Search

 

Cablegate: Goz Steps Up Arrests of Forex Externalizers

This record is a partial extract of the original cable. The full text of the original cable is not available.

120835Z Nov 04

UNCLAS HARARE 001862

SIPDIS

STATE FOR AF/S
USDOC FOR ROBERT TELCHIN
TREASURY FOR OREN WYCHE-SHAW
PASS USTR FLORIZELLE LISER
STATE PASS USAID FOR MARJORIE COPSON

SENSITIVE

E. O. 12958: N/A
TAGS: ECON ETRD EINV PGOV ZI
SUBJECT: GOZ Steps Up Arrests of Forex Externalizers


Sensitive but unclassified. Not for Internet posting.

1. (SBU) Summary: The GOZ has again been arresting
prominent Zimbabwean businesspersons for sending foreign
exchange offshore. The GOZ appears to believe that these
high profile arrests will deter others from exchanging
forex on the ever-resilient parallel market. End
summary.

2. (SBU) Over the past week, the GOZ has arrested at
least eight leading businesspersons affiliated with
mobile phone operators Econet and Telecel. Among those
detained:

- James Makamba, who has already spent most of the year
behind bars on similar charges. The opposition press has
asserted that Makamba's alleged extramarital liaison with
First Lady Grace Mugabe is the underlying reason for his
arrest.

- Econet CEO Douglas Mboweni, an Embassy contact.

- PG Industries COO Nyasha Zhou, who serves on the Econet
Board of Director but does not oversee the firm's day-to-
day operations. Zhou participated in a U.S. Embassy-
sponsored seminar about hyperinflationary coping tactics
for businesses last year, and serves as Chairman of the
Board of Zambuko Trust, a micro-finance institution and
longstanding USAID partner.

- Jane Mutasa, one of Zimbabwe's top businesswomen and a
member of Telecel's board of directors.

These new inmates join Finance Minister Chris Kuruneri in
detention. The GOZ has held Kuruneri since March and
alleges that he externalized funds to build a beachfront
Cape Town mansion. This week, a local judge denied
Kuruneri bail for the third time.

3. (SBU) Reserve Bank Deputy Governor Charity Dhliwayo,
who oversees exchange control, told us on Monday that the
GOZ still considers the parallel market trading a threat
to the economy and will pursue anyone who trades or sends
abroad forex through these informal channels. In his
October 28 policy statement, Reserve Bank Governor Gideon
Gono said he seeks to "ensure that regulatory provisions
around parallel market dealing are tightened further."

Comment
-------
4. (SBU) The GOZ's approach to monetary policy and
disinflation is largely limited to exchange rate
management. To frighten people and firms from dealing on
the parallel market, the Government has sporadically
arrested high-profile businesspersons. One senior banker
commented that cracking down on businessmen and
corruption is part of the GOZ's demagogic pandering to
the masses to gain popularity in advance of the March
elections. The consensus of Zimbabwean businessmen from
various sectors is that this tactic is resonating with
large numbers of Zimbabweans. At the same time, the
GOZ's selective crackdown against "externalizers," which
includes almost all businessmen, keeps the moneyed elite
off balance and beholden to Mugabe and his favored inner
circle. In terms of economic impact, the GOZ's zealous
enforcement has dampened but not eliminated parallel
trading. Local contacts tell us this week's buy/sell
midpoint for U.S. dollars has been Z$8,700, a forty
percent premium to the official Z$6,200 exchange rate.

Weisenfeld

© Scoop Media

 
 
 
World Headlines

 



Save The Children: Ukraine: 21 Children Killed Or Injured In Horrific Week Of Violence

At least 21 children have been killed or injured in just a week in an uptick of violence across Ukraine, Save the Children said today... More>>


UN: Visionary ‘Blue Transformation’ Strategy To Enhance Underwater Food Systems

Record levels of fisheries and aquaculture production are making a critical contribution to global food security, the UN Ocean Conference under way in Lisbon, Portugal, heard on Wednesday...
More>>
Abu Akleh Shooting: Fatal Shot Came From Israeli Forces, Says OHCHR
Israeli forces were behind the fatal shooting of Al Jazeera journalist Shireen Abu Akleh in the West Bank - not indiscriminate Palestinian firing - the UN human rights office, OHCHR, alleged on Friday... More>>



UN Ocean Conference: Opens With Call For Urgent Action To Tackle Ocean Emergency
With climate change, biodiversity loss and pollution exacting a devastating toll on the world’s ocean — critical to food security, economic growth and the environment... More>>

World Vision: Deeply Concerned For Thousands Affected By Afghanistan Quake
World Vision is deeply concerned about the deteriorating humanitarian situation in Afghanistan in the wake of a powerful earthquake in the early hours of this morning... More>>



Malaysia: UN Experts Welcome Announcement To Abolish Mandatory Death Penalty

UN human rights experts* today commended an announcement made by the Malaysian government that it will abolish the country’s mandatory death penalty and encouraged Parliament to take concrete steps to pass the agreement into law... More>>