Christina Lamb
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MONEY that is being used to prop up President Robert Mugabe’s brutal regime, keep his military onside and win over voters in the run-up to Zimbabwe’s elections this month is being printed by a German company.
With inflation topping 100,000% and the highest value 10m Zimbabwe dollar note worth just 20p, heavily guarded planeloads of banknotes are flying into Harare almost every day to keep up with the demand.
Documents obtained by The Sunday Times show the Munich company Giesecke & Devrient (G&D) is receiving more than €500,000 (£382,000) a week for delivering bank notes at the astonishing rate of Z$170 trillion a week.
“The regime is surviving by printing money,” said Martin Rupiya, professor of war and security studies at the University of Zimbabwe. “At this stage there is no other way.”
According to a source at the Reserve Bank of Zimbabwe, G&D delivers 432,000 sheets of banknotes every week to Fidelity printers in Harare, where they are stamped with the denomination. Each sheet contains 40 notes and the current production is entirely in Z$10m notes.
Last week some of this money was used to award huge pay rises to the army in an apparent move to buy their loyalty ahead of the presidential and parliamentary elections on March 29. Teachers belonging to a union supportive of the government were also given large sums.
Soldiers received windfalls of between Z$1.2 billion for privates and Z$3 billion for officers, while teachers received Z$500m on average. Those belonging to the Progressive Teachers’ Union of Zimbabwe, which criticises Mugabe, were excluded.
“Mugabe is giving soldiers a lot of money as a way of buying allegiance,” said Raymond Majongwe, the Progressive union’s general secretary. “Mugabe is planning to rig the elections in March because he must win at all costs. He, however, believes that we teachers do not deserve increased salaries because he says we are agents of regime change.”
Last month Z$1 trillion was set aside for managing so-called war veterans “for the purpose of elections”. Mugabe has long used the war vets to intimidate voters.
“G&D are literally bankrolling the regime,” said a Zimbabwean banker who could not be named for fear of reprisals. “These notes are being used to buy votes, to purchase foreign exchange to import electricity and vehicles to keep their regime going, and to fund the import of Chinese water cannons and police equipment to keep us intimidated.
“They are profiting from evil and should be named and shamed.”
G&D’s involvement is embarrassing for the German government which has been one of the most vocal supporters of European Union sanctions against members of the Mugabe regime. Chancellor Angela Merkel has taken a tough stance on Zimbabwe, speaking out at the EU-Africa summit in Lisbon last December to insist that the world cannot stand by while “human rights are trampled underfoot”.
Asked about the company, a German foreign ministry spokesman said: “It’s their economic decision. According to current EU sanctions, the government does not have any legal basis to take action.”
G&D, the world’s second biggest printer of banknotes, is a secretive company. An official at the Dubai office, which oversees its sales to Africa, confirmed that the government of Zimbabwe was a long-standing client but refused to give details. The headquarters in Munich was no more forthcoming. “The printing of banknotes is a very confidential matter,” said Daniela Gaigl, a company spokeswoman. “We don’t comment on any issuing authority.”
The Sunday Times has established that G&D has been printing the country’s notes since the breakaway Rhodesian regime of Ian Smith in the 1970s when Britain declared sanctions. After British officers intercepted a consignment, G&D secretly shipped three machines to set up a printing press in the bowels of the Reserve Bank.
These have since been moved to a heavily guarded facility at Msasa in the industrial area of Harare.
The official value of the Zimbabwe dollar is fixed at 30,000 to the US dollar. But traders, businessmen, fuel vendors and even nationalised companies such as Air Zimbabwe use black market rates to set their prices. Last week, within just seven days, the Zim dollar depreciated from 12m to 24m to the US dollar.
Prices in shops rocketed as traders struggled to make money to cover replacement costs. In a Spar supermarket in central Harare, sardines rose from Z$15m per can on Tuesday to Z$30m on Wednesday while the cost of a single lavatory roll rose from Z$5m to Z$8m.
“We have the world’s first million-dollar banana,” joked one woman shopper.
The economic crisis is not the only reason that the forthcoming elections may be the toughest faced by Mugabe. The president, who turned 84 on February 21 and has been in power since 1980, is facing an unexpected challenge from within his own ruling party, Zanu-PF.
The candidacy of Simba Makoni, his former finance minister, has breathed life into a campaign in which people had been resigned to the likelihood that Mugabe would once again defeat Morgan Tsvangirai, the leader of the main opposition Movement for Democratic Change (MDC).
An MDC faction led by Arthur Mutambara has thrown its support behind Makoni. “Mugabe goes into these elections the weakest he has ever been,” said Gugulethu Moyo, a Zimbabwean lawyer for the International Bar Association. “Makoni’s candidacy has exposed huge fissures in Zanu-PF.”
While Makoni claims to have widespread support within the ruling party, few well-known Zanu-PF figures have publicly expressed support. But yesterday, Dumiso Dabengwa, a senior politburo member, threw his weight behind Makoni. “We urged him to come clean and take the burden and we will give him the necessary facilitation and support,” he told business leaders.
Makoni’s supporters are widely believed to include the powerful former army chief General Solomon Mujuru, whose wife Joyce is Mugabe’s deputy. Zimbabwean media have reported that Mujuru is under surveillance and his companies under investigation.
Some fear that Makoni may divide the opposition. A fourth candidate has also emerged in the form of Langton Towungana, a little-known independent, who is nevertheless receiving widespread coverage on state television.
Few believe the elections will be free and fair. Negotiations to try to achieve this, led by Thabo Mbeki, South Africa’s president, have collapsed.
In an open letter, James McGee, the US ambassador to Zimbabwe, warned of “ominous signs” such as inadequate preparation, voter confusion, registration irregularities and ongoing violence.
Additional reporting: Nicola Smith in Dusseldorf
Making of Makoni
- Simba Makoni, Mugabe’s strongest challenger, knows Britain well; he studied chemistry at Leeds University and Leicester Polytechnic
- Youngest member of Mugabe’s first government in 1980
- Dismissed as chief executive of Zimpapers, which controls the Herald, in 1994 after clashes with editor close to Mugabe
- Reemerged as finance minister in 2000
- Resigned in 2002 after Mugabe refused to devalue currency
- Announced last month he was fighting Mugabe for presidency after weeks of denying it
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If a firm such as G&D are supplying the evil regime is irrelavent. That is for the \german government or the EU to sort out. What needs to happen is that the country is taken by force and would have been if it had oil.
It doesn't and will be left to rot because of it.
Chapjen, Leeds, UK
When will the large international co-operations profiteering from Mugabe's dictactorship be made accountable by any law for supporting, police brutality and torture in Zimbabwe? Who will stop the illegal printing and production of excess cash by Zimbabwe's brutal Dictator President Robert Mugabe, with help from a German company named Giesecke & Devrient (G & D)?
This is quite disturbing as funds and proceeds from this horrible scam are being used by the ruling regime in Zimbabwe to suppress freedom and violate its citizenâs human rights. This is very contradictory from what German Chancellor Angela Merkel said at the European-African summit in Lisbon, She openly condemned the political and economic state of affairs, with regards to continuous and persistent human rights crisis in Zimbabwe. We have no idea if Germany knows for a fact that Mugabe is using this money from Giesecke & Devrient (G & D) to pay for military loyalty and vote buying, by paying large unaccounted salaries to Government employees, the military and police prior to the elections, later this month. The reality is that this money is used to buy real currency on the black market in Zimbabwe, and later used for Military purposes ,as funds to sponsor regimes ruling party Zanu PF militias who terrorize voters during the Presidential and Parliamentary elections scheduled for March 29 - 2008.
Michael Shambambeva, Toronto, Canada
zimbabweans, support simba makoni,plz. for you own good. to hell with those buyable voters,they betray african identity,choose the lesser evil:vote simba,for your own good. let the old man rest,he is a disgrace now for us,plz. be sober,think of the suffering and injustice he is standing for,be responsible,it is your duty.act now,end the dictatorship once and for all.vote in large numbers,invite your exzimbos to come home for the election.now is the chance for you to be counted,do your jobn as a good zimbo citizen!
hubert keinlercher, bulawayo , zimbabwe
Christine is right when she comments that their is no economic model that exists to represent what is happening. When comments are made regarding the shrinking GDP, it is quite clear that the contribution of the informal sector is not being taken into account. Traditionally, the majority of Zimbabweans have earned a living in this informal sector. It is this informal sector that is the main driver of the economy.The innovations that this sector is bringing about are amazing. Lack of commodities such as sugar, cooking oil etc do not mean a thing .Sugar has long being replaced by honey. Bee keeping is now very popular.Cooking oil , baby foods, yoghurt , bread are being prepared using tradtional african methods and ingredients.This is all happening all over Zim. The lack of processed foods in outlets like Spar is quite irrelevant. Traditional methods of bartering for services and goods is on the rise. A cashless society on the horizon perhaps! Maybe cash is not king after all.
.
chenzira, London,
I do not know why pasi naM'dhara, Chegutu is castigating Rusununguko for. Rusununguko is just telling it like it is. It is a fact of life that the rural people have always produced their own food and that their excess produce has always sustained the town folk. Markets like Mbare would be non-existent if it was not for this produce. Surely, pasi naM'dhara should be thanking the rural folk for all this hard work. I do not think that
that Rusununguko is being insensitive when stating that inflation does not affect them. If such folks have food security, why should inflation affect them? As stated by Rusununguko, the rural folks have never had runnuing water, electricity and shops full of food. What is the difference now?
It is also an assumption that commentators like Rusununguko have not been back to Zim for a long time. Some of us have recently been to Zim and are only commenting about what we saw and heard. Let us for once speak the truth about whats really happening in Zim.
chenzira, London,
Words such as "elections", "devalue" and "inflation" mean nothing to a population living on nothing. What good is cash if there is nothing whatsoever to buy in the shops? Those who have lived in Zimbabwe know the "Spar" group of supermarkets are supported by the super rich living off the stinking corruption in Zimbabwe. There is no way the average Zimbabwean can afford to buy anything from there. By comparison it is as ludicrous as forcing a British citizen on benefits to buy their weekly groceries at Waitrose and M&S. Forget all your assumptions and pre-conceptions of what an economy should be. No economic model exists to represent what is happening in Zimbabwe. There is no model of supply and demand...the only law that exists in Zimbabwe is the law of survival. A law that has already begun to putrefy the very social fabric that once knitted the Zimbabwean community so closely together.
Christine, Newark, Nottinghamshire,
@Rusununguko - You obviously havent been to zim in a long time.
"100,000% inflation does not mean anything to rural peopl because they produce their own food "... I bet they are growing sunflowers & 'soap-berry trees' too. Ever heard of division of labour ?Just becuase they are poor doesn't mean they are not affected by inflation. You are very insensitive to the plight of Zimba's.
@Chenzira, if things were good in Zim, a) You wouldn't need a visa to go to the UK, b) You wouldn't _need_ to go to the UK to have a good life at home. And by thankfully, bob won't allow you to vote for him - if you are outside Zim.
Things are getting worse, and the pace is accelerating. I know things are going to be well again in Zim. But it pains me, not knowing how long that will take.
What's the word on Gono, anyway? "Failure is not an option", we were expecting double-digit inflation figures in 2006 - what happened? Maybe they plan to slash 4 zeroes on the oficial inflation figure, so it becomes 10%
pasi naM'dhara, Chegutu, Zimbabwe
Black Zimbabweans were given 11 million hactares by President Mugabe, Land is the most precious resource one can own because it does not depreciate and it"s upto the rural people of Zimbabwe whether to give up what they were allocated or to hold on to it until the end. 100,000% inflation does not mean anything to rural peopl because they produce their own food and their poor anyway and they never had running water, electricity or rural shops full of food. Yes Simba Makoni will split the 30% urban vote that usually vote for the opposition especially in Matebeland, Harare and all towns in Mashonaland will vote for Morgan Tsvangirayi. I am sure Preident Mugabe will able to get 52% of the vote and Mokoni and Tsvangirayi will share the 48%. I am just someone from rural Zimbabwe and I know what I am saying. I agree with Chenzira
Rusununguko, London, UK
the zimbos in uk do you realise that if mugabe goes your life will even be more difficult, no fake asylum claims and the uk dream will be gone all the families we support in zimbo know this and they would rather keep mugabe in power than risk loosing the pound
wise zimbo vote bob
why vote bob, northampton, uk
Why is Simba Makoni associating himself with all these failed politicians like Tekere, Mutambara and Dabengwa? Every Zimbabwean knows that these politicians have been astounding failures. Is it the same Tekere who formed a new party a couple years back to challenge the leadership and failed miserably and had to rejoin the ruling party again?
Makoni's competence and performance in the various portifolios he has held in the past have also been questionable. This does not bode well for his campaign.
The electorate in Zimbabwe do not vote for failure or for policies that do not resonate with their aspirations.
Opposition politicians in Zimbabwe appear not to understand the electorate and thats why the MDC has failed miserably to make any in roads in the Zimbabwean political space.
chenzira, London,
Please leave us alone. Stop lying about us and do not for one moment think that because we vote for Mugabe we are his cronies or are politically daft. We know where our interests lie and historically these have always been parallel to the EU's and America's political and economic interests. And for those who think Muagbe wins by rigging, you probably missed an admission by Gift Chimanikire - senior Tsvangirai aide - in the now defunct Daily Mirro newspaper to the effect that the polls have not been rigged but that the opposition has simply been failing to assume national appeal like Mugabe has done.
Mwoyo Chirandu, Harare, Zimbabwe
Robert's time in power is almost up!!
I predict Simba Makoni will be supported by more and more ZANU heavyweights, including both former Army commanders from the armed struggle, desipating his standing among the much lauded 'war veterans'! Hopefully this will make him realise that it is time for a change and that his people are crying out for it!
Telit Likitiz, London,
One thing that Zimbabwe has that cannot be found in the rest of the world except a bit in Russia is Chromite Ore. You cannot build an oil refinery without using pipe made from alloys containing Chromite compounds.
Fred, Tulsa, OK, USA
I have been hearing about the impending collapse of the regime for 5 years now. Nothing is happening. Maybe the majority of Zimbabweans are actually quite contented with the man they have democratically elected every time? I thought this was what we wanted all along for Africa? I was in Zim a year ago and no one but no one said one bad word about Mugabe. Not one.
GK, Calgary, Canada
If 20p=ZW$50m then it means the Zim govt is spending ZW$16 700trillion to buy ZW$170trillion notes i.e spending ZW$98 to buy ZW$1.
My mind boggles.Just how is it possible for a country with negative forex reserves to be able to pay £382 000 a week to the Germans.Someone is lying somewhere.
But then it is not surprising because everyone is lying about everthing on Zimbabwe.There is no country that suffers more dishonest political commentary than Zimbabwe at the moment.
There is nothing more dishonest that projecting Simba Makoni as an 'above reproach' character.It is dihonesty of high order to choose not to report that Simba Makoni was sacked from his post as SADC Executive Secretary on maldministration charges which he never contested.It is also dishonest to suggest that Simba Makoni is now supported by political heavyweights.There is absolutely no evidence that Arthur Mutambara,Dumiso Dabengwa and Edgar Tekere command any support beyond that of their family members only.
Alton Hadzisa, London, UK
So Germany is allowed to harrass other countries such as Lichtenstein but cannot do anything at all to stop it's own country from propping up a horrendous regime. This just proves beyond any doubt that the E.U. revolves around money.
Rob, Singapore,
Truth is not easy to come by in Zimbabwe because during Mugabe's reign, truth has been discouraged. This election will not be free or fair by any description, not least because the voters have no idea whether Simba Makoni has been planted by ZANU PF or whether he is a true independent. On the other hand Mr Tsvangirai is known to be incapable of government. Mugabe himself has totally and utterly failed, like zero out of ten. So the choice is a very poor choice, hence the lack of freedom and fairness.
Anyone who is Zimbabwean is expectying significant rigging by the Mugabe regime, thus further reducing fairness. The African observers will endorse Mugabe as expected.
Eleanor Chibwe, Harare, Zimbabwe
Lack of knowledge about what is actually happening in Zim is quite evident as reflected by the comments given by people who do not know the country and its people.All that the people of Zimbabwe want is stability, peace,economic, social and political independence and non-interference from outsiders who do not have their interests at heart. Inflation of whatever figure means nothing to the 70% of the crucial electorate who will determine the outcome of this election. This electorate has already experienced extreme hardship and poverty during the liberation struggle and the colonial era. The level of political awareness of the rural people is amazing. They certainly know who their friends are and are also aware of those who are interested in their votes solely for their own personal and vested interests.
chenzira, London,
Ironically, printing money is more likely to hasten Mugabe's downfall by sending inflation into orbit soon after the upcoming elections. News reports already suggest that the lower echelons of the Zanu-PF elite are faced with imminent poverty.
A friend of mine from Chile told me that hyperinflation in that country was brought under control by exporting anything and everything that could be moved. Simply changing the snout at the head of the trough won't help.
@Joe C
The US most certainly has an ambassador in Zim. Until recently, the US ambassador was the outspoken Christopher Dell and he was a constant source of annoyance to Mugabe.
RogerP, Pretoria,
Had Zimbabwe had any oil or gas deposits, Mugabe would already be history, for the sake of freedon and democracy...
RONNIE, PARIS, FRANCE
Why is there an ambassador to Zimbabwe? How can we recognize such a regime?
Joe C, 29 Palms, CA, USA
Simba Makoni is the most serious and positive challenge yet to Mugabe. I met him in Botswana in the early 80s when he was secretary of SADDC and was given a very good impression of an intelligent and sound thinking man.
In my opinion he is one who could possibly pull Zimbabwe out of the mire.
C J Green, Port Alfred, South Africa