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Showing posts from April, 2013

Is Zimbabwe`s Dependence on China a Ticking Time Bomb?

That China has emerged as a global economic powerhouse especially in the aftermaths of the global financial crisis cannot be disputed. In fact, it is credited as having been the key driver of global economic growth, in a period where the western economic markets were largely subdued. Africa has benefitted immensely from the growth of the Chinese economy in the recent past. Statistics show that by the end of 2012, China`s Foreign Direct Investment in the continent approached the $20 billion mark. For all intents and purposes, this is a significant amount of investment which goes to show the prominence with which the so called ‘sleeping giant’ is rising.

Zimbabwe has increasingly become more reliant on China, on the back of the ‘look east policy’ being pursued by the Zimbabwean government. Chinese owned Anjin investments invested $400 million to form a joint venture with the Zimbabwean government to mine diamonds in the Marange fields. Furthermore, various companies in the country, Zisco…

Securitising Zimbabwe`s Minerals: A Case Study

Following the dollarization of the Zimbabwean economy in 2009, the country has seen its economic fundamentals improve. Inflation has been reigned in, and the Gross Domestic Product (GDP) growth has been on an upward trajectory. However, Zimbabwe`s total external debt overhang continues to stifle the recovery of the country`s economy, as investors are not willing to lend to the country, and this has had adverse effects on the country`s Foreign Direct Investment (FDI) flows. Zimbabwe`s external debt overhang is currently estimated at around US$10.7 billion, which is a gigantic, 111% of the country`s GDP. IMF Report, (2012)
To circumvent the problem of external debt, which continues to be a major impediment to the economic recovery of the country, various scholars have put forward several solutions which include, declaring Zimbabwe as a Highly Indebted Poor Country (HIPC), and securitisation of the country`s mineral resources.
This study looks at securitisation of mineral assets i…