News / National
US sanctions embargo 21 Zimbabwe banks
30 Oct 2023 at 01:19hrs | Views
Sanctions against Zimbabwe, initiated by the United States in 2001 through the Zimbabwe Democracy and Economic Recovery Act (ZDERA) and followed by the European Union in 2002, were prompted by allegations of property and human rights violations linked to the country's land reform program launched in 2000. These restrictive measures continue to place a burden on Zimbabwe's financial system and economy.
During the Sadc Anti-Sanctions Solidarity Summit in Mutoko, Dr. Charles Chishiri, the principal director in the Ministry of Foreign Affairs and International Trade, revealed that local banks have lost nearly all their correspondent banking relationships, as most international banks severed ties with Zimbabwe due to sanctions.
The sanctions have had a severe impact on Zimbabwe's economy, resulting in the loss of an estimated US$20 billion from the country's gross domestic product over 23 years. This loss is attributed to the impact on trade, investment, and tourism inflows. The sanctions have also led to the suspension of balance of payment support and ineligibility for financial support from institutions like the International Monetary Fund and the World Bank.
Dr. Chishiri explained that the sanctions, particularly ZDERA, directed US representatives at financial institutions to oppose or vote against any request by Zimbabwe for access or debt relief. He noted that only six out of 27 commercial banks in Zimbabwe can conduct international transactions, as international banks severed all correspondent banking relationships.
The decline in correspondent banking relationships has had a significant impact on global trade, finance, and remittances, as cross-border payments are crucial for economic development in a globalized economy.
Dr. Chishiri emphasized the extensive negative effects of 23 years of sanctions on all sectors of Zimbabwe's economy and its people. The measures have undermined progress toward achieving UN Sustainable Development Goals, he said. Additionally, the sanctions have led to the seizure and interception of mineral revenue, sanctions on key infrastructural and agricultural financing institutions, and suspension of direct bilateral development cooperation.
The Bankers Association of Zimbabwe's president, Mr. Lawrence Nyazema, acknowledged the loss of correspondent banking services by 16 commercial banks but mentioned that most had found alternative methods, albeit more time-consuming and expensive, for conducting international transactions through third parties.
In summary, the sanctions imposed on Zimbabwe have had far-reaching negative consequences on the country's economy, financial system, and people, and these impacts continue to be felt over two decades after their initiation.
During the Sadc Anti-Sanctions Solidarity Summit in Mutoko, Dr. Charles Chishiri, the principal director in the Ministry of Foreign Affairs and International Trade, revealed that local banks have lost nearly all their correspondent banking relationships, as most international banks severed ties with Zimbabwe due to sanctions.
The sanctions have had a severe impact on Zimbabwe's economy, resulting in the loss of an estimated US$20 billion from the country's gross domestic product over 23 years. This loss is attributed to the impact on trade, investment, and tourism inflows. The sanctions have also led to the suspension of balance of payment support and ineligibility for financial support from institutions like the International Monetary Fund and the World Bank.
Dr. Chishiri explained that the sanctions, particularly ZDERA, directed US representatives at financial institutions to oppose or vote against any request by Zimbabwe for access or debt relief. He noted that only six out of 27 commercial banks in Zimbabwe can conduct international transactions, as international banks severed all correspondent banking relationships.
Dr. Chishiri emphasized the extensive negative effects of 23 years of sanctions on all sectors of Zimbabwe's economy and its people. The measures have undermined progress toward achieving UN Sustainable Development Goals, he said. Additionally, the sanctions have led to the seizure and interception of mineral revenue, sanctions on key infrastructural and agricultural financing institutions, and suspension of direct bilateral development cooperation.
The Bankers Association of Zimbabwe's president, Mr. Lawrence Nyazema, acknowledged the loss of correspondent banking services by 16 commercial banks but mentioned that most had found alternative methods, albeit more time-consuming and expensive, for conducting international transactions through third parties.
In summary, the sanctions imposed on Zimbabwe have had far-reaching negative consequences on the country's economy, financial system, and people, and these impacts continue to be felt over two decades after their initiation.
Source - The Herald
