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Sanctions affect the economic growth agenda of Zimbabwe

It's been nearly two decades since Zimbabwe has been alienated from the global financial system because Western countries have imposed sanctions on the government's land reform program to eradicate historical colonial imbalances. While the US government and its global allies in the north have long been known to have sanctions against individuals and selected organizations, it is obvious that ordinary Zimbabweans and companies that are not on the list of alleged sanctions are the ones that have been targeted Brunt of these illegal sanctions have suffered restrictive measures.

On Friday, a rally against sanctions was held at the National Sports Stadium in Harare to express dissatisfaction with Western sanctions. This happened after the SADC leaders declared in August in Dar es Salaam, Tanzania, 25th of October Solidarity Day against sanctions. Like the Zimbabweans, the region also feels the effects of the sanctions.

According to the Reserve Bank of Zimbabwe, the sanctions against Zimbabwe have led to dehydration of project finances and balance of payments assistance with far-reaching consequences for the EU, resulting in a collapse of the majority of the population.

Despite growing voices condemning the sanctions, the US and its allies continue to justify the sanctions. A report from the Ministry of Foreign Affairs and International Trade (MoFAIT), released last month, showed that Zimbabwe may have lost $ 98 billion from illegal Western sanctions.

Sanctions have branded Zimbabwe and its entire country Financial links with the rest of the world pose a high risk and make the country a persuasive target for low-risk interventions by leading correspondent banks in the US and Europe.

"It is estimated that Zimbabwe has lost bilateral donor support estimated to the US Since 2001

, $ 4.5 billion annually, $ 12 billion in loans from the International Monetary Fund, the World Bank and the African Development Bank, commercial Credits of $ 18 billion and a reduction in gross domestic product of $ 21 billion among others, "said MoFAIT.

In 2016 alone, 19 cases of risk reduction were recorded in 10 of the local banks. In the same year, the US Treasury Department (OFAC) fined a Barclays bank with a $ 2.48 million fine to settle possible civil liability for 159 alleged violations of transaction sanctions between July 2008 and September 2013 , [19659002] A year later, CBA Bank was fined US $ 3.8 billion by the OFAC for facilitating transactions for a ZIDERA-designated bank.

ZIDERA signifies the Law on Democracy and Economic Recovery in Zimbabwe, a 2003 law imposed by the US to legitimize the illegal sanctions.

The sentence was only reduced to 385 million US dollars after mitigation and negotiations.

Another bank had funds frozen on all foreign bank accounts and in transit from customers. While all contracts and business relations with US citizens and companies were lifted.

His $ 5.8 million was blocked, contracts terminated for various provisions, and licenses issued for core banks, systems banned, support contracts suspended, and correspondent banking terminated. As a result, the bank was unable to receive or send money outside the country while credit lines dried up immediately.

Trading with credit card manufacturers such as VISA and Mastercard was prohibited at any given time.

In addition, Agribank was sanctioned by the State Agricultural Loan and Infrastructure Development Bank of Zimbabwe.

According to Agribank, the reputational damage caused by sanctions in 2016 meant that the bank was having difficulty finding an equity partner and had lost a $ 98 million credit line. Since the introduction of sanctions, the bank has been unable to establish new correspondence relationships, as many international banks could not risk being punished by the US.

Agribank and IDBZ have since been removed from sanctions.

"Today, Zimbabwean banks and money transfer agencies are struggling to meet their clients' obligations as correspondent banking agreements between local banks and international financial institutions are terminated," MoFAIT said.

It found that Zimbabweans and individuals found it "extremely difficult to make payments through the international payment platforms, as these transactions are intercepted and blocked in hostile countries, particularly in the US.

For example, the Industrial Development Corporation has lost over $ 20 million to the OFAC, while its fertilizer subsidiary still has its frozen $ 5 million. In addition, $ 2 million of the chemical subsidiary was intercepted.

Zimbabwe's Minerals and Marketing Authority lost over $ 30 million in revenue to OFAC. A private company lost $ 2 million recaptured by PTA Bank, and the company is currently struggling to produce some of its basic household products.

"The diaspora community has also not been spared, which has had a deleterious effect on Diaspora remittances Some money transfer companies are unable to transact money transfer transactions with some Zimbabwean financial institutions, funds are being intercepted and money transfer companies are being subjected to lengthy investigations into certain transactions from individuals in the diaspora, "the industrialist added.

Busisa Moyo, former president of the Confederation of Zimbabwean Industries, said the biggest impact of sanctions is the country risk premium.

"The fact that borrowing, the risk premium – expressed in US dollars – is very large and you end up with interest rates (interest) of interest of 18 percent – a large part of it between 10 percent and 12 percent is a premium for unmanaged risk.

"The scope for expansion is limited, access to finance is limited, and the rest becomes a destructive cycle of sanctions.

"You know that some of the IDC companies were affected, they did not close, but Chemplex was affected and permanently affected and had big problems so far.

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