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26.03.2009 Feature Article

Aid Will Cripple Zimbabwe, Again!

President Robert Mugabe has appealed for international assistance to rebuild his self-battered country. Many aid activists are already salivating to this rapprochement from Africa's most beleaguered president. The reason is simply that they never learn. However, they have a strong backing from the academic and entertainment industries.

Irish rock legend Bono of U2 and his counterpart, Bob Geldorf of the seventies teen pop group Boomtown Rats are part of a clique one can safely refer to as 'Angels of Mercy'

who habitually perceive Africa as an object of pity. This image seen through a prism of philanthropy nevertheless contaminated with molecules of colonial patronage is not without justification.

African governance standards, particularly in Zimbabwe, Sudan, Swaziland, Democratic Republic of Congo and Somalia are not exactly models of excellence. Somalia and DRC have never experienced peace since the departure of Siad Barre and Mobutu Sseseseko respectively. Political strife reigns supreme in the Darfur, Niger Delta, Guinea, Chad, Ivory Coast and Zimbabwe as the 'Lord Resistance Movement' kills for a living in Uganda. Swaziland is an island of despair while fear of competition has stirred

the African National Congress Youth League [ANCYL] in South Africa into combative mood swings. Egyptian prisons are swelling with opposition prisoners and Madagascar has just legalized a coup with its popular Mayor torpedoing an insecure President. Thus, who could vilify these two 'nice white rockers' for shedding tears for a continent that is either struggling to feed itself or chocking with human blood?

A recent UNDP report entitled “Comprehensive Economic Recovery in Zimbabwe

– a Discussion Document” seems to concur with the common sense knowledge that dishing out development assistance to any African country, no matter how deserving in the eyes of Western Philanthropists, adds very little value to lives of common citizens. UNDP says of Zimbabwe: “The real extent of external indebtedness is unknown, partly because of the contingency liabilities of the government and the central bank in respect of offshore loans for which they have provided guarantees, partly because the full extent of the current payments pipeline is unknown, and also because details of loans from non-OECD countries such as China, India, Iran and Venezuela are not in the public.”

If one then takes economic indicators as a country's test of 'good health', it is during Zimbabwe's 2000–2007 'deep crisis period' of gross indebtedness that indicators show an exponential decline and the highest negative trends. There is also no doubt in one's mind that this is the same period that Zimbabwe experienced the highest and crudest levels of political rights abuses. In simple terms, there is converse relationship between aid and development.

The latest publication of the Business Council of Zimbabwe titled 'Blue Print for Zimbabwe's Economic Revival' shed more light on this paradox: “Even where we apply for 'Least Developed Country' status to get preferential treatment in OECD markets, Aid surges can cause distortions and harm competitiveness. They can also breed dependency – build in obsolescence into programs.” They then dilute an otherwise good argument by proposing “effective management” of aid as a panacea – but has this ever happened anywhere in the developing world? For us in Zimbabwe we even have firsthand experience on how free money in the hands of incorrigible rascals results in unmitigated disaster. Beleaguered Reserve Bank Governor Gideon Gono had for the past five years poured millions of foreign currency into what he termed 'agricultural mechanisation programs' for the benefit of President Robert Mugabe's political support base. The Chinese, Libyans, Iranians and South Africans followed suit, yet the World Food Program reports that almost nine million Zimbabweans will require food aid this year.

Now that Morgan Tsvangirayi's MDC is an appendage of the Government of National

Unity (GNU), how do we propose that this 'fledgling democracy' satisfies its reconstruction requirements without a Jeffery Saachs 'jumpstart' or Marshall Plan approach? A report from electronic newspaper ZimOnline says: “A high-level International Monetary Fund this week returned to the country after a two-year break to assess the economy and review policies to address the economic and humanitarian crisis. Regional leaders have put Zimbabwe's needs at around US$2 billion.” About the same time, a memo from new GNU Finance Minister Tendai Biti warned that if Zimbabwe did not immediately get cash injection of US$ 1 billion, “failure to pay some of these obligations urgently would weaken the country's credit rating...”

Expectedly some promises are being made. Australian Foreign Minister Stephen Smith then immediately announced that his country would provide USD$10 million to help with clean water and attract professionals back to the country's health system.

He pontificated: “Now is the time for Australia to assist Zimbabwe's reconstruction by giving as much help and assistance as possible to its people and Zimbabwe Prime Minister Morgan Tsvangirayi.” Meanwhile, Mozambique, Tanzania and Uganda's national budgets are probably forty percent ODA-funded, but they still languish in the lower leagues of least developed economies.

Yet the International Monetary Fund concluded that Zimbabwe still owes too much to qualify for any realistic ODA. This cruel reality could be long term good news, but flies in the face of Minister Biti's short term requirements. My idea of reconstruction is not the overnight wine-at-Cana miracle approach.

First, we should disabuse ourselves of the cap-in-hand mentality. The poisoned

chalice is the bloated GNU predisposition towards recurrent expenditure, which

really is the second point – reducing the size of Government.

Thirdly, we can restore the viability of the banking sector by getting them to re-capitalise via offshore, not ODA financing. Fourthly, Zimbabwe is sitting on a wealth of public property that can be liquidated to raise working capital for infrastructure reconstruction. Fifth, almost thirty years of plunder and state-assisted pillaging have stashed billions of foreign currency in tax havens and discrete foreign accounts. If that money can be repatriated, it will be sufficient to sustain us until our entire productive capacity has been restored.

Ngwenya is a director of Coalition for Market and Liberal Solutions and an affiliate of www.AfricanLiberty.org

Rejoice Ngwenya, AfricanLiberty.org
Rejoice Ngwenya, AfricanLiberty.org, © 2009

This author has authored 43 publications on Modern Ghana. Author column: RejoiceNgwenyaAfricanLibertyorg

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