Business Seeks to Rebuild Govt Ties

UNCLAS HARARE 001681

SIPDIS

STATE FOR AF/S
USDOC FOR AMANDA HILLIGAS
TREASURY FOR OREN WYCHE-SHAW
PASS USTR FLORIZELLE LISER
STATE PASS USAID FOR MARJORIE COPSON

SENSITIVE


E. O. 12958: N/A
TAGS: ECON EAGR ETRD EINV PGOV ZI ZANU PF
SUBJECT: Business Seeks to Rebuild Govt Ties

Sensitive but unclassified. Not for Internet posting.

Ref: Harare 1347


1. (SBU) Summary: The Confederation of Zimbabwe
Industries' (CZI) top female official berated the GOZ's
trade-unfriendly policies and general economic
mismanagement. However, she expressed hope that
President Mugabe would send the business community a
positive signal either by meeting face-to-face with CZI
leaders or by allowing a serious succession discussion at
the ruling ZANU-PF's December congress. End summary.


2. (SBU) Econoff met Oct 1 with incoming CZI Vice
President Florence Sachikonye, the first woman voted into
a senior office of the country's preeminent business
association. Owner of a chain of Harare's top clothes
boutiques, Sachikonye related her own frustration as an
importer. Since the Reserve Bank (RBZ) introduced its
currency auctions in January, Sachikonye's firm has
failed each time at buying U.S. dollars through this lone
official channel. Like many importers, she has had to
source foreign exchange through the illegal parallel
market. Nonetheless, Sachikonye complies with the GOZ's
apparel tariffs, including 65 percent duty plus Z$
250,000 (US$ 45)/kg. She complained that a single pair
of men's shoes can weigh one kilogram, pushing duty well
beyond 100 percent. Sachikonye added that her clothes
compete against smuggled - and hence duty-free - Chinese-
made apparel. She worries that GOZ customs officials
will start asking her to explain her source of foreign
exchange as her containers enter the country.


3. (SBU) In her capacity as the new CZI VP, Sachikonye
hopes she will be able to arrange a meeting between
President Mugabe and CZI officials. The last such
encounter took place six years ago. Mugabe has also
declined invitations to address CZI's annual congress for
the past three years. Sachikonye said CZI will continue
to support RBZ Governor Gideon Gono, not because members
agree with his policies but CZI believes because he is
the only GOZ official with a chance of improving the
business climate. She dismissed other senior GOZ
officials, such as acting Finance Minister Herbert
Murerwa and Industry/Trade Minister Samuel Mumbengegwi,
as Mugabe's "yes-men." Finally, she speculated that a
ZANU-PF December congress that addresses presidential
succession would motivate firms to invest in the economy.


4. (SBU) Comment: As we observed at the August CZI
Congress (ref),business leaders are more willing than
even a year ago to take GOZ officials to task for poor
policies. Part of the credit for rebuilding this
government-business dialogue goes to Gono and part to
CZI's outspoken, recently-exited President Anthony
Mandiwanza. Certainly, GOZ officials are more receptive
to criticism from the relatively apolitical business
community than from the opposition, civil society or any
international players. Whether this modest government-
business dialogue can help bring about saner economic
policies is still an open question.

Dell