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ON Tuesday, the United States Department of the Treasury’s Office of Foreign Assets Control (Ofac) removed ZB Financial Holdings, its subsidiaries, the Industrial Development Corporation along with other individuals and farms from the list of Specially Designated Nationals and Blocked Persons that were designated under the US sanctions regime.The removal from the list of business organisations is welcome especially as it comes in the same week that Zimbabwe will push ahead with its re-engagement programme on the sidelines of the International Monetary Fund and World Bank annual meetings. While the US hid under the flimsy excuse that the sanctions were targeted at a few individuals believed to have a role in propping up President Mugabe and the Government, the sanctions hurt Zimbabwe in general and are estimated to have cost the country over $42 billion in lost revenue.
Several Zimbabwean companies have had their export receipts, amounting to millions of dollars, seized over the years by the Ofac. Both ZB and IDC have in the past noted that the sanctions placed on the companies had severely undermined their operations. The sanctions had also hampered their efforts to attract investors. ZB has often had its capitalisation plans derailed with investors pulling out of transactions because of the prohibitions while the bank also failed to get international credit lines. In March, ZB management said the group had been lobbying hard to get the sanctions removed.
For IDC, funds have in the past been intercepted while the group has also failed to close numerous investment deals while most of its exports from subsidiary companies were through third parties. Some regional and international financial institutions were reluctant to deal with the companies because everything was hinged on these punitive measures.
Some of the companies linked to the IDCZ, whose funds were intercepted by the US financial system include Olivine Industries; $1,9 million, Deven Engineering $200 000 and Chemplex $2,5 million. Even some individuals in the Diaspora, who had paid for residential stands to Sunway City, a division of IDCZ had their money intercepted.
Its subsidiary companies Chemplex Corporation and Zimbabwe Fertiliser Company triggered a $2,5 million fine on Barclays Bank PLC for transactions done under embargo.
With the sanctions out of the way, companies like IDC and ZB now have the opportunity to implement their turnaround strategies and to attract investment. For IDC which cuts across the industry, the company can now restore its role as development financial institution. One can only hope that the US will proceed to remove from its heinous sanctions on all corporates and individuals from Zimbabwe in what will complete the victory to empower locals through access and ownership of land to which the US responded by evoking the sanctions.
As long as the sanctions remain in place, Zimbabwe’s capacity to fully and effectively implement its turnaround strategy is deeply curtailed and this does not only affect Government, but filters through to the ordinary person on the street.
Online Reporter