As Zimbabwe Talks Collapse, Dollarisation Now Official

The latest Zimbabwe news on the Power-sharing talks: SADC leaders last night gave Robert Mugabe their blessing to form a unilateral government, which will run the country until Morgan Tsvangirai and the MDC decide to join.

The president of South Africa, who is the Chairman of SADC, will announce to a full summit in Johannesburg on Monday that the regional body had no option but to allow Mugabe to form a government and proceed with governing Zimbabwe until such time as the MDC join the government.

What I told you all more than a month ago on this blog has come to pass: SADC has now declared Tsvangirai's MDC to be the stumbling blocks to the implementation of the deal. See my article entitled How SADC and Mugabe Have Boxed-In Morgan Tsvangirai to understand how this can be.

Mugabe told the meeting that he had agreed to all SADC demands and stunned everyone present by producing the documents that Tsvangirai signed during the allocation of ministries last  year, after the Agreement had been signed. These appear to show that Tsvangirai agreed to all other allocations except Home Affairs, and Finance.

This apparently is the reason why SADC have all along been saying that the only ministry that was remaining was that of Home Affairs, after Mugabe handed Finance to the MDC. SADC subsequently ruled that Home Affairs be shared. The South African president rather pointlessly reminded Tsvangirai again at the meeting yesterday that this was a suggestion that had come from the MDC leader himself.

The true final sticking point came after Mugabe told the gathering that he could not reverse the appointments of Governor of the Reserve Bank and Attorney General before Tsvangirai was sworn in. He said that he was sure if he did that, Tsvangirai would still refuse to join and come up with other excuses for not taking part, thereby making the country virtually ungovernable.

Mugabe said that as far as he could see, the MDC had made up their minds not to join and also to make the country ungovernable and reversing the appointments would paralyse the government while Mr Tsvangirai still refused to become Prime Minister.

President Motlanthe said he he did not think that was case and asked Tsvangirai in front of the whole meeting to give the assurance that if these appointments were reversed, he would join government.

Tsvangirai responded that he could not give that undertaking because there were other issues to be finalised. He mentioned the "banditry" charges and the abductions of his supporters as well as the reopening of the allocation of ALL ministries as other issues that needed attention.

President Motlanthe apparently then expressed "surprise", saying that the documents brought in by Mugabe showed Tsvangirai had assented to the allocation to all other ministries except Finance and Home Affairs. These had now been settled in line with requests from Tsvangirai, the South African said.

In any case, the bottom line is that, as I explained to you on this blog in the article: How Mugabe and SADC Have Boxed-In Tsvangirai, the SADC leaders agreed that, as far as the agreement went, ZANU PF had done all that was required of it. Mugabe has been careful to stick to the letter, if not the spirit, of the agreement.

In any case, the position now is that SADC have given Mugabe the go-ahead to form a government without the MDC and to run the country.

Meantime, it has also emerged that the Chairman of the SADC Organ on Defence and politics, King Mswati of Swaziland, is now so set against Tsvangirai that he refused to attend yesterday's meeting despite being called personally by the South African President on the matter.

Mswati also refused to send any emissary to represent him, as suggested by Motlanthe. He rejected a suggestion to send his Prime Minister. In the end, the SADC Chairman, the president of South Africa, drafted in the Deputy Chairman of the Organ in Defence and Politics, President Guebuza of Mozambique.

Mswati is still smarting from Tsvangirai's refusal to go to Swaziland last year, where SADC Heads of State had gathered to hear Zimbabwe's case. The King even suggested that he send his own personal jet to collect Tsvangirai from Harare, but the MDC leader refused to entertain the suggestion. Mswati apparently told Motlathe that Tsvangirai was no longer interested in the government of national unity and wanted instead to overthrow Mugabe by force. 

I think this gives a pointer as to the findings of the Investigation Team from SADC, which is investigating the allegations that Botswana is hosting "bandits and insurgents" from Zimbabwe on behalf of the MDC. The Investigation Team is led by Swaziland.

We should see a government in Zimbabwe by the first week of February. Mugabe has also indicated that he will not be attending the Summit in South Africa on Monday, at which the decision to allow him to go ahead and form a government will be announced by the SADC Chairman.

The SA president has only asked that Mugabe hold off forming the government until that official announcement is made.


All this comes as dollarisation has now virtually become official in Zimbabwe. Yesterday, commercial banks in Zimbabwe started opening individual foreign currency accounts for their clients on a directive from the Reserve Bank of Zimbabwe.

Barclays Bank is asking for a minimum balance of US$200 to open a foreign currency account. The Reserve Bank, however, is expected to announce next week that there will be no minimum balances on current accounts, as is the case with Zimbabwe dollar accounts.

In addition, the Zimbabwe dollar, which has been losing value against the US dollar daily recently, gained marginally yesterday, mostly because of the shortage of Zimbabwe dollar notes. Banks like Barclays were not dispensing money at all to their clients yesterday and on Friday last week, saying they had received nothing from the Reserve Bank.

When Patrick Chinamasa presents the National Budget next week on Thursday, there are going to be some shocks for the people of Zimbabwe. I expect that moves towards dollarisation will be announced then.

In any case, the fact that banks are now opening foreign currency accounts to used in day to day transactions by Zimbabweans points to an official dollarisation of the Zimbabwe economy. Mugabe and Gono are simply waiting now for South Africa to admit the country to the South African Customs Union in order for the move to be cemented.

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