Curbing illicit financial outflows from Zimbabwe remains a matter of urgency

By Nancy Makurira

Africa is particularly susceptible to looting, mainly because of its abundant natural resources coupled with a poor governance track record. The report of the High Level Panel on Illicit Financial Flows from Africa, chaired by former president Thabo Mbeki, found that “our continent is annually losing more than $50-billion through illicit financial outflows.

“This annual $50-billion loss comes as a result of, among other factors, tax evasion and the mispricing of trade services by multinational companies.

Let’s look at the illegal externalisation of funds and wealth cases of our African politicians, none of them was sentenced, look at Zuma, Mugabe and Mnangagwa, the rule of law is just weak and nothing is being done to save the public. The SADC relevance is not visible.

United Nation’s 16th Sustainable Development Goal (SDG) focuses on attaining Peace, Justice and Strong Institutions. The goal is a worldwide acknowledgement that inclusive societies are possible only when the country’s institutions are rooted in rule of law and accountability.

Zimbabwe was part of the 193 Member States of the United Nations that agreed on the SDGs in 2015 at the General Assembly. The SDGs were hailed as the global “blueprint to achieve a better and more sustainable future for all”.

The Zimbabwean government is bound to leave up to the promise of ensuring that the country’s resources are exploited to fund critical investments and public initiatives.

To that effect, it should show open commitment in probing and eliminating corruption. Laws should be strengthened, and transparency improved to ensure that all forms of illegal flight of resources and capital is eradicated.

The idea to form the Special Anti-Corruption Unit (SACU) in 2018 was a positive way forward in admitting the ruinous nature of corruption in Zimbabwe. Soon afterwards, the Special Anti-Corruption Courts were established.

The police however came in to duplicate the SACU status by creating their own Police Anti-Corruption Unit (PACU). Quickly, the intention to fight corruption manifested into an intention to set up units to fight political battles and perpetuating corruption. SACU currently is set up within the president’s office, thus defeating the whole point of curbing corruption.

Transparency International Zimbabwe (TIZ) was recently critical of the legality of SACU. They advised the president that if the National Prosecuting Authority (NPA) is not doing a good job of prosecuting cases of corruption, he should restructure it rather than duplicating its role and centralising indictment powers in his office.

On their 2020 corruption index, Transparency International ranked Zimbabwe 157/80. In all corruption cases in Zimbabwe since Mnangagwa assumed office in November 2017, there has never been convictions over the illicit financial outflows.

Gold is Zimbabwe’s biggest foreign currency earner. The Henrietta Rushwaya gold smuggling case has left the world with more question than answers regarding the illegal movement of gold past Zimbabwean borders.

Most people asked if she could try to smuggle 6kgs of gold past the main Harare International airport, how many are being smuggled past the small ones. The government did not show any concern or interest in this case; infact, she has just been reinstated as the President of the Zimbabwe Miners Federation (ZMF).

The RBZ estimated a loss of US$3 billion between 2015 and 2017 while a research by AFRODAD estimates that US$2.7 billion was lost from the mining sector between 2009 and 2013. The RBZ further posited that an estimated US$684 million was remitted outside Zimbabwe or externalised under dubious and unwarranted circumstances in 2015 while Global Financial Integrity data shows that Zimbabwe lost an estimated US$670 million through trade misinvoicing in 2015. 

The Home Affairs and Cultural Heritage Minister Kazembe Kazembe admitted in 2020 that the country is losing US$1.2bn gold every year to smuggling.  In that year, the country only earned US$946m in gold exports. If fighting corruption is in the best interest of the ordinary citizens of Zimbabwe, the government would have been making serious efforts in ensuring that such losses do not reduce the country into a laughingstock.

Efforts by the Zimbabwe Revenue Authority (Zimra) to ascertain the source of wealth sustaining lavish lifestyles of the elite through a lifestyle audit have also turned out to be a damp squib, with critics arguing that the taxpayer was not casting the net wider to catch the corrupt big fish.

Mnangagwa rode into power promising fire and brimstone to those who had externalised money from Zimbabwe. What came out of that pomp and fanfare? Nothing. In March 2018, Mnangagwa’s administration published a long list of companies and individuals accused of externalising a staggering US$1 billion that is IFFs.

None of the alleged culprits including former Finance minister Ignatius Chombo have been brought to book. It also remains unclear how much the state managed to recoup from the externalised US$1 billion. This is just a snapshot without mentioning 15 billion USD which just disappeared.

How many top officials in Zanu PF can be absolved of corruption from a really close forensic inspection of their dealings? My point is “If you are the author, grandfather and godfather of corruption you cannot fight corruption,”

Mnangagwa’s crackdown on graft has gained little traction with critics accusing him of attempting to use the legislation to subdue real and perceived political opponents while his closest allies walk away. This has raised questions around Mnangagwa’s sincerity to tackle graft fuelled by the elite.

The continued silence and inaction by Mnangagwa’s regime in securing borders and coming up with robust mining policy frameworks is leaving a lot of ordinary Zimbabweans exposed to violence, environmental degradation and abject poverty.

The MDC Alliance president, Advocate Nelson Chamisa warned Africa and the rest of the world that there is a lot of “demographic dividend” that is potentially being lost if they stand aside while despots like Mnangagwa continue to rule with impunity. He maintained that dictators in Africa are sustaining their focus on personal aggrandisement at the expense of critical institutions and vital reforms that should be bridging the current enormous wealth gaps.

In its statement on minerals smuggling, the Centre for Research and Development in Zimbabwe (CRD) has further challenged parliament to not give up on holding the government to account regarding illicit financial outflows.

It is up to parliament and the opposition MDC Alliance to continue to stand on the side of the ordinary people and sustain pressure on the government to bring back the Gold Trade Bill and the Precious Stones Trade Bill. These two bills are vital steps in making sure that our resources are well safe guarded and are non excludable in prospering the country as a whole.

Nancy Makurira is the MDC UK and Ireland Youth Assembly Vice Chairperson