Sunday, 10 January 2016

Zimbabwe is "technically insolvent" says Yamamoto - it is the economy stupid that will force regime change. By Wilbert Mukori

“Zimbabwe owes Japan about $400 million - overdue debt. It owes the top five Paris Club creditor nations (Germany, France, Japan, UK and the US) $2,6 billion. Zimbabwe's debt is nearly $10 billion. This would not have been a big deal if the economy was big, and if the debt was not overdue,” you said.

“I have seen some analyst give themselves comfort by expressing this debt as a percentage of GDP. That is mindless and phoney analysis. Since this debt is overdue and must be paid during the year, it must be expressed as a percentage of the projected government revenue since you don't settle your debt from GDP. Given that Chinamasa projects government revenue for 2016 at $3,8 billion (the actual figures will be far less), this renders the Zimbabwe government technical insolvent. This whole situation took place under Mugabe's watch.

This is spot on! I would only wish to add that Zimbabwe’s creditors have all refused to grant the country the “heavily indebted nation status” because they all know that Zimbabwe has the capacity to pay back it debts if the nation’s vast resources and wealth were managed properly and not wasted away through gross mismanagement and rampant corruption and looting.

According to Partnership Africa Canada, a Canadian NGO monitoring the world trade in diamonds, Mugabe alone pocketed $2 billion from his share of the wholesale looting going on in Marange and Chiadzwa. The Police, Army and CIO are some of the other local partners with mining concession in the area and Partnership Africa did not know how much they are pocketing. So Mugabe alone is pocketing 20% of the total national debt or more than 53% of Zimbabwe’s annual $3.8 billion 2016 budget.

Finance Minister Patrick Chinamasa tired of being asked government was not receiving a dollar from the diamond bonanza told parliament in early 2015 the were no alluvial diamonds left in Marange and Chiadzwa. In his letter to IMF in May 2015, just a few weeks after his statement to parliament, the Minister change his story; he diamond operators were facing some serious  problems and government had decided to stop collecting tax to give the industry the chance to recover. He knew the IMF and the world know the mining in Marange had not stopped but, if anything gone into overdrive!

One has to agree with the debtors granting Mugabe “most indebted nation status” will have encourage him to borrow even more with no intention of paying back as before and he would have expand his looting activities beyond Marange and Chiadzwa!

Zimbabwe’s economic meltdown is of Mugabe’s own making and after 36 years of gross mismanagement, rampant corruption and reckless borrowing and spending the chicken have finally come home to roost in the millions, like red-billed quelea. Mugabe was able to bribe, bamboozle, rig elections, threaten and even murder his political opponents and critics to stay in power.

However he has failed to rig economic prosperity and it is Zimbabwe’s economic collapse and mass poverty  that will, in the end, force him to give up power! It is the economy stupid that will deliver regime change in Zimbabwe.

1 comment:

  1. Why is it that foreigners like Ken Yamamoto are more informed about Zimbabwe's problems and are offering well thought out solutions than Zimbabweans themselves? Even when someone has done all the thinking for them and offer us a way out of this nightmare we are still not motivated enough to act? I find Zimbabweans' inaptitude both puzzling and a great disappointment.

    There are a number of freedom fighters who fought in the war of independence because they really cared about freedom, justice and human dignity. Others like President Mugabe and all his Zanu PF ruling cabal wanted absolute power and the wealth it brought them.

    As for the majority of ordinary Zimbabwe most played their part in the fight for independence but only because they were pressured to do so, being labelled a sell-out was a death sentence. Many of them never believed that Mugabe and other cared about their freedom ad so when Mugabe and others started reneging on their promises and assuming more and more tyrannical powers for themselves these people were not surprised but worse still took it all on the chain and did nothing about it.

    People did not expect Mugabe to deliver good governance and so that happened they did not even fight for their freedoms and rights as if to do so would have been a waste of time and human lives! What many people have failed to appreciate is by failing to stop Mugabe becoming a tyrant the nation has directly and indirectly lost a lot more than they ever imagined.

    Those of us who risked life and limp to fight in the war of liberation did the right thing the failure by others to hold the fort to stop another oppressive regime emerging is the fault of the post independence generation. They failed to hold on to the freedom and human dignity the freedom fighters had placed within their reach on 18 April 1980!