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Monday, 23 September 2019 07:57

Why ED’s UNGA message will ring hollow

President Emmerson Mnangagwa is this week expected to attend the United Nations General Assembly in New York, USA.

The annual meetings come barely a month after the Southern African Development Community held a summit and declared October 25 as a day entities within the region will organise activities and lobby the US to lift sanctions or restrictive measures on Zimbabwe.

 The Zimbabwe Democracy and Economic Reform Act (Zidera) has been a thorn in the flesh for authorities in Harare.

Soon after his ascendancy following the November 2017 coup, President Mnangagwa broke rank with his party’s ideology when he said sanctions were of little effect on Zimbabwe’s economic outlook.

When he made this statement he had the goodwill of the international community following former president Robert Mugabe’s ouster. That goodwill was short-lived. Post-election violence, which claimed the lives of seven people and left several injured blemished Mnangagwa’s reengagement with the international community.

Quite predictably Mnangagwa had to sing from the same hymn as his predecessor after western powers lost faith in him. The impact of US sanctions has been felt in both public and private spheres. At UNGA, Mnangagwa will take the anti-sanctions message to global leaders when he takes to the podium. Already some people are picketing in New York and the late Coltrane Chimurenga is conspicuous by his absence.

Zimbabwe’s anti-sanction drive is not peculiar to the Mnangagwa’s administration. Here lies the problem. One cannot expect a different result after doing the same thing over and over again. Conditions for the lifting of sanctions have been spelt out and government should focus on these conditions.

The idealistic path of institutionalising Zimbabwe’s problem on a global forum cannot work in a world where realism prevails. The United States will not move an inch when a group of developing countries call for the lifting of sanctions. That is a sad reality of international relations.

 President Mnangagwa should have a defined foreign policy after his return from the US. As it stands Zimbabwe’s foreign policy has been ambiguous and that will not serve to protect her interest. Zimbabwe’s economic policies are anchored on reforms—political and economic and the anti-sanctions are against reforms. This disjointed narrative will only serve to extend the status quo or probably lead to more international isolation given recent developments in Zimbabwe.

One of the reasons why Zimbabwe has remained a member of the UN despite trying in vain to force the US to lift sanctions on Harare is that she has powerful allies—China and Russia who can veto any aggression on Harare. This cooperation has helped Zimbabwe survive but it has also come at a cost. Zimbabwe will remain a source of chrome and other primary products to these super powers and she will find it difficult to unshackle poverty using such a development model.

Published in econometer
Monday, 26 August 2019 13:39

CBZ’s new role in Zim-US reengagement

Zimbabwe’s largest financial group by assets CBZ Holdings last week announced the appointment of its new board chairperson, American banker Marc Holtzman.

Holtzman succeeded Noah Matimba after Akribos Capital fronted foreign investors in taking over the 24 percent majority stake in CBZH. Holtzman’s appointment has generated a lot of interested given the financial services group central role and how it has been under the spotlight of US sanctions.

CBZ was up until 2014 banker to government after the Reserve Bank became almost technically insolvent following the introduction of the multiple currency system in 2009. The multiple currency regime ended this year when government introduced the mono-currency system this year to manage foreign exchange movements.

For a bank that is facing a hefty fine from the United States Office of Foreign Assets Control (OFAC) for carrying out thousands of transactions on behalf of ZB Bank which was under sanctions, Holtzman, who has over three decades of political and public service in the US is expected to help the bank negotiate for the lifting of a penalty. OFAC had initially slapped CBZ bank with a $3.8 billion fine but after mitigation the penalty was reduced to $385 million.

Holtzman’s new job could also signal Zimbabwe’s multi-pronged approach in pushing for full re-engagement with the US which imposed the Zimbabwe Democracy and Economic and Recovery Act (Zidera).

Zidera is a restrictive measure that has been a major hurdle in Zimbabwe’s interactions with international financial institutions, particularly the Brettonwoods institutions in which the US has majority shareholding. Already Zimbabwe has hired US public relations firm, Ballard Partners which is headed by prominent Washington lobbyist Brian Ballard.

However recent developments in Zimbabwe such as repressive acts by state security agents have put Zimbabwe back on the spotlight. The European Union has also raised concern over growing human rights violations.

Holtzman faces a herculean task in changing Zimbabwe’s narrative beyond the country’s borders. The deep-seated issue around the imposition of sanctions is something that could take a generation to reverse. Zimbabwe is at crossroads.

Published in econometer