US Moves to Scrap ZIDERA but Keeps Strings Attached for Zimbabwe

The United States Congress has introduced a bill seeking to repeal the Zimbabwe Democracy and Economic Recovery Act of 2001 (ZIDERA) a law long blamed by Harare for crippling its access to international finance.

Section 303 of the proposed legislation, H.R. 5300 formally repeals ZIDERA which for over two decades restricted Washington’s support for loans and debt relief to Zimbabwe from institutions such as the World Bank and the International Monetary Fund.

However, the repeal comes with a caveat.

The draft law makes clear that Washington will not back any new or expanded IMF or World Bank funding for Zimbabwe unless the government settles arrears owed under the Global Compensation Deed, a 2020 agreement to compensate former white commercial farmers for land seized during the country’s controversial land reform programme.

The bill stipulates that payment must be made within 12 months of approval and not through Zimbabwe-issued securities.

The conditions highlight continued US pressure on Harare to honour its financial commitments and uphold property rights even as Washington signals a willingness to ease restrictions.

ZIDERA has been a point of contention in Zimbabwe’s relations with the West.

Successive governments have blamed it for worsening the country’s economic decline while Washington has maintained the sanctions were targeted at promoting democratic reforms and human rights.

Analysts say the repeal, if passed, could be a symbolic victory for President Emmerson Mnangagwa’s administration which has lobbied vigorously for its removal.

But the attached financial conditions may prove difficult for a cash-strapped government already struggling with external debt estimated at over US$14 billion.

“This is a carrot-and-stick approach. It signals a shift in Washington’s tone but still ties economic relief to Zimbabwe meeting very specific obligations,” said one Economist

The bill is still at an early stage in the US legislative process.

For Zimbabwe, the prospect of ZIDERA’s repeal could mark a turning point in re-engagement with the international community but only if it can demonstrate the political will and financial capacity to meet the new requirements.