VZCZCXRO7175
RR RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN
DE RUEHSB #1122/01 3510812
ZNR UUUUU ZZH
R 160812Z DEC 08
FM AMEMBASSY HARARE
TO RUEHC/SECSTATE WASHDC 3822
RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE
RUEHUJA/AMEMBASSY ABUJA 2144
RUEHAR/AMEMBASSY ACCRA 2496
RUEHDS/AMEMBASSY ADDIS ABABA 2619
RUEHRL/AMEMBASSY BERLIN 1112
RUEHBY/AMEMBASSY CANBERRA 1888
RUEHDK/AMEMBASSY DAKAR 2243
RUEHKM/AMEMBASSY KAMPALA 2668
RUEHNR/AMEMBASSY NAIROBI 5096
RHEHAAA/NSC WASHDC
RHMFISS/EUCOM POLAD VAIHINGEN GE
RUEHGV/USMISSION GENEVA 1763
RUZEJAA/JAC MOLESWORTH RAF MOLESWORTH UK
RHEFDIA/DIA WASHDC
RUEAIIA/CIA WASHDC

UNCLAS SECTION 01 OF 03 HARARE 001122 
 
AF/S FOR B. WALCH 
ADDIS ABABA FOR USAU 
ADDIS ABABA FOR ACSS 
NSC FOR SENIOR AFRICA DIRECTOR B.PITTMAN 
TREASURY FOR D. PETERS 
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 12-12-2008 
 
----------- 
¶1.  SUMMARY 
----------- 
 
Topics of the week: 
 
-  PF-ZAPU Revitalizing Party... 
-  MDC Holds Strategy Meeting... 
-  Manyika's Death an Accident?... 
-  ZANU-PF Conference Delayed... 
-  Mugabe Says Cholera Stopped... 
-  Zimbabwe to be Discussed at UNSC... 
-  EU Adds 11 Names to Sanctions List... 
-  Harare Sends Team to Investigate Plot in Botswana... 
-  Government Orders Retailers to Reduce Prices... 
-  New Z$200 Million Note Issued and Cash Withdrawal Limits 
Raised... 
-  Wheat Crop Abysmal; Maize to Follow... 
-  Zimbabwe Introduces Fuel Tax... 
-  Survival of Stockbrokers Threatened... 
-  Fall In Platinum Prices Hits Zimplats... 
 
--------------------------------- 
¶2.  Price Movements-Exchange Rate 
and Selected products 
--------------------------------- 
 
Parallel rate for cash rose seven-fold to Z$70,000,000:US$1 
 
Check rate came down to Z$10 quadrillion:US$1 against inter-bank 
average of Z$226,955:US$1 
 
Bread on the parallel market went up to Z$80,000,000 
 
Sugar rose to Z$100,000,000/2kg 
 
Petrol and diesel rose to Z$100,000,000/liter 
 
----------------------------- 
On the Political/Social Front 
----------------------------- 
 
¶3.  PF-ZAPU Revitalizing Party...  The former liberation party 
PF-ZAPU is holding a conference in Bulawayo on December 13 and 14 to 
establish the party's political structures.  PF-ZAPU declared it was 
breaking away from ZANU-PF in November and has already publicly 
nullified the 1987 Unity Accords that merged the two independence 
parties. See Harare 1115. 
 
¶4.  MDC Holds Strategy Meeting...  The MDC met in Gaborone this week 
to discuss strategy.  Subsequently, MDC negotiators Tendai Biti and 
Elton Mangoma met with South African facilitators to discuss 
Amendment 19.  There have been no discussions on outstanding issues 
such as the equitable distribution of ministries.  See Harare 1117. 
 
¶5.  Manyika's Death an Accident?...  ZANU-PF political commissar 
Elliot Manyika died in a car accident last Saturday when his car 
suffered a blown tire.  In rumor-driven Zimbabwe there is 
considerable speculation that this was not in fact an accident. 
Manyika was close to Emmerson Mnangagwa and was viewed as a 
hardliner who was attempting to reform ZANU-PF party structures in 
support of Mnangagwa.  Perhaps not coincidentally, his two immediate 
predecessors died under similar circumstances.  Border Gezi died on 
April 28, 2001 when his car skidded of the road.  Moven Mahachi died 
on May 26, 2001 when his Range Rover also went off the road. 
 
¶6.  ZANU-PF Conference Delayed...  Party leaders announced that the 
ZANU-PF annual conference scheduled for December 10-14 has been 
 
HARARE 00001122  002 OF 003 
 
 
delayed due to the recent death of Manyika.  The conference is now 
expected to be postponed until December 19.  Despite the party's 
explanation for the delay, there is speculation that a lack of funds 
is the real cause of the postponement. 
 
¶7.  Mugabe Says Cholera Stopped...  In a speech on December 11 
memorializing Manyika's death, Mugabe stated that the cholera 
epidemic had been halted.  Meanwhile, the UN has said that cholera 
fatalities are approaching 800 with numerous undiagnosed deaths 
indicating the actual number likely exceeds 1,000 and rising. 
Mugabe's mistaken or deliberately deceptive statement may have been 
the cause for the denial of visas to a French team of disease 
specialists who had intended to aid in cholera treatments and 
prevention. 
 
¶8.  Zimbabwe to be Discussed at UNSC...  British Prime Minister 
Gordon Brown indicated that he had spoken with UN Secretary General 
Ban Ki-moon who told him that the UNSC could meet as early as 
December 15 to discuss the deteriorating situation in Zimbabwe. 
Brown said that Zimbabwe faced a "humanitarian emergency of colossal 
proportions." 
 
¶9.  EU Adds 11 Names to Sanctions List...  Following a growing 
chorus from world leaders calling for Mugabe to go, the EU added 11 
names to their Zimbabwean sanctions list that freezes assets and 
bars travel to Europe.  The statement also indicated further 
sanctions could be imposed depending on events in Zimbabwe.  The new 
names, described by British foreign secretary David Miliband as 
"middle-ranking members of the regime" were added to 168 others on 
the list. 
 
¶10.  Harare Sends Team to Investigate Plot in Botswana...  For the 
second time in two weeks, Zimbabwe has sent a team of investigators 
into Botswana to uncover evidence of a purported plot to train 
Zimbabwean dissidents and members of the opposition in tactics that 
would lead to the government's overthrow.  Botswanan president Ian 
Khama has been outspoken that the charges were trumped up by ZANU-PF 
and invited SADC to assemble its own investigations team to dispel 
the accusation. 
 
---------------------------------- 
On the Economic and Business Front 
---------------------------------- 
 
¶11.  Government Orders Retailers to Reduce Prices...  The chairman 
of the National Incomes and Prices Commission, Godwills 
Masimirembwa, ordered retailers on December 9 to reduce prices of 
basic commodities to their December 3 levels because the increases 
were "not cost based."  The wave of price increases that coincided 
with the introduction of new higher denomination bank notes last 
week was caused by a fivefold fall in the cash value of the Zimbabwe 
dollar.  It is not yet clear how the order will be enforced in light 
of the empty shelves and public outcry that accompanied enforced 
price controls in July 2007. 
 
¶12.  New Z$200 Million Note Issued and Cash Withdrawal Limits 
Raised...  The Reserve Bank of Zimbabwe introduced a new Z$200 
million (Under US$3 at today's cash rate of Z$70 million:US$1) note 
and increased the weekly cash withdrawal limit to Z$500 million.  In 
anticipation of the increase, lines started forming at banks around 
8 pm on December 11.  Although higher cash withdrawal limits and the 
higher denomination bank notes have previously cut bank lines, the 
effect is temporary as prices quickly rise. 
 
¶13.  Wheat Crop Abysmal; Maize to Follow...  Total production for 
the 2008 wheat crop was 38,933 metric tons (MT) which reflected an 
average yield of 1.2 MT/hectare.  These figures are the lowest 
recorded for wheat production since 1980.  The GOZ has also only 
 
HARARE 00001122  003 OF 003 
 
 
distributed 5,445 MTs of maize seed out of a specified goal of 
12,500 MTs. The humanitarian community distributed an additional 838 
MTs of maize seed and/or fertilizer to about 330,000 households. 
 
¶14.  Zimbabwe Introduces Fuel Tax...  The GOZ introduced a fuel tax 
to raise funds for the Zimbabwe National Road Administration to fund 
road maintenance.  The formula for determining the tax rate is a 
complex function of quantities imported and the invoiced purchase 
and shipping costs when the fuel arrives in Mutare.  The tax will 
increase fuel prices to motorists at a time when world oil prices 
are falling.  In view of the government's widening deficit, there is 
no guarantee that the money will go towards road maintenance. 
 
¶15.  Survival of Stockbrokers Threatened...  There has been no 
recent trading activity on the Zimbabwe Stock Exchange since reserve 
bank governor Gono introduced punitive measures against stockbrokers 
and banks that traded on unfunded checks.  Most stockbrokers are 
busy counting their losses as a number of them were either victims 
of fraudulently drawn bank checks or were affected by the market's 
collapse. 
 
¶16.  Fall In Platinum Prices Hits Zimplats...  Zimplats Holdings 
Limited expects to post a loss for the second half of 2008 because 
of the 65 percent fall in global platinum prices from a peak of 
US$2,300 per ounce in March to US$817 per ounce by December 9, 2008. 
 The company said it would have to borrow in order to complete the 
first phase of the expansion of its Ngezi mine because it failed to 
generate enough cash flow for the project. 
 
----------------- 
Quote of the Week 
----------------- 
 
¶17.  "This is a bad deal: a very bad deal.  I wonder where these 
guys were when they signed this deal.  Perhaps they were in a 
stinking toilet.  But even a stinking toilet stops smelling if you 
stay in it for a long time."  Political analyst John Makumbe on the 
power-sharing agreement. 
 
 
DHANANI