Mnangagwa seeks to revive Chinese mega deals

Published: 06 September 2018

PRESIDENT Emmerson Mnangagwa says he will pursue mega deals with China during his visit to the Asian country.

The southern African nation, still battling to shake off a hangover from a decade-long recession, is dogged by dwindling national revenue, company closures, high unemployment, widening budget deficit and very low foreign direct investment.

Mnangagwa - currently attending the China-Africa Cooperation (FOCAC) forum in Beijing - told Chinese media that he will negotiate deals and investments for Zimbabwe with the Asian economic giant, during his stay.

"We have several projects (that) we have put forward and this time around, we hope we will be able to put bankable projects which meet the criteria for assessment by China," he said.

Over the past four years, Zimbabwe and China signed multi-billion dollar infrastructure deals involving key sectors such as energy, construction and communications, but very little has materialised.

Market watchers contend that China - which was apparently no longer keen to extend funding nor facilitate investments into Zimbabwe due to confidence concerns, policy inconsistency and continued default on loans - has been warming up to Mnangagwa.

"It seems there's renewed confidence in the country judging by credit lines that have been opened by China since Mnangagwa took over in November last year," United States-based economic commentator Francis Mukora said.

He, however, warned that although China might provide funding to Zimbabwe, the deals would be skewed in China's favour.

China maintains trade surpluses with many African countries, including Zimbabwe.

"China's strategy in Africa has been largely based on resource extraction and is generally characterised by offering mostly yuan-denominated loans, in exchange for permitting Chinese state-owned enterprises access to resources," Mukora said.

Former African Development Bank vice president Mthuli Ncube said it was important for Mnangagwa's government to negotiate win-win trade deals with the international community in order to gain a competitive advantage.

"In terms of trade deals, we should look everywhere; not East, not West. Secondly, because the relationship with the West has not been very good maybe more emphasis should be placed there now so that we restore that relationship.

"For example, with Brexit in the United Kingdom (UK), I think if UK people ask me what they really need now is friends within the Commonwealth and my view is Zimbabwe must join the family of the Commonwealth and let's have trade agreements with the UK because they also need that because of their own fractures in terms of the Brexit process.

"So, let's look everywhere but again don't ignore China because that's where the money is. Everyone is looking to China, it's not just us even the whole of Europe, this idea of the Chinese, of the global silk road is real and we have to make sure we don't lose out and we should benefit as much as we can. But let's negotiate well and fairer deals and maybe there is something to learn about the Chinese," he added.

Ncube, who is also an economics and public policy expert, urged the new government to come up with solid economic policies.

"What is important is to draft a very clear economic vision and strategy for the country, to create an economy that exhibits strong gross domestic product growth over a period of 10 years which should be sustained and shared.

- fingaz

Tags: Mnangagwa,