World Bank, no thanks


RECENTLY the World Bank warned the Zimbabwean Government on its plans to securitise its minerals to China in order to unlock funding to revive the economy citing this would have dire consequences to the country’s future generations.
Nadia Piffaretti, the World Bank’s senior economist said the hard-pressed Southern African nation would be better advised to seek loans at concessionary rates instead of securitising its minerals to secure loans.
“Securitisation of minerals is one way of financing things,” Piffaretti said.
“However, it brings a lot of risks.
“It’s not an easy solution because you might end up giving away more than you are getting.
“It’s not really advisable at your development stage because you might just take away the future of your children.”
Is it not surprising that the Bretton Woods Institution now care about Zimbabwe’s future generations?
Why did they not think about the country’s future generations when they implemented the Structural Adjustment Programmes that destroyed industries and entrenched a vicious cycle of impoverishment and dependency and later on to admit it was an experiment?
The consequences of the programmes are still being felt as they destroyed industries through the call for liberalisation of trade among other key attributes of the so-called Washington Consensus.
That is why sometimes it is wise to do some reading around before accepting naïve statements which are not backed by empirical evidence.
There was celebration concerning the World Bank statement in the so-called independent media.
Reports from the International Monetary Fund and World Bank are not gospel truth.
Statements by these Bretton Woods Institutions should be analysed not simply accepted as fact.
Angola and DRC have leveraged off their natural resources to obtain funding thereby creating value in their economies basing on future cash flow receivables from their mineral assets.
The DRC for example, attracted over US$8 billion from foreign investors, when it securitised its future receipts from its diamond mines.
Therefore it should be underscored that Zimbabwe does not need armchair critics, but active international partners who are willing to support its efforts to revive the economy.
The securitisation of minerals is part of the country’s economic blue print, the Zimbabwe Agenda for Sustainable Socio-Economic Transformation (Zim-ASSET) plans to raise the US$27 billion needed to drive the revival of the economy.
It would be reasonable if Government plans to use the nation’s vast mineral resources to attract funding to Zim-ASSET, which if implemented, will bring economic boom.
Piffaretti talks about seeking loans at concessionary rates, but is it not the same World Bank that snubbed the country’s request for loans at concessionary rates citing the country’s ‘unsustainable’ debt?
So why don’t they leave Zimbabwe to securitise its minerals to whoever to enable them to pay off its debt?
The World Bank knows that Zimbabwe is too rich to be in debt given the vast mineral deposits it has.
Statistics from the Reserve Bank of Zimbabwe show that the country has gold reserves of 13 million tonnes.
At a current annual extraction rate of 20 tonnes per year, it would take over 600 000 years for the reserves to be exhausted.
The central bank said platinum reserves were over 2, 8 billion tonnes.
At an extraction rate of 2, 3 million tonnes per year, it would take 1 200 years to exhaust the resource.
Diamonds reserves are estimated to be 16,5 million tonnes while iron ore and copper are 30 billion tonnes and 5, 2 million tonnes respectively.
It is clear that the World Bank’s statements about dire consequences of securitisation of the country’s minerals to China are a mere continuation of the Buy American campaign and on a larger scale the demonisation of the Chinese.
Remember a lot has been said in the Western media about China’s developmental projects especially in Africa where America, Europe and China are covertly fighting to control the resource rich continent.
In an article in The Guardian a British daily newspaper, David Blair says China is trying to colonise Africa.
“Today, few appear to have noticed that a second ‘scramble for Africa’ is under way,” writes Blair.
“This time, only one giant country is involved, but its ambitions are every bit as momentous as those of Rhodes and company.
“With every day that passes, China’s economic tentacles extend deeper into Africa.
“While Europe sought direct political control, China is acquiring a vast and informal economic empire.”
Such talk is the product of fear and envy.
It is a sign of Western anxieties, that China is fast becoming the new power in Africa, building more equal relationships, and undermining Western influence on the continent.
China has overtaken the United States as Africa’s biggest trade partner.
China’s trade with Africa in 2013 was US$167 billion according to The Economist magazine with over 80 percent of the trade on mineral products.
The West were short sighted when they imposed illegal sanctions against Zimbabwe as the move shut them out and left China to benefit from the country’s resources.
They are feeling the pinch hence the efforts to discredit China and what it stands for.
But the World Bank and Western governments must know it is entirely up to Zimbabwe to decide who to sell to its minerals.


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