Zim debts, acid test to Chinese friendship

Guest column: Paidamoyo Muzulu

ZIMBABWE rarely hosts high-profile guests, especially from the big political and economic powerhouses. However, last weekend was exceptional as Chinese top diplomat Wang Yi was in town on official business that has remained secretive, except a few comments that the two countries are working on strengthening their relations.

This visit is significant in more ways than one. It marked the first high-profile guest from China since the November 2017 coup that ousted the late former President Robert Mugabe, ushering in a new — not so new dispensation that was underwritten by China and the United Kingdom.

In the past decade, Zimbabwe was a beneficiary of Chinese generosity during Mugabe’s turbulent reign that had left the southern Africa nation a pariah State, with no meaningful economic relations with European Union (EU) nations and the United States. China stepped in to fill the breach, pumping in about US$2,2 billion in concessionary loans for infrastructure development.

The Chinese have funded the expansion of the Robert Gabriel Mugabe and Victorial Falls international airports, Kariba South and Hwange power stations, NetOne expansion and the flagship National Defence College.

The cherry on top of this grandiose generosity was the Mahusekwa District Hospital, Bindura High School and the new Parliament Building in Mt Hampden, which were all implemented for free, so we are told.

Yi’s visit came at a time Zimbabwe has been making the waves on privatisation of State resources – minerals and parastatals. Naturally, China, as the all-weather friend, expected a slice of the cake, but Zimbabwean leaders have been bitting the hand that fed them. The lucrative Darwendale platinum project was dished out to the Russians, Chiadzwa diamond fields (that has been used as collateral for Victoria Falls International Airport and the National Defence College) had been nationalised and Chinese firms kicked-out.

The Chinese, for now, have also been locked out of the National Railways of Zimbabwe, NetOne and Zupco partial privatisations. This has been done despite that the Chinese under the Belt Road Initiative have put in a lot of money (US$60 billion) on the table for infrastructure development in Africa. The Zimbabwe regime has kept a blackout on its management of the Chinese debt.

An issue that Parliament never debates in detail, despite the fact that the Finance minister tables the Appropriation Bill each year on the country’s income and expenditure. Tucked in there are the sovereign debts and when they are due.
For those who can read, Zimbabwe’s debts to China are now due after the seven-year grace period. Zimbabwe has to cough up the moola, reschedule the repayment plan or alternatively mortgage more minerals and fire-sale some State enterprises.

These are hard decisions, but the reality is that the Chinese at this point have all the aces. The State-controlled daily, The Herald, had a telling paragraph on the front page of its Tuesday edition: “Minister (Mthuli) Ncube said due to the difficulties of having to service debts and liabilities for Chinese investments into Zimbabwe, they had entered into a currency swap arrangement deal.”

This is a telling sign, an issue that the Budget and Finance Portfolio Committee or even the National Assembly should pursue with urgency. The Constitution is very clear that international agreements and debts should be approved by the House.

Having the agreement tabled in the House would allow the nation to know the exact details of the agreement.

For now, we have to rely on speculation and conjecture.

@Jamwanda2, the Twitter handle supposedly owned by Presidential spokesman George Charamba, on Sunday tweeted, “Among projects discussed was the Batoka Hydro-Electric Project to be sponsored jointly with Zambia and to be executed by Sino-Hydro in partnership with General Electric. The project, once completed, will leave Zimbabwe in a power surplus position.”

As earlier alluded, Zimbabwe has re-opened the Batoka tender for the Chinese, taking a significant chunk of the project from the Americans (General Electric). Will this be enough? Probably more of the nuts and bolts will be released in due course.

What one can take away from Yi’s visit is that Zimbabwe has bad negotiators, people who do not share the investment priorities with the nation. A people who believe they know all and they are doing a favour to the God-forsaken citizens of Zimbabwe. Which projects does Zimbabwe need under the Belt and Road Initiative?

If we had a good regime, this opportunity could have been used to negotiate a public-private partnership development of the Greater Harare light rail system.

This would deal with the traffic congestion in the capital once and for all. Ethiopia did the same and Addis Ababa today is better for it.

Zimbabwe could have negotiated a deal to have the Chinese have a slice of the pie in the Willowvale Mazda Motor Industry and started producing minibuses and conventional buses for the domestic market and export into Sadc. The country’s central position gives it an advantage just as much as its educated labour force.

To negotiate smarter, Zimbabwe has to deal with the elephant in the room; its unsustainable debt with every credible creditor be it the EU, African Development Bank and the Bretton Woods Institutions where the country’s debts are all in arrears. We wait to see how Zimbabwe manoeuvres out of this one.

Paidamoyo Muzulu is a jornalist and writes here in his personal capacity. He can be contacted on muzulu.p@gmail.com