Mthuli Ncube Comes Up With A Deal That Certainly Puts Zimbabwe At The Risk Of Being Looted Dry By The Chinese. Time Will Tell.
14 January 2020
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Mthuli Ncube

Own Correspondent|Finance and Economic Development Minister Mthuli Ncube has agreed on a unique deal with China where Chinese investing in Zimbabwe will be allowed to take back to China in foreign currency all the profits they will have generated in the country.

“One issue that has been of concern is we need to make sure there is full repatriation of profits. The returns are guaranteed so we make sure the accounts remain in hard currency or are guaranteed to be so. Those are the issues that will allow us to unlock more resources from China.

“China is the leader in the world in terms of strategies for developing infrastructure and we want to learn from them. There is a lot of resources to tap in terms of infrastructure development,” he said.

Minister Ncube said due to the difficulties of having to service debts and liabilities for Chinese investments into Zimbabwe, they had entered into a currency swap arrangement deal.

“There are those who will be investing in Zimbabwe from China and those who require their profits to be remitted back to China, which is normal. The idea is those individuals will then swap so that those investing in Zimbabwe will be able to have the domestic currency and they use foreign currency which they are bringing to invest in Zimbabwe to pay those who are exiting.

“This will do with any country that has a similar relationship as Zimbabwe. But with China specifically, we have this special relationship and the Chinese Government has approved this currency swap. It will strengthen our capacity to honour our liabilities with China and also attract new investors from China,” he said.

Minister Ncube said the currency swap had been approved and was only awaiting implementation.

Mthuli Ncube’s flashy proposal already appears difficult to understand as China’s heavy involvement in any country, words like “exploited” and “corrupted” replace rosier depictions of the country’s activity. Recently, phrases such as “human rights abuses,” “volatile race relations,” “unsustainable trade,” and “labor violations” have resonated with most Chinese companies in the country leaving one wondering how the deal Mthuli Ncube is pushing will survive.

On the sale of State enterprises, he said they had not discussed the issue with Mr Wang, but he was of the view that any bidder globally or locally was free to bid or express interest for Zimbabwe’s partial privatisation of its assets.

Source: State Media