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UPDATE 4-Mugabe to keep major powers under deal

(Adds EU’s Michel on Tsvangirai)

HARARE, Sept 12 (Reuters) - President Robert Mugabe will keep his job and head the cabinet under a power-sharing deal in Zimbabwe, but the opposition will have more senior ministers than his ZANU-PF party, an opposition senator said on Friday.

Giving first details of the deal reached on Thursday, Senator David Coltart said Morgan Tsvangirai, leader of the main opposition MDC group, would be prime minister and chair a council of ministers that supervised the cabinet. The power-sharing deal was reached under the mediation of South African President Thabo Mbeki, who said details would not be announced until a ceremony on Monday.

Coltart, a senior member of a breakaway faction of the MDC (Movement for Democratic Change), said Tsvangirai’s party would have 13 cabinet seats, his group three seats and ZANU-PF 15.

This was based on votes cast for the parties rather than seats won in a March 29 election in which ZANU-PF lost control of parliament for the first time since independence in 1980.

Tsvangirai won a parallel presidential vote but pulled out of a run-off in June citing systematic violence against his supporters. This allowed Mugabe’s unopposed but widely condemned re-election, extending his unbroken rule since independence.

Zimbabweans are desperate for an end to a crisis that has destroyed the economy, hitting the once-prosperous country with the world’s highest rate of hyper-inflation -- over 11 million percent -- and sending millions of refugees into neighbouring countries.

But there was widespread caution among commentators over how quickly the deal could end the crisis or persuade Western powers -- deeply opposed to Mugabe -- to step in with massive financial support to aid recovery.

The European Commission welcomed the agreement, but said it was too early to say whether it would release frozen aid.

“At this stage, we are cautiously optimistic,” spokesman John Clancy said. Coltart said Mugabe would be chairman of the cabinet but his grip would be greatly reduced under the deal, and Tsvangirai, in the new role of prime minister, would have substantial but not absolute power.

But some commentators said Tsvangirai had lost out by compromising on his earlier demand for full executive power. They said the deal was fragile.

“The fact that Mugabe remains in power as head of state and head of government means the MDC is the one coming into this deal as a junior partner,” said Lovemore Madhuku, head of the pressure group National Constitutional Assembly.


European Union Aid and Development Commissioner Louis Michel said, however, that Tsvangirai had told him he was satisfied.

“I think that the fact that Mr Tsvangirai tells me that he’s satisfied with the accord is an important element of judgment for the European Union,” he said.

Investors are already relishing prospects in Zimbabwe if the economy improves.

Shares in Zimbabwe-focused investment group LonZim LZM.L were up more than 5 percent early on Friday from an all-time low on Thursday at a time when a deal had looked difficult.

London-listed shares in Mwana Africa MWA.L which operates nickel mines in the country, also rose 9.8 pct in the morning.

Coltart, Secretary for Legal Affairs in the MDC faction of Arthur Mutambara, said the deal would allow the creation of an inclusive government which would initiate a process of constitutional reform lasting 18 months.

This would end with the creation of a new democratic constitution, including setting of a date for new elections.

Coltart said Tsvangirai would be vice chairman of the cabinet. There would be two largely ceremonial state vice presidents from ZANU-PF.

In addition, Mugabe’s party would have eight deputy ministers, Tsvangirai’s MDC six and Mutambara’s faction one.

“If the two MDC factions work together, which they must in the national interest, they will enjoy a majority in cabinet,” Coltart said.

There was relief among many Zimbabweans hoping for an end to their economic suffering but caution over how quickly the deal would bring relief.

“For us the details really don’t matter. It’s the principle of working together which is important because the problems we are facing as a country require that our leaders work together,” said Harare security guard Lloyd Ncube.

“Life has become unbearable, and I am happy that there is some movement of sorts,” he added.

Coltart said most new opposition cabinet members would at one stage have been “brutalised on the instructions of those they will now have to work with”. Tsvangirai himself has suffered beating in police custody.

Roelof Horne, an asset manager at Investec, said the deal was a cause for only whispered celebration. “The Zimbabwean economy needs more than peace....the architects of the economic implosion are still partly in the driving seat.”

South Africa’s ruling ANC, also buoyed on Friday by the dismissal of corruption charges against its leader Jacob Zuma, welcomed the deal and congratulated Mbeki.

“Not only is the agreement important for Zimbabwe, but has far-reaching political and economic implications for Southern Africa and the entire African continent,” it said. (Additional reporting by Jeremy Lovell in London, David Brunnstrom in Brussels, Serena Chaudhry in Johannesburg; Mathieu Bonkoungou in Ouagadougou; Writing by Barry Moody; Editing by Mark Trevelyan)