Prime
EU suspends debt aid to Zimbabwe over ‘draconian’ new law
President of Zimbabwe Emmerson Mnangagwa.
What you need to know:
- Mnangagwa, on Friday, signed the Private Voluntary Organisations (PVO) Amendment Bill into law, ignoring the advice of four United Nations human rights rapporteurs who described it as an assault on democratic principles.
The European Union (EU) has frozen debt relief aid to Zimbabwe after President Emmerson Mnangagwa signed a controversial law targeting civil society and non-governmental organisations (NGOs).
Mnangagwa, on Friday, signed the Private Voluntary Organisations (PVO) Amendment Bill into law, ignoring the advice of four United Nations human rights rapporteurs who described it as an assault on democratic principles.
The law amended five major pieces of legislation and triggered sweeping changes to Zimbabwe’s regulatory framework for civic groups and NGOs.
It gives the authorities extensive powers to monitor and control the operations of voluntary organisations, including the ability to scrutinise their ownership structures, funding sources and affiliations.
President Mnangagwa’s ruling Zanu PF first mooted the new law in 2019, accusing civil society organisations of being conduits for external funding for opposition parties.
His predecessor, Robert Mugabe, had in 2005 refused to sign into law a similar bill, following criticism that it was too draconian.
Jobst von Kirchmann, the EU Head of Delegation to Zimbabwe, said the bloc was suspending its funding for the country’s reforms that were meant to ease the arrears clearance and debt resolution process being spearheaded by the African Development Bank (AfDB).
Von Kirchman said it was disappointing that Zimbabwe had not upheld its own commitments under the process, particularly regarding the expansion of civic space.
“Zimbabwe has over $21 billion in debt and arrears with bilateral and multilateral creditors,” he said.
“Several years ago, the government of Zimbabwe initiated a commendable arrears clearance and debt resolution process to address this situation.
“The enactment of the PVO Amendment Bill, without concluding consultations to address the concerns of civil society organisations, has further reinforced negative trends in governance.
“As a consequence, the European Union has decided to discontinue its planned targeted 2025 funding in support of the government’s good governance initiatives under the structured dialogue framework.”
Debt relief programme
In November last year, Zimbabwe said it was ready to accelerate the arrears clearance and debt resolution process by working with the International Monetary Fund for a staff monitored programme that was meant to start in January 2025.
The IMF programme is part of the economic reforms Zimbabwe is undertaking to clear its $21 billion public debt and arrears. The EU, along with the United States, has ben the biggest financier of the process.
The US pulled out of the process last year following President Mnangagwa's controversial re-election and has demanded economic as well as political reforms as part of its conditions for returning to the table.
Von Kirchman said the EU would reconsider its position if Zimbabwe starts showing commitment to reforms.
“The EU remains engaged and ready to reconsider its position should the government demonstrate a genuine commitment to meeting the governance targets outlined in the process,” he said.
President Mnangagwa’s government insists the new law is designed to enhance financial accountability and combat money laundering, terrorist financing and criminal funding of political activities.
In December last year, UN human rights rapporteurs Gina Romero, Irene Khan, Mary Lawlor and Ben Saul wrote to the President urging him not to sign the then PVO Amendment Bill into law, saying it was too draconian.
Former Mozambican president Joachim Chissano, who is advising Zimbabwe’s debt restructuring process, has in the past emphasised that the country needs to introduce reforms to do with “enhanced justice delivery, public sector transparency and accountability, combating corruption, promotion of human rights, electoral reforms and national unity” for it to gain traction.
Last week, Zimbabwe started paying white farmers who were dispossessed of their farms during the often violent agrarian reforms spearheaded by the late Mugabe from 2000.
The $3 billion in compensation payments to evicted farmers is one of the conditions set by international lenders to begin the process of restructuring Zimbabwe's debt.
Zimbabwe cannot borrow from the World Bank or the IMF because it has been in arrears since 2000 and 2001 respectively.
Debt stock
The country’s largest Paris Club creditors are Germany, France, the United Kingdom, Japan and the US with a combined external debt stock of $2.9 billion, representing 74 percent of the total Paris Club external debt.
Zimbabwe’s debt stock has risen in previous years because it resorted to seeking cheap loans from China for infrastructure loans, but it has been unable to pay back the money due to an unending economic crisis characterised by hyperinflation and instability.
The country has also mortgaged its mineral resources such as platinum in exchange for financial support from China, but experts warn that this route is unviable and will leave the southern African country in a serious debt trap.
President Mnangagwa, who came to power after a 2017 coup that toppled the Mugabe, has been accused by Western countries of failing to deliver on promises to introduce key reforms.
Instead, the 82-year-old ruler is accused of becoming an even worse authoritarian than his predecessor by closing down the democratic space and moving Zimbabwe towards a one-party state.
