Chinamasa panics over economic meltdown

AFTER failing to secure an economic rescue package from China, South Korea and Kuwait as well as a reprieve from multilateral lending institutions, Finance minister Patrick Chinamasa is running scared as he has briefed the Joint Operation Command (Joc) — which brings together the army, intelligence services and the police — suggesting the issue is now treated as a national security matter.

Elias Mambo

Informed government sources say Chinamasa, under pressure to deliver a workable matrix to rescue an imploding economy, presented a report to Joc clearly showing since President Robert Mugabe and Zanu PF won the elections last year, the economy has been on a downward spiral but no one, including the so-called “all weather friends” such as China, are willing to bail out the country.

Sources close to the issue say Joc met on April 17 after five months of no get-togethers citing different reasons, including the absence of some members like Presidential Affairs and Intelligence minister Didymus Mutasa who has been sick, to assess the economic situation and its security implications.

The sources say the security service chiefs are anxious about the state of the economy insofar as it impinges on security matters and are pressuring the already harried Chinamasa with demands to find ways of reviving the economy before the situation spins out of control.

“Chinamasa reported that international financiers and countries approached were reluctant to offer a rescue package and lines of credit to Zimbabwe due to its bad debt record, poor credit rating and political risk.

“He also said mobilising resources had become a challenge because institutions such as the International Monetary Fund (IMF), World Bank and African Development Bank (ADB) are owed billions of dollars by Zimbabwe,” a source said.

After the elections Chinamasa met the ABD, IMF and World Bank, among other multilateral lenders, seeking financial bailouts.

The World Bank’s October 2013 report on Zimbabwe said the country was facing downside risks in agriculture; political uncertainty during the run-up to elections resulting in low business confidence; liquidity challenges and very high real interest rates on short-term credit; ballooning wage bill in the public sector; ailing infrastructure; possible compression of exports on the back of the fragile and slowdown of the global economy; potential destabilising effects of the indigenisation programme on the economy and disorderly unwinding of vulnerabilities in the banking sector.

Chinamas also approached China, South Korea and Kuwait without success.

Early this year, Chinamasa returned home empty-handed from his trip to Beijing where he was told there would be no bailout but bankable projects funding. Chinamasa, accompanied by Deputy Foreign Affairs minister Christopher Mutsvangwa, failed to convince the Chinese business community in Beijing and Shanghai to loan Zimbabwe funds using the country’s minerals as security.

Through securitisation of minerals, Chinamasa was hoping to get US$10 billion in funding to finance the ambitious ZimAsset, a policy document pitched as the panacea for economic revival by the Zanu PF government, which needs US$27 billion.

Sources say Chinamasa’s approach to Joc was an indication that he had run out of options.

“The minister’s meeting with Joc on April 17 clearly shows he has run out of options and now wants the economy to be handled as a security matter so that decrees and other unorthodox interventions can be made,” a source said.

“While Joc is obviously keen to understand the state of the economy to assess its impact on security matters, they have no solution to the economic problems at hand. It was easy for them to manipulate elections but they can’t rig the economy.”

A senior government official said it was alarming Chinamasa was now approaching Joc.

“What do they know about the economy? People who have not even read Adam Smith, not just the Wealth of Nations but mostly significantly The Theory of Moral Sentiments, which is more important,” the official said. “He is working hard but that’s the wrong way of doing it. His proposals have been rejected by colleagues and now he wants interventions by decrees. He needs a team of competent economists and advisors to come up with serious economic matrices to rescue the situation.”

To try to cultivate good relations with the IMF, he has continued with Staff Monitoring Programme (SMP) which although it does not include financial assistance or endorsement by the IMF executive board helps to improve relations.

An IMF staff mission, led by Mr. Alfredo Cuevas, met with Chinamasa and other senior Zimbabwean authorities in Harare during March 12-26 2014 to discuss the SMP and state of the economy.

The IMF team held discussions Chief Cabinet Secretary Misheck Sibanda, Mining minister Walter Chidhakwa, Indigenisation minister Francis Nhema, Advisor to President Robert Mugabe Timothy Stamps, then acting Governor of the Reserve Bank of Zimbabwe Charity Dhliwayo, Chinamasa and other senior government officials, as well representatives of labour, business, civil society, and development partners.

Chinamasa was in Washington DC early this month for IMF spring meetings.

The IMF mission’s discussions covered recent economic developments and the near and medium-term outlook and risks for Zimbabwe; implementation of the policies and reforms under the SMP; and measures to restore fiscal and external sustainability, enhance financial sector stability, and unlock the country’s potential for sustained growth and poverty reduction.

In recent years Zimbabwe’s economy expanded following more than a decade of decline that culminated in hyperinflation, but the rebound phase of its recovery is over. Growth decelerated in 2013 and real GDP was just above 3% percent, a sharp decline from 10,5% in 2012.

Just as Chinamasa warned Joc, the IMF equally painted a gloomy picture of the situation during its visit to Zimbabwe in March. The World Bank’s latest report does point out similar issues .


12 thoughts on “Chinamasa panics over economic meltdown”

  1. obert nhoko says:

    The investors are uncertain about what would happen after the old man leaves office, its everyone’s guess who would take over and what direction would the country go. Its risk, even if I were an investor,
    resolve succession issue, so we know know either its Garwe or Joice or Gono or Grace or Tsvangirai

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  2. Zimbabwe has to tap into those calling for its re-introduction into the international community firstly with becoming a member of the commonwealth. Then normalising relations with the the UK/EU and the USA, and given well thought through development plans, which are rational, the WB/IMF will listen. Lines of credit will be opened. What’s missing right now is diplomacy – that’s Simbarashe Mbengegwi’s baby and the President’s weak spot.

  3. John Banda says:

    But we haven’t tried the Bolivar and the N Korea Won. Those printing presses are still going flat-out

  4. Vimbai-Naye Chatitai says:

    After the whole salaries scandal, they still expected their “friends” to give them money o_O seriously?

  5. ronaldos says:

    It is obvious to all peoples of Zimbabwe that you are CLUELESS as to how to revive the economy. The fact that you go to JOC ( ARMY and POLICE etc ) for advice ,clearly shows you have no education in the profession you are in.
    Why don’t you do the honourable thing and resign, in turn you will get public hero status. May I recommend that you find a team of economists from the private / professional sector ( non political ) and get them to restart the economy which you and your team have destroyed. YES it is that simple, really it is. We will start to see results in a very short time, and more to the point you will even be able to pay wages on time. It’s got you thinking hasn’t it ????

  6. thula says:

    i would not blame cde Chinamasa for lack of economic ideas to revive the economy,but rather team Zanu pf as whole they handle the dire economic situation as if it is a joke thre is no seriousness 0r meaningful attempts to arrest the economic downward spiral that we re facing ,they are occupied by factional fighting to ascend to the thrown now that the president is near the end of his political carrer zpf needs to appoint a team of competent economists to design appropiate policies that will revive the econmy, do away with indeginisation it has faled dismally,arrest corruption appoint competent managers and boards to parastatals, if these are implemented zpf ‘s all whether friends will look at zim with a favourable outlook, failure to act wil lead to the continuation of the dire consequences the country is already facing.

  7. Doubtful Nehwede says:

    So Chinamasa thinks mere soldiers like Chiwenga can help revive the economy? He needs to be locked up in Ingutsheni.

    1. shumbayemdc says:

      As article says, the stagnant economy has become a security threat. This is the reason he is updating JOC.

  8. Member says:

    Kunetsa kwezvinhu kwakauya pakauya MDC. Deno kusina kubarwa Tsvangirai pamwe tingadai tigere zvakanaka zim dollar redu richitenga tirimunyika ine hunhu

  9. saturday says:

    All weather friends only when they exploit us with your (zanu pf) blessings. Forget they will give you money when you only know to steal it.
    Just resign Chinamasa


    The United Nations Organisation was established to protect the nascent nations that emerged from out of the ruins of the various European empires that imploded as a consequence of the war against the Hitler regime.

    The UNO has masqueraded as the impartial palladin of Justice and the guardian of Food and of Water supplies, as well as the protector of the Environment.

    It was generally regarded as the Great Auditorium for Humanity.

    After seventy years the African Continent has been mutilated by foreigners who have damaged the landscape in order to extract Natural Resources.
    They polluted the Soil and the Water, and they used political puppets to serve as conduits for Cash to end up in Tax Shelters.

    The citizens of Africa have not benefitted from the materials that were exported from their lands but the various communities have been provided with miltary equipment and encouraged to re-visit ancient tribal animosities.
    A smouldering warfare has endured for seventy years and is characterised by gratuitous cruelty against women and children.

    it is common knowledge that General Sanni Abacha transferred more than 250 Billion US Dollars to his personal account in a Swiss bank. And so did Milton Obote and every other puppet.
    These political leaders were installed to serve as conduits for Cash that would end up in the Western hemisphere.
    The UNO colluded with the criminals by resorting to Willful Blindness.

    The egregious suffering and the degradation of Africans are in stark contrast to the elaborate infrastructure and the admirable social safety networks that are ubiquitous throughout the Western world.

    Pious fury and malicious confabulations were invoked to transform the audacious Robert Mugabe from Patriot and Hero into a failure and a heartless villain.

    As integral part of its anti-Mugabe campaign, the United Nations Organisation orchestrated the econmic lynching of Zimbabwe.

    As a consequence of the sanctions imposed against Zimbabwe the greatest Bread Basket of the World had failed to produce a harvest for 34 years……….which is apostacy for an institution that purportedly is comitted to secure the food supply for humanity.

    And then its second apostatic transgression became manifest when the United Nations Organisation vociferously championed the White Farmers of Rhodesia who usurped the land of the Zimbabweans. ……… Whereas its avowed mission is to denounce such predatory behaviour.

    I submit that an injunction be edicted to shut down the United Nations Organisation until it compensates Zimbabwe 500 Billion US Dollars.

    Such an amount of National Revenue was denied to its citizens simply because the concept of an African Leader ending up as a Patriot and a Hero is anathema and must not be permitted to prevail.

    Submitted by:
    Dharma Appavoo,
    Buddhist Group of North America,

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