China demands minerals as security for ZimAsset bailout

via China demands minerals as security for ZimAsset bailout | SW Radio Africa by Nomalanga Moyo on Wednesday, May 7, 2014

The Zim and Chinese governments are reported to be working on a rescue package that could see ZANU PF receiving billions of dollars to fund its economic blueprint.

The blueprint, dubbed Zimbabwe Agenda for Sustainable Socio-Economic Transformation (ZimAsset), was at the centre of the ruling party’s poll manifesto, and promised the electorate a vibrant economy, and at least 2 million extra jobs.

“Judicious exploitation of the country’s abundant human and natural resources” would propel this economic programme to success, Zimbabweans were told.

Ten months later the blueprint has turned out to have been no more than a pretentious wish-list not premised on any feasibility plan.

The ZANU PF government says it needs $27 billion to kick-start the economy. But with no industrial activity or foreign investors coming into the country, raising the money is proving to be a huge challenge.

Senior ZANU PF officials control the country’s vast mineral wealth, but despite this, the party has failed to channel the proceeds towards national programmes.

Finance Minister Patrick Chinamasa has extended his begging bowl East and West but says lenders have declined to give Zim further loans due to the country’s appalling credit record.

However traditional allies the Chinese who had also seemed reluctant, have agreed to bail out the country in exchange for proceeds from the country’s mineral wealth, according to media reports.

This follows a proposal by the Zim government to use the country’s minerals as security, Chinese envoy to Zim Lin Lin is quoted in the State-run Herald as saying.

The financial package is likely to be in the region of $10 billion.

Another Chinese diplomat Han Bing told online news agency The Source that his government was “asking for collateral because it’s in accordance with rules and regulations when granting any loan.”

The deal further entrenches the Chinese presence in Zimbabwe’s natural resource sector, and one which they have jointly looted and plundered with ZANU PF for close to two decades now.

Accountability activist Farai Maguwu described the deal as disastrous and said it was wrong for the Zim government to be “trading off the country’s mineral wealth the way it is doing.

“The government should be doing a thorough exploration of what the country has underground, and then engage investors who can mine and trade in our minerals for the benefit of the country,” said Maguwu, head of the Centre for Natural Resource Governance group.

Maguwu said Zimbabwe was facing a crisis of reckless leaders who do not care about future generations hence they continue to mortgage the country to China.

“Zimbabwe does not need a loan to kick-start the economy. What we need is a conducive business environment that is attractive to genuine foreign investors.

“The problem with Zimbabwe at the moment is corruption, organised crime in the minerals sector, and that our government is choosing to engage the wrong people.

“Without addressing these issues, even if they get $100 billion, the economy will continue to backslide as the funds will be looted and they will still say the country has no money,” Maguwu said.

He said ZANU PF should, “normalise relations with the international community so that the country can begin to attract genuine investors not the fly-by-night type that just comes in to bleed the country dry.”