More handshakes than hard cash from Beijing
Smiles all round, but any hope of a bailout for Harare is dashed
● Show me the money. That is what President Emmerson Mnangagwa would have hoped for during his state visit to China this week — his first international state trip since his rise to power in November last year.
But instead, China made promises, signing seven memorandum-of-understanding agreements in different economic sectors. China’s President Xi Jinping and Mnangagwa also fell over each other to make commitments of allegiance to one another.
“I’m willing to work with Mr President to jointly map out our future co-operation and write a new chapter in China-Zimbabwe relations for the benefit of our two peoples,” Xi said during a meeting in Beijing.
But — as has been the case for decades in Zimbabwe’s relations with China — what was markedly missing from the trip was Beijing extending a financial bailout to Harare. In the end, the week-long trip reeked of déjà vu from the days of Robert Mugabe’s rule, when big promises were made but there was little delivery.
Zimbabwe is desperately in need of an injection of capital to kick-start an economy that is on its last legs. Foreign currency shortages persist, about 70 companies have closed down in the past six months and unemployment remains high, estimated at about 90% of the population.
Lenders from the developed economies are unwilling to pour fresh funds into Zimbabwe. The country owes about $2-billion (R24-billion) to the World Bank and the International Monetary Fund.
Ben Leo, CEO of Fraym, a geospatial data analytics company focused on Africa and a visiting fellow at the Centre for Global Development in the US, said this week that Zimbabwe had pursued a “Look East” strategy for the last decade, but had little to show for it in terms of large-scale Chinese financing.
“While China has provided budgetary support to other countries in the past, such as Venezuela and Sudan, Zimbabwe will likely have to rely on the World Bank and the IMF for that,” he said.
“However, that still means clearing the country’s long-standing loan arrears to those institutions first, and the politics remain tricky.
“In the meantime, the new Zimbabwean government might be able to convince the Chinese government to start financing strategic infrastructure investments that could promote broad-based growth.”
A long-haul view appears to be favoured by China, rather than pouring in money in the short term. Mnangagwa secured various memoranda of understanding from China, a country that he last visited on an official trip in 2015, when he was Mugabe’s deputy. The agreements signed are in sectors such as energy, economic co-operation and education.
The most significant of these is a power agreement for the refurbishment of units 7 and 8 at Hwange power station. The refurbishment of Hwange will increase power generation by 600MW.
Last week, Chinese firm Sinohydro completed a four-year refurbishment of Kariba power station. The $533-million refurbishment added 300MW of power and will result in a reduction of Zimbabwe’s reliance on electricity imports from South Africa’s power utility, Eskom.
China Communication Construction Company, the world’s largest infrastructure development company, also intends to set up a regional office in Zimbabwe.
It will roll out various road, rail, air and dam construction projects.
Mnangagwa said he was pleased by “the chemistry” between the two countries.
“Zimbabwe is going through a new dispensation and there is a lot of hope and expectation, so we have come to the People’s Republic of China as our first port of call outside Africa and I am hopeful that the assistance in terms of grants and loans will help us greatly,” he said.
Tara O’Connor, director of London-based Africa Risk Consulting, said it was likely Beijing was trying to be a “responsible superpower” by not doling out money to Harare.
“It is therefore in its interests to work alongside the international community to cajole Zimbabwe into meaningful economic reforms . . . despite being hostile to democracy at home.
“Zimbabwe has relied on this avenue for
Harare might be able to convince Beijing to start financing strategic infrastructure investments Ben Leo CEO of data analytics company Fraym
relief too often and patience has worn thin,” she said.
Chinese investment in Africa has grown over the past decade. Estimates are that more than $100-billion has been ploughed into roads, railways, mines, powerlines and factories. According to Chinese state media, trade between China and African countries reached $85.3-billion in the first half of last year.