The United States can continue working with and within the civil society on youth targeted educational programs that promote peace and democracy. In 2017, the United States spent an estimated $158 million on health programs focused on HIV/AIDS, malaria, malnutrition, TB, maternal/child health, family planning, and water sanitation. These programs are critical and must continue. A healthier Zimbabwe creates important trade opportunities for the United States.
At the heart of Zimbabwe’s problems is endemic corruption. Zimbabwe loses between USD$1-2 billion from corruption each year. To put that in perspective, Zimbabwe’s annual budget hovers just above $4 billion. Zimbabwe is ranked in the top 30 most corrupt countries in the world.
In public opinion surveys conducted by Michigan University’s Afrobaromter, at least 72% of Zimbabweans believe the majority of government officials to be corrupt., Perceived and real corruption scares serious investors away from Zimbabwe, creating opportunities for rogue businessmen who cause more harm from their business practices.
President Mnangagwa has promised zero tolerance of corruption. However, to date corruption investigations have targeted those affiliated with the G-40 faction of ZANU PF. President Mnangagwa gave officials a February deadline to return any stolen funds and to declare assets. The President has said some officials have returned funds, but he has not shared any specifics about those returns.
In his own administration, President Mnangagwa’s has appointed individuals accused of corruption. Five of his cabinet members have been implicated in corruption worth billions of dollars.
In 2016, President Mugabe announced that Zimbabwe had lost USD$15 billion in diamond revenue to corruption. These numbers have not been verified but during a recent hearing on diamond revenues, the commission on diamonds revealed that they had expected at least USD$2 billion from diamonds sold since 2009. To date only $189 million had been tendered to the government between 2009-2016. A plurality (40%) of Zimbabweans believe that government officials in all sectors are corrupt.
As long as poverty is not addressed, corruption will continue to be an epidemic. Troubling incidents of dehumanization of vulnerable persons have been reported by the UNCHR, the over 19 000 refugees in Zimbabwe’s camps are often forced to pay bribes to corrupt government officials in exchange for access to basic commodities.
For this reason, it is important for the United States to engage the new government very strongly and firmly on corruption. The United States, must continue engaging in local level programs that can be insulated from government corruption. While low level everyday citizen corruption exists, the cost of that type of corruption is minimal when compared to the value of money lost via government channels.
Robert Mugabe often blamed Zimbabwe’s stunted economic growth on economic sanctions in particular the United States’ Zimbabwe Democracy and Economic Recovery Act (ZIDERA). Confusion on both the Zimbabwe and U.S. investor side on the requirements of ZIDERA has negatively impacted investment in Zimbabwe. Zimbabwean businesses have been denied loans by American banks who are not clear on the policy requirements under ZIDERA.
For most investors perception is reality. The fact that Zimbabwe is identified as a country under sanctions has scared away potential investors. I have recommended that the United States provide clarity on the types of business to business engagements acceptable within the confines of ZIDERA.
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