House of Commons - DFID's Assistance to Zimbabwe - International Development Committee

DFID's Assistance to Zimbabwe - International Development Committee Contents

2 The development context

Political background

9. An illegal "Unilateral Declaration of Independence" by white settlers in 1965 delayed independence and majority rule by 15 years. Zimbabwe finally became independent on 18 April 1980. For almost the entire period since then it has been ruled by the ZANU-PF party, under the leadership of President Robert Mugabe.[7] In that time it has declined from a well-run state to one that depends on remittances and aid for food and basic services, due to political turmoil and economic maladministration. DFID says that the ZANU-PF regime reacted to the country's decline "with electoral manipulation, abuse of state power and increasing intimidation of political opponents and civil society".[8] This was made clear to us during our visit.

10. Professor Brett of the London School of Economics (LSE) believed that the decline began when the ZANU-PF government's political monopoly was challenged in the late 1990s. He says that it responded to the confrontation from radical civic groups and the Movement for Democratic Change (MDC) by using a variety of measures, including currency and financial market controls, restrictions on the press, a grain and fuel market monopoly and land seizures to transfer resources to political associates, the security services and war veterans. Through these actions, ZANU-PF was able to win elections, but at the same time it destroyed the economic system, which has led to "fiscal, food, fuel and foreign exchange crises."[9]

11. In the 2008 parliamentary elections, ZANU-PF lost its majority for the first time since independence. Morgan Tsvangirai's MDC-T faction of the Movement for Democratic Change became the largest party in parliament. In the presidential elections, Morgan Tsvangirai won the first vote with 47.9%, while President Robert Mugabe gained 43.2%. As Morgan Tsvangirai did not achieve the 50% of the votes cast in the first round necessary to be declared the winner of the election, the Zimbabwe Election Commission announced in May that a second round of voting should take place. In June, before the votes could be cast, Morgan Tsvangirai announced that he was withdrawing from the run-off because of the increased violence and intimidation aimed at his supporters. In the second round election, Mr Mugabe took a majority of the vote and was sworn in as President on 29 June.[10]

12. Controversy over the presidential vote led to a protracted period of uncertainty. Finally, in September 2008, a Global Political Agreement (GPA) between the parties was brokered by the then South African President Thabo Mbeki, acting on behalf of the Southern African Development Community (SADC). After a four-month delay, on 30 January 2009, Morgan Tsvangirai's wing of the MDC agreed to form a coalition government with President Mugabe's ZANU-PF, and the Government of National Unity (GNU) came into existence.[11] Under the GNU Robert Mugabe retained his position as President, and Morgan Tsvangirai became Prime Minister.

The Global Political Agreement and the Government of National Unity

13. Dr Steve Kibble of the Zimbabwe European Network considered the GPA to be "a very badly drafted document" and one that:

Nevertheless, DFID's view is that "the Inclusive Government remains Zimbabwe's best hope". It has "largely succeeded" in stabilising the economy but "there has been far less progress in restoring the rule of law and ensuring human rights are respected."[13] Donald Steinberg, Deputy President of the International Crisis Group, believed that the new government "started out reasonably well":

14. However, he also highlighted serious concerns, including the continuation of farm seizures and the decline of human rights. Security forces "continued to arrest and detain activists and MDC parliamentarians". He pointed to the reappointment of ZANU-PF stalwarts Reserve Bank Governor Gideon Gono and the Attorney General Johannes Tomana as very negative developments.He said that "top generals boycotted the new national security establishments and showed public disdain for Tsvangirai, and ZANU-PF delayed or ignored key commitments under the GPA."He believed that "some old regime elements, especially hard-line generals and other Mugabe loyalists" had "actively thwarted the new government, and undermined it by refusing to implement its decisions".[15] Professor Brett agreed that ZANU-PF had not implemented most of the agreements in the GPA, and believed that it "still intended to extricate itself from it in order to retain its mantle as the only dominant and ascendant political party."[16]

15. Witnesses believed that a stable political environment in Zimbabwe was far from guaranteed. Donald Steinberg identified a number of "formal" challenges which the GNU had to meet. These were: completion of the GPA; agreement of a new Constitution; and the holding of elections. In addition, there were a set of "informal" challenges: a need for political maturity in the process; resolution of the security situation; and rebuilding of the economy.[17] He told us that:

16. The GNU has continued to function for just over a year, albeit with sporadic breakdowns. Particularly serious divisions arose in October 2009 following the arrest of Roy Bennett, a senior MDC member. The Prime Minister and the MDC announced that they were boycotting Cabinet meetings and refusing to engage with the rest of government.[19] DFID says that this period "saw a particular ramping up of violence".[20] The immediate crisis was resolved the following month, following intervention by SADC, and the MDC re-engaged with the GNU.[21]

17. Mr Tsvangirai remains publicly optimistic about the GNU. In an address to Zimbabwean expatriates at Southwark Cathedral in June last year he said that Zimbabwe had already made great strides towards recovery after years of a downward economic spiral.[22] When we met him during our visit, he reiterated his comments about progress since the formation of the Inclusive Government. He believed that there were two main objectives for the transitional government: to revive the economy and to implement a constitutional agenda. His view was that there would be no reversal in the political progress which had been made.

18. We welcome the Global Political Agreement (GPA), which, although not perfect, created the basis for formation of the Government of National Unity. Progress has been made since the settlement was reached, including the re-opening of schools and hospitals, the introduction of a budget and stabilisation of the economy. However, movement towards full implementation of the Agreement has been slow and important provisions have been ignored by some of the parties involved. Adherence to the rule of law and respect for human rights are two areas requiring urgent and significant improvement.

The new Constitution

19. Article 6 of the GPA provides for the adoption of a new Constitution for Zimbabwe within 18 months of implementation of the GPA, subject to approval in a referendum.[23] A parliamentary select committee, comprising the three parties (ZANU-PF, MDC-T and MDC-M) has been established to guide the constitution-making process. DFID believes that a "successful review and implementation of the Constitution would likely strengthen the separation of powers and could increase the prospects of free and fair elections." It says that, together with other donors, it "is considering support which can make this a more open and accountable process, including strengthening parliamentary oversight and supporting wider civil society engagement."[24]

20. There are differences over whether the "Kariba Draft" for a new Constitution, which provides for substantial presidential executive powers, or a more "people-driven" approach, as called for by civil society and some within MDC-T, should form the basis of the new Constitution.[25] Dr Kibble questioned the scope for public involvement in the process: "Despite the existence of a Constitutional Parliamentary Committee (COPAC), one of its three chairs has recognised that a culture of fear gripping a population that has endured years of political violence [...] could hamper free debate."[26]

21. We regret that development of a new Constitution for Zimbabwe is making such slow progress. We agree with DFID's assessment that its implementation could increase the prospects for free and fair elections in the future. We recommend that, in response to this Report, DFID provide us with more information about the support it is giving, jointly with other donors, to the constitution-drafting process.

DFID support for the Prime Minister's Office

22. DFID's governance support has included technical assistance to the Office of the Prime Minister (OPM). The aim of the support was to enable the OPM to fulfil its functions set out in the GPA to lead policy design and implementation. DFID's £450,000 funding has supported a core team of two consultants from the Adam Smith International, with experience in supporting central government systems. The aim of the programme, which started in June 2009 and operated until the end of December, was to "strengthen the systems for designing, monitoring and communication of Government of Zimbabwe's policies and priorities."[27]

23. Mr Tsvangirai has written to DFID requesting an extension of the support which would maintain the same focus, including to the Prime Minister's role in leading executive business in Parliament. When we met him, he reiterated his appreciation of the support his Office had received and the need for this to be extended. The DFID Minister of State told us that he would look sympathetically at further requests for assistance from the Prime Minister. DFID's support was designed to enable the Office of the Prime Minister to perform the normal functions that a head of government's office would usually undertake, including oversight of the budget, ensuring ministries followed through on the Government's agreed work plan and helping to resolve disputes between government departments.[28]

24. DFID's support for the Office of the Prime Minister has clearly been valuable and has been much appreciated by him. We recommend that DFID extend this support for a further period. This will enable progress achieved to date to continue, in terms of strengthening the capacity of the Office to oversee the smooth running of government departments and implementation of policy, and to lead on executive business in Parliament.

Political violence and lack of security

25. The UN Office for the Coordination of Humanitarian Affairs (OCHA) states that "political instability and related violence in Zimbabwe has placed considerable strain on coping mechanisms and income-generating activities, and contributed to [an] increase in unemployment".[29] Widespread repression and human rights abuses occurred before, during, and after the 2008 elections. OCHA has estimated that post-election violence in May 2008 displaced over 36,000 Zimbabweans.[30] DFID reports that incidents have decreased under the GNU. However, arrests of civil society activists and trade unionists have continued, as well as land invasions and politically motivated attacks against parliamentarians, with "weak and inconsistent responses from the judiciary." There have also been recent reports of serious human rights abuses in the Marange diamond fields.[31] We were also told that diamonds were probably being illegally expropriated and proceeds diverted to ZANU-PF.[32]

26. DFID stresses that "reform of the security and justice sector into a set of professional and accountable institutions is essential."[33] Dr Kibble was concerned that the militarisation of the state which had occurred over the last 10 years had not been challenged.[34] He told us that:

It has been reported that Gertrude Hambira, Secretary-General of the General Agricultural and Plantation Workers Union of Zimbabwe, whom we met during our visit, is in hiding and fears for her safety after police raided the union's head office.[36] This illustrates the continuing threat of political violence and the need for such cases to be highlighted internationally.

27. Continuing political violence and lack of security has resulted in the displacement of many Zimbabweans, the migration of many thousands to neighbouring countries and the closure of many schools and medical facilities throughout the country. It compromises donors' ability to provide support to Zimbabwe's development and should be an ongoing concern to the international community.

The economy

28. Article 3.1 of the Global Political Agreement (GPA) states that the parties agree:

^29.According to the World Bank, Zimbabwe's economy grew strongly in the decade following independence, and living standards improved considerably. Economic growth started to slow down in the 1990s due to a balance of payments crisis and droughts. In 1998 agriculture accounted for 22% of GDP.[38]The effect of land seizures and drought on agricultural productivity has therefore been one of the key elements in the economic decline (see below). Zimbabwe's economy has continued to deteriorate, reaching critical levels. GDP fell by a third between 1999 and 2006.[39]Economic decline was accompanied by hyper-inflation: in July 2008, Zimbabwe's Central Statistical Office announced the official inflation rate to be 231 million per cent. However, some international economists considered that the real rate was substantially higher.[40]

30. Unemployment reached 94% in January 2008. Out of the country's 12 million people, only 480,000 had formal jobs, a reduction from 3.6 million (30%) in 2003.[41] The high rate of unemployment has, according to Dr Kibble, "driven tens of thousands of professionals to leave the country to find work abroad [and] millions of less-skilled others into the southern Africa region and Europe."[42]

31. In January 2009 the Zimbabwean Government decided to abandon the Zimbabwean dollar and use the US dollar.[43] A budget statement in the same month indicated that the Reserve Bank of Zimbabwe would be taking a less prominent role in economic management of the country. The Finance Minister, Tendai Biti, announced a revised budget in March, which introduced an economic plan (the Short Term Emergency Recovery Programme) aimed at reinstating fiscal discipline and resuscitating productivity. These changes have had a positive impact in many areas.[44] GDP growth for 2009 is estimated at 3.7% and forecast to be 6.0% in 2010.[45]

32. Concern about the economy increased again in February 2010 when President Mugabe introduced a law, which came into effect on 1 March, that required white-owned companies with an asset value of over $500,000 to surrender 51% of their shareholdings to black Zimbabweans. The law was introduced by the President without consultation with his partners in the coalition government.[46] He compared it to his "revolutionary land reforms" (see below). He said that only "indigenous" people could control the country's resources. He had previously declared that white Zimbabweans were not "indigenous, even though they were born here [Zimbabwe]. They are the offspring of settlers." It has been reported that when the new law was announced there was an immediate halt on billions of dollars of investment plans, including a $500 million project for the expansion of a platinum mine by a South African-based company.[47] The Financial Times has reported that economists, business leaders and trade unionists have warned that the new "indigenisation" law would "wreck any chance of attracting foreign investment and strangle the economy's weak recovery."[48] We agree with this assessment.

RELATIONS WITH THE INTERNATIONAL MONETARY FUND

33. In 2001, the International Monetary Fund (IMF) imposed a series of measures on Zimbabwe in response to the high level of arrears to two of its main funding mechanisms for developing countries, the Poverty Reduction and Growth Facility (PRGF) and the General Resource Account (GRA). In 2002, Zimbabwe's further failure to meet its financial obligations resulted in the IMF suspending the provision of technical assistance to Zimbabwe; and in 2003 Zimbabwe's voting rights at the IMF were suspended. Zimbabwe settled its GRA arrears in 2006.[49]

34. Following the recent improvement in Zimbabwe's economy and its co-operation on economic policies there has been progress towards normalisation of the country's relationship with the IMF. The IMF approved the provision of technical assistance in May 2009. On 19 February 2010, following a request from Zimbabwe's Finance Minister, the IMF Executive Board announced that Zimbabwe's voting and related rights had been restored, together with its eligibility to use resources from the GRA. However, the IMF says that "notwithstanding the restoration of eligibility to use GRA resources, Zimbabwe will not be able to use resources from the GRA or the Poverty and Reduction and Growth Trust (PRGT) until it fully settles its arrears to the PRGT" of $140 million.[50]

35. Normalisation of Zimbabwe's relations with the international financial institutions will clearly be a major contributor to its economic recovery. We welcome the IMF's approval of technical assistance to Zimbabwe and the restoration of its voting and related rights as a major step in this process, in response to the economic recovery in the country. We would urge the IMF to continue to engage with the Government of National Unity, with a view to making further progress towards restoring the availability of funding, and to support Zimbabwe in its efforts to work towards meeting the loan approval criteria.

EU restrictive measures

36. In February 2002 the European Council imposed restrictive measures ("sanctions") against Zimbabwean individuals following the expulsion of the head of the EU observer team covering the presidential elections. The Council said that the "EU remained profoundly concerned at the continuing political violence, the serious violations of human rights and the restrictions on the media in Zimbabwe." They questioned the prospects for free and fair elections.[51] The Council agreed a Common Position which stated that it "prohibits the direct or indirect sale or supply of equipment capable of being used to repress the people of Zimbabwe." It also "freezes all funds, financial assets or economic resources of persons [named in an annex to the Common Position] who are engaged in activities that seriously undermine democracy, respect for human rights and the rule of law in Zimbabwe." Additionally, a ban on travel to the EU was imposed on named individuals.[52]

37. The restrictions target approximately 200 individuals and 40 companies, linked to the ZANU-PF party.[53] The US has also imposed sanctions that have frozen the assets of named Zimbabwean individuals.[54] Since their imposition the sanctions have been used for political purposes by ZANU-PF, who claim that they favour the MDC party. The state-controlled media argues that the sanctions are targeted at all Zimbabweans, not just named individuals. President Mugabe and his supporters have repeatedly demanded that the UK remove the sanctions. President Mugabe has also used the restrictive measures to accuse the UK and US "of seeking to oust him by imposing economic sanctions."[55]

38. In February 2010 the European Council renewed the restrictive measures for a further year. However, it also emphasised its "readiness to work closely with the Government of National Unity in addressing the challenges the country faces and in the implementation of its commitments as set out in the Global Political Agreement". While recognising the progress made by the GNU after a year in office, the Council nevertheless noted "with concern" that insufficient progress had been made with "regard to the rule of law, respect for human rights, constitutional reform, power sharing on equal terms, national reconciliation, security sector reform and the protection of investors." It said that the restrictive measures would be kept under review and that they would be revoked "in response to further concrete developments in the implementation of the GPA."[56]

39. Donald Steinberg of the International Crisis Group told us that:

He suggested that "The UK and EU should make clear to Zimbabwe the specific steps it needs to see in order to lift these and other sanctions."[58]

40. President Zuma of South Africa made a state visit to the UK at the beginning of March. He argued for the lifting of sanctions both in advance of and during the visit, saying that they were "one-sided" and had "served only to divide the already fragile power-sharing government in Zimbabwe". He believed that Zimbabwe could not be expected to sort out its problems while the GNU was subject to two different sets of rules.[59] The UK Prime Minister's response was that some sanctions had been lifted but that those which remained in place targeted individuals with a history of supporting violence, rather than ordinary Zimbabweans.[60] He stressed the need for the Commissions on human rights, media and governance established under the GPA "to move forward quickly so people can see the future of Zimbabwe as a democratic, prosperous country with freedom of the press and where there is respect for human rights."[61]

41. The EU has renewed the restrictive measures on named individuals and organisations in Zimbabwe for another year. We agree that further progress on democracy and human rights needs to be demonstrated before all the measures can be lifted. The UK should continue to make clear the basis of the measures, and their specific terms, to the people of Zimbabwe. It should also continue to support governance reforms which will help Zimbabwe move to a position where the measures can be removed.

Land reform

42. The 1979 Lancaster House Agreement placed restrictions on land acquisition which protected white farm-owners. A system of "willing-seller, willing-buyer", at full market value, was instituted in the first 10 years following independence. In 1990 President Mugabe amended the constitution to allow compulsory acquisition of white-owned land, but few farms were acquired at that time.[62] DFID says that in 2000 the Government began the Fast Track Land Reform Programme "ostensibly to address the inequitable distribution of land once and for all". In practice, it resulted in the occupation of thousands of commercial farms "at a high cost to the economy and the people in general".[63]

43. Since the land seizures started, more than 200,000 farm-workers have lost their jobs and a million people have been displaced. DFID says that total commercial agricultural production has more than halved,[64] (although, more positively, the Commercial Farmers Union told us that they had recently successfully promoted advisory programmes for farmers which had led to increased production). Professor Brett told us that the land seizures "have removed most of the best commercial farmers from their land and replaced them with small-holders operating at little more than subsistence level, and political cronies on large farms that they cannot run effectively."[65] He believed that the current land reform process had resulted in a situation where "handing over the land to the people means handing it over to generals who are now starving the people."[66]

44. When our predecessors examined Zimbabwean land reform as part of their inquiry into the humanitarian crisis in Southern Africa in 2003 they said that "the disruption caused by the government's disastrous land reform programme has severely undermined agricultural production and created a [...] new class of vulnerable people, farm workers and their families, who have lost their livelihood as a result of the land resettlement programme."[67] Seven years on, the situation has not changed: agricultural production is still severely reduced and even more farm-workers and their families have lost their livelihoods and homes. The DFID Minister condemned the farm invasions that had taken place and pointed out that "terrible human rights abuses" had been committed as part of the invasions. This was "completely unacceptable" on an individual basis, but also in terms of the "devastating impact it has had [...] on the rural agricultural economy."[68]

45. A recent report from the Africa All-Party Parliamentary Group (APPG), Land in Zimbabwe: past mistakes, future prospects, says that the major consequence of the Fast Track Land Reform Programme has been the loss of farming skills, not just the management and agricultural skills of the white famers, but also those of their skilled farm-workers.[69]It recommends that any future land reform policy must seek to:

· Address the political as well as the economic tensions at the heart of the land issue in Zimbabwe;

· End the dual land tenure system and ensure that there is a uniform system;

· Establish institutions to consult with the stakeholders, administrate land policy and implement transparent, fair and sustainable land reform and resettlement within the rule of law;

· Establish and pay fair compensation for land acquisition and losses;

· Increase agricultural production to its full potential and address the ongoing under-utilisation of land.[70]

46. The Global Political Agreement includes provision for the "conduct [of] a comprehensive, transparent and non-partisan land audit [...] for the purpose of establishing accountability and eliminating multiple farm ownerships".[71] The NGO Action for Southern Africa (ACTSA) said that the "issues are who owns, controls and benefits from the land." It called for a "comprehensive response" that addressed land title, historic injustices of land ownership, sustainable livelihoods and poverty reduction. It supported appeals for a land audit and suggested that the UK Government should provide funding to support a transparent and accountable process of land reform.[72]

47. DFID agrees that the first step towards reform would be for a land audit to take place. However, the Minister believed that there would only be merit in conducting a land audit if there was confidence that the information obtained would be used to "promote the type of pro-poor, sensible, transparent land reform" that would revive the rural economy. He said that DFID was ready to support a land audit, as part of a wider international effort, if the conditions were right. He considered that they were not right at present.[73] Moreover, it was far from clear that all parties in the Inclusive Government wished a fairer land policy to be introduced.[74]

48. The GNU Finance Minister allocated $30 million (£18.8 million) for the land audit in his December 2009 budget, to clarify who owns what land and to ensure that no-one owns more than one farm. Zimbabwe has, however, undertaken land audits in the past. A Presidential Land Review Commission produced an audit in 2003, but the full report was not published.[75] Donald Steinberg highlighted that the Minister of Agriculture had said that it was too soon to undertake a new land audit. His own view was that a land reform programme was "absolutely necessary" but that now may not be the right time for the international community to be putting funds into the process.[76]

49. Land reform in Zimbabwe is a complex issue. It is also a highly-charged political issue between Zimbabwe and the UK. However, resolution is essential for political stability and continued economic recovery. Land seizures have had a devastating impact, both on individual farm-owners and workers and on the agricultural economy, and should cease. We agree with the DFID Minister that the terrible human rights abuses which have taken place as part of farm invasions are completely unacceptable. The first stage in the land reform process should be a comprehensive and transparent land audit, as laid down in the Global Political Agreement. The timing of the audit is a matter for the Government of National Unity. The process should be supported by the international community, including the UK.

50. In the longer term, the UK should be prepared to join other donors to fund land reform as part of a wider rural and agricultural development strategy, provided the Government of Zimbabwe is able to give credible assurances that such a process will transfer land to the landless poor. However, the responsibility for compensating people for land seizures lies with those who seized land or condoned seizures.

7 Ev 48 Back

8 Ev 48 Back

9 Ev 38 Back

10 See FCO Zimbabwe Country Brief available at www.fco.gov.uk Back

11 International Crisis Group, Zimbabwe: Engaging the Inclusive Government, April 2009. See also Ev 48 Back

12 Ev 64 Back

13 Ev 48 Back

14 Ev 77 Back

15 Ev 77 Back

16 Ev 39 Back

17 Q 1 Back

18 Ev 77 Back