Parly enlists AfDB help in 'mega deals' talks

HARARE - Zimbabwe's National Assembly has unanimously ratified an agreement for the ratification of the African Legal Support Facility, hosted by the African Development Bank (AfDB), to help government in the negotiation of complex commercial transactions  so-called mega deals. 

Finance and Economic Development minister Patrick Chinamasa won support for the ratification in the Upper House last week.

He told the House that the agreement benefits the country in legal capacity building and getting a fair deal in complicated contracts.

This comes after Zimbabwe entered four agreements with China on electricity generation, including the expansion of Hwange, as well as deals on road construction and infrastructure development during President Xi Jinping’s two-day visit to Zimbabwe last December.

China’s Sinohydro Corp won the $1,5 billion bid to add two generation plants at Hwange in western Zimbabwe, in the most ambitious move yet to tackle the country’s crippling electricity shortages.

China is also promising Zimbabwe a “special share” of the $60 billion it is going to invest in Africa in the next three years, while South African companies have also indicated they are keen to invest in Zimbabwe.

“Madam President, as we negotiate these mega deals, we are finding that we are short on technical skills to negotiate on an equal basis with those across the counter,” Chinamasa said.

“It is for this reason that it is my singular honour to move that Zimbabwe’s membership to the African Legal Support Facility be ratified by this august Senate.

“...,considering Africa’s superior natural resource allocation, the facility offers an opportunity for African countries to train their respective technocrats in how to negotiate more favourable terms for natural resource exploitation and concurrently to promote growth and poverty alleviation in their respective countries and ultimately across the continent.

“This, in part, informs the need to subscribe to the African Legal Support Facility.”

The AfDB facility was established to support African governments in their dealings with deep-pocketed international investors who often took the upper hand in negotiations. It provides technical assistance of a legal nature in the negotiation of contracts and advises on cases concerning sovereign debt litigation and commercial contracts amongst other areas.

The concept of establishing the African Legal Support Facility was agreed during the annual meeting of ministers in charge of Finance and Economic Development on June, 2, 2003 in Addis Ababa, Ethiopia, where the ministers recognised the skills gaps of African States in negotiating contracts for extractive natural resources.

The AfDB facility also grants and advances funds to African countries for legal advice from top legal counsel in these areas and says its goal is to ensure fair and balanced negotiations.

Chinamasa said Zimbabwe will not be obliged to provide any financial support to the facility beyond voluntary contributions as a goodwill gesture.

“In addition, the country will not be responsible for any debts, liabilities or obligations of the facility,” he said.

Gwanda Senator Bheki Sibanda expressed concern over the lapse in benefit.

“ totals 13 years from the time the ministers met or signed that agreement (in Addis Ababa) and a total of eight years, during which you have been members of this legal support facility.

“... if we quantify that and look at the potential loss during that period in terms of opportunity, wise counsel or any other saving, it is quite a lot. What I am seeking to understand is, specifically, why do some of these agreements take so long?  Do we find them unnecessary at specific times? 

“In this particular one, why has it taken us up to eight years after membership for us to bring it to the august House and possibly be in a position to execute?” Sibanda asked.

Explaining the delay, Chinamasa said: “...there are usually discussions on whether or not we should not go to the next stage; that is ratification and those discussions can be very protracted.”

Midlands MDC Senator, Morgan Komichi, said Zimbabwe’s negotiating capacity was very low and backed the intervention.

“...we should embrace it as Zimbabwe and Africa at large. Without the capacity to negotiate, we will continue being exploited by the West because they want to sustain their economies with our resources and in the end, we do not benefit anything.

“Zimbabwe has a very clear example of when our diamonds were usurped from us, we did not benefit. There is nothing that we can show from the exploitation of the Marange diamonds. 

“Minerals were stolen and I think that if this facility is expedited and people are taught, it will help our country now and in future. We have taken long to do this and if this facility came earlier when diamond mining was started, I think we could have been able to handle the situation well.  All in all, I think this facility should be implemented quickly.”

MDC Senator James Makore also backed Komichi.

“...we did not realise anything from diamonds because we did not have the expertise. 

“You will find that we lost a lot of money and I think you have heard it when something about the $15 billion was talked about. If all that money was channelled into our economy, all of us could be flying aeroplanes. 

“Even yourself (Chinamasa) in your responsibility of sourcing for funds, you could be a very high-powered person that you would just give commands.”

President Robert Mugabe announced in March that $15bn of the country’s diamond wealth had been looted and simply disappeared. There has been no inquiry, no arrests - just a $15bn hole in the nation’s coffers.

Manicaland Senator Shadreck Chipanga said the facility “will help us as a nation.”

Beitbridge Zanu PF Senator Tambudzani Mohadi said “due to the fact that this facility does not need any money from us, we have to protect what we already have.”

“I also fully support the ratification of Zimbabwe to be an active member and also get benefits from this development,” she said.

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