US Senate Committee on Foreign Relations backs ambassador Brian Nichols after Zimbabwe government threats “Ambassador Nichols set the record straight that culpability for Zimbabwe’s dire economic situation rests with its leaders” – ZIMLIVE
The United States Senate Committee on Foreign Relations on Friday backed the US ambassador to Zimbabwe, a day after President Emmerson Mnangagwa’s government threatened to expel him for alleged political meddling.
Foreign Affairs Minister Sibusiso Moyo took issue with Ambassador Brian Nichols’ forthright comments about official corruption, which the envoy said was the cause of Zimbabwe’s economic malaise, and not sanctions as claimed by the regime.
The powerful US Senate committee, in a tweeted response on Friday, gave no inch to the regime in Harare as it backed Nichols to the hilt.
“The US is deeply committed to the people of Zimbabwe,” the Committee chaired by Senator Jim Risch (Republican-Idaho) said. “Ambassador Nichols set the record straight that culpability for Zimbabwe’s dire economic situation rests with its leaders, provided the truth about sanctions, and reiterated our strong and lasting commitment to a free and open Zimbabwe.”
Mnangagwa’s efforts to woo western countries to back his regime with budgetary support and debt relief have gone up in smoke after his government targeted opponents, killing dozens, following his disputed election win in July last year.
The 77-year-old took over power from the late Robert Mugabe in a 2017 military coup promising economic prosperity and greater freedoms for Zimbabweans, but many now say life is worse than when Mugabe departed after a controversial 37-year-rule.
Amid an ever-present threat of strikes by government workers and rising public anger over a deepening economic crisis marked by hyperinflation and shortages of power, fuel and medicines, Mnangagwa’s regime has blamed United States sanctions which have been in place since 2001.
The United States embassy last week called out the regime, accusing it of using propaganda to distract from its own failings including corruption and misuse of the country’s mineral riches.
Writing in a local newspaper a day before nationwide marches called by the government to protest against US sanctions, Ambassador Nichols said: “What is holding Zimbabwe back? It’s not sanctions. There are only 141 Zimbabwean people and companies on the United States sanctions’ list. That’s right, just 141, in a country of 16 million. They are on the list for good reason. These are people who have engaged in corruption, committed human rights abuses, and undermined Zimbabwe’s democratic process.
“Blaming sanctions is a convenient scapegoat to distract the public from the real reasons behind Zimbabwe’s economic challenges —corruption, economic mismanagement, and failure to respect human rights and uphold the rule of law.”
Moyo issued an unprecedented statement on Thursday, accusing Nichols of making a “constant portrayal as fact of what are mostly largely unsubstantiated allegations or even rumours, often still being investigated or processed by law enforcement or other agencies of government.”
“Persistent behaviour of this nature will test the patience of even the most tolerant amongst us… We have the means to bring all of this to an end, should we deem it necessary or should we be pushed too far,” Moyo said in a thinly-veiled threat to expel America’s top diplomat in Harare.
With 8.5 million people facing serious food shortages next year, the discovery that some senior state officials are profiteering by importing 17,000 tonnes of grain at double the world market price is the latest blow to the diminishing credibility of President Emmerson Mnangagwa‘s government.
Africa Confidential understands that the grain was brought in from Tanzania – Mnangagwa and President John Magufuliare allies – at a price of US$600 a tonne; the world price is currently $240 a tonne. An expert in the regional commodity trade said the only explanation for the inflated price of the consignment is a ‘vast corrupt rake-off’. Now the keys question are, says the expert, who knew about the deal and who benefited from it.
Senior officials in international organisations have confirmed the pricing of the deal and say it helps explain the slow response to the United Nations’ call for emergency funding to alleviate Zimbabwe’s food shortfall. It comes as relations between the government and Western states falter again, after a brief improvement following the ousting of President Robert Mugabe in November 2017 (AC Vol 58 No 25, A martial mind-set).
Although the main cause of the food crisis is the drought which has hit most countries in the region, corruption and mismanagement are making it worse. The World Food Programme (WFP) estimates at least half Zimbabwe’s population of 16.5 million are now ‘food insecure’, a staggering failure in a country that was the breadbasket of southern Africa.
Zimbabwe President Emmerson Mnangagwa
Those at risk in Zimbabwe are not far short of the 9.7m needing food aid in all the 17 countries of the Sahel and West Africa combined.
Nor is Zimbabwe’s crisis confined to the rural areas where 5.5m people are food insecure. Another 3m in towns and cities also face chronic shortages. At the start of the crisis it was estimated that it would cost $300-500m to feed 7m people; now another $100m will be needed.
Some 800,000 tonnes of wheat and maize may have to be imported to avert disaster. This doesn’t include the grain needed to keep farm animals alive: up to half of all cattle could die in some areas. In July, some agency estimates suggested Zimbabwe would need 1.3-1.4m tonnes – 850,000 tonnes of white maize, 350,000 tonnes of wheat and 80,000 tonnes of soya and cooking oil. That includes animal feed.
But trust in the government is low. A WFP ‘flash appeal’ has so far secured pledges of only about $150m: $89m from the United States, €9 mn ($10m) from the European Union and £50-60m ($60-75m) from the United Kingdom.
If money can be raised for emergency imports, there are still big logistical challenges that increase the risk of starvation. Zimbabwe has enough grain to support its population for the next three months. Drought has affected the whole region, so most imports will have to come from outside Africa.
Even if procurement deals are reached rapidly, it may take two months to move the grain from, say, Mexico to the main import gateway ports – Beira in Mozambique and Durban in South Africa. Beira remains seriously damaged by the recent cyclone, so more shipments will have to come through Durban, which is further away.
This will impose huge pressure on the run-down railway network and on the availability of trucks. If the import needs are as great as 1.3 million tonnes, the railways could probably only move about a tenth leaving the rest to be trucked, at the rates of 4,500 tonnes a day. That would need over 1000 lorries, operating a shuttle for several months.
The government’s policy response to food supply has been the Command Agriculture system, a state-backed system providing seeds and fertilisers. Apart from governance and corruption issues (see Box), the programme was compromised from the start because so many land-holding beneficiaries had secured the best farmland through political loyalty (AC Vol 60 No 18, Cash at the generals’ command).
In many cases the loyalists lacked the skills and personal commitment to make their farms more productive but were favoured in the distribution of inputs under Command Agriculture. However, tens of thousands of serious farmers did benefit from the contested land redistribution in the 2000s and many have rebuilt production.
But a common complaint is that farmers who are not overtly loyal to the ruling Zimbabwe African National Union–Patriotic Front face discrimination under the Command Agriculture scheme. Many of those giving Mnangagwa and his allies the benefit of the doubt two years ago now see it as both brutally authoritarian and incompetent, having reneged on its promise to open the economy to legitimate business.
One of the biggest shifts is the government’s loss of support from public sector workers. Over the last five years, state sector workers were the main beneficiaries of the state. The average civil servant was paid Zimbabwe$ or RTGS1000 per month ($600-700) in the past three years. They were doing better than most other workers.
Now state workers are underpaid because inflation has massively eroded the real value of their salaries.The average salary of RTGS1000 is now worth only $60-70 in market terms.
Many civil servants are the only regular wage earner in a household of five or six. Now there arecases of civil servants and their families suffering from malnutrition. Beyond the human suffering, this hits their ability to work, further undermining state administration and public services.
This has prompted strikes such as the continuing clashes between doctors and nurses and Mnangagwa’s government. The brutal response to these protests is triggering further dissent in the cities where support for the opposition is already strong. Although the opposition has failed to capitalise on this growing anti-government sentiment, the prospects for a wider and more decisive confrontation increase as conditions deteriorate (AC Vol 60 No 17, Activists take on the crisis).
The Sakunda price
Investigations by Parliament’s Public Accounts Committee into how the army-backed oil importer, Sakunda Holdings, has profited from the Command Agriculture scheme are causing international problems.
First, is Sakunda’s long association with the Amsterdam-based Trafigura oil trading outfit. Sakunda has a stake in Trafigura Zimbabwe; Kudakwashe Tagwirei, Sakunda’s chief executive and once close to President Emmerson Mnangagwa, was a key enabler of Trafigura’s business in Zimbabwe (AC Vol 59 No 22, Trafigura in a tug-of-war). The joint venture company, Trafigura Zimbabwe, is accused of contributing, directly or indirectly, to Mnangagwa’s re-election campaign (AC Vol 58 No 4, ZANU-PF digs for votes).
There is little transparency about Trafigura’s links to the Command Agriculture scheme before it became a government-funded programme. The trader denies any wrongdoing in the matter. There is no ambiguity about the role and networks of its local partner, Sakunda.
The second risk is that Sakunda’s operations are undermining the onerous economic reform programme pushed by Finance Minister Mthuli Ncube. So close is Sakunda to the government and the Reserve Bank that it has benefited from preferential exchange rates between the local Zimbabwe$ or RTGS and the US$.
The deal uncovered by former Finance Minister Tendai Bitiand the Public Accounts Committee allowed Sakunda to receive US$366 million in government bonds as payment for supplying inputs for Command Agriculture.
When Sakunda redeemed some of those bonds at a preferential exchange rate (reckoned to be US$1=new RTGS/Zim$9-10) – everyone else was being repaid on basis of US$1- new RTGS/Zim$1). This led to an 80% surge in money supply.
On 20 February, all contracts were converted from US$ contracts into local contracts: all assets were converted to Zimdollars, including Treasury Bills and other government paper. There was one exception:Sakunda which was allowed to hold onto its bonds denominated in US$.
Sakunda started to unload these bonds in July 2019. But only one bank took the bonds. Most banks lacked the liquidity to do so and their executives were also worried about the legality of doing such a transaction. So Sakunda turned to the Reserve Bank. Sakunda managed to unload $220-230m of the $366m. It retains some $100 million on its books, while a further $20-40m is placed with a local bank.
In the main transaction, the Reserve Bank had in effect created a massive sum of new local dollars, about Zim$2.3 billion, a huge increase in the reserve money. After criticism from bankers and international agencies, the government froze the Sakunda accounts and the company’s political network appears to have been hit almost as badly as the local currency.
Down the yellow sandy road, over the hump, round the dusty corner and I was face to face with the luscious eyelashes of a giraffe. Luscious eyelashes hiding hungry eyes in our parched land where we are all reduced to being watchers, waiting for something to happen. For the past fourteen months, since election 2018, we’ve been paralyzed, helplessly witnessing the government converting our US dollars into useless Zim dollars, watching the loss of our savings, erosion of our incomes, soaring inflation and a new frenzy of looting and corruption.
Hunger is knocking on Zimbabwe’s door this October 2019. Some of it we can blame on last season’s drought but we also have to apportion responsibility to the latest ‘missing billions’ story from Zimbabwe. We don’t do corruption in thousands or hundreds of thousands in Zimbabwe anymore, now it’s always in the millions and billions of disappeared US dollars. Parliament are still waiting for answers as to what happened to US$3 billion allocated for agriculture which can’t be accounted for since the government’s Command Agriculture scheme started in 2016. The missing billions didn’t translate into grain in our silos so where did it go? Mansions? Luxury cars? Foreign bank accounts? And before we even get the answers to all that missing money, or Mr Mugabe’s self confessed missing US$15 billion or ZINARA’s missing $25 billion, President Mnangagwa just announced an additional injection of ZW$1.8 billion and US$51 million into this year’s Command Agriculture programme. More seed and fertilizer or more mansions and cars?
Last week the US Ambassador to Zimbabwe, Brian Nichols, exposed the one simple fact about our agricultural capability which we all know; a fact which should be cause for national shame twenty years after Zanu PF’s seized all commercial farm land in Zimbabwe. Ambassador Nichols said: “In the 1990s, there was a deep drought in the region and all Southern African nations were fed by Zimbabwe, but now this country requires food aid to feed half of its rural population.”
With just a couple of weeks to go until our main planting season, the stacks of seed maize are piled high in the supermarkets but no one can afford to buy it. This morning in my home town seed maize is selling for ZW$389 for 10 kgs and Compound D fertilizer is ZW$500 for 50 kgs. ZW$900 to plant one acre of maize is more than a lecturer earns in a month, more than a domestic or garden worker earns in five months. Desperate to try and survive the ravages of inflation which international economist Steve Hanke puts at over 800% a year, people are left with no choice but to plant maize pips left from last year’s harvest and just hope for the best. Even more alarming are the current huge empty gaps on supermarket shelves where the staple maize meal usually is; the price sticker is there: ZW$59.89 for 10 kgs but there has been nothing to buy for the past fortnight or more.
With such a massive food disaster in the making and at a time when almost half the population need international food aid, the Zimbabwe government have been diverting our attention with a rash of new financial regulations and Statutory Instruments, just as they did at the height of the last economic crash in 2008. It is now illegal to display, quote, charge, sell, pay for or receipt goods and services in US dollars or any currency other than ZWL dollars. Large fines have been tagged on to the latest rash of financial constraints which look very much like sending us headlong back to the days of empty shelves as the government takes control of every single US dollar out there and businesses are left with nothing to use to import the goods they require..
A fortnight ago the Reserve Bank announced that Bureau de Change could not pay out more than 7% of the bank stipulated rate when buying currency. Two days ago they dropped the rate again to between 3 and 5%. At the beginning of this week the Reserve Bank banned all cash in, cash out and cash back transactions offered by the country’s mobile phone money operator, Ecocash saying they were trying to protect consumers from abuse and profiteering. In a country where banks don’t have any money and 90% of the population don’t have bank accounts, Ecocash has become the life blood of Zimbabwe. An uproar ensued and within three days the Reserve Bank backtracked on the ban.
Frankly it’s a nightmare trying to understand and keep up with all these rules, regulations and iron fist policies and these words from ZCTU President Peter Mutasa offer the best summary of the current situation: “What the RBZ is doing is not new; the same institution blamed everyone but itself in 2007-2008. It went on the same spree and churned out Statutory Instruments weekly… but failed to reverse hyperinflation. … It is wasting time and burying the head in the sand…. These arbitrary policies are going to destroy the few remaining companies and jobs.” Mutasa concluded with the chilling words: “Citizens must prepare for the 2008 financial and economic Armageddon.”
Until next time, thanks for reading this Letter From Zimbabwe, now in its 19th year, and for supporting my eye witness books about life in Zimbabwe.
Cathy Buckle is well known for her writings of daily life in Zimbabwe. These are sent to subscribers around the world and are regularly featured by a number of international print and broadcast media outlets.
President Mnangagwa declared Robert Mugabe a ‘national hero’ after his death on Friday [Jekesai Njikizana/AFP]
The burial of the late former President Robert Mugabe slated for Sunday has been postponed indefinitely, reports say///CRIMSON TAZVINZWA
The family of former Zimbabwean leader Robert Mugabe does not want the late liberation war hero buried at the country’s National Heroes Acre, preferring a family shrine in keeping with his last wishes.
According to a government memo sent to diplomatic missions, Mugabe’s funeral will be in Harare’s National Sports Stadium on Saturday, though it didn’t specify where the burial would be on Sunday.
Mugabe, who died aged 95 in Singapore on Friday, did not want people behind his political downfall in November 2017 playing a role at his funeral, a relative said on Sunday.
Mugabe was removed from power in a coup after he fired Emmerson Mnangagwa as vice president at the instigation of his wife, Grace, and a faction of ambitious and young politicians loyal to the late leader.
Funerals for national heroes are officiated by a sitting president, which would be Mnangagwa, who is now Zimbabwe’s leader.
The European Union offers its condolences on the passing of former President of Zimbabwe, Robert #Mugabe. The EU will continue to stand by #Zimbabwe and its people, to support reconciliation and to help ensure a united, prosperous, secure a democratic future for all Zimbabweans.