Sadc calls out U.S and EU on sanctions lie
Harare (New Ziana) – Sanctions imposed on Zimbabwe by the U.S and her Western allies two decades ago are not targeted at individuals as they have proved to be directly responsible for the decline of the Southern African country’s economy, the Southern African Development Community (SADC) said on Friday.
Western countries imposed sanctions on Zimbabwe at the turn of the millennium following the Zanu PF government’s decision to compulsorily acquire vast tracts of prime agricultural land that was in the hands of a few white commercial farmers to resettle thousands of landless black families.
The West responded harshly to the agrarian reforms by imposing illegal economic sanctions on Zimbabwe, which have cost the country in excess of US$90 billion in economic damages over the years.
The countries responsible for those sanctions, have however maintained that the restrictions were only targeted at specific ruling party individuals, a theory which Sadc has rubbished.
In a damning four page statement to mark the special day which Sadc set aside for the entire region to call for the removal of sanctions against Zimbabwe, the bloc’s executive secretary Dr Stergomena Lawrence Tax detailed the impact of sanctions on the local economy as well as the region.
“The sanctions have proved to be directly affecting entities beyond the so-called targeted individuals, and have a negative impact on the credibility of Zimbabwe and serious trickle-down effects on the economy and people of Zimbabwe, and by extension, the SADC Region,” she said.
“Regardless of the terms used to define the sanctions, international finance and investment entities take a precautionary approach, and inadvertently restrict the extension of financial support to Zimbabwe, and investment across economic sectors. This is contrary to the argument that the sanctions are targeted at individuals, and do not affect ordinary Zimbabweans and the region. This situation negatively affects the prospects for economic recovery.”
Dr Tax said the nature of U.S. sanctions on Zimbabwe for example, were contained in two key instruments, the Zimbabwe Democracy and Economic Recovery Act (ZIDERA) and the “targeted sanctions program”, which comprises a list of individuals and entities, and specifically instructs US nationals not to do business with these designated entities or their affiliated entities.
The current list as of October 2019 includes, 13 state owned enterprises, including the Minerals Marketing Corporation of Zimbabwe (MMCZ) and the Zimbabwe Mining Development Corporation (ZMDC) and 13 so called “other” enterprises.
She said sanctions on the Infrastructure Development Bank of Zimbabwe, an entity mandated with providing long and medium-term funding for key infrastructure projects had resulted in the loss of credit lines worth $100 million and equity partnerships.
“The State owned enterprises traditionally contribute significantly to SADC economies including that of Zimbabwe, and that at the peak of the Zimbabwean economy, state owned enterprises contributed close to 40 percent of the Zimbabwean economy, and as at now, is estimated to contribute about 14 percent of Zimbabwe’s GDP, making these entities a key part of the economy.”
“Sanctions on these entities directly impact on employment and income generation opportunities, and thus the livelihoods of the ordinary Zimbabweans,” she said.
She added; “The Agricultural Bank of Zimbabwe, an entity entrusted with providing financing for smallholder farmers was put under sanctions until February 2016. This development, coupled with the lack of external financing support, and the lack of foreign direct investment have negatively impacted on expansion programmes and investment in agriculture, hence the deterioration in production capacity.
“Two strategic entities in the Mining Sector, the MMCZ and the ZMDC were sanctioned in 2008 and 2012, respectively. The sanctioning of these entities, particularly the MMCZ (an institution mandated to solicit markets and administer mineral sales proceeds), has resulted in constrained financing for mining operations, loss of revenue, and reduced ability to access new markets.”
Dr Tax said the prevailing sanctions also restricted Zimbabwe’s ability to access multilateral financing while also limiting business dealings with US companies.
She said the cancellation of business ties with US-based and US linked firms and companies had negatively impacted the manufacturing sector, as the sourcing of industrial technologies and supplies was disrupted, including loss of supply and market contracts.
“Since 2001, International Financing Institutions such as the World Bank, International Monetary Fund and the African Development Bank are barred from extending financial support to Zimbabwe and have instituted a number of suspensions on balance of payments and technical assistance support, including declaring Zimbabwe as ineligible to access fund resources. Despite the accumulation of arrears on the part of Zimbabwe, the IFIs have deliberately avoided to enroll Zimbabwe on special recovery programmes (like other countries in similar circumstances). The suspension of multilateral financing support is more linked to sanctions than failure by Zimbabwe to honour loan servicing obligations,” she said.
In the aviation industry, she said, most European Airlines exited the Zimbabwean market as a direct result of sanctions, affecting not only the aviation industry, but also the tourism sector which is further constrained by the bad publicity and negative travel advice given to tourists as part of the calculated sanctions against Zimbabwe.
“It is evident that the strategic sectors of the Zimbabwean economy are constrained by the imposition of the sanctions (targeted or not targeted) as they are a barrier to innovation, growth, profitability and investment. Sustained sanctions will imply continued lack of access to multilateral financing and therefore no prospects for economic resuscitation. Instead, the economy will continue to grapple with public debt, inflation, unemployment, low FDI stock and limited supply of goods and services, with negative and devastating impacts on the lives of ordinary Zimbabweans.”
Dr Tax said the removal of all forms of sanctions against Zimbabwe would pave way for its socio-economic transformation and economic development as they have had serious ramifications on economic growth and therefore on the livelihoods and social well-being of ordinary Zimbabweans.
She said the removal of the illegal embargo would benefit the SADC region as well while enhancing cooperation of SADC with the European Union (EU) and the United States of America (USA).
“The implosion of the Zimbabwean economy has added a burden to the social services of neighbouring countries due to mass emigration. The lack of financial support for infrastructure development has led to the dilapidation of critical rail and road networks in Zimbabwe, which were traditionally utilised by neighbouring countries as transit networks in support of regional trade.
“Regional economic integration targets such as SADC macroeconomic convergence have been retarded as Zimbabwe has failed to meet some of its targets owing to the adverse effects of the sanctions. Sanctions have reduced Zimbabwe’s capacity to take part in regional programmes that are supported by International Cooperating Partners, thus impacting negatively on SADC development and integration agenda,” she said.