Out at last

Results of the 2008 presidential elections were released on May 2, just over a month after the elections and showed that Movement for Democratic Change leader Morgan Tsvangirai had pipped Zimbabwe African National Union-Patriotic Front leader Robert Mugabe.

Tsvangirai had received 47.9 percent of the vote with Mugabe down at 43.2 percent and Simba Makoni who had stood as an independent polling 8.3 percent. Another independent candidate Langton Towungana got only 0.6 percent.

If Makoni indeed took away some of Mugabe’s Votes, this would mean that the ZANU-PF candidate would have won 51.5 percent, an outright majority.

Full cable:

Viewing cable 08HARARE417, ZIM NOTES May 9, 2008

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ADDIS ABABA FOR USAU

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COMMERCE FOR BECKY ERKUL

CIA WASHDC

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E.O.12958: N/A

TAGS: PGOV PREL ASEC PHUM ECON EAGR EFIN ZI

SUBJECT: ZIM NOTES May 9, 2008

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¶1. SUMMARY

————-

Topics of the week:

– It’s Official, MDC Tops ZANU-PF In Presidential Poll

– Recount Of Parliament Vote Confirms Initial Results

– MDC Reconciliation

– Violence Continues

– More Violent Farm Invasions

– Ambassador Hosts Meeting On Violence

– SADC Investigates Violence

– Veterans Of The Liberation War Get Six-Fold Allowance Raise

– Editor Arrested

– Swedish Aid Worker Declared Persona Non Grata

– Zimbabwe Dollar In Tail Spin In Liberalized Market

– New Higher Notes Issued

– Kingdom Meikles Shares Tradable on Zimbabwe and London Exchanges

——————————

¶2. Price Movements-Exchange Rate

and Selected products

——————————

Parallel rate for cash converged with the inter-bank average at

ZW$210 million:US$1;

Bank transfer rate: Z$260 million; official rate remained at

ZW$$30,000:US$1

Sugar fell again to Z$300 million/2kg vs. controlled price of

Z$8million/2kg

Cooking oil doubled to Z$700 million/750ml vs. controlled price of

Z$9.3million/750ml

Petrol and diesel more than doubled to Z$400million/liter vs.

controlled price of Z$60,000/liter

—————————–

On the Political/Social Front

—————————–

¶3. It’s Official, MDC Tops ZANU-PF In Presidential Poll… After

an unprecedented delay of over one month, the Zimbabwe Electoral

Commission’s (ZEC) Chief Elections Officer declared on May 2 that

Morgan Tsvangirai (MDC-T) had received 47.9% of the presidential

vote, incumbent Robert Mugabe (ZANU-PF) 43.2%, Independent Simba

Makoni 8.3%, and Independent Langton Towungana 0.6%. He further

stated that as no candidate had secured a majority of the total

votes cast, there would be a runoff election between the two top

vote getters on a date still to be announced by the ZEC. The

Commission has the power to extend the period in which a runoff must

take place. Suggesting that the ruling party is unsure whether

Mugabe can win a runoff, Deputy Information Minister Bright Matonga

said it could be put off for up to a year. Our best information is

that a date will be announced in the next 10 days and that a runoff

election will be set within 40 days.

¶4. Recount Of Parliament Vote Confirms Initial Results… The ZEC

announced last week there were no changes to the winners of House of

Assembly and Senate seats as a result of the recount in 23

constituencies. The convening of Parliament, however, will have to

await declaration of the winner of the presidential election as the

new Parliament only forms once the president is sworn in.

¶5. MDC Reconciliation… In the wake of an agreement by the

Tsvangirai and Mutambara factions of the MDC to unite in support of

Tsvangirai in a runoff election, both factions have agreed that

Mutambara faction bigwigs Gibson Sibanda, Welshman Ncube, and Paul

HARARE 00000417 002 OF 003

Themba Nyathi will stand as united MDC candidates in three

by-elections to be held at a date to be set by the ZEC. All three

MDC members ran in the March 29 elections and lost to Tsvangirai

faction candidates. The by-elections are necessitated by the deaths

of candidates before the March 29 election.

¶6. Violence Continues… ZANU-PF-perpetrated violence continues

unabated, principally in rural areas. There is documentation of

over 700 victims who have been treated, over 200 who have been

hospitalized and 20 deaths as a result of the violence. Actual

figures are much higher.

¶7. More Violent Farm Invasions… The Commercial Farmers’ Union

informed us of a dozen new farm invasions in the past seven days,

predominantly in Chegutu and Norton in Mashonaland West province,

within an hour’s drive of Harare. In half of the cases, the farmer

was forced off his property. All the affected farmers in Chegutu

had been given interim relief by the SADC Tribunal in Windhoek, but

it is not being respected and police are providing no protection.

¶8. Ambassador Hosts Meeting On Violence… Ambassador McGee hosted

a meeting this week with SADC ambassadors and representatives to

discuss the growing violence in Zimbabwe. He showed a video,

produced by the Solidarity Peace Trust, which contains statements of

violence victims as well as graphic images, and led a discussion on

ending the violence. The Ambassador also visited a local hospital,

along with several EU ambassadors and the Angolan ambassador, and

talked with patients. He has invited EU and SADC ambassadors to

accompany him next week to rural areas where violence has occurred.

See Harare 408.

¶9. SADC Investigates Violence… The leader of the South African

contingent of SADC’s election observation delegation, Ambassador

Kingsley Mamabolo, stated this week in South Africa that a runoff

election could not credibly be held now because of the escalating

violence. While Mamabolo did not ascribe blame of the violence, his

report to South African president Thabo Mbeki resulted in the

dispatch of a team of retired South African generals to Zimbabwe to

further investigate the violence. The group has met with a

cross-section of Zimbabweans, including ZANU-PF, MDC, religious

leaders, and civil society. Mbeki is expected in Harare today for

talks with Mugabe.

¶10. Veterans Of The Liberation War Get Six-Fold Allowance Raise…

The Standard reported on May 4 that the GOZ had raised war veterans’

monthly allowances from Z$1.6 billion to Z$9 billion. The weekly

newspaper added, for comparison’s sake, that a teacher earns Z$6.4

billion, or roughly US$32, a month. In this context most teachers

aligned to the Progressive Teachers’ Union of Zimbabwe are calling

for a strike to get a minimum monthly salary of Z$18 billion.

¶11. Editor Arrested… Davison Maruziva, editor of the independent

The Standard newspaper, was arrested and charged with false

statements prejudicial to the state and contempt of court. The

charges stem from an article written by Arthur Mutambara and

published in The Standard last month. It criticized Mugage and the

government, and questioned Mugabe’s right to remain in office.

Police have indicated charges will also be brought against

Mutambara.

¶12. Swedish Aid Worker Declared Persona Non Grata… The GOZ this

week notified the Swedish Cooperative Center, a Swedish

non-governmental organization, that it was cancelling the visa and

work permit of the Center’s Country Director. The notification came

in the form of a letter signed by Didymus Mutasa, Minister of State

for National Security, Lands, Land Reform and Resettlement in the

President’s Office, rather than from immigration. No reason for the

action was given. The Cooperative Center is engaged in rural

development and nutrition in Gokwe and Gweru in Midlands province.

HARARE 00000417 003 OF 003

————————–

Economic and Business News

—————————

¶13. Zimbabwe Dollar In Tail Spin In Liberalized Market… The

Zimbabwe dollar fell sharply following the partial liberalization of

the exchange rate last week (see Harare 00416). The week opened

with the currency trading at Z$160 million:US$1 in the banks. By

mid week, the cash rate on the parallel market had begun to converge

with the new inter-bank rate at around Z$200 million:US$1. Given

the prevailing high year-on-year inflation rate in April of one

million percent for high income earners (according to a widely

respected private sector report), and low foreign financial inflows,

the Zimbabwe dollar is set to continue depreciating until exports

start responding favorably to the new exchange rate and to the new

foreign currency surrender requirements.

¶14. New Higher Notes Issued… As inflation soars and the demand

for transaction balances increases, the Reserve Bank introduced new

Z$100 million (roughly 50 US cents) and Z$250 million notes this

week, just over a month after releasing a Z$50 million note.

¶15. Kingdom Meikles Shares Tradable on Zimbabwe and London

Exchanges… Kingdom Meikles Africa Ltd announced this week that the

Reserve Bank had granted approval for full fungibility status to all

of its shares registered on the London register and listed on the

London Stock Exchange. This means, in theory at least, that shares

bought in local currency on the Zimbabwe Stock Exchange may be sold

for Sterling on the London Stock Exchange and vice versa. As with

similarly fungible Old Mutual shares, the devil lies in the detail,

especially in regard to obtaining Exchange Control approval from the

Reserve Bank for the transaction.

MCGEE

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