Unpacking effects of sanctions

ZIMBABWE has been under US and European sanctions over the past two decades. US sanctions were imposed through the Zimbabwe Democracy and Economic Recovery Act (Zidera). This law is supported by Executive Order 13288 enacted by the US President and renewed on a yearly basis.

While the US and Western countries claim that the sanctions were imposed over human rights violations, it is common knowledge that these sanctions are a direct response to Zimbabwe’s historic and revolutionary land reform programme which corrected the racially imbalanced land ownership in the country. This fact is exposed by the fact that one of the key US demands expressed through Zidera is that land ownership patterns in Zimbabwe must revert back to the pre-2000 era when around 4 500 white settlers used to own over 70 percent of the arable land.

Clearly, this system was unsustainable given that blacks, who constituted over 90 percent of the population, were crammed on the remaining land, which was basically poor. When the Zanu-PF led Government corrected this clear injustice, the Western powers stood with their kith and kin and imposed sanctions. This is despite the fact that they had reneged on their promise to fund land reform in an independent Zimbabwe.

The cost of these sanctions has been very heavy on Zimbabwe’s economy, which is basically driven by extractive industries, principally agriculture and mining. Following the imposition of the sanctions, all the white-controlled secondary industries that relied on agriculture and mining either closed down or scaled down operations in protest. Foreign capital which was closely tied to these white farmers fled the country in protest. This situation was inflamed by the concurrent imposition of the Western sanctions, which has had fatal domino effects on various sectors of Zimbabwe’s agrarian economy.

Millions of Zimbabweans who used to work on commercial farms lost their employment. This figure is estimated at over one million. Although a significant bulk of these former farm workers became land owners in their own right after the land reform programme, some did not get land, rendering them unemployed.

The country’s commercial farming sector provided around 40 percent of the country’s export earnings. The closing down of industries by white capitalists in protest against the land reform programme significantly affected the whole economy.

Due to Western control of the international financial system, Zimbabwe has been starved of foreign funding, either at the bilateral or multi-lateral levels. Zimbabwe has had no significant funding from the International Monetary Fund (IMF), World Bank and other multilateral finance organisations since the inception of the sanctions. It is a fact that Zimbabwe’s small economy requires supplementary funding to plug gaps that result from the mismatch between low exports and high imports. Such funding has literally been reduced to zero as other financial institutions that could help the country usually take their cue from the IMF and World Bank. According to studies, the country used to enjoy inflows that amounted to US$480 million by 1990, which inflows significantly dropped to around US$80 million by 2008 due to the debilitating effects of the sanctions and the tagging of Zimbabwe as a pariah State by the powerful Western media.

Zimbabwe’s Minister of Foreign Affairs and International Trade, Dr Sibusiso Moyo presented a paper to Cabinet that revealed that the country’s economy has lost in excess of US$42 billion in revenue, US$4,5 billion in potential bilateral donor support, US$12 billion in loans from international financial institutions and US$18 billion in commercial loans. This led to a reduction of US$21 billion in the country’s Gross Domestic Production. The minister noted that “Zimbabwe’s access to international credit markets was blocked after the enactment of Zidera. The country has been forced to virtually operate on a hand-to-mouth basis, and there has been a significant build-up of external debt arrears”, which situation has inevitably affected the country’s risk profile.

Due to the sanctions and the resultant closure of industries, many families have been ripped apart as breadwinners have emigrated to the diaspora in search of working opportunities. Children are growing outside proper family environments, thus creating a fertile ground for juvenile delinquency and the attendant social ills of drug abuse, alcoholism and prostitution, among others.

Local banks have been fined hefty fines for processing transactions beneficial to Zimbabwe. A case in point is Commercial Bank of Zimbabwe (CBZ) which was fined US$385 million by the US Office of Control of Foreign Assets for processing transactions for a corporate that was under US sanctions. Other Zimbabwean entities have had their funds passing through the US financial system frozen.

The on-going industrial action by medical personnel in the country is a living example of the devastating effects of the sanctions. The State’s capacity to avail funding for critical public services has been severely compromised to the extent that public hospitals are inadequately funded, civil servants’ salaries are inadequate and funding for public infrastructure projects has been eroded. The challenges affecting the medical sector are symptomatic of the challenges bedevilling the whole spectrum of the economy.

It is therefore a huge surprise that some Zimbabweans, especially those in opposition and hostile civil society circles maintain the false narrative that the sanctions are targeted at a few Government officials. In this scenario, there is need for an intensive campaign to educate Zimbabweans on the all-encompassing effects of the ruinous sanctions. Children, widows, the disabled and pensioners have been hardest hit by these sanctions.

It is against this background that progressive forces in Sadc and across the African continent have taken it upon themselves to launch an intensive campaign for their removal.

The declaration of 25 October as Sadc anti-sanctions day is a step in the right direction as this would demonstrate to the whole world that the entire continent is against these sanctions.

Africa is now speaking with a united voice on the matter. It is a matter of time before they are removed. Right will eventually prevail over US and Western might.