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Clearing debt arrears hit a snag after "financier dumps Zimbabwe" - deep in debt, stop digging

06 Nov 2020 at 11:33hrs | Views
"Zimbabwe's efforts to clear its arrears with international lenders who include the World Bank and the African Development Bank have hit a snag after an unnamed financier dumped the country halfway through negotiations for a funding deal," reported Fingaz.

"Finance Minister Mthuli Ncube told Parliament that Government had gone back to the drawing board in a bid to secure new financiers to help extinguish its international obligations.

"Ncube said the country had resumed its token payments to contain debt accumulation."

The sheer foolishness of the whole hare brain scheme beggars belief. What exactly was Professor Mthuli Ncube trying to achieve here? Has he gone mad?

Zimbabwe is a Banana Republic in every sense of that phrase! The country has failed to revive its own economy; the economy has been in total meltdown although the regime insists it growing and on target to be a middle income by vision 2030; and, worst of all, has done nothing to stop the haemorrhage through mismanagement and corruption.

Zimbabwe could pay off its outstanding debts and bankroll its economic recovery if it could rein in the criminal waste of resources through mismanagement and corruption. In 2015, in one of his very rare moments of openness, the late Zimbabwean dictator, Robert Mugabe, admitted the country had been swindled out of US$ 15 billion in diamond revenue alone.

Of course, Mugabe knew who the swindlers were; it was he and his cabinet that granted the diamond mining concession and approved the fragrant disregard of the country's laws and regulation including the failure to keep any record of quantity and quality of diamonds, to whom the diamonds were sold and for how much, who are the partners and how much they received, etc. It was all a bluff talking of swindlers when the Zanu PF regime itself was responsible to facilitating the looting.

In 2012 Africa Canada, a Canadian body monitoring the world wide trade in diamonds, reported that Mugabe earned US$ 2 billion from looted diamonds. Mugabe; Mnangagwa; the top brass in the Army, Police and CIO; and a few others in the Zanu PF ruling elite are the Godfathers of corruption and have looted the nation blind.

When Mnangagwa seized power following the 2017 military coup that toppled Mugabe, he promised "zero tolerance on corruption". He has done nothing to end corruption; indeed, the secretive diamond mining concessions have not only been retained but extended to other areas such Platinum and Gold mining. The looting under Mugabe has continued under Mnangagwa.

Zimbabwe is losing at least US$ 5 billion per year through gross mismanagement and rampant corruption this is simply unsustainable for a nation whose GPD is US$ 10 billion or so. As long as nothing is done to stop this criminal waste of resources it is foolish to even think there could ever be any meaningful economic recovery.

What Minister Ncube was trying to do was to borrow money from this "unnamed financier" to pay off the WB debt. With its WB debt finally cleared, Zimbabwe was going to borrow money from the WB. Why would the WB grand Zimbabwe fresh loans knowing the country still has the serious problem of corruption and therefore unlikely to put the loan to productive use?

The "unnamed financier" was going to change Zimbabwe even higher interest rates than WB is charging. If you are in a hole; for Pete's sake, stop digging!

Until Zimbabwe ends the curse of gross mismanagement and rampant corruption which are the root causes of the criminal waste of human and material resources; there will be no meaningful economic recovery in the country.

It is crystal clear that Mnangagwa and his Zanu PF cronies will never ever end corruption, they are the Godfathers of corruption. And so to end corruption the country must first end the Zanu PF dictatorship. We must bite the bullet and demand the implementation of the democratic reforms designed to end Zanu PF's carte blanche powers to rig elections.

Holding free, fair and credible elections is Zimbabwe's ticket out of the economic and political hell-on-earth we find ourselves stuck in! Borrowing money from loan sharks to pay off existing debts will only land us in even worse financial trouble.

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