Zimbabwe News and Internet Radio

Zimbabwe budget banks on ‘blood’ diamonds

Zimbabwe’s government expects to take in $600 million in additional revenue from diamond sales next year, after a global watchdog lifted its ban on exports, Finance Minister Tendai Biti said on Thursday.

Tendai Biti about to present budget last year
Tendai Biti about to present budget last year

The windfall will give a 17 percent boost to the national budget, which had originally been set at $3.4 billion but will now grow to $4.0 billion, Biti told parliament in presenting the 2012 budget.

“Our original budget for 2012 was $3.4 billion but now we are anticipating additional diamond revenue of $600 million,” he said. “We anticipate that we will be able to contain inflation below five percent in 2012,” he added.

The Kimberley Process, the global regulator created to prevent “blood diamonds” from financing conflicts, agreed on November 1 to allow sales of gems from the eastern Marange fields, which have been scarred by army abuses.

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The decision allows two firms, state-owned Marange Resources and state joint venture Mbada Diamonds, to sell gems from one of Africa’s biggest diamond finds in decades but also the site of alleged gross human rights violations.

Human Rights Watch says President Robert Mugabe’s army killed more than 200 people in late 2008 in an operation to clear small-scale miners from the area and Kimberley investigators confirmed abuses that resulted in a ban on the region’s diamonds.

The ban was lifted after months of tense negotiations.

Under the terms of the deal, Zimbabwe will have to consistently share data with Kimberley monitoring staff, including on the identity of mine investors and steps taken to combat illegal mining and trafficking. Civil society representatives will also have access to the area to independently verify mining activity.

Meanwhile political analyst Clifford Mashiri on Thursday said Biti is being “very ambitious and brave,” regarding the projected diamond profits.” He told SW Radio Africa that Biti’s optimism is “questionable,” as there were no conditions in place to ensure the Treasury gets its share of the diamond sales.

“In the absence of a Diamond Act to ensure accountability and transparency, there is no reason to be optimistic,” Mashiri said. Biti has previously voiced the need for such legislation to be in place, but to date there has been no movement on this issue.

Mines Minister Obert Mpofu has also raised concerns about diamond smuggling, said to be rife at the controversial Chiadzwa alluvial fields. Despite these concerns and ongoing reports of human rights abuses, Zimbabwe has been cleared to resume exporting to the international diamond trade market.

The US based Rapaport group this week said in a statement that it “strongly opposes” the recent decision of the KP, warning that “the KP does not certify against human rights abuses and KP certification does not ensure that diamonds are not involved in human rights abuses.”

“The Rapaport Group calls on all ethical members of the diamond trade to cease and desist from the trading of (Chiadzwa) diamonds. We demand that firms selling (Chiadzwa) diamonds do so with full disclosure,” the group said in a statement.

The group also warned that any of its members who are found to have knowingly traded in Zim diamonds “will be expelled and their names will be publicly communicated.” It added: “The continued sourcing and legitimisation of diamonds involved in human rights abuses threatens the integrity and reputation of all diamonds.”AFP/SW Radio Africa