We must benefit from Chiadzwa diamonds, says Mashakada

TAPIWA Mashakada, the Minister of International Trade and Investment Promotion, says the cash-strapped Goverrnment of National Unity (GNU) must ensure that we benefit from the diamonds being mines at Chiadzwa in the Manicaland Povince.

TAPIWA Mashakada
TAPIWA Mashakada

"The money should help us bounce back into betterr economic times," he said in Harare.

"We must really get something out of this facility because it could rresult in us returning to good economic times."

The ministerr, however, pointed out that he is "very worried" about the allegedly "slow speed" of the implementation of the Mid Term Development Programme (MTDP) which he, ironically, launched last year.

The MTDP is expected to last for five years and is meant to be a recovery cushion for the cash-strapped nation.

"The programme is not being implemented fast enough," Mashakada said.

"We are not moving fast enough on the MTDP but everything has been set down for all to follow in the programme. We must continue to make a conscious effort to bring Zimbabwe back to its economic glory."

The comments come amid reports from the United Nations Development Programme (UNDP) which said it is extremely worried about Zimbabwe's huge and soaring debt.

The UNDP said the MTDP would not work at all as long as the country had a huge debt to international creditors including the World Bank, International Monetary Fund (IMF), International Finance Corporation (IFC) as well as the influential and cash-rich Paris Club.

John Mahmoud, a Senior UNDP official made the revelations about his organisation's worries about Zimbabwe's cash crisis which has resulted in commercial banks limiting cash given to customers to as little as US$200 daily while companies cannot withdraw more than US$15 000 monthly.

This has almost resulted in another business and finance malaise in Zimbabwe similar to 2008 when there was hyperinflation of 231 million percent the highest in the world and record.

"Zimbabwe is highly indebted," Mahmoud said in Harare.

"There is serious need to deal with this huge debt. The debt issue around our necks has to be solved and the MTDP will not take us anywhere if we do not deal with it and deal with now.

"There is very serious need for the GNU to deal with debt and get it out of the way because it is a serious matter to us at the UNDP too."

Analysts and economic commentators point out that the GNU desperately needs US$45 billion over the next 10 years to regain the Gross Domestic Product (GDP) levels it boasted back in 1997 when the economy was kicking.

Mashakada said the MTDP could benefit from the diamonds being mined in Marange in the Manicaland Province.

"Me need to show on that resource (diamonds)," the minister said.

"We must make a conscious effort to bring back our glory using the diamonds we are getting from Marange. In Marange there are four mines which are mining diamonds and we need to show for it and not just talk about our wealth."

Deprose Muchena, Deputy Director of the Open Society Initiative for Southern Africa (OSISA) said if the GNU needs to find $8,3 billion in the short term for its recovery programme on top of its current debt obligations, then Zimbabwe somehow has to find $15 billion in the short term.

"Overall, following the cumulative economic contraction between 1998 and 2008, the country needs US$45 billion over the next 10 years to regain the GDP levels it boasted back in 1997," he said.

He said Zimbabwe's sovereign debt overhang had not improved since the signing of the Global Political Agreement (GPA) or the inauguration of the Inclusive Government of President Robert Mugabe of Zanu PF, Prime Minister, Morgan Tsvangirai of the MDC-T and Deputy Prime Minister, Arthur Mutambara of the MDC.

Muchena says Zimbabwe's huge debt problem was not set to improve in the "near future because the country still needed to battle to finance its economic recovery and social development programmes".

Zimbabwe's exact debt is debatable as official figures vary.

Analysts say Zimbabwe faces a debt overhang conservatively estimated at US$6,9 billion – including $5,2 billion in external debt.

Of the publicly guaranteed debt, $3,2 billion is in arrears – including $1,3 billion owed to multilateral creditors such as the Washington-based International Monetary Fund (IMF) and the World Bank as well as other international institutions.

Zimbabwe owes $1,6 billion to bilateral creditors such as the prestigious Paris Club and many other individual countries and $200 million to credit suppliers.

Some, however, say the country's total external debt stock stands in the region of $7 billion.

"The first step is for Zimbabweans and the international community – to publicly acknowledge the size of the debt problem and how it is acting as a serious drag on the economic ship of State," Muchena said in his analysis of the debt problem.

"While civil society orgnanisations in Zimbabwe have highlighted the issue, some agreements of the Inclusive Government continue to deny the shocking reality of Zimbabwe's indebtedness.

"In particular, there has been fierce opposition to declaring Zimbabwe a Highly Indebted Poor Country (HIPC), despite the fact that it is exactly that. But the issue is not about whether to declare the country a HIPC or not.

"Zimbabwe has already been declared a crisis country, a fragile State, a failed State, and a low income country under stress among others.

"These declarations do not resolve anything. Specific policy, legislative and economic governance measures are seriously needed."

Post published in: News

Leave a Reply

Your email address will not be published. Required fields are marked *