Sanctions stifling economic growth

Sanctions stifling economic growth | The Herald March 5, 2016

Felex Share Senior Reporter
ZIMBABWE’S economic growth continues to be stifled by impediments in the international trading system that is largely dominated by the use of the American dollar, President Mugabe has said.

The President also said Zimbabwe could not freely trade with other world markets with the United States sanctions regime still in place.

In his 92nd birthday interview with the Zimbabwe Broadcasting Corporation aired on Thursday, night (March 3), President Mugabe said home grown solutions, coupled with the Look East Policy would fight off the iniquity.

This comes as the Obama administration this week extended its embargo on Zimbabwe by another year saying the country remained “a threat to the foreign policy of the United States.”

The US Office of Foreign Assets Control (OFAC), which administers and enforces economic and trade sanctions, has since the turn of the new millennium intercepted several transactions coming to Zimbabwe from other markets and vice versa.

“No, we are not failing (on the economy), but there are difficulties that face us,” President Mugabe said.

“Running an economy is not just a matter of having capital as it is and then produce products. You have to trade products and, trade has got to be facilitated. It is in the facilitation of trade and the securing of investments and the necessary failings from your exports that we face a problem, a huge problem.

“We don’t have our own currency. We are using American currency. When we import say vehicles be it from America, South Africa, Brazil and want to pay for them, its the American dollar that we use. Questions are asked when the money gets to New York, where it is from and if it’s from Zimbabwe, No!

“Similarly, if payments are to be made to us, if these are to Zimbabwe, America says no because all the payments must be made through their banking system.”

President Mugabe said while the European Union — which has also slapped Zimbabwe with punitive sanctions — was “better behaved” when it came to transactions, it was the same story when it came to payments because they are done using the US dollar.

“Your progress is inhibited,” he said.

“You have to find ways of circumventing these impediments that face us in trading with other countries. We have managed to sustain our economy, nevertheless. There is a negative side in our environment that we continue to fight against to say no, give us a way, allow us to pass through and constantly we have roadblocks, we are stopped on the way. But we keep ourselves going and ensuring that our community remains alive, especially during a period like we have had this year, where the rains were at the beginning sparse and we were visited by El Niño and our crops went dry in the fields.”

He said Government would continue clarifying its indigenisation and economic empowerment policy to attract more investors.

The ultimate goal of the policy, the President said, was to create a win-win situation between investors and locals.

“We are saying come, if it is mining minerals the resources are ours, we own them in the first place,” President Mugabe said.

He continued, “That ownership must be recognised because we must get them out of the ground with your help and you are prepared to be partners with us in that process of getting them out from the ground.

“From our total ownership of these commodities, we are prepared to reward you for your task to the exact of 49 percent. We want our people empowered, given jobs. But that is not the only task we demand of investors. It’s a task that we ourselves on our own must ensure is discharged, establish enterprises, companies, ensure that our people are employed, give them jobs at various levels including the level of management.

“In some cases, encourage our people to undertake businesses where they do that business for themselves entirely. In that case, it’s not the State employing them, but the State might be sponsoring them or just supporting them financially or technologically, but the business is entirely their own.”

President Mugabe said investments “do not start on a high pitch” and Zimbabweans would soon start reaping rewards from the Chinese and Russian mega deals.