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Sanctions or Corruption: Zimbabwe Remains on a Self-Destructive Path

By Wisdom Mumera

Two epochal things happened after the coup that toppled former President Robert Mugabe; strategic moves aimed at starting a new foreign policy and setting the new regime on a new course for success.

The first was the disengagement from the sanctions mantra blaming every failure on the Western measures.

In January 2018 President Emmerson Mnangagwa told chiefs at a conference in Gweru that “yes, sanctions are there but we should not continue talking about them.

“We must have solutions and already, we have solutions in agriculture and this should cascade to all sectors.”

The second move was to shift the foreign policy from a strictly Eastern, (read China) centred agenda to a more expansive approach that was ready to engage anyone. Zimbabwe was open for business.

However, by early 2018 the new government was convinced the West wasn’t interested in re-engagement and was ready to resort to hardline tactics that resulted in the shooting of civilians.

The government has since begun blaming sanctions again for derailing trade in diamonds, loss of investments and the loss of jobs in the country among others.

The Research That Never Happened

However, by now the country should have been able to know exactly the impact of sanctions. On 8 March 2017 the Ministry of Higher and Tertiary Education, Science and Technology Development signed a contract with the University of Zimbabwe to carry out research on the impact of Western-imposed sanctions.

The research was meant to determine the extent to which various sectors of the economy had been affected by the sanctions.

For that government availed $150 000 for the research which was to be carried out by a UZ consortium within one year.

Speaking about the research the then Minister of Higher and Tertiary Education Professor Jonathan Moyo said the aim was to find out, “the actual impact (of sanctions) not their ideological implications but their economic impact.

“Their real impact in the lives of ordinary people, in the national economy has not been systematically accounted for, audited, analysed, understood and yet this is very important not just for the sake of knowledge but for policy intervention.

“It is not about looking back and indulging in history but it is about understanding what has happened in order to have a basis for making informed policies on the way forward,” he said.

The findings of the research were supposed to be published in peer-reviewed journals such as African Journal of Economic Policy, South African Journal of Economic History, Journal of Applied Sciences in Southern Africa and Journal of Human Capital

The research never happened as by November both Prof Moyo, the engineer of the project, and his supposed G40 government allies were booted out and the project suffered a still-birth.

The project was also dismissed by some such as Dr Alex Magaisa as an additional layer to the political gameplay by Zanu PF.

The scholar accused the party of seeking to create a dubious academic research project that would be used in the 2018 elections to sell the party as the victim of sanctions.

Sanctions as a Political Weapon

Zanu PF has been doing exactly that using the absence of scientifically verifiable figures to play the victim in the sanctions issues by throwing around random numbers.

In its 2013 manifesto, titled “Taking back the Economy: Indigenise, Empower, Develop and Create Employment,” the party alleged that the country had suffered financial damages amounting to US$42 billion.

It romped to victory partly by playing the victim of a larger neo-colonial foe.

In July whilst appearing before a Parliamentary Committee Foreign Affairs Minister Sibusiso Moyo postulated that sanctions had cost the country a combined US$80 billion.

“The country lost multi-lateral donor support which is estimated at US$4.5 billion annually since 2001 and US$12 billion in the IMF, World Bank and the African Development Bank loans which could have developed infrastructure in this country and commercial loans estimated at US$18 billion which could have gone to the private sector and into other areas and as a result of that, a reduction of GDP of over US$21 billion,” he said.

It is indeed in this aspect that sanctions have been most powerful. Whereas the opposition may have hoped that sanctions would increase political pressure on the ruling party and lead to mass uprisings and mass disaffection with the revolutionary party, the effect has not been as anticipated.

Zanu PF has managed to hoodwink a sizeable chunk of the population with this narrative, deflecting responsibility and managing to stay afloat the mess that Zimbabwe is currently in, partly by playing the sanctions victim-card.

The MDC Alliance has been at pains to disown the sanctions as their own creation and the tag weighs them heavily.  They have resorted to dismissing their effect on the economy.

Dr Tapiwa Mashakada, MDC Alliance Secretary for Finance and Economic Affairs disputes the pedestrian sanctions points and argues on the existence of bigger causative.

“What we can deduce….is that sanctions exert cyclical shocks on the economy for a while but once counter-cyclical measures are activated, sooner or later, sanctions are defeated”

Giving examples of Rhodesia and Cuba he said sanctions have a limited impact for sincere governments, innovative and open to strategise around them but not for the corrupt.

“The only problem with sanctions is that they provide an excuse for leadership failure. Sanctions breed fertile ground for dictatorship and rent-seeking activities.

“The other issue that Zimbabwe needs to address is corruption which causes allocative inefficiencies in the macro-economy. Therefore, looking back, the collapse of agriculture in Zimbabwe is the epitaph written on the grave of the once-vibrant economy.”

How True Are The Points?

Foreign Affairs Minister Moyo’s points about lost loans from the IMF and World Bank are a huge spin of facts when one realizes that by the time ZIDERA was enacted in 2001 Zimbabwe was already unable to access financial assistance due to un-serviced debts.

So big and long are Zimbabwe’s debts and time in default such that even if it were to take part in the IMF and World Bank run Highly Indebted Poor Country (HIPC) program, which Mugabe refused, the country would still not have its full debts cancelled.

A HIPC program would only reduce the debts by half and, even worse, “lead the country to spend considerable more time in debt repayments.”

The pure economic explanation for Zimbabwe’s deterioration actually charts the shrinking from as far back as 1998 when the country took part in the DRC war which lasted until 2002 and had unbudgeted for costs.

The devaluation of the ZimDollar around the same period as foreign speculative money fled worsened the situation.

Secondly the Land Reform from 2000 handed over a huge chunk of land to inexperienced and sometimes uninterested new farmers who could not cover the gap of the previous white farmers and focused on selling equipment, in an agro-based economy, leading to severe export losses.

With no access to Western finances, the Zimbabwe government has resorted to China which has given some bad-kind of loans, such as the US$100 million for a non-productive Defence College.

Unbudgeted spending and printing of money have also previously destabilized the economy leading inflation reaching quadrillion percent.

Thus policy uncertainty, fiscal indiscipline, political frictions and poor property rights have all negatively affected the ability to draw in foreign direct investments.

Other experts reading into the Zimbabwe sanctions case are also not convinced of the challenges we have originated in 2001 when ZIDERA was first enacted.

In their research paper released under Chatham House titled The Domestic and External Implications of Zimbabwe’s Economic Reform and Re-engagement Agenda various scholars such as Knox Chitiyo, Alex Vines and Christopher Vandome dispute the sanctions issue by tracing the economic erosion to 1997.

“Zimbabwe’s economic output halved between 1997 and 2008. The adoption of a multi-currency system in 2009 quelled the country’s infamous hyperinflation and brought relative economic stability and a period of strong growth in real gross domestic product (GDP).”

“None the less, structural deficiencies and a long history of political mismanagement had deindustrialized the economy, and the new growth rate was unsustainable,” they said.

Other scholars aligned to the anti-Western ideology, supported by Zanu PF, have produced their own research pieces which support the argument that the ZIDERA sanctions have nothing to do with supporting democracy and democratic governance but are an extension of neo-colonial hegemony.

In their research titled Zimbabwe Economic Sanctions and Post-Colonial Hangover: A Critique of Zimbabwe Democracy Economic Recovery Act (ZDERA) –2001, Munoda Mararike says, “the current bill is an incorporation of the Movement for Democratic Change (MDC) electoral reforms demands.

These demands he says “are precariously designed to squeeze out Zanu PF and its liberation struggle ideology from political space in Zimbabwe.”

Thus Zanu PF has chosen to be political about the sanctions reading them in the greater context of a never-ending battle with Western and former colonial masters.

In Targeted or Restrictive: Impact of U.S. and EU Sanctions on Education and Healthcare on Zimbabweans the writers concluded that sanctions on Zimbabwe were not “a plausible way of resolving international disagreements and conflicts, and instead advocated for the adoption of non-violent approaches to conflict resolution” because “sanctions have still been unable to achieve its set goals; instead, there are daunting records of their gloomy impact on the rights and well-being of ordinary and otherwise innocent civilians,” it said.

On the argument that the sanctions were aimed at individuals and businesses that have been promoting an undemocratic system of governance, only the research argued that a reading of ZIDERA showed that they were indeed “economic elements that inevitably contribute to the country’s economic collapse”

The collective summation of these and a variety of other expert opinions on the impact of sanctions is that they do have a negative effect but not to the extent to which Zimbabwe has fallen. There is something else that has added weight to sink the economy so low.

The Fact of Internal Sanctions

Asked about the Western-imposed sanctions on Zimbabwe former Deputy Prime Minister Arthur Mutambara said before the government worried about those they had to show a willingness to deal with the self-imposed sanctions of corruption.

According to Transparency International’s 2017 corruption perception index, Zimbabwe ranked number 157 out of 180 countries. Using a scale of 0 to 100 (where 0 is highly corrupt and 100 is very clean), Zimbabwe has a 22 index score of the perceived levels of public sector corruption.

Zimbabwe continues losing billions through corruption with parastatals leading the way. The  Auditor-General’s 2017 audit report stated that 23 state-owned enterprises and parastatals were on the brink of failure due to poor corporate governance, corruption, political interference and mismanagement, among other financial wrongdoings.

The 2018 Auditor-General report contains the very same issues about parastatals and in a statement underlying the psychology behind the continued rot the Permanent Secretary in the Ministry of Lands Ringson Chitsiko, whilst appearing before the Public Accounts Committee said they had to be forgiven and in the new year “they would not repeat the same mistakes.”

The Business Anti-Corruption Portal adds that “investors face both high-level corruption in the form of nepotism, patronage and abuse of power, as well as petty bribery and extortion. The Prevention of Corruption Act prohibits active and passive bribery, gifts and facilitation payments in the public and private sectors, but such practices are common.”

The sentiments are shared by commercial business owners who are suffering under concerted politically supported corruption.

Farffel Estates Director and retired Swiss banker Richard Le Vieux appearing before the Parliamentary Portfolio Committee on Lands in July, on a typical corruption case in Zimbabwe, implored legislators to introspect and advocate for a changed course in the country’s direction if Zimbabwe was to be rescued.

“We need our own Deng Xiaoping moment. We don’t need half measures; the country needs a complete reversal of everything”.

For context, Deng Xiaoping is the man who led what can be considered China’s Second Republic and managed to effect the reforms and structural changes that have led to China becoming the second biggest economy in the world today, a far cry from the austere Communist periods.

The analogies between the transition of China from Mao Zedong to Deng Xiaoping and Zimbabwe’s, from Robert Mugabe to Emmerson Mnangagwa is an exciting comparative that goes to highlight how Zimbabwe’s supposed the Second Republic has become a façade of substantial vulgarity.

The new government accumulated a budget deficit of US$225 million in only the first three months after assuming power, a staggering 1.5% of real GDP which was more than the entire budget deficit the Mugabe regime incurred in 2014.

Characterized by the profligate flying of the President who constantly hires a private plane from Dubai to service his domestic jaunts, the new government has failed to curtail the insatiable appetite for spending even as it has called for austerity for everyone else.

This erratic consumerist behaviour is characteristic of the system in which corruption has been politically supported and given a wide berth to various cartels holding the nation to ransom.

In such a mess Zimbabwe has been losing an estimated $1 billion per year. With a GDP of around $26 billion, a loss of such a magnitude speaks of gross and politically-supported corruption and resultantly sanctions become an honorary addition to the ills.

So What’s to Blame, Sanctions or Corruption?

With no definite figures from research sanctions remain a vulnerable tool for political mind games, dismissed as inconsequential some time and crucified as the main problem at others.

What is most damaging and definite has been corruption manifesting in different forms sucking the life out of the economy.

The absence of political will to tackle it has worsened the situation with the public growing tired of the many naming and shaming episodes which have resulted in some arrests but no convictions of the many well-known criminals who are politically connected.

Identifying the political scores they could accumulate by seeming to act the government has been slowly increasing noise over it

Recently President Mnangagwa swore into power new Zimbabwe Anti-Corruption Commissioners (ZACC) whilst the Office of the President and Cabinet already has a Special Anti-Corruption Unit whose legality still remains vague.

The recent arrest of a sitting Minister in Tourism head Prisca Mupfumira has tickled excitement of many that things may change but it’s still early days yet. The rot has been so long to be healed by a single arrest.

More still needs to be done to rescue Zimbabwe for it is clear corruption is the fatal virus to the nagging itch of sanctions.

 

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Daniel Chigundu

Daniel Chigundu is a male journalist in Zimbabwe and has been practising since September 2009. He used to the editor for The Business Connect (newspaper) in Harare, has his own news website Tourism Focus which is biased towards the tourism sector. Daniel is also working with Magamba Network on their project called Open Parliament where they do live coverage of Parliamentary activities on Twitter and Facebook. He is currently the secretary-general of the Zimbabwe Parliamentary Journalists Forum, is a member of Zimbabwe Small Broadcasters Association and a board member of Digital Communication Network. He holds a Diploma in Communication and Journalism from the Christian College of Southern Africa (CCOSA), a certificate in Youth leadership training from the Friedrich Ebert Stiftung (FES), a certificate in Citizen Journalism from Magamba Network and is currently a first-year student at Zimbabwe Open University studying for a Bachelor of Arts Honours in Ethics and Organisational Leadership.

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