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Mnangagwa returns with a bagful of nothing?

by Staff reporter
08 Apr 2018 at 08:07hrs | Views
President Emmerson Mnangagwa returned home yesterday from a highly fruitful trip to China, where his administration struck deals worth billions of dollars that will see new projects and those that stalled in the previous dispensation taking off.

After floundering for three years, the US$1 billion Hwange Thermal Power Station deal was finalised and funds to start work on units 7 and 8 of the plant will be released immediately.

The Kunzvi Project reached financial closure, with Sino Hydro and China Communications Construction Company (CCCC) committing to provide resources for a dam and water treatment plant, and to rollout installation of smart prepaid water meters.

Other projects that will get immediate funding totalling about US$1 billion include Robert Mugabe International Airport expansion, a new Parliament Building, NetOne's expansion, refurbishment of Morton Jeffrey Water Treatment Plant, and construction of a pharmaceutical factory among others.

Zimbabwe and China also signed a US$1 billion tourism memorandum of understanding.

President Xi Jinping's government extended a special RMB1 billion (close to US$160 million) facility for Zimbabwe to draw down over three years, and US$20 million to assist President Mnangagwa's administration.

Chinese investors offered to fund construction of roads and railways, while one wants to build a multi-million dollar five-star hotel in Victoria Falls.

Officials from Oriental State Chinese agreed to set up industrial parks in special economic zones.

On the diplomatic level, the two countries agreed to elevate relations to Strategic Partnership Status, the highest level of bilateral co-operation.

Soon after landing in Harare yesterday morning, President Mnangagwa said: "The trip was a huge, massive success. We have now escalated our relations from the all-weather friendship status to the level of Comprehensive Strategic Partnership and Co-operation.

"This is the highest level which China has with other nations so Zimbabwe has been elevated to that status. When that is achieved it means that there would now be very comprehensive economic relations.

"In that regard, when we looked at our economic relations, there were some challenges facing Zimbabwe in relation to arrears of various loans or contracts or projects or agreements which had been entered into before.

"So we are able, through the wisdom of his Excellency President Xi Jinping, to de-link the past with the present.

"The present is now being opened from a new page where all the projects which we presented have been agreed to and are going to be financed; whilst the old commitments by Zimbabwe to previous projects will be worked on, but separately de-linked from the current process."

Briefing journalists on the State Visit, Foreign Affairs and International Trade Minister Dr Sibusiso Moyo said President Mnangagwa's administration had registered huge successes in China.

He said there was "real chemistry" between Zimbabwe's Head of State and President Xi.

"This, was in summary, what I would call a rejuvenated relation between two brother nations," said Dr Moyo

"It has been action packed in as far as concretising the economic interest of both countries. The success story is that Zimbabwe was offered Comprehensive Strategic Partnership, which is higher level from the usual all-weather friendship which existed over the years."

Dr Moyo also said China had agreed not to judge Zimbabwe on the failures of the previous administration.

"President Xi's government accepted to de-link that whole process and gave a new blank check to Zimbabwe's current administration.

"We pledged to be responsible for the legacy debt, but as far as those debts were going to be an impediment for us to implement the existing projects, at least that has been de-linked. Zimbabwe was given a new life line as far its economic trajectory is concerned."

Dr Moyo said the visit had created space for major infrastructure investments.

"There were a number of memoranda of understanding that were signed to develop the road infrastructure in Zimbabwe, and these include possible roads like Beitbridge-Bulawayo-Victoria Falls, and also support was pledged to develop the road from Beitbridge to Harare and also to Chirundu, when certain aspects have been finalised.

"There have been issues around the construction and development of railway systems from Zimbabwe to a port in collaboration with Mozambican authorities, and these are infrastructure projects which are already in the pipeline and which are coming through. The success stories from China are numerous."

Dr Moyo said Zimbabwe had been invited to be part of the Belt and Road Initiative, President Xi's ambitious project to create a truly global economic village.

Finance and Economic Development Minister Patrick Chinamasa said the objectives of the mission to China had been achieved.

"The funding of new projects had stopped because we were required to reach an agreement with China Eximbank and also Sinosure, which guarantees most of the investment signed in China," he said.

"So, they had stopped disbursing, stopped funding new projects. As a result of this visit we were able to persuade the Chinese authorities that our failure to pay our loans was that these loan were legacy loans; these are legacy arrears and that we should be given time to undertake our reforms.

"The result was that the Chinese authorities have de-linked three specific projects, which could not take off. These had reached financial closure but could not take off.

"For Hwange 7 and 8, the disbursements will start immediately. The NetOne Phase 1 was also de-linked, and disbursement will start immediately. The same for Robert Mugabe International Airport.

"The important outcome was to de-link new things from old things. With respect to the old existing debts, we are taking discussions and the expectations is that the discussions will conclude soon.

"This included the Harare Morton Jaffrey Water Works (refurbishment) which stopped and disbursement stalled and we fell into arrears. The Sino Pharmacy debt, National Defence University debt and Sino cement debt are under discussion."

Industry, Commerce and Enterprise Development Minister Dr Mike Bimha said there was keen interest from Chinese investors to invest in special economic zones.

Dr Bimha said the representatives of 75 Zimbabwean private companies that went to China with President Mnangagwa also sealed deals.

"There is renewed interest in terms of special economic zones in terms of industrial parks; we have an investor who will soon be coming to Zimbabwe to establish an industrial park," he said.

"We have an investor interested in special economic zones looking into textiles, looking into the whole value chain from cotton to textiles. There was also interest in tourism."

On arrival in Harare yesterday, President Mnangagwa was received by Vice-President Dr Constantino Chiwenga, Cabinet ministers and other senior Government officials, and service chiefs.

Source - zimpapers