Zimbabwe delegation off to China to study economy with cap in hand

By Janet Shoko
Posted on Monday, 7 July 2014 12:22

The 20 member inter-ministerial team is the second such delegation, after the first returned empty handed, as more potential donors are closing doors on the troubles southern African nation.

Finance Minister, Patrick Chinamasa leads the delegation, compromising of several government officials including cabinet ministers and deputy ministers that jets out on Tuesday.

The main aim of the trip is to seek funds to finance to fund government’s economic blueprint, ZimAsset which needs about $27 billion.

The 10-day visit is to “study the working of the Chinese economy at the invitation of the Chinese government”, a communiqué from the government says.

It is understood that Chinese officials are also expected to make a reciprocal visit in the coming months and all of this will culminate in a visit to Zimbabwe by the Chinese premier, Li Keqiang early next year.

In January, Chinamasa returned to Zimbabwe empty handed after failing to convince the Chinese to lend Zimbabwe money.

The Chinese demanded more tangible guarantees on loan repayment.

ZimAsset is a five-year, 2013 to 2018, economic blueprint development programme extracted from the ruling Zanu PF election manifesto that focuses on four pillars — food security and nutrition, social services and poverty reduction, infrastructure and utilities and value addition and beneficiation.

It has a two-pronged approach, the quick fix (2013 to 2015) and the long term of dealing with the woes confronting the economy.

It aims to grow the economy by 6,1% this year, with the ultimate target of achieving a 9, 9% growth rate by 2018 — but government is struggling to secure funding for these plans and the World Bank says Zimbabwe’s growth prospects for 2014 are no more than 3%.

But the China jaunt seems to have created friction within President Robert Mugabe’s government, with Foreign Affairs Deputy Minister, Chris Mutsvangwa attacking his boss Simbarashe Mumbengegwi for leaving him out of the trip.

Mutsvangwa, a former ambassador to China has been angered by inclusion of junior officials from the Finance Ministry at his expense.

He blames Mumbengegwi for his exclusion.

As a former ambassador to China, Mutsvangwa believes his presence would have boosted chances of clinching deals, arguing that China, as an economic giant, should be handled carefully by experienced people.

Ironically, Mutsvangwa was part of the January team that failed to source funds.

Meanwhile, Chinamasa says the public and publicly guaranteed external debt was $5 billion or 56 % of the total debt and $1.35 billion (15%) while the RBZ’s external debt stood at $596 million or 7%.

Among the creditors are multilateral institutions – AfDB, owed $597 million with arrears amounting to $519 million, ADF Bank at $58 million (arrears $16 million), Afrexim Bank $20 million, BADEA $20 million, World Bank $833 million (arrears $828 million), IDA $563 (arrears $205 million).

Chinamasa said the government was engaging its creditors, with a view to get alleviation, get more loans and to clear the way to attract Foreign Direct Investment (FDI).

“It’s a long road, a very long road – maybe two, three years down the line,” he said.

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