Zimbabwe needs investment to upgrade its ailing infrastructure

China and Zimbabwe have marked the new year by stepping up high-level engagements seen as crucial in assisting this Southern African nation in realizing its potential for sustainable economic growth, after close to two decades of decline.

Both sides are now preparing the groundwork for Chinese investment in different sectors of Zimbabwe's economy. The first step is exchanges designed to achieve parastatal reform through capacity building, ensuring public finance management, preventing financial leakages as well as eradicating or mitigating corruption.

The Zimbabwean Government, which has thus far failed to come up with the $27 billion needed to implement its Zimbabwe Agenda for Sustainable Socio-Economic Transformation (ZimAsset) economic blueprint, signed a number of memorandums of understanding (MOUs) with China last year. These included cooperation in implementation of infrastructural projects in sectors such as power generation, water, telecommunications and mining. The MOUs were signed during Zimbabwean President Robert Mugabe's state visit to China last August. 

All-weather friend

However, most of the projects are yet to take off, causing concern for China over the poor state of Zimbabwean parastatals that are the vehicles for the implementation of investment deals.

Beginning this January, two high-level Chinese delegations have visited Zimbabwe, the first being from the International Cooperation Center of the National Development and Reform Commission of China (ICC-NDRC), led by its director Cao Wenlian.

Commenting on the ICC-NDRC visit, Zimbabwe's Economic Planning Minister Simon Khaya Moyo told ChinAfrica the government expects it to benefit the Zimbabwean economy, particularly through exchange of ideas for better implementation of ZimAsset.

"China is our all-weather friend. They have given us all support during the liberation struggle and they have continued to do so after independence," Moyo said in a telephone interview.

"They obviously understand our difficult situation due to the illegal economic sanctions imposed by Western countries for over a decade. They also understand our economic program driven by ZimAsset. This is an exchange which will obviously be beneficial to our economy because they have done well in their planning processes through their parastatals."

The Office of the President and Cabinet in Zimbabwe issued a statement, describing the purpose of the ICC-NDRC visit as the need to discuss areas of economic cooperation.

"Its main objective during this visit [was] to discuss a range of economic development issues affecting Zimbabwe, with a view to proffering solutions on the back of the experience of the Chinese," Deputy Chief Secretary Christian Katsande told the president and cabinet.

"The broad areas of cooperation between the government and the ICC-NDRC include exchange of experiences and knowledge covering the formulation of five-year development plans, reform of state-owned enterprises (SOEs), establishment of special economic zones, and promotion for the growth of small to medium-sized enterprises," he added.

Also included are promotion of strategic economic policy research, planning, coordination, monitoring and evaluation of government policies and programs.

In February, Chinese State Councilor Yang Jiechi and several other senior government officials visited Zimbabwe as a follow-up to the ICC-NDRC visit. They met President Mugabe as well as Vice President Phelekezela Mphoko.

The Chinese Embassy in Zimbabwe said the main purpose of the visit was to promote the implementation of China-Zimbabwe agreements jointly blueprinted by China's President Xi Jinping and President Mugabe, and to discuss and connect specific measures with Zimbabwe for comprehensively deepening bilateral friendly and mutually beneficial cooperation. 

Investment challenges refuted

There has been much speculation in the Zimbabwean media that China is balking at assisting Zimbabwe because of high levels of corruption and poor corporate governance practices in the parastatals and SOEs implementing the investment projects.

In her current report titled Appropriation Accounts and Miscellaneous Funds, Local Authorities and State Enterprises and Parastatals, Zimbabwe's Comptroller and Auditor General Mildred Chiri revealed rampant diversions of funds, unauthorized expenditures as well as the possibility of understatement of revenues collected by line ministries leading to "significant variances" totaling almost $170 million. Various state enterprises and ministries are cited for over-spending, failure to account for funds and other poor corporate governance practices, lending credence to demands for reform.

Both Chinese and Zimbabwean officials emphasize that the Chinese model of assistance to Zimbabwe and other African countries compares favorably with that of Western countries and their related institutions like the International Monetary Fund and the World Bank.

While Western aid is viewed by Zimbabwe and other countries as prescriptive and tied to conditions, the Chinese say they are engaging Zimbabwe on the basis of equality and mutually beneficial exchanges of experience, which will enable it to find its best path to development.

According to the Chinese Embassy in Zimbabwe, "China believes that every country shall pursue its own path of development according to its conditions."

In an email to ChinAfrica, the embassy stated, "As Chinese President Xi Jinping said, 'Only the wearer knows if the shoes fit his feet.' We believe that Zimbabweans have the wisdom to find the most suitable development path, during which China is glad to lend a hand by sharing its experience and providing assistance in China's capacity... Contrary to the reports of some local media, China will never impose its development path or experience on Zimbabwe or any other country."

The two countries have a long history of mutually beneficial economic and political cooperation dating back to the 1960s, when China provided military assistance in the form of training, logistics, equipment and an ideological direction to the military wing of President Mugabe's Zimbabwe African National Union-Patriotic Front, then known as the Zimbabwe African National Liberation Army.

In more recent times, Chinese Ambassador to Zimbabwe Lin Lin said his country has assisted Zimbabwe with amounts exceeding $1 billion in preferential and concessionary loans. The projects funded include the National Defense College, upgrading the Victoria Falls Airport, and the Kariba South power station extension.

"Since 2010, Zimbabwe has also been given more than $100 million in grants and interest-free loans," added Lin, saying it was more than any other African country has received "because we understand that Zimbabwe is faced with serious challenges and needs more help from its [Chinese] friend."

(Reporting from Zimbabwe)