Under the sanctions law, the Zimbabwe Democracy and Economic Recovery Act of 2001, the US Secretary of the Treasury votes against any new loans, credits or debt relief for the Zimbabwean government from international financial institutions. (Shuttershock)
The US Congress will on Wednesday debate the Department of State Policy Provisions Act, which, among other things, proposes the immediate removal of 24-year-old targeted sanctions on Zimbabwe.
Under the sanctions law, the Zimbabwe Democracy and Economic Recovery Act of 2001, the US Secretary of the Treasury votes against any new loans, credits or debt relief for the Zimbabwean government from international financial institutions. Only the American president can certify waivers if he believes Zimbabwe has made political and economic reforms.
If the Act, proposed by Republicans, is passed into law, the US will support Zimbabwe borrowing money from international lenders such as the World Bank. Conditions set are that Harare must settle its $3.5 billion debt under the Global Compensation Deed owed to commercial farmers displaced during the country’s land reform programme.
Once the US supports Zimbabwean borrowing, the government must “commit, within 12 months of the approval of such new or expanded funding, to remit all outstanding arrears owed under the Global Compensation Deed, inflation-adjusted to the date of enactment”, the draft law says.
In April, Zimbabwe’s Finance Minister Mthuli Ncube announced that the government had begun paying displaced farmers with treasury bonds and small cash payments. However, the proposed US law rejects payments in the form of “Zimbabwe-issued securities”.
If, after the sanctions are removed, Zimbabwe backtracks on the arrangement, the law provides that the US will withdraw its support for the country with lending institutions.
Over 4 000 white commercial farmers were displaced at the turn of the millennium when the Zanu-PF government, under late president Robert Mugabe, took land taken from blacks during British colonial rule.
The Zimbabwean government has blamed the sanctions for the country’s economic ruin, but critics blame decades of mismanagement by Zanu-PF.
Last year, the US terminated the Zimbabwe Sanctions Program, which targeted specific individuals and entities, under executive orders.
It, however, added some Zimbabweans, such as President Emmerson Mnangagwa and his close ally, businessman Kuda Tagwirei, to those sanctioned under the Global Magnitsky Human Rights Accountability Act, citing “their involvement in corruption or serious human rights abuse”.
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