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RUFOADA/JAC MOLESWORTH RAF MOLESWORTH UK
RHEFDIA/DIA WASHDC

UNCLAS SECTION 01 OF 03 HARARE 000133 
 
SIPDIS 
 
AF/S FOR S.HILL 
ADDIS ABABA FOR USAU 
ADDIS ABABA FOR ACSS 
NSC FOR SENIOR AFRICA DIRECTOR B.PITTMAN 
TREASURY FOR J.RALYEA AND T.RAND 
STATE PASS TO USAID FOR L.DOBBINS AND E.LOKEN 
COMMERCE FOR BECKY ERKUL 
 
SIPDIS 
 
E.O.12958: N/A 
TAGS: PGOV PREL ASEC PHUM ECON ZI
 
SUBJECT: Zim Notes 2-15-2008 
 
 
¶1.  The Embassy Harare Political/Economic Section began producing 
Zim Notes in July, 2007 to present a perspective on current events 
in Zimbabwe.  Suggestions are always welcome. If you would like to 
receive Zim Notes by email, as well, please contact Frances Chisholm 
at chisholmfm@state.gov. Distribution is restricted to U.S. 
government employees. 
 
¶2.  Price Movements-Exchange Rate and Selected products 
Parallel rate for cash soared to ZW$8.5million:US$1; bank transfer 
rate: Z$10million; official rate: ZW$$30,000:US$1 
*Sugar shot to Z$15million/2kg vs. new controlled price of 
Z$8million/2kg 
*Cooking climbed to Z$20million/750ml vs. new controlled price of 
Z$9.3million/750ml 
Petrol rose to Z$11million/liter and Z$10 million/liter vs. 
controlled price of Z$60,000/liter 
 
----------------------------- 
On the Political/Social Front 
----------------------------- 
 
¶1.  Simba Makoni Speaks...  Simba Makoni on February 13 held a press 
conference and gave a diplomatic briefing.  He stated he would run 
as an independent candidate (ZANU-PF said his decision had resulted 
in his automatic expulsion from the party), and that supporters from 
all parties were welcome to endorse him.  Short on specifics, Makoni 
said he offered reengagement and renewal in a polarized country 
riven by fear, disease, and poverty.  Makoni's presumed principal 
backers such as Solomon Mujuru have not come out publicly.  He 
insists he has widespread backing throughout the country, although 
without public polling this is certainly subject to dispute.  While 
most political observers believe a Makoni-Tsvangirai united front 
would have an excellent chance of defeating Mugabe, there are no 
signs at present of such an alliance, and the danger exists that 
Makoni and Tsvangirai could split the opposition vote.  See Harare 
¶0130. 
 
¶2.  Street Protests As Elections Draw Near... About 100 students 
took to the streets of Bulawayo on February 13 over the high cost 
and declining quality of education and to demand a free and fair 
election in March.  Four students including the Zimbabwe National 
Students Union President, Clever Bere, were detained and beaten. 
Police assaults caused others to seek medical attention.  Privilege 
Mutanga, the Gender and Human Rights Secretary for ZINASU, who is 
nine months pregnant, suffered a broken hand and a twisted ankle. 
Members of Women of Zimbabwe Arise (WOZA) also demonstrated in 
Bulawayo and Harare on February 12 and 13 respectively.  The aim of 
these peaceful protests was to "encourage Zimbabweans to stand up 
for their children in these times of extreme hardship and as an 
election looms."  Eleven members of WOZA required medical attention 
for injuries sustained from being beaten by baton sticks. 
 
¶3.  Challenges In Registering To Vote...  Although the Zimbabwe 
Electoral Commission (ZEC) extended voter registration from February 
7 to February 13, many people, particularly in Harare, have found 
the process cumbersome and full of hurdles.  While evidence is 
anecdotal, it is sufficient to indicate a pattern.  Among Embassy 
locally employed staff (LES), we've seen cases of names no longer 
being on the voter rolls and failure on the part of officials to 
confirm subsequent registration.  In another case, names of family 
members appeared on the rolls although the relatives had not lived 
in or even visited Zimbabwe in a decade.  An Embassy household staff 
member who was born in Zimbabwe and has voted in previous elections 
was told in attempting to verify registration that he was not a 
citizen and could not register to vote without first applying for 
citizenship because his parents were born in Mozambique. 
 
¶4.  Urban Water Woes continue... Although Bulawayo's main supply dam 
is at 100% and spilling, there remains a shortage of water treatment 
 
HARARE 00000133  002 OF 003 
 
 
chemicals.  Residents are advised to boil tap water, and there is an 
urgent need for water treatment tablets at the household level. 
Harare's high-density suburbs of Mabvuku and Tafara have received 
technical and material support from UNICEF in the form of water 
deliveries and borehole drilling.  UNICEF is also coordinating 
hygiene promotion, sanitation, and water services to the 
high-density suburbs of Hopley, Hatcliffe Extension, and Epworth. 
While the UN reports that cases of diarrhea-related illness remain, 
at present, stable and manageable, the Herald quotes Ministry of 
Health officials as reporting 7 deaths from cholera in one district 
and four in another , all in February. 
 
¶5.  US$5 Million From CERF... The UN's Central Emergency Response 
Fund allotted US$5 million to Zimbabwe for under-funded emergencies. 
 Priority projects will be chosen by the Inter-Agency Standing 
Committee (IASC) Country Team on a biannual basis - at the beginning 
and middle of each year - and will be selected from the 2008 
Consolidated Appeals Process (CAP) activities. 
 
¶6.  Regional Flash Appeal For Flood Relief...  This week OCHA issued 
a Southern Africa Regional Preparedness and Response Plan to address 
flooding in Malawi, Mozambique, Zambia, and Zimbabwe.  The total 
request was US$89 million, $15.8 million of which is requested for 
Zimbabwe, where it is estimated that 15,000 people and 12,000 
hectares have been affected since December. 
 
-------------------------- 
Economic and Business News 
-------------------------- 
 
¶7.  *NIPC Approves Wave Of New Prices...  The National Incomes and 
Pricing Commission (NIPC) gave the green light to increase the 
prices of numerous commodities dramatically.  Mealie meal, for 
example, went from Z$189,000 to Z$19.2 million/10 kg; international 
phone call charges shot from Z$67,000 to Z$1.2 million/minute and 
local calls went up from Z$43,000 to Z$300,000 - stil only 14 and 3 
US cents respectively at the parallel rate.  Responding to Reserve 
Bank of Zimbabwe (RBZ) Governor Gono's recent advice to confine NIPC 
activities to the three controlled and 16 monitored products, NIPC 
chairman Masimirembwa was quoted in the press reminding Gono that 
Statutory Instrument 142 of 2007 gave the NIPC authority to manage 
pricing of every commodity and had been extended to June 30. 
 
¶8.  GOZ Releases Official Inflation Figures For December...  The 
year-on-year inflation rate rose to a record 66,212% in December, up 
from 26,470% the previous month, according to the Central 
Statistical Office (CSO).  Month-on-month inflation nearly doubled 
to 240% in December from 131% in November, by official reckoning. 
The CSO uses the controlled prices of goods, regardless of their 
availability, rather than purchase prices in calculating the 
consumer price index.  More reflective of actual spending, private 
sector estimates of inflation in January for a broader consumer 
basket are roughly triple the CSO December figure, with higher 
school fees being the biggest inflation driver in January. 
 
¶9.  RBZ Ups Spending on "Logistical Preparedness" For Elections... 
The RBZ has increased spending on fuel, motor vehicles, computers, 
generators, food and other items intended exclusively for the March 
29 elections to ensure "preparedness" for the polling day.  See 
Harare 0131. 
 
¶10.  And Perhaps Related, Foreign Exchange Woes Worsen... 
Companies are finding it increasingly difficult, if not impossible, 
to access foreign exchange held in their own Foreign Currency 
Accounts (FCA) at the RBZ.  Officials at the Confederation of 
Zimbabwe Industries (CZI) told us the problem had worsened in the 
last three weeks as the little amount of hard currency available has 
been diverted, without the companies' permission, to fund other GOZ 
obligations, leaving companies short of key imported raw materials 
 
HARARE 00000133  003 OF 003 
 
 
for production. 
 
¶11.  In his October 2007 Monetary Policy Statement, RBZ Governor 
Gono centralized the management of all corporate FCA at the RBZ 
allegedly as a way of boosting exporter viability and improving the 
country's accountability for total export and other foreign currency 
receipts.  However, although exports grew in Q4 thanks to 
concessionary funding, they have not kept pace with the GOZ's 
increasing demand for foreign exchange associated with the need to 
import electric power, fuel, raw materials, agricultural chemicals, 
and other key needs.  In typical short-term thinking, the RBZ 
appears to be "borrowing" from the increasingly strapped corporates 
to meet its own deepening forex shortfalls. 
 
 
MCGEE