Chinese integrity, investment in Zim raise more questions

BY TINASHE KAIRIZA

OVER the past seven decades, the rapid advancement of China economically and militarily as a global powerhouse has triggered scrutiny on the implications of its growing presence in Africa, particularly in Zimbabwe.

This has resulted in critics expressing scepticism about the benefits of China’s investment to Zimbabwe, which is reeling from United States sanctions.

Zimbabwe’s enduring ties with China, which were recently upgraded to an “all strategic relationship”, have deep historical origins, dating back to the liberation struggle, when the Asian giant supported the southern African country in its quest for self-determination from British rule.

One of the most symbolic historical interactions between the nations’ leadership, which were to shape the course of the states’ co-operation was on May 15, 1981 when the late former president Robert Mugabe — then Zimbabwe’s prime minister — held a meeting with late former Chinese leader Deng Xiaoping in Beijing.

During that high-level meeting, Deng, who in 1978 had rolled out sweeping reforms, combining socialist ideology with free enterprise, under the rubric “socialism with Chinese characteristics”, is said to have counselled Mugabe, who had led the liberation struggle posing as a Marxist that ideological dogma would no longer work going forward, pragmatism would.

Deng, like Mugabe, was a socialist at heart. In short, he told Mugabe that “it doesn’t matter whether the cat is black or white, as long as it catches mice”.

Needless to say, Mugabe did not listen.

Now, over four decades later, while China has grown exponentially, economically and militarily as it forges ahead to bolster its presence in Africa through investment, Zimbabwe’s fortunes have waned sharply as it battles to stave off a severe economic crisis, characterised by dwindling foreign direct investment (FDI) and currency volatility.

In recent times, the presence of China in Zimbabwe has come under the spotlight, largely as a result of how investors from the Asian country have been allocated vast mineral claims in controversial transactions that have often resulted in the displacement of local villagers and claims of irregular labour practices.

This publication has extensively reported on such deals forged by Zimbabwe’s government and Chinese investors, which have raised the ire of citizens.

The most recent being a jaw-dropping US$109 million tender awarded to China Nanchang for the construction of the long-awaited Kunzvi Dam — touted for many years as the panacea to Harare’s perennial water problems.

There are questions about the Chinese company, which won the tender, despite being one of the most expensive in terms of cost structure. Several other Chinese companies have been given tenders for infrastructure projects, energy and pharmaceuticals.

Stephen Chan, a professor of world politics at the University of London, pointed out that addressing the question of integrity and transparency on Chinese investment remained the elephant in the room for Zimbabwean authorities and other African governments.

“Zimbabwe depends on China for capital inflow, both by way of investment and loans. There is very little transparency on the nature and especially the conditionality attached to these loans,” he said.

“The fear is that, without alternative lenders, and also because of a lack of Zimbabwean negotiating skills, the Chinese drive deals that are more advantageous to them than to Zimbabwe in the long-run.

“This basically means strong leverage in several Zimbabwean sectors. The type of negotiating skill shown by especially the Angolans and Ethiopians does not seem matched by the Zimbabweans.”

Chan’s opinion is also reinforced by Afrodad, in its report titled The China, Zimbabwe relations: Impact on Debt and Development in which the continental think-tank avers that the lack of transparency around its investment deals with Zimbabwe, which have seen the country’s external debt ballooning, stuck out like a sore thumb.

The report, which also profiles the nature and impact of Chinese investment in Africa reads: “The Chinese investments in Zimbabwe have been mainly in the energy and real estate sector. However, just as with other alternative financing sources there are some pros and cons associated with the Zimbabwe-China relations, which need attention especially in the areas of transparency and accountability as well as good governance.

“The Chinese share of external debt stock as of 2018 was estimated around 34%. This implies that China and Zimbabwe relations are significantly having a bearing on the debt development in Zimbabwe.”

And yet another factor that could have created perceptions that investment from the global giant has done little to lift Zimbabwe from its multifaceted economic crisis is rampant public corruption and lack of transparency, permeating every facet of Zimbabwean life.

In 2019, Finance minister Mthuli Ncube understated that China had extended a paltry US$3,6 million to Zimbabwe when the exact amount of support was US$137 million. Ncube’s mistake irked the Chinese.

“China, however, is reluctant to ‘solve’ Zimbabwe’s economic crisis. In fact, the Chinese are somewhat appalled that the economy has been handled so badly,” Chan said.

“The Chinese are, however, keeping a watchful eye on Zimbabwean corruption. That is a behind-the-scenes barometer of how much investment can be made available.”

Economist Tawanda Purazeni highlighted that Chinese investment was yielding little benefit, but harm to Zimbabwe.

“Locals are not benefiting from these deals except the elite, which brings such fly-by-night investors. The tendering processes involving the Chinese are questionable,’’ Purazeni said

As a result of Zimbabwe’s investment ties with China, among other factors, the southern African country has been mired in indebt, which has militated against efforts to lift its 15 million people from poverty.

Afrodad highlights: “The size of the Zimbabwean external debt seems to imply a huge impact of China on the debt development.

“Indebtedness has hindered Zimbabwe from attaining the millennium development goals (MDGs) and continues to be a major barrier towards attaining the sustainable development goals (SDGs) and the African Union 2063 aspirations for a prosperous Africa.”