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The fate of poor contract negotiation on national resources: The missing $15 Billion

By Malvern Mkudu

One of the major causes of underdevelopment in Africa has consistently been the poor negotiation of contracts by Africans with foreigners. Africans, it would seem, have always entered into bad contracts, often negotiated by their leaders behind closed doors and with minimum consideration for the national well-being.

This fact has been magnified by the fact that Zimbabwe has unnecessarily lost $15 billion according to President Robert Mugabe. Many NGOs and outside observers have been raising red flags about the bad dealings at Chiadzwa but government turned a deaf ear. It is a bit too late to admit that resources have been looted when livelihoods have been disrupted and wealth has been lost. It simply is unforgivable.

To be fair, yester-century leaders could be forgiven for having been cheated into making deals that they could barely understand because such deals were drawn and presented in a language that could not be understood by them. To blame that historical anomaly on the illiteracy of these leaders is not only to mock our heritage but also to deprive ourselves of the important understanding of how citizens should relate to their country and the wealth that belongs to it. Could the same be said about our current crop of leaders, a large number of who can boast of at least two university degrees and extensive knowledge of the world around us?

Could it be that the deals we have entered into, especially those in the recent past which affect the mining of our national resources, have not been informed by or relied on the application of knowledge benefiting the country’s well-being but have been motivated by greed and a burning desire for self-enrichment?

Contracts between the Zimbabwe government and mining companies have often been shrouded in secrecy. They are usually unavailable to ordinary citizens and they often contain confidentiality clauses that explicitly limit public access. Minister of Mines, Obert Mpofu, in June this year pointed out that diamond-mining contracts could not be made public because the country is under international sanctions. That is as vague as one can get.

The Essar deal, for example, is one bad deal that is in many ways eerily similar to the deal struck by Lobengula and the British imperial agent, Charles Rudd, who was acting on behalf his handlers, Cecil John Rhodes and the greater the British Empire.

In the Essar deal, a deal that may be filled with unblushing dishonesty, government gave away the country’s iron owe deposits estimated to be worth US$30billion for a paltry US$700million. And to think that the people who presided over this deal are prominent lawyers!

Further, there are no clear details about the kind of contracts that have been entered into by government with Anjin and other Chinese enterprises in the Marange diamonds venture. All that is publicly known is that revenue flows to the treasury have been questionable while workers have complained of being underpaid. There have been other unconfirmed stories of aeroplanes loaded with diamonds taking off unaccounted. Former ZANU-PF Chairman for Manicaland, Comrade Mike Madiro once complained that Mutare, the province’s capital, had not seen the development that was expected to flow from the rich diamond deposits that are a stone throw away from the city.

Russians are said to have entered into mining arrangements with the government in Penhalonga, again in Manicaland, and the details of these arrangements are only known by a select few. It would also appear as if the indigenous Zimbabweans who have managed to acquire mining rights from the government are giving these away for a song to foreigners flocking into the country. As numerous news reports suggest, resource plundering, in the country have become the norm. Where is the leadership?

Perhaps the more relevant question to ask is this; why are there such striking similarities between what is happening now and what happened in the time of Lobengula? Is history fatefully repeating itself? If it is, then as citizens of Zimbabwe, we need to urgently place all these developments in their proper historical context.

What we know as the Rudd Concession was, of course, a cocktail of deceitful elements. The result, as we know, was the painful loss of native mining rights and the unprecedented assurance that British imperialism could be furthered without any hindrance. The icing on the cake in this deal was far from sweet. It was the gunboat on the Zambezi and a few rifles. The genius of the gunboat, however, was that it actually served as a tool for protecting British interests in the Matebele region and not Lobengula’s kingdom.

As the Chinese, for example, further their interests in Zimbabwe and cement, literally, what appears to be their permanent residence in this country, should we not be asking what ‘gunboats’ they have brought to ice the cake of the deals they are entering into? Should we be grateful for their generosity without asking much about what the cost to the nation is? Indeed, is the military college that the Chinese helped build testimony of their honesty, sincerity and commitment to our sovereignty or, like Lobengula’s gunboat and as others would argue, this college is actually meant to increase Chinese military influence in the country and strengthen the Zimbabwean military towards protecting Chinese interests?

If there are any lessons from history in as far as the pursuit of our mineral wealth is concerned, these lessons instruct us to always apply objective thinking in negotiating deals with foreign entities to avoid resource plunder and exploitation of our people. Friendships, as Lobengula discovered with Robert Moffat, are usually insincere in these circumstances.

In its own way, the “Look East” policy adopted by President Mugabe’s government at the turn of the century could be described as visionary as global geo-politics testify now. However, since it came at a time of the country’s growing isolation, could it be that the furthering of Chinese interests in particular are the bargain end of the policy? If that is the case then should the national price to pay be the unmitigated exploitation of Zimbabwean labour and wanton destruction of the environment?

This is also not to downplay the contributions of the Chinese and Russians in Zimbabwe’s armed struggle; these are well documented. Still, did these powers expect us to mortgage our sovereignty in the latter days by entering into trade agreements that would undermine the very cause so many men and women, boys and girls had taken up to fight colonialism?

It would appear the Chinese have been given a licence to ‘do whatever they may deem necessary’ in pursuit of their economic interests often paying little regard to the country’s environmental and labour laws. In 2012 alone, more than 3 cases of Chinese ill treatment of local labourers have been reported with the government reportedly doing nothing to address this.  1500 Anjin workers were dismissed for asking for a more equitable share from the proceeds of their natural resources and our government did not raise a finger in their defence. The idea of sovereignty of those who sit in the corridors of power would appear is about unyoking the native from the yoke of one master and placing him in the yoke of another master.

There is a new policy to ‘swap resources for infrastructure’ as the Chinese are helping African governments to build infrastructure. However the Chinese have only built infrastructure that is key towards a more efficient exploitation of African resources. In Zimbabwe, China has not built dams or energy stations so that we develop our own manufacturing industry. Instead they have built malls so that they can export finished goods in our economies.

The Chinese like their Western counterparts are driven by their own economic interests, with Zimbabwe’s economic interests taking a back bench. China’s ‘primary objective is to obtain African resources as cheaply as possible’ so as to keep their big manufacturing economy functioning and creating jobs for its own citizens.

The government of President Mugabe must not only reject Western supremacy but must be seen to be rejecting Chinese supremacy in equal measure. Ordinary people who face the realities of poor contract negotiation through appalling service delivery, poor working conditions, unemployment and abject poverty can see through the government’s hypocrisy. The manner in which government has awarded concessions and negotiated contracts have left many wondering whether this government is committed total economic empowerment.

The point then is that in whatever agreement we enter into, such an agreement must satisfy the soul of the nation by respecting its heritage, its history and aspirations. Otherwise it makes no sense to have a government – the ZANU-PF side of it anyway – that continuously proclaims, ad nausea, that this country and its liberation heritage will not be lost on the stroke of a pen (on a ballot pen) only for them to partake in deals that effectively give up the country to new imperial forces like China. Yes, the land and the mineral wealth beneath it is the economy and the economy is the land and the mineral wealth beneath it, to use some of the party’s thinking.

Hence, the “Look East” policy could actually be a lot beneficial to Zimbabwe, but only if our leaders can summon the wisdom and decency to enter into informed contracts with trading partners. Those tasked with the public positions to negotiate contracts on behalf of the nation must put national interests ahead of individual or political interests. Zimbabwe badly needs that before we wake up one day with no ‘friends’ and no resources.

The last word belongs to Frantz Fanon: “The future will have no pity for those men (and women) who, possessing the exceptional privilege of being able to speak words of truth to their oppressors, have taken refuge in an attitude of passivity, of mute indifference, and sometimes of cold complicity.”


This article first appeared in the Daily News in 2012


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