GilbertMakore's Blog

I took my first deep dive into data from the Auditor General’s reports in 2013. I was working with a colleague on a research project to pry into the goings on at the Marange diamond fields. To say I was shocked is an understatement. Here lay before us a real treasure trove of information and data. The reports we looked at then gave an account of the poor corporate governance and downright brazen corruption at state owned enterprises such as the Zimbabwe Mining Development Corporation (ZMDC). I remember the excitement I had; I pored through those reports with disbelief.

 

AG

A quasi-independent ‘government agency’ was doing such a great job exposing rot in state owned enterprise. Auditor General Reports are quite voluminous but surprisingly they are part fun (and of course part infuriating and sad). In the 2014 report on State Enterprises, the auditor general noted that;

The Chairman of the Mining Development Board (Godwills Masimirembwa- former ZANU PF Harare Province Chair and CMED Chair) retired from the Mining Development Board on June 30, 2013 and was paid US$ 261 000 as gratuity for his three and half years service on the board which is in contravention of the best principles of corporate governance which state that non-executive directors shall not receive excessive payments on contract termination. The gratuity payment was also not taxed in contravention of the Income Tax Act [Chapter 23:06] 13th schedule which states that any amount paid or payable to any person by way of gratuity constitutes gross income and should be treated as gross income and taxed under the Pay As You Earn ‘PAYE’ system.

The auditor general then recommended that ZMDC should consider a remuneration policy which is in line with Corporate Governance Practices and should comply with the Income Tax Act. SOEs are given a right of response in the reply and ZMDC in its response said;

The Corporation will adhere to the best principles of Corporate Governance and comply with the Income Tax Act. The Corporation will remit the PAYE on the gratuity in July 2014.

But hold on. Mildred Chiri and team were not satisfied with the response as it essentially meant tax-payers would bear the burden. In other words, Godwills Masimirembwa should pay his own PAYE as we all do. ZMDC should not do that for him. The Auditor then noted that;

By paying the PAYE in 2014 the Corporation utilises its resources, of which it should have withheld the PAYE through the system.

This initial research resulted in a report we titled Tracking the Trends: An Analysis of Diamond Mining Tax Contributions’ and also led us to another research project where we were looking at current disclosure practices in Zimbabwe’s mining sector. We sought to assess the extent to which the private sector, government and quasi independent institutions proactively disclose information relating to Zimbabwe’s mining sector.

As part of that research we wrote a bunch of letters to various government departments, Zimstats, Minerals Marketing Corporation of Zimbabwe, ZMDC and others. We also wrote to the Auditor General requesting a couple of reports. We already had most of these reports but were interested in testing the institution’s responsiveness.  And this is when I got newfound respect for that office and the work that Mildred Chiri was leading.

We got a response to our letter within 2 days of having delivered it. I remember getting an email and a call from the OAG’s office acknowledging our letter and requesting that we visit the office for a short meeting and to pick up the requested reports.

To be clear, when we wrote these letters, we were working for a local NGO but we intentionally did not mention the institutions we were affiliated to and the reasons why we had made our request. The idea was to request for information as ordinary citizens.

When we got to the office, all the reports we had requested had been put together. The courteousness on display and to which we were treated has stuck with me, three years on. We were casually asked why we wanted those reports and we mentioned that we were just interested in the work of the OAG office as citizens and that was good enough.

I distinctly remember that Valentine’s Day (14 February 2015) was around the corner post our meeting with the OAG’s office. We mooted the idea of sending the OAG flowers to show our appreciation of her and her team’s consistently sterling work. For no reason at all, we unfortunately did not go ahead with that plan.

What set Mildred Chiri apart, in my eyes, was how unassuming she was. She was not loud or boisterous. I would wager that more have gone through her reports than have heard her speak. She assembled such a great team and managed to keep those ‘civil servants’ motivated. You do not produce such reports year in year out on the back of so little resources without having and leading a great team.

Through the years, I have always pondered though- why didn’t she quit? She surely must have been frustrated. You produce good and factual reports that have clear indications for action; and those that have the authority to address concerns raised equally consistently ignore them. In my imagination, I think she stayed because she felt she had a moral duty to continue exposing rot. Sometimes you just have to do the right thing because it is the right thing.

I do not know the clear circumstances surrounding her departure and even the Finance Minister seems confused and appears to have bungled the dismissal or whatever they are calling it. What I am pretty certain of is that her team will miss her, I will miss her and the nation will miss her. She was one of the good ones. Working in the muck but keeping her head high and doing the best she could. People often say we should build institutions and not focus on individuals. True. But individuals are important to. You can have the best institutions and systems and still have that individual- ask the Americans. For once I choose to focus on her, the individual. I choose to celebrate her and hold her up as a hero to my kids. Maybe, soon, I will find a way to give her those flowers she so deserves.

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pomona

Photo cred: The Herald

5 November 2016. Smoke billowed from the Pomona dumpsite for days on end. But recall, it had done the same in October 2013.

The roads around Pomona and Mount Pleasant became treacherous, particularly at night when visibility became so poor.

The Mayor of Harare took a helicopter ride ostensibly to see extent of the fire.

We spent days, or was it weeks, with windows and doors completely shut.

We inhaled, coughed and wheezed.

We prayed for the rain. The rains eventually fell and gave much needed respite. But not before people fell ill.

And so the smoke stopped.

The show moved on.

No report from Harare City Council on  how to make sure it does not happen again.

Now onto the next tragedy- Typhoid

Rinse and Repeat.

Rinse and Repeat.

  1. Gold will continue to do well. The country is likely to breach 20 tonnes once again as the RBZ continues its drive to mop up ASM gold through increased monitoring and improving market access (‘ no questions asked’ policy). There might not be a significant increase in gold deliveries if the liquidity crisis does not ease. Deliveries are likely to plateau- discouraged by failure of FPR to pay hard currency but evened off by miners who may still want some of the 5% export incentive. Alluvial gold mining in Gache Gache by Zimbabwe Diamond Mining Company might result in a significant increase. Either way, gold is the one to watch.
  2. Platinum is also likely to keep doing well. The major companies- Unki, Mimosa and Zimplats are established companies and have expansion plans. Barring a huge fall in commodity prices (one that cannot be shored up by increasing production, as previously done), the sector will continue to do well.
  3. The Mines and Minerals Amendment Bill– It is likely that Parliament might fail to pass the Bill in its current form in 2017. This would follow the trend- with Parliament expressing concern around the Minerals  Exploration and Marketing Corporation Bill (gazetted in December 2015 and still to be passed). If Mines Amendment  Bill gets to the 3rd Quarter without much movement, it is likely it might be shelved. Legal reform and policy making often gets significantly gridlocked towards elections. The Bill might be potentially fast-tracked id re-engagement of IFIs is brought back on track. This might also see some reforms, however minor, on diamond mining.
  4. A new mining fiscal regime– after much talk- this might eventually see light of day towards the end of 2017. It might have some rationalization on taxes and fees. It might result in government take increasing. It is difficult to imagine what this might look like as there has been very little information given out by the Minister of Finance and Economic Development on this thus far. What is beyond doubt is that- it is highly unlikely that it would result in the reduction of the effective tax rate of mining companies. Government needs money.
  5. Value addition and beneficiation– There might not be much movement here particularly in the platinum sector. The government of Zimbabwe does not have a well thought out value addition and beneficiation strategy that includes analysis of feed-stocks, infrastructure capacity and markets. What the government has is the threat of the 15% export tax on exports of raw platinum. This tax has been deferred to 2018. The platinum mining companies will do just enough to demonstrate that beneficiation is still on their agenda while advocating for further deferments of the tax come November/December 2017 when the National Budget is presented. This could include completion of a small smelter at Unki Mines for example.
  6. Diamonds– The new consolidated company, the Zimbabwe Consolidated Diamond Mining Company, will not do much. Dogged by the legal battles (which are unlikely to be resolved in 2017) surrounding the consolidation, it is unlikely that there will be improved production. There should be considerable monitoring of the company though. Everyone says there is nothing coming from the diamond fields and attention has shifted when it should not. However, ZCDC simply cannot attract the much needed investment in the sector. It is blighted by the legal and contractual disputes. There might be some compromise- the government might ease its stance or make some major concessions on consolidation in desperation to get Marange ticking again.
  7. Exploration– there are unlikely to be any significant new projects besides some very minimum movement on the Russia-Zimbabwe Great Dyke Platinum project, coal bed methane and lithium. The macro-economic conditions have not improved and are unlikely to improve during the course of 2017. There are no incentives for exploration. Government’s intended expropriation of land belonging to Zimplats will only serve to reinforce anxiety around property rights in the sector.
  8. Transparency and accountability– listed companies will continue to make significant disclosure- through their integrated annual reports and management updates. Where transparency is needed most-bar the issues around tax and illicit financial flows- is with respect to State owned enterprises. Nothing will change. What may be continuously held up as addressing transparency and accountability is the proposed consolidation of diamond mining companies and the establishment of a new mining fiscal regime. I also do not see the mining cadastre coming online in 2017.
  9. State owned enterprises/JVs– the Zimbabwe Mining Development Corporation, the Minerals Marketing Corporation of Zimbabwe, Hwange Colliery and the Zimbabwe Consolidated Diamond Mining Company will continue to be financial sink-holes due to poor management and under-capitalization.
  10. Sovereign Wealth Fund– this is not going to be operational. It is supposed to be funded by a percentage drawn from mining royalties. It is hard to imagine that it is a priority when the government can barely meet its wage obligations. The 2016 National Budget allocated $500 000 to kick start the operations of the Fund and a Board was subsequently put in place. But there has not been any news with respect to this. Frankly, from government’s perspective and in the scheme of things- the SWF is just a ‘nice to have’.
  11. Indigenization and Economic Empowerment– Ambiguity around this will persist. The Presidential Statement clarifying the implementation framework of this law was not conclusive. If the re-engagement of IFIs fails to get back on track and is totally abandoned then rhetoric around ownership and indigenization might pick up again during the course of the year.

Halo-

noun

-a circle of light shown around or above the head of a saint or holy person to represent their holiness

Econet has long fashioned its story as that of the underdog. The small pesky little company that came against the government’s full might. The small up-start that fights in the corner of the ordinary citizen. The start up that upended a staid industry. A truly successful Zimbabwean company that has grown into a global innovative juggernaut all the the while maintaining its ability to do good by its customers.

I have been a loyal Econet customer for years. I have never owned a Netone or Telecel sim. I will continue being a loyal Econet customer (ZOL is awesome and Econet does innovate). Its difficult to escape the company’s tentacles- ZOL, Ecocash, Steward Bank, Mutare Bottling Company, Liquid Telecom.  But lets face it- the halo is gone. After the floor price #datamustfall debacle- that veneer of a company that makes profit while doing good is now truly wearing off.

Personally, this descent (perceived perhaps only by my eyes) began in July 2016 when on the day a stay-away was called – we woke up to a social media shut-down. No explanation from NetOne or Telecel (Ok, thats to be expected). No explanation from Econet.

But remember, Econet is the company that’s not afraid of governments. Its the company that is supposed to do what is always right even when it costs, moreso when it costs. Its the company that stands for truth, for justice.  Strike One.

The whole floor price #datamustfall debacle only reinforces my thinking. Here’s the situation according to Econet;

  • The Minister of ICT and the government owned telcos played us (Econet) on the floor price issue
  • We, Econet, screwed you because the government screwed us and made us pay our full licence fee and owes us lots of money
  • But dont focus on us screwing you because we were ‘forced to screw you’ by the Minister.He is the bad guy

Strike two.

Remember when Steward Bank and Econet raided the office of the online publication- The Source?

I have reconciled myself to the fact that Econet will screw us repeatedly in the future. It is no longer that company. Do not be under any illusion. Econet will now do anything to stay in business (to recoup its licence fee, to maintain its licence, to make a profit, to ostensibly ensure thousands of employees do not lose their jobs). In my mind, its not beyond Econet to;

  • Fund the excesses of government, fund a political party or pay a bribe;
  • Give government customer data (social media protestors be warned). Remember- hey, we screwed you, but its because the government screwed us and the playing field is not level
  • To shut down social media because the government asked it too. Because licence fee, because licence, because employees, because jobs, because orphans.
  • Charge you so much for data and voice that blood comes out of your eyes. Because licence fee, because playing field, because Minister played us.

 

The halo is gone.

  1. Command Agriculture! This command agriculture is different. We will feed ourselves.
  2. We have started work on the Harare- Beit bridge road
  3. STEM. Enough said.
  4. SI64- they all said it would not work. Now we have chompkins, spuds and chipsticks. Industry will boom. Very shortly.
  5. Bond Notes- we have stopped capital flight and money laundering. We have not triggered hyper-inflation and we have been transparent.
  6. We have a new airport at Vic-Falls!!
  7. We established the Sovereign Wealth Fund and put in place a board. We wills tart putting money into this soon.
  8. When last did we have serious power cuts in Harare?
  9. NSSA established NBS to ensure that civil servants can access housing
  10. Peri-urban land is being given to the youths
  11. We are supporting artisanal miners and gold deliveries are on the increase
  12. Those companies that stole $15B from us? Gone!! We will mine diamonds by ourselves. After we are done with the court cases of course.
  13. Air Zimbabwe is on the cusp of a massive turn-around given recent sterling appointments
  14. We are scouting for investors for ZISCO-Steel and are very close to tying up a deal
  15. We are scouting for investors in NRZ and are very close to tying up a deal
  16. We are scouting for investors in CSC and are very close to tying up a deal
  17. We are not tolerating corruption! No sacred cows. Even Ministers are being investigated
  18. We have allowed protests- when they are peaceful. And ZEC is engaging everyone on electoral reform.
  19. The IMF, the World Bank- they will give us money soon. We are on the economic reform programme
  20. We are crafting a diaspora engagement policy/framework.
  21. We allowed public debate among Ministers on the Indigenization and Economic Empowerment Programme. And the President clarified the Programme. Now we implement!

Come 2018, don’t say ZIMASSET yielded nothing.

Based on ongoing and closer analysis, I would like to add my voice to the national and, indeed, International debate on #ThisFlag and whether or not it will be a success. I am currently in Harare, Zimbabwe and therefore have the vantage point of being closer to the action than most analysts.
#ThisFlag will fail because the movement or platform does not have a clear and concisely written Proposal. The movement also does not have a logical framework and no theory of change. Resultantly it is very difficult to understand; the ultimate goal/purpose; the intermediate outcomes, the outputs and even the inputs. It is not clear if whether or not the movement has achieved its objectives already. This will make it difficult to do an effective mid-term and or end –term evaluation.
The fuzziness of the movement’s objectives is not made any better by the fact that no baseline was conducted. How will the movement track progress against milestones when no baseline was conducted? The movement is also not clear on whether or not it will produce knowledge products or compendiums. The communication and advocacy strategy is not clear. While it is good that the movement got airtime on ZiFM and now on international news networks, this has not been well structured. The movement did not send a movement delegation to the recent AU Summit in Kigali.
The movement does not have a clear organizational structure. It is not clear if Pastor Evan Mawarire sits in the Board (if there is a Board) or if he is the Executive Director (if there is a Secretariat) or if he is the Spokesperson or if he is all those rolled into one. This movement seems like a briefcase NGO. It is not clear who initiatied #ThisFlag events in Cape Town, Johannesburg, Nottingham, London, Leeds, Washington DC, Perth and Vancouver when the movement does not have any regional structures, offices and representatives.
The face of the movement, Pastor Evan Mawarire also does not have a clear track record in activism and civil society work. This possibly explains why there have been no workshops, national dialogue conferences and seminars to interrogate, in-depth, the issues of corruption, poverty and injustice.
I recommend, as a matter of urgency
1. A change of name from #ThisFlag to something that can be formulated into an acronym
2. A Baseline Survey
3. A Proposal (along with a clear Theory of Change, a logical framework and outcomes mapping doc)
4. A Communications and Advocacy Strategy
5. A Monitoring, Evaluation Strategy
6. The recruitment of a Monitoring, Evaluation , Accountability and Learning Officer (MEAL Officer)
7. Organizational development for the Board and Secretariat
8. That they consider setting up national and regional offices
9. That the leader, Pastor Evan, go back to school and explore courses such as Development Studies, International Relations etc

I often read my daughter a bedtime story. She absolutely loves it. The one thing that easily puts my daughter to sleep is me picking up a good book and reading for her.

One day I had tucked her in already when I realised there wasn’t a book close by. I then decided to tell her a story from my head. Not a story I have heard before. Not a story I have read before. A new story. One I would make up right there and then.

It was agonising in a fun way and she absolutely loved it. The next night she asked that she tells a story ‘from my head daddy’. It was a messy and crazy story but it was fun.

I got to realise that I had, very slowly and almost imperceptibly,  lost the art of story-telling.

It reminded me of when I spent a couple of months living in Anchorage, Alaska in the USA. My hosts and friends in Alaska introduced me to a show called ‘The Arctic Entries ‘.

The organisers of this show would have themes for stories. December 2015 themes included ‘ Oops! Stories of Mistakes, Lucky Breaks, and Narrow Escapes‘ and ‘Talk to the Hand: Stories of Taking a Stand, Getting Scorned, and Doing It Your Way‘. The show would approach people or ask people to propose participants to tell their based stories on-stage. It was such a fun and amazing experience.

I think I might convene such a show at some point in the future. Meanwhile, let me challenge you today -try making up a story that actually makes sense, is engaging and fun. You will fall over yourself but you’ll enjoy it.

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