February 3, 2008
Zimbabwe 2008: The election whose outcome is predetermined
Zimbabwe finds itself at the crossroads and the bank created at independence in 1980 of justice, freedom and equality seems to be bankrupt and it is evident that the promissory note that was given to citizens at independence will not be honored on March 29.
A central bank should ordinarily represent a repository of trust and integrity but the Reserve Bank of Zimbabwe has been reduced to a theatre of games and machinations while the nation is at its knees groping for solutions and desperate for direction and answers.
At last week’s announcement of the monetary policy statement, Dr. Gono has this to say: "We have chosen a low-key presentation of this monetary policy statement for strategic reasons while we prepare for a comprehensive post-elections policy program.’’
Read more...
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February 3, 2008
Cash Barons – Flatwater Revisited
A case has been made that Zimbabwe is under siege and, therefore, the end should justify the means. In about 56 days, Zimbabweans will be faced with a choice about who should shape their future and they will have to think seriously about the role of state institutions in undermining or promoting their collective interests.
The RBZ has boldly asserted that it has been forced to go beyond its mandate because of extraordinary conditions prevailing in the economy. It is has been pointed out that the actions of the Western countries combined with the nefarious activities of unscrupulous business and political actors have created the economic mess.
Read more...
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January 28, 2008
Zimbabwe 2008: The triumph of the politics of fear
It is now a reality that the harmonised polls will be held on 29 March 2008.
Only last year this time, the conventional wisdom in many opposition circles was that President Mugabe would not secure the mandate of his party as a candidate when his term expired let alone him being democratically endorsed as candidate of the party for the 2008 elections.
Many experts advanced the notion that Mugabe would not last the year as the head of state and ZANU-PF will disintegrate into tribal factions. A combination of internal party contradictions and confusion was meant to facilitate the exit of Mugabe from the political scene.
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January 24, 2008
Obama v Clinton/Clinton and lessons for Africa
Both Senators Obama and Hillary Clinton are democratic Presidential nominees and their emergence as the front runners of their party represents a historic and defining moment in American history.
Since the founding of the republic, the White House has been the exclusive preserve of white males and the thought of an African American and a White Female, albeit a former first lady, being prospective custodians of American values, interests and way of life was certainly not in the minds of the founding fathers of the USA.
The intersection of race and gender in American political life and its dominance in the 2008 elections has to be understood in a broader context of the evolution of the country’s democratic order and the consequences of the civil rights and women suffrage movements.
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January 21, 2008
Africa 2008: Citizens, Money and Power in Africa
There are many big questions that should inform African conversations but regrettably we are all guilty of small talk in respect of some key and fundamental issues that have to be addressed if Africa is to advance its cause.
The role of citizens, money and power relationships in shaping Africa’s destiny have to form part of the great debates between and amongst us. Who does Africa belong to? What are the obligations of African citizenship? What should be the role of the state in a developmental state? These are some of the questions that come to my mind in the quietness of my time when occassionally I reflect on the African condition and the seemingly helpless state of affairs that my continent of birth finds itsef in. After more than fifty years of trying and US$600 billion worth of aid, the frontiers of poverty have not been reduced in the continent.
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January 17, 2008
Africa 2008: Citizens and Power – The Zimbabwean Case Study
Political power in any democratic and constitutional order is held by the holders of sovereignty. It is true that without following a principle of containing and balancing legislative, executive, and judiciary powers, there can be no freedom and no protection against the abuse of power. The separation of power principle between the three branches of the state is so fundamental to the protection of any constitutional order. It is generally agreed that any atmosphere where any of the branches of the state can operate with excessive limitation from others and one branch can rule out the decisions of the other branches necessarily undermines the principle of sovereignty and the rule of law. Africa is a challenged continent in so far as locating political power in the context of the wishes and aspirations of citizens.
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January 13, 2008
Obama’s audacity of hope and lessons for Africa
After two primaries, Obama has won 16 delegates compared to Senator Clinton’s 9. The results of the New Hampshire primary have demonstrated the resilience of Obama and underlying the hype following the elections is the undeniable fact that Clinton and Obama ended up in New Hampshire with the same number of delegates i.e. 9 each making it a draw.
Even if Obama may not make it as the candidate, the politics of America will never be the same.
What Obama represents to America and to all global citizens who are trapped in seemingly hopeless situations is already evident in the courage and determination of the marginalised to invest in meaningful change politics.
When Barack Obama stepped up to the podium at the 2004 Democratic National Convention, few in the world let alone outside his home state knew anything about him. His place in American history is not only secure but inspirational. His message is so basic and compelling. It captures the imagination of anyone who cares about life and the importance of positive activism.
Obama has entered national politics at a defining moment in American history when the names of both the incumbent President and his deputy are not on the ballot box
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January 13, 2008
If Zuma & Shaik are guilty, who is innocent?
The relationship between the petty bourgeoisie and political elites in a post colonial state is a subject that requires critical interrogation not only because it informs the kind of democratic order and political morality that is necessary to push back the frontiers of poverty itself largely a legacy of the colonial state. The end of apartheid in South Africa ushered a new era in which political power was transferred to the majority of the citizens through their elected representatives. Republicanism formed a foundational basis of the post apartheid state underpinned by a government of laws and not of men.
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December 30, 2007
Be the change that you want to see
NO SOCIETY can ever be greater than the sum of the actions of its citizens. The end of each calendar year is like a birthday of a natural person that provides an opportunity to take stock and reflect on past achievements and challenges of the future.
Indeed, when we say many happy returns, we are celebrating life and its renewal because, like water, life makes a difference that cannot be reduced to any monetary value. The quality of life of any people is causally linked to human action and not inaction. It would be unreasonable to wish many happy returns to a dead person or a person who makes no difference to the lives of people.
Hope and faith is all we have as mortal beings, but in both, possibilities and opportunities exist to advance the cause of human civilisation in a manner that defines history and leaves a legacy for future generations.
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December 24, 2007
The paradox of African liberation and change
IN 1994, South Africa became the youngest African country that was born from the womb of apartheid and its foundational constitutional order was uniquely informed by not only the experiences of other post-colonial African states but other nations outside the continent.
The deracialisation of South Africa was a costly project principally because the stakes were high and the settler community had invested in making the country an extension of Europe with its own race-based constitutional order underpinned by a balkanisation concept. Blacks were apportioned their own land under the apartheid structure where they were presumed to be free, notwithstanding the unfair resource allocation.
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December 19, 2007
Zimbabwe and the Jacob Zuma factor
AS SOUTH Africa and indeed President Thabo Mbeki digests and reflects on Jacob Zuma’s victory as the president of Africa’s oldest political party, the African National Congress (ANC), there is no doubt that the political actors in Zimbabwe are also challenged by the implications of a Zuma presidency underpinned by strong support by President Mugabe’s strongest and most vocal critics i.e. COSATU and the SACP.
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December 17, 2007
The EU-Africa relationship post-colonialism
THE controversial EU-Africa summit is now history but will forever be remembered for the Brown-Mugabe debacle that at the safe signified an attempt by former colonies to negotiate a new and just post-colonial engagement with former colonial masters.
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December 10, 2007
Beyond Lisbon: setting the African agenda
THE EU-Africa summit held in Lisbon last weekend has come and gone but Africa’s challenges will remain.
For the first time, Africa came to Europe as a united block specifically more on the Zimbabwean issue than on the key issues on the agenda of the summit. The Zimbabwean stand-off that has prevented the indaba from taking place for seven years has its own historical significance and provided an opportunity for Africa to take the values debate head on with its former colonial masters.
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December 03, 2007
Implications of Zuma winning ANC leadership race
THE colonial state was founded on the notion that natives could not be trusted with the vote and, therefore, they had to be excluded from governance issues. The value system that underpinned the colonial state informed the constitutional order of the day.
The role of the colonial state was to promote, protect and sustain the hegemony of the settler community. At the core of the colonial state was the need to commodify native labour and this was achieved by systematically alienating natives from economic resources.
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November 27, 2007
Africa's enduring economic apartheid
APARTHEID is a social and political system of racial segregation and discrimination that was popularised and institutionalised by white minority governments in South Africa for a 46 year period from 1948 through 1994.
The term apartheid (from the Afrikaans word for “apartness”) was introduced in the human vocabulary in the 1930s and used as a political slogan of the National Party in the early 1940s, but the philosophy underpinning it was an integral part of the colonial South African experience that dated from 1652. In 1948, apartheid was institutionalised and supported by a complex legal and economic system that stratified citizens along racial lines.
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November 18, 2007
Does indigenisation threaten law of succession?
THE political destiny of Africa is now notionally in the hands of the natives in all of its states while the key economic decisions about Africa’s future continue to be made by non-Africans notwithstanding the last five decades of uhuru.
The democratisation of Africa’s economic space is the enduring challenge that confronts the continent with equal measure, irrespective of the stage of economic development of the individual states.
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November 11, 2007
Defining the role of the state in post-colonial Africa
THE purpose of this article is to assess the role of the state in light of the last 50 years of post-colonial experiences.
The extent of the state’s role in the transformation and development of Africa continues to be debated particularly in light of the unorthodox institutional arrangements that seem to have facilitated economic development in the East Asian economies. Post colonial African politics have been heavily shaped by controversies over the role, size and strength of the state.
What is the role of the state in post-colonial Africa?
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November 05, 2007
Mushore's ordeal and the New Zimbabwe we want
JAMES Mushore, one of three professionals who founded the first merchant bank controlled and managed by blacks in Zimbabwe, the National Merchant Bank of Zimbabwe (NMB), made history in 2004 when like the late Vice President Joshua Nkomo, he fled to the former colonial power, England, for fear of his life in post colonial Zimbabwe.
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Wednesday, February 6, 2008
Sunday, February 3, 2008
Zimbabwe 2008: The election whose outcome is predetermined
Zimbabwe finds itself at the crossroads and the bank created at independence in 1980 of justice, freedom and equality seems to be bankrupt and it is evident that the promissory note that was given to citizens at independence will not be honored on March 29.
A central bank should ordinarily represent a repository of trust and integrity but the Reserve Bank of Zimbabwe has been reduced to a theatre of games and machinations while the nation is at its knees groping for solutions and desperate for direction and answers.
At last week’s announcement of the monetary policy statement, Dr. Gono has this to say: "We have chosen a low-key presentation of this monetary policy statement for strategic reasons while we prepare for a comprehensive post-elections policy program.’’ He also made startling revelation that the RBZ would come up with a post-elections monetary policy blueprint that will cover a 24-month recovery programme stretching from May 2008 through to April 2010.It appears that Gono already knows the outcome of the general elections otherwise he would have been cautious instead of preempting the actions of a new administration particularly given that this landmark election will involve Presidential, Parliamentary and local choices. It appears that Gono has already discounted the possibility of any other outcome than the victory of ZANU-PF.
In line with his belief that ZANU-PF will win the election, Gono said that the post election programme will focus on, among other things, the removal of pricing distortions in such areas as fuel, agricultural inputs and outputs, multiple interest and exchange rates, electricity, water and other municipal and parastatal service charges. Does this not sound familiar? Is it not the same Gono who said failure is not an option? Why would citizens of Zimbabwe place their trust on him after the elections? If these policies makes sense now what defer them to the post election period? Is it the change that Zimbabweans should vote for on 29 March 2008?He also said that the government will also look at the subsidies policy with a view to scrapping untargeted general subsidies, amend investment laws, and boost productivity through incentives for key sectors — agriculture, mining, tourism and manufacturing.The Governor who is increasingly assuming the role of an unelected President had no kind words for Government ministries, local authorities, parastatals and some sections of the business community which he alleged have over the years failed to take heed of policy advice and warnings from the central bank as if to suggest that these state institutions are now accountable to him. Under what constitutional order would a Governor of the central bank make such statements? It can only be when a democratic order has been irretrievably broken. It is important for citizens to record all the words of Gono because they help in exposing the extent of the breakdown of the rule of law and the collapse of the state. As is now characteristic of Gono, he spared no effort to lament the impact of the sanctions imposed on the country by the European Union, the United States and their allies, saying there were "considerable attempts being made to dismantle Zimbabwe’s economic fabric through a combination of armory". He was also reported to have said: "The subtle nature of some of these sanctions has regrettably escaped the eyes of some stakeholders here at home and many others in the world community who, instead, are interpreting Zimbabwe’s current difficulties as a product of domestic policy imbalances.’’
With respect to the impact of sanctions, he was of the view that the freezing of donor-supported programmes, withdrawal of external lines of credit and balance of payments support and the denial of Zimbabwe’s access to the Global Fund for health-related programmes had combined to create the economic crisis.He then attempted to justify his questionable and possibly corrupt quasi fiscal activities by saying that the RBZ had been forced to carry extraordinary responsibilities outside its core business to ensure that the country was fed and had fuel, among other things.Gono was supposed to appear before the Budget and Finance Committee of the recently dissolved parliament to expose the so-called cash barons but it was reported that the meeting was now postponed and will only take place after the elections by which time there may be new players in parliament.
Gono is firmly in control of economic actors who are reduced to beggars for this or that dispensation on the false premise that the RBZ has an existence outside the control of citizens. While it is universally accepted that no state can exist on its own it is clearly evident in the Gono construction that with or without elections ZANU-PF will be in charge and by deductive logic he will be in power as well to continue to play tactical games with people’s resources and steal their future through manipulative actions.
A central bank should ordinarily represent a repository of trust and integrity but the Reserve Bank of Zimbabwe has been reduced to a theatre of games and machinations while the nation is at its knees groping for solutions and desperate for direction and answers.
At last week’s announcement of the monetary policy statement, Dr. Gono has this to say: "We have chosen a low-key presentation of this monetary policy statement for strategic reasons while we prepare for a comprehensive post-elections policy program.’’ He also made startling revelation that the RBZ would come up with a post-elections monetary policy blueprint that will cover a 24-month recovery programme stretching from May 2008 through to April 2010.It appears that Gono already knows the outcome of the general elections otherwise he would have been cautious instead of preempting the actions of a new administration particularly given that this landmark election will involve Presidential, Parliamentary and local choices. It appears that Gono has already discounted the possibility of any other outcome than the victory of ZANU-PF.
In line with his belief that ZANU-PF will win the election, Gono said that the post election programme will focus on, among other things, the removal of pricing distortions in such areas as fuel, agricultural inputs and outputs, multiple interest and exchange rates, electricity, water and other municipal and parastatal service charges. Does this not sound familiar? Is it not the same Gono who said failure is not an option? Why would citizens of Zimbabwe place their trust on him after the elections? If these policies makes sense now what defer them to the post election period? Is it the change that Zimbabweans should vote for on 29 March 2008?He also said that the government will also look at the subsidies policy with a view to scrapping untargeted general subsidies, amend investment laws, and boost productivity through incentives for key sectors — agriculture, mining, tourism and manufacturing.The Governor who is increasingly assuming the role of an unelected President had no kind words for Government ministries, local authorities, parastatals and some sections of the business community which he alleged have over the years failed to take heed of policy advice and warnings from the central bank as if to suggest that these state institutions are now accountable to him. Under what constitutional order would a Governor of the central bank make such statements? It can only be when a democratic order has been irretrievably broken. It is important for citizens to record all the words of Gono because they help in exposing the extent of the breakdown of the rule of law and the collapse of the state. As is now characteristic of Gono, he spared no effort to lament the impact of the sanctions imposed on the country by the European Union, the United States and their allies, saying there were "considerable attempts being made to dismantle Zimbabwe’s economic fabric through a combination of armory". He was also reported to have said: "The subtle nature of some of these sanctions has regrettably escaped the eyes of some stakeholders here at home and many others in the world community who, instead, are interpreting Zimbabwe’s current difficulties as a product of domestic policy imbalances.’’
With respect to the impact of sanctions, he was of the view that the freezing of donor-supported programmes, withdrawal of external lines of credit and balance of payments support and the denial of Zimbabwe’s access to the Global Fund for health-related programmes had combined to create the economic crisis.He then attempted to justify his questionable and possibly corrupt quasi fiscal activities by saying that the RBZ had been forced to carry extraordinary responsibilities outside its core business to ensure that the country was fed and had fuel, among other things.Gono was supposed to appear before the Budget and Finance Committee of the recently dissolved parliament to expose the so-called cash barons but it was reported that the meeting was now postponed and will only take place after the elections by which time there may be new players in parliament.
Gono is firmly in control of economic actors who are reduced to beggars for this or that dispensation on the false premise that the RBZ has an existence outside the control of citizens. While it is universally accepted that no state can exist on its own it is clearly evident in the Gono construction that with or without elections ZANU-PF will be in charge and by deductive logic he will be in power as well to continue to play tactical games with people’s resources and steal their future through manipulative actions.
Cash Barons – Flatwater Revisited
A case has been made that Zimbabwe is under siege and, therefore, the end should justify the means. In about 56 days, Zimbabweans will be faced with a choice about who should shape their future and they will have to think seriously about the role of state institutions in undermining or promoting their collective interests.
The RBZ has boldly asserted that it has been forced to go beyond its mandate because of extraordinary conditions prevailing in the economy. It is has been pointed out that the actions of the Western countries combined with the nefarious activities of unscrupulous business and political actors have created the economic mess.
The recent cases involving the disbursement of funds by the RBZ to a relatively unknown company, Flatwater, to procure tractors as well as the handling of the Dorothy Primrose Mutekede matter have exposed the role of the RBZ in undermining public confidence in state institutions.
On the Flatwater matter, the court was told last week by the RBZ financial intelligence director, Mr. Mirirai Chiremba that Flatwater was chosen because it had a good track record dealing in foreign currency related transactions ignoring the fact that such a record has been used in targeting other persons such as Mushore, Muponda, Kuruneri, Makamba not forgetting yours truly and only recently Van Hoogstraten for prosecution.
The state prosecutor had submitted that there seemed to have been a conspiracy between Flatwater and RBZ as there appeared to have been no due diligence and proper agreement between the two parties before Z$7 million was disbursed to Flatwater.
Chiremba said that Flatwater had dealt with several renowned companies like Delta, Blue Ribbon and had in the past supplied the central bank with more than 300 tractors under the purportedly the same program.
What is strange from the testimony of Chiremba is that the representatives of Flatwater who appeared previously before the same magistrate, Tendai Chivaviro and Misheck Manjoro, forgot to present the same resume of the company and omitted to mention that the company had been involved in similar transactions with third parties who also should be investigated for possible foreign exchange violations.
It is strange that the state prosecutor found it fit to ask for an order to compel the RBZ to explain its role in a transaction that clearly had ramifications for the integrity of the state if Flatwater was a well established and financially sound company.
Misheck Manjoro and Tendai Chivaviro have already admitted to violating the exchange control regulations by playing a role in a scheme financed by the RBZ. If the RBZ was satisfied that Flatwater, a company incorporated under the laws of Zimbabwe, had access to foreign currency without alerting the police as has been the case in similar circumstances, then surely this is a case of selective application of the law.
Chiremba informed the court that Flatwater had previously supplied the RBZ with 300 tractors without explaining how a Zimbabwean registered company that is subject to the same punitive exchange control regulations would have access to foreign currency that other companies in similar circumstances do not have.
The relationship between Gono and the CEO of Delta is well known to confirm that Flatwater may have been used as a vehicle for Friends of Gono (FOG) to access foreign currency without being subject to normal rules applicable to Enemies of Gono (EOG).
Delta’s sales are in local currency and yet its inputs are largely in foreign currency. The question then becomes how Delta has been immune from foreign exchange violations unless it belongs to the category of companies that are untouchable. The Coca Cola Company supplies concentrate to Delta that has to be paid in foreign currency as is the case for imported tractors. Zimbabwe is in short of foreign currency and the suppliers of foreign currency including those in the diaspora are unwilling to part with it at the insulting official exchange rate.
Gono is fully aware as many business people are that the prevailing official exchange rate is unworkable. Instead of telling the truth to his principal, President Mugabe, Gono has chosen to lie and protect only his friends like Blue Ribbon and Delta. He wants the country to believe that companies like Flatwater would be stupid enough to part with foreign currency sourced from dubious sources that may well turn out to be some of the big names in the export business at the official exchange rate.
An inescapable conclusion can be drawn from Chiremba’s testimony that Flatwater has acquired a track record of illegal transactions that fall into a category of generally corrupt transactions in which the state is constructively involved in. The only mechanism through which shadowy companies like Flatwater can operate is through the sanction of the RBZ. It is evident that something went terribly wrong prompting the RBZ to report the matter to the police as if they were innocent role players.
Chiremba had this to say about the company: "Flatwater has a good track record, we have worked well with the company, so we had no reason to doubt its credibility." In what context would a central bank work well with a private non banking company? How was the company selected by the RBZ? Why would the RBZ be party to a transaction involving the procurement of foreign goods and pay for such goods in local currency without taking any interest on the source of the foreign funds and the implied exchange rate?
The court was told that Flatwater, a purportedly sound company, had failed to acquire the outstanding 59 tractors because US$1.6 million belonging to the company had been locked in the collapsed Premier Bank. Allegations have been made about Gono’s personal interest in Premier Bank. Could it be the case that Chiremba had no choice but to cover up the role of the RBZ by implicating a bank whose independence is questionable in a transaction that has helped unmask the illegal operations of the RBZ? It has not been explained how Flatwater would be in a position to have foreign currency in its possession in a local bank. Where did Flatwater get the foreign currency?
What emerged after Chiremba’s testimony is that the lawyer representing Flatwater, Steven Chibune, had no choice but to apply for the directors of the company to pay Z$200 billion installments for six months as repayment for the money allegedly locked in the collapsed Premier Bank. Why would Chibune find it fit to make this application if the funds belonging to Flatwater were legitimately locked in a collapsed bank? Would it not have made more sense for Chibune to apply to join in the Premier Bank estate in the litigation? The only rational explanation is that no funds were locked in Premier Bank.
It is curious that Chibune offered a number of alternatives for the recovery of the funds that disappeared from Flatwater. He also proposed that an order be granted for the state to recover its money from the title deeds it was holding as part of the bail conditions the directors had been tied to when it is common cause that the state was not involved in the transaction. Even Chibune seems to have accepted that it was, indeed, the state that had contracted with Flatwater instead of the RBZ.
He made the point that: "The fiscus has a number of options to recover its money. It is within this court's powers to make an order to recover the outstanding money since it holds the title deeds of properties owned by the accused persons whose value is well above the money complained of." If one accepts that the rule of law is still prevailing in Zimbabwe then surely it is absurd for Chibune to make this concession that the state was a contracting party in what appears at face value to be a civil matter. The statement by Chibune confirms that there was no formal agreement between the RBZ and Flatwater suggesting that there could well be more such transactions involving people’s money.
It is not strange that it was the same Chiremba who failed to protect the evidence against Ms. Mutekede. Is the RBZ above the law? It is scary to know that the RBZ has no qualms dealing with companies whose bona fides is clearly questionable and yet purport to occupy a high ground on key moral and ethical questions in terms of business transactions.
It is unfortunate that an environment now exists in Zimbabwe in which members of the judiciary finds themselves financially embarrassed to the extent that they have no choice but to rely on the RBZ for financial support. In such an atmosphere, no justice can be expected and the RBZ’s partners in crime like Flatwater are then presented as angels in shinning armor while other role players not aligned to the system are vilified for the same conduct.
The RBZ has boldly asserted that it has been forced to go beyond its mandate because of extraordinary conditions prevailing in the economy. It is has been pointed out that the actions of the Western countries combined with the nefarious activities of unscrupulous business and political actors have created the economic mess.
The recent cases involving the disbursement of funds by the RBZ to a relatively unknown company, Flatwater, to procure tractors as well as the handling of the Dorothy Primrose Mutekede matter have exposed the role of the RBZ in undermining public confidence in state institutions.
On the Flatwater matter, the court was told last week by the RBZ financial intelligence director, Mr. Mirirai Chiremba that Flatwater was chosen because it had a good track record dealing in foreign currency related transactions ignoring the fact that such a record has been used in targeting other persons such as Mushore, Muponda, Kuruneri, Makamba not forgetting yours truly and only recently Van Hoogstraten for prosecution.
The state prosecutor had submitted that there seemed to have been a conspiracy between Flatwater and RBZ as there appeared to have been no due diligence and proper agreement between the two parties before Z$7 million was disbursed to Flatwater.
Chiremba said that Flatwater had dealt with several renowned companies like Delta, Blue Ribbon and had in the past supplied the central bank with more than 300 tractors under the purportedly the same program.
What is strange from the testimony of Chiremba is that the representatives of Flatwater who appeared previously before the same magistrate, Tendai Chivaviro and Misheck Manjoro, forgot to present the same resume of the company and omitted to mention that the company had been involved in similar transactions with third parties who also should be investigated for possible foreign exchange violations.
It is strange that the state prosecutor found it fit to ask for an order to compel the RBZ to explain its role in a transaction that clearly had ramifications for the integrity of the state if Flatwater was a well established and financially sound company.
Misheck Manjoro and Tendai Chivaviro have already admitted to violating the exchange control regulations by playing a role in a scheme financed by the RBZ. If the RBZ was satisfied that Flatwater, a company incorporated under the laws of Zimbabwe, had access to foreign currency without alerting the police as has been the case in similar circumstances, then surely this is a case of selective application of the law.
Chiremba informed the court that Flatwater had previously supplied the RBZ with 300 tractors without explaining how a Zimbabwean registered company that is subject to the same punitive exchange control regulations would have access to foreign currency that other companies in similar circumstances do not have.
The relationship between Gono and the CEO of Delta is well known to confirm that Flatwater may have been used as a vehicle for Friends of Gono (FOG) to access foreign currency without being subject to normal rules applicable to Enemies of Gono (EOG).
Delta’s sales are in local currency and yet its inputs are largely in foreign currency. The question then becomes how Delta has been immune from foreign exchange violations unless it belongs to the category of companies that are untouchable. The Coca Cola Company supplies concentrate to Delta that has to be paid in foreign currency as is the case for imported tractors. Zimbabwe is in short of foreign currency and the suppliers of foreign currency including those in the diaspora are unwilling to part with it at the insulting official exchange rate.
Gono is fully aware as many business people are that the prevailing official exchange rate is unworkable. Instead of telling the truth to his principal, President Mugabe, Gono has chosen to lie and protect only his friends like Blue Ribbon and Delta. He wants the country to believe that companies like Flatwater would be stupid enough to part with foreign currency sourced from dubious sources that may well turn out to be some of the big names in the export business at the official exchange rate.
An inescapable conclusion can be drawn from Chiremba’s testimony that Flatwater has acquired a track record of illegal transactions that fall into a category of generally corrupt transactions in which the state is constructively involved in. The only mechanism through which shadowy companies like Flatwater can operate is through the sanction of the RBZ. It is evident that something went terribly wrong prompting the RBZ to report the matter to the police as if they were innocent role players.
Chiremba had this to say about the company: "Flatwater has a good track record, we have worked well with the company, so we had no reason to doubt its credibility." In what context would a central bank work well with a private non banking company? How was the company selected by the RBZ? Why would the RBZ be party to a transaction involving the procurement of foreign goods and pay for such goods in local currency without taking any interest on the source of the foreign funds and the implied exchange rate?
The court was told that Flatwater, a purportedly sound company, had failed to acquire the outstanding 59 tractors because US$1.6 million belonging to the company had been locked in the collapsed Premier Bank. Allegations have been made about Gono’s personal interest in Premier Bank. Could it be the case that Chiremba had no choice but to cover up the role of the RBZ by implicating a bank whose independence is questionable in a transaction that has helped unmask the illegal operations of the RBZ? It has not been explained how Flatwater would be in a position to have foreign currency in its possession in a local bank. Where did Flatwater get the foreign currency?
What emerged after Chiremba’s testimony is that the lawyer representing Flatwater, Steven Chibune, had no choice but to apply for the directors of the company to pay Z$200 billion installments for six months as repayment for the money allegedly locked in the collapsed Premier Bank. Why would Chibune find it fit to make this application if the funds belonging to Flatwater were legitimately locked in a collapsed bank? Would it not have made more sense for Chibune to apply to join in the Premier Bank estate in the litigation? The only rational explanation is that no funds were locked in Premier Bank.
It is curious that Chibune offered a number of alternatives for the recovery of the funds that disappeared from Flatwater. He also proposed that an order be granted for the state to recover its money from the title deeds it was holding as part of the bail conditions the directors had been tied to when it is common cause that the state was not involved in the transaction. Even Chibune seems to have accepted that it was, indeed, the state that had contracted with Flatwater instead of the RBZ.
He made the point that: "The fiscus has a number of options to recover its money. It is within this court's powers to make an order to recover the outstanding money since it holds the title deeds of properties owned by the accused persons whose value is well above the money complained of." If one accepts that the rule of law is still prevailing in Zimbabwe then surely it is absurd for Chibune to make this concession that the state was a contracting party in what appears at face value to be a civil matter. The statement by Chibune confirms that there was no formal agreement between the RBZ and Flatwater suggesting that there could well be more such transactions involving people’s money.
It is not strange that it was the same Chiremba who failed to protect the evidence against Ms. Mutekede. Is the RBZ above the law? It is scary to know that the RBZ has no qualms dealing with companies whose bona fides is clearly questionable and yet purport to occupy a high ground on key moral and ethical questions in terms of business transactions.
It is unfortunate that an environment now exists in Zimbabwe in which members of the judiciary finds themselves financially embarrassed to the extent that they have no choice but to rely on the RBZ for financial support. In such an atmosphere, no justice can be expected and the RBZ’s partners in crime like Flatwater are then presented as angels in shinning armor while other role players not aligned to the system are vilified for the same conduct.
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