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Yoliswa Dube Features Reporter
WINDOWS of expectation and hope were recently opened following the signing of nine bilateral co-operation agreements between China and Zimbabwe, as the two countries strengthened economic and political relations. More anticipation was ignited after Zimbabwe and Russia signed an agreement for the setting up of a $1 billion platinum project in Darwendale under a deal expected to create thousands of jobs.
The platinum project, which has been dubbed the biggest in Zimbabwe and among the largest mining ventures in the world, is expected to boost economic turnaround.
The project, expected to see the setting up of concentrators and a smelter, is a joint venture between the Zimbabwe Mining Development Corporation and state-owned high tech corporation, Rostec and VB Bank.
It is expected to significantly boost value addition and beneficiation which are key pillars of Zim-Asset, the country’s economic blueprint. China is ready to work with Zimbabwe to promote the comprehensive and in-depth development of the bilateral relations to further benefit the people of both countries.
The bilateral cooperation documents with China covered the fields of telecommunications, infrastructure financing, food donation, tourism, and student exchange programmes.
The deals, for the ordinary citizen, mean a new ray of hope for the economy. A hope that will see lives transformed and livelihoods improved.
But for the economic and business minded Zimbabwean, caution will be necessary. The country will need to enter into specific arrangements that will not only benefit the investor but the country.
“It’s a positive thing for the country that we’re entering into these deals, with the infrastructure one with China and platinum one with Russia. It will bring money to the country and create employment,” said Matabeleland Chamber of Industries president Busisa Moyo, who is also United Refineries chief executive officer.
He was quick to note that what had been signed were simply memoranda of understanding (MoU).
“An MoU is an MoU. We’re keen to know when the money will hit the local economy. But we didn’t have this investment before and it shows that Zimbabwe is an investment destination. These are all positive steps,” said Moyo.
Because there are always two sides to a deal, Moyo said it was important for Zimbabwe to know what the country would have to give up in the process of negotiating specific arrangements.
“We want to know the terms. What are we going to have to give up? We’re yet to do funding agreements for specific deals because an MoU is very broad. For example, if it’s an infrastructure deal to rehabilitate a specific highway we’d need to know at what amount and with what conditions.
“This is yet to be critiqued, taking into consideration the specifics of each agreement. It’s a positive step but we’re yet to see how it goes,” said Moyo.
Zimbabwe has in the past entered into agreements to revive the defunct Ziscosteel, now NewZim Steel, but years later, the fruits of the deals are yet to be enjoyed.
Years of mismanagement and neglect took their toll on Ziscosteel, which was a strategic company to the country’s economy employing over 3,000 workers.
It produced thousands of tonnes of steel annually for domestic use and export markets. Ziscosteel was also strategic as many downstream industries benefited from it.
The government resolved to swap 54 percent of its shareholding in the parastatal for a $340 million foreign and domestic debt takeover by a Mauritian company, Essar Africa Holdings.
However, resumption of operations at NewZim Steel is likely to take longer than expected amid indications the firm has to build three new plants before normal work starts.
Industry and Commerce Minister Mike Bimha said because of the state of affairs on the equipment at NewZim Steel, there would be construction of at least three new plants alongside what is already there.
“These deals mean good stuff for Zimbabwe but we need to remember that it’s a two way deal. Zimbabwe also needs to play its part and ensure it meets its end of the deal,” said a local civil engineer with reference to the China infrastructure deals.
“Are we going to be organised enough to pull it off? We don’t want deals that would end up stalling like what happened with Ziscosteel, which is yet to benefit the country.”
Under one of the deals, the Export and Import Bank of China, or China Eximbank, will provide a $218-million concessional loan to fund network upgrading of Zimbabwe’s state-owned telecom firm NetOne, one of the three mobile phone operators in the country.
The China Eximbank and China Export and Credit Insurance Corporation also signed MoUs with the Zimbabwean government that will enable Chinese financial institutions to fund viable projects in Zimbabwe.
Some Chinese companies also signed tentative cooperation agreements with relevant Zimbabwean institutions and companies, which is an indispensable step of the cooperation laying a solid foundation for concrete cooperation in the future, citing the project joint development concerning the Gwayi Coal Power Integrated Project in Matabeleland North province.
“I think this country needs fresh capital and as many foreign investors as possible. The more investors we get the better for us,” said former Zimbabwe National Chamber of Commerce president Obert Sibanda.
“As we structure some of these deals, it’s equally important to be cautious and ensure we look out for how the deals would benefit the local economy. If they’re not well structured, they’ll benefit only the investors and not us.
“We need a situation where money will circulate here. If we look at construction for example, they should buy equipment here and employ local labour as opposed to bringing in their own equipment and labour,” he said.
Sibanda said in as much as investors were welcome into the country, it was important to consider ways in which deals with investors would benefit Zimbabweans.
“When people negotiate, they need to consider ways in which deals would benefit the local economy,” he said.
China would also provide Zimbabwe a non-reimbursable emergency food donation.
Although Zimbabwe received generally good rains during the last agricultural season resulting in the best harvest in five years, some areas did not have good yields either because of shortages of inputs or erratic rains.
Chinese President Xi Jinping said the Chinese side supported Zimbabwe’s efforts to develop the economy and improve people’s livelihood.
He said China was ready to take part in the construction of Zimbabwe’s special economic zones and industrial parks, to enable them to play a leading role in the cooperation of infrastructure construction, mining industry, manufacturing and other fields, and will encourage more Chinese companies to invest in Zimbabwe.
On its part, Zimbabwe hoped to strengthen cooperation with China and constantly advance the bilateral relations in the new era.
Online Reporter