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2 - 9 March 2014 - The Observer
Grace Mugabe’s greed haunts economy
Z
BARNABAS THONDHLANA
imbabwe has been advised to
lower its country risk as a matter
of urgency if it is to receive any
meaningful infusion of direct
investment.
The country’s high risk has been worsened
by First Lady Grace Mugabe’s recent
acquisition of vast tracts of land from Mazoe
Citrus Estates. The Estate had borrowed
heavily using its vast operations as collateral,
something which its financiers are now
questioning whether they will recover their
initial investment.
Mashonaland Central Resident Minister
Martin Dinha said recently: “Some people
might say: ‘The First Lady is greedy, why does
she want more land?’, but we are saying it is
justified for her to have more land.”
The First Lady took the land to expand her
educational holdings, which to date comprise
an orphanage and a primary school. She
intends to build a secondary school on the
acquired land. And possibly a university as
well.
Last month, Grace Mugabe took over 800
hectares of prime land at Mazoe Citrus Estates
and Manshou Game Reserve in Mazowe,
leaving hundreds of workers unemployed and
homeless.
This was in addition to the land she
forcibly took from the same estate in 2013.
Last year, Grace Mugabe helped herself to
1,600 hectares of land representing about 46
percent of the total arable land at the Estates,
forcing the company to write off about $6
million in immovable assets (biological and
property as well as plant and equipment)
related to MCE.
Interfresh said the portion represented
30 percent of its budgeted revenue for the
financial year 2013 and 52 percent of the
value of immovable and biological assets.
They have since lodged an appeal with the
Ministry of Lands and Rural Resettlement.
Acting World Bank Country Director,
Nadia Piffaretti said: “Lowering high country
risk should be the top priority. There is already
a high country risk. You can’t really afford to
increase it further because you are sterilising
investments mostly in the manufacturing,
agriculture and low grade mining sector that
would be profitable in another situation.”
In its annual report, the company also
said the First Lady’s actions had resulted in
the breakdown of negotiations with partners
aimed at helping recapitalise the group.
When schools opened in January, Dinha
promised to provide more land to the First
Lady during the official opening of the Amai
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Mugabe Junior School in Mazowe, saying
the school and the orphanage had given the
province a facelift.
Dinha had earlier made the same promise
during a tour of the orphanage in October
last year. He said as the provincial leadership,
they were already working on papers to have
the land extended.
“The land is no longer sufficient to sustain
the projects the First Lady has on her sleeves,”
Dinha said.
“We are working on the papers to stretch
the land so that she can have more land to do
her projects.”
The First Lady’s actions had unsettled
financiers currently bankrolling the country
through lines of credit to banks and
institutions of national interests such as PTA
Bank, Development Bank of Southern Africa
(DBSA), Afrexim Bank, African Development
bank (AfDB) and the Industrial Development
Corporation of South Africa (IDCSA).
IDCSA last year in March sent a delegation
to Zimbabwe to protest against escalating
political or country risk hitting Interfresh.
Since then things have been going horribly
wrong, particularly after Grace’s second wave
of land seizures.
According to media reports, IDCSA was
on the verge of finalising a line of credit to
a local institution, but has now frozen the
facility as sovereign risk rose in light of the
Interfresh problems. Zimbabwe continues
to experience a liquidity crunch that has
hampered government’s efforts to resuscitate
the ailing economy, amid indications that
macro-economic fundamentals are on the
slide.
DBSA and IDCSA share the same
shareholder — the South African government
— and this is causing grave concern in
Pretoria.
Similar reports of land grabs are coming
from across the country where Zanu PF
supporters are moving in and disrupting
farming activities.
Analysts said the reputation of the country
was critical as a way of instilling confidence in
potential investors.
“Zimbabwe on this area has failed to win
back the hearts of most foreign investors,
mainly due to lack of (respect for) property
rights a nd inconsistent government policies,”
said asset management company, Tetrad.
A Confederation of Zimbabwe Industries
(CZI) report showed that a quarter of
respondents that participated in a year-end
poll cited access to funding as the biggest
impediment to doing business, with most
companies using internally generated funds
for capital expenditure. Policy inconsistency
was seen as the second factor inhibiting
business growth. “In terms of capital
investment, 60 percent of the respondents
did not carry out any new investment in the
year 2013. Of the respondents who carried
out capital investment, 90 percent invested in
machinery and equipment, while 10 percent
invested in land and buildings,” said CZI in its
2013 manufacturing sector survey.
“The major reason for investment was to
replace worn out machinery and equipment
(for 47 percent of respondents) while the
remainder indicated that they wanted to
expand their operations. The issue of capital
investment has been critical and discussed
widely, largely as a result of lack of capital to
undertake such projects.”
Tetrad said Zimbabwe’s policy makers
need to focus on improving the country’s
reputation as a way of unlocking funding,
especially for the mining sector.
“We believe that policymakers need to
address the perception risk that foreign
lenders hold. Risks cannot be eliminated
entirely but can only be reduced,” it said.
Analysts said while the government might
cry about international sanctions, it was the
Zanu PF government itself, especially the
First Lady, who were imposing sanctions on
the country as efforts to bring the country
from the brink are stalled.■
Mangoma suspension unconstitutional: Biti
T
HE leadership fight
within the opposition
MDC-T took a turn for
the worst on Friday after
party secretary general Tendai Biti
came to deputy treasurer general
Elton Mangoma’s defence, declaring
his suspension move null and void.
Biti told a hastily arranged press
briefing at his Harare law firm that
the composition of the national
council meeting that made the
decision to kick out Mangoma,
albeit temporarily, was a nullity.
“We sat this afternoon but the
events thereof are regrettable and
I represent the views of many of
us who are democratic and have
suffered for this,” said Biti.
“We received a report from the
national chairman and the decision
was that we did not think the
matter should be referred to the
national council. We agreed that the
leadership should go for a retreat
and find each other.
“However, coming to the
national council; some people who
received suspension letters as they
tried to enter the meeting. The
biggest crime is that there was no
vote. People were asked what they
think, some answered while some
remained mum.
“As the secretary general of the
party, I have a duty to uphold and
protect the constitution. We will now
call for a national executive meeting
before a properly constituted
national council is convened.”
He added: “If that national
council decides in its wisdom to
charge Mangoma, he should be
given his right of reply.”
Earlier, party spokesperson
Douglas Mwonzora had said the
decision had been unanimous.
“The MDC national council met
and recommended that disciplinary
action be taken against the party’s
deputy treasurer general Elton
Mangoma.
“A unanimous decision by all of
the MDC’s 12 political provinces
was taken that charges be preferred
against him,” Mwonzora told
journalists at a press briefing.
Mangoma, Mwonzora said, had
breached the party’s disciplinary
code, in the process, bringing the
party into disrepute and would now
be hauled before an independent
tribunal headed a lawyer to be High
Court Judge.
“It is alleged that Mangoma
intentionally put into the public
domain, contents of the letter
he had written to the president
(Morgan Tsvangirai) and conducting
interviews with the press in clear
violation of a national executive
as well as engaging in factional
meetings,” said Mwonzora, adding
the former energy minister was
also guilty of granting interviews to
the press, undermining the party’s
structures.
“Mangoma’s allegations made
in the various interviews with
the local and international media
houses undermined the authority
of the national standing committee,
national executive, national council
and congress.”
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