Ndlovu called German leader racist, fascist

Information Minister Sikhanyiso Ndlovu called German leader Angela Merkel a racist, fascist and a remnant of Nazism after she had criticised Zimbabwe for damaging the image of the New Africa.

Merkel’s criticism came after President Robert Mugabe had been allowed to attend the European Union-African Union summit in Lisbon which some members of the EU were against.

British Prime Minister Gordon Brown boycotted the meeting because of Mugabe’s attendance.

The Herald printed a cartoon of a Swastika with Summit critics of Zimbabwe, Germany, the Netherlands, Denmark, and Sweden named on the Swastika’s points.

Full cable:

Viewing cable 07HARARE1119, Zim Notes December 14, 2007

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AF/S FOR S.HILL

ADDIS ABABA FOR USAU

ADDIS ABABA FOR ACSS

NSC FOR SENIOR AFRICA DIRECTOR B.PITTMAN

TREASURY FOR J.RALYEA AND T.RAND

STATE PASS TO USAID FOR L.DOBBINS AND E.LOKEN

COMMERCE FOR BECKY ERKUL

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TAGS: PGOV PREL ASEC PHUM ECON ZI

SUBJECT: Zim Notes December 14, 2007

¶1. The Embassy Harare Political/Economic Section began producing

Zim Notes in July, 2007 to present a perspective on current events

in Zimbabwe. Suggestions are always welcome. If you would like to

receive Zim Notes by email, as well, please contact Frances Chisholm

at chisholmfm@state.gov. Distribution is restricted to U.S.

government employees.

¶2. Parallel: ZW$1,700,000:US$1; Official: ZW#$30,000:US$1

Sugar on the parallel market is steady at Z$2.5/2kg vs. controlled

price of Z$247,000/2kg

Cooking oil on the parallel market rose to Z$6million/750ml vs.

controlled price of Z$440,000/750ml

Cash shortage depressed fuel price to Z$3million/liter vs.

Z$60,000/liter at controlled price

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On the Political/Social Front

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¶3. ZANU-PF Congress Endorses Mugabe – As expected, the ZANU-PF

Congress endorsed President Robert Mugabe as its candidate for

president in next year’s elections. Mugabe, in a speech to the

Congress, said elections would take place in March. In a broadside

against western interference in Zimbabwe, he indicated, as he has in

the past, that SADC election monitors would be welcome, but not

monitors from the West.

¶4. SADC Talks Stalled – SADC talks between ZANU-PF and the MDC

stalled last week over MDC demands primarily for implementation of a

new constitution before elections, postponement of the date for

elections, and electoral reform. See Harare 1107. South African

president Thabo Mbeki has reportedly recalled negotiators to South

Africa this weekend in an attempt to break the impasse. Both

factions of the MDC have indicated they will at last form a

coalition to contest the elections, and will do so with or without

an agreement with ZANU-PF.

¶5. EU-AU Summit Fallout – The Herald trumpeted Mugabe’s attendance

at the Summit as a victory for Zimbabwe over the UK. The lack of

African criticism of Zimbabwe at the Summit led Mugabe and the

ZANU-PF Congress to praise African unity. Meanwhile, responding to

German chancellor Angela Merkel’s criticism of Zimbabwe that it

“damages the image of the new Africa, Information Minister

Sikhanyiso Ndlovu publicly called Merkel a “racist,” a “fascist,”

and a “remnant of Nazism.” The Herald printed a cartoon (reproduced

below) of a Swastika with Summit critics of Zimbabwe, Germany, the

Netherlands, Denmark, and Sweden named on the Swastika’s points.

¶6. Secretary Honors Zim Human Rights Defenders – Secretary Rice

conferred the inaugural Freedom Defenders Award on Zimbabwe Lawyers

for Human Rights (ZLHR) in Washington on December 10, International

Human Rights Day. The award was instituted to honor foreign

activists and/or NGOs that demonstrate outstanding commitment to

1wQT93Rice who remarked that in Zimbabwe “civil society remains under

siege amid political and economic crises caused by the irresponsible

policies of the regime.” The Secretary honored ZLHR for its

tireless and fearless efforts “to advance democratic principles, and

in particular, it has taken on the dangerous task of providing legal

representation to persecuted human rights and democracy defenders.”

The honor was well deserved. Attacks, arrests and abductions

continue unabated, with more than 500 instances of human rights

abuses reported each month. (See related text and fact sheet.) In

the last year, the ZLHR caseload has increased by more than 20

percent.

¶7. Coincidence? – ZLHR held its annual Human Rights Lawyer of the

Year award banquet on December 7 at the Holiday Inn, Harare,

conferring the honor posthumously on Lawrence Chibwe, deputy

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secretary of the Law Society of Zimbabwe, after his sudden death in

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an automobile accident last month. The ceremonies were difficult to

bear not only because of the sadness of having lost a charismatic

and dedicated human rights defender, but also because a six-person

band at a very thinly-visited cocktail reception for Zimpapers,

publisher of the government mouthpiece The Herald, blasted music

from the next room throughout the proceedings.

¶8. Civic Activists Keep Up Street Pressure – In the past week,

activists from Women of Zimbabwe Arise (WOZA) and National

Constitutional Assembly (NCA) staged separate street demonstrations

in Harare that resulted in beatings by police and arrests. On

December 7, police in Harare used batons to break up an estimated

crowd of 300 NCA activists who were demanding a new constitution and

protesting economic conditions. On December 11, more than 75

protesting WOZA members encountered similar police brutality in

Harare. See Harare 1106 for details.

¶9. SADC Tribunal Rules In Favor Of White Zimbabwean Farmer – The

SADC Tribunal in Windhoek ruled on December 13 in favor of Michael

Campbell who was contesting the compulsory acquisition of his farm

by the GOZ. The Tribunal issued a protection order for his farm and

ordered that the GOZ must not evict or allow the eviction of or

interference with his farm, its owners, employees or property. The

interdict will hold until the Tribunal decides on the main case

dealing with the legality of the contested expropriation. The

Tribunal noted in its ruling that according to relevant SADC

Protocols on human rights, democracy, and the rule of law, SADC

members must protect the rights of their citizens and ensure the

rule of law. Campbell appealed to the Tribunal after the Supreme

Court of Zimbabwe failed to act on his case.

¶10. New Zealand Extends Zim Travel Sanctions To Adult Children –

New Zealand announced on December 10 the extension of its travel ban

on associates of the Mugabe regime to their adult children.

¶11. Young Poets Express Anger – A group of mostly young poets,

calling itself Zimbabwe Poets for Human Rights, captivated an

audience of 75 during a 2-hour poetry slam/beat session at the

Embassy’s Public Affairs Section. Their work expressed the anger,

despair, outrage and hope felt by many young Zimbabweans, and they

didn’t hesitate to blame Mugabe and the GOZ. They asked why

“students armed with nothing but their brains” are being beaten by

cops. Why they are to “Look East when everybody else is looking

West,” and why the rhetoric of liberation doesn’t apply to young

black Zimbabweans. Members admitted to having been unable or afraid

to perform in public before. The reaction of the audience showed

they share the same outrage and frustration.

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On the Economic and Business front

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¶12. Reserve Bank Raises Reserve Requirements, Accommodation Rates

-The RBZ raised reserve requirements for demand deposits from 45% to

50% and for time deposits from 35% to 45% on December 7, reducing

the amount of funds available to the banks for lending and thus bank

revenue. It also increased the overnight accommodation rate to 975%

for secured borrowing (that’s over one million percent annual

compounded interest), further cutting into banks’ profitability.

Banks are already finding that the RBZ has robbed them of their

corporate borrowers by offering new concessionary lending facilities

(25% annual interest) across sectors. In addition, the banks are

facing the erosion of their deposit base as Zimbabwe’s cash crisis

deepens. Lines for cash withdrawals snake around the city’s blocks

and cash continues to command a premium in the parallel market.

While the RBZ’s move might appear to indicate a tightening of

monetary policy, with the other hand the Reserve Bank is flooding

the market with its quasi-fiscal concessionary lending.

¶13. RBZ Governor Gono Says “Practical Solution [To Cash Crisis] On

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The Way” – Gono indicated again this week that he will soon take

measures to alleviate the cash shortage. He is widely expected to

lop off more zeros on new bearer cheques some time between the end

of this week’s ZANU-PF Congress and Christmas.

¶14. Inflation Reaches Six Digits, According To Private Account -…

Private sector estimates of the rate of inflation in November vary

from 80,000%, according to one leading supermarket chain, and an

average of 126,000% across income categories according to another

well regarded source.

¶15. Zimbabwe’s Myriad Exchange Rates – As local currency

availability dries up, the Zimbabwe dollar appreciated on the street

this week to about Z$1.7 million:US$, but foreign exchange traders

are shifting more activity into the parallel market for bank

transfers. The official is Z$30,000:US$, the parallel market cash

rate is about Z$1.7 million:US$, the parallel market bank transfer

rate (“RTGS” rate) is about Z$5.2 million:US$, the benchmark Old

Mutual Implied Rate is about Z$4.3 million:US$, the benchmark fuel

price is about Z$3 million:US$, and the Embassy’s own current rate

is Z$1.5 million:US$.

¶16. Meikles-Kingdom Merger Approved – Following uncertainties

surrounding the merger of Meikles Africa Limited and Kingdom

Financial Holdings Limited arising from the high valuation of

Kingdom, Meikles shareholders approved the merger by a margin of 54

to 46 on December 11. Apparently the desire to satisfy looming

indigenization requirements outweighed arguments for revaluation of

Kingdom. The shareholders also approved a name change to Kingdom

Meikles Africa. Based on combined pro-forma March 31, 2007 revenues

of Z$369.9 billion (US$711.35 million at the parallel exchange rate

for bank transfers), the new group will have an estimated market

capitalization of US$250-300 million which works out to 10 percent

of the Zimbabwe Stock Exchange market capitalization. The merged

companies plan to raise capital on the London Stock Exchange to

finance investments in hotels, among other assets, in Zimbabwe and

in the region, according to a member of the Board.

¶17. LonZim Raises 32.3 Million Pounds on AIM – Investor interest in

cheap local assets, at least in foreign currency terms, appears on

the rise. In this connection, Lonrho set up an investment Fund,

LonZim, in October 2007 to meet the investment demand. According to

Lonrho’s chairman, David Lenigas, most of the initial investments

will be in property which he called “as cheap as chips”. LonZim was

listed on the Alternative Investment Market in London with a mandate

to invest and operate in Zimbabwe and the Beira Corridor. LonZim

raised 32.3 million pound sterling from investors by selling 46.4

million shares. According to Bloomberg, Lonrho, which owns 39.4

percent of LonZim, said it planned to seek a separate listing of

LonZim shares “on a major stock exchange”.

¶18. Update on “Mother Of All Agricultural Seasons” – Areas in the

central and eastern parts of the country have accumulated more than

200 mm of rainfall so far this agricultural season. Much of the

Midlands, Manicaland, Masvingo and some parts of Matebeleland South

provinces have received more than 125% of their long-term mean

rainfall. However Matebeleland North (Victoria Falls), some parts

of Mashonaland West (Kariba), and South of Midlands (Zvishavane)

have received less than 75% of their long-term average. Now if only

fertilizer were available…

¶19. No Relief For Business From Price Commission – The Herald

reported on December 8 that a meeting of the Confederation of

Zimbabwe Industries (CZI) with the National Incomes and Price

Commission (NIPC) ended in a stalemate after chairman Godwills

Masimirembwa rejected proposals by business to liberalize the

exchange rate and allow some level of free-play on pricing.

Dismissing business presentations as “cheap”, he said industry must

produce “without excuses because cheap funds had been released for

such purposes.”

¶20. Cover price of The Herald Doubles – The National Income and

Price Commission approved a 100% increase in the price of The Herald

to Z$600,000 last week.

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