AS Zimbabwe commemorates the Anti-Sanctions Day on Tuesday next week, the focus has been on the comparison of the impact of the restrictions against the corrosive effect of corruption and policy inconsistency on the country’s development.
Sadc set aside October 25 as a special day to campaign against the economic restrictions which have for years inflicted damage on Harare's economy.
Sanctions against Zimbabwe were imposed at the turn of the century following a diplomatic fall-out over controversial and often violent agrarian reforms, high-level corruption and alleged human rights abuses such as abduction of political activists, journalists and pro-democracy forces.
The measures, slapped on Zimbabwe by the US through the Zimbabwe Democracy and Economic Recovery Act (Zidera) and the European Union (EU), are, according to the government, estimated to have cost the country over US$42 billion, apart from condemning thousands of firms into bankruptcy.
Both Sadc and the African Union (AU) have intensified calls for sanctions to be lifted. Several African leaders including Senegalese President Macky Sall called for the lifting of the sanctions at the 77th session of the United Nations General Assembly (UNGA) held in New York last month.
“The AU once again calls for the lifting of foreign sanctions against Zimbabwe. These harsh measures continue to inflict a sense of injustice against an entire people and aggravate their suffering in these times of deep crisis,” Sall said.
Bankers have also bemoaned the impact of the sanctions which led to the loss of more than 100 correspondent banking relationships since the restrictions were imposed at the turn of the century.
“What we need to do is to say how many correspondent banking relationships have been closed since 2001/2002. The number is 102. There is no bank that has not been affected by sanctions,” FBC managing director Webster Rusere told delegates at the Institute of Bankers of Zimbabwe Summers School in Victoria Falls last year
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The impact of sanctions, Rusere said, is not restricted to those said to be targeted, but extends to the country as a whole.
“When you have a situation where your suppliers cannot access credit . . . Can you say that it is targeted? No, it is not,” Rusere added.
However, not everyone is convinced that sanctions are the main cause of the country’s ills, pointing to the high levels of corruption as well as policy inconsistencies by the government.
One such proponent of this line of thought is economist Chenayi Mutambasere who argues that it is graft and the government’s skewed policies that have had a detrimental impact on the country’s economy.
“The direct impact of sanctions for the most part is circumstantial in that the economy is still able to generate mining and other revenue as evidenced by its trade balance. Zimbabwe is still able to export horticultural products and other agricultural products. Therefore, it would be a logical fallacy to suggest that sanctions have zeroed the economic revenue base,” Mutambasere argued.
She said the cause of the country’s economic crisis is much closer to home, pointing to the currency volatility created by government policies resulting in domestic debt being conveniently converted to forex using grossly inflated rates.
Mutambasere added that sanctions have no role to play in inflated government contracts, for example the recent procurement of laptops for Parliament at a grossly inflated price of more than US$9 000 eachC.
Transparency International has ranked Zimbabwe as one of the top countries with endemic corruption.
Auditor General Mildred Chiri’s report on the appropriation accounts, finance and revenue statements and funds account for 2021, revealed details of how millions of United States dollars and billions in local currency have vanished from government coffers due to accounting malpractices and breaches of protocol, with no paper trail to back the spending.
The report exposes a number of entities with variances between figures in the financial statements or returns and corresponding or related accounting records. The variances totalled ZW$3,2 billion which shows how corruption has contributed to the country’s economic crisis.
The Zimbabwe National Chamber of Commerce said while it acknowledges the negative impact of sanctions, there is a need for the government to improve on policy consistency and implementation.
“Chamber acknowledges the negative effects of sanctions on the general citizenry and business in particular. However implementation of political and social reforms as well as modifying and repealing some rules and regulations are not premised on the presence of sanctions,” the business membership organisation wrote on the microblogging site Twitter.
Economist Prosper Chitambara believes that sanctions and corruption have crippled the country’s economy.
“I would say both corruption and sanctions have had an adverse impact on the country’s economy. There have not been any scholars who have made a proper, objective and empirical analysis to find out which of these have had a more severe impact,” he said.
“I think this is something that scholars need to work on,” Chitambara said.
He said the impact of corruption has triggered a negative perception of the country.
Chitambara noted that on the other hand sanctions play a huge role in the loss of correspondent banking relationships which heightened the country’s risk factor.