Trump sanctions lead to hike in smuggling on Mozambique-Zimbabwe border

Trump sanctions lead to hike in smuggling on Mozambique-Zimbabwe border

By Arnaldo Cuamba

The smuggling of several key commodities involving Zimbabwe has been increasing at the Machipanda border, which divides the country with Mozambique, due to the economic crisis that is aggravated by the sanctions imposed by the United States of America.

On Monday U.S. President Donald Trump extended one year’s sanctions against Zimbabwe saying that the new government’s policies continue to pose an “unusual and extraordinary” threat to U.S. foreign policy.

The situation is worsening the economic crisis of the southern African country which impacts are affecting the Machipanda border in the central Mozambican province of Manica. The number of Zimbabweans crossing the border in search of food increased sharply and smuggling as well.

On Wednesday, the Provincial Customs Services of Manica province announced the seizure of 23 tonnes of smuggled sugar through several pores on the Machipanda border.

Many goods in Zimbabwe have become incredibly expensive due to the financial crisis there, but it is still economic to smuggle sugar from Zimbabwe to Mozambique, something that is damaging the Mozambican state in millions of fiscal meticais per year, according to the local head of the customs service, Remigio Guiamba.

He said the situation was exacerbated by the fact that the Mozambican government had introduced “very high surcharges” as a way to inhibit the import of sugar to enhance domestic production.

At least a thousand bottles of alcoholic beverages were also confiscated when they tried to be introduced illicitly across the Machipanda border, Guiamba said.

On the other hand, from Mozambique to Zimbabwe, products such as clothing and shoes, fuel, and food, such as rice, oil and maize flour, are being smuggled.

Migration data indicates that the number of Zimbabweans coming to Mozambique to search for food products increased by 20 per cent.

In February, Mozambican police announced the seizure of dozens of tons of used clothing and shoes, which would be smuggled from Mozambique and Zimbabwe, in a business that is growing between the both countries.

Zimbabwe, which is facing a severe crisis of lack of foreign exchange, is unable to finance itself with multilateral institutions such as the International Monetary Fund or the World Bank – where it has arrears of around 2.4 billion millions of dollars – causing the country to resort to credit alternatives with local and African credit institutions.

It was in this sense that several African banks, including the Central Bank of Mozambique, lent USD 985 million to Zimbabwe, an amount that will allow the country to import fuels and basic necessities.

These loans will be paid with future results from the gold mining industry and have maturities of three to five years, with an interest rate 6 percent above Libor (rate that results from inter-bank lending).

Share

Comments

comments

Leave a Comment

Your email address will not be published. Required fields are marked *

*