ZIM NOTES 12-14-2009

UNCLAS SECTION 01 OF 03 HARARE 000966 AF/S FOR B. WALCH ADDIS ABABA FOR USAU ADDIS ABABA FOR ACSS NSC FOR SENIOR AFRICA DIRECTOR STATE PASS TO USAID FOR L.DOBBINS AND J. HARMON COMMERCE FOR ROBERT TELCHIN SIPDIS E.O.12958: N/A TAGS: PGOV PREL ASEC PHUM ECON ZI SUBJECT: ZIM NOTES 12-14-2009 -------------- ¶1. SUMMARY -------------- Ambassador Presents Credentials... ZANU-PF Congress Begins... Human Rights Day Marches... Report on ZANU-PF Perpetrated Rape Released... Kunonga Renews Attacks on Anglicans... WOZA Cases Continue to Drag On... Court Acquits Human Rights Lawyer... MDC-T Suspends Corrupt Members... Grain Marketing Board (GMB) Back on Market to Raise Money... Interfin Holdings Limited Takes Over CFX Financial Services... The National Railways of Zimbabwe (NRZ) Requires Money to Restore Electric Locomotives... LonZim Raises More Money to Support Recovery... -------------- On the Political and Social Front -------------- ¶2. Ambassador Ray presented his credentials to President Mugabe on Wednesday. During the hour-long meeting, Mugabe gave his usual "history lesson" starting with the liberation struggle, continuing through the Lancaster House agreement, British betrayal on land reform, and ending on illegal sanctions. The Herald ran a front-page article on Thursday announcing the new ambassador, "Another ex-soldier to run U.S. embassy." The article explained, "Ambassador Ray replaces Mr. James McGee, with both having served in the disastrous Vietnam War of the 1960s and getting decorated for their participation in that losing cause." On December 10, Ambassador Ray also met with Prime Minister Morgan Tsvangirai. See Harare 955 and Harare 959. ¶3. President Robert Mugabe gave the keynote address at the official opening of the ZANU-PF Congress today. (Delegates and officials have been meeting since December 8; the official Congress will last two days.) The theme of the Congress is "United in Defense of Our National Resources and People?s Economic Empowerment." Mugabe focused much of his speech on U.S. and EU sanctions designed to undermine the government so the West can gain access to Zimbabwe?s resources. He sharply criticized the MDC for having supported sanctions and for not having supported repeal of them. Showing sensitivity to recent reports of serious ZANU-PF in-fighting, Mugabe, and Vice President Joice Mujuru after him, implored the several thousand people seated in the International Convention Center to abjure factionalism. In the same vein, today?s banner headline in The Herald was "President blasts factionalism," based on Mugabe?s address yesterday to the ZANU-PF Central Committee. We expect the Congress to ratify decisions already made by the Central Committee and Politburo. See Harare 946. ¶4. Zimrights and Zimbabwe Lawyers for Human Rights led separate marches in Harare on December 10 to commemorate Human Rights Day. Hundreds participated in each of the marches and the groups were led by police escorts. Although the two groups hoped to have one, large march, police refused permission and forced them to hold separate marches. ¶5. New York-based NGO AIDS-Free World released a report this week Q5. New York-based NGO AIDS-Free World released a report this week detailing politically-motivated rape perpetrated by ZANU-PF supporters and members of Mugabe's regime. The report is online at: http://www.aids-freeworld.org ¶6. On Sunday December 6, church services in every Anglican church except one in Harare were interrupted by either police or supporters of deposed Anglican Bishop Nolbert Kunonga. Police attempted to stop services, lock churches, and intimidate priests who went ahead with HARARE 00000966 002 OF 003 their services anyway. The disruptions are a continuation of a nearly two-year dispute within the church as ZANU-PF-supported Kunonga seeks to assert control over Anglican church-owned property. ¶7. WOZA leaders Jenni Williams and Magodonga Mahlangu appeared in Bulawayo Magistrate's Court on Monday December 7, only to learn that their court record file was not accessible. Upon returning on the 8th, their lawyer, Kossam Ncube, was informed that the file was locked in an "exhibit? room and the person with the keys was away on leave. With the keys missing, the magistrate directed the State to bring the file for yet another hearing scheduled for December 14. WOZA members in solidarity in the court counted at least seven plain-clothed state agents in the court room. Since returning from the U.S. where they received the RFK Human Rights Award from President Obama, they have been frequently followed by suspected security agents. ¶8. On December 10, Magistrate Fadzai Mthombeni acquitted human rights lawyer Alec Muchadehama and High Court Clerk Constance Gambara of contempt of court. Police had argued that Muchadehama and Gambara committed the offense when they arranged the release from prison of three abductees, Kisimusi Dhlamini, Gandhi Mudzingwa and Andrisson Manyere in April, after the state failed to appeal to the Supreme Court against bail. The acquittal ends an eight month ordeal for Muchadehama and Gambara, at least for now. ¶9. MDC-T Suspends Corrupt Members...On December 8, the MDC National Executive suspended three party members accused of corruption and inciting violence: former Chitungwiza Councilor Rangarirai Mutingwende, former Mayor of Chitungwiza Israel Marange, and Zengeza East Member of Parliament Alexio Musundire. Mutingwende was sanctioned for two years while Marange was barred from party activities for five years. The two stand accused of allocating residential stands in Chitungwiza to party supporters in exchange for money. Although Musundire was suspended from holding any position in the party for two years, he will keep his seat in the House of Assembly. MDC Director General Toendepi Shonhe told us the party took drastic action to make it clear that it was not following the corrupt and violent practices of ZANU-PF. -------------- On the Economic and Business Front -------------- ¶10. The GMB is planning to come onto the market to raise the USD2.5 million needed to purchase grain through grain bills even though attempts to borrow an equal amount in November managed to raise only USD1.6 million. The bills, which have a tenure of 90 days and include other attractive features such as tax exemption, liquid asset status and prescribed asset status, are designed to attract funds from Pension and Provident Funds, Insurance Companies, Commercial Banks and individuals. ¶11. The troubled CFX Financial Services, which failed to meet the Q11. The troubled CFX Financial Services, which failed to meet the Reserve Bank of Zimbabwe?s minimum capital requirements threshold set for September 30, has been taken over by Interfin Holdings Limited following a flop in its USD10 million rights offer to existing shareholders. Only 1.38 percent of the required amount was raised by previous shareholders leaving the underwriter, Interfin Holdings Limited, to take up the under-subscribed ordinary shares up to a maximum of 51 percent, giving it a controlling stake in CFX. ¶12. NRZ requires USD200 million to buy equipment to restore electric locomotives that were suspended because thieves stole overhead cables used to transmit power and the poles supporting the cables as well as control equipment. In view of the key role played by railways in improving competitiveness, government allocated USD16.7 million to NRZ to kick-start the revival of the country?s rail network. HARARE 00000966 003 OF 003 ¶13. The London alternative investment market (AIM) listed LonZim raised 1.17 million pounds sterling designed to recapitalize its Zimbabwean subsidiaries that include, among others, Celsys, Paynet, Millpal Chemicals and Leopard Rock Hotel. In addition to this portfolio, LonZim is also considering other investment opportunities in Zimbabwe, including the operation of a low cost airline. According to the company?s Executive Chairman, LonZim is taking advantage of Zimbabwe?s economic recovery which he says is now quite "tangible". -------------- Quote of the Week -------------- ¶14. "As Mr. Ray probably knows, Zimbabwe Government officials, from the ZANU-PF side, have been slapped with unjustified, politically motivated travel restrictions which prevent them from traveling to Western capitals to tell the Zimbabwean story, except on multilateral business... We hope Mr. Ray, as the eyes and ears of Washington here, will tell the real Zimbabwean story to his principals back home and impress on them the importance of lifting their ruinous economic sanctions to help 'restore the country to prominence and prosperity'." -- Opinion column, The Herald, December 11, 2009. RAY