Tag Archives: mugabe

Zimbabwe’s “Bondnotes” crisis: The questions that now need to be taken to Afreximbank and Aliko Dangote’s doors

13 Oct

Date: 13/10/2016

To: Dr. Benedict Okey Oramah (https://afreximbank.com/dr-benedict-okey-oramah-president/): President: African Export – Import Bank (Afreximbank) 72 (B) El-Maahad El-Eshteraky Street – Heliopolis, Cairo 11341, Egypt

Re: Request for information on the Afreximbank $200 million loan offered to Zimbabwe and subsequent cancellation

The above matter refers.

Allow us to introduce ourselves. We are Zimbabweans deeply concerned about your recent dealings with the Government of Zimbabwe led by one President Robert Mugabe. We write to you in peace and we would like you and your institution to lend us an attentive ear. Our apologies if any of our language might seem disparaging. Be assured Sir, that we do not intend to do so. Anyway, we will get into the details of the reasons we are writing you.

Firstly, we are informed through feedback meetings held with ourselves and the Zimbabwe Reserve Bank Governor, Dr. John Panonetsa Mangudya as well as other public pronouncements by the Zimbabwe Minister of Finance, Mr. Patrick Chinamasa that you have agreed to loan the Zimbabwean government USD$200 million. The details of the loan arrangements remain hidden and classified but we are told that the money will be used to secure an equal value of 200 million so called Bondnotes that will effectively become the new trading currency in Zimbabwe.

Secondly, we would like to note that we have asked the Zimbabwe government on several occasions through letters, public meetings, and social media and in person but we have failed to get any satisfactory answers about the conditions of this loan. Instead we have been told that the information is confidential and will be treated as such between yourselves and the Government of Zimbabwe. If you go onto your Afreximbank twitter account, or generally on twitter you will notice how your bank has become so (un)popular in Zimbabwe and internationally because of this USD $200 million loan to Zimbabwe. Several Zimbabweans have written to your bank on social media and they have not received any responses from yourselves. Fair and fine, you and the Government of Zimbabwe might refuse to respond but we would like to set a few issues clear with your bank before your bank relaxes and believes that all is well with regards this loan to ZimbabweWe are of the view that your bank has misdirected itself and gone against its Mission Statement and rather is abusing the “profit oriented” approach to its business and utterly disregarded the “socially responsible financial investment institution” that you describe yourselves as by awarding this loan to the Zimbabwe government. It is in our humble view irresponsible of Afreximbank knowing fully well and having seen on international media the resistance to the said Bond Notes that you continue to be quiet and not respond to Zimbabweans’ concerns. We are now of the firm view that your bank is only interested in profit making and will do so at any cost. However, we the people of Zimbabwe refuse that position and are making it clear to you now!

We would like to warn you that you are entering into a bad investment deal by lending this current Zimbabwe government such an amount of money. You can be rest assured that we will not be sitting idle while our country is auctioned away by this government and allow this our generation and our children to be saddled with President Mugabe’s ill- informed debts funded by institutions like yours. We are Zimbabweans and we know what we are talking about! You can save us the trouble of trying to explain any legal niceties about international treaties and so on. We are fully aware of the implications. However, we would like to warn you that we will when the times comes, scrutinize each and every loan that this government has borrowed in the last 5 years with Afreximbank. If indeed we will find any loans ill – gotten and not having been used wisely we will certainly refuse and recommend that any new Zimbabwe government to dishonor such loans.

Your bank and its shareholders cannot purport not to know the socio – political and economic situation in Zimbabwe at the present moment. Definitely, your regional office based at Eastgate Mall in Harare must have briefed you and continues to do so on the state of affairs in Zimbabwe. We are of the firm belief that Afreximbank and its shareholders are acting in no less than criminal and exploitative ways to get Zimbabwe hooked onto bad loans in the name of assisting the Government.

In addition and to our dismay, we are fully aware that some of your shareholders and Aliko Dangote in particular who we greatly respect as a progressive African brother and father is also unwittingly trying to benefit from this sorry situation unethically. We know that Mr. Dangote acquired a substantial amount of shareholding on 30 May 2016 in Afreximbank and thus has keen interests in how the bank performs. As you and ourselves know Mr. Dangote has to make investments all over Africa and he has been making these overtures in Zimbabwe as well. Is it a coincidence as well that at the same time that he is making inroads with his Dangote Group in Zimbabwe your bank is also making unbridled offers to bail out the Zimbabwe government financially. Could it be that, your Afreximbank or even Mr. Dangote himself is preparing a red carpet for his businesses in Zimbabwe by giving the economy a false sense of liquidity? Unfortunately, we will give you free advice and note that your bank is making or might have already made a wrong move that will cost you dearly by giving Zimbabwe this loan.

Mr. Oramah Sir, you might wonder and be less amused by this letter and our actions. However, we have to let you know that we cannot allow anymore this country, this Zimbabwe, the land of our forefathers, our fathers, ours and our future children to be continuously run down by unwise decisions which border on criminality, senselessness and pure selfishness. This means therefore that we have to guard our country from such bad decisions and deals as the ones the Government of Zimbabwe is making with your bank now. We respectfully ask you to reconsider and immediately halt any financial assistance to the current Zimbabwe Government until us as Zimbabweans have sorted out our internal problems. We believe strongly that by your continued purported efforts to assist this government you are indirectly funding our misery, torture and desecration of our country by the current Government of Zimbabwe.

Our demands are quite simple and very clear. Afreximbank must be accountable to the peoples of Africa where the bank invests. In this case it is the people of Zimbabwe. We have rights and freedoms to access information on deals conducted by our government and external parties. Zimbabwe has serious problems with freedoms of expression and access to government information. Your bank cannot be found to be aiding and abetting such manipulation of peoples’ right. Your bank cannot purport to be oblivious of a situation as is obtaining in Zimbabwe and continue to hold your bank in high esteem. We need information from Afreximbank on what kind of deal you have reached with the Government of Zimbabwe. In addition, we need to know what the interest rates are, how long the loan will be for and other related information. Furthermore, we implore you to do the right thing and withdraw this USD $200 million from your client – The Government of Zimbabwe. The purpose for which they have asked the money is not in sync with what the Zimbabwean people want. It is more destructive and will take our country back to the days of strife and hunger that was marked by hyperinflation running into millions. The Bondnotes are just another back door way of the Zimbabwe government to reintroduce the local currency. We do not necessarily have any problems in having our own currency but you must understand as a financial person that the current situation in Zimbabwe does not allow that.

We will be waiting to hear from you and your bank Sir. In the event that we do not hear from yourselves in reasonable time which we will allow at two weeks from the date of this letter, we the people of Zimbabwe will definitely be calling on your offices in Harare; Cairo, Lagos, Nairobi and Abidjan to demand a response by any means necessary.

Sincerely

We the people of Zimbabwe.

Ends://

The art of bathing in dirty water: Joice Mujuru and land compensation in Zimbabwe

12 Oct

The theatrics to take over after the geriatric President Mugabe kicks the bucket or calls it quits (honestly I don’t see him leaving office on his own volition anytime soon) seem to be reaching a crescendo in opposition quarters. What with all the drama last week from former Zimbabwe Vice President Dr. Joice Mujuru when she announced that she met with the white man whose farm they grabbed or got “reallocated to” by ZANU PF when her late husband was still alive. At the least I find the whole thing unfunnily theatrical and at most cheap propaganda trying to sway the international community (read white people) to believe she is a repentant former ZANU PF zealot. I am convinced that her theatrics were not even meant for the general Zimbabwean audience. This is just trying to take a shower in dirty water, IT CAN’T!

I am not getting it. Joice Mujuru says she wants to compensate this man, this former white farmer whose land she alleges they “grabbed”. My understanding is that ZANU PF policies and laws that were enacted at the time the land was taken from most white farmers and redistributed to black people converted all that land into state property. So if the land belongs to the state, how then will she be able to compensate this white farmer when the land does not belong to him and purportedly never belong to him?

Maybe, Joice Mujuru wants people to believe that she wants to work out an arrangement that she will compensate him for “developments” made on the farm. Maybe she wants to compensate the former “landowner” for his machinery and or crops they “looted” at the time. That would in a sense be understandable but still it would be interesting to see how they will reach an agreement on the compensation rates. Of course, whoever lost his property would have an inventory but I’m really interested in seeing how the values for these properties/machinery etc. will be calculated.

This same Joice Mujuru who pleaded bankruptcy in recent court processes after her alleged step – children stepped in to claim their inheritance from their dead father is the same person who is claiming she can compensate people? Okay?

Cheap, very cheap, miscalculated propaganda I say!

One might want to see racism in these questions. However, I am of the opinion that the land question that Joice Mujuru wants to fiddle with cannot be used as a backbone for her attempts to get back into politics. There is no question that the majority of former white farm owners inherited from their ancestors this land that was stolen from black communities that were in Zimbabwe at that time. Joice Mujuru now wants to ride on a charade that seeks to trivialize this matter. She of all the people cannot forget that the liberation struggle was fought for among others to retain this same land from the erstwhile colonizers.

That ZANU PF is rogue and could have made mistakes in handling the land question does not mean that Joice Mujuru can try to downplay the need for land to be repossessed and be utilized by black Zimbabweans. The argument that white people were “very good’ and were good farmers is just unacceptable hogwash that should be told as folktales in faraway lands. It is a fact that most white families benefited from cheap bank loans, protected markets and so on such that they became “profitable farmers’. The new farmers in Zimbabwe who have been given that same land need to be given the same chance. There is nothing special about being white and neither is anything wrong with being black.

If there is one issue that will break Joice Mujuru’s attempts at the Presidency in Zimbabwe’s future it will be the land question and how she proposes to deal with the land redistribution process from the controversial “Third Chimurenga”. There are questions of principle on the much delayed and botched land redistribution process as well as questions about black empowerment and the need to possibly compensate the white folks who lost “their farms”. For her to conflate and confuse these issues with her attempts to renter politics is just mere political suicide and puerile propaganda which will not fly or win her the hearts of Zimbabweans! In any case, it is not these folks who will vote in 2018, if her recent theatrics are about looking for votes.

Compensation! Compensation for what purpose, to who and how much is the question she has to answer!

Pensions Conversion Commission: Zimbabwe tinkering with justice for past economic rights violations

28 Jul

On 25 July 2015 President Mugabe set up a Commission of Inquiry to probe the process used to convert pensions and insurance benefits following the dollarization of the economy in 2009. This is a welcome development which was long overdue. This process is essential in terms of addressing the mayhem caused to Zimbabwean workers and pensioners during the inflationary Zimbabwe dollar period. Thousands of workers and their dependents lost the real value of their pensions and this lacuna needs government intervention at the least. It would seem the corporate world took advantage of a lax system and benefitted unfairly. This matter raises 3 issues 1) questions on the part of the government of Zimbabwe’s responsibility to give protection to its citizens from rogue private corporate entities; 2) corporate bodies and fair business conduct and 3) the right to remedies for pensioners shortchanged in the process of converting Zimbabwe dollar pensions to the US currency.

The first thing to note in this whole discussion is to admit that the Zimbabwe Government and statutory bodies charged with regulating the Life Insurance and Pensions fraternity failed to “protect” citizens by intervening at the time they were needed the most – when the insurance companies started making unilateral decisions on what rate of exchange and value they would place on pensioners’ contributions. This given, it is important that the government of Zimbabwe realizes henceforth that there is need to come up with a proper plan in the event that problems arise again. This discussion would warrant stricter measures set on institutional reform in the insurance and pensions industry to govern such in the event of an economic collapse, company closures etc.

Furthermore, it will be interesting to juxtapose this discussion on the conversion process and to see what rates will be used to determine the real value of the Pensions as at 2009 and the recently implemented rates used in the highly controversial (https://tchabvuta.wordpress.com/2015/06/30/what-exactly-is-this-animal-called-demonetization-in-zimbabwe/) demonetization process. There will have to be uniformity in purpose on the part of the government in terms of dealing with the lacuna of the wrongs of the past.

Secondly, this development will of course not go down well with business especially the insurance firms who have now been placed at the center of “inquiry”. For a long time after the dollarization process these companies in my view enjoyed undeserved profits from the unilateral conversions they made on pensioners’ contributions. In the event they are found wanting they might have to review their finances and pay out more and this will be contentious on the basis of what laws to follow, what rate to use and so on. However, I believe that this process calls for corporate social responsibility and moral accountability on the part of insurance companies to ensure that they “give to Caesar what belongs to Caesar”. I am not an economist or finance expert but it honestly does not make sense that one contributes funds into a pension fund which then invests in high rise buildings, stocks and so on and then one day you work up to be told that your contributions have been reduced to half or are not even worth following up because INFLATION devoured the money. It cannot be right!

Thirdly on the part of pensioners, this discussion centers more on the need for redress of the wrongs of the past. To what extent this becomes a matter for transitional justice debate I would not be sure, but I definitely think that there is some merit in placing this issue under the myriad of issues being pursued on transitional justice in Zimbabwe. The matter whilst economic, requires some form of justice in the form of compensation for any losses incurred; it requires restoration of peoples’ confidence in financial institutions and their investments (Institutional Reform) and the need for the truth to come out on what exactly happened during the conversion processes.

The work of the Commission
The work of the Commission is clearly cut out for them and it will be interesting to see how they handle this one on a number of aspects. The statutory instrument establishing makes it clear that the commissioners have jobs for a period of 9 months which can be extended for another 3 months. I find this overly long but well I guess these people know better what and who they have to investigate to get to the bottom of the matter.

Legal Questions: The next question is on a question of operation. To what extent will the findings of the Commission be implementable especially in the light that the insurance companies might be found wanting. The government has advisors and they should have discussed the legal consequences of such processes by now. It will also be interesting to see if the assurance companies can be retroactively held liable if found to be in breach and generally how this will define government’s relationship with corporate bodies in future.

Transparency: Another issue relates to the transparency of this process. Previous Commissions set up to deal with investigations on human rights violations, football stampedes etc. have been a disappointment to the public. The deliberate ploys by government to ignore civil society and offer half – hearted overtures such as the defunct Organ on National Healing and the still born National peace and Reconciliation Commission to handle past human rights violations are well noted. Government has not even considered investigating the high levels of corruption at institutions like the Reserve Bank when senior officials were “burning” money and buying US dollars, the rampant theft of gold, how NGOs and Embassies forex accounts were raided during the peak of the economic crisis etc.

Integrity of the Commissioners: It will be interesting to see what will come out of this body. People like Dr. Kanyenze would be reminded to ensure they maintain their professional and personal integrity and deliver a good job. The 9 member Commission would be well advised as well to ensure that they will be able to live with the realities they will encounter in their investigations and be able to stand up to the “regime” and make the report public. In the event or likelihood that this will not be possible, they are better advised to stand down. Knowing Zimbabwe and the tough times we are in, a good Commissioner’s allowance is not easy to fend off though, so let’s see.

Interrogating Government’s own policies: It will also be important to see and get information on how the government has dealt with own staff and pension funds. This is information that should be in the public domain and government could begin their transparency by giving out such information.
The bottom line is that while the Zimbabwe government can be lauded for coming up with such a process, it would be much more important to have a national dialogue first on these matters to collect views from the nation and all stakeholders. A more robust discussion on transitional justice needs to be held at a national level to discuss what happened during the economic crisis in the years between 1999 – 2008 and a whole host of other pertinent issues is really delayed and must be convened.

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