Business in anti-sanctions pledge

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BUSINESS has pledged to lobby against economic sanctions imposed on Zimbabwe by some Western countries, which it says have dented the country’s investment appeal and its debt profile.
This was one of the resolutions at Zimbabwe National Chamber of Commerce’s (ZNCC) congress in Victoria Falls last week.
Speaking to The Financial Gazette on the sidelines of the congress, ZNCC president Mike Kamungeremu said the impact of the sanctions on the economy was undeniable.
“… out of the discussions, a resolution came out to the effect that perhaps, as businesses, we are not doing enough to lobby for the removal of sanctions,” he said.

“So, a resolution was passed that we need to do more in terms of lobbying for the removal of sanctions because they are affecting us; it is a fact and in terms of ethics, our appeal as the chamber of commerce is for all business people to conduct their business legally and ethically and to also put national interest ahead of self-interest.”
Chairman of the Nairobi Securities Exchange, Kiprono Kittony, who was also at the congress, said the business community should add its voice to the call for the removal of sanctions because they have restricted international trade, among other things.
“I strongly feel that the business lobby should be advocating for the removal of sanctions for Zimbabwe to allow you to take part in the global business community without any restrictions of that nature,” he told this publication.
According to a 2021 report by the UN Special Rapporteur, Zimbabwe has been unable to access more than US$100 billion in bilateral donor support, grants, and loans from the IMF, World Bank, and African Development Bank due to the sanctions.
Because of the embargoes, Zimbabwe’s GDP contracted from US$6,8 billion in 2001 to US$4,4 billion in 2008, according to the World Bank.
The sanctions have also hamstrung the country’s international banking channels.
Since 2003, American presidents have persistently renewed an executive order prohibiting any dealings by a US entity with designated Zimbabwean nationals.
Even though this is specifically targeted at individuals linked to the late Robert Mugabe regime, which is accused of a number of atrocities, business leaders say there have been significant spillover effects into the broader economy.
“The fact that Zimbabwe is under sanctions sends shivers to potential investors and to potential funders … outside the International Monetary Fund (IMF), the World Bank and the African Development Bank (AfDB) who might be funding private sector deals, and not necessarily the sovereign budget,” chief executive of ZNCC, Chris Mugaga said earlier this year.

“What happens is that a thick level of uncertainty is created when an investor is no longer sure whether the sanctions will be lifted or will be extended to even harsher conditions, which then stifles or reduces their chances of recouping their investments.
“Sanctions are a threat to investor appetite. Even when private businesses want to secure a line of credit, often this can’t be a long-term structure,” Mugaga said.
The president of the Confederation of Zimbabwe Industries, Kurai Matsheza, has also said sanctions have hamstrung the country’s business sector.
“Businesses require credit lines and with the country under sanctions, this is difficult to attain. Thus, businesses operate on a cash-upfront basis and that ties in a lot of money.
“Accessing tenable trading terms is also difficult. We require to retool our businesses and we require equipment from outside and all this needs financing.
“Even if you do get the finance, it’s priced heavily. The country risk is factored in and that country risk is coming up high because of those sanctions,” Matsheza said.
SADC has set aside October 25 of every year as a day for calling for an end to the sanctions, which were imposed by the West amid allegations of human rights violations by the government of the late former president Mugabe.
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