Historic friends, Zimbabwe remains neutral to Russia, despite hard hit to fragile economy

By Farai Shawn Matiashe
Posted on Friday, 25 March 2022 16:05

Russia's President Putin meets with his Zimbabwean counterpart Mnangagwa in Moscow
Russia's President Vladimir Putin shakes hands with his Zimbabwean counterpart Emmerson Mnangagwa during a meeting at the Kremlin in Moscow, Russia January 15, 2019. Sergei Chirikov/Pool via REUTERS

The Russia-Ukraine war might be geographically far away from Africa, but its ripple effects have already trickled down to many Zimbabweans who were already grappling with economic mismanagement by President Emmerson Mnangagwa's government. Even so, the negative impact hasn’t completely swayed Harare to criticise Moscow, given the historic ties between the two nations.

The cordial relations between Zimbabwe and Russia can be traced back to the liberation struggle fought by Zimbabwean nationalists against the British colonialists. Russia provided training and other support to some of the freedom fighters.

In 2003, then President Robert Mugabe adopted the Look East Policy after the US and other Western nations imposed sanctions on targeted individuals and entities following gross human rights violations and a chaotic Land Reform Programme by his regime. At the time, Mugabe had cordial relations with both Russia and China.

Mnangagwa’s government has also maintained this relationship with some countries, such as Russia and Belarus, after he came to power in 2017 through a military coup that toppled his mentor Mugabe. Mnangagwa’s bids to re-engage with the West have not borne any fruits due to continuous gross human rights violations, corruption and economic mismanagement.

On 2 March this year, when the UN General Assembly voted on Russia’s war against Ukraine in an emergency session, an overwhelming 141 out of 193 member states supported the resolution calling on Russia to withdraw from Ukraine. Zimbabwe was part of the 15 African nations that abstained. Foreign affairs minister Frederick Shava said, in a statement, that the situation in Ukraine is complicated.

Voting against the UN vote would have put us in the line of fire as has been done to the four countries that voted against; that is, Eritrea, North Korea, Syria and Belarus.

Tawanda Zinyama, an academic at the University of Zimbabwe, says the decision was probably influenced by the fact that both Russia and the Western countries are key to the country’s foreign policy. “Russia has investments in Zimbabwe, and it has been in favour of Zimbabwe in wading off hostile actions, such as UN sanctions. But the West has also become a key target for diversifying our foreign policy from the East through the re-engagement strategy.”

“Our vote can be described as a bloc or loyalty vote, in particular as we voted alongside China. Voting against the UN vote would have put us in the line of fire as has been done to the four countries that voted against that is Eritrea, North Korea, Syria and Belarus. Look at Belarus, how it has already begun to be ostracised,” he tells The Africa Report.

Negative impact

Prices of wheat and fuel have gone up since mid-March, after the Russia-Ukraine war broke out on 24 February, triggering a constant rise in prices of basic commodities across the country.

Wheat

Statistics from the Observatory of Economic Complexity show that in 2019, Russia and Ukraine both exported more than a quarter (25.4%) of the world’s wheat. Zimbabwe heavily relies on wheat imports from Russia.

According to the Grain Millers Association of Zimbabwe (GMAZ), wheat from Russia accounts for at least 50% of the country’s wheat imports. GMAZ president Tafadzwa Musara attributes the increase to the war between Russia and Ukraine.

In mid-March, wheat flour prices shot up by nearly 15% from Z$119,000 (USD$595) to Z$136 544 per metric tonne.

Fuel

On 12 March, the government blocked fuel increases, according to the Zimbabwe Energy Regulatory Authority (ZERA), the regulator of the country’s energy sector. ZERA had hiked fuel prices twice in a space of one week after the Russia-Ukraine war began.

Petrol reached up to $1.67 per litre while diesel was at $1.68 per litre in mid-March before the government reduced it to the current price of $1.59 per litre for petrol and diesel $1.60.

Kurai Matsheza, president of the Confederation of Zimbabwe Industries, says the fragile economic recovery of Zimbabwe will start to falter as the war prolongs.

“Oil prices are now over $130 per barrel and rising. Other commodity prices are pushing up, wheat, soya and fertiliser. All this was a result of the war. Particularly, on the fertiliser, Zimbabwe’s agricultural performance is going to be impacted negatively,” he tells The Africa Report.

Western nations and the US have, since the invasion, imposed economic sanctions on Russia in a bid to pile pressure on the superpower to withdraw from Ukraine.

Basic and non-essential goods will jump as fuel and gas prices shoot against declined supply. Air and sea cargo fees have risen sharply…

Denford Mutashu, president of the Confederation of Zimbabwe Retailers, says the Russia-Ukraine war will negatively impact the global economy with ripple effects spilling over to the global south nations, such as Zimbabwe, as crude oil and gas prices surge.

“It should be borne in mind that Russia is a powerhouse with the ability to retaliate sanctions to the detriment of supply of goods and services. Basic and non-essential goods will jump as fuel and gas prices shoot against declined supply. Air and sea cargo fees have risen sharply yet the war is only in its 13th day,” he says.

Brace for price escalations

Mutashu says consumers in Zimbabwe should brace for price escalations, not of the retailers’ own making, but as a result of direct and indirect effects of the war. Economist Eddie Cross says though the trade with Russia is insignificant, the ripple effect of the war is that inflation in Zimbabwe will surge. “We will benefit from the surge in metal prices as we are an exporter. At the same time inflation will rise.”

Jee-A van der Linde, an economist at Oxford Economics Africa, says the importance of African imports from Russia is not so much in magnitude as it is in the make-up. “Zimbabwe’s major trading partners are its neighbours, Asia and the Middle East.”

“Favourable terms of trade shocks resulting from higher commodity prices will benefit precious and semi-precious metal and stone producers like Zimbabwe. Trade profiles mean Zimbabwe stands to gain on aggregate in an environment of higher commodity prices, gold and diamond prices are likely to remain elevated,” he says.

Van der Linde tells The Africa Report that the Russia-Ukraine war is set to have implications for global economies and African markets will not be spared. “Trade disruptions and soaring commodity prices will be felt by some of Africa’s more import-dependent economies.” He says higher international oil prices will lead to an increase in fuel costs and place upward pressure on inflation over the coming months.

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