Mugabe hailed in China and selling out Zim for further Help

The joke made in China is perfect: Mugabe has been hailed as “renowned leader in Africa” and as “example for the fight against colonialism”. Look, who is talking, human rights violator to election-faker; buddies on the lowest level of international recognition.

But what is really bad is the freedom Mugabe enjoys to sell out Zimbabwe without any organisation or institution to stop him. China and Zimbabwe now signed again several cooperation deals during a visit to Beijing by long-time Zimbabwean Top-Honcho “Uncle Bob”. Mugabe began a state visit to China on Sunday, which has included talks with Chinese President Xi Jinping, The two most controversial presidents witnessed the signing of several deals, including on food, finance and tourism.

h3. Mugabe renown Leader

Mugabe is an old friend of China, Xi was quoted as saying, praising him as a leader of Africa’s struggle against colonialism and hailing him as a renowned leader in Africa.Zimbabwe in turn committed to speeding up its economic development and hoped to boost Africa-China ties. This comes as a 59% plunge of foreign investment into Zimbabwe to US$ 67m in the first half of this year, the central bank said on Monday, reflecting worries over President Robert Mugabe’s policies and the risk of investing in his country.

h3. Significant Increase in Zim – China Trade

Official data show China has extended US$ 1bn in loans to Zimbabwe since 2009 and trade between the two nations rose to US$ 1bn last year from US$ 300m five years ago. Mugabe has increasingly leaned on China after being shunned by Western trade and financial partners. They have been put off by concern over human rights and alleged fraud in elections won by the president and his Zanu-PF party.

h3. Drastic Fall of FDI

Announcing the drop in foreign direct investment, Reserve Bank of Zimbabwe governor John Mangudya said exports, mostly minerals and tobacco, were also down 13% in the first half of the year, to US$ 1.3bn, compared with the first six months of 2013. “There is therefore need for the country to create an investor-friendly environment so as to tap into these external capital resources to boost employment, production and exports,” Mangudya said in a half-year monetary policy statement.

h3. Unemployment and Blackouts

Zimbabwe’s economy is experiencing a serious dollar crunch and electricity shortages. Several companies have failed to pay salaries or have closed altogether, in a country where only 500 000 out of a total 13 million people hold formal jobs. The economy did return to growth in 2009, after nearly a decade of recession, when Mugabe was forced to share power with his opposition rivals. But his landslide victory last year has coincided with a rapid slowdown.

h3. Growth Forecast cut

The government has cut its growth target for this year to 3.1% from 6.1% previously. Mangudya said the tough economic conditions had strained the capacity of companies and individuals to repay loans. The percentage of non-performing loans out of total loans had risen to 18.5 % from 17 % at the start of the year. Banks in turn have tightened their lending to customers. “Reduced credit is leading to a decline in economic growth, private consumption, job losses and decrease in government revenue,” Mangudya said. Mangudya said further that liquidity problems among banks meant foreign banks like units of Barclays Bank and Standard Chartered and larger local lenders would have to raise their minimum capital to US$100m by 2020 from the current US$ 25m. Smaller banks would be required to maintain minimum capital of US$ 25m. Mangudya said in order to ease the dollar crunch in the economy, banks would now be required to keep only 5% of their foreign currency offshore, down from 30%.

So, Zimbabwe was for Sale. China bought it, welcome to Africa!

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