President Mnangagwa’s push to open up Zimbabwe for investment captured the imagination of potential investors at the just-ended Tokyo International Conference on African Development (TICAD) summit.
In one of his engagements in Japan, the President held an interview with journalists from Nikkei, which is considered one of the largest circulating financial newspapers in the world.
We reproduce the full interview below.
Question: Zimbabwe is suffering from high inflation and hunger, some say half of the population is living in poverty. How are you solving your problems as a country?
Answer: We must look at the background of Zimbabwe. Since 20 years ago, we had sanctions imposed on us by the West. As a result of that, our economy collapsed, our currency collapsed. In 2009, we embraced a basket of currencies that included the US dollar, the euro, pound, the rand, pula and so on.
Recently, when we had the New Dispensation, which I lead, we decided that despite the sanctions which the West continue to have on us, in particular the Americans under ZDERA, we decided to open our economy and liberalise the economy on all fronts.
Our economy is basically agro-based, mining and tourism. These resources are domestic resources that we have in the country. We are, therefore, focusing on developing and modernising our agriculture to fight the sanctions, as well as to grow our economy on this basis.
To do that, we had to remove the Indigenisation Act, which was one of the constraints in attracting global capital to come into our economy. That, we have now removed.
Q: When did you remove it?
A: We removed it last year in October. We have also further liberalised our mining laws, with respect to diamonds and platinum; other minerals we liberalised soon after I came into office.
We then came up with the engagement and re-engagement policy. Engagement meaning, we are willing and open to engage and work with any member state of the United Nations. Re-engagement means that we would like to re-engage with those countries that had disengaged with us as a result of sanctions. So, we have opened up.
We now have a raft of reforms that are being carried out through Parliamentary systems to do with the ease and cost of doing business, relaxation of various constraints in terms of investment, repatriation of profits from our country and property rights. All that has been liberalised on the economic front.
We also have political and electoral reforms. For the first time, when we had elections last year, we opened up. In the past, the door was closed. We were quite an isolated country, except that we used to relate to Sadc, which is our regional bloc. When we went for elections last year, we opened up and we said we wanted the entire global observers to observe us, those who wanted to.
We had global observers coming to our elections for the first time. We also opened the democratic (space) and for the first time in history, (we had) 55 political parties contesting in our general elections. In the past, we had five or six. And of the 55, 23 contested for the office of the President. So with the political parties, you can see how we have opened up the democratic space in Zimbabwe.
We continue to appeal to the global community to come to Zimbabwe and see the opportunities that we have created.
As a result of the New Dispensation, the EU has relaxed some of the measures it put on Zimbabwe.
To a great extent, there has been dialogue between US and the United Kingdom, which was responsible for persuading the EU to impose sanctions on Zimbabwe.
We are happy that most of the sanctions imposed by the EU are being removed. With Britain, we have now upgraded our engagements to the level of Ministers.
We believe that this positive approach and discussion will continue. There is a new leadership under Mr Boris Johnson and I hope he can continue with the same spirit created by his predecessor.
Q: Sanctions were imposed in 2002 and it feels strange that they are the source of turmoil because inflation has gone up very rapidly. Do you not think it is the financial policy that you have put?
A: We have some austerity measures that we have put in order to resurrect our collapsed economy. We also removed the basket of currencies; now we have our own.
We have also opened the exchange rate of our currency, it is finding its place. It has been stable for the past two months, at 8-10 with the US dollar.
Unfortunately, we had a serious drought, which was worsened by the devastating Cyclone Idai, causing damage to infrastructure and crops. So, we were facing drastic damage in the country as a result of Cyclone Idai, which also hit Malawi and Mozambique.
We are determined now to put policies to make sure that whether there is drought or no drought, we have a programme on irrigation so that we make sure we have enough crops under irrigation; so that whether there is drought or not, we are able to produce enough grain to feed our population.
That programme is ongoing. Government is also subsidising farmers in terms of seed, fertiliser, chemicals, ploughing and so on. So we are making sure that we are putting in place measures to guarantee food supply and food security for our people
Q: Besides political and economic reform, are you seeking international aid?
A: About two weeks, we launched a disaster appeal to the international community and we had a really good positive response . . . and we are happy with the response. We have bridging support from the international community up to March and April next year. That is the period which we think we need support.
Q: You mean in terms of food crisis, but are you seeking help from the international monetary authorities?
A: ZDERA constrains us. For the past 20 years we cannot access support from the IMF, World Bank, IFIs (international finance institutions). Those Bretton Woods institutions cannot extend any lines of credit to Zimbabwe. So, we are surviving through our own domestic means. We are doing our best. We cannot bury our heads in the sand and blame the Bretton Woods institutions for not giving us credit. We are doing our best and using our domestic resources to grow.
However, for us to leapfrog and catch up with the rest of the region, this is why we have opened up, and we are inviting global capital to come into the country by creating an environment that is conducive to attract global capital.
Q: So what are you seeking now? Is it international assistance or just the humanitarian assistance (food programme)?
A: It is both. There is specific arrangement to deal with the current disaster that we are facing, then there is the global approach, where we need investment into the country.
Q: I believe that the source of funding is restricted to China?
A: No, it not restricted to China. Japan can also come on board. Just before I left for Tokyo, I held a ground-breaking on a project that is being financed by Japan. So it is not only China. Japan is participating, Spain is participating, India is participating, Russia, Spain, Brazil are participating. In fact, when I go back home, I am going to be launching an irrigation project funded by Japan.
Q: Is there a way you can receive support from the IFIs?
A: Currently, they are unable to extend any financial support for us because of ZDERA.
Q: What about funding? Are there any discussions on loans coming from Japan or China or any other country?
A: I will be meeting the Japanese Prime Minister to continue to support us in our endeavour to revive our economy. With regards to China, there is the Focac, where African countries are invited to participate and apply for funding for projects. It is of the same platform as TICAD.
Q: EU has already lifted sanctions, what are your expectations?
A: Most of the member states of the EU are now in discussions with us. We have discussions with France, German has sent a Minister to discuss and open old ties that we had. Italy has done the same. Brussels has also done the same. With regards to the EU, there is a lot of progress . . . But with the US, this is where we have the problem, but we are doing everything possible to appeal to the Trump administration to revisit the ZDERA sanctions.
Q: There are a lot of reports on the crackdown against the opposition and that is why the US may be reluctant to review the sanctions?
A: There has been no incident where the rule of law has been breached. Not even one incident. We apply the rule of law; those who commit crime, the law must apply. You cannot have double standards where the rule of law (applies); if people funded by the Americans commit crimes, we should not touch them? No! Zimbabwe is a unitary State and our laws apply to every citizen, whether you are in the opposition or you are in Government or don’t belong to any political party at all. If you commit murder, you get arrested; if you commit corruption, you get arrested; any violent act, you get arrested. That is the rule of law which we observe.
I would like you to quote an action where Zimbabwe has acted outside the rule of law, then I would like to hear that.
Q: What are US conditions for lifting of sanctions?
A: Let me give you the background of the basis of sanctions. It was the time when Tony Blair was the Prime Minister of Britain and George Bush (Jnr) was US President. Bush was invading Iraq at the time.
In Zimbabwe, we were having our land reform programme, which the British did not support. So George Bush went to the United Nations to seek the invasion of Iraq and did not succeed. So they went ahead with willing allies. Tony Blair then offered to support US on Iraq, and Bush offered to Blair on Zimbabwe by imposing sanctions against Zimbabwe. That is the background.
Q: What measures are there to stabilise the currency, which has lost its value . . .?
A: As I said, our currency has stabilised in the past two months. When we are in this transition to open up, our currency had to find a level to which it stabilises. Now it has stabilised around between 8 and 10 (to the US) . . . It has been there for a long time now and I think the stabilisation has started.
Q: How do you evaluate former President Mugabe? He has been called a dictator here in Japan.
A: Former President Mugabe was our commander-in-chief for over 15 years when we fought the liberation struggle against Ian Smith. In 1979, we went to Lancaster (UK) where we got our political independence.
Secondly, former President Mugabe is the founding father of our independent Zimbabwe, and the principle grievance that we had during the liberation struggle was for us to get back our land. Our land was owned 70 percent by less than 5 000 whites and eight million blacks owned 30 percent of the land. That was our major grievance. We undertook to regain our land through land reform. That is now beyond us. When we began that programme, the sanctions were imposed on us. But now the land reform is irreversible and we have the land in the hands of Zimbabweans, so we are moving on.
Q: You are trying to issue a new Zimbabwean dollar, is that true?
A: Currently, it is already there . . . we have removed the basket of currencies.
Q: What is the difference between Mugabe . . . and yourself?
A: He is human, he stepped down in November 2017 and I was elected to be President of my party, which is the majority in Parliament, so that is how I became President.
In July last year, I won the elections with over two-thirds majority in Parliament — more than 140 seats against the opposition’s 60. I have the majority party in Parliament. I have now liberalised and opened the space . . . in modern times you must compete for global capital to come into your country. That is why we are doing the liberalisation measures in Parliament, a raft of economic measures, political and social measures.
Q: What do you think of the Asian way of so-called development dictatorship — less liberal in terms of political and strong leadership to economic development — like Singapore? Maybe Mr Kagame of Rwanda is the same way. Do you think this liberal democracy is relevant today?
A: The issue for Zimbabwe is not to interrogate the ideologies of other countries. That is not our business. Our business is what is good for Zimbabwe, what is good for our people and what we should do to have a better life to grow our economy.
To do so, we must modernise. Zimbabwe is an agricultural economy. We must modernise so that each hectare of land must increase in yields. To do so, we must bring in the best practises for agricultural production. We are endowed with vast minerals — over 60 — but we do not have capital to extract those minerals for our people.
So we have to go to countries that have the capital and technology to come and share with us, on a win-win basis.
Q: Including Japan?
A: Yes, including Japan, that is why we are here for the TICAD summit.
Q: Sorry to come back on the question of financial loans, with IMF and the World Bank out, what is your plan? Are you going to get a loan from China, Saudi Arabia, Japan or any country to tackle the debt question?
A: The IFIs are not totally out. We are going to make an appeal to the Paris Club to deal with the debt so that perhaps we can succeed to have some of it to be perhaps cancelled or rescheduled.
But on a bilateral level, we relate with many countries: Russia, China, Japan, Brazil, India — many countries — and we discuss bilateral support. That is how we are approaching it.
Q: Do you have a target amount of the debt you want cancelled by the West?
A: Currently, our external debt is about US$8 billion. My Finance Minister (Professor Mthuli Ncube) is discussing with the creditors, some may wish to cancel, others may wish to reschedule. It’s not us who decide. But that should not be the saviour for Zimbabwe. The saviour for Zimbabwe should be us to say what resources do we have and how we can use those resources to grow our own economy and modernise our own economy.
Q: Can you say what is caused by the drought has become a humanitarian crisis, with people struggling for food?
A: No! We have capacity currently. In past seasons, we had a surplus and we kept a strategic reserve to feed our people. The strategic reserve for feeding our people is still there and we are using it. But (it) cannot bridge us from one season to the other. That is why we are appealing for support to bridge the gap from November to March next year. We have enough food to feed our people for the next two to three months, but we are busy looking for support to bridge the gap to the next season.
Q: If some of the US$8 billion debt you owe is cancelled, is it your plan to have support from IMF and the IFIs?
A: I do not think you were listening. The Bretton Woods institutions are controlled mainly by America and America is bound by ZDERA, which forbids these institutions to extend lines of credit to Zimbabwe. What is critically important is removal of ZDERA. We are busy discussing with the Trump administration to remove ZDERA.
Q: I understand the United States is concerned by the issue of restrictive laws in Zimbabwe?
A: There is Posa and Aippa, which are in the process of being repealed. We are not repealing to please America, we are repealing because it is necessary for us. It is for Zimbabwe and if it helps the Americans, so be it.
Transcript by Kuda Bwititi in YOKOHAMA, Japan.