News / National
Obert Mpofu, Masimirembwa, strange bedfellows
28 Jun 2014 at 16:26hrs | Views
THE darkest hour in the uneasy relationship between government and business was reached during hyperinflation in 2007, when the National Incomes and Pricing Commission (NIPC) was established to enforce price controls that crippled industries. Charging viable prices turned into a crime as government, through the NIPC pushed struggling firms to the brink, deploying police to raid shops and arrest defiant executives, even as inflation galloped to a record of 500 billion percent in 2008.
Over 23 000 business managers and executives were arrested for allegedly attempting to incite public anger against government by making people's lives extremely difficult through price hikes. The man propelled into the hot seat by industry and international trade minister at the time, Obert Mpofu, was Godwills Masimirembwa, who was appointed NIPC chairman.
Cowed into submission, supermarket owners maintained prices at uneconomic levels, but soon found themselves unable to replenish dwindling stocks, leaving shelves empty and a stranded population grappling for basics on the black market. Government ignored advice about the implications of an all powerful pricing body. The Zimbabwe National Chamber of Commerce had warned in 2007 the NIPC Bill, which was in the process of being made into an Act, was "counterproductive to foreign investment".
But it was equally bad even to domestic investment. The advice fell on deaf ears, and government nonetheless passed the legislation, resulting in the creation of the NIPC. On his appointment, Masimirembwa fought to accomplish the assignment at hand, leading to a blossoming relationship with Mpofu, with whom he seemed to share a common belief that populist policies were the solution to a pricing crisis.
After the NIPC's interventions had already inflicted tremendous damage to the economy, with over 40 000 losing jobs in mines, over 1 500 companies closed, banks on their knees and three million Zimbabweans having fled the crisis to other countries; government, as an afterthought, accepted liberal polices in 2009. The defenceless Zimbabwe dollar, then trading at ZW$3,5 trillion to US$1, was ditched and replaced by multiple currencies, rendering the NIPC, which however still exists, irrelevant.
Today, it is largely a white elephant draining State funds for nothing. With the NIPC era gone, many thought they had seen the last of Masimirembwa, who had unsuccessfully fought to be re-registered as a practising lawyer by the Zimbabwe Law Society. They were wrong.
Mpofu, who retained a Cabinet post in the power-sharing government between ZANU-PF and two Movement for Democratic Change formations, and was re-assigned to the influential Mines and Mining Development ministerial, brought him back, this time to a new State body, the Zimbabwe Mining Development Corporation (ZMDC).
The ZMDC was given a mandate to ensure that the mining sector led economic recovery. Gold mines had collapsed, SMM Holdings' key asbestos mines had closed under the weight of excessive State interference, offloading 3 000 jobs. The ZMDC was being re-positioned to take over 50 percent shareholding in each of the diamond mines in Marange diamond fields, resuscitate the asbestos outfits, and rebuild its own struggling gold mines.
Government was battling to arrest alleged impropriety in the gems industry where millions were being unaccounted for. And a strong team was required to drive ZMDC. Mpofu turned to Masimirembwa, whom he gave the mantle to take leadership of the process as ZMDC chairman. "What people don't know is that Masimirembwa impressed Mpofu while at the NIPC," said a ZMDC official.
"He was an instruction taker who rarely questioned the minister," he said.
Takunda Mugaga, head of research at Econometer Global Capital agreed.
"Ministers have soft spots for certain individuals," he said. "This is everywhere, even when Presidents appoint their Cabinets; there are certain people you know will get appointments," Mugaga said. This is the problem that has dragged Zimbabwe into the situation it finds itself in today.
At ZMDC, a 2013 parliamentary report questioned how the mining firm was being managed. "The committee noted with concern the manner and the type of people who were being appointed to serve on ZMDC's subsidiary companies…board appointments to ZMDC's subsidiary companies were being made by the Minister of Mines, in clear violation of the ZMDC Act," the report said.
When Zimbabwe held its elections on July 31, 2013, Masimirembwa resigned from his position as ZMDC chairman, in line with a government proclamation that all those on State institutions intending to contest in the elections had to resign. He contested for a Parliamentary seat in Mabvuku, but lost. Then he received a public lashing from President Robert Mugabe that everyone thought would spell his doom.
President Mugabe accused Masimirembwa corruption involving a US$6 million bribe from a Ghanaian diamonds investor who wanted diamond claims in Marange. Mugabe demanded swift police action against Masimirembwa charging: "Come on, we can't have that in our country. That n*ked corruption, no!" But Masimirembwa quietly wriggled himself out of a potential criminal investigation, even arrest.
In fact, the pendulum surprisingly swung the other way: The top brass within the police insisted it was in fact the Ghanaians who should be prosecuted, arguing they had embarked on illegal deals, including trading in gold, when they were in the country. Many Zimbabweans still thought Masimirembwa would not rise again from the President's attack, despite having survived the threat of incarceration.
But Mpofu, now Transport, Communications and Infrastructure Development Minister, gave him an unexpected lifeline. He, this month, appointed Masimirembwa chairman of CMED (Private) Limited, a State firm that manages and fuel facilities for mostly government departments.
The appointment was apparently endorsed by President Mugabe, who approves all appointments to key parastatals by his ministers. Rashweat Mukundu, a Harare-based analyst, said the appointment was inappropriate. "This is a case of jobs for the boys," he says.
"Government is equally telling citizens to go to hell by appointing questionable characters to its State enterprises' boards."
Over 23 000 business managers and executives were arrested for allegedly attempting to incite public anger against government by making people's lives extremely difficult through price hikes. The man propelled into the hot seat by industry and international trade minister at the time, Obert Mpofu, was Godwills Masimirembwa, who was appointed NIPC chairman.
Cowed into submission, supermarket owners maintained prices at uneconomic levels, but soon found themselves unable to replenish dwindling stocks, leaving shelves empty and a stranded population grappling for basics on the black market. Government ignored advice about the implications of an all powerful pricing body. The Zimbabwe National Chamber of Commerce had warned in 2007 the NIPC Bill, which was in the process of being made into an Act, was "counterproductive to foreign investment".
But it was equally bad even to domestic investment. The advice fell on deaf ears, and government nonetheless passed the legislation, resulting in the creation of the NIPC. On his appointment, Masimirembwa fought to accomplish the assignment at hand, leading to a blossoming relationship with Mpofu, with whom he seemed to share a common belief that populist policies were the solution to a pricing crisis.
After the NIPC's interventions had already inflicted tremendous damage to the economy, with over 40 000 losing jobs in mines, over 1 500 companies closed, banks on their knees and three million Zimbabweans having fled the crisis to other countries; government, as an afterthought, accepted liberal polices in 2009. The defenceless Zimbabwe dollar, then trading at ZW$3,5 trillion to US$1, was ditched and replaced by multiple currencies, rendering the NIPC, which however still exists, irrelevant.
Today, it is largely a white elephant draining State funds for nothing. With the NIPC era gone, many thought they had seen the last of Masimirembwa, who had unsuccessfully fought to be re-registered as a practising lawyer by the Zimbabwe Law Society. They were wrong.
Mpofu, who retained a Cabinet post in the power-sharing government between ZANU-PF and two Movement for Democratic Change formations, and was re-assigned to the influential Mines and Mining Development ministerial, brought him back, this time to a new State body, the Zimbabwe Mining Development Corporation (ZMDC).
The ZMDC was given a mandate to ensure that the mining sector led economic recovery. Gold mines had collapsed, SMM Holdings' key asbestos mines had closed under the weight of excessive State interference, offloading 3 000 jobs. The ZMDC was being re-positioned to take over 50 percent shareholding in each of the diamond mines in Marange diamond fields, resuscitate the asbestos outfits, and rebuild its own struggling gold mines.
Government was battling to arrest alleged impropriety in the gems industry where millions were being unaccounted for. And a strong team was required to drive ZMDC. Mpofu turned to Masimirembwa, whom he gave the mantle to take leadership of the process as ZMDC chairman. "What people don't know is that Masimirembwa impressed Mpofu while at the NIPC," said a ZMDC official.
"He was an instruction taker who rarely questioned the minister," he said.
Takunda Mugaga, head of research at Econometer Global Capital agreed.
"Ministers have soft spots for certain individuals," he said. "This is everywhere, even when Presidents appoint their Cabinets; there are certain people you know will get appointments," Mugaga said. This is the problem that has dragged Zimbabwe into the situation it finds itself in today.
At ZMDC, a 2013 parliamentary report questioned how the mining firm was being managed. "The committee noted with concern the manner and the type of people who were being appointed to serve on ZMDC's subsidiary companies…board appointments to ZMDC's subsidiary companies were being made by the Minister of Mines, in clear violation of the ZMDC Act," the report said.
When Zimbabwe held its elections on July 31, 2013, Masimirembwa resigned from his position as ZMDC chairman, in line with a government proclamation that all those on State institutions intending to contest in the elections had to resign. He contested for a Parliamentary seat in Mabvuku, but lost. Then he received a public lashing from President Robert Mugabe that everyone thought would spell his doom.
President Mugabe accused Masimirembwa corruption involving a US$6 million bribe from a Ghanaian diamonds investor who wanted diamond claims in Marange. Mugabe demanded swift police action against Masimirembwa charging: "Come on, we can't have that in our country. That n*ked corruption, no!" But Masimirembwa quietly wriggled himself out of a potential criminal investigation, even arrest.
In fact, the pendulum surprisingly swung the other way: The top brass within the police insisted it was in fact the Ghanaians who should be prosecuted, arguing they had embarked on illegal deals, including trading in gold, when they were in the country. Many Zimbabweans still thought Masimirembwa would not rise again from the President's attack, despite having survived the threat of incarceration.
But Mpofu, now Transport, Communications and Infrastructure Development Minister, gave him an unexpected lifeline. He, this month, appointed Masimirembwa chairman of CMED (Private) Limited, a State firm that manages and fuel facilities for mostly government departments.
The appointment was apparently endorsed by President Mugabe, who approves all appointments to key parastatals by his ministers. Rashweat Mukundu, a Harare-based analyst, said the appointment was inappropriate. "This is a case of jobs for the boys," he says.
"Government is equally telling citizens to go to hell by appointing questionable characters to its State enterprises' boards."
Source - fingaz
