Brian MacGarry
As the political obstacles to people’s aspirations remain, even though they may be moving
detectably at the time this is being written, the real question is ownership of the economy. In the hands of those who hold it now, that is only ‘economic power’ to do no more than destroy and to hold on to enough power to prevent anyone from interfering with that. There can be no meaningful change in the country unless their stranglehold can be loosened. That grip is in an interdependent relationship with the corruption that permeates every level of society, but especially the public sector. It is not a question of dealing with a few corrupt individuals, but a system of corruption from top to bottom.
Reading all at once about the mountain of corrupt tricks that have become daily life for so
many should be a depressing task, but in preparing this review I was struck, not only by the depth of cunning shown by our multiple economic parasites, but also the astuteness and dogged determination with which some of the new ministers in the ‘inclusive’ government have unearthed details of so many rackets and with which they pursue their aim of root and branch reform. Naming names would be invidious – at least in an introduction.
There has been some growth, after a decade of decline, but it has begun to slow for lack of the political will to make fundamental changes. Finance minister Tendai Biti has revised the country’s growth prospects this year from 7 percent to 4.5 percent.
The economy registered its first growth in a decade last year after President Robert Mugabe and Prime Minister Morgan Tsvangirai’s power-sharing government implemented measures, including the adoption of multiple currencies that doused hyperinflation.
However economic experts as well as the IMF maintain that economy recovery remains fragile because of the government’s heavy dependence on imports and increasing wage demands at a time when the country’s shaky economy, and especially the government budget, cannot satisfy these demands.
The IMF and other multi-lateral lenders have refused to provide fresh loans until Harare clears outstanding debts, while rich Western nations are also reluctant to provide soft loans and grants, insisting the government must first step up the pace of democratic reforms, do more to uphold human rights and the rule of law.

Wages and cost of living
Average wages as negotiated between trade unions and employers are shown in the table below.
Table 1: Trade Union Average Wages (US$)  2010      2009
Tobacco                                                231.00   150.00
Baking                                                   213.00   127.00
Agriculture                                             32.00    32.00
Domestic                                                70.00    46.00
ZEWU                                                  315.00   315.00
Food Processing                                  231.00  125.00
Meat, Fish,Poultry & Abattoirs         160.00  133.00
Soft Drinks Mfg                                    186.00  120.00
Detergent, Edible Fats & Oils             240.00   101.50
Catering                                                 150.00    85.00
Security                                                 150.00    90.00
Shoe & Leather                                     198.00  137.98
Travel & Canvas                                   198.00 100.00
Clothing                                                  132.00    80.00
Communication & AlliedServices        200.00  150.00
Textile                                                    150.00   150.00
Civil Service                                           122.00   100.00
Plastics Mfg                                           197.00   144.00
Engineering                                           200.00  150.00
Graphical                                               183.00   130.00
Urban Council                                        301.29    301.29
Construction                                           170.00   150.00
RAYOS                                                    282.79    282.79
Commercial                                            200.00   150.00
ZARWU                                                   225.00   125.00
Cement and Lime                                  220.00    125.00

In most industries there has been an improvement in wages, The next table shows how minimum wages compare with the official poverty datum line. ZimStats and LEDRIZ give a ‘food poverty line’ which seems arbitrarily chosen. It is included here but will be discussed below.
Table 2: wage and cost of living comparisons Source: LEDRIZ
Minimum wage compared to cost of living, by month
Month         Min Wage   CSO PDL   CSO FPL Min.wage/PDL  Min.wage/FPL

Jan’10           $183             $453           $134                 40%             137%
Feb’10           $183             $468          $140                  39%             131%
Mar’10          $183              $463           $141                 40%            130%
Apr’10           $195              $494          $151                  39%            129%
May’10          $195             $503          $154                   39%           127%
June’10         $200             $517           $158                   39%           127%
July’10          $200             $462          $154                   43%           130%
Aug’10          $210              $477           $146                   44%           144%
Sept’10          $210             $482           $142                   44%          148%
Oct’10            $226             $489           $137                   46%           165%
Nov’ 10          $226             $499           $143                   45%          158%
Dec’10            $226             $500          $144                   45%           157%

The Poverty Reduction Forum1 published a November 2010 survey of the cost of a basic needs basket in ten Harare suburbs, which at US$482.64 averaged across Harare, agrees fairly well with the CSO figure above.
The “Food Poverty Line” above now looks as if it was calculated on the cost of food, which is an improvement on allocating it an arbitrary percentage of the whole basic needs basket.
The Poverty Reduction Forum report with great concern that rent and municipal rates require a disproportionate 56% of the average family’s expenditure.
They hope to be able to produce updates regularly.
Cost of shopping has been forced up, especially for those who make smaller and more frequent purchases, by retailers’ reluctance to handle coins.2 They are reluctant to trade US dollars for rand coins, although the banks had been importing and stockpiling the coins. Most formal sector retailers refused to accept the coins at face value (around R7 = $1 for most of the year) because they have got used to using a rate of 10:1. Informal traders and commuter omnibus operators switched happily to 8:1 as soon as the dollar dropped below that level.

Food & agriculture
Finance Minister Biti said agricultural production was expected to have grown in 2010 by
18.8%, compared to 14.9% in 2009. This was mainly driven by tobacco, up to about 119
million kg from 55.6 million kg. “Horticulture production in 2010 is projected to register growth, rising to 43,000 tonnes against last year’s 35,000 tonnes. There is still much more investment to be undertaken before production levels rise to levels above 60,000 tonnes experienced previously,” Biti said.
He said depressed prices and financing constraints in 2009 undermined cotton production,
which decreased from 246,000 tonnes in 2009 to 172,000 tonnes in 2010. Sugar production during 2010 was also projected to decline below last year’s levels.
Harassment of the estimated 400 remaining white commercial farmers continued. They are now so few that the impact on overall production may not be significant.
Maize and grain supply
As usual, the CFU (voice of the remaining white farmers) and ZCFU disagree over the size of the 2010 crop 3. The CFU President, Deon Theron, said the country would have to import 800,000 tonnes to meet national demand of about 2 million tonnes, at a cost of around US$136 million, as it was being imported at between US$160-US$180/t, Theron said. The ZCFU president, William Nyabonda, said at the annual congress their final maize and small grains estimate for the 2009/2010 season was 1.5 million tonnes, with maize contributing 1.2 million tonnes. Allowing for approximately 300,000 tonnes “carried over from last season due to lack of reliable markets,” he saw no real need for grain imports. “What is required is to move grain from grain surplus areas to grain deficit areas and therefore it is essential that the GMB buys this grain from farmers,” Nyabonda said.
In September FAO reported a slight increase in maize output from 1.2 million tonnes in the
2008/09 season to 1.3 million tonnes in 2009/10. Farmers said in October there was a mistaken belief that enough maize had been produced because of better than average rains. ZCFU blame the shortages of recent years on lack or late distribution of inputs.
SeedCo said in mid-October they had distributed 10,000t of maize seed and had 14,000t in stock for the 2010/1 season.
Government increased the maize producer price by US$10 to US$275/t with effect from April 1, 2010.[4]
Labour and Social Services Deputy Minister Mrs Tracy Mutinhiri[5] said more than 1,3 million Zimbabweans would need food aid between January and March 2011, according to the May 2010 vulnerability assessment.
This year’s national target planting was set at 60,000ha. The actual total was about 12,367ha.
The greatest challenge farmers faced was unreliable power supply that seriously affected
irrigation schedules. Also, most farmers do not have anything to offer as security and this is
worsened by the liquidity problems affecting the country in general, said Theron. This year
some farmers who had been producing wheat for years shifted to barley under contract
farming because of the guarantee of early inputs and ready market[6].
Wheat farmers had by 18 July only collected a total of 84 tonnes of seed and 2,015t of
compound D fertilizer provided by Government against available stocks of 720 tonnes of seed and 14,414t of compound D fertilizer[7].
In early September, government set the winter wheat producer price for this year’s marketing season at US$466 per tonne in a bid to stimulate more deliveries to the GMB. Last season’s price was US$4008.
Farmers complain of private hire combine harvester charges of US$85/ha, which they say are too high.
The CFU predicted the 2010 winter cropping season would be a disaster with yields as low as 10,000 tonnes. From the available figures, the total crop was probably nearer to 30,000t, against a requirement of over 300,000t. GMB received 21,152t from farmers by the end of the year.[9]
As the buying season approached, merchants were offering producers US 31c/kg, a price
growers rejected. Growers withheld their crop, prompting Government to intervene, proposing minimum producer prices of 42 US cents for grade A cotton, US 39c for grade B, US36c for grade C and US33c for grade D. Farmers have however, rejected the price arguing that the crop should fetch more to cushion them against high production costs.
Government proposed new minimum cotton producer prices at the end of June: grade A being sold for at least US$0,50/kg grade B US$0,46, grade C US$0,39 and grade D US$0,35 per kg[10].
The cotton crop totalled only 176,000 tonnes of seed cotton down from 246,000t the previous season as farmers opted out due to low prices. Top cotton prices were US30c/kg in 2009.
The Cotton Ginners’ Association raised concerns that Sino-Zimbabwe Cotton company were buying cotton from growers who already had contracts with other companies that had supplied their inputs on loan. They took their complaints to court, but lost their appeal to block Sino-Zimbabwe Cotton from buying cotton seed from farmers contracted to them and to stop Sino-Zim from selling cotton seed both in Zimbabwe and abroad pending determination of the case.
Judge President George Chiweshe on 30 July threw out the application to the High Court saying “the applicant has brought its case to the wrong forum”.
Sino-Zim were able to pay higher cash prices because they had not invested in inputs. They were assisted by politically highly-placed people. Among those named in the CGAZ court papers were Minister of Indigenisation Saviour Kasukuwere, Minister of Infrastructure and Transport Nicholas Goche, Zanu PF Mashonaland Central provincial chairman and MP for Mt Darwin North Dickson Mafios, and Police Assistant Commissioner Martin Kwainona.
CGAZ director-general Godfrey Burumbo-Buka said Sino-Zimbabwe Holdings was operating in Gokwe, Kadoma, Mhangura, Mount Darwin, Bindura, Guruve, Mutoko and Raffingora. An annexure to CGAZ court papers alleges that Sino-Zimbabwe Holdings “invaded” Cotton Company of Zimbabwe’s Bindura business unit on July 4 with the help of politicians.[11]
Cottco managing director Mr David Machingaidze said in September preparations for the next production season were well advanced. He said that there was potential for an increase on yield on dry land cotton farming from about 800 kg/ha to 3000 kg. “Contractors should play their part by providing a complete package of inputs to farmers ‘timeously’ and [farmers] should . . shun side marketing,” he said.[12]
Table 3: Progress of tobacco sales through the season:
Tobacco sold (million kg) By date: Earnings (US$ million)
contract auction total                       contract auction Total
35.4         29.9     65,3     10/06/10 112.25    87.01 199.26
46.6         34.4    81.06    24/06/10 146.05     96.6  242.7
55.4         36.8     92.2      12/07/10 172.4      101.4 273.8
100.81    21/07/10                            297.11
116.9      28/08/10                            341.01
Sources: daily newspapers
The bulk of the crop so far has been sold under contract system, where 78,689,429kg worth US$239,259,428 were sold. A total of 42,466,566kg were sold at the other two auction floors – the Tobacco Sales Floor and Zimbabwe Industry Tobacco Auction Centre.[13]
Growers are, however, concerned about the prices being offered at the auction floors, as they are low – averaging US$2,40/kg at the auction floors compared to US$3/kg at the contract market.
According to official figures, over 40,000 small-scale black farmers produced 70% of the
tobacco crop. The remainder was from large-scale commercial farmers[14]

53,065 farmers registered by 2 August to grow tobacco in the 2010/11 season, said the
Tobacco Industry and Marketing Board, a total of 25,051 A1; 15,488 communal; 5,969 smallscale; 3,428 A2; and 1,893 commercial farmers had registered. Of these, 51,551 have
registered to grow flue-cured tobacco; 659 for burley; 85 for Oriental; and 110 have opted for dark fire. Growers are concentrated mainly in Mashonaland West (16,385) and Central (15,251) and Manicaland (10,406). Only 17,000 farmers had registered to grow tobacco in the 2009-10 season by November. Agritex has said it projects next season’s tobacco output to reach 150 million kg.[15]
TIMB latest statistics show that by August 11 a total of 581,242g of tobacco seed had been
sold, enough for 96,872ha, compared to the 349,165g sold by same period in 2009, enough to plant more than 58,000ha.
Tobacco looks like a success story, though there have been complaints of congestion at the
auction floors, which the merchants blamed on farmers who arrived expecting to make a sale without booking. Some growers urge the buyers to decentralise, as cotton growers have done, not only providing inputs but going out to the growers and buying from them, freeing them from the burden of carrying their crop to a central market.
season ended               yield (t)
01/03/09                     298,000
01/03/10                     259,000
Sugar crop
Hippo Valley Estates, said Zimbabwe’s sugar output for April 2009 to March 2010 had fallen 13% from the previous year. “Cane yields for the period were adversely affected by the limited and delayed application of fertilisers and herbicides,” Hippo Valley said.[16]
Hippo Valley said Zimbabwe had exported 146,000 tonnes of raw sugar to the EU and the
United States under preferential market access, which the country enjoys.
Many Lowveld A2 farmers under the Commercial Sugar Cane Farmers’ Association of Zimbabwe have pledged to donate over 3,500ha of land to Government for a winter maize project, which is planned to take 5,000ha.

Bank lending
Some banks resumed consumer lending at the end of the year, at an interest rate of 28%/year. Bank charges are still so high that most people shun the banks.
Government income and expenditure:
The civil service audit, promised by August 2010, appeared in February 2011. It reported that, out of 188,019 civil servants detected, 75,273 do not have the minimum qualifications for the posts they hold. The designations of another 17,088 do not appear in the Detailed
Establishment Tables. About 1,315 are working without designation, and there is no information on the qualifications of another 8,723. No information at all could be found for 2,191. Thus, the position of half those on the civil service payroll is, to say the least, irregular. Among them are 10,000 ‘youth officers’ posted to every district of the country ‘in preparation for the elections’,clearly members of the ZANU-PF militias. One ministry (unnamed) employed 6,861 new workers in one day.
Balancing the budget
The first problem facing the Minister of Finance is clear enough from the table below.
revenue & grants    surplus(deficit)            need
Jan/10]                                    -250.0                          400.0
Feb/10]Total                         -250.0                          400.0
Mar/10]( 6 months)             -250.0                          400.0
Apr/10 ] = 900                      -250.0                          400.0
May/10]                                  -250.0                          400.0
Jun/10 ]                                  -250.0                           400.0
Jul/10                  183.1           -216.9                           400.0
Aug/10                144.4           -255.6                           400.0
Table 5: government income & expenditure, January – August 2010
The depth of the problem appears on both sides of the “Micawber equation”: income and
Income: a lot of revenue is either not collected or goes astray. In July Biti said $30 million
worth of diamonds had disappeared; early in 2011 he was talking about $300 million in
government revenue not having been delivered. In both cases, he was met with denial by the ZANU-PF Mines Minister, Obert Mpofu17. The army still control access to large areas of the Chiadzwa diamond fields and are brutalising the inhabitants18; they are allegedly selling diamonds[19] to buy arms, such as the mysterious shipment of several containers that passed through the border at Mutare in May 2011 under military guard and without Customs inspection.
Zimbabwe’s generals are accumulating a secret slush fund from diamond sales, Global Witness campaign group claims. The military’s control over the Marange fields – the source of a quarter of the world’s diamonds – has become an important factor in the future of Zimbabwe. The Joint Operational Command earns revenues from the mines through the control of companies.
Among those alleged to have earned many millions from diamond sales are factions headed by the Defence Minster, Emmerson Mnangagwa, and Solomon Mujuru.
Alan Martin, who compiled a report on the military’s role in Marange for the pressure group Partnership Africa Canada, said Mr Mujuru and Mr Mnangagwa, were preparing for the death of Mr Mugabe. ”Undoubtedly, they are building up their war chests,” he said. ”None of them will make a move until he dies but there will be a succession fight after his death.”
Zimbabwe has stockpiled more than 4.5 million carats of rough diamonds between January and August 2010, which officials say could fetch the country up to $1.7 billion, nearly 80% of government’s $2.2 billion budget for the year[20].
Revenue due to ZIMRA from NOCZIM has, at best, been tardily transferred.
Parastatals and district councils are paying their executives $11-15,000/month or more while ordinary workers get no more than $170. The rule that 70% of district council revenues should go to providing services and no more than 30% to paying staff is a dead letter. Salaries often take 70% of income.
The Ministry of State Enterprises and Parastatals, in a joint operation with the Zimbabwe
Revenue Authority (Zimra), began investigating reports that some parastatals have two
payrolls which they are using to siphon public funds amid a growing furore over the staggering salaries being paid to bosses of the bankrupt state companies[21].
MPs, given cars by the Reserve Bank in 2008, are holding on to them although they now have other vehicles under a parliamentary loan scheme[22]
An audit of the civil service, supposed to present results by November, did give a report in
February 2011. It found about 77,000 workers who seemed to have been irregularly employed.
The Ministry of Youth Development that was singled out as the worst case of abusing
government recruitment procedures when it employed 10,277 youths between May 2008 and June 2008 without having posts for them in the ministry’s establishment[23]
Harare City Council in December 2009 announced plans to make a human resources audit to flush out ghost workers and unqualified employees who were employed illegally during the era of commissions led by Zanu PF sympathisers. Local Government minister Ignatious Chombo interfered with the audit processes and twice halted the exercise. In September Mayor Muchadeyi Masunda announced the audit was complete and added that council would hire professionals to validate the exercise. The audit established that Harare employed 9,500 workers and an additional 500 casual labourers. Council did not say how many were irregularly appointed. Masunda said council would not be retrenching anyone but would instead rely on death and retirement to rationalise its workforce[24].
The longer COPAC, the parliamentary committee on the constitution, sits, the more money it eats up for allowances, accommodation in expensive hotels and much else. By May 2011,
senior MDC and ZANU-PF members of COPAC were complaining that progress was so slow they were being paid for doing nothing[25]
If an election were to be held in 2011, which now seems mercifully unlikely, Biti told journalists on 31 August it would cost $200 million: $100 million each for presidential and parliamentary polls[26].
About 30% of the nation’s schoolteachers could not be paid in September.
The Ministry of Foreign Affairs cannot maintain all its embassies and consulates. An outstanding example is the Cape Town consulate, taken over by that city council for persistent non-payment of rates.
Frequent overseas trips by Mugabe and his family, which can involve diverting a long-distance airliner from its scheduled flight, carry much of the blame for the near-bankruptcy of Air Zimbabwe[27].
Police bribes and foreign currency allocations to officials sold for private profit add to the
Toll-gate funds
The largest amounts of money from toll-gate fees collected nationwide, went to where Mugabe and his closest cronies hail from. Most of the money disbursed by the Zimbabwe National Road Authority (Zinara) by July to different districts for the maintenance of the country’s road network went to Mashonaland West and Mashonaland Central. Zvimba and Bindura got the highest sums disbursed[28].
The top six beneficiary districts for the US$15 million paid out were:
Bindura (Mashonaland Central) with US$2,6 million
Zvimba (Mashonaland West) slightly more than US$2 million
Mhondoro-Ngezi (Mashonaland West) US$1,8 million
Chaminuka (Mashonaland East) US$510,000
Mazowe (Mashonaland Central) US$190,000
and Pfura (Mashonaland Central) US$137,655 .
The Reserve Bank
RBZ is retrenching 85% of its 2,000-plus staff29.
Finance minister Biti is demanding accountability for the RBZ debt before a settlement plan is executed. Speaking at the inaugural Independent Dialogue on 8 September, he said some ministers were opposed to his push for an inquiry into the central bank debt. He said the proposed RBZ debt settlement plan had torn cabinet apart, with ministers divided on how to pay the debts incurred by RBZ governor Gideon Gono’s quasi-fiscal activities.
Gono in July 2010 said RBZ contributed US$1,2 billion of the country’s US$6,4 billion external debt and payment arrears.
Biti proposed creating a special purpose vehicle able to take all the debt and also to its credit take the quasi-fiscal assets of the bank. This was blocked by some ministers who wanted government to take over this debt without asking any questions. Biti insisted government should follow due process that determines the amount of debt and requires another “legal instrument” to legitimise the central bank debt.
Biti said government should appoint an administrator who can “prove and approve” claims
made by central bank debtors for government to inject funds into this vehicle. The debtors, Biti said, will be rated accordingly. “I would reckon that class A would be your sovereign creditors like Afrexim Bank, PTA Bank. Class B could be domestic creditors – people who woke up in the morning and found their monies gone. Class C could be risk-takers – those who took a risk with the bank and took quasi-fiscal activities, not having read the provisions of the Reserve Bank Act,” said Biti.
The Reserve Bank debts arising from quasi-fiscal activities include:
owed to        amount, US$mio
statutory reserves              83
corporations                         80
NGOs                                     20
Equatorial Guinea (for oil) 222
Reserve Bank of SA              10
Malawi central bank             20
CFU                                         20
Table 6
In addition, RBZ repaid $184 million arrears to IMF and gave $200 million in farm
mechanisation loans that have mostly not been repaid30. Some of the corporate debtors are Zimplats (US$34 million), the CFU and other mining companies that were at year-end yet to benefit from an underfunded special bond set up in April to settle the debt.
Carslone Enterprises, a subsidiary of the RBZ, entered into a joint venture for extraction and processing of diamonds and gold with Gweru farmer Magiel Casper Jovner, who owns Kleimpton Farm, in 2007 to carry out mining activities at his Mangwe Mine claim 24 for a three year period up to June 2010. The deal turned sour and the matter is now before the courts.[31]
To help settle the RBZ debt, the Reserve Bank apparently, through its investment vehicle
Finance Trust of Zimbabwe, was aiming in December to sell its 64% shareholding in Cairns, 65% interest in Astra and 62% stake in Tractive Power.[32]
The Zimbabwe Farmers Union was compiling in September a list of its members whose money is with the Reserve Bank of Zimbabwe under the foreign currency retention facility of the 2007/8 seasons. In 2007, tobacco growers were entitled to 20% of their sales proceeds in foreign currency. The retention levels were increased to 25% during the 2008 selling season. By April 2009, the central bank owed tobacco growers US$18 million and many said they were still to be paid.
This list does not completely explain the $1.2 billion.
Government has already categorised public entities into three broad categories – those to be commercialised, those to be privatised and those to be restructured although it remains tightlipped on which enterprises would be affected[33].
Minister Biti said the focus of the budget would be to refine and define the refocusing,
regeneration and rebuilding of the economy within the context of all factors required to achieve a developmental state.[34]
External debt at 31 December 2010 was US$6,929 million, of which 57% was owed by
government, 35% by parastatals and 8% by private companies. This total debt compares with a government budget of $2,700 million and amounts to 103% of GDP (however that may be estimated)
At the end of June, Zimbabwe’s total debt to the IMF, the African Development Bank and the World Bank was $1.4 billion. In September, debt to AfDB was $400 million and to the IMF $134.85 million, leaving the WB debt at about $865 million. Repayments during the year were negligible, but Zimbabwe’s payments to the IMF in January – September 2010 of $1.3 million exceeded new obligations falling due for the period and the authorities’ commitment to quarterly payments to the Fund of about US$100,000. In February this year the country’s IMF voting rights were restored. Biti reported that Zimbabwe’s debt was accruing US$300m interest annually.
In the 2010 budget, Government was expecting about US$810 million from donors. But just under US$250 million found its way into the country.
Between January and June, government authorised companies to retrench nearly 3,000
employees, with the banking and textile sectors mostly affected.
Activity in the informal sector has picked up during the year.
Stock exchange
By mid-February 2011 trade on the ZSE was between $1 and $2 million per day. This is low, which could exaggerate price fluctuations in the table below.
Table 7: Stock market indexes 2010
industrial mining
06/01/10  142.88    185.72
13/01/10   166.95   201.28
20/01/10   159.09   208.32
03/03/10   133.37   172.55
17/03/10   131.51    138.44
24/03/10   155.73    161.17
21/04/10   133.19    185.13
12/05/10   139.57    164.50
07/07/10   122.91    132.36
14/07/10   121.29     132.63
04/08/10   132.16    139.34
01/09/10   132.67     132.28
08/09/10   132.89    134.32
15/09/10   130.24    142.87
22/09/10   131.33     170.89
06/10/10   135.73     157.76
17/11/10     157.13     223.97
08/12/10    149.46     233.69
15/12/10    147.77      223.49
29/12/10    148.84     207.25
Source: ZimInd
ZSE has lost about a billion dollars in value between March and August, due to fears raised by the indigenisation regulations, out of a total capitalisation of about $4 billion.
Foreign direct investment (FDI) in Zimbabwe totalled US$60 million in 2009, an increase of $8 million from the $52 million recorded last year, according to the World Investment Report released by UNCTAD on 22 July 2010.
Economic Planning and Investment Promotion Minister Minister Tapiwa Mashakada said government are considering a new Investment Promotion and Protection Act, Prospects seem doubtful while indigenisation Minister Kasukuwere sings a different tune – loudly.
By 27 July The Zimbabwe Investment Authority has approved projects worth US$120 million.[35]
The Herald on 27 September reported that 51 Bilateral Investment Promotion and Protection Agreements (BIPPAs) were at various stages of completion. Zimbabwe has ratified agreements with China, Denmark, Germany, Netherlands, Swiss Federation, Yugoslavia and South Africa. Agreements with Iran, India, Kuwait, Opec Fund and Singapore are in line for ratification.
They reported a Zimbabwe/Botswana BIPPA was in an advanced stage of negotiation, but in June the Zimbabwe Independent reported this was stalled as Botswana negotiators didn’t see how it squared with the Indigenisation regulations.

Manufacturing production
Problems constraining production, estimated by the Minister at 15% of GDP in July, include shortage of capital, frequent electric power cuts and uncertainty caused by ZANU-PF’s rhetoric about indigenisation and what that might mean in practice.

The search for an investor to revive ZISCOsteel seems not to have reached a conclusion. ZANU-PF had wanted a Chinese or south-east Asian firm, but one Chinese investor has already pulled out of a prospective deal citing interference by government officials. After Jindal Steel of India and South Africa’s Arcelor-Mittal were rejected, another Indian company came forward but seem to have withdrawn from the deal.
Generators at Hwange and Kariba have been refurbished, but mining and timber companies are trying to import electricity directly. ZESA is trying to involve private investors in reviving the small thermal stations in Harare, Bulawayo and Munyati and talking of small private hydro plants that could add 200Mw to total power generation.
Zimbabwe is currently importing between 50MW and 300MW. Financial constraints at ZESA mean the local power utility cannot secure supply contracts from the Southern Africa Power Pool surplus of 900MW.
Other energy
Stoat Mining, a subsidiary of the BMC Engineering Group, has commissioned the second unit of its coke oven battery in Hwange, under a Build, Own, Operate and Transfer (Boot) agreement with China’s Taiyuan Sanxing Coal Gasification Company and Hwange Colliery Company. BMC chairman Dr Cephas Msipa Jnr said in June the plant, being built at a cost of US$150 million will produce 40,000 tonnes of coking coal per month once complete and fully operational.[36]
We hear talk of a Chisumbanje ethanol-for fuel project, but no mention is made of the earlier Triangle plant. A bio-diesl project using jatropha as feedstuff, a brainchild of Gideon Gono, has gone the way of most of his schemes.
Air Zimbabwe has suffered an on-off pilots’ strike on top of near-bankruptcy from Mugabe’s habit of commandeering planes. When it was announced that they were trying to buy two new long-haul Airbus planes for $400 million, the only conclusion was that someone was trying to get the usual kickbacks on such sales.[37]
NRZ is run down, with most of its locomotives out of action and extensive theft of cables on the electrified stretch of track, Harare-Gweru.
Sub-Sahara Africa Buses, a new local company has begun assembling buses, with a capacity of 15-20 buses/month.
Mobile phone ownership has increased from 30 per 100 of population in January to 49 in
September, according to POTRAZ. Other observers put the number of lines higher; 3 million lines were suspended for non-registration, but even if these were not quickly registered, there are probably about 6 million lines in use, providing one of the requirements for economic growth.

Table 8: production of major minerals, 2009-10
mineral            production (t)                   value US$mn
2009    2010      increase  2009      2010
platinum            7         8.6          26%        409
gold                   4.9      9.6           96%       157          380
ferrochrome 72,223 154,336   114%      135
coal        1,662,500 2,660,000 60%          97
nickel           4,858     6,133        26%
ALL MINERALS                                      672         1380
Source: Chamber of Mines
The Herald, on 28 June, 2010 reported data released by the Minerals Marketing Corporation of Zimbabwe, responsible for marketing all minerals except gold and silver: a total of 426,359 tonnes of various minerals valued at about US$403 million were exported in the first five months of 2010, up from US$191,9 million during the same period of the previous year. The table above shows a rise in the rest of the year, that is modest and credible, allowing that MMCZ figures don’t include gold.
Power cuts, labour disputes, loss of skilled workers and inadequate working capital are among factors that slowed growth of the mining industry. The uncertainty has also been worsened by the promulgation of the indigenisation law.
Production may be higher than recorded here, as this year’s biggest export, for the second year running, is ‘Stamp-impressed paper, banknotes and bond certificates’, which is unlikely but could plausibly conceal gold exports. However you reckon it, this ‘paper’ and recorded gold exports amount to more than the 10t/year needed to restore our membership of the London Bullion Market Association, so one wonders what the problem is there.
Anglo Platinum’s Unki mine shipped its first consignment of concentrates at the end of March 2011.
Government revenue from diamonds was US$35 million, which does not fairly represent the volume of either production or exports. Minister Biti claims it should have been $300 million more.
The disputed Kimberley Process certification allowed two semi-private sales of diamonds before the end of the year. Before that, RioZim Murowa Mines and River Ranch already had Kimberly process clearance, but Government suspended diamond exports arguing it was in accordance with the WTO rules on non-discrimination in trade because the other mining houses were awaiting Kimberly Process export clearance.
Focus has also shifted to diamonds from Chiadzwa. Zimbabwean has stock piles of more than six million carats worth about US$2 billion.[38]
LonZim is investing $300 million in a diamond processing plant at Marowa and one of the
companies brought into Marange, Canadile is also building processing capacity
has disappeared off the screen since control of Shabanie Mashaba Mines was siezed from Mutumwa Mawere. Workers are not being paid, production is at a standstill but senior executives are still paying themselves fat salaries. Shabanie posted a loss of US$18.6 million last year. It is said to have reserves enough for 17 years production.

Zimbabwe’s official imports totalled $3,754,314,461 and exports amounted to $1,946,390,609, giving a balance of -$1,807,923,852.
Trade by principal countries:
Table 9: 2010 Imports; 10 biggest suppliers of imports (US$), all products:
Imports    Exports             balance        exp/imp,%    Export rank
South Africa 2,041,956,480 1,450,797,339 -591,159,141     71.0%               1
Kuwait               251,938,851      0                    -251938851      0.0%                –
China                 228,590,322    166,940,137   -61,650,185      73.0%               3
UAE                   136,853,084     276,645,797   139,792,713   202.1%               2
GB                       97,928,244        72,520,876   -25,407,368     74.1%                6
Botswana            93,853,515     102,529,860       8,676,345    109.2%               5
Mozambique       91,796,373        71,130,466   -20,665,907      77.5%               7
Zambia                90,576,168      125,348,970     34,772,802    138.4%               4
Mauritius            59,247,974           3,821,547   -55,426,427         6.5%             33
India                     47,266,040         2,553,265   -44,712,775         5.4%              38
Source: ZimTrade/Zimstats
The top 10 markets for for Zimbabwe’s exports included these not shown in the
table above:
imports          exports         balance        Exp/imp,% Import rank
Italy         15,731,866   61,304,441   45,572,575       389.7%           26
Germany 43,564,330  38,015,297   -5,549,033         87.3%           12
Belgium    12,951,800  35,739,642    22,787,842       275.9%          28
Source: ZimTrade/Zimstats

Table 10: Principal Zimbabwe imports, by category, in US$:
HS4 imports
2710 PETROLEUM OILS & OILS OBTAINED FROM BITUMINOUS MINERALS,OTHE                                                                                                    781,373,093
8517 ELECTRICAL APPARATUS FOR LINE TELEPHONY OR LINE TELEGRAPHY                                                                                                             192,649,383
1001 WHEAT AND MESLIN                                                                                     165,751,581
8704 MOTOR VEHICLES FOR THE TRANSPORT OF GOODS                         105,093,857,
2203 BEER MADE FROM MALT                                                                              100,253,748
1512 SUNFLOWER-SEED, SAFFLOWER OR COTTON-SEED OIL AND THEIR FRACTIONS                                                                                                                     86,463,788
7501 NICKEL MATTES, OXIDE SINTERS AND OTHER PRODUCTS OF NICKEL METAL                                                                                                                              68,851,338
1101 WHEAT OR MESLIN FLOUR                                                                             67,348,954
3102 MINERAL OR CHEMICAL FERTILIZERS, NITROGENOUS                      64,293,896
3401 SOAP; ORGANIC SURFACE-ACTIVE PRODUCTS IN BARS, ETC; PAPER WI                                                                                                                                       57,735,929
-accounting for 38.9% of import value Source: ZimTrade/Zimstats
Mining has picked up and the imports of electrical equipment, mostly for mobile phone
networks, shows there is growth, mainly of infrastructure for further growth. However, large imports of vegetable oil, soaps and clear beer point to the weakness of agriculture. Local fertiliser production remains inadequate for even the low demand of recent years.
Imports of unprocessed or partly-processed nickel ore suggest that it undergoes some
processing in Zimbabwe. The large amount of nickel ores and mattes exported (see table
below) show that we need to do more processing of our minerals.
Table 11: Principal exports, by category, inUS$:
HS4 exports
FORMS                                                                                                          521,877,202
7501 NICKEL MATTES, OXIDE SINTERS AND OTHER PRODUCTS OF NICKEL METAL                                                                                                           407,709,914
2401 UNMANUFACTURED TOBACCO; TOBACCO REFUSE              385,927,555
7102 DIAMONDS, NOT MOUNTED OR SET                                           323,088,643
7108 GOLD, UNWROUGHT OR IN SEMI-MANUFACTURED FORMS, OR IN POWDER                                                                                                          303,441,511
2604 NICKEL ORES AND CONCENTRATES                                            244,513,383
7202 FERRO-ALLOYS                                                                                  183,664,868
2523 PORTLAND CEMENT, ALUMINOUS CEMENT, PERSULPHATE CEMENT, ETC                                                                                                                   157,960,920
5201 COTTON, NOT CARDED OR COMBED                                            123,962,915
2610 CHROMIUM ORES AND CONCENTRATES                                     42,233,456
-accounting for 81.9% of export value. Source: ZimTrade/Zimstats
The mysterious and unlikely item “unused postage or revenue stamps, stamp-impressed paper, cheque forms” has grown dramatically since the previous year. In 2010, it was divided into monthly amounts between $200million and $700 million.
Remembering that the possible source of this kind of paper would be the RBZ’s printing subsidiary, Fidelity Printers, who also were the country’s licensed gold exporter, the picture becomes clear. There were no exports in this category in 2007 or 2008. In the years 1999-2006, they only once exceeded a million dollars.
Platinum exports don’t appear near the top of ZimTrade’s lists for the year, although import of ‘platinum in unwrought or semi-manufactured form or powder’ for $23,396 is recorded. Where did the $409 million worth produced in 2010 go to?
The diamond exports listed here represent proceeds from the two known sales. Diamonds and arms are widely believed to be traded by the army to preserve their hold on power.[39]
The UK Sunday Times reported in January 2011 that the Zimbabwe government transferred arms to the Ivory Coast’s decade-long ruler Laurent Gbagbo’s administration. The transfer was allegedly facilitated by the state-owned Zimbabwe Defence Industries (ZDI)as part of an armsfor-oil exchange agreement with the Gbagbo regime.
Tourist figures reported a three percent growth in 2009, the first in a decade. In Victoria Falls, tourism reportedly grew by 70% in the first quarter of 2010. This probably indicates that visiting the country is considered less of a security risk than it seemed a few years ago.
Continuing poaching by people who seem to enjoy impunity still affects wildlife as an
advertisable tourist attraction adversely. So would the much publicised dispute over the
construction of a restaurant in the small and ecologically-sensitive Victoria Falls rain forest.
Some detected cases showed that there are still ‘hunting safaris’ that exceed sustainable
levels. This makes a few fat pockets fatter now at the expense of the whole community and
future generations. That is how Zimbabwe is today.
The overall picture indicates a moderate revival of mining and agriculture. The prospects for a restoration of the industrial base the country still had twenty years ago are less certain. World trends, including the rise of new industrial and commercial powers, China in particular, are likely to leave us condemned to being a consumer market for manufactures and a producer of valuable primary products at low cost.
The continuing existence of a ruling clique with very limited understanding of, or interest in how a productive economy might work makes that gloomy prospect more certain, and shaking their grip is going to be a far bigger job than getting a few signed agreements and a free election.
Published in Zimbabwe Review 11/3, BZS, Oxford, August 2011
1 Poverty Reduction Forum Trust, 59 Mendel Road, Avondale, Harare: Phone: +263 777 340 370; Email: prftresearch@gmail.com
2 Munyaradzi Mugowo/Tarisai Tahungai – Jul 23 2010
3 The Zimbabwean, 7 October 2010
4 Herald, 23 June, 2010
5 Herald, 11 October 2010
6 The Independent, 29 July 2010 (Harare)
7 Herald, 19 July 2010; Herald, 11 June 2010
8 Herald, 10 September 2010
9 Herald, 31 December 2010
10 Herald, 30 June, 2010
11 Herald, 4 August 2010
12 Herald, 16 September 2010
13 Herald 20 August
14 Herald 17 September
15 Herald, 10 August 2010
16 Reuters, 2 June 2010
17 Zimonline, 10 August 2010
18 Daily News, 26 May 2011
19 http://www.smh.com.au/ & Daily Telegraph, London, 21/9/10
20 http://www.zimonline.co.za/ 10 August 2010
21 http://www.theindependent.co.zw/ 5 August 2010
22 The Herald, 9 September 2010
23 http://www.theindependent.co.zw/, 14 October 2010
24 http://www.thestandard.co.zw/, 22 August 2010
25 The Zimbabwean, 26 May 2011
26 Herald, 1 September, 2010
27 Clifford Chitupa Mashiri, London, zimanalysis2009@gmail.com, in The Zimbabwean 19/9/10
28 The Zimbabwean, 22 July 2010
29 http://www.monstersandcritics.com/, 29 Aug, 2010
30 http://www.newzimbabwe.com, 30/12/2010
31 http://www.theindep endent.co.zw/, 3 September 2010
32 Herald, 30 December 2010
33 http://www.theindependent.co.zw/, 20 August 2010
34 Herald, 1 September 2010
35 http://news.radiovop.com, 27/07/2010
36 Sunday Mail, 6 June, 2010
37 Daily News, 23 May 2011
38 Herald, 2 August 2010
39 e.g. Daily News, 18 May 2011

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