What it means to remove sanctions on banks

Khumbulani Vodloza Sibanda
EVEN in darkest of times there is always a glimmer of hope. There is always a silver lining even in a dark and ominous cloud. Despite the debilitating effects of the ongoing illegal sanctions imposed on Zimbabwe by the United States of America (USA) and her Western allies, there is always that day that the unexpected happens.

For Zimbabwe, this happened last week when the US Treasury’s Office of Foreign Assets Control (OFAC) removed the country’s very important financial institutions, the Agricultural Development Bank (Agribank) and the Infrastructure Development Bank of Zimbabwe (IDBZ) from its sanctions list. For the uninitiated, these two institutions form the bedrock of Zimbabwe’s economic development.

Unlike the MDC Alliance deputy leader, Tendai Biti’s empty claim that his party holds the keys to Zimbabwe’s economic recovery, these two banks are the real game changers in Zimbabwe’s quest for economic turnaround which is aimed at improving the people’s livelihoods. This is the reason why captains of industry such as United Refineries chief executive officer, Busisa Moyo celebrated and Agribank acting chief executive officer, Elfas Chimbera described the event as “a positive development for the bank.”

According to the Food and Agricultural Organisation (FAO), agriculture employs 60 to 70 percent of Zimbabweans, supplies 60 percent of the manufacturing sector’s raw material needs and contributes 40 percent of the country’s export earnings. Given this key role of agriculture to Zimbabwe’s economy, the county needs an unencumbered bank to handle the sector’s financing needs.

When the land reform programme was rolled out in 2000, its funding was ably handled by Agribank which had been formed, a year earlier from the Agricultural Finance Corporation (AFC), which had been established in 1925 to meet the financing needs of white former commercial farmers. The conversion of the finance house to a commercial bank enabled it to include small farmers who were largely excluded owing to stringent borrowing conditions such as possession of immovable property, which could be used as collateral.

The removal of Agribank from the sanctions list means that the institutions has been given a new impetus to serve Zimbabwean farmers and enable the country to regain its breadbasket of Africa status. This is because it will now be able to secure lines of credit to fully discharge its mandate as the funder of Zimbabwe’s agricultural sector.

No country can successfully turn around its economic fortunes without sound infrastructure. This is the reason why, the IDBZ was formed in 2005 from the assets of the Zimbabwe Development Bank (ZDB). The rebranding of the financial institution repositioned it as a funder of infrastructural development in Zimbabwe.

It was no longer enough to talk of development without singling out and strengthening the main elements, thereof, such as infrastructure.

Over its 15-year history and in spite of being sanctions hamstrung, the institution has acquitted itself very well. It’s project portfolio spans from urban housing development in cities such as Harare and Masvingo, water supply augmentation in Chitungwiza and Victoria Falls among others to national projects such as the Hwange Thermal Power Station expansion.

It was in view of this critical role that the IDBZ plays, that the country celebrated its removal from the OFAC sanctions list.

The two institutions were placed under US sanctions in July 2008 which were partially lifted in April 2013 by the issuance of a licence permitting business with the two banks subject to limitations. They were removed from sanctions in February 2016, but the US kept in place the licence requirement.

The latest development spells the complete removal of the banks from the sanctions list. The removal of the key national financial institutions from the American sanctions is not just cause for economic celebration. It also spells the slipping influence of the MDC-Alliance over who should be added or removed from the sanctions list as was the case in the past.

During the late, Morgan Tsvangirai’s tenure as the leader of the MDC, the party would deny playing a role in the placement of Zimbabweans and Zimbabwean institutions under American sanctions, but, under Nelson Chamisa, it is now increasingly coming out in the open that brandishing the punitive measures was part of its anti-Government and anti-Zanu-PF arsenal.

Stung by his party leader, Chamisa’s electoral defeat by President Emmerson Mnangagwa during the 2018 harmonised elections, Biti emotionally vowed that his party “will mobilise more sanctions, Zanu-PF won’t get a penny.”

Following a visit to some European countries last year, Chamisa told his supporters that part of his mission was to advise them to tighten screws on Zimbabwe economically. “Sunga one, Sunga dozen. Economy tasunga (I’ve persuaded some European countries to tighten screws against Zimbabwe),” he boasted to his ululating followers at a rally in December.

He even promised to lobby for the same, during his then, scheduled visit to America. It is interesting that he never got to travel to the US on his evil mission. The removal of the two banks from the American sanctions list and that country’s waning interest in Chamisa is bold writing on the wall for him, Biti and those who blindly follow them.

This could not have come at a worse time in the MDC-Alliance camp. It came at a time that Chamisa is helplessly watching while the political party, which he unconstitutionally grabbed from the rightful heiress, Dr Thokozani Khupe, in 2018 is tearing into shreds and slipping through his fingers.

The Americans, like most global players, do not keep permanent friends. They keep permanent interests. The MDC failed the Americans’ assignment of unseating Zanu-PF despite limitless millions and a 20-year time frame. The time is up. The American government’s decision is a very clear message for Chamisa and company to start looking for jobs, as the sanctions-induced protest votes from Zimbabweans has failed to unseat a Zanu PF-led Government.

Despite starting off as a workers’ party, the MDC-Alliance has degenerated into a party of no known policy or ideology. Given this background, the party is increasingly cutting a lone figure on the local political landscape and its chances of unseating Zanu- PF are getting even dimmer with each passing day.