Adesina insists that political reforms are an integral part of the debt restructuring package. “Success on the political and electoral reforms, and a free and fair election, are crucial to clear the pathway towards arrears clearance and debt resolution for Zimbabwe,” he said.
The ruling ZANU-PF party has a long history of abusing state institutions to muzzle and oppress the opposition. Two high-profile opposition leaders, Job Sikhala and Jacob Ngarivhume, are currently jailed on what critics say are politically motivated charges, while the voters’ roll has yet to be opened for public inspection with fewer than three months to the elections.
Zimbabwe’s electoral management body, the Zimbabwe Electoral Commission (ZEC), remains one of the country’s least-trusted institutions, populated by former military officials who aren’t known for their impartiality.
With its privileged access to state resources, ZANU-PF is poised to win the upcoming general election, even without overt cheating. If they choose to use violence and intimidation once again, they will prove that the political and electoral playing field is unchanged since the time of Mugabe.
Adesina has made it clear that there will be no deal if there is another bad election: “The people of Zimbabwe and the international community will be watching very closely. The full weight of re-engagement… will depend not just on the election, but the entire electoral process that guarantees a credible election.”
This is an opportunity that Mnangagwa should grasp to restore trust and confidence between the government and the international community, but compensation to unpaid investors, including farmers and miners, is key to re-engagement.
Zimbabwe’s external debt is estimated at US$14.04-billion, comprising US$5.7-billion of bilateral debt, US$2.6-billion of multilateral debt, US$3.4-billion Reserve Bank of Zimbabwe debt and US$2.3-billion in blocked funds.
Accumulated arrears were estimated at US$6.3-billion at the end of September 2022 and are rising fast.
A deal on the arrears will enable Zimbabwe to access new lines of credit to surmount the catastrophic underperformance of what should be one of the best economies in Africa.
Adesina revealed that the bank has developed financial instruments to “fast-track and front-load” the promised US$3.5-billion compensation to the white farmers as part of the debt-clearance programme.
What has been conspicuously absent from the debt talks is any proposal to compensate mining investors, who are owed more than US$460-million by Harare after they won international arbitration cases arising from rights disputes.
The Zimbabwe Mining Development Company (ZMDC), which incurred exposures as a result of the cancellation of mining rights and the forceful removal, for instance, of Grandwell from the Marange diamond fields in 2016, is a 100% government-owned entity.
However, the state has been reluctant to assume ZMDC’s debts as it has done with other state-owned enterprises. Instead ZMDC has been involved in endless and costly litigation trying to overturn the arbitration awards.
Leaving out mining investors could hamper efforts to attract blue-chip investors rather than the bottom feeders and rogues that currently pollute the Zimbabwean economy.
The good news is that Zimbabwe’s ability to repay its debt and rebuild its economy has been enhanced by increased earnings from platinum and gold, while the country has also recently discovered extensive lithium deposits.
Some estimates indicate that Zimbabwe has the largest lithium reserves in Africa and the fifth-largest in the world, and Mnangagwa has signalled that mining and refining lithium ore is a focus of the Zimbabwe government.
The pieces are in place for a revival of Zimbabwe that would be a much-needed boost for the entire southern African region.
The choice now is Mnangagwa’s. Which legacy will he opt for? Daily Maverick
By Phillip van Niekerk, editor of Africa Unscrambled
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