More woes for Air Zimbabwe

Problems for Air Zimbabwe continued with reports saying the national airline was technically insolvent and was on the verge of collapse, just six months after the formation of the inclusive government.

The airline was said be planning to slash wages by 50 percent and send some workers home in a last-ditch effort to stay in business.

Air Zimbabwe’s monthly wage bill for its workforce of 1 420 was said to be US$1.2 million.

The airline’s chief executive Peter Chikumba said he needed only half the current number of workers.

Full cable:

Viewing cable 09HARARE651, ZIM NOTES 08-07-2009

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STATE PASS TO USAID FOR L.DOBBINS AND J. HARMON

COMMERCE FOR ROBERT TELCHIN

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E.O.12958: N/A

TAGS: PGOV PREL ASEC PHUM ECON ZI

SUBJECT: ZIM NOTES 08-07-2009

———–

¶1. SUMMARY

———–

Topics of the week:

– VP Msika Dies…

– Parliament Recommends 12 for Media Commission…

– Protesting Students Arrested…

– GOZ Forms Diamond Committee…

– ZLHR Wins ABA award…

– Magistrate Acquitted…

– Women Speak Out on Political Rape…

– Hillary Who?

– Bus Company Denies Juju…

– Mayor to Get New Merc?

– Air Zimbabwe Losing Altitude…

– Zim Dollar Casts Shadow from its Grave…

– Farm Output Expected to Decline…

—————————–

On the Political/Social Front

——————————

¶2. VP Msika Dies… Vice President Joseph Msika died on Wednesday

at 85 after years of poor health. Leaders from all political

parties have issued statements praising the late Msika who has been

a leader since the liberation struggle. Msika was named a national

hero by the ZANU-PF politburo and will be buried at hero’s acre. We

believe Mugabe will appoint another Ndebele politician to replace

Msika, but there are no clear-cut favorites. See Harare 643.

¶3. Parliament Recommends 12 for Media Commission… Parliament

concluded interviews this week for the Zimbabwe Media Commission

(ZMC) and the Broadcasting Authority of Zimbabwe (BAZ), recommending

12 nominees for appointment by the President. Mugabe is bound by

law to appoint eight ZMC commissioners and a chairperson. After

former Media and Information Commission Chairman Tafataona Mahoso

received a low score and did not make the short list of nominees,

eliciting anger among some ZANU-PF stalwarts who called the process

biased.   Media and human rights lawyer Chris Mhike received the

top score in the interviews.   Other nominees include journalists

Nqobile Nyathi, Mathew Takaona, Miriam Madziwa, Henry Muradzikwa,

Godfrey Majonga and Wabata Munodawafa, academic Rino Zhuwarara,

pastor Useni Sibanda, Roger Stringer, academic Clemence Mabaso and

banker Millicent Mombeshora.

¶4. Protesting Students Arrested… 10 of the 14 students arrested

Wednesday at the University of Zimbabwe have been released. Four

others, including Zimbabwe National Students’ Union (ZINASU)

president Clever Bere, remain in police custody. The students were

protesting high fees at the university, which now range from

US$400-600. The University re-opened this week, and students who

have not paid fees have been barred from attending lectures and from

the library.

¶5. GOZ Forms Diamond Committee… Defense Minister Emmerson

Mnangagwa, Finance Minister Tendai Biti, Mines Minister Obert Mpofu

and Trade Minister Welshman Ncube have reportedly formed a committee

to respond to concerns raised by the Kimberley Process. This is

apparently in response to a letter the KP Chair, Namibian Bernard

Esau, sent to the government this week regarding concerns for the

safety of Zimbabweans who met with the KP delegation members during

their visit in late June.

¶6. ZLHR Wins ABA award… Zimbabwe Lawyers for Human Rights (ZLHR)

Q6. ZLHR Wins ABA award… Zimbabwe Lawyers for Human Rights (ZLHR)

received the American Bar Association (ABA)’s Rule of Law award at

the ABA’s national congress in Chicago on August 1. In her remarks,

ZLHR Director Irene Petras acknowledged the economic progress made

in Zimbabwe but decried ongoing human rights abuses.

HARARE 00000651 002 OF 003

¶7. Magistrate Acquitted… Mutare acting regional magistrate

Livingstone Chipadza was acquitted this week of criminal abuse of

duty. The State contended that Chipadza showed favor in sanctioning

the release of MDC-T Treasurer and Deputy Agriculture

Minister-designate Roy Bennett from remand prison in Mutare in

February. After allowing Bennett’s release, Chipadza was arrested

and held for several days in the notoriously overcrowded and filthy

Mutare jail before being released on bail.

¶8. Women Speak Out on Political Rape… A local NGO has published

a video featuring stories of political rape during last year’s

election violence. See: http://hub.witness.org/en/HearUs

ViolenceAgainstWomeninZimbabwe2.

¶9. Hillary Who? While press around the rest of Africa is abuzz

with news of Secretary Clinton’s ongoing visit to Africa, the

government-run local press has not mentioned her ongoing, historic

visit.

¶10. Bus Company Denies Juju… This week the government revoked

the license of Mhunga Bus Services after a head-on crash killed 40

people on August 2. Earlier this year a Mhunga bus was involved in

an accident that killed 30. Since 1995, 200 people have died in

accidents involving Mhunga’s buses. In an article in The Herald,

the company director denied that Mhunga had used juju to enhance its

business, following allegations that juju-gone-wrong had caused the

crashes.

¶11. Mayor to Get New Merc? Harare’s mayor, MDC-T’s Muchadeyi

Masunda is getting a new Mercedes at the cost of USD153,000 to the

Harare city council, according to the government mouthpiece The

Herald.

———————————–

On the Economic and Business Front

———————————-

¶12. Air Zimbabwe Losing Altitude… Local press reports that Air

Zimbabwe is technically insolvent and “on the verge of collapse.”

The airline may slash wages by 50 percent and send some workers home

in a last-ditch effort to stay in business. Air Zimbabwe’s monthly

wage bill is USD 1.2 million for its workforce of 1,420. AirZim CEO

Peter Chikumba has said he needs only half this number of workers.

The GOZ is the airline’s sole shareholder and has reportedly sought

to sell a 60-percent stake in return for a capital injection of USD

750 million.

¶13. Zim Dollar Casts Shadow from its Grave… Finance Minister

Tendai Biti has said more than once that he had put “a tombstone on

the grave of the Zim dollar,” but the public is getting different

signals from the other side of Zimbabwe’s disunited unity

government. Zimbabweans generally see the reintroduction of a

national currency as inevitable, but much depends on the timing.

Business leaders and bankers told us this week that uncertainty over

resurrection of the Zim dollar makes people nervous about depositing

their U.S. dollar balance in the banks, and that further reduces the

banks’ capacity to make loans. With Zimbabwe’s dollarized economy

now showing signs of life, lack of credit is now a universal

Qnow showing signs of life, lack of credit is now a universal

complaint within the business community.

¶14. Farm Output Expected to Decline… Production estimates

published this week by the Commercial Farmers’ Union (CFU) show

output declining in 2009 for all crops except maize and sorghum.

The CFU projects a 28-percent increase in maize output this year

over 2008 with an expected harvest of 534 tons. Production of

cotton is expected to fall to 210 tons, down 6 percent, and

flue-cured tobacco output will be down 18 percent to 40 tons. The

CFU’s annual report says production has been constrained by lack of

HARARE 00000651 003 OF 003

financing for inputs, unreliable power supply, and price controls.

—————–

Quote of the Week

—————–

¶15. “Zimbabwe welcomes foreign investment and offers immense

opportunities in the mining sector. Acquisition of a mining title

is relatively the simplest in Africa.” – Mining Minister Obert

Mpofu, speaking at the Fifth Annual Mining in Africa Conference in

South Africa on August 6.

DHANANI

(15 VIEWS)