THE illegal sanctions imposed on Zimbabwe by the West continue to work against efforts to grow the economy, as businesses fail to access offshore loans at concessionary rates.
This was said by Zimbabwe National Chamber of Commerce national vice-president Mr Godwin Muoni last week.
The sanctions have seen Zimbabwe, for close to two decades, being treated unfairly by some Western countries, affecting its economic progress.
President Mnangagwa has, since he assumed office in November 2017, been on an international re-engagement drive to thaw the relations.
Mr Muoni called on the lifting of the sanctions to promote the economic revival efforts being pursued by the Second Republic.
“Sanctions have done a lot of damage to the economy and lives of the ordinary Zimbabweans, and they must be removed like yesterday,” he said.
“The embargo was put for a certain purpose and the purpose is for the country not to progress economically and that has affected the entire economy, including the manufacturing sector. As a result of sanctions, local businesses are not able to access cheap money offshore and foreign direct investment has been slow.”
Mr Muoni said the money that Zimbabwe could access during the sanctions era was expensive because financiers and investors perceived the country as a high-risk destination. This, he said, rendered local enterprises uncompetitive in terms of production if compared with regional counterparts.
“For example,” he said, “our banks cannot give us (industry) cheap money because they are also not accessing cheap money on the international market. Zimbabwe is perceived a risky destination for investment, so whoever is giving money to Zimbabwe will put a very high premium and this is affecting the economy heavily.”
Mr Muoni said the sanctions affected the growth of small and medium-scale enterprises (SMEs).
“Sanctions are real and have also affected SMEs’ growth because there is no research and development because such initiatives have to be funded by international financiers such as IMF (International Monetary Fund), World Bank,” he said.
In this context, Mr Muoni said Zimbabwe’s economy had over the years lost potential investments worth billions of dollars.
“What has happened is that at independence we inherited a lot of old machinery in companies such as Dunlop, which is supposed to be supplying every tyre in this country,” said Mr Muoni.
“Now, because of sanctions, that company cannot attract fresh capital to replace the old plant that is there because that company is not working and so are other strategic firms like Zisco. How much money are we as a country losing importing from as far as Japan or India?”
Mr Muoni said in some instances, Zimbabwe had not been able to attract potential investors because the moment they set up investments in the country, they risked being put on the sanctions list.
“And if not put on sanctions list, there is no certainty that as an investor, your return on investment will be recouped and after how long,” he said.