Rumours swirled in the first week after the 2008 elections with some reports saying President Robert Mugabe had won the elections and others saying the Movement for Democratic Change had won and was negotiating a settlement under which Mugabe would step down.
What appeared to be clear, though, was that no one had won the 50 percent plus one required for victory and a run-off was being contemplated.
The issue was that though a run-off was supposed to be held in 21 days, it was most likely to be held 30 days to 6 months after the announcement of the results because, according to the United States embassy, Mugabe would argue that the government was not logistically ready.
But results announced showed that the MDC had won 99 seats in the lower house, the smaller faction of the MDC had won 10 and Mugabe’s Zimbabwe African National Union-Patriotic Front 97.
One seat had been won by an independent candidate and three were not contested because the candidates had died during the campaign period.
Interestingly the US’s 11 observers reported a positive experience.
Viewing cable 08HARARE281, Zim Notes 04-04-2008
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SUBJECT: Zim Notes 04-04-2008
¶1. Zim Notes is a compendium of political & economic news items from
ZIM NOTES IS NOT FOR DISTRIBUTION OUTSIDE THE U.S. GOVERNMENT.
This newsletter is produced by the Political/Economic Section of
Embassy Harare. It is intended to present a perspective on current
events in Zimbabwe. Suggestions are welcome. Please let us know of
anyone else who would like to receive it. Zim Notes is circulated
in email form each week and can be accessed on Webgram and SIPRnet.
Price Movements-Exchange Rate and Selected Products
¶2. Parallel rate for cash steady at ZW$43million:US$1; bank
transfer rate: Z$67 million; official rate: ZW$$30,000:US$1
Sugar soared to Z$85 million/2kg vs. controlled price of
*Cooking oil rose to Z$100million/750ml vs. controlled price of
Petrol and diesel shot to Z$80million/liter vs. controlled price of
On the Political/Social Front
¶3. Presidential Results Yet To Be Announced… The Zimbabwe
Electoral Commission (ZEC) has yet to release the results of the
presidential election; ZEC is expected to announce them sometime
between today and Monday. Rumors have swirled this week, ranging
from a ZANU-PF announcement that Mugabe had won the election to a
negotiated settlement between ZANU-PF and the MDC under which
President Robert Mugabe would step down. As of now, it appears the
ZEC will announce a runoff, with neither of the candidates having
earned the 50 percent plus one required to avoid one. While the
Electoral Act requires a runoff within 21 days, it appears that
Mugabe will claim the government is logistically unready, and set
the date somewhere between 30 days and 6 months from the date the
results are announced. See Harare 00278.
¶4. Historic Results, Opposition Wins Majority In House Of
Assembly… For the first time in the countryQs 28 year history,
ZANU-PF will not control the House of Assembly. Of the 210 seats,
the MDC Tsvangirai formation won 99, ZANU-PF 97, the MDC Mutambara
formation 10, and an independent one. Three remaining seats will be
decided in by-elections. The MDC Tsvangirai formation penetrated
rural areas and scored gains in traditional ruling party
strongholds. Several ZANU-PF bigwigs lost their seats, including
Justice Minister Patrick Chinamasa and WomenQs Affairs Minister
Oppah Muchinguri. See Harare 00273.
¶5. Embassy Harare Election Observations: A Positive Experience…
Embassy HarareQs 11 election observation teams reported that voting
took place in a calm and orderly manner. The teams were generally
well-received and noted a sense of excitement coming from the
electorate. Police had a noticeable presence in all polling
stations and interacted cordially and professionally with observer
teams. See Harare 00270.
¶6. SADC Tribunal Rules In Favor Of Zimbabwean Farmers… The
Southern African Development Community (SADC) Tribunal ruled last
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week in Windhoek that more than 70 white Zimbabwean farmers who had
been evicted from their land could remain on their property pending
a hearing on their joint application on May 28. The farmers are
challenging the legality of ZimbabweQs fast-track land reform.
Their suit has been joined with that of Michael Campbell whose case
is now pending before the court.
¶7. Migration From Zimbabwe… The Johannesburg-based Center for
Development and Enterprise released last week a paper entitled
Migration From Zimbabwe, Numbers, Needs, and Policy Options, which
concluded that cross-border movement of people was on the rise and
unlikely to slacken in the foreseeable future, and the crisis in
Zimbabwe was increasing pressure on already strained and overloaded
policies and systems for migration management in South Africa. See
the paper at: http://www.cde.org.za/article.php?a_id=280.
Economic and Business News
¶8. Another Leap In Inflation… The Financial Gazette reported
this week that the Central Statistical Office calculated the
official rate of year-on-year inflation in February at 164,900
percent, up from 100,580 percent in January. A well regarded
private sector report put the March y-o-y figure at over 370,000
percent and the month-on-month rate at close to 180 percent.
¶9. Anecdotally, we found that the price of a no-frills hotel buffet
dinner in the provincial capital of Mutare had doubled from Z$300
million to Z$600 million in the one week between our pre-election
observation visit and Election Day.
¶10. New Higher-Denominated Notes Released… The Reserve Bank of
Zimbabwe (RBZ) issued Z$25 million and Z$50 million notes today.
The new highest-denominated note is worth about USD 1.16. The RBZ
also raised the daily cash withdrawal limit for individuals and
companies to Z$ one billion.
¶11. Olivine Industries Benefits From GOZ Largesse… A former
executive of Olivine Industries until the HJ Heinz majority
shareholding was sold to the GOZ last year told us that new
management had negotiated 100 percent retention of its forex
earnings. (The Reserve Bank otherwise takes 35 percent and pays it
back in local currency at the ludicrous official exchange rate.) In
addition, Olivine is now getting more frequent price relief from the
National Incomes and Pricing Commission (NICP). While there is a
bit more oil in the market, it is mostly going into margarine and
baking fats to ensure the baking industryQs survival. For
background on other U.S. companiesQ departure from Zimbabwe, see
¶12. Wheat Stocks Dry Up… The Financial Gazette reported last
week that the National Bakers Association estimated that Zimbabwe
needed to import US$120 million worth of wheat (about 300,000 MT out
of an annual national requirement of about 500,000 MT) beginning in
April to carry the country through to the arrival on the market of
the winter wheat crop in November. Last yearQs wheat harvest of
144,000 MT was the smallest since independence.
¶13. Reading The Tea Leaves In Zimbabwe: Troubled Times…
Production is down at ZimbabweQs two largest tea estates in the face
of a severe labor shortage and lack of foreign exchange for inputs.
In addition, the move to mechanization has reduced tea leaf quality
and the amount of exportable product. Both estates have taken over
the provision of many public services in their communities, but
management recognizes that the situation is commercially
unsustainable beyond the short term. See Harare 00277.
¶14. More Company Results, Mostly Grim… Publicly traded Hippo
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Valley Estates Ltd reported the lowest sugar production since the
drought of 1992: 349,356 t, 22 percent off the 2006 figure.
Analysts blamed the poor results on price controls, the unviable
exchange rate, and poor agronomic practices of re-settled
out-growers, although increased technical assistance and good
weather conditions this season are grounds for some optimism.
¶15. InnscorQs bakery outlets recorded 56 percent reduction in
volume in the second half of 2007 due to flour shortages.
¶16. But pig and ostrich production was up. Triple C, a division of
publicly traded Colcom Holdings, ZimbabweQs major pork processor,
increased its pig output last year by 4.5 percent as it began to
benefit from an out-grower project. Colcom also reported that 4,298
ostriches were slaughtered last year against 1,381 the year before.
The projected output this season of 5,700 birds is destined entirely
for the export market.
¶17. Tobacco Auction Floors To Open Soon (If ThereQs Enough Wrapping
Paper)… Industry players reported that a shortage of imported
wrapping material was delaying the opening of HarareQs tobacco
auction floors until April 22.