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ZDERA big threat to the economy, says Parly committee on Budget and Finance

ZDERA big threat to the economy, says Parly committee on Budget and Finance

Story by Owen Mandovha

PARLIAMENT says the Zimbabwe Democracy and Economic Recovery Act (ZDERA) remains a cause for concern under the new sanctions regime announced by the United States this Monday.

The agreed position is that illegal sanctions will continue to affect the economy and ordinary Zimbabweans contrary to the US assertions that they are targeted.

The new measures modelled around the Global Magnitsky Act, retain the Zimbabwe Democracy and Economic Recovery Act (ZIDERA) which has crippled the economy for over two decades.

Chairperson of the Parliamentary Portfolio Committee on Budget and Finance, Honourable Clemence Chiduwa is convinced that ZDERA’s impact goes right to the heart of the economy in preventing the flow of capital into the country.

“ZDERA was issued by way of an executive which prohibits the International Development Association, the International Monetary Fund, the African Development Bank to offer lines of credit to Zimbabwe neither to even provide loan guarantees. Zimbabwe has been denied of the essential lines of credit to support its economy and the private sector hence ZIDERA will always stifle the economy even with the new sanctions programme,” he said.

Honourable Chiduwa further revealed that Zimbabwe has missed out from the Africa Growth Opportunity Act (AGOA).

He added, “AGOA offers an opportunity for African countries to grow their economies by removing tariffs on exports to the US market. Many African countries have benefited from this except for Zimbabwe because of the ZIDERA which even going forward will continue to be in force.”

While the new measures pave the way for the release of blocked funds for companies and individuals under the old sanctions regime, they still leave the country in the high-risk category which may not change investor perception, hence the rallying call is for the total and unequivocal removal of these embargoes.

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