EU not prepared to drop sanctions against Mugabe

Robert Laing and Tamlyn Stewart

Robert Laing and Tamlyn Stewart

The European Union (EU) has shown its scepticism over the power-sharing deal in Zimbabwe by voting to maintain sanctions for at least another month.

This means that the country's new coalition government will not be able to print more Zim dollars because EU sanctions have prevented the country's German supplier of banknote paper, Giesecke & Devrient, shipping to the Mugabe government since July.

EU foreign policy chief Javier Solana told AFP as he entered EU talks in Brussels yesterday that the union was not yet prepared to alter its sanctions against Mugabe. "The sanctions for the moment will not be changed today, the decision will probably be taken in October," said Solana.

However, the EU indicated that it was willing to help with foreign currency.

Reserve Bank of Zimbabwe governor Gideon Gono announced last week that 1000 retailers and 200 wholesalers may now sell goods in US dollars, rands and the pound sterling while motorists can buy fuel in foreign currency.

Tony Hawkins, an economics professor at the University of Zimbabwe, said the "reform" would only "help a fortunate few with access to foreign currency while enabling the government to exercise its political patronage in giving foreign currency licences to favoured retailers".

Hawkins pointed out that Gono made no mention of industrialists, farmers and mining companies who, presumably, would be forced to use the local currency.

Hawkins, along with other economists, warned that there was no quick fix for Zimbabwe's economy. "It will take 10 to 15 years for incomes to return to pre-crisis levels," he said.

Leon Myburgh, sub-Saharan Africa strategist at Citigroup was doubtful that a coalition government would be able to fix Zimbabwe's ills. He said: "A coalition government is inherently troublesome and raises doubts as to whether the tough decisions will be able to be made.

"If a new government had taken over it would have been able to fix things. Under the current model it is very difficult to make decisions," said Myburgh.