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Zimbabwe: corruption and patronage do more damage than sanctions

Siphosami Malunga
By Siphosami Malunga
Executive director of the Open Society Initiative for Southern Africa

Posted on Friday, 25 October 2019 12:59

An anti-riot police officer watches as ruling party supporters hold placards during the official opening parliament in Harare, 1 October 2019. REUTERS/Philimon Bulawayo

Zimbabwe’s government has declared 25 October a national holiday. The country will come to a standstill. Schools are to be closed and the government has ordered head teachers to bus students to specified venues to attend ceremonies for a day against sanctions.

The origin of this bizarre extravaganza, endorsed by the Southern African Development Community, is to use the day to campaign for the removal of sanctions against Zimbabwe.

It is accompanied by a distasteful splurge of public resources – some say over US$4m – including on a football match and music gala. This is at a time of power blackouts for days, shortages of fuel, banknotes, medicines and other basic needs. Inflation has shot up in the past three months. In June, the government banned the use of foreign currency, deepening the hardship but proclaiming the return of a robust national currency.

That hasn’t happened. Instead, politically connected elites get US dollars from the reserve bank and sell them at a profit on the parallel market, pushing down the value of the revived national currency or “bond dollar”. It currently trades at US$1=Zim$20.

Contested narratives

Zimbabwe’s crisis is decades old and its cause is contested. Ask the ruling party, ZANU-PF, and it all started when Mugabe redistributed land from a handful of white commercial farmers to the majority black population. Upset by the racially corrective nature of land redistribution, ZANU-PF says, European countries  and the United States imposed sanctions against Zimbabwe.

These sanctions, they argue, caused the economic crisis that is reaching breaking point. Mugabe railed against the West’s sanctions and rallied African countries to his anti-imperialist cause.

Sanctions have become a geopolitical football kicked between the Zimbabwean government and its Western foes

Western officials insist there are no sanctions against all Zimbabweans, just targeted restrictions on travel against specific individuals and corporations deemed to be “obstacles to democracy and human rights in Zimbabwe”.

They add that foreign support to Zimbabweans continues via bilateral and multilateral organisations working with local civil society. And that the government cannot be trusted to manage external finance accountably.

  • Starting in 2001, these sanctions were reviewed and renewed every year. In 2013 they were suspended for certain individuals.
  • The sanctions are based on laws that include the conditions for their removal. In the US, the law is the Zimbabwe Democracy and Economic Recovery Act (Zidera), enacted in 2001 and renewed annually ever since.
  • Western governments insist that all the government has to do is undertake democratic reforms and respect human rights for such restrictions to be removed.

Ask ordinary Zimbabweans about sanctions and you get a mixed reaction. Some accept the “sanctions are the cause of all our problems” argument, but many others blame the country’s troubles on local political elites and their excessively corrupt behaviour.

Sanctions have become a geopolitical football kicked between the Zimbabwean government and its Western foes. The truth about sanctions lies between the two.

Chicken and egg

In 2006, I was at a development conference in Helsinki, where the Zimbabwe crisis took centre stage.

The head of the UK’s Department of Foreign Development (DFID) was replaying the argument that there were no sanctions against Zimbabwe, just targeted measures against individuals.

I asked her if she could confirm what proportion of social services (education and health) were financed via direct budget support to the Zimbabwean government. She replied that Zimbabwe had received almost 40% of external financing for basic services, mainly health and education.

This support went directly into the budgets of the ministries. I then asked her whether thus budget support to the government from foreign partners had continued under in the sanctions era.

She was nuanced: “There was no way the UK, Europe and US could maintain direct budget support to a government that could not be trusted with managing money after demonstrations of bad faith and financial impropriety.” This included the raiding of people’s bank accounts and pensions, grand corruption and diversion of resources for public services. That meant no.

Government-to-government aid for vital services had stopped. Then I asked what would happen to health or education services if 40% of their budget was withdrawn. She agreed they would collapse.

The truth is that neither the government nor its former funders in the West were willing to accept responsibility for the terrible conditions. Much easier to blame the other side.

  • Long overdue but violently and corruptly implemented land reform had triggered a disproportionate reaction from the West. Those same countries said nothing in the mid-1980s when Mugabe massacred thousands of black Zimbabweans.
  • It was a quick leap to perceptions of prejudiced foreign policy positions, given the racial nature of land ownership that redistribution had sought to correct. Reactions in Western states, and their backing for opposition politicians, played into Mugabe’s hands.

Horse-trading blame about the cause of Zimbabwe’s crisis doesn’t help. Is it sanctions or bad government or both?

Beating Sanctions: Rhodesia vs Zimbabwe

This is not the first time that sanctions have been imposed on our country. When Ian Smith adopted the Unilateral Declaration of Independence in 1965, Western countries imposed sanctions at the urging of the liberation movements, who argued that until majority rule was introduced Rhodesia should be pressured.

Those sanctions lasted until independence in 1980. Although Rhodesia’s wartime economy struggled under sanctions, it did not collapse. Its currency was trading more strongly than the British Pound. Manufacturing and agricultural exports were robust and social services did not collapse.

Why should Zimbabwe be different? Why have sanctions hit harder on a country at peace than they did on Rhodesia in a civil war?

The answer is clear: bad governance, poor leadership, and the corruption of political elites. Were the country well-governed and led honestly, there is no reason why the suspension of foreign aid should have led to catastrophe.

What caused it was a failure of leadership. Instead of responding to changed circumstances and the demands for pluralism from the opposition, ZANU-PF went into survival mode and resorted to plunder and scapegoating.

After decades of finger pointing about the causes of our economic woes, we need an honest discussion. After the coup that brought Emmerson Mnangagwa to power in November 2017, it emerged that the government had borrowed US$5bn dollars without approval from Parliament and for which it could not account.

It was suspected that the money was parcelled out to senior government and Zanu-PF officials and military officers, some to be used for ZANU-PF’s election campaign last year. Over the past year, the International Monetary Fund reported that the Reserve Bank has allowed the energy company Sakunda to redeem over $300m bonds at highly advantageous rates when almost everyone else was given about a tenth of the face value of their bonds.

Sakunda is owned by Kuda Tagwirei, a fuel baron and close confidante of the president and his deputy, General Constantino Chiwenga. The company was benefiting from these preferential rates at a time when most people were struggling with fuel and forex shortages.

This year, the ministry of finance acknowledged to parliament’s Public Accounts Committee that it could not account for $3bn from the agricultural subsidy scheme called “Command Agriculture”. A key player in this scheme was Tagwirei’s Sakunda Fuels. Last month the government and Reserve Bank suspended Sakunda accounts, but we understand that order has been lifted.

The fundamentals of Zimbabwe’s crisis are not caused by sanctions. Yes, when government-to-government aid was suspended it disrupted clinics and schools, causing suffering to many people. That was a policy choice by Western states in response to land reform and corruption. Those states should accept responsibility for that decision and ask themselves whether cutting off funding to education and health achieves anything more than making social conditions even worse.

This does not exonerate the ZANU-PF government for creating the crises. Since 1982, Zimbabwe has endured one corruption scandal after the other, all benefiting senior ZANU-PF officials. Not a single official has ever been held to account. After the ousting of Mugabe, despite spirited promises by President Mnangagwa, new and bigger scandals have cropped up.

The government hires presidential jets for multiple overseas trips while public hospitals are turning into mass morgues, doctors, nurses, teachers and other government workers get measly wages, and living conditions in the country have deteriorated to levels unseen before.

The country faces its worst drought in years – despite US$3bn having been set aside for agriculture in 2017 – but we learn that the government is importing maize from Tanzania at $600 a tonne when the market price is $240 a tonne. Who organised this contract and who benefits from it? Radio silence from the government.

ZANU-PF doth protest too much: Unpacking Zidera

  • The US first imposed sanctions against Zimbabwe in 2001 by passing the Zimbabwe Democracy and Economic Recovery Act, which included references to the sending of troops to the Democratic Republic of Congo (DRC), the private appropriation of public assets and the fast-track land reform programme.
  • In 2018, Zidera was amended to remove the DRC deployment and the fast-track land reform issues. The amendment recognised the government’s effort at clearing its IMF arrears, which had blocked credit lines. It included measures the government was required to take to ensure free and fair elections in 2018, such as keeping the military away from the polls and allowing all parties access to the state media.
  • The amendment introduced some new issues. First, that the government should implement the 2013 constitution, specifically to respect and protect human rights, to account for diamond and mineral revenue, to build peace and unity following the divisive July 2018 elections and to enforce the SADC Tribunal’s decisions on human rights and land compensation.

On close analysis there is nothing in the Zidera amendment that is oppressive, burdensome or impossible for ZANU-PF and the government to deliver. The government fails to account for diamond and other mineral revenues. The looting of public as well as private resources is unabated. Raids on bank accounts continue, with the government and Reserve Bank taking over private citizens’ forex savings.

The government has dragged its feet on implementing human rights provisions in the 2013 constitution. It holds on to draconian and repressive laws and it condones violence by state security, protecting known perpetrators of serious violations.

The killing of  protesters by the army in August 2018, the violent clampdown on protests by the army and police in January 2019, the banning of protests and beating of protesters in August 2019 and the continuing spate of abductions, torture and, at times, killing of government critics, trade union leaders, opposition officials, satirical comedians and civil society activists clearly point to the relevance of the concern at the government’s continued terrible human rights record.

The issues related to the 2018 election have also been raised by electoral observers (including non-Western ones) and commentators, as well as the Motlanthe Commission set up by the government to investigate the August army killings.

Finally, the issue of enforcement of the SADC Tribunal decisions is now moot, laid to rest by President Mnangagwa, ZANU-PF and the government’s commitment to compensate white commercial farmers dispossessed of land in the early 2000s. The government, via the ministry of finance, proceeded to make budget allocation – albeit paltry – for compensating some farmers in 2018. To the extent that it has accepted and attempted to act on this, it doth protest too much about it.

Double standards and sovereign prerogatives

My view is that sanctions by superpowers – whether targeted on individuals or specific entities – are ideologically distasteful, ineffective and inconsistent as an instrument of foreign policy.

They are often selectively applied against countries seen as unfriendly while strategically important countries are spared. They are not applied against Western allies who violate democratic practice and human rights such as Israel, Saudi Arabia and Turkey.

Apart from offering a bogeyman to ZANU-PF, sanctions are a blunt instrument

But the foreign policy of a government, including its investment policy, is its own prerogative. Americans and Europeans can decide where to invest their money and to whom to give aid. The sudden withdrawal of government-to-government aid usually hurts ordinary citizens far more than corrupt elites. This is the case in Zimbabwe, where elites loot public assets and the masses suffer. Apart from offering a bogeyman to ZANU-PF, sanctions are a blunt instrument.

Can Zanu-PF have its cake and eat it?

Sanctions are not the point, in the final analysis. There is clear evidence that ZANU-PF has plundered and mismanaged the economy.

One of the responsibilities of a government is to develop policies to manage and steer the politics and economy forward regardless of the prevailing context. In wanting to plunder the economy, abuse citizens’ rights, subvert democracy and violate human rights and then blame it all on the sanctions bogeyman, Zanu-PF has sought to eat its cake and have it. It cannot.

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