When sanctions create an elite class, corruption blossoms

The impact of sanctions imposed on Zimbabwe’s economy is a topic that
has generated debate over the last 20 years.

The efficacy of the restrictions is something that most Zimbabweans now view through political lenses, hence it adds to the growing list of emotive subjects in the southern African nation.

Zimbabwe, which was once seen as the jewel of Africa has since
independence struggled to extricate its citizenry from the jaws of poverty.
The irony, however, is that the country is endowed with vast natural resources and talented human capital.

Over the years our leaders have singled out sanctions as the barricade
stifling economic growth but now corruption and inconsistent policies are
standing out.

The southern African nation has since the imposition of sanctions and its
failure to settle arrears relied on costly bilateral loans from her allies as well as some regional financiers.

She has failed to leverage her latent potential to unlock value and here we are.

Last week authorities woke up to sad news when the Paris Club— an
informal group of official creditors whose role is to find coordinated and
sustainable solutions to the payment difficulties experienced by debtor
countries said Zimbabwe should implement sustainable political and
economic reforms and successfully complete an IMF monitoring programme in order to normalise ties with international lenders.

Paris Club creditors provide debt treatments to debtor countries in the
form of rescheduling, which is debt relief by postponement or, in the case
of concessional rescheduling, reduction in debt service obligations during a
defined period (flow treatment) or as of a set date (stock treatment).

Zimbabwe has been ineligible to access long term capital from the World
Bank, International Monetary Fund and the Paris Club after failing to settle

In April, Finance Minister Mthuli Ncube made a passionate plea when he
wrote a letter to the International Monetary Fund, World Bank, Paris Club
and African Development Bank seeking high-level talks to improve relations with the creditors. He warned that without their help, Zimbabwe faced a catastrophe.

But the Paris Club insisted that President Emmerson Mnangagwa’s
government should first implement “substantive and sustainable political
and economic reforms, in particular regarding respect for human rights,
especially freedoms of assembly and expression”.

The slow pace of political reforms being demanded by creditors has fuelled
on how sanctions have created new elites all in the name of busting the
restrictive measures.

As hunger stalks millions of people across the country,
the deteriorating socio-economic situation in the country could be a time
bomb for Zimbabwe.

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