Columnist/OpinionLatest

Even Mutsvangwa knows sanctions not to blame for Zimbabwe economic downfall!

by Tendai Ruben Mbofana

I was listening to a most interesting debate at the CEO Africa Annual Roundtable recently held in Zimbabwe’s resort city of Victoria Falls.

This year’s Roundtable went under the theme, ‘Delivering the Vision: Prospering through Smart Partnerships’.

During this meeting, there was a debate moderated by renowned publisher and Chairman of Alpha Media Holdings, Trevor Ncube.

Those locking horns were Chris Mutsvangwa (ZANU PF spokesperson and Minister of Veterans of the Liberation Struggle), Tendai Biti (former opposition CCC legislator and Minister of Finance, 2009-2013), and Nigel Chanakira (investment banker).

The main focus of the sometimes heated debate was basically whether the economic and political environment in Zimbabwe was conducive for investment, and if not, what was hindering development in the country.

Mutsvangwa was rabidly supportive and largely defensive of the Emmerson Dambudzo Mnangagwa administration’s policies.

No surprises there!

However, it was what he did not say that peaked my curiosity.

As an integral part of the ruling ZANU PF regime – whose survival in power has, to a large extent, been anchored on the ‘economic sanctions imposed on Zimbabwe’ drivel – not even once did he make reference to these  restrictive measures, as the reason our economy has been in the intensive care unit for the past two decades.

He, instead, elected to place the blame squarely on his own comrades and colleagues in the Zimbabwe government – most particularly, under the late ousted president Robert Gabriel Mugabe.

In fact, he chose to label some Cabinet ministers in the administration as ‘nitwits’  who propagated unworkable and investor-hostile economic policies, which scared away potential international capital.

To be precise, Mutsvangwa made reference to the ‘indigenization program’, which compelled any foreign investors in Zimbabwe to concede 51 percent shareholding to locals – whom, in most cases, would have never put in a single cent in these entities.

Indeed, what nincompoop will pour in billions of dollars of his hard-earned money into a country where 51 percent will be taken by individuals who never contributed anything to the business?

Is there any wonder there was very little, to no, significant investment in Zimbabwe over the past decades?

He further indicated that such twisted and nonsensical economic policies were what led him into leaving the Mugabe regime after only a few months in Cabinet.

In actual fact, numerous foreign companies closed shop in the country and relocated to more favourable economies over the past two decades.

I need to highlight that this was not the first time Mutsvangwa had faulted his own colleagues in the ZANU PF government for the economic meltdown witnessed in the country – predominantly as a consequence of the flight of capital from the country.

I remember him making similar accusations during a live ZBC (Zimbabwe Broadcasting Corporation) television interview.

It is not every day that I agree with the excitable man – but he is spot on.

In addition to Mutsvangwa’s assertions, it is a well-known fact that the flagrant violation of the rule of law – especially at the height of the land acquisition program and threats to take over foreign mines and other companies – understandably scared away many investors.

Then, there is the unstable and unpredictable exchange rate, as well as repeated flawed and disputed elections – which do not inspire any confidence in investors.

These are the real reasons our country faced, and still faces, enormous disinvestment and under-investment.

The misery and poverty ordinary Zimbabweans have been subjected to for over two decades has been the result of poor economic policies by the regime, coupled by the massive looting of our national resources by those in power.

All this noise over so-called ‘economic sanctions imposed on the country’ is just a smokescreen and diversion deliberately designed to distract from the real causes of our suffering in Zimbabwe.

As a matter of fact, if the citizenry bothered listening very carefully and meticulously to top government officials, these truths will be laid bare and there for all to hear.

A day or two ago, the ministry of finance, presided over by Mthuli Ncube, expressed satisfaction with the direction Zimbabwe’s debt and arrears clearance program with international creditors was going.

This was established in late 2022, whereby the government began engaging multilateral financial institutions on an agreed formula for paying back the unsustainable ballooning debt owed by Zimbabwe.

According to most statistics, the country owes over US$14 billion to external lenders – such as the World Bank, IMF (International Monetary Fund, and many others) – and US$17.5 billion in public debt.

The government is very clear that the main reason international leaders are no longer willing to extend lines of credit to Zimbabwe is over the failure to repay its humongous debt over the past two decades.

Surely, who in their right mind would continue giving loans to someone who repeatedly defaults and does not pay back?

If there is such a person, please get in touch with me, so that I can borrow money from you – as there will be a guarantee that you will keep lending, even when I do no repay!

This failure to service loans is why Zimbabwe has not been receiving many lines of credit from multilateral financial institutions.

This has absolutely nothing to do with supposed ‘economic sanctions imposed on Zimbabwe’.

You don’t pay back loans, then you don’t get more!

It’s that simple!

In fact, the 2022 debt and arrears clearance program – in which AfDB (African Development Bank) President Akinumwi Adesina and former Mozambique president Joachim Chissano were roped in – was not the first time the Zimbabwe government took this route to appease its creditors.

In 2011, there was the Zimbabwe Accelerated Re-engagement Program – which went nowhere!

Then, there was the Zimbabwe Accelerated Arrears Clearance Debt and Development Strategy.

As recently as 2021, the Mnangagwa administration introduced the Zimbabwe Debt Management Strategy.

Needless to say, these too went nowhere!

So, on what basis is the international community expected to continue lending Zimbabwe money when there is no interest in paying back?

I actually believe that, sooner rather than later, even our so-called ‘all-weather friends’ will follow suit – since Zimbabwe owes US$13 billion to China, which, as per norm, will likely fail to repay.

Based on a report, only US$150 million has so far been repaid to the Chinese.

We all know what these east Asians can do to those who fail to pay back loans.

Who does not know of the sad fate that befell Sri Lanka, whereby China repossessed the huge Hambantota Port – which was constructed using a Chinese loan – after failing to repay US$7.5 billion?

Zimbabwe owes China more than that!

I wonder if the Robert Gabriel Mugabe International Airport, or Hwange Power Station Units 7 and 8, are in danger of being repossessed!

Unless, of course, if the Mnangagwa regime is mortgaging our national resources, namely minerals, in exchange for these loans.

Who can forget the 2006 incident, in which the Zimbabwe government offered China minerals worth US$52 billion for a loan of a paltry US$200 million?

It is akin to giving away your five-roomed suburban house for a US$200 loan!

What I am simply trying to show with this long discourse is that Zimbabwe is not in bad books with the international community due to some supposed ‘economic sanctions imposed on the country’.

Neither is our economy bleeding because of the same reason.

We are our enemies!

I can not sign off without highlighting what these sanctions really are.

They are simply travel and financial restrictions on a handful of identifiable individuals and entities – whose impact on the broader Zimbabwe economy is very minimal.

Right now, the Zimbabwe government is boasting over the country becoming the seventh biggest diamond producer in the world – with an annual output of over 4 million carats worth US$420 million – according to the KPCS (Kimberly Process Certification Scheme).

Additionally, we are endowed with the largest reserves of lithium in Africa, the second platinum deposits (2.8 bullion tons) in the world, and the second largest gold reserves (13 million tons).

In other words, Zimbabwe can still freely trade with the world in all our mineral resources.

Yet, we are home to some of the poorest people in the world – with half the population living in extreme poverty, whilst two-thirds of the workforce earning below the poverty datum line.

The country has the embarrassing tag of having one of the highest food price inflations in the world – up there with Venezuela, Lebanon, Argentina, and Suriname – according to the World Bank.

Our health delivery system is virtually comatose – lacking essential medications, functional cancer machines, adequate ambulances, and other basics.

In all this, Zimbabwe’s ruling elite are enriching themselves through repulsive corruption and plundering of our abundant resources – making them some of the wealthiest people on the continent.

Each year, the country is prejudiced over US$3 billion in our minerals through smuggling, and other illicit cross-border financial transactions – with not a single one of those involved and aligned to power ever brought to book.

Who can easily forget the Al Jazeera ‘Gold Mafia’ investigative documentary exposing gold smuggling and money laundering in Zimbabwe by the ruling elite?

The ZANU PF regime is fully aware of why the country is not receiving any lines of credit from multilateral financial institutions or why investors have not been coming to Zimbabwe in their numbers.

Those in power also know why there was massive disinvestment over the past two decades and a pronounced hesitation in new investments.

This has absolutely nothing to do with any ‘sanctions’.

Mutsvangwa knows it, and I am sure so does Mthuli Ncube!

● Tendai Ruben Mbofana is a social justice advocate and writer. Please feel free to WhatsApp or Call: +263715667700 | +263782283975, or email: mbofana.tendairuben73@gmail.com, or visit website: http://mbofanatendairuben.news.blog/

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