Zimbabwean President Emmerson Mnangagwa said that the U.S. sanctions against his country have improved the country’s economy. Speaking on the sidelines of Russia’s International Economic Forum in St. Petersburg, Mnangagwa said that he wished the United States would not remove the sanctions as they helped the Zimbabwean government to best other African countries.
Mnangagwa’s claims come three months after U.S. President Joe Biden terminated broader economic sanctions imposed on Zimbabwe by President George W. Bush in 2003, amid corruption and violations during the redistribution of land to indigenous Zimbabweans, a reform that was supposed to rectify colonial injustices.
Concurrently, the Department of the Treasury imposed fresh sanctions against Mnangagwa, his vice president, nine other individuals and three entities on charges of corruption; gross abuses of political, economic and human rights; severe restrictions on political activity and fundamental freedoms.
Mnangagwa, along with “some of the most powerful people and companies in Zimbabwe” have “siphoned off public resources for personal gains” supporting and contributing to a “global criminal network of bribery, smuggling, and money laundering that impoverish communities,” the White House said in a statement.
The U.S. reiterated, “Sanctions on these individuals and entities do not represent sanctions on Zimbabwe or its public.”
Commenting on the U.S. sanctions for the Russian state-owned media outlet Sputnik, Mnangagwa said: “because of the sanctions, we are more focused on our domestic resources to grow our economy and modernize our economy, and we are doing better in the entire region in our economic growth year by year because of sanctions. Those countries without sanctions in our region are not doing better as we are doing.”
That is misleading.
Economically, Zimbabwe is not ”doing better in the entire region.”
Zimbabwean Vice President Constantino Chiwenga contradicted Mnangagwa’s claim, saying that due to the economic restrictions imposed by the EU and the U.S., Zimbabwe lost more than $150 billion since 2001 “through frozen assets, trade embargos, export and investment restrictions from potential bilateral support, development loans, IMF and World Bank balance of payments support and commercial loans.”
“Sanctions are really hurting Zimbabweans,” Chiwenga told protesters outside the U.S. Embassy in Zimbabwe rallying against the sanctions on October 25, 2023 – a day designated the anti-sanctions day by the Southern African Development Community, a regional bloc of 16 countries.
The sanctions “include financial restrictions and illegal economic measures that alienate Zimbabwe from global supply chains and the global financial system as well as bar capital inflows mainly from the West,” Chiwenga said.
“For decades after independence, Zimbabwe was one of the countries with the highest living standards in Africa — buttressed by a skilled workforce and infrastructure superior to most countries,” the World Bank says in the country’s profile.
But Zimbabwe has not been able to reach its potential for economic growth, “capitalize on existing and emerging opportunities for the private sector,” or “harness the country’s advantages,” including its “strong human capital,” according to the World Bank.
The nation’s economy is hampered by fiscal debts, high dependency of its agriculture on climate conditions, and slow structural transformation. More than 37% of Zimbabweans live in extreme poverty.
Despite the real GDP growth in 2022 and 2023, the World Bank WB projects Zimbabwe’s real GDP growth to slow to 3.3% in 2024.
The World Bank had stopped lending Zimbabwe money due to arrears (unpaid debts), which in 2023 have exceeded $14 billion.
The local currency, the Zimbabwean dollar, depreciated its value by 70% against the U.S. dollar early this year.
In recent months, the currency has been trading at 30,000 Zimbabwean dollars against U.S. $1.
On April 5, the Zimbabwean government introduced a new currency: the Zimbabwe gold (Zig), saying it is backed by gold and its value is pegged to the amount of gold reserves held in the country.
The Associated Press reported in April that Zimbabweans have no trust in their federal reserve because the government introduces a new currency every time their old currency becomes too expensive against the U.S. dollar.
Zig, the new currency, is the sixth note launched by the government since the spectacular collapse of the Zimbabwean dollar amid the 5 billion percent hyperinflation in 2009, one of the world’s worst currency crashes.
Analysts warn that the financial situation in Zimbabwe is so dire, so the country uses other foreign currencies to trade: the U.S. dollar, South African Rand, Indian rupee, British pound, Chinese yuan, and Japanese yen.
The 2024 Index report by the Heritage Foundation, a Washington-based conservative think tank described Zimbabwe’s economy as “repressed” and ranked it 46th out of 47 countries in the Sub-Saharan Africa, among the worst in the region. Zimbabwe’s economic freedom score is lower than the world and regional averages, the Index said
The United Nations Development Program report ranks Zimbabwe 17th out of 54 African countries, describing it is a “medium-developed country.”
Zimbabwe is not on the list of the fastest-growing economies in Africa in the African Development Bank Macroeconomic Performance and Outlook biannual report on the continent.
In March, the U.S. Treasury imposed a second round of sanctions on President Mnangagwa, accusing him of siphoning off Zimbabwean natural resources by corruptly participating in gold and diamond smuggling networks.
The Treasury said, ‘’Mnangagwa provides a protective shield to smugglers to operate in Zimbabwe and has directed Zimbabwean officials to facilitate the sale of gold and diamonds in illicit markets, taking bribes in exchange for his services.’’
