PRESIDENT JACOB ZUMA WORRIED OVER ZIMBABWE'S CONTINUED "CHAOS".

October 22 2009

By Mercury Correspondents

President Jacob Zuma said yesterday that South Africa was concerned about the situation in Zimbabwe and that the country "should not be allowed to slide back into instability".

Holding a high-level meeting with Zimbabwean Prime Minister Morgan Tsvangirai at Tuynhuys in Cape Town, Zuma stressed that South Africa was ready to step in to assist in the implementation of the Global Political agreement, which is in line with the Southern African Development Community process.

His meeting followed the fallout within Zimbabwe's government of national unity. Tsvangirai, who cut ties with President Robert Mugabe's "dishonest and unreliable" camp on Friday, briefed Zuma on the developments. He has also reportedly met other leaders of SADC and appealed for their help.

'Last week the cabinet did approve the distribution of this money'
While the Movement for Democratic Change (MDC) said it had "disengaged" from the government in the past week following the arrest of MP Roy Bennett, a spokesperson has said the MDC would not withdraw from the government.

Mugabe led a Zimbabwe cabinet meeting on Tuesday despite the boycott by Tsvangirai, who flew to South Africa to appeal for regional mediation.

Zimbabwe state media reported that Mugabe would not recognise Tsvangirai's suspension of ties until he was told officially.

Tsvangirai has said he will only resume relations once unresolved issues with his long-term rival are settled. These include disputes over key posts and a crackdown against his supporters.

Bennett, one of Tsvangirai's top aides, is due to go on trial on terrorism charges on November 9.

'We agreed that $150m should go to productive sectors'
On a more positive note, the Zimbabwe government has agreed on how to use a $400-million (R2.95 billion) grant from the International Monetary Fund after months of feuding about its allocation, a minister said on Wednesday.

"Last week the cabinet did approve the distribution of this money, which will be used in the completion of public works programmes," said Industry Minister Welshman Ncube.

"We agreed that $150m should go to productive sectors such as mining and manufacturing," he said.

Finance Minister Tendai Biti clashed with central bank boss Gideon Gono last month over the use of the money.

Biti wanted the funds to be put into the country's annual budget, which he is expected to present to parliament next month.

In another Zimbabwe development, our foreign service reports that empowerment activists have demanded that Nestlé Zimbabwe resume buying milk from first lady Grace Mugabe's dairy farm. They have also demanded that Nestlé sell a majority stake in the business to local business interests.

The Affirmative Action Group (AAG) told the Harare Press Club that Nestlé was guilty of imposing sanctions on Grace.

The Swiss-based Nestlé stopped buying milk from her farm after The Mercury disclosed last month that she had seized several farms owned by white people and had set up a dairy selling milk to Nestlé.

The AAG also claimed the move to stop buying milk from the Mugabes was at the instigation of former Rhodesian elements who wanted to discredit Mugabe. The group said Nestlé should now be 51 percent owned by locals to guard against what it called selective choosing of milk suppliers based on hatred of the Mugabe family.

Since Nestlé terminated its deal with Mugabe, they have been under pressure to close down their operations. The government moved fast to freeze its accounts, claiming the company was to be investigated. The accounts were later opened.

The company's premises have also been besieged by Zanu-PF supporters escorting tankers of milk from Grace's Gushungo farm and trying to force the management to accept the milk.

So far, they have refused to budge.