MDC on Zimbabwe's re-engagement with IMF

International Monetary Fund

During the Government of National Unity, the then Minister of Finance, Mr. Tendai Biti initiated the process of re-engagement with the International Monetary Fund. This resulted in a series of “Staff Monitored Programmes” which have now come to a conclusion. The so called “Targets” set for the Zimbabwe Government were ridiculously low and throughout this process the IMF has lent over backwards to ensure that Zimbabwe remains in the process.

The visit by an IMF review mission that came to an end recently was no different. Despite the palpable failure of the Government to meet its fiscal and monetary targets and its obligations to make the Indigenisation Laws more acceptable to investors, the Fund has declared that Zimbabwe has met its targets and they will now move onto the next stage in this process.

The next stage is an exercise agreed during the Lima meetings of the Fund in September/October 2015 and involves the clearance of the accumulated arrears on loans extended to Zimbabwe by the multilateral agencies of the IMF, World Bank and the African Development Bank amounting to $1,7 billion. What this involves is the ADB taking over the arrears and converting them into a single, new long term debt. Zimbabwe will make a small contribution from its stock of IMF funds carried over from the era of the GNU. The exercise will not alter Zimbabwe’s total indebtedness to its creditors but will eliminate the arrears to the multilateral agencies and reschedule a part of the Debt.

This process, although cosmetic, will then open the door to the next stage in the re-engagement process. This involves the main Board of the Fund, meeting in Washington in May 2016, deciding on the conditions Zimbabwe must satisfy in order to become eligible for debt rescheduling and cancellation and the resumption of normal operational conditions in regard to relations with the multi-laterals and global financial markets.

The stakes could not be higher; Zimbabwe desperately needs a massive injection of new funds to support its recovery from nearly 4 decades of bad government and poor policies. Zimbabweans are poorer than they were in 1980 and Zimbabwe, once a regional economic hub, has now got an economy which struggles to compete with its smaller neighbors.

But what the IMF is not doing is being brutally honest with Zimbabwe. They continue to make the false claim that the economy is growing when it is patently obvious to all that another economic collapse is underway. They also falsely claim that the Country has met its targets under the SMP – already so low as to be laughable, when it is clear to all that we are spending more than we can afford and staff costs in the Civil Service now exceed the gross income of the State.

But it is also time that the Fund made it clear to everyone what are going to be the new conditions that the Fund Board will demand from us when they meet in May this year. To get Zimbabwe back on its feet the following are the main issues:

  • 1.They must demand that we deal with all impediments to economic recovery and growth. Unless we can resume economic growth there is no point in debt relief or rescheduling.
  • 2.They must demand that we respect property rights and contractual obligations within the Law.
  • 3.They must demand that any future elections in Zimbabwe must be internationally supervised and meet the conditions that apply to such activities.
  • 4.They must demand that the Government of Zimbabwe respect the human and political rights of all Zimbabweans.
  • 5.They must demand the full implementation of the new Constitution and the restoration of the rule of law in its widest sense.

It is time that the international Community draws a clear line in the sand and makes it clear what Zimbabwe has to do to resume its membership of the global community of nations. Zimbabweans have suffered for too long under a regime that has consistently denied them their most basic rights and destroyed the economy through bad governance and corruption. The IMF has the obligation to make it clear that the re-engagement process will not abuse this process.

MDC: Equal opportunities for all Add a comment

MDC calls for thorough audit of Marange diamonds

Audit Marange diamonds

Recent revelations by President Robert Mugabe to the effect that at least US$15 billion worth of diamonds from Marange/Chiadzwa has not been accounted for are very astounding and startling, to say the least.

Mugabe publicly stated that less than US$2 billion has been remitted to treasury ever since diamond mining operations began in the Marange/Chiadzwa areas about a decade ago. The MDC is extremely concerned with the opaqueness surrounding the diamond mining activities at Marange in Manicaland province. It is more than apparent that right from the outset, the manner in which mining licences were awarded to the various mining companies at Marange/Chiadzwa lacked transparency and accountability.

There was no public tender system that was instituted before the afore-mentioned diamond mining licences were awarded. Everything was done secretively and as a result, it was always going to be very difficult to enforce transparency and good corporate governance consistent with international best practice.

In a desperate move purportedly aimed at restoring sanity within the diamond mining industry in Marange, the government recently cancelled all licences that had been granted to the various mining companies. Not surprisingly, a number of these diamond mining companies have since resorted to litigation in order to enforce what they claim to be their rights that were infringed by the government’s rather draconian and unprecedented action. Since the court cases are still sub- judice, the MDC will not give its own interpretation of the law suits. Suffice to state that the MDC strongly advocates for respect for the rule of law and property rights.

No rocket science is needed to appreciate the fact that there has been serious illicit financial flows from Zimbabwe emanating from the opaque and shadowy diamond mining operations in Chiadzwa over the years. Even the local communities that live in Marange communal lands have bitterly complained about how the diamond mining activities on their ancestral land has not benefitted them in any meaningful and tangible way.

Abject poverty and destitution remain the order of the day for the thousands of villagers who were translocated to Arda Transau Estate to make way for the diamond mining operations. Even the provincial capital city, Mutare, still looks like a ghost town inspite of the fact that billions of dollars worth of diamonds have been extracted from Chiadzwa over the past few years.

Put bluntly, the people of Chiadzwa in particular and the whole of Zimbabwe in general, have absolutely nothing to show to prove that diamonds have improved their standard of living. If anything, the discovery of diamonds in Marange has come to be some kind of a curse to the people of Chiadzwa in particular and to all Zimbabweans in general.

Marange diamonds have benefitted only a few privileged people; most of whom are members of the ruling elite. It is beyond comprehension how a staggering US$15 billion worth of diamonds could go missing without the President of the country knowing, exactly, what is taking place on the ground.

Mugabe’s recent disclosure, therefore, is clear proof of gross dereliction of duty on his part. Without a proper and comprehensive forensic audit of the diamond mining activities in Marange being carried out, the people of Zimbabwe might never get to know how much, the country has lost as a result of the criminal and illicit financial flows coming out of Marange.

The MDC holds Mugabe and his entire Zanu PF regime solely and wholly responsible for the mess in Marange. We have stated it before, and we repeat it here and now, Mugabe is no longer in full and effective control of the country. The deep-rooted factionalism that is tearing Zanu PF apart has literally made it impossible for Mugabe, at the very advanced age of 92, to efficiently and effectively discharge his duties as Head of State.

It is apparent that there are some shadowy and Mafia-like forces that are now in de facto control of the country. In order to save Zimbabwe from a complete and irretrievable breakdown, the MDC calls upon parliamentarians, across the political divide, to do the patriotic and honourable thing of immediately impeaching Mugabe. The old man is certainly no longer fit and proper to remain in office as the country’s President. He has totally and hopelessly failed to discharge his duties as Head of State.

MDC: Equal Opportunities Add a comment

Headquarters

Headquarters:

44 Nelson Mandela Street
Harare,Zimbabwe

Phone:     +263 773011263
WhatsApp    +263 771687197
Email:    info@mdc.co.zw
Web:    www.mdc.co.zw