After Dinner Speech to the Real Estate Institute of Zimbabwe
By David Coltart
6th June 1998
When Craig Friend phoned me this week to invite me to speak to you tonight I think he was somewhat foolhardy because not only did he allow me to speak on a topic of my choosing by also he gave that liberty to a lawyer. I think the Chair may have realised the error of Craig’s ways because a few minutes ago he turned to me and said: “Would you like to speak now – or shall we let them go on enjoying themselves a little longer?!â€
Well, like it or not, you are now stuck with me. I suppose to cheer you up a bit I should tell the mandatory lawyers’ joke. I have recently been advised that rats have been replaced by lawyers as laboratory research animals in the USA and there are three reasons for this: Lawyers are more numerous; lab assistants get less attached to lawyers so if one dies no one cares; and there are some things even the highest paid rats won’t do.
In some ways it is not surprising that lawyers are likened to rats because often our work places lawyers in similar environments to rats: they are forced to delve into the dark and seedy side of life. In my years of practice I have often been made aware of some of the murky goings on in Zimbabwe. That was certainly so during the painful Gukurahundi/ Fifth Brigade years in Matabeleland. However, in the last few months I have, in my capacity as counsel for the CSC, come face to face with a most unacceptable side of life in Zimbabwe, namely rampant corruption and disregard for the rule of law.
It is in this regard that I would like to speak to you tonight as I believe that we all have a role to play if we want Zimbabwe to prosper and all of us share responsibility in securing a viable future for ourselves, our families, our businesses and indeed our clients in Zimbabwe. Estate Agents are no exception to the rule. Indeed, people come to you for advice as to future property developments, the success of which always depends on an accurate assessment of the future of the economy and the socio-political environment generally.
But to get back to Mr Boka’s Bank and my client the CSC. If you have been following the issue through the press you will have seen that as long ago as 22nd April I and two senior executives of the CSC advised the Governor of the Reserve Bank that the UMB appeared to be guilty of defrauding the financial market of some $758 million (it has now gone up to some $968 million). In my opinion there has been blatant fraud perpetrated by so far unknown (to us) staffers within the UMB. In early March this year officials in UMB issued over $800 million of fraudulent bills – indeed in one day alone over $700 million of unauthorised bills were issued! And yet it took the Reserve Bank almost two weeks after our meeting to react in the way it should have done immediately, and only last week it appears as if the police have been called in.
The impression I have gained from all of this is that there has been an attempt to cover up the entire issue. Regrettably I cannot in this speech explain everything in detail but suffice it to say that in my mind at least the Reserve Bank in the early stages attempted to cover up. And how does the Reserve Bank explain the delays of the last six weeks? It seems to me that we are witnessing before our very eyes not only one of the biggest scams perpetrated against the Zimbabwean public but also a well-orchestrated attempt to cover up the fraud which appears to have been ordered by the very highest echelons of power: namely the office of the President. How else does one explain the President’s extremely lame attempts to exonerate Mr Boka in Cairo? No we hear that the investigators have had difficulty in establishing the UMB’s debtors listing and it is thought that numerous senior members of Government have received large loans on extremely favourable terms from Mr Boka. If this is so it would explain the cover up, Mugabe’s speech in Cairo and Government’s recent announcement that they were contemplating funding Mr Boka’s Golden Leaf Tobacco Co to purchase a lot of the crop. All no doubt designed to, if you will excuse the pun, “bale†out Mr Boka and save their own necks in the process.
You may well be asking – what does this have to do with the Real Estate Institute and what can we do about it in any event?
The relevance is this: the business fraternity, Estate Agents and Property Developers included, have been surprised by the events of the last six months including the crash of the Zim Dollar, the riots and now the serious threat to the financial sector. Is it not correct that this time last year the general business mood was, to put it mildly, far more upbeat that it is now? The business sector was genuinely shocked by the events of December and November last year and the banking sector has been well and truly caught with its collective pants down this year. And yet I believe that it was all so predictable.
In 1992 the Financial Gazette published a speech of mine in which I expressed the view that economic liberalisation would ultimately fail unless there was corresponding political liberalisation. The World Bank at the time was touting the so-called Asian Tiger economies of the East and even went so far as to argue that Structural Adjustment Programmes, because of their austerity, were more likely to succeed in authoritarian regimes because the rulers there would have the strength to force the policies through. The collapse of the Indonesian and Malaysian economies has clearly given lie to that notion. The Zimbabwean business sector fell into the same trap. It flirted with Government and as a result has been found wanting. The collapse of the Zimbabwean economy was well nigh inevitable because some of the fundamental obstacles to meaningful economic growth and economic stability had not been overcome.
It is in this context that I will make a paradox which is that for the first time in decades we have an opportunity to turn Zimbabwe from a faltering and increasingly irrelevant Third World banana republic into a winning nation. The reason for this is because for the first time we have all had to come face to face with the reality that we are lumbered with an increasingly corrupt regime which has itself been created by a seriously flawed Constitution and system of governance. Many of us in the human rights community have been warning about this for years but we have been largely ignored. The reason: business was in bed with Government and enjoying the good life. I regret to say that this was no more apparent than in Harare where the property boom and general development has contributed to the illusion that all was well. Harare’s marble and Mercedes Benzes have created the entirely false impression that the economy was doing well. But in many ways the proliferation of marble clad high rise office blocks have simply been symbols of our Government’s profligacy and the underlying corruption in society. The Reserve Bank building in particular is a monument to profligacy. The construction of so many of these buildings was simply not justified in terms of what was happening in the wider economy and Zimbabwe is now starting to pay the price. But now that the bubble has burst we can start dealing with the underlying problems.
I have neither the time nor the inclination to deal with all the problems tonight. In any event it would be highly inappropriate for me to spoil what has no doubt been an otherwise enjoyable and entertaining day for you wall. But if I am to end on a positive note I must deal with what I perceive to be some of the major lessons we all need to learn if we are to entertain any thoughts of creating conditions for long term economic stability and growth.
The first is, I concede, a fairly radical proposition. It is that we need to understand that the ZANU-PF Government and the President himself in particular is part of the problem and not part of the answer to our problems. The collapse of UMB and the President’s defence of Mr Boka in the face of the biggest fraud ever perpetrated in Zimbabwe is just one of a string of events which point to the fact that ZANU-PF and Mugabe are thoroughly corrupt. I was one who, when UZ was last closed in 1989, felt sorry for Mugabe. I thought that he had merely lost control over the corrupt people around him. Now I think very differently: I believe he had already become another typically corrupt despot. The VIP Housing scandal (involving his wife), the cell phone scandal (involving his nephew), the Hwange YTL scandal (involving him), the War Victims Comp scandal (the biggest beneficiary of which was his brother-in-law) and now the apparent attempt to cover up the Boka scandal all point to Mugabe. And if Mugabe is corrupt rest assured that the vast majority of Cabinet is equally so. History tells us that corrupt regimes do not reform themselves because it is impossible to undo the sins of the past in this regard. And once corrupt it becomes imperative to stay in power at all costs because that is the only way one can prevent one’s misdeeds from coming to light. What history also teaches us is that corruption ultimately bleeds a Nation to death and there can be no guaranteed long term economic stability until it is rooted out.
As I have said already, business has largely collaborated with Government – whilst it has whimpered about taxation and Government spending, it has generally flirted with Government. Until all sectors of society, including the business and professional sector, understand that ZANU-PF and Mugabe must go we will continue our slide into oblivion. Business must also recognise that we now have a window of opportunity to deal with these issues but that window is not open very wide and will not be kept open for much longer.
That leads me to my second proposition and that is that the greatest danger that we face in Zimbabwe today is not the prospect of a change of Government but the prospect of a change of Government which will have access to the same laws and powers which ultimately led ZANU-PF and Mugabe astray. It is vitally important that we all work towards a new Constitution as quickly as possible so that when the new Government comes to power (and it is a matter of when, not if) it will be restrained and made accountable and transparent in a way that ZANU-PF has never been.
Which leads me to my final proposition this evening. The Real Estate Institute has a major role to play in that process of Constitutional debate and reform and you should be involved if you are not already. Let me leave you with two examples of issues I believe you should be involved in:
Firstly, it is my view that the right to freehold title in communal areas should be part of Constitutional debate. For many years ZANU-PF has steadfastly refused to give title and the reason obvious: if you give title you give power to otherwise impoverished and vulnerable rural people. But the refusal to give title has not only disempowered rural people but has also dramatically slowed down the potential growth of the Zimbabwean economy. Estate Agents know this and speak to it with authority using their experience obtained in urban areas.
Secondly, compensation for any land or property compulsorily acquired should be determined by the Courts in their absolute discretion. Much has been written about this already but let me reiterate that it is an area of Constitutional debate that you should engage yourselves in.
Let me conclude by restating the paradox that whilst this may seem to be Zimbabweans’ gloomiest hour it could be the start of a glorious new era. Fortunately, as you all know, the infrastructure of Zimbabwe is pretty much intact. We have a highly educated and motivated workforce, we have some of the best natural resources in the world. If we all play a determined and positive role Zimbabwe could reach its true potential which is huge. Now, however, is the time to act and to act quickly and boldly.