Zimbabwe is negotiating deals said to be worth billions with Chinese firms, including possible contracts with a company that allegedly has a chequered history in Africa.
Just a day before he announced his Cabinet, President Robert Mugabe met a delegation of Asian investors at State House, where they sold Mugabe a string of lofty promises.
Among the delegation were China International Fund (CIF) and Singapore OKP Group, which pledged to build a power plant.
Other deals promised by the delegation included a $10-billion petroleum refinery by Baoda Petroleum Corporation; investment in the Zambezi-Bulawayo water pipeline, a project first mooted in the 1950s; a car assembly plant for Chinese carmaker Hawtei; as well as deals to construct roads, rail and other infrastructure.
However, few even within Mugabe’s government know the details surrounding how these deals are being structured, and one senior official told the Mail & Guardian on Wednesday that there was “some degree of concern as to who is running with the deals and what exactly is being promised in return”.
Over the past seven years, CIF has reportedly promised projects worth at least $18-billion across Africa.
In 2009, an official with Global Witness, which has tracked CIF’s activity on the continent, described CIF as “buccaneers” that were “cutting themselves a large slice of Africa’s resource cake”.
But on its website, CIF claims to have built low-cost houses in Angola.
The company says it was “honoured to have undertaken the construction project of 215 500 units of public housing in Luanda and another 17 provinces”.
However, a 2009 diplomatic cable on WikiLeaks said the project was not completed.
In a January 27 2009 cable, it was reported that Bolum Zhang, the Chinese envoy to Angola, had said that CIF was a “private” company. Zhang also said that CIF “has weak management and poor leadership in Angola, despite its close links to the Angolan presidency.”
CIF is not new to Zimbabwe. It is associated with Sino-Zimbabwe, a joint venture that has interests in agriculture and other businesses.
Resources deals overturned
In 2011, the Guinean government overturned resources deals, reportedly worth $7-billion, which had been granted to CIF by the previous military junta. CFI did not respond to questions.
CIF is just one of a rash of Chinese firms that have won contracts over the past month alone.
Chinese firm Henan Guoji will build 10 000 low-cost houses, according to Local Government and Housing Minister Ignatius Chombo.
“We signed a memorandum of understanding, which will begin to consummate this year. Identification of land has been done by the officials and the layout is now being scrutinised,” Chombo said this week.
Zimbabwe has also awarded a $144-million contract to China Machinery Equipment Company (CMEC) to upgrade Harare’s water works, build three new dams and set up a new water treatment plant.
This would be done over the next seven years, according to Harare town clerk Tendai Mahachi.
The deal is being funded by a loan from the China Export and Import Bank.
Expanding Zim's power plants
China’s Sinohydro and CMEC have also won tenders to expand Zimbabwe’s two main power plants, Kariba and Hwange.
China Africa Sunlight Energy, a joint venture between Chinese and Zimbabwean investors, also plans to invest up to $2.1-billion on coal mines and a power plant, according to the project’s general manager, Charles Mugari.
The company has so far spent $20-million on exploration for coal and coal-bed methane.
China quickly backed Mugabe after his re-election with President Xi Jinping sending one of his ministers, Li Liguo, as his special envoy to Mugabe’s inauguration.
Finance Minister Patrick Chinamasa said the country had accepted the reality of being shunned by the West and must look even more to China.
“Because the doors have been closed by those who used to be our traditional partners, we have to intensify new economic relationships and friendships. That means every country that is friendly to Zimbabwe, including China,” Chinamasa said.
Many analysts fear not enough detail is being made public about the new deals.
“We are not opposed to Chinese investment, but we hope for more transparency and disclosure. Who is doing what, what are they getting?” said labour expert and economist Charles Tembedza.
But other observers say disclosures are unlikely. “We are desperate to stitch up big deals, if not to prop up the economy, then to thumb our noses at the West. We are not in a very good position to demand too much,” said fund manager Richard McCawley.