SADC promised to raise US$2 billion for Zimbabwe

The Southern African Development Community promised to seek US$2 billion for Zimbabwe’s recovery barely a month after the swearing in of the inclusive government.

Half of the money would be spent on activities that would restore economic activity, while the other half would be directed towards restoring basic services such as health and education.

Education Minister David Coltart estimated that he needed US$483 million to resurrect the education.

Prime Minister Morgan Tsvangirai who had been on a fund-raising trip had said the new government needed US$5 billion to rebuild the country.

Full cable:

Viewing cable 09HARARE163, ZIM NOTES 02-27-2009

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COMMERCE FOR ROBERT TELCHIN

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TAGS: PGOV PREL ASEC PHUM ECON ZI

SUBJECT: ZIM NOTES 02-27-2009

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¶1. SUMMARY

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Topics of the week:

– MDC and ZANU-PF Going Head to Head in Government…

– SADC Looking to Raise US$2 Billion for Zimbabwe…

– Roy Bennett Granted Bail, but Still in Jail…

– Tsvangirai to Attend Bob’s Birthday Bash? …

– USAID Employee Released…

– WOZA Women Beaten-Again…

– Commodity Prices Keep Falling…

– Policy Tug of War on Dual-Listed Stocks…

– Platinum and Diamond Companies Buck Gono Directive…

– ZESA Told to Reconnect Customers…

– Zimbabwe has Trade Surplus with U.S…

– IMF Coming to Zimbabwe…

—————————–

On the Political/Social Front

——————————

¶2. MDC and ZANU-PF Going Head to Head in Government…On February

24, President Mugabe unilaterally appointed a new slate of permanent

secretaries-the third-ranking official in each ministry-without the

“consultation and agreement” of the senior members of government

(including the Prime Minister) as stipulated in the Interparty

Political Agreement signed last September and in Amendment 19 to the

Constitution. Tsvangirai immediately held a press conference and

declared their appointments “null and void.” He also said the

appointments of Reserve Bank Governor Gideon Gono, Attorney General

Johannes Tomana, and of provincial governors should be dealt with

immediately, that Mugabe had agreed to the release of political

detainees but this had not happened, and condemned the recent spate

of farm seizures. See Harare 149. Mugabe publicly responded that the

appointments of Gono, Tomana, and the permanent secretaries had been

appropriately made. At week’s end, government principals Mugabe,

Tsvangirai, and Arthur Mutambara met to discuss these issues.

¶3. SADC Looking to Raise US$2 Billion for Zimbabwe… On the heels

of Prime Minister Tsvangirai’s fund-raising trip last week to South

Africa, and after a meeting of SADC finance ministers including

Zimbabwe’s Tendai Biti, South African Finance Minister Trevor Manuel

told the media on February 26 that SADC would seek to raise US$2

billion in funds for Zimbabwe’s recovery. The figure is less than

the US$5 billion Tsvangirai said was necessary to rebuild the

country. Half of the money would be spent on activities that would

restore economic activity, while the other half would be directed

towards restoring basic services such as health and education.

Meanwhile, several of the new MDC ministers have been appealing for

financial support, including new Education Minister David Coltart

who estimated he needed US$483 million to resurrect the education

sector. See Harare 156.

¶4. Roy Bennett Granted Bail, but Still in Jail… The incarcerated

Deputy Minister of Agriculture, Roy Bennett, was granted bail by

Zimbabwe’s High Court. Zimbabwean law grants the State seven days in

which to decide whether to appeal the bail decision and, pursuant to

law, Bennett remains in custody for this period. Bennett’s lawyers

are optimistic that the State will not appeal and that Bennett will

Qare optimistic that the State will not appeal and that Bennett will

then be released.

¶5. Tsvangirai to Attend Bob’s Birthday Bash? … A spokesperson for

Tsvangirai informed the press that the Prime Minister planned to

attend Mugabe’s lavish 85th birthday party this weekend. While his

presence is certainly intended to strengthen their long-frayed

relationship, Tsvangirai’s attendance has drawn criticism at a time

of great economic hardship for most Zimbabweans. The menu for the

event purportedly includes 2,000 bottles of champagne, 8,000

HARARE 00000163 002 OF 003

lobsters, 200 pounds of shrimp, 4,000 portions of caviar, 8,000

boxes of Ferrero Rocha chocolates, and 500 bottles of high-end

liquor. Perhaps most offensive to hungry Zimbabweans was the boast

that “no mealie meal or beef!” would be served.

¶6. USAID Employee Released… USAID employee Frank Muchirahondo was

released from prison on February 24, after the State failed to make

the case that he was involved in the alleged attempted assassination

of Air Marshal Perence Shiri. Muchirahondo had been held in police

custody since January 22.

¶7. WOZA Women Beaten-Again… At least nine members of Women of

Zimbabwe Arise (WOZA) were treated for injuries inflicted by police

and five were arrested on Wednesday when 450 members attempted to

deliver a petition to Education Minister David Coltart. The

petition, signed by 25,000, called on government to cancel the 2008

school year and allow children to repeat the year at no charge. As

of Friday morning, the five in custody had not yet been charged.

Riot police indiscriminately beat protesters and chanted, “today we

are going to beat you” and “why are your husbands allowing you to

protest?” The arrested women sang “we want education for our

children” as they were hauled off to jail. One woman sustained

serious injuries and is unable to walk; another’s toe was fractured

when a policeman stomped on her foot.

———————————–

On the Economic and Business Front

———————————-

¶8. Commodity Prices Keep Falling… A quick survey of six different

shops in Harare on February 26 showed that prices of most basic

commodities continued to fall during the week under review. The

decline in prices ranged from as low as 4 percent for maize meal to

as high as 30 percent for salt and sugar. Despite the recent

declines, most prices are still above regional averages and are

expected to fall further in the short term.

¶9. Policy Tug of War on Dual-Listed Stocks… Boding ill for the

promotion of foreign investment, and hardly a week after Finance

Minister Biti had restored trading of dual-listed shares offshore

(i.e. their fungibility), Reserve Bank of Zimbabwe (RBZ) Governor

Gono issued a directive on February 23 reversing the practice. The

RBZ also reiterated its claim to 5 percent of hard currency sales of

shops for “monitoring and administration” purposes.

¶10. Platinum and Diamond Companies Buck Gono Directive…

Zimbabwe’s established platinum and diamond mining companies are not

complying with RBZ Governor Gono’s directive to localize their

foreign currency accounts and submit to greater RBZ control. See

Harare 161.

¶11. ZESA Told to Reconnect Customers… The new Minister of Energy

and Power Development has ordered Zimbabwe Electricity Supply

Authority (ZESA) to reconnect consumers who had failed to pay its

new forex rates until “appropriate tariffs” have been set. Following

years of under-pricing, ZESA appeared to have set rates designed to

Qyears of under-pricing, ZESA appeared to have set rates designed to

recoup all its losses in the shortest time possible. With many

people still being paid the bulk of their salaries in worthless

local currency, the move drew the public’s ire.

¶12. Zimbabwe has Trade Surplus with U.S… Interestingly, despite

the U.S. targeted sanctions on Zimbabwe that have been blamed by

ZANU-PF stalwarts for the country’s economic decline, Zimbabwe

posted a trade surplus in 2008 with the United States. In 2008,

Zimbabwe exported US$112 million worth of goods to the U.S.,

dominated by minerals exports, and imported US$92.9 million worth,

predominantly food, according to the U.S. Census Bureau.

¶13. IMF Coming to Zimbabwe… The IMF expects to arrive on March 8

for a mission to Zimbabwe to assess the economic health of the

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country and forestall future financial problems.

——————

Quotes of the Week

——————

¶14. “Therefore the announcement of the permanent secretaries has no

force of law and is therefore null and void.” — Morgan Tsvangirai

in reference to the unilateral nomination by Mugabe of permanent

secretaries.

¶15. “I do not see any reason why those people should go and they

will not go.” — Robert Mugabe’s response to calls to dismiss Gono,

Tomana, and the permanent secretaries.

MCGEE

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