Rumours abound over election results

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.

Full cable:

Viewing cable 08HARARE281, Zim Notes 04-04-2008

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TAGS: PGOV PREL ASEC PHUM ECON ZI

SUBJECT: Zim Notes 04-04-2008

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SUMMARY

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¶1. Zim Notes is a compendium of political & economic news items from

Zimbabwe.

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.

END SUMMARY.

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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

Z$8million/2kg.

*Cooking oil rose to Z$100million/750ml vs. controlled price of

Z$9.3million/750ml.

Petrol and diesel shot to Z$80million/liter vs. controlled price of

Z$60,000/liter.

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On the Political/Social Front

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¶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

HARARE 00000281 002 OF 003

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.

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Economic and Business News

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¶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

Harare 00280.

¶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

HARARE 00000281 003 OF 003

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.

MCGEE

(20 VIEWS)