A top official with the United States Agency for International Development (USAID) said that the sanctions imposed on Zimbabwe were not blocking investment but rather, the country’s hostile environment.
Speaking during a discussion on “Zimbabwe’s burgeoning food crisis” in Washington D.C. that involved President Emmerson Mnangagwa’s economic advisor, Ashok Chakravarti, Jason Taylor, the director of USAID’s Humanitarian Assistance and Resilience office in Zimbabwe said:
You’re right to say that ZIDERA exists, it’s also true to say that it has never been implemented.
ZIDERA only comes into effect when Zimbabwe clears all its arrears to international financial institutions. That’s the point at which discussion about ZIDERA can begin. And so the idea that ZIDERA is ruining the investment climate in Zimbabwe is simply not true.
Regarding the other sanctions, about 82 individuals who have been sanctioned, about 56 institutions have sanctions, these are individual targeted sanctions. So, there’s nothing in ZIDERA, nor is there anything in the targeted sanctions that prohibits investment in Zimbabwe.
I would argue what prohibits investment is a lack of economic reform, a lack of property rights, a lack of a secure investment climate and lack of a political and human rights context that businesses appreciate.
I think to point to sanctions is to create a straw-man and destroy that straw-man and do nothing about the root causes that you are addressing.
To prove that US sanctions are indeed in place, Chakravarti recounted a personal story about how a transfer of $4,000 to his daughter studying in the U.S. was blocked by the Office of Foreign Assets Control. He said:
Because the correspondent bank saw Zimbabwe written over there, it blocked this transfer for her fees. I have all the papers… You think that ZIDERA doesn’t make a difference; some years ago we had about 40 banks which dealt with Zimbabwe.
It’s a fact that there are only about a half-a-dozen correspondent banks that are willing to deal with Zimbabwe now because of the perceived risk.