A tale of two nations: the Chinese in Botswana & Zim

via A tale of two nations: the Chinese in Botswana & Zim | The Zimbabwean by Kevin Bloom 09.10.13

The dismal governance record of Zimbabwe’s President Robert Mugabe is in stark contrast to the performance of President Ian Khama of Botswana. The huge gap in governance is especially obvious in relation to large-scale infrastructure projects in their respective countries.

The top-line numbers provide an important backdrop. On a scale of zero to 100, where zero counts as “highly corrupt” and 100 as “very clean”, Transparency International’s 2012 Corruption Perceptions Index gave Botswana a score of 65 – 30th position out of 176 countries and the highest of any African country. Zimbabwe’s score was 20, which placed it in 163rd place—on a par with Equatorial Guinea, and only slightly above Burundi, Chad, Somalia and Sudan.

The latest index, which takes into account bribery of public officials, kickbacks in public procurement and the enforcement of anti-corruption laws, showed that Zimbabwe had dropped nine places against the 2011 rankings. Botswana, on the other hand, had risen by two places, a jump that served to bolster Khama’s reputation as a champion of African governance.

In any comparison between Botswana and Zimbabwe, Khama’s lone-star foreign policy must be taken into account. When comparing Chinese-funded infrastructure projects in Botswana and Zimbabwe, it appears that this is reflected most prominently in his application of a strict set of governance standards. Mugabe’s attitude would appear to be characterised by the absence of such rules.

According to Mmegi, Botswana’s major news daily, the Sinohydro Corporation has been feeling the sharp end of Khama’s rules for the last 18 months.

As the world’s largest hydropower firm and one-time employer of former Chinese president Hu Jintao, the Sinohydro Corporation was until July 2013 the most visible international contractor in Botswana’s infrastructure space.

The corporation’s largest project in Botswana was the Dikgatlhong dam, a few kilometres below the confluence of the Shashe and Tati Rivers in the country’s north-east. Second was the new terminal at the Sir Seretse Khama International Airport in Gaborone; third was the reboot of the 80km road from Francistown to the Zimbabwean border; fourth, the rehabilitation of the 115km Kang-Hukuntsi road in the country’s west; and last the Lotsane dam in the east.

As of December 31st 2010, according to China Daily newspaper, Sinohydro was working on 261 projects in 55 countries across the globe; in October of that year, China Radio International had pegged the sub-total of African countries in which it was active at 21. In revenue terms, Africa was said to account for over 40% of the $4 billion the corporation had generated off overseas projects in 2010.

During a four-day research trip in January 2011, I visited Sinohydro’s signature project in Botswana, the Dikgatlhong dam, the largest civil engineering project under construction anywhere in the country. The $153m development was meant to take 47 months to complete. The Botswana government had paid the villagers of Polometsi and Matopi $96,000 for relocation (the dam had wiped out their villages), plus a further $179,000 for exhumation and reburial of their dead.

The principal engineer on the project was Boikanyo Mpho, a Botswana national employed by the engineering consulting firm Bergstan Africa, based in Gaborone. He was adamant that the strictest tender evaluation criteria were used to choose Sinohydro. The first public sign that the Chinese giant’s working relationship with the government had deteriorated was in March 2012, when Mmegi reported that five unfinished projects, poor performance and a heavy workload had cost Sinohydro the North-South Water Carrier II project. The Public Procurement and Asset Disposal Board (PPADB) had awarded the 1.5 billion pula ($175m, as per mid-August 2013 exchange rates) tender to fellow Chinese companies, the Consolidated Companies and Quingian Group.

Sinohydro challenged the decision in the courts but the government felt that its failure to fulfil its contractual obligations on previous projects disqualified it from winning the contract on the new project.

Then Mmegi published a story in July 2013 that stated that Sinohydro was moving out of the country. The lead came from an item in the Botswana Advertiser newspaper and website, which indicated that the corporation was selling off its assets, including cranes, scaffolding, construction tools, vehicles and office furniture. The Chinese conglomerate has so far declined to comment, but there is ample evidence to suggest that the intense scrutiny of its processes, as brought about by the court case which Sinohydro itself instituted, has led to an irretrievable breakdown in its partnership with the Botswana government.

Zimbabwe by comparison, has not applied the same level of inspection to its Chinese contractors. The most prominent is the Anhui Foreign Economic Construction Group. In February 2011 I attempted to gain access to what was then Anhui’s largest construction project in Zimbabwe, the National Defence College on Harare’s old Mazowe Road. Access to members of the foreign press, however, was strictly prohibited.

Later reports would confirm that while Anhui had been involved in a number of relatively benign projects across Africa—including the construction of army and police barracks in Ghana—its presence in Zimbabwe was stained with controversy. Amongst other reports, an investigation by local media revealed that Anhui is a 50% joint owner in Anjin Investments, the largest diamond mining concern.

At a cost of $98m, the state-of-the-art National Defence College opened for business in September 2012. At its inauguration, Mugabe proclaimed that the military school’s purpose was to serve as a “think tank” on security matters, a “bulwark against Western countries pursuing a ‘regime change’ agenda”. The college is reserved for Zimbabwean military personnel of the rank of colonel, group captain or higher—and their equivalents in state security, prisons and the police. Over a period of 13 years, according to South Africa’s Mail & Guardian newspaper, the Zimbabwean government will pay back the Chinese loan for the college’s construction, in the form of diamonds mined from the Marange fields.

Equally controversial is the identity of Anhui’s partners in Anjin Investments, a group that appears to consist of these self-same Zimbabwean government security forces, although every effort has been made to conceal the names of the shareholders. The entity is “reported to be Matt Bronze”, wrote Jason Moyo in the Mail & Guardian in July 2012, “a shelf company bought by the military to house its investments. Matt Bronze’s directors have never been named publicly, but Anjin’s Zimbabwean directors are almost entirely from the security forces.”

Anhui has recently entered into a joint venture with the government of the DRC to mine diamonds in that country’s Eastern Kasai province. With the DRC’s mining ministry projecting an output from the venture of 6m carats a year by 2016, the plan is to take the company public on an “unspecified” stock exchange.

In Zimbabwe Anhui is currently completing a hotel and shopping complex, said to be worth $200m, adjacent to the National Sports Stadium in Harare.

Ultimately, however, the company’s African presence must be weighed against the accusation of former finance minister Tendai Biti, who said in 2012 that while Marange diamond operations were producing an estimated $600m a year in earnings, only $30m had been received in tax contributions.

For Chinese construction conglomerates, the difference between doing business in Botswana and Zimbabwe is clearly vast—and this difference has everything to do with Khama’s governance expectations, on the one hand, and Mugabe’s lack thereof, on the other. – Used with permission from Good Governance Africa.