The Sunday News
Rutendo Nyeve, Business Reporter
THE Zimbabwe National Chamber of Commerce (ZNCC) has said the illegal sanctions continue to impact negatively on the country’s industry and commerce.
ZNCC says sanctions have triggered high costs of borrowing, tight liquidity conditions, outdated technology, continued use of antiquated plant and machinery, declining agriculture output, low aggregate demand and power outages.
Zimbabwe’s land reform programme initiated in 2000 led the United States of America (USA) to impose the illegal sanctions under the Zimbabwe Democracy and Economic Recovery Act (Zdera) of 2001.
Supplementing the US legislative sanctions of Zdera are Executive Sanctions (Executive Order 13288) of March 2003 that have been renewable on a yearly basis. The European Union (EU) also introduced its own sanctions in February, 2002. However, the EU lifted some of its sanctions in 2014, although political sanctions against senior Government officials, the country’s Service Chiefs and Zimbabwe Defence Industries are still in place.
The sanctions also include travel bans and asset freeze for Zimbabwean officials and companies. The EU insists that it will maintain the sanctions under constant review in light of political and security developments in Zimbabwe. Far from the claim that sanctions are ring-fenced and targeted on a few individuals, the reality on the ground is that the tight grip of the declared and undeclared sanctions is being felt throughout the whole economy. These punitive measures have effectively hampered the Government’s efforts to implement its development agenda.
Sunday News caught up with the Zimbabwe National Chamber of Commerce Matabeleland regional vice-president Mr Louis Herbst who said sanctions on Zimbabwe had impacted negatively on the country’s economy which has lost large sums of revenue.
He said the sanctions affected the manufacturing sector through lack of long-term financing which precluded the sector from accessing the much-needed capital injections for retooling. This was through the withdrawal of the multilateral financial institutions from providing balance of payment support to Zimbabwe which had a ripple effect as some other bilateral creditors and donors also followed suit by either scaling down or suspending disbursements on existing loans.
“Sanctions on Zimbabwe have had a huge impact on industry. For example, Zimbabwe has lost well over US$42 billion in revenue over the past 19 years because of the sanctions. This includes lost bilateral donor support estimated at US$4,5 billion annually since 2001, US$12 billion in loans from the International Monetary Fund, the World Bank and African Development Bank, commercial loans of US$18 billion and a GDP reduction of US$21 billion. As a consequence, the significant progress that Zimbabwe had made in the development of infrastructure, as well as health, education and other social service delivery systems had been severely reversed.
This has resulted in the most vulnerable sections of the population falling into poverty,” said Mr Herbst.
He further said the nation must not be misled into thinking that sanctions are the remedy in solving internal issues.
“We cannot and should never find ourselves in a place where we justify sanctions as being the right measure to resolving our internal matters, sit back and watch our people suffer as a direct consequence, comment and contribute negatively internationally of our country, the perceived wrongs yet offer no rights.
The reality is that sanctions have had a direct negative impact on our lives and the economy that has left little to no alternative but to create an informal economy as a means to an end and survival,” said Mr Herbst.
However, he was quick to express his confidence on the Second Republic’s policies which he says will go a long way in mitigating the effects of sanctions.
“Through President Mnangagwa’s Vision 2030, and beginning with National Development Stratedy 1 we are working towards becoming an upper-middle income society and as such we all have our role to play. Society as a whole may say that they have not been positively affected by these changes so far nor have they yet had an impact on their lives, we must understand that this is the long term plan, transport infrastructure, water crises, power outages, food security to mention a few are all being addressed and we are heading in the right direction.
“You cannot plant a seed and harvest the next morning, it needs time to grow and that’s exactly what we must allow, time for that seed to grow and we will soon be able to accomplish the set targets and goals of which so far the trajectory clearly shows we are achieving and heading in the right direction,” said Mr Herbst.
