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What is worse? Targeted sanctions or abuse of public power and the theft of public reaources using public institutions as vehicles.



‘When State managed institutions fail, everyone suffers the consequences’
When State managed institutions work well they are often not recognised or rewarded and are taken for granted. When they fail, everyone suffers the consequences.

At Independence in 1980, 40 per cent of the GDP of Zimbabwe was created by publicly owned and operated institutions called Parastatals. Today I doubt if they contribute 5 per cent and are almost universally corrupt, inefficient and loss making. It does not have to be so.

I am sure we are not alone in this respect – right now South Africa is witnessing the collapse of a number of icons – South African Airways, Transnet, and Eskom. When I was much younger, SAA was the leading airline company in Africa.

The CEO of Eskom was a visionary and the utility not only kept the lights on but at low cost and in addition supplied regional States with power. If there is any single factor that is likely to reduce South Africa to a mediocre economic hub, hardly able to sustain itself, it is the failure of these enormous State owned entities.

Here in Zimbabwe the record is even worse. Our State owned power utility is generating half of what we consumed in power 20 years ago. Cities are receiving less than half the water that they require for normal use.

Our railways which used to handle the great majority of our freight, now handles less than 10 per cent; if that. Air Zimbabwe, once the African airline that had never had an accident, is no more and barely functioning with a couple of small aircraft.

Our road infrastructure, once one of the best in Africa is in a terrible condition in rural and urban areas and our national roads need rehabilitation and repair. The list goes on and on.

At one stage we advocated privatisation. But even that has had little impact and in many cases has actually made the situation worse with private sector interests exploiting their monopoly rights and not doing their job. Levels of corruption have sometimes been made worse by incorporating private interests. Cottco is a prime example.

So, what do we do?

I worked for a State Owned entity for over 20 years, rising from a lowly economist to Chief Economist and then CEO of two major SOE’s. During my years as an economist, the Board of the organisation I worked for was a combination of a number of outstanding individuals.

I think we could have matched that Board against any other group of a similar nature, anywhere in the world. We were responsible for about US$3 billion in annual sales, employed 25 000 people and generated perhaps a quarter of our national foreign exchange receipts.

We operated under one of the harshest sanctions regimes ever adopted, imposed by the Security Council of the UN and backed by the Royal Navy which blockaded our main Ports. Despite all of that, we thrived.

Looking back, I now appreciate the expertise and enterprise of those men who worked for very little. There was some corruption but it was negligible.

Then when I moved to management and was appointed CEO of a large division, employing 3 500 people and serving all households and retail stores in Zimbabwe on a daily basis. We had to overcome sanctions, isolation, the inability to transfer funds and buy essential inputs and spares.

Our farmers were fighting a bush war and were themselves under constant pressure, yet we survived and even thrived. The key, a dedicated Board of Directors who knew the industry and were all, themselves, successful and self-made people.

My staff were all selected on merit and were required to operate without corruption and to meet the high standards demanded and the targets set in their budgets.

I was able to select and train my successors and when the time came for me to leave, I was able to leave behind a team that I had every confidence would maintain the organisation and its standards.

My next job was with a larger division – over 5000 staff and a major export program. In the middle of a drought and a management crisis. A much tougher assignment but we were able to maintain our activities, even expand our market reach and support one of the largest businesses of its kind in Africa.

It was a profound experience and we had a great time. Today that organisation is bankrupt, its industry base less than a third of what it was and the basic suppliers are either out of business or suffering under a much diminished regime.

How does this happen? What are the remedies?

We need to accept that the main mistake we have made since Independence is that we have appointed Boards of Directors of these major State Owned Enterprises (SOE’s) and management on a political patronage basis. Ministers, representing the shareholders, viewed these enterprises as cash cows.

If they needed something not provided for in their budgets, they called the Chairman or the CEO. Often this led to manipulation of the accounts or the audit at the year end. It was not long before the rot set in and the whole management structure, built up over many years, collapsed and the SOE with it.

It is interesting that China and many other countries in the Far East have maintained their SOE structures and in fact been able to build them up into highly competitive enterprises. The reason, a national policy of progression on merit – both in the States political leadership and at corporate level.

A Chinese delegate to their embassy in Harare told me once that very few of the leaders in the Western nations could survive the very rigorous selection process that determined State leadership in China. You can see that in everything they do.

Such political leaders, themselves survivors of a very tough competitive climb to the top, do not tolerate mediocracy in their subordinates or the institutions they lead and control.

Such values and norms are often not even found in our private sector organisations and companies. This process is reinforced by a near total intolerance for corruption or self-interest.

In Africa, by and large, such malpractices are not only tolerated, but they are also accepted as a ‘normal’ part of life. The spectacle of a manager driving a top of he range luxury vehicle out of the gate of a derelict state owned plant is not queried.

We build a state of the art glass factory near a mountain of the raw material, see it opened by the State President, stop operating a week later and never reopened, and no one asks why? We watch 300 kilometres of electric cable stolen from the railway line between Gweru and Harare, costing over US$100 million, in broad daylight. No outcry, not a single person arrested and the case closed – millions of dollars’ worth of railway infrastructure destroyed and equipment rendered idle.

In addition to these fundamental failures of management and control, is the failure of policy. The ANC came to power in South Africa, like Zanu PF in Zimbabwe, accepted and took for granted the infrastructure they inherited from the previous Governments and put social and political needs first.

Charges for services were manipulated, people allowed not to pay for what they consumed and fantastic organisations. like Eskom, were eaten alive.

Today they have a debt bigger than most States in Africa and very little to show for it. Installed capacity for 60 000 megawatts is performing at less than half its capacity. Their most recent power station came in at three times its budget and years late and only operated for days before failing.

The consequences of these failures of policy and management are immeasurable and impact on the daily lives of everyone. They exacerbate poverty and joblessness and are totally self-inflicted.

Eddie Cross is a former opposition MDC MP for Bulawayo South and a respected economist. You can follow his blog African Herd


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President Cyril Ramaphosa

President Cyril Ramaphosa will tomorrow , Wednesday, 22 March 2023, deliver the keynote address at the first day of the three-day National Conference on the Constitution which is titled Reflections And The Road Ahead.

The event will take place at the Gallagher Convention Centre in Midrand, Gauteng, under the theme “Reflections on the Constitution: Rule of law, accountability, social and economic justice”.

The conference gives the nation an opportunity to reflect and engage in dialogue on the past 25 years of the Constitution, nation building, gender equality, youth economic empowerment, service delivery and social stability, with the objective of charting a way forward that builds on the gains of democracy.

As a platform for deliberating on continuous, robust debate on the purpose and effectiveness of the Constitution, the National Conference on the Constitution intends to broaden the discourse on the Constitution and encourage members of the public to participate in the conversation on constitutionalism and the state of democracy in the country.

Some of the focus areas in the programme include:

• Transforming and building an independent and resilient judiciary;
• Transforming and growing the economy as a constitutional imperative;
• Progress on land reform: restitution and distribution;
• Governance and electoral reform;
• Effectiveness of constitutional and independent statutory bodies in strengthening
constitutional democracy.

The conference will be attended by prominent figures of South African society including academics, members of legislatures, constitutional and independent statutory bodies, mayors, political parties, youth, students, business leaders, religious leaders, representatives of the legal fraternity, traditional leaders, media and others.

The conference will be held as follows:

Date : 22-24 March 2023
Time : 08h30
Venue: Gallagher Convention Centre, Midrand, Gauteng

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Here are the facts:

THE COCA COLA COMPANY (TCCC) acquired THE ENTIRE ISSUED SHARE CAPITAL OF CADBURY SCHWEPPES PLC resulting in the control and management of the global Schweppes businesses into TCCC value chains including Schweppes Zimbabwe Limited (SZL), a company incorporated in terms of the laws of Zimbabwe.

Mr. Brian Musekiwa, a Zimbabwean-born professional based in Texas, USA, said: “I had no idea of the SZL matter and its intersection with the SMM Holdings Private Limited (SMM) affair until I joined the Justice Under Rule of Law’s (JUROL) corporate heritage and legal literacy campaign powered by the Banking on Africa’s Future (BOAF) of which I am a paid up member. I have followed the SZL saga with keen interest not because of the Zimbabwe angle but because TCCC is a global corporate icon and just the idea that this company was party to an extortion and corrupt deal involving the payment of $2.7 million to Chinamasa, Mnangagwa’s key 2017 coup ally, is chilling leading any person like me to want to know if there exists any causal link between the complicity of TCCC’s alleged corrupt practices and conduct in relation to the affairs of the SZL localization and upgrade program concluded with Africa Resources Limited (ARL), a private company incorporated in terms of the laws of the BRITISH VIRGIN ISLANDS (BVI) and wholly owned by Mr. Mutumwa Mawere, a Zimbabwean born South African naturalized citizen, who Mnangagwa and Chinamasa using Messrs. Edwin Manikai and Afaras Gwaradzimba as surrogates, and the extrajudicial and the unconscionable theft of the control and management of SZL and other juristic entities using an unprecedented draconian and barbaric law called the Reconstruction of State-Indebted Insolvent Companies Act that was authored by Mnangagwa to bridge him to state power.”

Mr. Cornwell Mutetwa, a Zimbabwean businesan said: “I naively thought that the reconstruction project was solely premised on the affairs of SMM as a company and not on the person of Mawere and his alleged interests in companies like SZL.

I am pleased that Mr. Mucha Mugore, a member of BOAF-JUROL, inspired by findings in his MBA dissertation research on how public power was abused in expropriating Mawere’s relationships with not only SMM but many separate and distinct juristic entities, provoked in a whatsapp group that the record of this sad chapter in the corporate history of Zimbabwe must be corrected preferably in form of a memoir written by Mawere.

I was encouraged and remain so that I have flins myself being part of this noble project that has enabled me to interface with Mr. Mawere who has generously downloaded critical information that hitherto has not been in the public domain. I had no idea that Coca Cola Holdings Netherlands (CCHN) was directly and indirectly involved in the affairs of SZL until I read this:

Having understood that it was the Zimbabwe Competition and Tariffs Commission (TCTC) was weaponized to have jurisdiction beyond its mandate to regulate competition issues to become relevant in prescribing localization matters, I began to understand that under the late Mugabe’s watch the governance system was already broken.

My memory was then provoked to appreciate why the former Minister of Indigenization, Hon Kasukuwere, had a hand in the SZL matter and used his public office to cause ZCTC to require as a condition for approving that the control and management of SZL be divested and deprived from TCCC using public power.

It is against this background that the extortion inherent in the extract below from a meeting between SZL’s then SA-based legal counsel, an employee of Coca Cola South Africa Pty Limited, a private company incorporated in terms of the laws of SA, can properly be understood:

It was made clear to CCSA that unless a payment of $2.7 million was paid to the order of Fidelity Life Asset Management (FLAM) and SMM under Chinamasa’s control through his appointee, Gwaradzimba, the ARL purchased equipment imported from Europe and delivered to SZL as part of the upgrade project, would not be released to an SZL controlled by CCSA until a ransom amount of $2.7 million was paid to the order of Chinamasa.

On the advise of Gwaradzimba whose relationship with SMM was a consequence of a decree and an order issued by Chinamasa with no judicial involvement, CCSA according to Mr. Mokwena, in his capacity as the legal counsel of both SZL and CCSA, was advised by Gwaradzimba and accepted his advise to part with a bribery of $2.7 in million to cause Chinamasa to exercise public power to issue a notice removing SZL from the purported and unlawful and invalid control by Gwaradzimba using the order issued by Chinamasa in relation to SMM affairs only.

It is chilling that Chinamasa used public power to issue a notice dates 26 January 2006 and through his appointee was rewarded with a secret gift of $2.7 million to the prejudice of ARL and its sole shareholder, Mr. Mawere.”

Mr. Peter Makoni, an attorney and a member of BOAF-JUROL, said: “I have had the opportunity to read and understand the sequence of events leading to the confiscation of equipment acquired by ARL using the personal agency of Mr. Mawere as set out below:

It is clear from the fax above that neither FLAM nor SMM under reconstruction were involved in the SZL matter as promoters and sponsors to permit any lawful payment of a bribe of $2.7 million to Chinamasa using cronies like Gwaradzimba and Manikai.

Having concluded that Chinamasa was unjustly enriched to the tune of $2.7 million based on fraudulent representation that the $2.7 million that ARL, a company whose affairs fell outside the jurisdiction of Zimbabwe and, therefore Chinamasa and his surrogates, in exchange for a government gazette to divest and deprive ARL of the control and management of the upgrade equipment that was conveyed by Petter Trading Pty Limited as ARL’s agent, received pocket money to be used for ulterior motives in the amount of $2.7 million from CCSA.

It would please anyone interested in building a future of not only Zimbabwe but Africa that is characterized by the respect of the rule of law to take notice of the documents in the flipbook below:”

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