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THE Western sanctions regime against Zimbabwe over the past two decades has done damage, but Zimbabwe has managed to overcome many of the problems, at least under the Second Republic, with investment by a rapidly growing business sector replacing much of what we might otherwise have been tempted to borrow.
We are now as a result likely to see growth of more than 3,8 percent this year, according to the Minister of Finance and Economic Development, Professor Mthuli Ncube, who has to keep his fingers on the pulse of the economy and who has the expert staff who run the economic models through the calculations.
The important point in many ways in all the debate on growth rates is the total acceptance that the economy will continue growing, with the only point under debate being just how fast. Our farmers are heading for record harvests in many crops, as they combine good rains with the smooth flow of inputs that has become a hallmark of the Second Republic.
The combination, plus the hard work of the farming families, means that output has grown and that rise in output puts more money into rural family wallets, and that in turn accelerates growth in other sectors as there are more people spending money.
Mining production is still surging, with several of the massive investments by international investors into lithium seeing a swathe of processing plants coming into operation from the middle of the year.
In addition, Zimbabwe is likely to mine more than a tonne of diamonds this year, that is more than 5 million carats, and with production of gold, platinum and other minerals continually rising.
Iron ore mining suddenly jumps from present low levels as the first phase of the Manhize steelworks of Dinson Iron and Steel Company comes on stream, again around the middle of the year.
Even unglamorous coal will see a significant jump as Zesa commissions its 600MW of new capacity at Hwange and Dinson and others process more coke for the steelworks and exports.
Industry has been widening its output, with more products on the shelves, and the growth in agriculture and the new jobs in mining create more customers who will be buying what is on shelves as standards of living improve.
The line between industry and mining will be blurring more as there is more processing of Zimbabwean minerals in Zimbabwe.
Manhize will be a major example as it moves into manufacturing steel products, mainly sheet and bars for construction and industry, rather than just ingots for export. At the same time there is a growing awareness in the Western countries that sanctions are not just not really working, but can be counterproductive.
The warming relations between Zimbabwe and most European countries, and with the European Union itself as more of its members want better relations, was highlighted this week by the new European Union Ambassador Jobst von Kirchmann not just talking about the better relations, but seeing part of his job as pushing these and making known to European investors and businesses the real reforms made by the Second Republic.
He sees the answer to the “tainted” perceptions of Zimbabwe in Europe being overcome by better information on what is actually happening now in Zimbabwe. Obviously more trade and more investment benefits Zimbabwe, but it also benefits those who buy our products and sell us goods and services, and the return on secure investments is what investors look for as they sink more money into the country. We can all win this way.
The EU Ambassador has been active in finding out just what is happening, and since there are EU citizens operating in the Zimbabwe business world, he can get the background and a more complete picture rather than rely solely on Government statistics or press reports.
This helps flesh out his own perceptions and the advice he can tender. He was really impressed by the efforts of Zimbabwe to tackle its debt arrears, by acknowledging those debts exist and must be cleared and then taking action to start sorting out what it owes.
Another interesting intervention has come from an American business person and energy expert, Glenn Jakins, who sees American sanctions harming the US and sees most of the reasons why they were imposed in the first place as now no longer existing.
Besides Zimbabwe’s action in helping defend the internationally recognised government of the DRC in the Second Congo War, over for more than 20 years, the main reason for the American sanctions was land reform.
Mr Jakins stressed the fact that a deal has now been struck between the Zimbabwe Government and the white commercial farmers who had their land expropriated. Clearly the sooner sanctions are removed the easier it will be for the Zimbabwe Government to accelerate the agreed payments for improvements.
In fact most land reform around the world is built on sinking a deal with the former owners, and then borrowing money or issuing bonds to fund compensation, and then paying off that borrowing by being able to tax, usually indirectly through VAT or similar, the growing incomes of the resettled farmers.
We have all the bits in place except the middle bit of raising the cash easily and cheaply, although we are already making payments to farmers for the improvements they made.
The other factor Mr Jakins pushes is that the sanctions make it difficult for American businesses to invest in Zimbabwe.
He notices that lithium is a mineral vital for the future energy mix, since lithium ion batteries are easily the most efficient, and that the US needs to import lithium to eke out its own mining.
Zimbabwe is more than happy to sell to whoever wants to buy and more than happy to accept investment in the mining sector from companies in any part of the world. There are rules and regulations obviously, but we have been making these as simple as possible.
We want to be, in the words of President Mnangagwa, a friend to all and an enemy of none, and the more people who want to invest in Zimbabwe, or buy what we produce, or compete on price for what we need or want to buy ourselves, the faster will be our growth and the more prosperous will be our population.
Mr Jakins makes the double point that first the reasons for the sanctions in the first place have largely fallen away, and that their continuation will be more likely to be harming America than Zimbabwe. It seems a sensible argument. While neither the ambassador nor the business person mentions it, the harmonised elections this year offer more opportunity for improving perceptions.
We seem ready for open, free elections and just about everyone has been stressing that they need to be violence free. We can manage these well, and every Zimbabwean, regardless of their political opinions, needs to put their country first and ensure that we do have violence free and open elections, with the only questions to be decided being who gets the most votes in the wards, constituencies and Presidential voting. We can all win if we do this.
Online Reporter