ED awards Tagwirei major shareholding in Zim Commodities Exchange

President Emmerson Mnangagwa has approved a shareholding structure of the newly established Zimbabwe Commodities Exchange (ZMX) which saw CBZ Holdings, a bank linked to his ally Kudakwashe Tagwirei scooping major shareholding.

Cabinet last week approved the proposed partnership between the Ministry of Lands, Agriculture, Fisheries, Water and Rural Development and Zimbabwe Merchantile Exchange (Pvt) Limited on the establishment of the Zimbabwe Commodities Exchange.

Addressing journalists at a post cabinet meeting in Harare last week, Information Communication Technology, Postal and Courier Services Minister Jenfan Muswere said the shareholding structure of ZMX had been approved by the cabinet.

The structure is as follows: FINSEC 22.5%; TSL 22.5%; CBZ Bank 35% and Government represented by the Ministry of Lands, Agriculture, Fisheries, Water and Rural Development 20%.

“The nation will recall that the Government gazetted the Warehousing Receipt Act with the aim of introducing an Agricultural Commodity Exchange. Government is now desirous to establish and operationalise the Agricultural Commodity Exchange,” he said.

“The nation advised that Cabinet has approved the shareholding structure for the Zimbabwe Commodities Exchange (ZMX) as follows: FINSEC 22.5%; TSL 22.5%; CBZ Bank 35% and Government represented by the Ministry of Lands, Agriculture, Fisheries, Water and Rural Development 20%.

“ZMX will bring about an organised digital platform for participants to trade their commodities on the market with fair and transparent price discovery,” Muswere said.

Tagwirei is always in the media every week over controversial government contracts and tenders. The tycoon has a 30% stake in CBZ.

Recently, there was public outcry after CBZ was handed the monopoly of payments for application of electronic passports launched by Mnangagwa.

In an interview with Nehanda Radio, UK based Development Economics and Policy expert Chenayi Mutambasere asked the government why it would give such shares to controversial characters like Tagwirei who is on the sanctions list.

“By approving the shareholding structure of the Zimbabwe Commodities Exchange in the way that it is currently set, it calls into question the intended beneficiary of this move.

“Why do I say that? In the first instance, we all know that Tagwirei in reports that have been done by Sentry and many others has been associated with corruption and expropriation deals from the Zimbabwe economy running into millions of US dollars,” she said.

“Therefore why are we putting him in this close proximity to the Commodities Exchange when we all know of the unscrupulous activities that have happened whether we are talking about Command Agriculture or the Treasury Bills in 2018 that were converted by the Reserve Bank of Zimbabwe?

“The second issue is that looking at the shareholding structure, more than 50% of the shares will be held by named entities on the targeted sanctions list including Tagwirei and this increases the risk profile of the Commodities Exchange so much that it is off-putting for any local or international investors that do not want to be associated with individuals on the sanctions list because by that association, it will also impact them and their businesses.

“Therefore it then calls us to conclude that the Zimbabwe Commodities Exchange is actually being designed in nature to benefit a few individuals rather than the nation as a whole.”

Mutambasere further said she was disappointed by the Competition Commission of Zimbabwe which she said is failing to rein in Tagwirei from capturing the whole sector of the economy.

“I’m also disappointed in the role of the Competition Commission in Zimbabwe because what they should be doing is safeguarding the country against these monopolistic tendencies.

“We are seeing Tagwirei’s hands literally in a lot of key entities that are to do with the whole macro economic infrastructure of Zimbabwe. This puts the country at risk,” she added.

Last week, Nehanda Radio reported that before snapping cement company Lafarge Zimbabwe, Fossil Contracting, a company fronted by businessman Obey Chimuka but owned by Tagwirei, had already been controversially awarded a US$132 152 527 tender by the Zimbabwe National Water Authority (ZINWA) to construct Ziminya Dam in Nkayi.

Last year, a report by the Sentry titled “Shadows and Shell Games: Uncovering an Offshore Business Empire in Zimbabwe”, revealed key details of Tagwirei’s business dealings alleging that he presides over a sprawling network of more than 40 companies spanning the oil, mining, banking, logistics, transportation, and import/export, which have been linked to alleged corrupt activities and state capture.

Tagwirei and his other company Sakunda Holdings were slapped with sanctions by the United States Department of the Treasury’s Office of Foreign Assets Control (OFAC) for allegedly providing support to the Zanu-PF regime and promoting corruption and economic mismanagement at the expense of the poor.

After being sanctioned for corruption, the fuel mogul reportedly continued to do business by relocating his network to Mauritius.