US sanctions a double-edged sword for Zimbabwe

Zimbabwe First Lady Auxillia Mnangagwa became the first victim of the new United States sanctions put in place in early March. She was denied a visa to attend the United Nations Women Conference, a slap in the face for the Southern African country that, over the last six years, has been on a reengagement path.

The US imposed sanctions on Zimbabwe in 2001. The sanctions were implemented under two legal instruments – the Zimbabwe Democracy and Economic Recovery Act and Executive orders, which were renewed annually each February. As many as 90 Zimbabweans and a dozen companies were on the sanctions list.

Zimbabwe’s economy has over the last two decades groaned under the sanctions regime, increased poverty among the citizens and ultimately hindered the government’s ability to provide social services like health and education.

The country’s road infrastructure collapsed and its energy generation was hampered to the extent that load-shedding has become perennial, in most instances lasting over 16 hours a day.

However, Zimbabwe, to evade the economic choke, has turned to the East, particularly China, Russia and Belarus, for new lines of funding. It has also given large contracts to local companies to fund agriculture production and the reconstruction of roads.

Zimbabwe’s economy has been growing at slightly above 3% annually, according to the International Monetary Fund (IMF). And more importantly, the Zanu PF regime has won re-election six times since the sanctions regime was imposed, albeit disputed by the opposition, which cited the use of violence, gerrymandering, and suspected poll rigging.

The US started reviewing its sanctions regime in 2021, culminating in the new regime announced on March 4, which said: “Today we are refocusing our sanctions on clear and specific targets: President (Emmerson) Mnangagwa’s criminal network of government officials and businesspeople who are most responsible for corruption or human rights abuse against the people of Zimbabwe.”

The US added: “Consistent with the findings of Treasury’s 2021 sanctions review, we are committed to the use of economic sanctions towards a clear and specific objective, in coordination with diplomacy and other tools of statecraft.”

The new US sanctions replace those under the Executive Orders. They are based on the Global Magnitsky Human Rights Accountability Act. Using this Act, 11 individuals and two companies—Fossil Agro and Fossil Contracting—.

Among the 11 people, there are two couples: President Mnangagwa and his wife Auxillia and businessman Kudakwashe Tagwirei and his wife Sandra Mpunga.

At this juncture, it is important to say Tagwirei owns both Fossil Agro and Fossil Contracting. Fossil Agro has been the major funder of agriculture since the land reforms at the turn of the century that saw white commercial farmers booted off their land and replaced by indigenous Zimbabweans.

Fossil Contracting is the largest contractor engaged by the Zimbabwean government to implement road reconstruction programmes.

The Zimbabwe regime seems to have been a step ahead in evading the impact of the new sanctions. Recently, the government changed procurement rules and gave a long list of state-owned enterprises that are exempted from following the Public Procurement and Disposal of State Assets Act.

It means all the procurement contracts by these companies will not be put to tender. This could potentially create room for more entrenched corruption in public procurement of goods and services and possibly make them more expensive.

The new sanctions, particularly because they target the president, mean many foreign governments will be circumspect in their dealings with Mnangagwa and Zimbabwe. Ultimately, the economy will suffer, and the social conditions of many citizens will get worse.

The Zimbabwe regime seems to be in a rush to implement the much despised Private Voluntary Organizations (PVO) Bill that seeks to control and scrutinise every work of non-governmental organisations in the country.

In many instances, the Zanu PF government has labelled NGOs ‘regime change agents.’

It is conceivable that the new sanctions regime will push the Zimbabwean government to be more paranoid, restrict the rights of its citizens, entrench corruption in public procurement, and control the operation of NGOs, which have been helping many citizens in rural and marginalised communities with food, skills training, and civic education to hold the government accountable.

While the US, by denying Auxillia a visa, have fired the first shots that they are serious about sanctions, the Zimbabwe regime will retaliate at some point, making sanctions a double-edged sword that may leave Zimbabwe worse off than it was. Time will tell, but the trajectory that things could get worse cannot be faulted.

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