China extending Mugabe's hold on power: Analysts

A $98 million Chinese loan approved by parliament has been castigated by analysts as crucial in extending President Robert Mugabe's hold on power as it is meant to build a special purpose military academy on the outskirts of Harare. The academy will be funded from proceeds of the country's diamonds.

Minister of Finance Tendai Biti signed on behalf of the Government of Zimbabwe while Li Ruogu Chairman and President of the Export-Import Bank of China appended a signature on behalf of the Chinese investment bank. As part of the deal, Zimbabwe will offset the loan using proceeds from Anjin Investment (Private) Limited , a Chinese mining firm in a joint diamond mining venture with the Zimbabwean government.

Article 9 of the agreement document made public after the presentation in parliament says AFEC will garnish Zimbabwe's diamond proceeds from Anjin's operations in the industry, with the deal stipulating that China will be the preferential primary supplier of materials to be used during construction.

To cement benefits accruing to the Chinese, part of Article 2.5 of the agreement reads:

"The goods, technologies and services shall be purchased from China preferentially (and) also from Zimbabwe where this will benefit the Project and End User," the agreements states.

The deal brokered and spiritedly defended last week in parliament by Minister of Defence Emmerson Mnangangwa and later confirmed by Minister of Finance Tendai Biti, will see all construction materials and essential manpower sourced from Beijing. Under the deal signed on March 21, 2011 between the Government of Zimbabwe and the Export –Import Bank of China, the Chinese will provide seed money to build the purpose.

Although the deal looks very much in China's favour,  Mnangangwa told senate last year in his defence of the deal launched by Mugabe in 2007 that it comes with massive benefits for the country, among them employment creation and benefit to local downstream industries.  "The military facility will serve as a premier defence education centre in Zimbabwe especially training in the field of national security," he said.

Zimbabwe will pay 0.5 percent management and commitment fees to the Chinese. Ironically President Mugabe hastily recalled parliament this week to approve the loan. The haste recall came at a time when a delegation of about 30 senior Chinese military officers was visiting the country. The delegation was led by Chief Air Marshal Xu Qiliang. It was not clear why they were in the country. "China is a great friend of us in many ways. To us all, citizens of China are our great friends," Mugabe said after meeting the Chinese military men.

Security experts have in the past described it as "a techno-spy and communication base" whose purpose will be to spy on communications in and outside the country.

A  Harare based economic commentator said the loan shows just how misplaced the priorities of government are. "When we expected them to spent money in social services they are busy splashing it in things that we don't need now. Why a military college, we are not under threat from anyone. Not even one of our neighbours would think of attacking us, this probably has more to do with something else rather than state security," said economic commentator John Robertson.

Minister Mnangagwa says the academy will also be used to select the military and civilian officers from the various segments of the society to represent the country in various capacities. In addition he said it will also act as a think tank for providing research, military, defence and national security studies for the national Security Council, ministry of defence and other national institutions.

Chinese government, businesses and individuals have invested heavily in several sectors in Zimbabwe including in textile, retail, mining and the food sector. Several Zimbabweans now eat, dress, ride, fly and live Chinese. The country has bought buses and planes from China but most of the buses are no longer on the road while two of the three planes bought in 2003 are now grounded. The University of Zimbabwe has also since set up a Department for Chinese mandarin language.