Zimbabwe: Mutual Assured Destruction??
On May 7, 2000, Zimbabwe finally proceeded to suffer governmental
control problems from the Crash. At this point, it was demonstrated
that the white farmers (whom Mugabe is confiscating land from
without compensation) had the means to destroy Zimbabwe even as
Zimbabwe destroyed them. Fairly impressive, taking down a regime
where the judicial system has already been eradicated -- without
A glossary of abbreviations:
- NOCZIM: National Oil Company of Zimbabwe
- NRZ: National Railways of Zimbabwe
- the ZCTU: the Zimbabwe Congress of Trade Unions
- ZESA: Zimbabwe Electric Supply Authority
- SADC: Southern Africa Development Community
Zimbabwe's problems regarding the acquisition and use of
everything from hard currency to public utilities
January 8, 2004
December 26, 2003 [IRIN]
- South African banks Absa, Nedcor, and Standard Bank (all with major exposure to Zimbabwe) have admitted to concerns over
the stability of the Zimbabwean banking sector. With annualized inflation over 600%, Zimbabwe Reserve Bank's governor
Gideon Gono's threat to not bail out illiquid banks provoked interest rate hikes above the then-prevailing 150% to 375%- 450% at big banks, and to 600%-700%
at small banks. This also entailed the suspension of six of Zimbabwe's sixteen banks from Zimbabwe's settlement system. Three unnamed
major companies are reputed to not be accepting cheques from any Zimbabwean bank.
- ENG Capital Asset Management's discount house, Century Discount House (acquired from Century Holdings April 2003, although
technicalities had prevented the sale's completion and also left Century Holdings materially involved in managing it post-April 2003)
failed to pay its depositors on January 2, 2004 because ENG failed to repay them. This caused ENG to collapse, owing
depositors over Z$100 billion against an asset base of Z$250 billion in equity, property, and vehicles. First Mutual
Limited's subsidiary First Mutual Asset Management is owed Z$27 billion by ENG. It is unclear whether ENG financed
Capital Alliance (Private) Limited's purchase of 840 million shares of First Mutual Limited's stock.
December 4, 2003 [BBC]
- Zimbabwe's official year-on-year inflation for November 2003 was 619.5%. Black market prices are overwhelming
pensions; most pensioners receive no more than Z$15,000/month, while some get as little as Z$2,000 month. But a loaf of
bread costs Z$3,000, five litres of cooking oil sell for Z$12,000. A family of six needs (according to the Consumer Council of Zimbabwe)
at least Z$400,000 per month just for food.
November 26, 2003 [AllAfrica]
- The IMF has initiated procedures to expel Zimbabwe. This is in response to Zimbabwe's failure to adopt policies
required to address its macroeconomic collapse.
November 21, 2003 [AllAfrica]
- The Zimbabwean government has cancelled all fourteen gold concessions issued to gold buyers in 2002 and 2003, due to
insufficient gold received by the central bank (15kg instead of at least 500kg). This suggests that most of the gold
has been diverted to the black market at over Z$50,000/oz, vs. the official price of Z$38,000/oz. [It is unclear whether
government-controlled Gold Mining and Minerals Development Trust has had all of its concessions rescinded (Mazowe, Shamva,
Mudzi, Mutare and Filabusi). It is definite that the following have had all concessions rescinded: Shipford Investments
(trading as Golden Kopje Mine; most parts of Mashonaland West province), Needgate Investments (Chegutu), and Temba
Transport (trading as Golden Syndicate; Kwekwe), Minerals Marketing Corporation of Zimbabwe (Gweru), Oleaster Investments
(Gwanda), Rynwald Trading (Zvishavane), and SAD (Masvingo).]
November 13, 2003 [AllAfrica]
- The onset of the rainy season is destroying Zimbabwe's wheat crop (at least, the part cultivated by resettled farmers).
Their inability to hire combine harvesters has forced them to resort to using hand-held sickles to harvest. The worst-affected
areas are Mushandike Irrigation Scheme in Masvingo Provice, and Mashonaland Central Province.
- Zimbabwe's agricultural sector is expected to decline by up to 50% in 2004 if no constructive action is taken.
The Zimbabwean government does not have the the money to finance the 2003/2004 agricultural season, leaving
farmers trying to acquire seed, fertilizer, and fuel one month after the beginning of the season. The 2002/2003 tobacco
season sold only 81 million kg of tobacco for about U.S.$183 million -- about half of the 2001/2002 season. 2002/2003 wheat
production was less than 150,000 tonnes, compared to a national requirement of 400,000 tonnes. Mugabe's land confiscation
program has driven the demand for fertilizer up to about 1 million tonnes, from 400,000 tonnes. Furthermore, at least
30,000 tonnes of seed should be imported to augment local supplies, at about U.S.$2,000/tonne. The national herd (2003) is at 250,000 head,
compared to 5.1 million in 1998. Restocking is unaffordable because of the price of stock feeds (official price Z$750,000/tonne,
costs up to Z$2 million/tonne to import).
November 6, 2003 [AllAfrica]
- Zimbabwe's Tobacco Industry and Marketing Board has proposed introducing contract tobacco growing, as well as
auction tobacco growing. Tobacco farmers would be required to choose between the two options. In particular, contract
growers would get input support from the contractor; also, contract growers would get the larger of the contract price
for tobacco, or the current auction price for tobacco. Contractors would have to register by January 31, 2004.
- Many Zimbabwean industrial operations have started to import coal from South Africa, rather than attempt to rely on
dramatically erratic supplies from the 40% government-owned Wankie Colliery Company. This includes tobacco, cement, sugar,
and steel production, as well as fertiliser manufacturing. For instance, Pretoria Portland Cement adjusted the price of
its cement by 100% in October 2003; the new price was Z$12,000 for 50kg on the official market, and Z$24,000 on the black market.
October 19, 2003 [BBC]
- Due to hyperinflation, most Zimbabwean real estate agents are now valuing properties in U.S.$
to avoid weekly reappraisals.
October 3, 2003 [IRIN]
- Zimbabwe's NOCZIM has run out fuel, directly contradicting Zimbabwe's Minister of Energy and Power Development Ambassador
Amos Midzi. The next deliveries are expected within a week.
October 2, 2003 [BBC]
- The Zimbabwe National Water Authority's [ZINWA] plans to disconnect water services to all towns owing it money poses a
massive public health risk. This directly antagonizes Zimbabwe's Ministry of Health and Child Welfare. The initial six
towns targeted in Matabeleland South are: Gwanda, the provincial capital (Z$37.4 million); Beitbridge, on the border
with South Africa (Z$56.1 million); Plumtree, on the border of Botswana (Z$29 million); Esigodini, an agricultural and district capital about 50km southwest
of Bulawayo; Kezi and Maphisa on the edge of Matopos National Park; and Filabusi, the district capital
for Insiza constituency. In September 2003, ZINWA increased water tariffs by between 80% and 100%. For those who consume
up to 10 m3 per month, the new tariff was Z$180/m3. For those who consume between 10 m3 and 25
m3 per month, the new tariff was Z$280/m3.
September 30, 2003 [IRIN]
- Zimbabwe has introduced its first Z$1,000 bill. This is in conjunction with new-design Z$500 notes, and short-term
"bearer cheques" valued at up to Z$20,000.
September 24, 2003 [IRIN]
- Shangani Hospital in Matabeleland South was forced to not admit patients, because it ran out of food two weeks before.
Even critically ill patients were refused admittal. The Grain Marketing Board depot in Filabusi (~80 km southeast of Bulawayo)
is also empty, making the hospital's priority status meaningless. (Hospitals, prisons, orphanages, and other
caregiving institutions are supposed to be allocated grain and maize flour before other customers.) More generally, Bulawayo
reported that its health clinics and a referral hospital it runs were operating with only 50% of ideal staff because
medical professionals continue to leave Zimbabwe for work in South Africa, Botswana, Europe, and the Americas. Ninety staffers
had resigned from Bulawayo council services, fourteen have retired, and some have simply absconded between Jan. 2003 and Sept. 2003.
August 28, 2003 [BBC]
- Zimbabwe's parastatal District Development Fund [DDF] reported that more than half of its fleet of tractors was in
disrepair due to the shortage of spare parts. This was aggravated earlier in 2003, when Tanaka Power (a Harare-based
agricultural equipment and supplies company) withheld its services following DDF's failure to pay for 2002 services.
The going rate for DDF to till ground is Z$32,000/hectare, with fuel extra at Z$200/litre. (At this price, filling the fuel tank
is Z$80,000.) The current open-market price of fuel was reported as Z$2,000. Instead of having at least seven tractors assigned
to each district, the DDF has not been able to assign even one tractor to all disticts. Some Matebeleland districts have two
tractors assigned...but they do not have fuel either. Last week, the controlled price of a 10kg bag of seed maize was changed to
Z$21,000. This is enough for 1 hectare...so it would cost Z$133,000 to even till and plant one hectare of farmland through
August 24, 2003 [AllAfrica]
- Zimbabwe has (officially) ended price controls on petroleum fuels. Private companies will be allowed to import fuel
in a bid to end Zimbabwe's fuel shortages. diesel has immediately gone from Z$200/litre to Z$1,060/litre. Petrol has
immediately gone from Z$450/litre to Z$1,170/litre. Earlier this week, Comoil (a company owned by the Zanu-PF politburo
member Saviour Kasukuwere) had 35,000 litres of fuel impounded on charges of selling fuel at black-market prices.
August 22, 2003 [AllAfrica]
- The German firm Giesecke & Devrient has asked for €6 million as down payment to print the October 2003 issue of
Z$1,000 notes. (The total printing cost is thought to be about €30 million. The Zimbabwean government commissioned
the printing from Giesecke & Devrient in July 2003.) Also, the current Z$500 will be replaced with one that is less
expensive to print. However, the commercial banks enlisted by the Reserve Bank of Zimbabwe to hunt for the hard currency
(as U.S.$) to pay Giesecke & Devrient have only managed to raise U.S.$4 million so far from the black market. While doing
this, the black market exchange rate hit Z$6,000/U.S.$1.
August 21, 2003 [AllAfrica]
- The Z$5 billion of travellers' checks issued by the banking system has failed to prevent long queues for legal cash. At some banks, lines
form at 5AM in the morning to withdraw Z$5,000. Also, daily withdrawal limits in some places have been reduced from Z$100,000
August 20, 2003 [AllAfrica]
- The black market exchange rate went from Z$3,500/U.S.$ to Z$5,100/U.S.$ in one week. The British £ fell from Z$4,600/GB£
to a range of Z$5,000-Z$6,500/GB£. The spike is attributed to the Zimbabwean government sourcing
hard currency to pay for the paper to print banknotes from the black market. Tobacco failed as a hard currency source;
2003 sales were 80-85 million kg, compared to 2002 sales of 160 million kg. The shortfall is directly due to Mugabe's land confiscation program.
August 15, 2003 [AllAfrica]
- Zimbabwe's annualized inflation rate for July 2003 was 399.5%. In comparison, the January 2003 annualized rate was
208%; June 2002 was 123%; January 2002 was 116.7%.
August 7, 2003 [AllAfrica]
- The following airports are scheduled for upgrading to standards suitable for use by international airlines: Harare International Airport, Victoria Falls, Joshua Mqabuko Nkomo and Buffalo Range.
This is necessary to enable international tourism.
- One of the proposals Zimbabwe's Ministry of Finance is submitting to the Cabinet is the weakening of the official
business exchange rate to Z$1,350/U.S.$1 from Z$824/U.S.$1. [This does not affect the normal exchange rate of Z$55/U.S.$1.]
July 31, 2003 [AllAfrica]
- The black market exchange rates hit Z$6,000/U.S.$ and Z$8,000/UK£1 on August 6th, 2003. The
two days before, the rate was Z$4,500/U.S.$.
July 26, 2003 [AllAfrica]
- The black market exchange rates attained Z$3,000/$U.S.1 on July 25, 2003, and Z$3,900/U.S.$1 on
July 30, 2003. It is plausible that NOCZIM is going to attempt to use the black market to raise
hard currency, again. [When it did so in May 2003, the black market exchange rates hit
July 25, 2003 [AllAfrica]
- Almost all banks in Zimbabwe ran out of cash today. Anti-riot police were called in to
prevent angry crowds from breaking into the banks in Harare and Mutare. In Harare, queues
had started at 4AM. In general, withdrawals were limited to Z$5,000. While the Reserve Bank intends
to inject Z$12 billion into circulation, it appears that this is not happening quickly: daily
allocations for any given bank branch appear to be about Z$30 million.
July 9, 2003 [AllAfrica]
- Zimbabwe does not have the hard currency required to import food and medical supplies for
the rest of 2003. In particular, Zimbabwe expects to harvest almost 900,000 tonnes of maize, against
a requirement of 1.9 million tonnes. 284,000 tonnes of maize are in stock, and the World Food
Program is sending 120,000 tonnes of food assistance, leaving about 600,000 tonnes to account
for -- somewhat under U.S.$142 million in value. U.S.$28 million in value of medical supplies
also cannot be paid for to be imported.
July 2, 2003 [AllAfrica]
- NOCZIM, through Syfrets Corporate & Merchant Bank, went to the open market to raise
Z$10 billion to finance fuel imports. The original directions were for Z$60 billion, but
historically there has not been a reasonable response to the petrofin bills. [Last week's
attempt to raise Z$5 billion failed.] Fuel supplies from Libya's Tamoil have not yet visibly
June 29, 2003 [AllAfrica]
- The Reserve Bank of Zimbabwe has released only U.S.$1.3 million to the Tobacco Grower's Trust (which finances imported inputs
for resettled tobacco growers). Sales through June 17, 2003 were about U.S.$28 million, so
the Tobacco Grower's Trust should have received 20% of that: U.S.$5.6 million. Total earnings are expected
to be U.S.$180 million, down from the 2002 season's U.S.$380 million. The last season before
Mugabe's land confiscation program, 2000, saw a total sale value of U.S.$526 million.
June 27, 2003 [AllAfrica]
- The Libyan state news agency Jana has announced that Zimbabwe's fuel deal with Libya has been
June 26, 2003 [AllAfrica]
- Zimbabwe's President Robert Mugabe is in Libya, trying to resuscitate a fuel deal suspended because
of Zimbabwean non-payment in agricultural goods (sugar, beef, and tobacco). Libya's Tamoil is
reported to want to purchase Zimbabwean strategic assets in exchange for restarting the fuel
deal. Price deadlocks include NOCZIM's 50% share in PetroZim (U.S.$100 million vs. U.S.$48 million),
the Mutare-Harare pipeline and Msasa depot, and a number of service stations. Other desperation
sources being considered include France's TotalFinaElf (a dominant company in Angola), Angola,
Kuwait, United Arab Emirates, Sudan, Iran, South Africa, Botswana, and Nigeria.
June 20, 2003 [AllAfrica]
- The Reserve Bank of Zimbabwe has finally started to release Z$24 billion of Z$500 notes into
production. Unfortunately, there was no seignorage from this: it cost around Z$800 to
print a Z$500 note. This makes the phaseout of new Z$500 notes fiscally required. They are expected to
be replaced by Z$1000 notes in November 2003.
June 13, 2003 [AllAfrica]
- ZESA reported that its monthly expenses were approximately U.S.$10.9 million. [U.S.$5 million
each for power imports and debt service, U.S.$500,000 for wheeling charges, U.S.$350,000 for spare
parts.] It would take U.S.$7.5 million to immediately upgrade all of its facilities in Zimbabwe.
Foreign loans currently amount to U.S.$145.2 million, of which U.S.$109.7 million was in arrears.
ZESA generation capacity is 1,770 MW; monthly imports were 650MW.
[Hydro Cahora Bassa of Mozambique: owed U.S.$22 million, responsible for 400MW of imports;
South Africa's Eskom: owed U.S.$11 million, responsible for 150MW of imports; Snel of the
Democratic Republic of Congo: owed U.S.$5 million, responsible for 100MW of imports;
EDM of Mozambique: owed U.S.$5 million; and Zesco of Zambia: owed U.S.$5 million]
- NRZ has been reduced to only 20% of its locomotives being in working condition. This is due
to 95% of the spare parts being imported (and requiring hard currency).
June 12, 2003 [AllAfrica]
- Harare terminated three companies contracts for garbage collection because they failed
to procure the required trucks, etc. within 90 days: Wills Gara's Davexcorp, Miles Zata's
MNF Environmental Services, and Tony Gara's Cleansing and Environmental Services.
Joel Biggie Matiza's Encore Consolidated and Oliver Chidawo's Broadway Services (also newly
contracted with Harare) were able to procure the required equipment within the required deadline.
June 5, 2003 [AllAfrica]
- Zimbabwe is well on the way towards unofficial dollarization. Not only does ZESA bill in
foreign currency, but rent, property sales, and airline fares are now often priced in U.S.$.
Also, fuel is often priced in foreign currency.
- Smuggling petrol and diesel from Botswana to Zimbabwe is proving highly profitable.
500 litres of fuel may be purchased for about 1,200 Botswanan pula (official exchange rate Z$11.2/pula,
black market Z$325/pula). 200 litres of fuel is reselling for as much as Z$500,000 on the black
May 30, 2003 [AllAfrica]
- Insufficient diesel fuel and railway transportation have sabotaged Wankie Colliery's ability to
supply coal to other industries. The tire manufacturer Dunlop Zimbabwe Limited was forced to
close for an entire week, before acquiring sufficient supplies from middlemen to operate.
- The projected Zimbabwean wheat crop for 2003 is about 80,000 tonnes. 2002's wheat crop (at
least, that delivered to the Grain Marketing Board) was 136,000 tonnes. Furthermore, it is controversial
whether the new controlled price for a loaf of break (Z$250, up from Z$60 two weeks before) will
allow bakers to make a profit.
- The MDC-driven stayway has stripped the black market of Z$. Exchange rates have fallen
drastically as a result: Z$800/U.S.$, Z$2000/GBP, Z$180/South African rand, Z$250/Botswanan pula were attained.
The week prior, rates were more like: Z$2000/U.S.$, Z$2500/GBP, Z$250/South African rand, Z$300/Botswanan pula.
May 29, 2003 [AllAfrica]
- In general, Zimbabwe's banks were gridlocked today as many people attempt to withdraw
enough cash to cover an entire week's worth of bills ahead of a planned nationwide strike. A
number of ATM networks were shut down. Z$24 billion in Z$500 notes is expected to be printed
(and put into circulation) by mid-June 2003.
May 28, 2003 [AllAfrica]
- Finance Minister Herbert Murerwa's plans to review the exchange rate no later than the end
of May 2003 have failed. It appears that unacceptable conditions tied to the last export devaluation
of Z$824/U.S.$1 (normal is still Z$55/U.S.$1) have resulted in the near-total refusal to put
hard currency in the control of the Reserve Bank of Zimbabwe.
- The Reserve Bank of Zimbabwe initiated crisis talks with bankers and exporters to discuss how to
locate foreign currency to pay for imports of electricity and fuel. Also, some banks were
reported as buying Z$ notes at a premium.
- The special paper required to print Z$ notes has arrived, and is expected to be used up
very shortly. There are now plans to introduce a Z$1,000 note before the end of November 2003.
- Total milk production for 2003 is now projected at about 140 million litres, well below the
250 million litres expected to prevent shortages. The reduction since 2000 (44%) is about what
is expected from the physical reduction in the dairy herd of cows.
May 25, 2003 [AllAfrica]
- Some bank branches in Harare completely ran out of paper money. Those that did not were
restricting cash withdrawals to Z$15,000 or Z$20,000.
May 15, 2003 [AllAfrica]
- Zimbabwe's Grain Marketing Board has been completely failing to deliver its promised
allocation of wheat to the three largest millers in Zimbabwe: National Foods, Blue Ribbon
Foods, and Victoria Foods. Between the three, the total allocation is 6,000 tonnes/week.
The wheat harvest was 140,000 tonnes, compared to government projections of 250,000 tonnes.
- The HIV i.e. AIDS pandemic has driven the Zimbabwean death rate to about 3,000/week. This is
overloading the hospital mortuaries, especially since relatives are afraid to claim the bodies
due to exorbitant hospital bills and burial costs. While a typical time before a body was
subject to a pauper's burial was 90 days, some hospitals are changing their policy on this to
May 12, 2003 [AllAfrica]
- The Zimbabwean government has yet to respond to the National Railways of Zimbabwe's request
for at least U.S.$27 million to upgrade its railway lines. U.S.$20 million is intended to
revive the signalling system, while U.S.$7 million is needed for repair and replacement of
tracks. In the absence of a functioning signalling system, ancient techniques such as
allowing only the train driver with a given wood staff to enter a section of track, and
deliberately setting gunpowder detonators before and after a stopped train, are being used to minimize
the risk of collisions.
- Black market exchange rates hit Z$2,700/U.S.$1, Z$3,500/UK£1, and Z$270/1 South African rand.
This is apparently due to ZESA and NOCZIM using the black market to acquire critical funding.
May 10, 2003 [AllAfrica]
- Air Zimbabwe was reduced to 3 days supply of Jet A1 fuel, with no idea as to when the next
delivery was. This prompted a decision to stop over in Lusaka, Zambia to refuel a London-Johannesburg
flight that had taken off with only enough fuel to reach Harare.
May 9, 2003 [AllAfrica]
- The black market exchange rate reached Z$1,700/U.S.$1. It had been stable since November
2002 between Z$1,200/U.S.$1 to Z$1,300/U.S.$1. The weakening is attributed to NOCZIM and ZESA,
who must have more than U.S.$240 million to finance fuel and electricity imports. Tobacco
auctions have failed to improve the foreign currency situation, due to a combination of fuel
shortages and late planting.
May 8, 2003 [AllAfrica]
- Zimbabwe has actually managed to reduce its domestic debt, starting from a peak
of Z$372.4 billion on February 28, 2003. In particular, it was reported as Z$354.1 billion on
March 21, 2003. A high proportion of this is Zimbabwean Treasury bills. While a substantial
fraction of the deficit is driven by subsidies on fuel and food, removing these is politically
unviable. Imports also pose a considerable obstacle to controlling the deficit.
- Zimbabwe's Ministry of Finance and Economic Development has failed to approve the budget
proposed by the Reserve Bank of Zimbabwe. As a result, this bank has no foreign currency with
which to import the ink and paper for printing money. It is hoped that this situation can
be remediated by the end of June 2003.
- Circle Cement Ltd (Circem) has been reduced to one month of coal supply.
Company chairman Ian Coulter noted that the company's continued viability required both
an immediate price increase to cover costs of production (apparently, Z$511/bag is not enough to
do this) and a reliable coal supply. The price review is scheduled for May 13, 2003.
May 7, 2003 [AllAfrica]
- The tobacco selling season has failed to improve foreign currency supplies. It is currently
physically impossible for the Reserve Bank of Zimbabwe to allocate enough foreign currency for
fuel, electricity, grain, and pharmaceutical imports. ZESA has been completely cut off from
the Congo's Snel (100 MW imports to zero). Mozambique's Hydro Cahorra Bassa has cut supplies
from 450MW to 150 MW over non-payment, and Eskom's 150MW of imports is endangered by failure to
pay. Also, alternate oil suppliers are needed: Kuwait's Independent Petroleum group is likely
to cut off supplies over U.S.$70 million in debt. Libya's Tamoil has stopped supplying over
nonpayment. Attempts to set up imports from Iran and Sudan have failed due to credit risk.
Angola is still possible.
- Wankie Collerie had its last functional dragline break down about two weeks ago. This
rendered it completely incapable of coal mining with the open cast technique. Remaining stocks
of mined coal are reserved for the for Hwange Thermal Power Station. U.S.$5.3 million in
funds being relayed through Jewel Bank from the African Export-Import Bank have yet to
materialize. It is unclear whether the dragline has been repaired; it is definite that no
companies other than Hwange Thermal Power Station have received coal for the past two weeks.
May 2, 2003 [AllAfrica]
- Transport operators near Chiredzi are charging Z$19,000/km this year,
in contrast to Z$152/km last year. This complicates the situation for the farmers created by
Mugabe's land confiscation program, since they are expected to have over 500,000 tonnes of
sugarcane to transport.
- Zimbabwe's soybean crop has dropped 28% year-on-year to 50,000 tonnes for the 2002-2003
growing season. Zimbabwe's annual requirement (at least, to avoid shortages) is 120,000 tonnes,
which is split between domestic consumption, cooking oil, and stockfeed. This in dramatic
contrast to 2000, when Zimbabwe grew 170,000 tonnes and exported 30,000 tonnes. Production in
2001 was 150,000 tonnes, and production in 2002 was 70,000 tonnes. The collapse in production
in 2002 caused a trade deal between Zimbabwe and Malaysia, requiring 36,000 tonnes of soybeans
to be exported, to collapse.
- Most filling stations in Harare have run out fuel. There are reports that NOCZIM's
reserves have dried up, and that NOCZIM is trying to acquire foreign currency from all Zimbabwean
banks to acquire fuel, without regard to exchange rate. The black market price for petrol
is between Z$1,800/litre and Z$2,000/litre, while the black market price for diesel is about
Z$1,000/litre. Taxi services are charging way above legal prices in order to cover the exorbitant
- The Reserve Bank of Zimbabwe used Z$21.6 billion to accomodate troubled banks during July 2002
to December 2002. The following banks were reported to have the lowest adjusted liquidity
ratios (applicable in a systemwide crisis): Beverly Building Society [7.3%],
First Merchant Bank (FMB) [4.8%], Zimbabwe Development Bank Finance (ZDBF) [4.8%],
and Trustfin [2.4%]. The following banks were reported as having unusually high ratios of
adversely classified loans to total loans: Metropolitan Bank [46%], Time Bank [79.9%],
Genesis Investments [63.1%], and CFX [58.4%].
April 24, 2003 [VOANews]
- Zimbabwe's last fuel import was apparently somewhen before April 26, 2003 (as of May 2, 2003).
The consignment of 439,000 litres was diverted from Mutare to Bulawayo to ensure that
Zimbabwe International Trade Fair delegates did not run out of fuel. No fuel imports are scheduled
for the next two weeks, due to the Reserve Bank's external payments committee's inability to
allocate foreign currency even to the main priorities of fuel, electricity, grain, and
pharmaceuticals. It is suspected that Zimbabwe's last fuel consignment from Kuwait was not
even paid for by the Zimbabwean government: Barclays bank had an offshore account in Jersey in
the Channel Islands that was available. At least four other banks have bailed the Zimbabwean
government out on fuel: Jewel Bank, NMB, ABC, and Trust Bank. Zimbabwean government guarantees
for NOCZIM are now generally worthless. NOCZIM's debt has escalated to Z$21.6 billion, in spite of
recent efforst to reduce the debt by Z$6.7 billion. Total debt owed by Zimbabwe to fuel suppliers
is now thought to be over twice that of June 2002's U.S.$106.2 million. Libya accounts for over
U.S.$170 million of this. Kuwait's Independent Petroleum Group accounts for over U.S.$70 million of
April 23, 2003 [VOANews]
- Zimbabwe's tobacco auctions started today. Estimates of how much tobacco is available to
be sold range from 110-120 million kg (Tobacco Industry Marketing Board) to no more than 85
million kg (Zimbabwe Tobacco Association). The deficit in production is apparently due to
the inexperience and lack of support given to the farmers created by Mugabe's land confiscation
April 16, 2003 [VOANews]
- The monopolistic phone company Tel.One has announced that all public coin-operated
telephones are to be decommissioned, due to a wide variety of motivations. First,
the manufacturer for the telephones has declared them obsolete, making it very difficult
to obtain spare parts to maintain the phones. Second, the largest Zimbabwean coin
in circulation, the Z$5 coin, is too small to pay for a basic phone call: it takes Z$25
to pay for a 3-minute local call. Public phones operated by phone cards will continue
to operate -- but these phone cards are imported, thus hard to obtain. Also, Tel.One plans
to set up more phone shops for those people who do not have their own phones. The lack
of foreign currency prevents expanding the land-line exchanges' capacity, which has been
at physical maximum for the past five years.
April 16, 2003 [AllAfrica]
- Temporary arrangements have been made to continue electric power imports. ZESA has been
concentrating the cuts on industrial customers, especially those that do not pay in hard currency.
Some companies have introduced night shifts to avoid power outages.
April 11, 2003 [AllAfrica]
- The price of diesel was changed from Z$119.43/litre to Z$250/litre. Leaded petrol was
raised from Z$145/litre to Z$450/litre, while unleaded petrol was raised from $Z176.53/litre
to Z$500/litre. This near-complete acquiescence to the petroleum industry explicitly sabotages
the government's 10-point National Economic Recovery Programme, which intended to control
inflation to a 96% annual rate by December 2003 by enforcing price stability.
April 4, 2003 [AllAfrica]
- Davexcorp, one of the new contractors for Harare's garbage collection service, has
found that it cannot be certain of the arrival of its trucks (from the United Kingdom)
by a May 1, 2003 deadline. [At the moment, two months seems to be a fairly conservative estimated
time of arrival.] Unfortunately, Harare's rates are already less than profitable for the
extant firms, making it unviable to violate the terms of the contract with Harare by
March 26, 2003 [AllAfrica]
- The Zimbabwean petroleum industry has asked for a raise in the pump price of petrol to
Z$500/litre. This appears to be what is required to enable positive margins. This request had
been denied in February 2003. Instead, increases for petrol from Z$74.47 to Z$145.20, and diesel
from Z$66.39 to Z$119.43, were granted on February 25, 2003. It is speculated that the
government is uneasy about this request because it would sabotage its entire price control
March 21, 2003 [AllAfrica]
- Costs in the funeral assurance industry have gone up by over 350% over the past 12 months in
Zimbabwe. This is forcing the dominant corporations (Doves-Crocker Morgan, Moonlight, First Funeral
Assurance, and Nyaradzo) to either raise premiums (from Z$2/month to Z$300/month), or use
the Insurace Act to cancel a policy by paying cash equivalent to the face value. Progressive
Insurance Brokers (which handles policies on behalf of Doves) recommended that these firms
review their policies before the end of August this year.
March 20, 2003 [AllAfrica]
- South Africa's Eskom has joined Mozambique's Cahora Bassa in threatening to halt
electricity supplies over ZESA's payment arrears, which are ultimately due to
the Zimbabwean government's refusal to allocate foreign currency towards the payments.
March 3, 2003 [AllAfrica]
- ZESA is said to have until Saturday (March 23, 2003) to pay debt arrears of over
U.S.$6 million to Mozambique's power utility Hydro Cahora Bassa (HCB).
The alternative is 100% termination of electricity exports to ZESA.
- The Finnish export credit agency FINNVERA has issued a default notice against Zimbabwe for
failing to honor a government guarantee of US$3,116,376 million on a loan to ZESA. As a
member of the Berne union, FINNVERA can only issue a default notice when the amount of funds
in question exceeds U.S.$100,000. This is only 4 months after the Office National du Ducroire [OND],
of Belgium, issued a notice against Zimbabwe for defaulting on a loan of U.S.$360 million.
Efforts to establish whether the government had repaid the loan were unsuccessful this week
as OND officials declined to release any information, citing client confidentiality.
March 1, 2003 [AllAfrica]
- The Reserve Bank of Zimbabwe has again run short of foreign currency to import the paper for
Z$500 notes. This time, they can print some of the notes...just not enough to completely satisfy
February 28, 2002 [AllAfrica]
- Mugabe's land confiscation program has caused the following prices for produce in Bulawayo:
Medium-sized pumpkins, Z$500-Z$700. 15kg of potatoes: Z$3,500 to Z$4,000, vs. Z$2,500 in Harare.
Cabbages: Z$500/head. 15kg of onions: Z$3,500-Z$4,000.
February 21, 2003 [AllAfrica]
- Harare has been forced to shut down virtually all non-essential services because of the
total absence of both petrol and diesel. Ambulance and fire-fighting services are still working.
Among other services, the following have been shut down as non-essential: refuse collection,
road repair, street light repair, and grass cutting
- ZESA's failure to pay debts has reduced imports of electricity from South Africa's Eskom,
Mozambique's Cahora Bassa, and the Democratic Republic of Congo's Snel from 50% of total supply
to 35% of total supply. Eskom has openly classified ZESA as an interruptible customer, as
well as raising its rates by 12.5%. The reduction in Mozambique's electricity exports apparently
dates from June 30, 2002; two financing arrangements (debt swap, and U.S.$1.5 million/week) with
Cahora Bassa have both collapsed. Snel has been demanding payment in foreign currency since
April 2002. Wankie Colliery's cash flow problems are aggravated by unpaid debts of Z$300 million from
ZESA and Z$1.6 billion by the Zimbabwe Iron and Steel Company.
February 20, 2003 [AllAfrica]
- The Confederation of Zimbabwe Industries (CZI) said that ZESA is currently in debt to
foreign electricity supplies by about U.S.$143 million. Load-shedding is apparently imminent, due
to the inability of Wankie Colliery Company to supply coal to the nearby Hwange power station.
[Wankie Colliery has been reduced to 50% capacity by foreign exchange shortage: it no longer
can buy critical equipment or spares.] Also, the Southern African Power Pool arrangement
prohibits a country from importing power from another member of the pool to compensate for
supplies lost through failure to pay debts. While ZESA has applied for a US$350 million loan
from an unnamed Indian bank, approval is said to be conditional on ZESA raising electricity rates.
This requires a formal application to the Zimbabwean government, since they are price controlled.
February 12, 2003 [AllAfrica]
- Murerwa's devaluation of the Z$ has passed, along with Z$100 billion in explicit subsidies.
January 9, 2003 [AllAfrica]
- Finance Minister Herbert Murerwa has proposed a devaluation of the Z$, for all exporters, to
Z$800/US$1. It appears that this is more politically tolerable than reintroducing bureaux of
- Approximiately two weeks ago, a delegation from Mozambique's Cabora-Bassa Hydro-electricity
project had visited Zimbabwe. They have already reduced electricity exports to Zimbabwe from
500MW to 200MW, and are considering completely discontinuing exports because of non-payment.
ZESA is expected to have to load-shed if this happens.
January 4, 2003 [AllAfrica]
- It appears that the Reserve Bank of Zimbabwe owes "several millions of American dollars" to a
German paper firm that supplies the paper used to print Z$500 notes. It is very unlikely that
further Z$500 notes will be printed, in their current format, until this arrears is dealt with.
January 2, 2003 [AllAfrica]
- Police had to break up a riot in Bulawayo today. The riot was provoked when the state-controlled
food distribution center refused to distribute maize-meal to people without Zanu PF membership
December 21, 2002 [AllAfrica]
- Bulawayo has completely run out of fuel (petrol and diesel) for so long that queues now only
form at filling stations when a shipment is thought to be imminent.
- ZESA, and the union representing its workers, disagree on whether a strike by the union's workers
is continuing. (Union says yes, ZESA says no.) The given cause was a difference over a proposed wage
increase (management offers 70%, union wants 150%).
December 20, 2002 [AllAfrica]
- Zimbabwe's banking system has run out of Z$500 notes. In particular, many ATMs were completely
out of cash, and bank tellers were forced to use Z$100 and Z$50 notes for large sums of money.
Apparently, the Reserve Bank of Zimbabwe is not in a position to import the paper required to
print money. [Perhaps Zimbabwe should have learned from pre-dollarization Ecuador? At least
the notes would be printed, even if they weren't fit for ATMs....]
December 19, 2002 [AllAfrica]
- The shutdown of the non-bank bureaux of exchange has locked Zimbabwean parastatals out of the
black currency market -- notably including NOCZIM, ZESA, and the Reserve Bank of Zimbabwe. (Hmm...perhaps
this is what blanked Zimbabwe's fuel imports?). The net result has been to force companies
with foreign exchange to move the bureaux of exchange overseas -- preventing most of the hard currency
from ever reaching Zimbabwe.
December 13, 2002 [BBC/AllAfrica]
- Zimbabwe has ended up in the dubious position of having stiffed all of its major oil suppliers, being
reduced to payment-in-advance for them. Officially, Zimbabwe owes: Tamoil Trading of Libya, at most U.S.$20 million;
the Independent Petroleum Group of Kuwait, U.S.$65 million; BP SA U.S.$17.8 million; Engen SA
U.S.$12 million; Mobil Africa U.S.$1.1 million; Caltex U.S.$7.8 million; Libya Arab Foreign Bank
U.S.$43 million; government of Botswana U.S.$4.4 million. While data is not available for Sasol, Sasol has
also stopped shipping due to non-payment. Zimbabwe also owes the following in
port charges: CFM railways US$1.4 million; BP Mozambique U.S.$1 million. Zimbabwe's major financiers
are the Libyan Arab Foreign Bank and the Bank of Negara of Malaysia. The Tamoil deal collapsed when
Zimbabwe refused to mortage more state assets for fuel.
December 5, 2002 [AllAfrica]
- Most filling stations are out of fuel most of the time. It appears that NOCZIM is trying to
renegotiate the Libyan fuel deal with Tamoil...but mortaging even more government assets may not
be that politically viable. The black market price of fuel has reached Z$1,000/litre. [A shipment
of 15,000 litres corresponds to a bit under 4,000 U.S. gallons -- that is, about half of what
a gas station with a 10,000 U.S. gallon tank a major U.S. highway expects in a shipment
of fuel two or three times a week. That the shipment typically lasts around 2-3 hours
(without rationing), rather than around a full day, is indicative of the severe shortages.]
November 22, 2002 [AllAfrica]
- Harare's supply of two water purification chemicals has fallen far below target. Lime has
been reduced to a 3-day supply, apparently due to systematic underdeliveries by a local supplier since
September 2002. The imported chemical 'ecol 2000' has completely run out; it is unclear whether
the application to the Reserve Bank of Zimbabwe for funds to import this was submitted in a
November 20, 2002 [Xinhua]
- A number of South African seed distributors said that they cannot sell to Zimbabwe, due
to pre-existing contracts. Monsanto South Africa (distributors of the Zadzamatura variety) is
already committed for Zambia, Malawi, Angola, and other regional countries experiencing food
shortages. Zimbabwe's four companies (Seedco, Pannar, Monsanto and National Tested Seeds) have
run out, and are not expected to receive any imports before the maize planting deadline circa Dec. 15.
A UN report indicated that on November 13, 2002, 30,600 tonnes of seed had been sold to farmers either
via the Zimbabwean inputs credit scheme, or direct sales. This is enough for about 980,000 hectares, of
of the 1.2 million hectares that could reasonably be planted based on known supplies. However,
the projected yield is only 0.6t/ha (720,000 tonnes) to 0.8t/ha (960,000 tonnes). Zimbabwe's requirement
is expected to be 1.8 million tonnes, excluding the strategic grain reserve.
November 14, 2002 [AllAfrica]
- Zimbabwe's stock market has dropped 16% in the past three days. This is attributed to the increase in
the direct percentage of foreign exchange earnings retained by the Reserve Bank of Zimbabwe from
40% to 50% announced on November 14, 2002 (as part of the budget speech by Herbert Murerwa).
November 11, 2002 [AllAfrica]
- In an effort to choke off the black currency exchange market, Zimbabwe announced plans to
totally shut down non-bank foreign exchange offices. It appears that the typical
non-bank foreign exchange office had been using a blended exchange rate of 40% official,
60% black market.
- Zimbabwe has finally started to take steps to finance the relocated farmers...two weeks late.
The agri-bond offer (effective interest rate 24.42%) is expected to end November 22, 2002. Mugabe has noted that
the planning for the next growing season (2003-2004) should start in February 2003, not November 2003.
November 8, 2002 [AllAfrica]
- The Libyan Ambassador to Harare, Mohammad Azzabi, formally explained that the Zimbabwe/Libya oil
deal had collapsed for commercial reasons. He mentioned that Zimbabwe had paid U.S.$10 million recently
and "not much was outstanding". Local (Zimbabwean/South African) fuel industry sources interpret that to mean
that Zimbabwe still owes U.S.$80 million.
- Fuel shortages (both petrol and diesel) have resumed in Harare. The number of filling stations, in Harare, with
any kind of fuel is "few".
November 8, 2002 [BBC]
- Continued transportation disruptions (due to lack of spare parts and fuel) have
made supplies of cabbage erratic in the cities. Maize-meal, cooking oil, bread, and milk have already
been erratic in the cities for some time...but not from transportation issues. The price of cabbage
doubles just from being moved from a farm to the roadside (from Z$20 to Z$40 at this time), and gains yet another 50% in price (attaining a
net tripling to Z$60 or Z$70) if it ever makes it into the cities.
- Total lack of food in Zimbabwe has prompted regions bordering South Africa to send crowds of at least one hundred into
South Africa to buy food -- far in excess of the export-controlled quantities. Border patrols let these
crowds bypass the posts in order to avoid committing mass murder (by starvation).
November 5, 2002 [AllAfrica]
- The Reserve Bank of Zimbabwe has announced the creation of a Financial Intelligence Unit to
investigate all (documented) cash transactions of over Z$500,000. This is part of an effort to
identify why Z$ bills appear to be disappearing from circulation outright. [Interesting...the aphorism
Gresham's Law states that bad money circulates in preference to good money. To put things
cynically, what money makes the Z$ "good" with a black market exchange rate of Z$1800/U.S.$1?]
November 4, 2002 [AllAfrica]
- Both the Zimbabwe Fertilizer Company, and the NRZ, are critically short of foreign exchange.
In general, it has proved impossible to import sufficient raw materials to make standard fertilizers
for agriculture. However, alternative formulae are in use. More problematic is that the NRZ's operations
have been disrupted by inability to acquire and maintain locomotives and train wagons. This
has made the supply of raw materials for all industries erratic.
November 3, 2002 [AllAfrica]
- Gerry Johnson, the IMF's resident representative to Zimbabwe, stated that Mugabe's policies, if
not totally reversed, would result in a hyperinflationary spiral. He mentioned that the IMF forecast
of 522% inflation for 2003 was almost certainly a severe underestimate. Unfortunately, the IMF
conditions on aid are political suicide for Zanu PF. This starts with fully agreeing with the charges that
the current government criminally invalidated the March 2002 elections, and that Mugabe's
presidency was obtained by mass murder and fraud. It's not going to happen....
November 1, 2002 [AllAfrica]
- Quality control issues threaten to ruin the prices for cotton, one of Zimbabwe's export crops.
It appears that quality control is much worse this year than last. Cottco chairman, Paddy Zhanda,
has asked the Agricultural minister, Joseph Made, to start regulating the industry more formally.
November 1, 2002 [MSNBC]
- Zimbabwe's fuel deal with Libya has collapsed, due to nonpayment. While NOCZIM had
switched over to the Independent Petroleum Group of Kuwait for 85 million litres of fuel, charges
that NOCZIM had stolen 15 million litres of the above is likely to sabotage further supply
from this source.
October 24, 2002 [BBC]
- President Mugabe has declared that multinational oil companies may no longer buy oil through NOCZIM.
Instead, they must import it themselves...especially since they have more hard currency than
October 23, 2002 [AllAfrica]
- Mugabe's land confiscation program had already reduced the yield of the 2002 tobacco
crop to 162,000 metric tons, from 202,000 metric tons in 2001.
[The 2000 harvest was 237,000 metric tons.] October 15 to November 15 is
the critical season for transplanting tobacco seedlings. The rainy season usually starts
around or after November 15. Unfortunately, a substantial proportion
of tobacco farmers have no access to land: even if they have seedlings, they can't transplant!
If no corrective action is taken, this is expected to reduce the 2003 tobacco crop by about 50%, i.e.
to about 81,000 metric tons. This would be devastating to Zimbabwe's supply of foreign
currency, starting in April 2003.
October 21, 2002 [AllAfrica]
- Shortages of foreign currency have prevented the Zimbabwean government from spending on
essential projects. This has reduced the budget deficit from the Z$114 billion target to Z$35 billion
for January-June 2002. The Ministry of Finance and Economic Development reported, in particular,
that only 5% of the funds intended to pay foreign debts actually were spent. Capital projects
were underfunded by 5%.
October 10, 2002 [AllAfrica]
- The Zimbabwe Farmers' Union reported that the seed price increases had helped supply.
However, much supply has been diverted to Zimbabwe's input credit scheme, resulting in practical
shortages. However, the shortages appear to be mostly a matter of distribution inefficiencies.
For instance, the estimated demand for maize seed is 40,000 tonnes, compared to physical reserves
of 47,518 tonnes. 7,000 tonnes of maize seed have been authorized for export. [Less than 30% of
communal and small-scale farmers have access to the Zimbabwean input credit scheme.]
October 8, 2002 [AllAfrica]
- Zimbabwe's Finance Minister Herbert Murerwa informed Zimbabwe's Parliament of several
government guarantees to various local banks. Z$20,937,225,000 was guaranteed (for five years) to Trust Merchant Bank Limited,
Commercial Bank of Zimbabwe Limited (CBZ), Interfin Merchant Bank Limited and
First Banking Corporation Limited to cover local purchase and imports of Oct.-Dec.2002 maize
and wheat imports by the Grain Marketing Board. A Z$6 billion guarantee (for ten years)
was issued to Time Bank, Kingdom Bank, Trust Bank Corporation, CBZ and
the curator-managed Genesis Investment Bank Limited to cover debts owed by
Zimbabwe's Cold Storage Company. The alternative was having the banks seize this company's
assets. Z$1.7 billion was guaranteed to CBZ for debts owed by the Zimbabwe Broadcasting Corporation.
Unfortunately, there is a very real risk that at some point, the Mugabe regime may have to renege
on any or all of these guarantees.
October 3, 2002 [AllAfrica]
- Over 50% of the 400,000 head of Zimbabwean cattle in Masvingo province, in 2000,
has been lost to a combination of cattle rustling and a critical shortage of pastures.
The outbreak of foot-and-mouth disease (among others) was strengthened by the destruction of
fences that would have otherwise prevented herds of livestock from intermingling. It has also
proven impossible for commerical farmers to plant any crop, due to Mugabe's land confiscation
October 1, 2002 [AllAfrica]
- Research by the SADC indicates that about 99% of Zimbabweans no longer have reasonable access
to grains, even on the black market. Rice is unaffordable, while maize and wheat are not to
- The Libyan fuel deal extension seems to have been in vain: both Bulawayo and Harare have
only a few filling stations with either petrol or diesel. It is unclear whether this is due
to logistical problems within Zimbabwe, or failure of the fuel to arrive in Zimbabwe.
NOCZIM is certain that the Msasa depot (near Harare) not only has fuel, but that it is sending
it out at the expected daily consumption quantities of 1.9 million litres of diesel and 1.2
million litres of petrol.
September 26, 2002 [AllAfrica]
- About 94% of farmers that had intended to plant maize are reported to have no maize seed.
About 60% don't have any estimate of when they would obtain the seed. Smallholder farmers
created by Mugabe's land confiscation program have no seed at this time for any crops.
Zimbabwean funding to support them is at Z$8.5 billion, as opposed to the Z$160 billion
thought to actually be sufficient.
September 19, 2002 [AllAfrica]
- Zimbabwe adjusted the controlled prices of seed for farmers. Maize was increased by 120%,
groundnuts and sunflower seeds by 150%, sugar beans by 300%, and soybeans by 375%. These
price increases, while they enable these to be sold on the market at all, are based on 15-month
old prices. As such, the approximately 135% annual inflation rate has not been factored in.
- Climate has defeated the Mugabe regime's efforts to grow maize in winter. Even the hot and
arid southern Lowveld region was not sufficient to make 1,500 to 1,800 hectares yield more than
four tonnes per hectare. [The amount of land planted depends on which government source you
consult. The land was dontated by the Triangle and Hippo Valley estates.] The resulting
yield, 6,000 to 7,200 tonnes, is considered to be worth only one day or so of current maize
demand (6,000 tonnes/day). Even the planned yield (ten tonnes/hectare) would have been worth
less than four days of demand.
September 17, 2002 [AllAfrica]
- Zimbabwe's fuel deal with Libya has been renewed. Libya, in exchange for petroleum product
exports, will accept imports of beef, fruit, and tobacco. In addition, guarantees about the
exchange rate from Z$ to foreign currency had to be made. Libya was also authorized to take
corporate stakes in mining, besides the current ones in oil, tourism (e.g, Rainbow Tourism
Group), and finance (e.g., Jewel Bank). It should be noted that foreign investment over 40% in
a Zimbabwean corporation requires exchange control approval of the Reserve Bank of Zimbabwe.
September 11, 2002 [AllAfrica]
- Liquid petroleum gas supplies have severely diminished in Harare since NOCZIM has been
made the monopoly reseller. Since the beginning of September, it has been normal for
less than one-fourth the adequate supply for a day to be shipped to local resellers from
NOCZIM -- per week.
- ZESA has announced that all companies must pay their electric bills in foreign currency.
This is expected to enable ZESA to pay more than U.S.$24 million to
the Southern Africa Power Pool for electricity imports.
September 6, 2002 [AllAfrica]
- Filling stations have started running out of both petrol and diesel. A few are completely
dry, while many others only have one of petrol or diesel. Hopefully, the renegotiation efforts
in Libya by Mugabe will be successful -- a huge debt (millions of U.S.$?) had not been settled
before the last deal expired.
- Zimbabwe's cattle herd has been reduced from 1.25 million to 500,000 by massive destocking
induced by Mugabe's land confiscation program. Unfortunately, the drought has resulted in
massive overgrazing in Matabeleland South. Some villages (e.g., Hwali -- about 100 km south of
Gwanda) have lost all of their cattle to drought.
September 2, 2002 [AllAfrica]
- Bakers located in Bulawayo have almost completely stopped baking bread loaves, instead focusing
on items like rolls, buns, and cakes which are not price-controlled. Those which still make
bread sell it on conditions. One grocery store is requiring Z$300 in groceries for each loaf, while
others are making it a "frequent buyer" or "large buyer" program reward.
August 15, 2002 [AllAfrica]
- Fruits and vegetables will be in much greater shortage within two weeks, as virtually
all small-scale farmers run out of well-water for irrigation. Delivery rates have already
been impaired by irrigation water shortage and Mugabe's land confiscation program. In the past
month, a box of tomatoes (high-priced end) has risen in price from Z$300/box to Z$500/box.
- Tobacco seed sales for this years crop are much less than last year's crop: 235 kg vs. last year's 304kg.
August 14, 2002 [AllAfrica]
- The black market exchange rates are around Z$750/U.S.$1 and Z$1000/UK£. The record highs
have been Z$1000/U.S.$1, Z$1250/UK£, and Z$75/South African rand.
July 16, 2002 [Xinhua]
- The black market price of bread has reached between Z$75 and Z$100 per loaf. For the past
few months, people had been using bread as a substitute for maize-meal. The situation is not
likely to improve until wheat stocks start to improve.
July 11, 2002 [AllAfrica]
- ZESA has raised electricity rates by 40%. The first half of this was scheduled for
July 1, 2002; the second half is scheduled for September 1, 2002. The rate increase
is substantially less than the increase in prices of fuel. Coal went up 95.6% in price
from January 2001 to October 2001. Diesel went up by 60% over the course of 2001.
The annualized inflation rate has been near 117% since February 2002...none of which is
accounted for in the price raises.
June 26, 2002 [AllAfrica]
- Zimbabwe is renegotiating a U.S.$360 million fuel deal with Libya, which expires at the end
of July 2002. Libya was to be compensated in both goods and shareholding in state-owned
companies. However, the 12,000 tonnes of beef exports has yet to be completed.
June 24, 2002 [AllAfrica]
- Zimbabwe has upgraded the priority of salt importers for foreign currency, after grocery stores
ran out of iodized salt. Other sectors that have already been prioritized are medication imports,
electric power, and petroleum products.
- The Zimbabwean dollar reached Z$850/U.S.$1 on the black market. This spike has been
attributed to the Grain Marketing Board resorting to the black market to obtain U.S.$55 million
for grain imports.
June 21, 2002 [AllAfrica]
- The Zimbabwe Tobacco Association's request that tobacco farmers be paid in U.S.$ has been
outright denied by the Finance Ministry. The current base price of U.S.$1.80/tonne, combined
with a mild exchange rate support resulting in an effective official exchange rate of
Z$99/U.S.$1, is enough to cover costs in U.S.$ -- but not in Z$. Cf. May 15, 2002.
June 20, 2002 [AllAfrica]
- Mugabe's land confiscation program has already resulted in the slaughter of 30% of Zimbabwe's
commerical cattle, and 45% of Zimbabwe's breeding cattle. It appears that any cattle farm that
intends to respect a Section 8 notice usually has no option except to completely slaughter
- Zimbabwe's Grain Marketing Board, under the pretext that bakers were hoarding flour, has
cut wheat flour supplies to them by 50%-70%. It is more credible that Zimbabwean wheat stocks
will run out before the end of July. Regardless of allegations, it is definite that
the GMB is not receiving the wheat that the Mugabe regime has been forecasting: the current
winter wheat harvest only has 30,000 hectares planted, with an estimated yield of 150,000
tonnes -- less than 3 month's supply at the normal usage rate of 35,000 tonnes month.
- Due to the inability of the NRZ to deliver coal to the state monopoly
Zimbabwe Sugar Refineries (ZSR), sugar refining has been shut down since June 8, 2002 --
when the refinery ran out of coal. Lost production has reached 6,500 tonnes.
June 7, 2002 [AllAfrica]
- The IMF declared Zimbabwe to be in non-cooperation with the IMF, in response to Zimbabwe's
being in default since February 2001. This completely suspends IMF technical assistance.
It is also expected to motivate similar positions from the World Bank and the African Development
Bank. It is now extremely unlikely that interest rates will rise above inflation, since the
government currently cannot source the hard currency required for food imports. Also, the exchange
rate on the black market ranged between Z$750/U.S.$1 and Z$800/U.S.$1.
June 3, 2002 [AllAfrica]
- The Zimbabwean dollar has reached Z$450/U.S.$1. The severe lack of foreign currency has
caused the parastatals [ZESA, NOCZIM, etc.] to stop new infrastructure construction.
May 31, 2002 [AllAfrica]
- Zimbabwean wheat stocks are expected to become non-existent within a month. The normal
annual requirement for wheat is 380,000 to 400,000 tonnes; the 2001 winter wheat harvest was
314,000 tonnes. However, Mugabe's land confiscation program has reduced the wheat planting
for the 2002 harvest to only 1/3 to 1/2 of the acreage of 2001. The lower bound is exactly
the proportion of commercial farmers (the only substantial planters of winter wheat) who have
not received Section 8 confiscation orders, whose compliance will totally prevent any harvest
whatsoever. 60,000 hectacres were grown in 2001, with an estimated 20,000 to 30,000 hectares
for 2002. This suggests that production from this will be 110,000 to 165,000 tonnes -- if
Mugabe and Zanu PF do not sabotage the harvest.
May 30, 2002 [AllAfrica]
- Basic commodities continue to be scarce in Harare. The black market price for a 10kg bag of
maize-meal is between Z$600 and Z$650, in contrast to the controlled price of Z$248,05. For a
20kg bag of maize-meal, the black market price is around Z$700, in contrast to the controlled
price of Z$491,84. Many supermarkets did not have cooking oil. One that did on May 30, 2002
[Food Chain Group's Robert Mugabe Way branch] also had a requirement that customers buy Z$500
of groceries for each 750ml of cooking oil. Cooking oil is being shipped -- in relatively
May 17, 2002 [AllAfrica]
- The Zimbabwean dollar has been trading in the range of Z$385/U.S.$1 to Z$420/U.S.$1 on the
black market, in spite of the opening of the tobacco marketing season on May 14, 2002. This
season is expected to end in November 2002. Zimbabwe's government had substantial hard
currency requirements to obtain before June 2002: it wants to pay off a U.S.$28.6 million
debt owed by Air Zimbabwe to prevent repossession of aircraft by the Import Export Bank,
and U.S.$23 million to even pay for imports of maize and wheat. The legal currency exchange
market is backlogged on applications back to July 2001.
May 15, 2002 [AllAfrica/BBC]
- Mugabe's land confiscation program is slashing the amount of land dedicated to next year's
tobacco crop, by preventing the initial preparation of the land. It appears that most of the
affected commercial farmland will be confiscated long before harvest time.
April 23, 2002 [AllAfrica]
- Zimbabwe has decided that this year, the tobacco auctions shall be done entirely in foreign
currency that was not obtained via the Zimbabwean banking system. Besides vastly simplifying collecting
the 40% excise on foreign exchange, it allows the Zimbabwean government to convert the currency for
the tobacco farmers at the official rate of Z$55/U.S.$1 . Unfortunately, the farmers must use
black-market exchange rates when going the other way: two of Zimbabwe's three auction floors
were completely shut down by hundreds of protesting farmers (most of whom would not be
tobacco growers except by Mugabe's land confiscation program) over low prices -- insufficient to
even cover transportation costs to the auction floors. [The Tobacco Sales Floor (TSF), and Zimbabwe
Industry Tobacco Auction Centre (Zitac), were 100% shut down; Burley Marketing Zimbabwe (BMZ) was
only 75% shut down. Zitac was shut down after the 23rd bale (it is indigenously operated), while
TSF was shut down at 11 AM.] The TSF operations manager, Mr. Mark Impey, had to directly order the
building security not to violently intervene against the protesters. Tobacco Industry and Marketing
Board chairman, Mr. Njodzi Machirori, confirmed that all three would be closed while discussions
were held with the Minister of Lands, Agriculture and Rural Resettlement, Cde Joseph Made, to
resolve the issues. Zitac managing director, Mr. Artwell Seremani, mentioned that it costs
Z$830,000 per hectare to grow tobacco, and the prices at the auction floors must account for this,
rather than making paprika more profitable than tobacco. [Another way of looking at it: initial
bids were on the order of Z$11/kg, while the cost of growing tobacco was around Z$300/kg at the black market
exchange rate of Z$340/U.S.$1. At official exchange rates, the cost would be about Z$48 (rounding down).
Clearly, even black market exchange rates would not save this auction. The Zimbabwe Tobacco Association
believes that this could collapse Zimbabwe's tobacco industry.]
- A generator breakdown at Hwange in Zimbabwe, combined with two breakdowns in Zambia
(Kafue and Kariba North) and diffuse technical problems in the Congo, has forced ZESA to apply
rolling blackouts during peak load. This is expected to continue through the end of May.
(The Kariba plant, in Zimbabwe, is also down for maintenance and refurbishment). South Africa
and Mozambique are said to be exporting as much electric power as possible.
April 11, 2002 [AllAfrica]
- The controlled retail price of bread has been adjusted from
Z$48.50 to Z$60.44 per loaf effective today. The corresponding
controlled wholesale price was adjusted from Z$44 to Z$54.95 per
loaf. While this is a violation of a Herald campaign ad, the
increases are insufficient to even temporarily make
large-scale bread baking profitable -- that would have required a
wholesale price of at least Z$63. Wholesale yeast prices have
increased by 202% since Feb. 2002; wholesale prices of baking fats
and oils were up by 26% in March 2002 compared to Feb. 2002. Wages
were increased 21% in Oct. 2001.
April 2, 2002 [AllAfrica]
- The ongoing maize shortages are disrupting the ostrich and
poultry industries by preventing acquisition of adequate stock feed
supplies. The amount of maize from birth to slaughter for ostriches
has been reudced from the recommended 110kg-120 kg to 30 kg per
bird. The ostrich industry has seen a decline of about 40% so far
(compared to when?), between maize shortage and reduced demand for
ostrich skin products. Most poultry producers have been shut down
outright because of inability to substitute feed stocks.
[Apparently, there aren't enough insectsto replace the cereal
deficit for poultry.] Ostriches can use a number of alternative
feed stocks, including maize and wheat bran, as well as soybean and
cotton oil. Of course, the maize and wheat shortages automatically
cause shortages in maize and wheat bran. Import costs for a tonne
of stockfeed maize are estimated at U.S.$195 [of which U.S.$20 is
the non-GMO ("not a Genetically Modified Organism") premium, since
it is illegal to import GMO organisms into Zimbabwe.]
March 20, 2002 [AllAfrica]
- ATM machine withdrawal limits have been adjusted in Zimbabwe.
The range of limits now is Z$5,000 to Z$20,000. First Banking
Corporation of Zimbabwe Limited (First Bank) has adjusted the ATM
withdrawal limit to Z$20,000 this week; this matches NMB Bank
Zimbabwe Limited. Standard Chartered Bank of Zimbabwe Limited
(Stanchart) has an ATM limit of Z$$8,000 -- and charges Z$100 for
any teller withdrawal less than Z$8,000. [The usual ATM charge of
about Z$2 goes straight to the Zimbabwean government; this was
introduced by Dr Herbert Murerwa as Minister of Finance.] Pairs of
designer shoes have been observed at Z$27,000.
February 22, 2002 [AllAfrica]
- The suppliers for Rusape General hospital have been refusing to
honor Zimbabwean government requisitions since January 2002 due to
non-payment. In spite of the Hospital Health Services Fund being
diverted to food purchases, the normal hospital diet has been
(cumulatively?) restricted to cabbages, milk, kapenta, beans and
beef. The quantity of beef has been restricted to 40% of intended
normal. [This is a balanced, if low-variety, diet.]
February 21, 2002 [AllAfrica]
- The large disparity between the official and black-market
exchange rates for the Zimbabwean dollar is causing the 40%
government take on hard currency export earnings to disrupt
Zimbabwean exports. There are suspicions that lowering this
percentage might actually increase the amount of hard
currency Zimbabwe collects. [I think the U.S. considered this back
in the late 1980's for income taxes. While it was proposed under
the Republicans (Ronald Reagan), it took a Democrat (Bill Clinton)
to actually implement it. Of course, the U.S. budget surplus that
Clinton attained for 2000 was immediately annihilated in 2001 -- it
seems both military action (Al Queda) and Republican dominance
correlate with increased spending.]
February 15, 2002 [AllAfrica]
- The Department of Agricultural, Technical and Extension
Services (Agritex) and the Commercial Farmers' Union (CFU) both
agree that total area planted to crops to date for 2002 is 10% than
both this time last year (2001) and the 1990's average. Of this,
60% has been planted to maize (2001 57%, 1990's average 63%), due
to successful support by the Zimbabwean government for this crop in
government-confiscated farmland. However, acreage decreases of 54%
for tobacco, 44% for soybeans, and 56% for sunflower are forecast,
mostly due to Zanu-PF-backed sabotage of commercial farms.
Unfortunately, the forecast harvest of maize for 2002 is dismal --
less than 1 million tonnes.
February 14, 2002 [AllAfrica]
- Out of current arrangements to import 160,000 tonnes of maize
from South Africa, transportation has been arranged for only
10,000...of which 5,000 has already arrived. The World Food
Programme accounts for 5,200 tonnes, and a U.S. donation of 8,450
tonnes is also scheduled for delivery through Tanzania. [Feb. 22,
2002: to prevent shortage, 150,000 tonnes/month is required: about
February 10, 2002 [AllAfrica]
- At least one supermarket has decided to stop carrying
mealie-meal, because riot police are required for crowd control
when it is in stock.
February 9, 2002 [CNN]
- Zimbabwe's GMB board chairman, Enoch Kamushinda, has joined
efforts to secure financing from South Africa for an additional
300,000 tonnes of maize imports...that being the absolute minimum
(on top of the 200,000 already scheduled) to prevent mass
starvation. If nothing is done, at least 500,000 Zimbabweans are
thought to be at risk.
January 22, 2002 [BBC]
- Harare grocery stores had their first shipment of corn meal in
two weeks today. Police provided crowd control services, and
restricted all purchases to one 10kg bag of corn meal per person.
The shelves were stripped bare the same day. Zimbabwe's planned
imports of grains (including corn) in progress were reported as
January 11, 2002 [AllAfrica]
- The first 2,000 tonnes of Zimbabwe's planned 150,000 tonnes of
imported maize are due to arrive from South Africa shortly.
Unfortunately, there is no trace of who the other 148,000 tonnes
will be imported from. Domestic output of maize was reported by the
Grain Marketing Board as 1.48 million tonnes for the 2001 harvest,
as compared to 2.04 million tonnes the prior season. The Zimbabwean
government has started to confiscate animal feed maize from
commercial farms who have not yet sold it; 36,000 tonnes was
reported as having been confiscated so far, with 6,000 tonnes being
confiscated from one German-owned farm in defiance of the German
December 24, 2001 [Xinhua]
- The Economist Intelligence Unit forecasts a 5% decline in
Zimbabwean GDP for 2002 compared to 2001, assuming that Mugabe's
land confiscation program is unchecked and no substantial changes
in Zimbabwe's macroeconomic policy happen. Even drastic
macroeconomic reforms after the elections are expected to do no
better than 1.2% GDP growth in 2003.
December 23, 2001 [AllAfrica]
- Ashburner, chairman of the Zimbabwe Sugar Association, reported
that Zimbabwe's sugar stocks were sufficient to last through April
2002. However, the spread between the official exchange rate and
the black market exchange rates has promoted substantial exports to
Zambia and Mozambique, requiring the criminalization of sugar
exports because they were inducing shortages in Zimbabwe
December 20, 2001 [AllAfrica]
- Zimbabwe's Grain Marketing Board stock of maize fit for human
consumption (70% of the Nov. 23rd figure of 96,096 tonnes) was
subject to a purchase rate of about 20,000 tonnes per week. This
has been completely exhausted, leading to probable shortages of the
- The commercial bank African Banking Corporation (ABC) estimates
that Zimbabwe's GDP will have declined 10% in 2001 compared to
2000. For comparison, Zimbabwe's official estimate is a 7.3%
decline in GDP, while another commercial bank, Stanbic, is
predicting an 11% decline in GDP.
December 14, 2001 [AllAfrica]
- Libya's Muammar Gaddafi considers the challenge by several
Zimbabwean politicians of Mugabe's offering Libya stakes in several
state run firms, as part of the fuel/goods barter deal, to be a
violation of terms. If this is not remedied, Libya is considering
requiring payment in hard currency.
- Zimbabwe's November 2001 inflation rate was reported at 103.8%.
A 100ml tube of toothpaste costs about Z$470, and the cheapest bar
of soap cost about Z$100. Some Zimbabweans are reported to be using
salt in place of toothpaste, as a money-conserving measure. The
black market price of a bottle of cooking oil is about Z$200, in
contrast to the controlled price of Z$148. This makes substituting
margarine for cooking oil reasonable. Also, housing prices in the
affluent suburbs of northern Harare are now around Z$70 million, as
compared to Z$5 million at the beginning of 2001. Properties in the
high-density areas are reported to be costing about Z$1 million, as
compared to Z$600,000 in January 2001.
November 7, 2001 [Xinhua]
- Zimbabwe's total parastatal debt is expected to reach Z$60
billion for 2001, up from Z$45 billion for 2000. This debt is
guaranteed by Zimbabwe's government, and is thus problematic for
Zimbabwe's reputation in case of default.
- As of Nov. 23, 2001, official maize reserves were reported as
96,096 tonnes. A combination of foreign currency shortages, and
other unspecified issues, have resulted in the Zimbabwean
government not having yet locked in 150,000 tonnes of planned maize
imports. An arrangement was reached with the United Nation's World
Food Program in October 2001; the 60,000 tonnes of maize assistance
is not likely to arrive before January 2002.
October 11, 2001 [AllAfrica]
- The Zimbabwean Grain Marketing Board is hoping (based on the
large early deliveries of winter wheat) for a possible 300,000
tonnes of winter wheat for this year's harvest. The current
controlled selling price of wheat is Z$25,000/tonne, and the
current controlled purchase price of wheat is Z$29,000/tonne.
Mashonaland Central is reported to have filled its wheat silos with
80,000 tonnes already.
October 3, 2001 [AllAfrica]
- Zimbabwe has opted for price controls on food and other
essentials (translating to an immediate 33% cut in legal prices)
with the consequent black markets and risk of business collapses,
rather than risk massive rioting. This is not enough to counter the
76% monthly inflation reported for September 2001.
September 26, 2001 [BBC]
- It appears that at least Z$3 million worth of grain has been
lost to fraudulent weigh bridge documenting the delivery of grain
that was not physically delivered at Northern Products silos
outside of Chinhoyi. [Others seem to be implicated; this is
probably one of the larger documented ones.] Other cities and/or
companies affected affected include Stentor, Gainful, Pamwechete,
Old Citrus Estate, Majuta, and Biri. Particularly annoying (to the
Zimbabwean government prosecutors) is the refusal of the local
magistrates to try these crimes.
September 21, 2001 [AllAfrica]
- The IMF has cut off Zimbabwe's access to loans under a program
for nations suffering from high poverty rates, due to an arrears of
over U.S.$50 million. The situation is expected to be reviewed in
about three months.
September 20, 2001 [AllAfrica]
- Sydney Mabika, an economist and assistant director at the
Reserve Bank of Zimbabwe, announced that initial estimates of a
Zimbabwean GDP decline of 2.8% for 2001 had been invalidated by
severe problems in the agricultural sector. The official estimate
is now an 8% decline; it is almost inconceivable that the decline
could be less than 5%.
September 5, 2001 [Xinhua]
- The Reserve Bank of Zimbabwe, in an effort to handle as much
hard currency as possible through official channels, is considering
undoing the current Export Retention scheme, and forcing all
foreign currency account holders to use the official currency
exchange market (rather than permitting black-market currency
exchanges at over Z$200/U.S.$1).
August 30, 2001 [AllAfrica]
- Zimbabwe has been forced to raise the controlled price for
buying maize from Z$7,500/tonne to Z$8,500/tonne, and the
controlled price for buying maize from Z$8,500/tonne to
Z$9,600/tonne. This is in agreement with the initial black market
prices when Zimbabwe implemented price controls.
August 27, 2001 [Xinhua]
- Zimbabwe's stronger enforcement of currency exchange laws
(official rate Z$55/U.S.$1, black market rate Z$350/U.S.$1) is
threatening to shut down businesses that must use foreign exchange
to acquire supplies.
August 25, 2001 [Xinhua]
- There is a severe divergence between Mugabe regime and
corporate estimates of how much maize Zimbabwe needs to import. The
Zimbabwean figure is 100,000 tonnes, while the corporate estimate
is more like 700,000 tonnes.
August 24, 2001 [AllAfrica]
- At least 33 million litres of assorted petroleum products have
arrived in Zimbabwe, courtesy of a U.S.$360 million one-year
contract with Libya. The Libyan contract is expected to supply 70%
of Zimbabwe's requirements. Other extant contracts (e.g.,
Independent Petroleum Group of Kuwait, Petraf and Engen) are
expected to cover the difference.
August 22, 2001 [AllAfrica]
- Empirical data indicates that Mugabe's land confiscation
program is severely reducing Zimbabwe's agricultural capacity. This
threatens to reduce agriculture's contribution to Zimbabwe's GDP
from 17% to about 8%. [This assumes, of course, that other sectors
do not implode faster.] E.g., maize: the commercial farms that
Mugabe is dismantling have been growing up to ten tonnes per acre,
while the communal farmers that Mugabe is reallocating the land to
are not doing better than 3 tonnes per acre. Estimates indicate
that it will take 15 years to attain maximum productivity from the
reallocated land -- as if there are fifteen years available.
- Dairibord Zimbabwe Ltd reported a 4% decline in milk supply for
Jan.-June 2001 compared to Jan.-June 2000. This is directly
tracable to Mugabe's land confiscation program, which is disrupting
day-to-day activities on Dairibord's suppliers.
August 17, 2001 [AllAfrica]
- The black market exchange rate hit Z$310/U.S.$1 .
August 16, 2001 [AllAfrica]
- Details of a U.S.$360 million fuel deal to be financed by
Libyan banks (including the Libya Arab Foreign Bank, which is the
foreign branch of the Central Bank of Libya) are expected to be
finalized soon. Coordination with the Reserve Bank of Zimbabwe is
needed to ensure compliance with foreign exchange regulations.
August 9, 2001 [AllAfrica]
- Zimbabwe's Finance Minister Simba Makoni reported that
Zimbabwe's arrears on foreign debt had accumulated to U.S.$690.9
August 7, 2001 [AllAfrica]
- Computer technicians at Zimbabwe's state-controlled Posts and
Telecommunications Corporation (PTC) are considering reinstating a
sit-in circa August 16, 2001 unless their salary grades are revised
to something closer to those at Net*One. Note: PTC is
appealing a High Court ruling already requiring the maintenance of
a 300% wage raise granted in 2000.
- Mugabe has overruled his finance minister (Makoni) regarding a
possible official devaluation of the Zimbabwean dollar, indicating
that this is not politically tenable until after the 2002
elections. [Makoni had proposed a devaluation to somewhere between
Z$84/U.S.$1 and Z$104/U.S.$1...against a black market exchange rate
of Z$240/U.S.$1.] There was speculation that both confiscating
Foreign Currency Accounts, and a ban on "non-essential imports",
were under consideration.
August 3, 2001 [Xinhua]
- The cost of bread was reported (after the last price hike) as
being about Z$50 per loaf, in contrast to about Z$23 per loaf in
January 2001. This is notably faster than Zimbabwe's nominal
inflation rate of about 60%.
July 31, 2001 [AllAfrica]
- NOCZIM reported that both South African refineries that
normally sell it diesel are shut down: Sasol Natref Refinery (in
Sasolburg) has been gutted by fire, and Engen Enref Refinery (in
Durban) is undergoing routine maintenance.
July 30, 2001 [Xinhua]
- It appears that NOCZIM's last price increase assumed a black
market exchange rate of Z$120/U.S.$1 . This is no longer
July 27, 2001 [AllAfrica]
- The Reserve Bank of Zimbabwe reported that the combined effects
of the Gold Floor Price Support and Foreign Currency Account
Retention programs has raised the production of gold from 44,766 oz
of gold in April 2001 to 58,227 oz in May 2001. The Gold Floor
Price Support program is maintaining a price of U.S.$343, versus a
global market price around $U.S.260. The Foreign Currency Account
Retention program was reported as providing U.S.$21.4 million to
gold producers cumulative through April 2001. It is hoped that a
reduction in corporate income tax rates from 35% to 25% will also
July 25, 2001 [Xinhua/AllAfrica]
- Zimbabwe's National Bakers Association chairman Mark Prior
reported that the miller Blue Ribbon is rationing wheat flour, and
that the largest miller (National Foods) is considering rationing
wheat flour. This is attributed to a wheat shortage aggravated by
the Mugabe regime's refusal to assist with imports, forcing millers
to get wheat from the black market.
- Zimbabwe's arrears with the IMF have grown to U.S.$30 million,
and are projected to reach U.S.$52 million if no effective action
- Zimbabwe's Tobacco Industry and Marketing Board indicated that
U.S.$181 million worth of tobacco had been committed for export.
However, the hard currency inflow is not expected for at least six
months, since it will take six months to cure the tobacco before
exporting it. By comparision, oil imports have been running at
U.S.$40 million a month, while ZESA's current power import costs
are U.S.$86 million per year.
- The black market price of maize is already Z$8,000 to Z$9,500
per tonne, well above the official price of Z$7,500 per tonne.
July 20, 2001
- Junior and mid-level doctors joined a nationwide strike that
the specialist doctors were already conducting. This strike was
into its third week. Compliance appears to be roughly 80%.
July 19, 2001
- Black market exchange rates spiked to about Z$255/U.S.$1
earlier this week. Finance minister Simba Makoni made it clear to
the local airlines that quoting rates using the black market
exchange rates was not reasonable; it seems that the
airlines consider the black market money exchange fully legal,
however. Not even the Zimbabwean government can use the legal
exchange rate of Z$55/U.S.$1, except for NOCZIM and ZESA export
proceeds to be used for fuel and oil imports.
July 18, 2001
- Zimbabwe has arranged a contract with Libya which would allow
importing U.S.$90 of petroleum products per quarter in exchange for
July 12, 2001 [Xinhua]
- Zimbabwe has declared maize, wheat, and wheat flour controlled
products. The only legal exchange for these (in Zimbabwe) is now
Zimbabwe's Grain Marketing Board.
July 11, 2001 [Xinhua]
- Martin Chingaira, administrator of Zimbabwe Building
Contractors Association, reported that the construction industry
would collapse further, since the Zimbabwean government has
suspended a number of construction projects due to lack of
July 5, 2001
- Zimbabwe has set up an inter-ministerial task force to oversee
Zimbabwe's food security. Maize, wheat, and wheat flour have been
declared controlled products; this is expected to take effect on
July 18, 2001.
July 4, 2001
- Zimbabwe's Finance and Economic Development Minister Simba
Makoni reported that Zimbabwe's expenditures had been successfully
controlled to within target with the enhanced accounting rules he
had introduced this year. However, Makoni reported that Zimbabwe
needs to import about 600,000 tonnes of maize; he attributed this
to an early dry spell followed by flooding. The latter claim is
politically correct; the former directly contradicts Zimbabwe's
Lands, Agriculture and Rural Resettlement Minister Joseph Made.
[Note: Makoni is defying the Mugabe regime's official PR.]
July 3, 2001
- Preliminary results of the ZCTU strike indicate about 95%
compliance overall (larger outside of Harare). About 80% of
businesses and factories were shut down by the strike. The main
strike-related violence has been inflicted by riot police
attempting to protect individuals ignoring the strike.
June 30, 2001
- The Mugabe regime has declared the ZCTU's strike illegal and a
direct threat to the government. However, no violence has been
traced to the strikers.
June 26, 2001
- The ZCTU called for a two-day strike on June 3-4, 2001,
to protest NOCZIM's refusal to totally reverse a 70% price increase
in fuel by June 27, 2001.
June 25, 2001
- Lovemore Mbengeranwa, Harare's Director of Health Services,
reported that hard currency shortages have put Harare's water
supply at risk, prohibited adequate garbage collection, and
prevented adequate treatment of sewage. Medical supplies cannot be
reliably procured, and the stability of staff wages is now
- Zimbabwe's Central Bank has announced plans to print a Z$500
note and mint a Z$5 coin. This is apparently in response to rampant
inflation, which has prompted the use of large and cumbersome
bundles of Z$100 notes for routine shopping trips.
June 20, 2001 [Xinhua]
- Bulawayo has been reduced to less than a month's supply of the
water purification chemicals chlorine (kill harmful microorganisms)
and aluminum sulphate (precipitate debris out) by shortages of hard
currency. The three companies tendered to supply these chemicals
(Cernol Chemicals, Chemplex Corporation, and AI Davis and Company)
cannot obtain enough hard currency to meet the requirements,
forcing the city of Bulawayo to purchase these chemicals by
June 18, 2001 [Xinhua]
- Zimbabwe's Finance Minister Simba Makoni admitted that the
difference between the official exchange rate (Z$55/U.S.$1) and
black market rates ranging from Z$120/U.S.$1 to Z$200/U.S.$1 was
endangering Zimbabwe's agriculture. [Agricultural products are
bought at the official rate, but the inputs are purchased at black
June 13, 2001
- Zimbabwe has stopped issuing gold buying licenses, due to
evidence of massive illegal extraction of gold, and dominance by
South African customers. [Of the recorded gold extraction of 22
million tonnes, over 10 million tonnes ended up in South Africa.]
It also appears that the Gold Act (the basis for the licenses)
needs to be revised to make it easier for small-scale extraction to
June 12, 2001
- The ZCTU plans to call a strike if NOCZIM does not completely
annul its price increases for fuel. Danny Dube, president of the
Zimbabwe National Chamber of Commerce, anticipated that the price
increase would accelerate Zimbabwean business failures. Joseph Muzulu,
chief economist at Zimbabwe Financial Holdings, reported that
the fuel price increase invalidated his estimate for Zimbabwe's
2001 annual inflation rate of 80%.
- Maize prices on the privately run Zimbabwe Agricultural
Commodity Exchange (ZIMACE) had firmed by Z$700/tonne since May 13,
2001. Z$300/tonne of this was since June 6, 2001. Industry groups
are estimating the ideal level of Zimbabwean imports of maize as
800,000 tonnes, mostly from South Africa. (They are directly
contradicting the Mugabe regime estimates by doing so). However,
Grain SA (the overall organization for grain producers in South
Africa) reports that this will break their supply and demand
estimate for Zimbabwe; they had been using an estimate of 300,000
tonnes. South Africa is expecting to produce 6.967 million tonnes
of maize this harvesting season, and has a carryover of about 2
May 10, 2001
- Zimbabwe's Finance Minister Simba Makoni's rhetoric distancing
the Zimbabwean government from Mugabe's land confiscation program
proved futile. The IMF first deputy director, Stanley Fischer, made
it clear in South Africa's Durban that IMF aid to Zimbabwe was
frozen until a sustainable economic programme was actually
intended, and "law and order was restored to Zimbabwe's land
- Translation: Mugabe must declare his land confiscation program
illegal and renege on it. This is not feasible, since Zanu
PF will lose most of its internal political support by doing
- NOCZIM boosted fuel prices (effective midnight June 12/June 13,
- Diesel: Z$66.39/liter, up 68.4% from Z$39.60/liter
- Unleaded gasoline: Z$77.42/liter, up 65.5%
- Illuminating paraffin: Z$55, up 63.8%
May 9, 2001
- Seven financial bids from international companies tendering for
a Z$5 billion digital phone project for Mashonaland and Manicaland
were found stolen last month right before the tender was to start.
Two senior Zimbabwe Tender Board (ZTB) officials - Howard Matimba
and Ellen Ruparanganda - have been charged with the theft. The
Japan Bank for International Cooperation (who is financing this)
has mentioned that the project cannot be approved until the stolen
bids are entered into the tender.
- Zimbabwe has apparently cut off debt service payments in order
to finance oil and electricity imports. The IMF reported current
arrears of U.S.$25 million; Finland has reported default on U.S.$8
million in debt. Germany did not provide figures, but did mention
that arrears had been building for about a year now.
April 5, 2001
- NOCZIM finally paid U.S.$10 million to Kuwait Independent
Petroleum Group to resume oil imports. This was after most taxis in
Harare were grounded for lack of fuel, and harvests of tobacco and
foodstuffs (maize and wheat, etc.) were endangered.
March 31, 2001
- NOCZIM lost a U.S.$90 million fuel deal financed by Marc Rich
& Company via its subsidary Marc Rich Investments Ltd. In the
words of an official with Marc Rich & Company, "We realised
that these people were not serious." This is in stark contrast to
the Congo, which Marc Rich & Company has had no problems
- It appears that Air Zimbabwe's fiscal difficulties included a
massive scam that had the airline paying repeatedly for its own
spare parts. This scam is presumed to involve top-level officials
at the airline. Internal auditing procedures are virtually nil (by
March 24, 2001
- The Zimbabwe Council for Tourism's Chief Executive Elias
Nyakunu reported that Zimbabwe's tourism industry was not
recovering, contrary to initial predictions. More than sixty
registered tour operators closed down in 2000. Nyakunu expected
more than one hundred tourism operators to face closure in the
first half of 2001. These figures do not include tourism operators
not registered with the Zimbabwe Tourism Authority. [It appears
that tourist arrivals were down 60% in 2000 compared to 1999; 1999
was up 8% from 1998 ()]
March 20, 2001
- NRZ has cancelled all passenger trains for the second day in a row,
due to incredibly low fuel reserves. NRZ has also cancelled most of its
cargo trains. The Confederation of Zimbabwe Industries also reported that most
commuter and long-range buses have already been shut down by lack
of fuel. It was projected that the crisis needed at least a
stop-gap resolution within four days to prevent mass unemployment
in the transportation industry.
- The Zimbabwe Independent (non-government-controlled media)
reported that Zimbabwe's Grain Marketing Board is planning to
import one million metric tonnes of maize and other small grains
for the year 2001. This is a reversal of plans by the Grain
Marketing Board, apparently in response to unexpected weather.
March 15, 2001
- Managing director of NOCZIM, Webster Muriritirwa, was reported by Zimbabwe's
state-controlled Herald newspaper as saying "It's no use continuing
to lie to members of the public regarding the fuel situation in the
country. .... There is no solution yet in sight for the problem we
March 10, 2001
- The Independent Petroleum Group (IPG) of Kuwait has suspended
supplies to the country because NOCZIM is in arrears of U.S.$30
million. IPG had been supplying 70% of Zimbabwe's fuel imports. The
fuel shortages are deemed largely responsible for "the problems
faced by the National Railways of Zimbabwe, the general public and
industries which have been forced to operate below their maximum
capacities. The ministries of mines and energy, finance and
economic development, the Reserve Bank of Zimbabwe and NOCZIM are all
working flat out to source foreign currency to pay IPG."
March 7, 2001
- NOCZIM's entire board of directors has resigned due to
government (Mugabe regime) interference. In the past week the
situation has worsened, with most Zimbabwean fuel stations having
no supplies. Libya has been instrumental in arranging for
short-term contracts, but Zimbabwe has usually failed to pay,
forcing cancellation by suppliers. The latest contract for US$75
million from ABSA Bank of South Africa was aborted on or before
Mar. 9, 2001 for this reason.
March 6, 2001
- South African power utility Eskom announced that ZESA is
currently ahead of schedule in paying off its refinanced arrears.
However, all purchases in excess of 150MW still must be made by
cash in advance.
- Due to the details of the regional Southern African Power Pool
contracts, plus Eskom's imports of power from Zaire/Congo and
Zambia through Zimbabwe: it is not practical for Eskom to
completely cut off Zimbabwe.
February 22, 2001
- Much of Zimbabwe's early maize crop has been damaged by
drought. The new estimated yield for 2000/2001 is 1.2 to 1.4
million metric tonnes, in contrast to the 1999/2000 harvest of 2.1
million metric tonnes. Zimbabwe typically uses 1.8 million metric
tonnes of maize in a year.
February 20, 2001
- Assuming Mugabe's land confiscation program continues on course
(plausible, since Mugabe has criminalized Zimbabwe's court system),
Zimbabwe's macroeconomy is expected to shrink 10% in 2001. There is
no particular reason to think this program will be altered, since
it is part of the political price for Mugabe/Zanu PF to remain in
February 9, 2001
- Zimbabwe's Department of Agricultural, Technical and Extension
Services (Agritex) reported that a prolonged dry spell in Jan. 2001
and early Feb. 2001 has rendered the early maize crop in most
provinces a total write-off (it hit during the tasseling period).
Agritex expects much of the late maize crop to have low yields.
Tobacco is also affected, although not as severely as maize. Under
these conditions, is is unclear whether the more expensive
high-yield varieties of maize would have helped. [the communal
farmers sector had to downgrade this year relative to last,
according to the U.S.-based Famine Early Warning System
January 27, 2001
- Some filling stations are starting to run dry again "in major
towns in Zimbabwe" [Xinhua's classic lack of useful detail at
work]. This is attributed to a combination of hard currency
shortage (massive imports of maize are in progress to prevent
starvation) and infrastructure limitations (the pipeline has
insufficient capacity by itself, so road and rail are also being
used to get the fuel in).
January 9, 2001
- The Civil Service Apex Council of Zimbabwe has called off the
three-day strike [started Jan. 24?], in the interests of orderly
negotiations. The statement was signed by "the Public Service
Association President Givemore Masongorera, Zimbabwe Nurses'
Association President Stella Zengwa and Zimbabwe Teachers'
Association President Leonard Nkala."
January 8, 2001
- Givemore Masongerera, chairman of both the Civil Service Apex
Council and the Public Service Association, reported that
Zimbabwe's civil pay raise of 15% for 2001 [in contrast to between
80% and 90% on a sliding scale for 2000] was provoking civil unrest
among the 170,000 public servants [government employees]. In order
to avert a possible crisis, Givemore Masongerera wants to discuss a
60%-78% cost-of-living adjustment (and other issues) starting no
later than Jan. 16, 2001. However, he is not certain that the
leadership can suppress the currently-volatile situation for even
December 21, 2000
- The black exchange market has seriously diverged from official
rates again: Z$65-Z$70/U.S.$1, versus the official Z$55/U.S.$1.
This is not expected to improve until the tobacco auctions.
December 15, 2000
- Black professionals -- doctors, nurses, engineers, lawyers,
academics, and financial-sector -- have been emigrating from
Zimbabwe this year. Primary countries they are fleeing to (from the
Crash's destructive effects on Zimbabwe) include South Africa, the
United Kingdom, New Zealand, the U.S., Ireland, Canada, and
Australia. The official number is approximately 500 per month; this
does not include those who give other reasons for leaving Zimbabwe,
such as going abroad for study or a holiday vacation. In
particular: out of 1,200 trained Zimbabwean doctors from 1990-1999,
only 360 are practicing in Zimbabwe, according to Employers'
Confederation of Zimbabwe president Joshua Nyoka.
December 14, 2000
- Zimbabwe's petrol imports are thought to be about U.S.$40
million/month. Zimbabwe's debt service costs for 2000 turned out to
be Z$180 million/day; officially, this is expected to be Z$384
million/day for 2001. The unemployment rate has hit 60%. Tobacco
production will be reduced to between 160 million and 180 million
kg for 2001 (in contrast to 230 million kg for 2000): this is
expected to reduce import revenues by Z$5.4 billion. Gold mining
output has fallen by 20% for Jan.-Nov. 2000, compared to Jan.-Nov.
December 12, 2000
- Richard Mbaiwa, acting Director of the Zimbabwe Investment
Center, reported that the number of investment projects in Zimbabwe
fell by 80% from 1999 to 2000. The fall in such projects for the
tourism, mining, and agricultural sectors apparently exceeded 80%,
since they were worth commentary as "a particularly huge drop".
[That is Xinhua's paraphrase, not Richard Mbaiwa.]
December 7, 2000
- Zimbabwe's year-on-year inflation rate was measured at 56% for
Nov. 1999-Nov. 2000.
November 18, 2000
- At least 200 families whose crops were destroyed by Cyclone
Eline in the "Chikombedzi communal lands, south of Chiredzi
district in South Zimbabwe" have not received any aid from the
Zimbabwean government -- three months after applying for it. The
district administrator's office in Chiredzi confirmed this; it
appears that the failure is at the national government level.
November 16, 2000
- Air Zimbabwe has been paralyzed by a strike involving all
workers -- except pilots -- that is reaching nearly 100%
compliance. One flight to Bulawayo and one flight to Johannesburg
took off today; flights to Nairobi, Victoria Falls, and
Johannesburg had been forced to not take off. Other airlines at
Harare International Airport were forced to determine their
schedules at departure time.
November 11, 2000
- Zimbabwe's new finance minister Simba Makoni, presented a
distressingly accurate budget. Prior drafts are thought to have
been so accurate that Mugabe squelched them. All major
macroeconomic sectors are forecast to decline in 2001. The total
budget size is Z$258.23 billion.
- Makoni (in a reasonable appeal to the MDC for support) 'said
the current suffering of the people invokes images of "the
caricature of the lot of our people during the colonial era of our
- "Makoni attributed the negative performance of Zimbabwe's
economy, once the second strongest in southern Africa, to the
country's unpopular involvement in the war in the Democratic
Republic of the Congo (DRC), a general breakdown of the rule of law
in the country and uncertainty surrounding the controversial land
acquisition and resettlement program."
- The budget assumes a substantial reduction in the intensity of
Zimbabwe's involvement in the Congo. Due to Zimbabwe's electric
power arrangements, this is not completely in Zimbabwe's
November 8, 2000
- Zimbabwe's year-on-year inflation rate for Oct. 2000 was
estimated to be 60.8%.
October 31, 2000
- South Africa's Eskom said that Zimbabwe's ZESA had worked out a
plan to liquidate its debt to Eskom by the end of Dec. 2000. At the
end of August, this was above 140 million rand. The current figure
is classified, both because it could be damaging to Zimbabwean
relations with South Africa.
October 30, 2000
- Zimbabwe's Grain Marketing Board failed to buy most of
the maize from last season's crop, raising serious concerns about
whether Zimbabwe's reserves will hold out through the May 2001
harvest. Mugabe's land confiscation program is expected to reduce
overall plantings by up to 70% among Commerical Farmers Union
members. This affects 38% of total production, for a potential
overall reduction of 26% or so. There is a government guarantee
that will allow Zimbabwe's Grain Marketing Board to purchase Z$5
billion more maize from last year's crop, but it has yet to be
acted on. Wheat plantings are down by 28%, and imports of wheat
[normally 1/3 of total used] have been totally shut down by
Zimbabwe's lack of hard currency. Wheat reserves are expected to
run out by May 2001; imports to compensate would be Z$15
million/month -- highly unrealistic, so the projection is that
wheat will mostly run out by May 2001. It should be noted that
Zimbabwe's Publicity and Information Minister, Jonathan Moyo, is
making statements about this that appear totally disconnected from
state-controlled media. Mr. Moyo, if you can honestly state "There
is no question of a food shortage at all," then you must be
confident that the events of Oct. 16-19 are a hallucination
of the state-controlled media reporters.
October 20, 2000
- South Africa's Mbeki has publicly noted that South Africa
cannot escape conseqences if Zimbabwe's macroeconomy collapses. In
his opinion, South Africa is an obvious place for Zimbabwean
refugees to flee to. Hard cash inflows (already insufficient) will
collapse further when the tobacco selling season ends in ten days.
It appears, from an academic viewpoint in South Africa, that at
least one of fuel or electricity will run dangerously short in
Zimbabwe. Mugabe's consistent violation of civilian property rights
(land confiscation program) is not helping the situation.
October 19, 2000
- It appears that Zimbabwe's tobacco production has already been
reduced by 25% via Mugabe's land confiscation program. Corn
production appears to already have been reduced by at least
October 3, 2000
- Zimbabwe's police and army finally managed to inhibit a riot
that ran for three days [Oct. 16-Oct. 18, 2000]. The provocation
was a 30% rise in the price of bread and sugar from Oct. 8 to Oct.
15 (my interpretion of "in a week"). While the MDC does have the
ability to organize such things, the MDC has strong incentives not
to -- it tried to prevent the riots from expanding by
- NOCZIM only has (Z?)$10 million available for fuel imports this
month, about 25% of what is needed to avoid outright shortage.
September 21, 2000
- Zimbabwe has fallen more than 6 months behind on its
(U.S.?)$889 million in loans to the World Bank. The World Bank has
responding by reclassifying the loans on a "nonpayment status":
overdue payments are now at (U.S.?)$47 million, and loan loss
reserves have been increased by (U.S.?)$115 million.
September 17, 2000
- Zimbabwe's 2000 budget was announced as 67% larger than its
1999 budget, with revenues projected to grow by only 2.5%. Of this
increase, Z$30.3 billion is for statuatory and constitutional
provisions, which are presumably almost impossible to reduce.
Zimbabwe's projected 2000 deficit is 24% of GDP. The ] 1999 budget
predicted a deficit of 3.8% of GDP -- but in physical reality,
salaries and wages were Z$55 billion, with a comparable amount for
debt service, overwhelming 1999 revenue of $89.3 billion.
September 15, 2000
- Mugabe's land confiscation program is on track to reduce
Zimbabwe's tobacco production by Z$5.4 billion, which would cost
Zimbabwe U.S.$107 million in hard currency. Seed sales have been
reduced by 23% (compared to this time in 1999). Initial projection
would put this years' tobacco crop at 170 million kg, but Mugabe
has reneged on pledges not to confiscate productive farms --
including farms responsible for 61 million kg of the above
estimate, reducing the crop size to 109 million kg. That assume no
further confiscations of planted cropland.
September 9, 2000
- Air BP reported that Air Zimbabwe defaulted defaulted on a $8
million debt(payment?) to Air BP. Air BP acted like this was not
unusual for Air Zimbabwe. Air Zimbabwe's PR department claimed the
Air BP fuel account was current.
September 7, 2000
- Several Zimbabweans (who have had relatives killed by Zanu PF
in the weeks before the elections) have lawyers who have
interesting insights...into U.S. law.
- The U.S. Alien Tort Claims Act of 1789 gives foreigners the
right to file civil suits in the United States for violations of
international law. Zimbabwe's President Robert Mugabe has a fairly
large exposure in this regard, because his land confiscation
program involves thousands of personal authorizations of violations
of international law.
- Mugabe was served a lawsuit, in or near a Harlem church, based
on the Alien Tort Claims Act of 1789. The plaintiffs are Zimabweans
whose relatives have been assaulted or murdered by Zanu PF.
September 1, 2000
- Zimbabwe's Commercial Farmer's Union estimates that if Mugabe's
land confiscation plan is not shut down, that Zimbabwe's GDP would
fall by between 8% and 12% for 2000, compared to 1999. A
significant factor is that the Zimbabwean banking system should
refuse to lend to farmers whose land is in imminent danger of
confiscation, or is being actively disrupted by Mugabe-supported
vandals. Wheat planting is thought to be down by 23% because of
this disruption. Cf. Zimbabwe National Chamber of Commerce, June
August 31, 2000
- NOCZIM raised prices on illuminating paraffin [Z$30.20, 101%
rise], leaded petrol [Z$40.80, 45% rise], diesel [Z$36.40 from
Z$23.57], and Jet A1 [Z$28, 52.3% rise]. With the exception of the
illuminating paraffin price boost, the changes appear mostly to
compensate for the combined rise in oil price (in hard currency)
and the official devaluation of Z$. In particular, the gross loss
issue does not appear to have been dealt with, except for
August 19, 2000
- A government special committee created to investigate
mismanagement at Air Zimbabwe has noticed that Air Zimbabwe has
creditors who are owed more than U.S.$4 million...and who may
decide to impound Air Zimbabwe's four planes. Air Zimbabwe is
apparently technically insolvent by about Z$1.5 billion. Sales at
London have fallen by a factor of about eight [from 100,000
pounds/week to 12,000 pounds/week]. There is internal division
within Air Zimbabwe's management. Air Zimbabwe's uncollected debts
rose from Z(?)$172 million in 1998/1999 to Z(?)$417 million in the
current fiscal year. Also, Air Zimbabwe is flying
currently-unviable routes [e.g., Harare-DRC-Harare and
Harare-Frankfurt-Harare], and is not necessarily matching planes to
their appropriate routes.
August 17, 2000
- NOCZIM managed to find the hard currency to pay the Kuwait
Independent Petroleum Group. This does not constitute even a
short-term stable supply, and gas sations without petrol or diesel
are expected to remain frequent for the next week [through August
25, 2000]. Negotiations to ensure a stable supply are in
August 16, 2000
- Most garages in Zimbabwe ran out of petrol and diesel today.
NOCZIM reported that Zimbabwe's diesel and petrol stocks were at
less than five days' supply, and that all suppliers had
discontinued exports for non-payment. It appears that NOCZIM was
selling diesel and petrol at 30% to 40% below cost before
the 26% price hikes last month. Fuel tanks are docked at
Mozambique's port Beira, but no fuel is being pumped.
August 14, 2000
- Slaugherhouses and bakeries have followed to the devaluation of
the Z$ vs. the U.S.$ by raising prices -- bakeries 15%,
slaughterhouses 25%. Most slaugherhouses do their accounting in
U.S.$, so this is reasonable. Bakeries are more obscure. Elizabeth
Nerwande, the executive director of Zimbabwe's Consumer Council, is
expecting a cascade in prices over the next six months [that is,
through at least February 2001].
August 2, 2000
- Southern African Development Community's (SADC) Food Security
Sector projected a cereal deficit of 487,000 tons for the 2000/2001
marketing year. This is attributed to "a number of natural and
economic factors including the Cyclone Eline which induced floods
that hit Botswana, Mozambique, South Africa and Zimbabwe". The SADC
declared that financial resources were available to import the
deficit -- a claim which I am sure the Zimbabweans find totally at
odds with physical reality....
July 28, 2000
- Zimbabwe officially devalued the Z$ to Z$50/U.S.$1 overnight.
This coincided with the foreign exchange reserves of the Reserve
Bank of Zimbabwe falling to 1 day's worth. The black market
continued to trade at around Z$60/U.S.$1.
July 27, 2000
- The new president of the Chamber of Mines of Zimbabwe, James
Maposa, reported that due to a lack of will to act by either the
Zimbabwean government or the Reserve Bank of Zimbabwe, all
Zimbabwean mines are liable to being shut down by lack of hard
currency. Apparently, half-measures will no longer work; what is
necessary is the unheard-of reclassification of mines as exporters,
which would allow them to directly open hard-currency accounts.
Otherwise, the mines are forced to sell to the Reserve Bank of
Zimbabwe [and are blasted into oblivion by the differential between
black and official exchange rates.]
July 26, 2000
- The Confederation of Zimbabwe Industries has directly
contradicted Mugabe's regime to its face: contrary to the Mugabe
regime's claims that fixing the exchange rate at Z$38/U.S.$1 [vs.
the black (grey?) rate of about Z$60/U.S.$1] is necessary to
prevent macroeconomic collapse [by keeping government debt
managable], that fixing the exchange rate (as above) is
causing macroeconomic collapse by rendering it physically
impossible for most businesses to make a profit [by de facto
legislating prices below cost of manufacture]. It seems that goods
must be sold at the official exchange rate, but foreign raw
materials must be bought at black-market exchange rates....
- Maybe they're both right: then Zimbabwe's government is caught
between Scylla and Charbydis.... [If this allusion escapes you,
please skim Homer's The Odyssey.]
July 14, 2000
- Diesel shortages have returned to Zimbabwe -- apparently,
severe enough to shut down public transportation last week. NOCZIM
has raised petrol by 25.6% to Z$27.46, and diesel by 19% to
Z$23.57. 75% to 80% of Zimbabwe's fuel consumption is said to be
70,000 tonnes per month of jet fuel, diesel, and fuel oil,
according to the supplier, Kuwait's Independent Petroleum Group.
While "a senior IPG source" did not wish to detail how much
Zimbabwe owed Kuwait's IPG, he was certain that Kuwait's IPG
deliveries to Zimbabwe have not been disrupted by a failure
by Zimbabwe to make the latest payment on time, contrary to
Zimbabwean industry analysts' statements.
- Looking back to Dec. 1999-Mar. 2000, I suspect that Zimbabwe's
military has been skimming fuel from the transports again.
July 12, 2000
- The United Kingdom, and Sweden, are both maintaining a total
freeze on aid to the Zimbabwean government, in part to protest
Mugabe's land confiscation program. Britain has indicated that
Mugabe has reneged on what he agreed to in 1998 for principles
under which land reallocation was to take place.
- Finance Minister Herbert Murerwa's projection of Zimbabwe's
budget deficit for the year 2000 -- 3.8% of GDP -- was flouted by
physical reality. Zimbabwe's 1Q 2000 budget deficit was over Z$13.9
billion, slightly above 10% of GDP. This was aggravated by
significant shortages in sales tax (actual Z$3.3 billion, 11% under
target) and customs duties of Z$1.8 billion (53% below target).
Total Zimbabwean government expenses for 1Q 2000 were Z$33.7
billion, of which Z$32.6 billion was recurrent expenditures.
Salaries and wages were Z$11.6 billion, interest on debt was Z$11.5
billion, and capital expenditures was at Z$1.17 billion.
- Let's see here. Sales tax was short (by percentage) by about
the amount Zimbabwe's GDP shrank in 1999 [11% vs. 10%]. In absolute
terms, sales tax was short by about Z$(3.3 billion)/[1-0.11]-Z$(3.3
billion)=Z$400 million, to one significant digit. Customs duties
were short by about Z$(1.8 billion)/[1-0.53]-Z$(1.8 billion)=Z$2.0
billion, to two significant digits. The shortage in excise duty
[Z$889 million, 1% short of target] is not significant. The total
absolute shortage from these two sources was about Z$2.4 billion,
to two significant digits. Zimbabwe's actual GDP is about Z$139
billion. So these two sources account physically for about 1.7% of
GDP in deficit. Even if we assume that the 10% quoted is an
annualized figure, there are significant deficit sources that were
not named: these annualize to about 7%.
- Zimbabwe is still trying to arrange financing for the
Tokwe Mukorsi dam. A historical review:
- Apparently, the Italian contractor Salini walked off after
completing about 40% of the work, over Zimbabwe's non-payment of
Z$600 million. [I am assuming Z$ because this is relayed from the
Zimbabwe Independent.] Salini was willing to finance the project
initially, but Zimbabwe refused the terms because they lacked a
- Zimbabwe then sabotaged its chances of getting financing from
Italy by bungling an Italy-funded Z$1 billion solar energy
commodity aid program, which got the program cancelled.
- Prospective financing by Iran collapsed in January 2000 after
Zimbabwe refused to let Iran have a large stake in the
- Apparently, Salini is still open to financing the project;
another faction in the Zimbabwean government wants to have the
sugar growers that benefit from the dam to finance it, but any
demands by the sugar growers to monopolize the water would violate
the Water Act.
July 11, 2000
- Timothy Stamps, Minister for Health and Child Welfare, reported
that all major hospitals have less than a month's worth of
essential medicines, unless Zimbabwe allocates hard currency to buy
them. This includes all vaccines, morphine, and quinine. Bandanges,
syringes, and gloves (among other basics) are also running short,
making routine management of the hospitals difficult. In some
cases, patients are already paying for their own drugs.
- Less than a month's supply of quinine? That's how long Zimbabwe
has to either fund quinine, or initiate a surge in malaria cases.
Not good, considering that there was a report in April 2000 of an
estimated Zimbabwean AIDS rate of 25%....
July 8, 2000
- The Zimbabwe Grain Producers' Association forecast a 15%
decline in maize production for 2000 compared to 1999. This is
attributed to the combined effects of Mugabe's land confiscation
program, and a serious divergence between official and grower
prices for maize [official Z$5,500/tonne, grower Z$6,500 to
July 3, 2000
- Mugabe's land confiscation program has reduced the hectarage of
irrigated tobacco from 32,000 [for 1999] to 28,000 [for 2000].
June 29, 2000
- Britain's Foreign Office minister Peter Hain said that "There
is a real risk now, in fact a probability, of starvation in a
country that should comfortably be able to feed itself." Also, he
noted that emergency food aid could be needed in "a matter of
months". This was obvious on April 9, 2000 [see that entry
on this page]
June 26, 2000
- Isaac Takawira, head of Zimbabwe's Barclays Bank, tried to
explain how the financial sector's exposure, of Z$4.5 billion to
Z$6 billion in loans made out to the 804 farms Mugabe has targeted
for immediate confiscation, will not default. Seasonal loans
are thought to be self-liquidating. Loans based on the land are
more problematic (and depend on reasonable interpretations of the
land confiscation by Mugabe, who has hinted that compensation for
land improvements is planned...).
June 22, 2000
- Zimbabwe's inflation rate was measured at an annualized rate of
58.7% for May 2000. This is attributed to costs of production and
monetary supply growth...so it will be hard to control. The
inflation rate consistently is worsened when Zimbabwe pegs Z$ to
June 21, 2000
- The Zimbabwe National Chamber of Commerce estimates that if
Mugabe's land confiscation program continues for the rest of 2000,
that Zimbabwe's GDP will shrink by over 10%, and Zimbabwe's
agricultural sector will shrink by more than 20%. Current estimates
are for sales of animal feeds to drop by more than 60%, production
of wheat to drop by 40%, and production of tobacco to drop by more
- A Zanu PF attempt to disrupt a MDC rally in Nyamandlovu was
itself disrupted. The local police called for reinforcements from
Bulawayo, and then sent riot police in to disperse the Zanu PF
supporters with tear gas.
June 18, 2000
- David Mbaya, director of pharmaceutical services at the Health
Ministry, said that only 30% of required essential drugs were in
stock at government hospitals, and that many pieces of hospital
equipment were broken down. This is a direct result of the failure
of the Reserve Bank of Zimbabwe to grant hard cash in response to a
request posed in late March/early April 2000.
June 17, 2000
- The Mugabe regime has found the state-controlled media in
Matabeleland to be less than state-controlled. While the Minister
of Information, Posts, and Telecommunications [Chen Chimutengwende]
is overtly unaware of such difficulties, it is known that two state
newspapers (the Chronicle and the Sunday News) were covering MDC
rallies far more effectively than Zanu PF rallies, and the Zimbabwe
Broadcasting Corporation and Zimbabwe's Inter-Africa News Agency
have had similar emphases.
June 15, 2000
- Mugabe denied the reports (on the 14th) about his considering
confiscating foreign-owned mining and other businesses, blaming
these reports on British media. It appears that he is having media
- The relay agency was Associated Press, which is U.S.,
- The original citation was qualified because it was extreme: the
original reporting paper was the Zimbabwe Independent.
- Mugabe's denial would be far more credible, locally, if he said
the Zimbabwe Independent was responsible for these reports. Unless
the Zimbabwe Independent is really British media (which I seriously
doubt, considering what it runs)...
June 14, 2000
- The Reserve Bank of Zimbabwe is intervening to deal with the
shutdown of foreign credit facilities. Its subsidiary, the Export
Credit Guarantee Company, is considering adding medium-to-long term
finance facilities. This is in addition to the following services:
an 80% guarantee on loans made to exporting companies by any bank,
and an export payment insurance policy for exporting
- ZESA is getting only 1/3 of the hard currency it needs (per
month) to generate electricity: U.S.$3.5 million from the Reserve
Bank of Zimbabwe, rather than U.S.$10 million. As a cost-control
measure, ZESA has suspended new connections to Zimbabwe's electric
power grid. It seems that about 80% of the materials for a new
substation, and 60% of all the materials for Zimbabwe's electric
power grid, are imported. ZESA also imports 45% of its power from
South Africa, Mozambique, the Congo, and Zambia. ZESA is also
planning a 20% tariff increase for July 2000.
- Zimbabwe's tourism industry has been practically annihilated by
the pre-election violence and Mugabe's land confiscation program.
Informal measures indicate at least a 75% decline, and possibly
100% in some areas. Also, it appears that the Mugabe regime's
concerns about whites even targets white Zanu PF supporters as
potential political threats.
- Zimbabwe's horticultural exports are expected to be reduced by
Z$1 billion. This is attributed to a combination of Mugabe's land
confiscation program disrupting plantings at farms, heavy rains,
and shortages in fuel and hard currency.
- A paraffin shortage has shut down a Z$40 million potato chip
factory for three weeks and still counting. There have also been
problems with getting potatoes in (this did a 4-day shutdown a
while back). The unavailability of imported oil (as opposed to
cottonseed oil) has reduced the shelf life of potato chips
manufactured at this plant from 42 weeks to 21 weeks.
June 12, 2000
- Zimbabwe's Independent newspaper reported that Mugabe is
considering confiscating foreign-owned mines and other firms, in an
extension to his current land-confiscation program. Mugabe also
mentioned that if Zanu PF broadly loses the election, "then I will
know for sure that we have been visited upon by the devil."
June 8, 2000
- Hard currency shortages have sabotaged gold mining in Zimbabwe,
reducing output by up 45% in 2000 compared to 1999, mainly due to
shortages of cyanide and explosives. South African credit
facilities have been shut down, due to inability to make U.S.$8
million in payments. Normally, gold mining accounts for 30% of
Zimbabwe's export earnings. The black-market spread at Zimbabwe's
banks is also contributing to this.
June 6, 2000
- Botswana's border town Ramokgwebana was being swamped by
Zimbabweans out to purchase petrol. This was raising fears of a
shortage; the town only has one petrol dealer. The Zimbabwean town
of Plumtree, as of this day, has had no petrol at all since Monday
[June 6, 2000].
- Zimbabwe's health minister, Timothy Stamps, warned that many
medical drug supplies (including anti-retrovirals for AIDS, blood
pressure, and insulin) were entering a severe shortage situation.
However, medicines for cholera and malaria have already been
stockpiled. This is in addition to Mugabe-regime violent shutdowns
of medical clinics in order to deny medical care to MDF
June 4, 2000
- The spread between the black market Z$/U.S.$ rate (uniformly
over 50 across Zimbabwe; Zimbabwean banks are the black
market[!]) and the official rate of 38 Z$/U.S.$ is generally
disrupting all business in Zimbabwe. This is being aggravated by
Mugabe's land confiscation program. The Mugabe regime considers the
general shutdown of businesses to be a deliberate attempt to
sabotage it, and plans to confiscate them after the elections.
June 2, 2000
- The Zimbabwe Standard has established that no construction work
has occurred after the groundbreaking (in Nov. 1999) for the US$60
million Chitungwiza-Harare rail-link.
- It seems that traveling abroad for the Zimbabwean elections
[June 24-25, 2000] is a popular idea for all Zimbabweans,
regardless of ethnicity.
- Popular destinations include Zambia, South Africa, Botswana,
flood-ravaged Mozambique, and Namibia.
- Hotels across the Zambezi River, in Zambia, have already been
- More esoteric destinations being considered include New
Zealand, Australia, Canada, and the United Kingdom.
May 31, 2000
- NOCZIM fuel supplies have gone unstable again. Mugabe is
resorting to conspiracy theories about the U.K....but this looks
like a repeat of the technical difficulties forecast on May 12,
2000 [this page].
May 29, 2000
- The shutdown of the tobacco auctions is not just white farmers:
all black farmers who do not need emergency cash are also
withholding tobacco. The black market rate is currently
Z$48/U.S.$1, rather than the official Z$38/U.S.$1. Apparently, the
tobacco auction shutdown will continue until this spread does not
- This suggests that Mugabe's plans are effectively also against
May 26, 2000
- Standard Chartered Bank estimated that Mugabe's illegal(??)
land confiscation program has seriously damaged the critical
agricultural sector of Zimbabwe's macroeconomy. Unless radical
changes in macroeconomic policy occur after the elections, Standard
Chartered Bank is certain that Zimbabwe's economic decline rate
will increase after the elections. The upper estimate on Zimbabwe's
GDP contraction for 2000 had been 5%.
- Of course, we must keep in mind that on this issue, it is
Zimbabwe's judicial system that is de facto illegal....
May 24, 2000
- The political infighting between the Sasol and the Zimalzam
factions in NOCZIM has apparently subsided. For some reason,
history was revised to blame Zimbabwean government interference for
Sasol's prepayment requirement [rather than Sasol!], which was
fatal to the Sasol contract. Zimalzam's claims of a
Zimbabwe-independent credit line are not long-term
May 21, 2000 [MyCNN]
- Mugabe has pushed through Zimbabwe's Congress the laws needed
to formally legalize his land confiscation program. The Commercial
Farmers Union has reported that 1,477 of the country's 4,500
commercial farms have been directly occupied at some point due to
Mugabe's land confiscation program, and estimated wheat planting at
30% under normal. [This is seriously divergent from the
supermarkets' estimates of wheat planting: cf. May 19, 2000]. The
CFU did not give a planting estimate for tobacco, just that it had
been seriously disrupted.
- The CFU's numbers don't check, however: 1999 wheat production
was 330,000 tons, with 70,000 tons imported. A 30% cut in planting
should reduce production to 231,000 tons, and increase imports to
169,000 tons of wheat -- versus the 100,000 tons lower bound stated
for imports. The deviation can be explained away either by the
CFU's expecting substantially higher planting, by a serious
population decline -- or a wording ambiguity, since 100,000 tons is
fairly close to the absolute reduction in wheat production....
May 19, 2000 [MyCNN]
- Zimbabwe's fertilizer industry has been endangered by Mugabe's
land confiscation program (mainly due to Zanu PF forces physically
preventing planting). A snap estimate of 40% decline in production
was given by an anonymous source.
- Cf. April 9, 2000 and May 19, 2000 on this page. This is a
dangerous underestimate of the production hit Mugabe is doing to
Zimbabwean agriculture. I believe the actual percentage of land
planted is a more accurate predictor.
May 12, 2000 [MyCNN]
- The white farmers continue to inflict Mutual Assured
Destruction on Mugabe's government:
- Tomatoes, onions and potatoes are already in shortage due to
Mugabe's land confiscation program.
- Bread and mealie-meal [ground maize] is expected to go into
shortage in the second half of 2000; however, packaging for these
is already going into shortage.
- Most basic commodities are expected to go up 30% to 60% in
price after an expected currency devaluation [i.e., rationalization
of exchange rates] in July 2000.
- Most grocery prices are expected to rise by at least 25% to
30%; imported items (such as cooking oil, fats, confectionery,
salt, rice, soaps, candles) will rise even faster in price.
- Only 20% of vegetable growers have planted their crops; this is
expected to cause severe problems in August 2000 through October
- About 40% of wheat hectarage has been planted; blending of
imports and local stocks is expected to work through early 2001 [at
which point the price of bread is expected to double from using
100% imported wheat].
- The above planting estimates are expected to be stable, since
Mugabe's land confiscation program has totally shut down planting
at the land not yet planted. The implied percentage reduction in
agricultural production is closely in line with the estimates I
named on April 9, 2000 [although not for the reasons cited]. This
assumes that Mugabe doesn't destroy crops between now and
- Livestock is being destocked; this is currently driving down
meat prices, but there will be a rebound effect....
- Severe shortages of lettuce, cabbages, carrots, and tomatoes
are expected by July 2000.
All projections based on
importing are suspect....
- However, it should be possible to shift soap and candles to
100% local production. The bread situation is more
- Norway has frozen U.S.$140 million in aid to Zimbabwe, out of
concern that the pre-election violence will prevent the usage of
the aid in any recognizable fashion.
- "A build-up of international debt arrears is now expected to
overwhelm the Treasury which, according to the latest central bank
report, borrowed about Z$6 billion from the central bank in a
single week. Although a World Bank communications officer for
Africa, Richard Uku, refused to divulge the amount by which
Zimbabwe was in default, the Zimbabwe Independent's investigations
reveal it was in the region of US$65 million."
May 8, 2000 [MyCNN]
- A nameless senior official in the oil industry is expecting
one-off supply disruptions to cause mild shortages in diesel and
paraffin over the next week. Mugabe's supply agreements have not
failed; these are technical difficulties.
- There are some questions about whether a de-facto "dual
government" is starting to form in Zimbabwe. At the moment, these
appear to be highly politically liberal fantasies in South Africa.
The lines seem to be geographically based [urban vs rural], much
like the situation in Ecuador was geographically based [coastal vs
- It should be noted, however:
- In Ecuador, the Mahuad government was confident that it was
trying to help the general populace.
- In Zimbabwe, the Mugabe government is explicitly intent on
suppressing large factions of the general populace by force.
May 7, 2000 [MyCNN]
- The farmers' boycott of the auctions has virtually shut down
the forex markets in Zimbabwe. This has also paralyzed Z$3 billion
of Z$17 in agricultural loans; there are fears that if this
continues, all non-reserve banks could simultaneously go
- The shutdown of hard currency by the above boycott is expected
to cause plastic packaging (for retail stores) to run out before
food (in particular, maize) does.
May 4, 2000 [MyCNN]
- Peter Tatchell (who almost got away with doing a citizen's
arrest of Mugabe in London in October 1999) has lined up the
support required so that the next such arrest will stick.
May 3, 2000 [MyCNN]
- Mugabe's abrogation of land rights (regardless of its necessity
for government stability) has definitely sabotaged the tobacco
auctions. It is currently possible that almost no tobacco (or
indeed, other planting) will occur this May -- which renders my
comments on April 9, 2000 meaningless. It doesn't matter what the
relative efficiencies are if no planting occurs. Mugabe's policies
have now guaranteed dangerous shortages of hard currency, putting
his government in (remote?) danger of debt default.
April 20, 2000 [MyCNN]
- The United Kingdom imposed export controls on Zimbabwe in
retaliation for Mugabe's abrogation of property rights in Zimbabwe.
It appears that virtually all export licenses are in danger of
immediate revocation. All military hardware export licenses are
April 19, 2000 [MyCNN]
- Mugabe's continued support of government confiscation of land
from white farmers has substantially shut down all Zimbabwean
preparations to plant wheat and barley, and has also substantially
annihilated tourism (safaris).
- Mugabe, in order to maintain his support of Zimbabwe's land
confiscation, is having to destroy the political careers of
probable successors that oppose this policy. This is starting to
raise the remote risk that Mugabe will be expelled from ZANU
April 9, 2000 [MyCNN]
- Zimbabwe's exchange-rate peg [at 6.38Z$/1 U.S.$, unofficial
rates about 6.45Z$/1 U.S.$] could sabotage the tobacco auction
scheduled for April 26 -- by preventing tobacco from making it to
the auction. This would substantially annihilate Zimbabwe's hard
currency supply. Mugabe's program of confiscating land from the
white farmers also endangers the planting of all Zimbabwean crops
April 7, 2000 [MyCNN]
- Mugabe's regime has, to put it mildly, eradicated Zimbabwe's
judicial system from Zimbabwe's government.
- Apparently, the effects of the Crash are so severe in Zimbabwe
that if Zanu PF loses the elections, Zimbabwe could take
macroeconomic damage just from the lack of coordinated effort
resulting from the transfer of power. Thus, Mugabe is opting for
April 2000 elections rather than October 2000 elections.
- Mugabe does have the constitutional option to delay the
elections to October 2000 from their normal time of April 2000,
since the generalized fuel and electricity shortages is a
- Unfortunately, Zanu PF, in order to hold the votes for the
election, has to massively confiscate land from white farmers to
redistribute to landless war veterans -- without compensation.
- This is only a 20-year-old political promise....
- I have no idea why this is combined with deliberately and
systematically antagonizing the U.K. politically.
- In order to do this, Zimbabwe's judicial system had to be
rendered powerless. Mugabe has been sustaining this process since
around April 1, 2000.
- The above reallocation has to be completed by June 2000 -- or
else the affected land will not be planted for wheat. [May is
planting season for wheat in Zimbabwe].
Empirically (based on earlier test
cases), reallocating land from white farmers to landless war
veterans reduces the agricultural output of the
land by around 85%. I presume Mugabe/Zanu PF has
an imminent cure for this empirical fact based on over a decade of
history. Otherwise, this reallocation constitutes a
- Estimates of how much of the 'most productive' arable land is
liable to imminent reallocation range from 70% [Zimbabwe
government] to 40% [organization representing the farmers].
- Assuming that between 40% and 70% of the arable land (all of
the land controlled by the white farmers) is reallocated...both
tobacco [hard currency] and wheat [food] production will be reduced
by at least 34%. Using Zimbabwe's own estimates,
agricultural production will be reduced by at least
- This is an underestimate, because the land that is not
reallocated is already impaired by an unknown percentage. I have no
information about whether productivity recovers with time.
Zimbabwe's agricultural production will be reduced by at
most 80%. Using the white farmers' estimate, Zimbabwe's
agricultural production will be reduced by at most
70%. [Skip the mathematical
explanation for these percentages?]
- Setting this up as an optimization problem in two independent
variables is instructive. [You'll need equivalent knowledge to
Calculus I or Business Calculus I to completely follow this. Most
of this only needs equivalent knowledge to College algebra.]:
- x := percentage of arable land reallocated. Assume somewhere
between 0.4 and 0.7.
- y := current relative efficiency of already-reallocated land.
Assume somewhere between 0.15 and 1.
- Then old production is some constant k times [x+(1-x)y].
- New production (immediately) is k times [(0.15)x +
- We are interested in the ratio of new production to old
production: [(0.15)x+(1-x)y]/[x + (1-x)y].
- The constant k cancels out. We need no longer consider it.
- This is easiest to analyze as:
- 1- [(0.85)x]/[x + (1-x)y]
- EXERCISE: this is an algebraically correct rewrite.
- Intuitively, the immediate impact of this should lessen as the
current relative efficiency y is near to 1, and should be least
when y is 1.
- Formally, intuition is correct: the partial derivative with
respect to y, of the ratio of new production to old production, is
always positive for y between 0.15 and 1 inclusive.
- EXERCISE: verify the above statement.
- To compute the partial derivative with respect to y, pretend x
is constant and take the derivative with respect to y.
- EXERCISE: set y=1, and verify that the "at least" percentages I
quoted initially are correct after truncating i.e. rounding
- We are now ready to analyze the worst-case scenario. Set
- EXERCISE: the ratio immediately reduces to
- 1- [(0.85)x]/[0.15+(0.85)x]
- EXERCISE: the above reduces to
- The last expression clearly decreases as x [the percentage of
land reallocated] increases.
- EXERCISE: Verify that the "at most" percentages I quoted
initially are correct after rounding up.
March 28, 2000 [MyCNN]
- Unusually high rainfall in Jan/Feb. 2000, combined with the
diesel fuel shortages in Zimbabwe, has forced the shutdown of a
ZESA power plant in Munyati [0 MW of 120 MW], and severe reductions
in generation at power plants in Harare [35 MW of 105 MW] and
Bulawayo [30 MW of 120 MW] -- due to inability to transport coal by
coal produce Wankie Colliery. Shortfalls at Hwange 1 [328 MW out of
440 MW] and Hwange 2 [170 MW of 440 MW] are directly impairing
Wankie's operations as well.
March 15, 2000 [MyCNN]
- ZESA has been forced to extend power cuts to mines, farms, and
factories outside of Harare, Bulawayo, Gweru, and Mutare. These
power cuts are intended to be for three hours, twice a week. ZESA's
power cut schedule already has been affecting residential
customers, and in some areas has attained 18 hours, in a single
block, per week.
- Eskom has been forced to convert U.S.$14 million in overdue
payments into a 2-year loan.
March 12, 2000 [MyCNN]
- South Africa's Eskom has downgraded Zimbabwe's ZESA to an
"interruptible" customer. ZESA currently owes Eskom about R135
million; this is escalating rapidly.
- In Aug. 1999, an agreement was reached whereby Eskom sells ZESA
150MW/month for R18 million, due within 45 days. ZESA has only paid
R46 million out of R90 million on the current account. [150MW/month
is over 15% of Zimbabwe's total electricity usage.]
- Political pressure from Harare has ruled out Eskom gaining
equity in ZESA to compensate for the arrears. This is actually
wise: equity in ZESA seems likely to evaporate with the Zimbabwe
- South Africa's Democratic Party is demanding public guarantees
from Eskom, and the Public Enterprises Minister Jeff Radabe, that
South Africa will not use taxes to cover ZESA's impending default
on debt to Eskom.
- Apparently, it is politically dangerous to subsidize ZESA
indefinitely -- or to plunge much of Zimbabwe into literal
- The Democratic Party also doesn't want Eskom in a ZESA equity
swap. Instead, they want the Zimbabwe Reserve Bank to guarantee
- cf. March 9, 2000: if the Zimbabwe Reserve Bank
won't do this for NOCZIM, why should they do it
March 9, 2000 [MyCNN]
- Zimbabwe's international airport at Harare has run out of A1
aviation fuel. Until this situation is corrected, airplanes that
fly to Harare must stop in South Africa to get enough fuel to both
fly to Harare and fly out. That is, unless the plane's owners do
not want it to leave Harare after landing....
- Several gas stations in Harare have been permanently closed due
to the diesel and gasoline shortages. This sector was estimated as
operating at 20% capacity.
March 8, 2000 [MyCNN]
- The contract between Sasol and NOCZIM, being pushed through by
remarkable political methods on both South Africa's and Zimbabwe's
parts, has almost no details about financing methods. Sasol is
demanding advance payment in the form of cash, in lieu of either a
letter of credit or a Zimbabwe-guaranteed bond. It is unclear how
much of the initial U.S.$1.4 million is going towards a prior
NOCZIM debt of U.S.$1.7 million, and how much was diverted by Sasol
accounting towards paying for the first shipment.
- NOCZIM is in the process of arranging a U.S.$50 million credit
line with Barclays Bank and Syfrets Merchant Bank. Unfortunately,
NOCZIM also lacks Zimbabwe dollars: the Reserve Bank of Zimbabwe
probably will not authorize NOCZIM bonds until at least the
inflation rate stabilizes at something more reasonable than
- While Zimbabwe has declared that it will permit other companies
to export fuel to Zimbabwe, the general foreign currency shortage
in Zimbabwe is quite sufficient to sabotage these efforts.
- It seems that NOCZIM's first priority (after distributing fuel)
is to fill its strategic reserve tanks near Msasa in Harare. The
situation will have to improve before this is feasible....
- Zimbabwe's banks have informed the Reserve Bank of Zimbabwe
that they plan to stop using informal exchange rate controls after
April 30 (conveniently at the start of tobacco season, and after
the elections [as currently scheduled]). [May 7: this was blocked
by the Mugabe regime....]
March 6, 2000 [MyCNN]
- Zimbabwe's lack of creditworthiness frustrated Mugabe's attempt
to negotiate a short-term deal for oil, etc. with Kuwait. He proved
unable to prove that Zimbabwe could pay for the fuel.
March 5, 2000 [MyCNN]
- Zimbabwe' contract with Sasol is starting to cut in (unlike the
cancelled one with Zimalzam, which never produced anything in over
three weeks....): 8 tankers of petrol and 5 tankers of diesel have
arrived the first evening after the contract was signed.
March 2, 2000 [MyCNN]
- The diesel shortage in Zimbabwe is expected to take about three
weeks to abate, due to Cyclone Eline's damage to the Beira pipeline
and South African railway lines. Meanwhile, some truckers have
taken to mixing paraffin into the diesel fuel to stretch it
March 1, 2000 [MyCNN]
- There is a less-than-confirmed report that Zimbabwe is
considering ending NOCZIM's monopoly on a long-term basis (rather
- Zimbabwe Lands and Agriculture Minister Kumbirai Kangai has
dismissed the entire board of the state Grain Marketing Board. This
is being politically challenged. Zimbabwe's Grain Marketing Board
has a monopoly on exports and imports of maize; for 1999, domestic
production was 1.54 million tonnes, against domestic demand of 1.8
February 28, 2000 [MyCNN]
- The former managing director, and five other top officials, of
NOCZIM have been arrested in connection with Zimbabwe's corruption
probe of NOCZIM. It appears that the fuel crisis has stabilized
(but is not improving, due to the aftermath of Cyclone Eline:
Mozambique's and South Africa's pipelines are currently disrupted.
Botswana and Zambia have agreed to temporarily assist.)
Februrary 25, 2000 [MyCNN]
- Mugabe has accepted Chikowore's resignation, and has taken
personal control of the Ministry of Energy and Transportation.
February 24, 2000 [MyCNN]
- Zimbabwe's fuel crisis seems to not be worsening drastically,
at least. Cyclone Eline is currently disrupting fuel imports, but
this will pass. Most gas stations in Harare do not have fuel; those
few who do have queues stretching for hundreds of meters (possibly
over half a kilometer). Sales to containers are usually banned by
the gas stations.
- Zimbabwe's Energy and Transport Minister Enos Chikowore has
resigned, as the most honorable response to the crisis. It was
unclear if Mugabe had accepted his resignation.
February 18, 2000 [MyCNN]
- Zimbabwe's Mugabe has targeted "essential foodstuffs such as
mealie-meal, bread, sugar, milk, vegetable oil and beef" for price
controls. It is reasonably certain that without massive subsidies,
this will create very extreme shortages. Massive subsidies seem
dubious, however, in the face of inability to pay international
debts, impending inability pay to import electricity, and extreme
difficulty in importing fuel.
- For some reason, the local commentary is ignoring the far more
massive risk of shortages in essential foodstuffs caused by the
electricity and fuel difficulties. Zanu PF may be concerned about
its election chances, but these price controls almost surely will
not create noticeable shortages -- compared to the fuel and
- Politically, Zimbabwe's government is caught between Scylla and
Charybdis. It is political suicide to start fixing Zimbabwe's
macroeconomy before the impending elections (April 2000??) -- but
the macroeconomy is self-destructing so quickly that failing to
start fixing the situation immediately drastically increases the
measures required to fix it. So far, the only fix measure with
reasonable support, that has been mentioned on MyCNN, is the NOCZIM
February 9, 2000 [MyCNN]
- It is now evident that the diesel shortage in Zimbabwe will
disrupt land preparation for tobacco enough to reduce the crop by
20%. This is expected to reduce Zimbabwe's exports of tobacco by
about U.S.$70 million.
- Mugabe is pushing for a fast and complete probe of NOCZIM. He
has already indicated that some "big names" are going to be
indicted. It now appears that the cancellation of NOCZIM's contract
with Zimbabwe-based Zamalzam, and its reallocation to South
Africa-based Sasol, is almost finalized -- and was provoked by this
Mugabe-enhanced probe of NOCZIM.
- I think it is very auspicious that Mugabe is taking quick,
decisive action regarding the diesel and petrol shortages.
February 7, 2000 [MyCNN]
- Zimbabwe's retail fuel prices were raised by up to 17.8%:
- "State oil procurement agency NOCZIM said the price of diesel
had gone up Z$2.99 to Z$19.80 a litre while petrol blend and
unleaded petrol will now cost Z$21.86 (US$0.57) and Z$22.62 a
litre, reflecting increases of Z$3.18 and Z$3.29
February 4, 2000 [MyCNN]
- Harare, in Zimbabwe, is starting to have shortages of paraffin
(for lamps) similar to shortages of petrol and diesel that have
been in place for some time.
February 3, 2000 [MyCNN]
- The following was reported regarding Zimbabwe:
- Zimbabwe's army is using up to 1.5 million liters/week in its
effort to support Laurent Kabila in the Congo. I assume the
remainder (out of 2 million liters/week skim) is going into
- Garbage collection in Harare's suburbs has been totally shut
down by lack of diesel fuel.
- If the fuel shortages continue into the harvesting and curing
periods for tobacco, the amount of tobacco available for export is
expected to be sharply reduced. This would sabotage the official
predictions of foreign exchange normalization in April 2000. [Cf.
Feb. 2, 2000]
February 2, 2000 [MyCNN]
- ZESA is trying to arrange a counter-trade deal with Mozambique,
to avoid increasing a crippling U.S.$20 million debt owed for power
imports. There are currently no plans to attempt a similar deal
with South Africa, the Congo, or Zambia. [Apparently, the
counter-trade deal makes sense only because Mozambique is
recovering from a 2-decade civil war.] About 10% of ZESA's electric
power is imported from Mozambique. [This is on top of the imports
reported Jan. 21, 2000].
- ZESA plans to do a 40% price hike for electric power in April,
as opposed to a 20% price hike in recent prior quarters.
- NOCZIM's planned (U.S. or Z?) $2 billion bond issue missed its
initially planned issue date today, due to failure to acquire
approvals from the Ministry of Finance.
- The diesel shortage in Zimbabwe has shut down most of the
freight trucks in Zimbabwe. Both imports and exports are measurably
impaired. Imports are currently less impaired, since they can get
diesel outside of Zimbabwe. If this shortage continues, it is
imminent that some businesses will fold.
February 1, 2000 [MyCNN]
- Zimbabwe extracted 12 days of fuel reserves from the holding
vessel in Beira, Mozambique.
- Wildly varying estimates suggest it will take 1 to 5 weeks for
the fuel to reach Zimbabwe gas stations, etc.
- The foreign exchange situation is expected to be fixed when
tobacco selling season begins (in April 2000). That assumes that
either the petrol/diesel shortage will not exist then, or that the
transportation system dealing with tobacco will get fuel as
reliably as Zimbabwe's army does now. [May 7: I forgot to consider
what is actually happening....]
January 27, 2000 [MyCNN]
- Zimbabwe's petrol and diesel shortages have already partially
shut down garbage collection in the cities, and inter-city
- The disruption of garbage collection is an imminent public
- The disruption of inter-city transport (by trucks) is starting
to impair the transport of agricultural products to their
- If it continues to the tobacco harvesting season, a positive
feedback cycle will kick in: the lack of petrol and diesel imports
inhibits the export of tobacco, which inhibits the acquisition of
hard currency, which inhibits repaying the credit lines currently
being arranged -- which inhibits petrol and diesel imports....
January 21, 2000 [MyCNN]
- Zimbabwe's general petrol shortage has forced a reassignment of
companies contracted to supply fuel to NOCZIM. The South African
firm Sasol is reported to have been offered the contract again,
after losing it the first time to the Zimbabwean firm Zimalzam.
These same (less than substantial) reports indicate that Zimalzam
has lost its contract in this regard; Zimalzam has indicated that
if this proves to be real, it will fight this in court.
- Zimbabwe's state-controlled electric utility, Zimbabwe Electric
Supply Authority [ZESA] has announced it will consider rationing
power to residential (and other non-essential) sectors due to its
inability to support its current debts [$80 million; is this U.S.
January 18, 2000 [MyCNN]
- Zimbabwe currently imports 40%(? Cf. Feb. 3, 2000) of its
electricity. In order to keep up these imports, Zimbabwe has
rescheduled debts with South Africa's Eskom, Zambia's Zescom, and
- Zimbabwe's support of the Congo is part of its electric bill to
the Congo. While I do not condone Zimbabwe's verifiable
understatement of how much it is spending to support the Congo, I
believe the total amount is justifiable compared to the
consequences. Now, why was this highly relevant
information suppressed since Aug. 1999 relative to MyCNN's clips of
the Harare Standard??
- When Zimbabwe's budget starts behaving, Zimbabwe should invest
in electric power generation. Zimbabwe should focus on
low-maintenance or locally-maintainable technologies. [Actually,
every nation on Earth needs to make this shift...but Zimbabwe is
- Solar panels feeding into a battery system, which is drained by
AC inverters, would be a fast way to provide power to key areas in
government buildings. [More general use implies things about social
stability that may, or may not be, wise to assume.] A detailed
engineering plan would have to specify:
- How much power the system could supply.
- The maintenance schedule for the batteries and inverters.
[Solar panels will last at least 30 years!]
- Zimbabwe's National Defense Forces have been skimming diesel
(and possibly other fuels) off of incoming ships. The shortage of
diesel (now running for about a month) apparently doesn't affect
them; in fact, they are building up strategic reserves [possibly
because of their supporting the Congo (new government, Kabila) vs.
Zaire (old government)].
- The diesel shortage is expected to continue for another five
weeks. Petrol and jet fuel are thought to be imminently suffering
diesel's fate. [Remember, this shortage is not about sky-high
prices; it is about almost all gas stations not having it for days
at a time.]
January 16, 2000 [MyCNN]
- Zimbabwe can import electric power because foreign power
companies are willing to tolerate delayed debt payments.
- Cars have fuel because private oil companies are defying the
NOCZIM government monopoly on fuel procurement.
January 14, 2000 [MyCNN]
- It appears that Zimbabwe's NOCZIM, contrary to its own PR
statements, was unable to restore its fuel reserves to required
levels. In fact, on Jan. 14, 2000, the state fuel procurement
authority CMED [Central Mechanical and Equipment Department] ran
out of fuel, forcing most Zimbabwean government vehicles off the
road. Also, it seems there is a week's delay between a
diesel-loaded cargo ship arriving in Zimbabwe, and the diesel's
availability for shipping to gas stations. [Namely: 2-3 days to
offload the ship, 3 days to pump the fuel to Mutare, 2 days for it
to settle before it is separated.]
December 21, 1999 [MyCNN]
- Locating diesel is apparently still problematic in Harare (in
Zimbabwe). Most gas stations are out of diesel at any given time,
and all gas stations have no diesel most of the time. While
logistical problems (rail transport from South Africa does not have
sufficient capacity?) are an immediately contributor, the shortage
is likely to continue as long as Zimbabwe lacks hard currency and
NOCZIM's paralyzing debt load is not dealt with.
- In spite of the recently acquired credit line, diesel fuel ran
out in various gas stations in Harare, Gokwe, and Bulawayo (in
Zimbabwe). Riot police were deployed at Puzey Motors in Harare to
deal with a mob of over 200 (underestimate may be in the hundreds)
truck drivers that simultaneously converged on the gas
- Zimbabwe Rural Transport Operators confirmed that most of their
buses were shut down because there was no diesel fuel in their
- There was disagreement over how long the diesel supply
disruption would last: high-placed sources indicated all week,
while low-level sources indicated the disruption would end by
Wednesday [Dec. 23, 1999]
Opinions, comments, criticism, etc.? Let me know about it.
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