Zimbabwe-China currency swap deal worse than colonisation says Mashakada

By Chris Martin

Hatfield legislator and economist Tapiwa Mashakada has castigated the proposed currency swap deal between Zimbabwe and China adding that the move will only serve to give the Asian country more power.

The deal was announced by Finance and Economic Development Minister Mthuli Ncube a few days ago.

However, in an interview, Mashakada said the proposed arrangement is exploitative and Zimbabwe should stay out of it.

Clearly this is an exploitative arrangement which disadvantages Zimbabwe.
Zimbabwe needs foreign currency so badly and for any foreigner to pay us in
our local currency instead of United States Dollars, it’s a daylight robbery.

Moreover given the negative trade balance between Zimbabwe and China it is
only clear that China stands to benefit more than Zimbabwe. China is now
buying our Gold, Platinum, Chrome, Tobacco and other minerals in Zimbabwean
dollars. This is worse than colonialism,” he said.

The seasoned legislator added that at the present moment, Zimbabwe is in desperate need of US Dollars and not Yuan which he said cannot be used to buy fuel, electricity and essential goods like drugs.

We are a forex constrained country. Gold and Tobacco have been our largest
foreign exchange earner. We do not import oil and electricity using Yuan but US Dollars. Our foreign debt obligations are paid in US Dollars. Medicines and
equipment are paid in US Dollars. The regime has bungled,” he said.

Zimbabwe Coalition on Debt and Development (ZIMCODD) raised concern over the mega-deals which are normally clothed in secrecy.

Sincerity on the party of government remains a cause for concern to ordinary citizens when the actual contents of this deal are shrouded in secrecy which defeats constitutional provisions on transparency and accountability. Lack of transparency in these mega deals further erodes public trust as exemplified by the recently contested China Aid to Zimbabwe.

It is therefore imperative for the government to publicise the actual terms and conditions of the currency swap to manage the country’s reputation both at home and abroad.”

Finance Minister Mthuli Ncube announced this week that Zimbabwe and China
had entered into a currency swap deal without giving details for people to

According to Cory Mitchell, a currency swap, also known as a cross-currency swap, is an off-balance sheet transaction in which two parties exchange principal and interest in different currencies. The purpose of a currency swap is to hedge exposure to exchange rate risk or reduce the cost of borrowing a foreign currency.

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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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