Mnangagwa engages US on sanctions

Zimbabwe is engaging the Trump administration over economic sanctions Washington imposed on the country nearly two decades ago, in addition to working on ways to minimise their impact on ordinary people, a senior official has said.

In an interview in New York yesterday, Reserve Bank of Zimbabwe Governor Dr John Mangudya said the nation could not wish sanctions away, and must address the matter head-on. He also said the response from the financial sector here to President Emmerson Mnangagwa's "Zimbabwe is open for business" drive had been positive but that people should not expect overnight returns.

Dr Mangudya is part of President Mnangagwa's delegation to the 73rd Ordinary Session of the United Nations General Assembly, along with Finance and Economic Development Minister Professor Mthuli Ncube, and Deputy Chief Secretary to the President and Cabinet (Presidential Communications) Mr George Charamba, among other Government officials.

President Mnangagwa on Friday headlined the Zimbabwe Investors' Forum here, where delegates made firm enquiries and arrangements on working in the country. Further, Prof Ncube and Dr Mangudya have been engaging reputed fund managers and investment firms as part of President Mnangagwa's vision to turn Zimbabwe into a middle-income economy by 2030.

Yesterday, Dr Mangudya said: "What is clear is that the sanctions (law), which is Zidera (Zimbabwe Democracy and Economic Recovery Act), has been a deterring measure on the financing institutions to participate in helping Zimbabwe. I think there is a positive attitude that we see from the banking sector here in New York.

"Specifically, they are looking at Zidera as an area where they also need to assist us in coming up with solutions.

"At the same time we need to work around those sanctions, wherein we look at the areas that are in (Zidera) and deal with them head-on because we cannot wish it away.

"So what it means is that those areas that are there, we need to deal with them. In fact, we are quite happy that some of the areas that are in the Act we have dealt with them.

"There are things like elections, that is now a little tick that has been done. There are things like payment of arrears to the IMF as recognised in the Act, that has been done. The economic issues which are to do with the investment climate in Zimbabwe - you are aware that we have amended the Indigenisation Act, so that has been done, and the other areas which are there which are to do with reforms in the economy."

Dr Mangudya went on: "When we say that Zimbabwe is open for business, we are now walking that talk saying what are those areas we need to do because by so doing we will also be attending to the issues that are raised in (Zidera).

"We do believe that we are (taking) the right course of action to continue negotiating with the US government on the sanctions." On engagements with potential investors in the United States, Dr Mangudya said attracting capital was central to retooling existing industries and opening new ones.

"We need patient capital to restart our industries; we need patient capital to increase capacity utilisation in the country, and we need it also for re-equipment. "We have been talking about all those areas, and we are quite happy the meetings have been very productive. We have been able to reach some understanding with them in terms of the level we require, in terms of amounts that we need, in terms of the timeline side.

"So, yes, the meetings have been very productive. But as you know in finance, it is not an overnight issue. It's about engagement, it's about discussing our requirements, it's about then execution. "You do not start with execution; you start by negotiating and talking and then at the end of the day you have term sheets that will come our way and then we will be able to continue discussing and then execute later."

Asked which firms and individuals they had engaged thus far, Dr Mangudya said: "They are too many to mention, but we have met the likes of JP Morgan, we have the met the likes of the Rothschilds, we have met the likes of Citi Group.

"We are happy with all that they have said. In fact, what we have noticed is that their appetite for Zim risk has improved over the past few months, and more so after the elections.

"They now see Zimbabwe as a good investment destination. They see that the country risk has been going down, which is one of the things that has always been inhibiting Zimbabwe to get access to foreign finance.

"You are aware that without foreign finance it is very difficult to manage the economy; it is also very difficult for us to manage our foreign currency exchange market. So with the type of indication that we are getting, Zimbabwe is ready to go."