Top stories September 26-30

Chinamasa appeals for cheap South African finance- Finance minister Patrick Chinamasa today appealed to South African development financial institutions for cheap finance as several parastatals seek $14.7 billion for retooling and to revive operations. A delegation of South African development financial institutions – Development Bank of South Africa, Public Investment Corporation , Transnet and Industrial Development Corporation – is in Harare for talks on funding for several infrastructural and utility projects. The government and DBSA are reportedly in talks over a $700 million loan to fund the rehabilitation of the National Railways of Zimbabwe. “Charge us fairly with a view to bring us to the same level of development as (South Africa is) industrially and in infrastructure. Don’t take advantage of your neighbour’s problems or desperation,” said Chinamasa. “Don’t charge us interest rates which are way above what you charge South African businesses. Being our neighbour you know we don’t have the country risk that is spoken of.” Chinamasa said developing the country’s infrastructure and economy would stop the migration of people to South Africa to seek better opportunities. An estimated three million Zimbabweans live in the neighbouring country. “You know all our boarders are porous and you can’t stamp that tide. It is in your interest to keep people in their countries,” Chinamasa said. “We should reverse that tide and it can only be reversed if, through your assistance we develop to the same level industrially as South Africa.” South Africa is Zimbabwe’s largest trading partner, accounting for at least 40 percent of total exports and 60 percent of total imports.

Mugabe asks: Muri marema here?

Zimbabwe is not poor. Finance Minister Patrick Chinamasa was told this last week by International Monetary Fund representative Domenico Fanizza who said that the country did not qualify for debt relief because it was not poor. Zimbabwe’s political leaders have always boasted about the country’s vast resources, and how rich the country is, but Zimbabwe has nothing to show for all this wealth.Now comes President Robert Mugabe on his return from the United Nations, and the 90-year-old asks a very pertinent question: Why do we need investors from the West? “Muri marema here?” “Kana muine mafuta ari pasi apa, zvicherwa zviri pasi apa, ivhu riri renyu, ko hupfumi hwamunoda kune ava (Western countries) ndehwei. Muri marema here? Vanouya vachiti tiri kukupai tumari utwu, asi mafuta ndivo vanenge vachiapedza………zvino isu takati kwete, maBritish muri kwenyu, ivhu nderedu, zvicherwa ndezvedu, mazano ekuzvichera ndeedu, garai kwenyu, tinogara kwedu,” he said.

Jonathan Moyo says think inside the box

Jonathan Moyo’s war of words with former central bank governor Gideon Gono seems to be raging on, or so it seems. He has just told a conference of the Chartered Institute of Secretaries and Administrators: “We must think inside the box and not outside the box. How can you tell us to think outside the box as if you have noticed that we are thinking inside the box? ” It is not clear if he was referring to Gono but the former central bank governor repeatedly told Zimbabweans to think outside the box, especially during his first term of office, and that failure was not an option. Moyo said the country’s economy was on the rebound, but people should not expect this to be overnight. “As a country, we have entered into serious partnerships with the second largest economies in the world. This is a result of the serious hard work that has been going on in the past 10 months of engagement and dialogue which gives hope of unlocking Zimbabwe’s economic potential.  People want to see the benefits of the Chinese and Russian deals today. Some are threatening us with demonstrations saying you promised two million jobs, but they are forgetting that the jobs will come over a five-year period. The benefits of the Chinese and Russian deals are over five years.  Yes, our economy took a battering, but as we speak today the economy is on the rebound because of policies and the self correcting process it is undergoing, especially in this multi-currency regime.  At one time our economic growth rate went up to 12 percent, but that was a result of indiscipline, especially between 2009 and 2011. It was that time when interest rates were too high and we did not understand the true value of the dollar,” he said.

ZANU-PF should appoint Mugabe’s successor in December to avoid a crisis- Crisis Group

The Zimbabwe African National Union-Patriotic Front should decide conclusively who will succeed President Robert Mugabe at its congress in December to avoid prolonged uncertainty and a possible crisis should Mugabe be incapacitated or decide not to seek re-election in 2018. The party should also seek to rebuild trust and collaborations with domestic and international constituencies by holding an inclusive national dialogue with the opposition and civil society on political, social and economic reforms; and should clarify key policy areas such as indigenisation, land reform and the rule of law, as well as anticorruption initiatives. These are some of the recommendations by the International Crisis Group in its report on Zimbabwe entitled: Zimbabwe: Waiting for the future, released today. The ICG was once a prolific producer of reports on Zimbabwe but its interest seems to have waned of late. The current report is the first since the July 2013 elections but it paints a bleak picture of the post-election Zimbabwe. “A year on, the country faces multiple social and economic problems, spawned by endemic governance failures and compounded by a debilitating ruling party succession crisis. Both ZANU-PF and the Movement for Democratic Change-Tsvangirai  are embroiled in major internal power struggles that distract from addressing the corrosion of the social and economic fabric. Zimbabwe is an insolvent and failing state, its politics zero sum, its institutions hollowing out, and its once vibrant economy moribund,” it says.

IMF tells Zimbabwe to demonstrate fiscal discipline to unlock funding

Zimbabwe should clarify its foreign ownership law and demonstrate fiscal discipline by next year to unlock financial support from international financiers, International Monetary Fund country representative Domenico Fanizza said today. Zimbabwe in June last year undertook an IMF staff monitored programme (SMP), an informal and flexible instrument for dialogue between the Fund staff and a member country on its economic policies. Although Zimbabwe missed key SMP targets, especially the reduction in its wage bill which is taking up three quarters of total revenues, the IMF expressed broad satisfaction with Harare’s commitment to the re-engagement, which was resumed after more than a decade of frosty relations. The IMF has also cajoled government to increase infrastructure and social spending. Speaking at a joint press conference with Fanizza, Finance Minister Patrick Chinamasa said the IMF management had already approved the second SMP, which will run for 15 months, subject to a nod from the IMF board. An IMF mission is in the country from September 17 to October 1, 2014 to conduct the third and last review under the first SMP and to hold discussions on the proposed second installment. Approval from the board is expected in November but Zimbabwe has to rebalance its expenditure to include infrastructure and social spending, among the key benchmarks in the new SMP. Fanizza said the second SMP would be a useful vehicle to mobilise financial support to clear arrears for the country’s nearly $10 billion external debt. “First of all, I would say that clarify the indigenisation and economic empowerment laws. It’s a key measure that authorities intend to take. This clarification would go a long way towards allaying perceptions on the security of the investments and property rights and re-assure markets of government’s open invitation to invest in Zimbabwe,” said Fanizza. “Secondly, the authorities intention to eliminate fiscal deficit without putting and taking into account interest payments by end of 2015 which gives us a strong message that Zimbabwe is going to live within its own means.”

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