Corruption, State Capture, Not sanctions: Cause Of Zimbabwe’s Economic Meltdown

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Daily Maverick

THE United Nations Special Rapporteur on the negative impact of unilateral coercive measures on the enjoyment of human rights,  Alena Douhan, will undertake an official visit to Zimbabwe from 18 to 28 October 2021 following an invitation from the government of Zimbabwe.

The UN Special Rapporteur’s office is established in terms of the Human Rights Council resolution 34/13 on human rights and unilateral coercive measures.

The invitation of the Special Rapporteur comes because Zimbabwe was put under sanctions by the Zimbabwe Democracy and Economic Recovery Act (ZIDERA) of 2001 by the US and the European Union Restrictive Measures, first introduced in 2002.

The ZIDERA and the EU restrictive measures have received mixed opinions and views in equal measure related to their legality and their impacts on the economy and the general populace in Zimbabwe.

According to the UN Resolution 34/13, unilateral coercive measures and legislation are contrary to international law, international humanitarian law, the Charter and the norms and principles governing peaceful relations among States, and highlights that on long-term, these measures may result in social problems and raise humanitarian concerns in the States targeted.”

The Southern African Development Community (SADC) called for the removal of sanctions at the SADC Heads of State and Government Summit in 2019 in Dar es Salaam.

The SADC Heads of State and Government noted that “the adverse impact on the economy of Zimbabwe and the region at large, of prolonged economic sanctions imposed on Zimbabwe” and set aside a day to denounce the sanctions at the regional level.

The African Union also weighed in and pronounced its solidarity with Zimbabwe on the call for the removal of the sanctions, citing, “the negative impact of the persistent economic sanctions on the economy and people of Zimbabwe”.

In 2020, the then AU chairperson Cyril Ramaphosa took the matter to the 75th UN General Assembly on behalf of the AU citing the need “To ensure that no country is left behind, we reiterate our position as the African Union that economic sanctions against Zimbabwe and Sudan should be lifted to allow their governments to respond adequately to the pandemic.”

Legality of sanctions?

The Zimbabwe government has endlessly raised concerns about the legality of the sanctions since the Robert Mugabe era, calling them illegal and showcasing their impact on the slow pace of economic recovery and failure to get new credit lines from international financial institutions

Besides appealing to the regional and continental bloc for solidarity and to the UN, several local initiatives to mobilise citizens have been ongoing. At the US Embassy, there has been an anti-sanction group camping for over a year now calling for the removal of the “illegal sanctions”.

On 25 October 2019, the Government of Zimbabwe mobilised citizens for a nationwide anti-sanctions march, alleged to have gobbled up close to $4-million of unbudgeted public funds.

The international community in Zimbabwe, particularly the US Embassy and the EU Resident Representative have continuously argued that ZIDERA has had no effect on Zimbabwe, as Zimbabwe disqualified itself from any debt relief package due to accumulation of arrears to the international financial institutions, starting back in 1999.

Representatives of the international community argue that trade relations have continued despite the sanctions.

The American Embassy indicated that it has supported Zimbabwe through aid to the tune of close to $4-billion since 1980, the UK government in 2020-2021 gave over $176-million to support the Covid response and rule of law among other pressing issues. The EU boasts of being one of the biggest donors in Zimbabwe, having poured in €287-million for the period 2014-2020, targeting various projects to uplift the livelihoods of many Zimbabweans.

Civil society: Agree to disagree

Civil society organisations, academia and prominent civic leaders have agreed to disagree on the legality and the impact of sanctions.

On one hand, some sections of civil society have been unapologetic in castigating the sanctions — calling them illegal, claiming that they have perpetuated repression as the government cites sanctions as an excuse for not delivering.

On the other hand, civics operating in Zimbabwe are more sceptical about the sanctions being completely lifted. This is driven by the continuous shrinking civic space for both social and political activists and human rights defenders. This group argues that sanctions act as a stick to some extent to deter outright closing of civic space.

While all these discussions have gone on since 2001, creating different narratives and positions at the national, regional and global levels, in 2017 the incoming president made an elegant inaugural speech that was balanced and pointed to the ideals of a prosperous, dignified and just society. The speech gave a balanced view of our political conundrum and hope to a significant segment of society: some were sceptical, but generally that speech earned him significant public goodwill in different circles.

The dissonant statements and actions that followed since 2018 took Zimbabwe back to the aptly described old dispensation by President Emmerson Mnangagwa in 2018. Instead of a new policy dispensation to recover the economy and to serve the people, the blame game started while those perpetuating corruption and arbitrage continued to consolidate their economic power, with patrimonialism flourishing unfettered.

In February, Daily Maverick published a scintillating report on how cartels have captured the state in Zimbabwe.

This was followed by many other reports and articles pointing to how business, government and the state were conniving toward primitive accumulation by siphoning public funds through “tenderpreneurship” and turning strategic public entities into private hands.

One report shows how local Zimbabweans in high places are benefiting from different sectors of the economy and operating in tax havens to stash their loot away from the fragile economy. Another report shows how a few elites are making a fortune while the economic and huge debt burdens are carried and borne by the 49% of the Zimbabwean population living in extreme poverty.

The Zimbabwe Auditor-General’s reports have exposed misuse of public funds and maladministration that has cost the national fiscus a fortune.

The findings point to irregularities in corporate governance of government institutions, criminal abuse of power by public officials and procurement irregularities — among other acts — that border on the theft of public funds.

Only 16% of the audited public institutions in 2019 have unqualified audit opinions; the rest had material or significant findings calling for fundamental reforms in the way the government operates. The Auditor-General has made 356 recommendations related to these matters and only 92 have been fully implemented.

The most affected sectors have been mining, agriculture, infrastructure development and energy.

Zimbabwe boasts resources of 40 precious minerals but has lost significant potential through illicit financial flows and harmful tax incentives to some corporates. The Minister of Home Affairs, Kazembe Kazembe, established that Zimbabwe is losing $100-million dollars a month through gold smuggling.

Annually, this figure adds up to $1.2-billion, a figure roughly equal to Zimbabwe’s total gold export earnings.

Zimbabwe is said to have lost about $1.5-billion through gold smuggling in 2020, due to the lack of a policy framework that can promote small scale mining and incentivise it to contribute directly to the gold earnings.

In 2016, the then president of Zimbabwe, Robert Gabriel Mugabe, hinted that about $15-billion was lost in diamond mining in Marange in the Eastern part of Zimbabwe.

Corruption and plundering of public resources

The plundering is facilitated by the lack of legal and policy frameworks that can enhance contract transparency and community benefit schemes that are not based on benevolence. In agriculture, through the Command Agriculture schemes, the Public Accounts Committee established that the agriculture input scheme of $3-billion was filled with irregularities and prejudiced Zimbabweans of huge public funds. The energy sector has been marred by white elephant projects and highly inflated projects costing millions of dollars.

Reports of gross, grand corruption and mismanagement of public resources have continued to pour in from public sector institutions, such as the Zimbabwe National Road Administration (ZINARa), National Social Security Authority (NSSA) and Zimbabwe Electricity Supply Authority (ZESA). While scandals are reported with some arrests, the masses reel in energy poverty, travel on unsafe roads and pensioners receive paltry earnings.

Abuse of public offices by senior government officials continues unabated as the economy remains volatile, uncertain, complex and ambiguous. This is exacerbated by the Covid-19 pandemic, which has caused serious negative social and economic impacts in Zimbabwe and globally.

The endemic corruption and abuse of public resources point out clearly that Zimbabwe has a deeper statecraft and internal crisis other than having external sanctions to deal with.

There is a clear pattern of a deep state that is controlling the economic and public affairs in Zimbabwe. Unfortunately, that creates a vacuum of ideology, principle and accountability as the agenda of the deep state is always cynical. Clear corruption cases slip through the cracks at various levels of government as the system pillages even the very core of institutions.

At parliamentary level, there has been complacency and lack of willpower to utilise the oversight power and role that institutions must check on the executive arm of government. Parliament has been further weakened by the cynical recall of genuinely elected MPs from the Chamisa faction.

Other accountability institutions such as the Zimbabwe Anti-corruption Commission (Zacc) have lacked capacity to play their key role of arresting suspects and having cases convicted, and corruptly gained public funds or resources recovered. The state presents weak prosecution cases that mostly end in acquittals.

The twin epidemics of maladministration and impunity have caused more untold suffering for the majority of Zimbabweans who depend on public services due to lack of employment, with over 64% etching out a living in non-productive informal employment.

Instead of harnessing domestic resources to improve the lives of many Zimbabweans and mitigate the impacts of both the exogenous and endogenous shocks, the government allows only a few to enjoy the national wealth.

What this has created is a crisis in and of the state resulting in a lack of identity, capacity and capture by a few businessmen — more like an undemocratic predatory state where the rule of law does not apply. The state and government fail to implement an economic model built on respect for human rights in their indivisible nature, accountability and equity standards.

Social spending by Zimbabwe on a five-year trend shows minuscule resource allocation to social services, far below the 4.5% Social Policy for Africa (2008) benchmark. This could easily be addressed by effective prioritisation and plugging the rampant leakages that currently prevail.

The government fails to fulfil its mandate, leaving the general populace and especially children in the rural areas to suffer dire consequences as the state fails to safeguard their right to education and healthcare, as enshrined in the constitution. For instance, the government is building a $269.5-million state-of-the-art hospital for the rich, yet public hospitals are crippled by acute shortages of medical drugs, equipment and health professionals.

A Zimcodd study established that Zimbabwe’s extensive political corruption is the major driver of fiscal deficits and the exponential growth of public debt beyond the legal threshold of 70%. The conflation of the state, politics and business is a triangular marriage that has continued to push the monetary, fiscal and economic burdens to the ordinary citizens who are muzzled and disempowered to hold those in the vortex of corruption and abuse of power accountable. Impunity is an embedded culture and no one is willing to be held accountable for economic and financial crimes being committed.

Without diving into the debate of whether the Zidera or the EU restrictive measures must stay or be removed (which is a conversation we Zimbabweans must have and give each other guarantees of a social contract as we move forward), the UN Special Rapporteur will have to grapple with the reality of the other set of sanctions imposed by a few Zimbabweans on other Zimbabweans through maladministration and impunity.

If the sanctions she is coming to Zimbabwe to assess are found to have had adverse impacts on ordinary Zimbabweans, the twin epidemics already highlighted must be equally treated as they have exacerbated the protracted crisis and contributed to weak social protection and public service delivery, causing humanitarian and human rights crises in Zimbabwe.

Zimbabwe must entrench a new policy dispensation that respects the constitution and fosters transparency, accountability and serving the people of Zimbabwe. There are political and economic reforms that Zimbabwe must embrace, based on the 2013 Constitution.

The SADC and AU as counterparts and the UN as a multilateral institution have roles to assist Zimbabwe rise again by ensuring that a framework of national envisioning, internal dialogue and consultations on rebuilding the nation is done in a way that builds trust and confidence.

For example, the UN could play a critical role in opening discussions on possibilities of discussing a debt relief package for Zimbabwe and how that can be insulated from abuse while directly benefiting Zimbabweans. The Special Drawing Rights (SDR) monitoring and accountability framework can be a starting point. Zimbabwe got an allocation amounting to $961-million from the IMF through the SDR facility to respond to Covid-19. This SDR can set a good example in complementing the required reforms rather than substituting the reforms.

The Special Rapporteur will have to be thorough to assess the accountability systems in place and be able to assist Zimbabwe in creating a conducive environment for its people, business and future generations.

For the past two decades, leadership has mainly apportioned blame on external forces while they toot their horns as messiahs who brought independence, land reform and indigenisation laws to Zimbabwe among the achievements they highlight.

While these struggles were noble, they gave political leaders great entitlement and created patronage politics, owing nothing to the citizens. They stagnated without setting a post-liberation narrative where women, the young, communities and other marginalised groups become key decision-makers with the central government ensuring those decisions are implemented.

Zimbabweans must know that to move forward there is a need for introspection on what being a nation means, what independence means for all of us.

The re-imagining of the state and the role of leadership and citizens is important to include in the matrix. Where leadership has been inept in its discharge of duty and mandate given by the citizens, those same citizens must be able to approach independent institutions for the redress or recall of such leadership.

More importantly, where leaders fail to deliver on their obligations to citizens, they must be held accountable through robust systems and independent institutions.

Our current crisis is primarily internally authored and driven, rather than being the result of external factors. We have an opportunity to write a new script for governance and not keep replaying an old horror movie where the many are insecure and suffer structural violence daily, while a few sit in the comfort of well-manicured gardens of plenty watered by others’ tears.

We are the people who must fix it. None but ourselves.