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Stalled Deals Derailing Zimbabwe's Economic Revival

  • Tatenda Gumbo

Since the formation of the Zimbabwe coalition government four years ago, politicians sought to re-work the country’s political landscape and revive the economy in an effort to boost the struggling economy.

Many multi-million dollar projects have been given the green-light to operate in the southern African nation amid pomp and fanfare but most of them today have stalled due to continued political interference.

Green Fuel (Pvt) Ltd's Chisumbanje Ethonal Plant, saddled with over 10 million liters of ethanol, has now been lying idle for almost a year though an inter-ministerial taskforce headed by Deputy Prime Minister Arthur Mutambara is trying to resolve its ownership structure.

Mutambara told journalists in Harare Wednesday that the taskforce has resolved to reconstitute the company’s ownership structure from the initial ‘Build-Operate-and-Transfer’ arrangement to a joint venture with the state-owned Agriculture and Rural Development Authority (ARDA).

He said the government is expected to gradually introduce mandatory blending of ethanol and fuel from E-5 to E-10 up to E-20 by 2015.

Mutambara said cabinet has accepted these recommendations after the taskforce unearthed numerous irregularities which are supposed to be addressed by Billy Rautenbach’s Ratings Investments, one of the top shareholders.

He said Green Fuel is now expected to also compensate over 1,238 villagers who lost their land and livestock when the project was implemented

At the same time, the $750 million Essar Africa Holdings and Zimbabwe Iron and Steel Company deal is another project facing serious problems due to disagreements in the unity government.

Government is currently renegotiating the deal after the Indian firm took over the collapsed entity and renamed it New Zimbabwe Steel Limited.

There were high hopes that the company would be speedily revived by Essar Holdings but everything was scuttled by the Ministry of Mines which claimed that the Indian firm was bound to grab vast iron ore reserves, worth billions of dollars in some parts of the Midlands Province, at a giveaway price.

More than 7,450 people have been left jobless due to the stalled operations at New Zimbabwe Steel and Chisumbanje Ethanol Plant.

On the other hand, politicians have been criticized for their involvement in conservancies, especially the recent forced take-over of the Save Conservancy, Manicaland Province.

Critics say this is threatening to derail the revitalization of the tourism industry and holding of the United Nations World Tourism Organization General Assembly in Victoria Falls next year.

Some top Zanu PF politicians and military commanders have grabbed the conservancies where they are reportedly killing large numbers of wild animals and selling the meat to urban retailers and villagers.

Left behind are Zimbabweans desperate to revive their lives as unemployment tops 86 percent countrywide. Critics say the government lacks the ability to revive the economy by letting politics to call the shots.

For perspective, VOA spoke to Callisto Jokonya, an economist and former president of the Confederation of Zimbabwe Industries, and Godfrey Kanyenze of the Labor and Economic Development Research Institute of Zimbabwe.

Kanyenze said the failure of these deals is a reflection of Zimbabwe’s woeful politics.

Jokonya concurred, adding that government negotiated these deals with many loose ends.