Sanctions a blessing in disguise for a few
One would have thought that Zimbabweans would be united in their opposition to international sanctions, which were introduced more than 20 years ago to punish Zimbabwe for state-sanctioned land invasions and human rights abuses.
There is however a small but powerful group that has grown rich off sanctions and has no interest in seeing them lifted.
That list includes members of the ruling Zanu-PF party as well as members of the opposition, billionaire businessmen, cartels that have established monopoly power over certain segments of the Zimbabwean economy, banks and lobbyists.
This astonishing claim comes not from Zimbabwe’s political opposition, but from the leader of Zanu-PF Sandton branch, Advocate Simba Chitando, who earlier this year filed papers in the Gauteng High Court to declare US sanctions against Zimbabwe unlawful, unconstitutional and invalid.
Chitando is not alone in his views
Zimbabwe’s most prominent businessman, Strive Masiyiwa, has pointed to the perverse effects of sanctions that rob the country of jobs and growth, under the palliative of “helping” ordinary Zimbabweans.
When presented with initiatives that could create tens of thousands of jobs, foreign investors and banks say they are afraid of violating sanctions and incurring massive penalties.
Cartels
“Many Zimbabwean cartels, no different from the opposition, profit from the arbitrarily imposed economic coercive sanctions on Zimbabwe.
The restrictions are a fertile ground for corruption, exploitation, racketeering, and clandestine deals [that are] closed to the majority of Zimbabweans,” writes Chitando in a report that lays out the beneficiaries of sanctions.
The anti-sanctions case in the Gauteng High Court was brought by the Zimbabwe Anti-Sanctions Movement (ZASM) and argues that sanctions are inconsistent with the Africa Free Trade Agreement, to which South Africa is a signatory, and the Bilateral Investment Promotion and Protection Agreement (Bippa) between SA and Zimbabwe.
Should the ZASM succeed in a South African court, this would pressure South African banks to reopen banking facilities to Zimbabwe, and may in turn pressure the US to reconsider its ongoing sanctions.
Cited as respondents in the case are US President Joe Biden, the President of the US Senate, the Speaker of the House, Treasury Secretary and several US and South African banking groups. US banks cited in the case are Citigroup, Bank of America, Goldman Sachs, Morgan Stanley and Wells Fargo.
Politically connected individuals have cornered key markets, not least of which is preferential access to hard currency via the Reserve Bank of Zimbabwe. Access to scarce hard currency is a virtual guarantee of prosperity, and allows the beneficiaries to corner key markets in the economy.
The country’s opposition is also in on it, says Chitando: “economic sanctions provide the opposition with a fettered economy, besieged by restrictions, which is the ideal breeding ground for public resentment to get votes. It is also a powerful tool for blackmail. Sanctions relief in exchange for a vote into power. We know this because they told us.
“We remember Mr Tendai Biti [vice president of the opposition] threatening to ensure that ‘they [the government] won’t get a cent” from international financial institutions.”
Impact
A 2019 report by Zimbabwe’s Ministry of Foreign Affairs and International Trade detailed the impact of these sanctions on the local economy, saying the restrictions suffocated Zimbabwe’s ability to meet its international financial obligations, while denying the country critical balance of payments support.
Zimbabwean importers are forced to pay cash upfront, loan inflows to Zimbabwean companies have dropped, and the country’s agricultural output has fallen due to an inability to import farming equipment.
The removal of these sanctions would be a kiss of death for these nefarious characters, and foreign-owned banks that abet the sanction-based economy.
It would mean the end of monopoly, the beginning of a market economy, transparency, increased taxes, and an open economy for the majority of Zimbabweans.
Also in Chitando’s sights are the lobbyists hired by the Zimbabwean government to bring an end to sanctions. After 20 years, they have nothing to show for their efforts. The incentives for continued failure are too obvious and plentiful.
SA benefits
South Africans, too, seem content to let sanctions continue. While AnC politicians publicly call for the removal of sanctions, these are empty words. A deindustrialised
Zimbabwe benefits South Africa by allowing it to tap international capital markets to buy Zimbabwean raw materials on the cheap and beneficiate them for sale at a profit. It means they can exploit Zimbabwean labour, also on the cheap, and dismiss them as quickly as a ZeP (Zimbabwe exemption Permit).
Chitando is also involved in bringing a legal challenge against the decision by the Department of Home Affairs to discontinue the ZeP system, which allows 178 000 Zimbabweans to live and work in SA, from June 2023. This will cause a regional crisis by forcing hundreds of thousands of Zimbabweans to either apply for alternative visas — which they are unlikely to get — or face deportation. Chitando says he is astonished at the opposition he has encountered to the court case seeking to have sanctions against Zimbabwe declared unlawful, unconstitutional and invalid.
“Opposition has come from quarters I least expected, including within Zanu PF, and the political opposition in Zimbabwe. When it comes to sanctions, they see things exactly the same way.
There are elements within Zanu PF and the opposition that support our court case, but we need to flush out these shady operators who want to see sanctions continue.”
Banks
The Banking Association of South Africa was the first to file court papers against the removal of sanctions.
“South African banks are massively invested in the perpetuation of sanctions for reasons I did not fully appreciate at the start of this exercise,” says Chitando.
“A normalised Zimbabwean economy would shift the locus of regional investment away from SA, which is already withering economically, to Zimbabwe, and banking flows would shift away from SA.
“The reasons are obvious to all Zimbabweans. Sanctions provide South Africans with an economic advantage over its northern neighbour at a time when competition for foreign direct investment, jobs, and tourists is high.
“It also means they get to sell Zimbabwean tourist destinations, as though they are South African destinations.
It means that every dollar Zimbabwe makes South Africans will always make the lion’s share.”
Chitando says Zimbabwean President emmerson Mnangagwa “does not have to go to Washington to find detractors”.
“Our real saboteurs are in Harare and Johannesburg.
earning illicit profits from unlawful sanctions, and using intimidation on the chairman of ZASM and myself, to prevent evidence of sanctions from reaching the courtroom.
“ZASM will soldier forward, against betrayal by some of our own, and work tirelessly with like-minded individuals and organisations for a sanction-free Zimbabwean economy, which is necessary for our country to alleviate poverty, and reach its full potential.” — Moneyweb.