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Cablegate: Zim Notes 02-22-2008

VZCZCXRO4555
RR RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN
DE RUEHSB #0144/01 0530943
ZNR UUUUU ZZH
R 220943Z FEB 08
FM AMEMBASSY HARARE
TO RUEHC/SECSTATE WASHDC 2509
RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE
RUEHUJA/AMEMBASSY ABUJA 1856
RUEHAR/AMEMBASSY ACCRA 1787
RUEHDS/AMEMBASSY ADDIS ABABA 1913
RUEHRL/AMEMBASSY BERLIN 0492
RUEHBY/AMEMBASSY CANBERRA 1190
RUEHDK/AMEMBASSY DAKAR 1547
RUEHKM/AMEMBASSY KAMPALA 1969
RUEHNR/AMEMBASSY NAIROBI 4400
RHEHAAA/NSC WASHDC
RHMFISS/EUCOM POLAD VAIHINGEN GE
RUEHGV/USMISSION GENEVA 1040
RUFOADA/JAC MOLESWORTH RAF MOLESWORTH UK
RHEFDIA/DIA WASHDC

UNCLAS SECTION 01 OF 03 HARARE 000144

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 02-22-2008


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$14million:US$1;
Bank transfer rate: Z$18million;
Official rate: ZW$$30,000:US$1
Sugar rose to Z$19million/2kg vs. controlled price of
Z$8million/2kg
Cooking oil steady at Z$20million/750ml vs. controlled price of
Z$9.3million/750ml
Petrol inched up to Z$12million/liter and diesel is steady at
Z$10million/liter vs. controlled price of Z$60,000/liter

-----------------------------
On the Political/Social Front
-----------------------------

3. Nomination Courts Meet for March 29 Elections... Nomination
courts met on February 15 to accept nominating petitions for the
March 29 elections. There are four candidates for president:
Robert Mugabe, Morgan Tsvangirai, Simba Makoni, and a political
unknown, Langton Toungana. If no candidate receives more than 50
percent of the vote, a runoff will take place within 21 days of
March 29. There are 730 candidates for 210 House of Assembly Seats
and 60 Senate seats. (60 Senators are regularly elected; there are
33 additional Senators: 10 are provincial governors appointed by the
president, the president and deputy president of the Council of
Chiefs fill two positions, 16 are chiefs elected by special
provincial electoral colleges, and two are selected by the
president.) There are also 1,958 candidates for 57 rural councils
and 28 urban councils. Unlike the presidential election,
Parliamentary (Senate and House of Assembly) and rural and urban
council elections are decided by plurality.

4. The nominations revealed signs of potential trouble for
ZANU-PF... Several party members, including Finance Minister Samuel
Mumbengegwi, who were defeated in party primaries, registered as
ZANU-PF candidates to oppose the party's official candidate. In
Matabeleland, several prominent party members thought to be covert
supporters of Makoni, including vice-president Joseph Msika, House
of Assembly president John Nkomo, and Dumiso Dabengwa did not
register as candidates. And about 70 individuals, presumably Makoni
supporters, registered as independent candidates.

5. Mugabe Celebrates 84th Birthday... The February 21 issue of The
Herald was a 44-page bumper issue including two eight-page
supplements commemorating President Mugabe's 84th birthday and
replete with congratulatory messages, mostly from ministries and
struggling parastatals. In comparison, the previous day's issue had
only 24 pages. Recently, government-owned Zimbabwe Newspapers
announced a reduction in the size of its newspapers due to a
shortage of newsprint.

6. On February 22, The Herald used an interview on the occasion of
Mugabe's birthday as the basis of a banner headline, "President
blasts Makoni...calls him a political prostitute."

7. ZANU-PF Youths Assault Members Of The Progressive Teachers'
Union of Zimbabwe (PTUZ)... Nine PTUZ members were abducted in
Harare on February 19 while distributing fliers for their "Save our
Education" campaign. The teachers were taken inside the nearby
ZANU-PF provincial headquarters and assaulted by five unidentified
youths with clenched fists, iron rods, booted feet, and sticks. A
female teacher was reportedly stripped naked. The victims'

HARARE 00000144 002 OF 003


attorney, Tafadzwa Mugabe, told us the group was rescued by the
police after an anonymous call, but then charged with unlawfully
distributing fliers and placards in a public place. Some of the
victims have been discharged from hospital and they may not be
charged according to Mugabe. He said the police have apprehended
two of the five assailants.

8. VOA Correspondent Detained Covering Anglican Church Dispute...
Riot police detained VOA correspondent Fazila Mahommed on February
17 allegedly for failing to identify herself adequately while she
was covering developments at Harare's Anglican Cathedral of St. Mary
and All Saints. She was later released after the police confiscated
her recorder. The Cathedral is at the center of a vicious feud
between followers of former Bishop Nolbert Kunonga and Bishop
Sebastian Bakare. Kunonga, an ally of President Mugabe, lost his
priestly license after illegally separating from the Church in
December. The Anglican Province of Central Africa appointed Bakare
to replace him, and Kanonga promptly took the case to court.
Pending legal resolution, the High Court has ordered Kanonga to
share the Church premises with Bishop Sebastian Bakare. Violence
occurred on Sunday when Kanonga refused entry to Bakare and his
followers.

9. EU Renews Targeted Sanctions... The EU has renewed sanctions
targeted against President Mugabe and his inner circle of government
ministers, family members, ZANU-PF members, and quasi-government
body heads until the 19th of February 2009. Key ruling-party figures
may not travel to Europe and are subject to an asset freeze.

--------------------------
Economic and Business News
--------------------------

10. Zimbabwe Dollar In Free Fall... The local currency continues
to fall precipitously on the parallel market on the back of
increased demand for foreign exchange. The Zimbabwe dollar has lost
over half its value in the past 10 days. The bank transfer rate has
shot as high as Z$20 million:US$ for large sums. The RBZ appears to
have re-entered the market in the search of foreign exchange to fund
vital imports and other expenditures. We foresee no letup in the
slide as export receipts fall far short of forex demand, and
external support is unavailable.

11. Official Inflation Figure Cracks 100,000 percent... For the
third time in three weeks the Central Statistical Office (CSO)
announced official inflation figures, once again breaking last
year's pattern of silence on the cost of living. It reported a
year-on-year inflation rate for the month of January of 100,580.2
percent, up from the December rate of 66,212.3 percent.

12. Price Hikes Erode Incomes... The Herald reported this week
that the National Incomes and Pricing Commission (NIPC) has
increased prices of basic commodities by over 2,000 percent since
the New Year, but salaries have remained unchanged. Although
official figures are yet to be published, the Poverty Datum Line
(threshold for keeping a family of five afloat) is estimated at over
Z$300 million while the minimum monthly wage is still Z$35 million.
Most workers are earning less than Z$100 million a month, according
to the government newspaper.

13. Zimbabwe Registers Trade Deficit With U.S.... Zimbabwe slipped
into a trade deficit with the U.S. for the first time in a decade,
importing US$105.2 million and exporting US$71.8 million worth of
goods to the U.S. in 2007. Bilateral trade volume continued its
rising pattern of the past several years, increasing to US$177
million, up from US$98.3 million in 2003.

14. Grain Marketing Board (GMB) Ventures Into Dog Food... The
Financial Gazette reported that as millers battle to secure grain
from the GMB to produce Zimbabwe's staple mealie meal (maize flour),

HARARE 00000144 003 OF 003


the parastatal has come up with "Doggy's Delight," a new maize-flour
based dog food for export to generate foreign exchange earnings.

15. Corrigendum... As sharply as prices are rising here, the
official price of a 10kg bag of mealie meal nevertheless rose "only"
to Z$9.6 million last week from Z$189,000 - not to Z$19.2 million as
we mistakenly reported in last week's issue.

MCGEE

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