By Nomalanga Moyo
SW Radio Africa
16 June 2014
A lobby group has described the decision by the EU-owned European Investment Bank (EIB) to bail out Zimbabwe’s private sector as an indirect way of funding ZANU PF.
Explaining the decision last week, EIB top official Diederick Zambon said the aim is to work through banks “to reinforce the financial sector”.
“The way we would like to return in the country, and where we see our role, is for the moment with the private sector,” Zambon said.
The Zim government owes the EU bank more than €300 million and according to Zambon, direct lending will resume after these arrears have been dealt with.
But the group Zimbabwe Social Democrats says the EU bloc is wrong to re-engage ZANU PF in spite of the regime’s refusal to implement crucial economic reforms.
“Zimbabwe’s private sector, like the public sector and the nation at large, is suffering greatly because of the serious economic meltdown brought on following decades of economic mismanagement and corruption.
“The Mugabe regime has stubbornly refused to implement meaningful political and economic reforms necessary for economic recovery.
“Whilst the EU has put its foot down in getting some of its own member countries like Greece and Spain to implement economic reforms, it is disappointing to note that the EU should be undermining calls for similar reforms in Zimbabwe.
“EIB’s indirect loan to the regime will encourage it to believe it can continue to rule without implementing the reforms,” the Zimbabwe Social Democrats said in a statement on Monday.
The EU bank has not said how much has been set aside for the Zim bail-out but African, Caribbean and Pacific States have access to a loan pot of €1.5 billion.
Zimbabwe fell out of favour with western financial institutions and donors after the ZANU PF regime embarked on disastrous political and economic policies in 1999.
The country reneged on its debt repayments to institutions such as the International Monetary Fund and the World Bank and was subsequently kicked out.
Although the EIB says the loans will be given to the private sector, Zimbabweans will view the move within the context of the EU’s resumption of cordial relations with President Mugabe’s government.
Harare-based economist Vince Musewe however welcomed what he said is the EU’s intervention in the private sector.
“I think we need a solution and the EU’s investment in the private sector addresses the fundamental issue of job creation which is what Zimbabwe needs at this stage.
“The funds however should go directly towards reviving companies and businesses because what Zimbabweans desperately need right now are jobs.
“Whether we like it or not ZANU PF will be in charge until 2018. In the meantime we need jobs and any initiatives that are geared to help the private sector create those jobs, or keep even two people in employment is important,” Musewe told SW Radio Africa on Monday.
In March, French diplomat Laurent Delahousse told Zimbabweans that his government and the EU are eager to resume direct funding to the ruling party.
The diplomat was speaking at a meeting where Zim civil society groups were reviewing the deeply contested 2013 election result which Mugabe ‘won’.
Despite the disputed poll result and the absence of fundamental reforms the EU has lifted most of the targeted sanctions imposed on ZANU PF officials, ignoring protests from human rights activists.
The EU has also signalled that starting November humanitarian aid, which was being channeled through Zim civil society groups, will go directly to ZANU PF.