adminDebra Matabvu
Academics say there is irrefutable empirical evidence showing that although sanctions imposed on Zimbabwe are packaged as “targeted”, they are directly and indirectly affecting the generality of Zimbabweans.
University of Zimbabwe (UZ)’s senior lecturer in the department of economics Professor Albert Makochekwana told The Sunday Mail that the embargo was particularly being felt by “ordinary people”.
Recent studies commissioned by the UZ and the Ministry of Foreign Affairs and International Trade proved the extent to which the United States-sponsored Zimbabwe Democracy and Economic Recovery Act (ZDERA) and sanctions by UK and the European Union bloc had wreaked the local economy.
“On paper, sanctions are targeted to the lists of individuals and companies, but in reality they affect the majority of Zimbabweans directly and indirectly,” said Prof Makochekanwa.
“Sanctions have affected ordinary people by or through the following: for instance, some people residing in Zimbabwe failed to receive remittances that were sent to them by their relatives through some local banks as the deposited money bounced because the headquarter bank could not process the funds.”
The UZ study, he said, showed that the inherent hurdles tied to sanctions had weighed so heavily on some companies that they eventually closed, which naturally led to job losses and poverty.
“The same fate as in above was experienced by firms, thus making it difficult for firms to access lines of credit, resulting in some reducing their production or manufacturing activities, thus resulting in a chain of negative impacts such as reduced production.”
Overall, sanctions had created a vicious circle of job losses, reduced taxes, low exports and, by extension, low foreign currency generation, he said.
Women, particularly widows, were most affected by the unilateral measures.
“The majority of groups most negatively affected by sanctions include women, especially widows; children, orphans; the unemployed and those who depend on remittances that are sent through formal banks, especially from USA or Europe.”
Although it is impossible to quantify the cumulative number of people directly affected by sanctions, Prof Makochekanwa added, all Zimbabweans are ultimately affected in some way.
According to the study commissioned by the Ministry of Foreign Affairs and International Trade last year, some
Diaspora remittances have been intercepted and subjected to rigorous investigations.
Some money transfer agencies also reportedly refused to transact with local financial entities.
“The Diaspora community was not spared and this had adverse effects on remittances into the country,” part of the report reads.
“Funds are intercepted and money transfer companies become victims of long, tedious investigations on specific transactions emanating from individuals in the Diaspora.
“The sanctions regime reduces access to both consumptive and productive remittances from the Zimbabwean Diaspora communities.
“This impacts negatively on the Zimbabwean financial outlook because the sanctions obstruct capital and financial flows. Resultantly, this counters the efforts by Government to harness Diaspora participation and contributions into the country’s national development agenda.”
Risk
Agriculture, which is the backbone of the economy as it supplies the bulk of raw materials for industry and supports livelihoods, also withered under the weight of the onerous embargo.
According to the research, Agribank Development Bank of Zimbabwe (Agribank) ended up getting higher interest rates of about 15 percent instead of the usual 4 percent from offshore banks because it was considered high risk to deal with.
“Furthermore, the bank could not partner with international organisations and donors, and ended up losing a number of customers and opportunities from the outside world.
“The market access for horticulture, sugar, beef and cotton, among other crops, was negatively affected.
“Horticulture was the fastest growing sector and generated significant amounts of foreign exchange, and at one point became the second-largest foreign exchange earner after tobacco.
“The horticulture export industry grew from US$32 million in 1990/91 to a value
of about US$143 million in the 1998/99 season. However, due to sanctions the country lost most of its niche and lucrative markets for horticulture products,” said the
report.
Previously, farmers used to export horticultural produce to the Netherlands and the UK.
However, these markets were closed due to sanctions, resulting in a significant decline in the horticulture industry.
By 2005, horticulture exports had gone down to about US$72 million, with the value further tumbling to US$40 million by 2009.
Online Reporter