, Prime

Minister Tsvangirai, Speaker Moyo and the three co-chairs of the

Parliamentary Select Committee on the Constitution. The delegation

discussed the performance of the inclusive government and the need

to resolve outstanding issues, while reiterating their support for

the Zimbabwean people. Despite several weeks of advance notice,

permission to meet with Mugabe came shortly before the group was

scheduled to depart Harare resulting in only a brief courtesy call.

The State media portrayed the rushed meeting as an indication that

the U.S. was not interested in meeting with ZANU-PF officials. See

Harare 707.

¶3. Min. of Justice Withdraws Zimbabwe from SADC Tribunal…

Minister of Justice Patrick Chinamasa (ZANU-PF) delivered a letter

to the SADC Tribunal dated August 7 informing the regional body’s

legal organ that Zimbabwe would no longer participate in Tribunal

proceedings until the establishment of the court has been ratified

by two-thirds of all members. Chinamasa said Zimbabwe would also no

longer be bound by the court’s decisions, which previously the

country had only participated in out of “respect for the SADC

Secretariat.” Legal opinions differ about whether or not Zimbabwe’s

ratification of the SADC Treaty extends to the un-ratified Protocol

that formed the Tribunal Court. The decision follows the Tribunal’s

November ruling favoring the case of a group of white farmers

contesting the seizure of their farms.

¶4. Fires Destroy Two White Homesteads… The farmhouses of white

commercial farmers Ben Freeth and his father-in-law Mike Campbell

were burnt down on August 31 and September 2, respectively. There

are different reports about the first fire, but the second fire

appears to be an act of arson stemming from the farmers’ refusal to

vacate their properties, despite having been granted relief by the

SADC Tribunal Court last November. The Freeths and Campbells have

QSADC Tribunal Court last November. The Freeths and Campbells have

also been victimized by violence for remaining on their land, as

evidenced by their April 2008 abductions and beatings at the hands

of ZANU-PF militias. Perhaps not coincidentally “Mugabe and the

White African,” a film about farm invasions and the SADC Tribunal

screened in Johannesburg on September 1.

¶5. KP Chair Clarifies Zim Visit… The Namibian Deputy Minister of

HARARE 00000714 002 OF 003

Mines and Kimberley Process Chairman Bernard Esau issued a statement

this week to clarify that his recent visit to Zimbabwe was a

“bilateral (trip) for informative purposes only.” Also this week,

Zimbabwe Minister of Mines and Mining Development Obert Mpofu told a

parliamentary committee that the government wants “50 percent

shareholding in joint ventures with investors, that’s not

negotiable.” For Esau’s statement, see:

http://www.kimberleyprocess.com/download/getf ile/925

¶6. Teachers Ignore Call to Strike… The Zimbabwe Teachers’

Association (ZIMTA) called for teachers to strike this week when the

third term started on September 2. ZIMTA and the Progressive

Teachers’ Union (PTUZ) engaged in long negotiations with Education

Minister David Coltart (MDC-M) and Finance Minister Tendai Biti

(MDC-T) over salaries. Teachers, like all civil servants, are being

paid on average just US $150 per month. PTUZ did not call on its

members to strike, acknowledging the two ministers’ efforts to

negotiate a raise while contending with empty government coffers. We

have heard that most teachers, regardless of union membership, were

back in class this week.

¶7. Mugabe Grants Amnesty to 1,500… Citing overcrowding and

limited resources in the prison system, President Mugabe granted

amnesty to 1,500 prisoners this week. All convicted female prisoners

and juveniles, except those serving sentences for serious crimes

such as murder, rape and other sexual offenses, car-jacking, armed

robbery and stock theft, would have the remainder of their sentences

curtailed.

¶8. S/GAC Visits Zim… Ambassador Eric Goosby, the Global AIDS

Coordinator for the President’s Emergency Plan for AIDS Relief

(PEPFAR) and lead for the U.S. Government’s engagement with the

Global Fund for AIDS, Tuberculosis and Malaria, was in Zimbabwe this

week, meeting with USAID, CDC, implementing partners and government

officials. Through PEPFAR, the USG is the leading provider of

bilateral HIV/AIDS assistance to Zimbabwe. Between 2004 and 2008,

the U.S. Government provided nearly $109 million to Zimbabwe to

support comprehensive HIV/AIDS prevention, treatment and care

programs.

¶9. Residents Angered by Council’s Profligacy… Harare residents

voiced their anger at the free-spending Harare City Council which

recently bought a Mercedes for the mayor and two Toyota Prados for

his directors, while failing to supply water to certain residential

areas. The total bill for the vehicles came to US$343,000. The

Combined Harare Residents’ Association (CHRA) has demanded a meeting

with Mayor Masunda over the matter and argues that the money could

have provided six month’s worth of water to the city’s dry suburbs.

¶10. HRW: GPA Fails to Deliver… This week, Human Rights Watch

published a new report documenting the Global Political Agreement’s

(GPA) failures to improve human rights in Zimbabwe. See:

http://www.hrw.org/en/reports/2009/08/31/fals e-dawn-0

Qhttp://www.hrw.org/en/reports/2009/08/31/fal se-dawn-0

———————————-

On the Economic and Business Front

———————————-

¶11. Gono Spins SDR Allocation… Following the International

Monetary Fund’s new allocation of Special Drawing Rights to all its

members, The Herald has portrayed the increase in Zimbabwe’s

reserves as a cash windfall (“IMF gives Zim US$500m”) resulting from

“months of behind-the-scenes interaction” between the IMF and

Reserve Bank of Zimbabwe Governor Gideon Gono. The GOZ mouthpiece

quotes Gono as saying, “We have been in constant delicate

discussions with IMF technical teams over the past few months and I

am pleased to now say that we have gotten somewhere.” Meanwhile,

HARARE 00000714 003 OF 003

back here on Earth, the RBZ is still going nowhere fast. But after

Dr. Gono’s spin-doctoring, Finance Minister Biti is likely to be

pilloried by The Herald if he chooses not to borrow the SDRs (at a

non-concessional interest rate) to fund a stimulus package. We

expect Biti will risk The Herald’s wrath and keep the SDRs in

reserve for now. See Harare 711.

¶12. Cost of Food Basket for Family of Six Falls… Data shows that

the cost of a food basket for a family of six monitored by the

Consumer Council of Zimbabwe (CCZ) fell from about US$500 in July to

US$495 in August, thanks to a 4 percent decline in food prices which

the director of CCZ attributed to a re-appearance of Zimbabwean as

opposed to imported products on supermarket shelves. Despite the

observed fall, the new level is still far above average earnings.

¶13. LonZim Mulls Secondary Listing in Zimbabwe… After surviving

a shareholder revolt that would have seen it selling Zimbabwean

assets, the London alternative investment market (AIM) listed LonZim

is working with advisors on a planned secondary listing on the

Zimbabwe Stock Exchange (ZSE). According to LonZim’s executive

chairman, the decision is primarily attributed to the expected

recovery reflected in rising equities on the ZSE.

¶14. Industry Recovery a Curse for Power Utility… The chief

executive officer of the Zimbabwe Electricity Supply Authority

(ZESA) told an energy forum on August 2 that an economic turnaround

will strain the country’s capacity to generate electricity. He

stated that ZESA would need US$900 million to refurbish its two main

electricity generating stations to ramp-up production and enable the

utility to cope with the expected demand as the economy recovers.

¶15. CZI Goes Zzzzz… The Confederation of Zimbabwe Industries

(CZI) held its annual conference this week. The two-day gathering

was sparsely attended, perhaps because captains of Zimbabwean

industry could not spare the US$240 registration fee. President

Mugabe was scheduled to speak, but failed to appear. The Prime

Minister and Finance Minister were also conspicuous by their

absence. Speakers from industry, government, and academia offered

numerous platitudes but no new ideas.

—————–

Quote of the Week

—————–

¶16. “Clearly, the Congressmen did not have the President on their

schedule. The meeting was incidental to their mission in Zimbabwe.”

— Presidential spokesman George Charamba, on a September 3 CODEL

meeting with Mugabe, requested over two weeks in advance.

PETTERSON

(27 VIEWS)