US embassy cable - 04HARARE1681

UNCLAS HARARE 001681 
 
SIPDIS 
 
STATE FOR AF/S 
USDOC FOR AMANDA HILLIGAS 
TREASURY FOR OREN WYCHE-SHAW 
PASS USTR FLORIZELLE LISER 
STATE PASS USAID FOR MARJORIE COPSON 
 
SENSITIVE 
 
E. O. 12958: N/A 
TAGS: ECON, EAGR, ETRD, EINV, PGOV, ZI, Economic Policy, ZANU-PF 
SUBJECT: Business Seeks to Rebuild Govt Ties 
 
Sensitive but unclassified.  Not for Internet posting. 
 
Ref: Harare 1347 
 
1.  (SBU) Summary:  The Confederation of Zimbabwe 
Industries' (CZI) top female official berated the GOZ's 
trade-unfriendly policies and general economic 
mismanagement.  However, she expressed hope that 
President Mugabe would send the business community a 
positive signal either by meeting face-to-face with CZI 
leaders or by allowing a serious succession discussion at 
the ruling ZANU-PF's December congress.  End summary. 
 
2. (SBU) Econoff met Oct 1 with incoming CZI Vice 
President Florence Sachikonye, the first woman voted into 
a senior office of the country's preeminent business 
association.  Owner of a chain of Harare's top clothes 
boutiques, Sachikonye related her own frustration as an 
importer.  Since the Reserve Bank (RBZ) introduced its 
currency auctions in January, Sachikonye's firm has 
failed each time at buying U.S. dollars through this lone 
official channel.  Like many importers, she has had to 
source foreign exchange through the illegal parallel 
market.  Nonetheless, Sachikonye complies with the GOZ's 
apparel tariffs, including 65 percent duty plus Z$ 
250,000 (US$ 45)/kg.  She complained that a single pair 
of men's shoes can weigh one kilogram, pushing duty well 
beyond 100 percent.  Sachikonye added that her clothes 
compete against smuggled - and hence duty-free - Chinese- 
made apparel.  She worries that GOZ customs officials 
will start asking her to explain her source of foreign 
exchange as her containers enter the country. 
 
3. (SBU) In her capacity as the new CZI VP, Sachikonye 
hopes she will be able to arrange a meeting between 
President Mugabe and CZI officials.  The last such 
encounter took place six years ago.  Mugabe has also 
declined invitations to address CZI's annual congress for 
the past three years.  Sachikonye said CZI will continue 
to support RBZ Governor Gideon Gono, not because members 
agree with his policies but CZI believes because he is 
the only GOZ official with a chance of improving the 
business climate.  She dismissed other senior GOZ 
officials, such as acting Finance Minister Herbert 
Murerwa and Industry/Trade Minister Samuel Mumbengegwi, 
as Mugabe's "yes-men."  Finally, she speculated that a 
ZANU-PF December congress that addresses presidential 
succession would motivate firms to invest in the economy. 
 
4. (SBU) Comment:  As we observed at the August CZI 
Congress (ref), business leaders are more willing than 
even a year ago to take GOZ officials to task for poor 
policies.  Part of the credit for rebuilding this 
government-business dialogue goes to Gono and part to 
CZI's outspoken, recently-exited President Anthony 
Mandiwanza.  Certainly, GOZ officials are more receptive 
to criticism from the relatively apolitical business 
community than from the opposition, civil society or any 
international players.  Whether this modest government- 
business dialogue can help bring about saner economic 
policies is still an open question. 
 
Dell