25 January 2013

Zimbabwe: Marange Diamonds - A Godsend for Zanu-PF

THE discovery of diamonds in Chiadzwa in 2006 was followed by the signing of the Global Political Agreement and establishment of the coalition government in 2008 and 2009 respectively, raising hope that a country ravaged by political strife and severe economic decline for over a decade was on the road to recovery.

Four diamond-mining firms, Marange Resources, Mbada Diamonds, Anjin and Diamond Mining Corporation subsequently commenced state-of-the-art mining, bringing an end to the primitive pick-and-shovel operations of villagers and other fortune hunters.

Local and international experts fell over each other in hailing Zimbabwe's new find and predicted the country could earn up to US$2 billion a year from the diamonds to become the third largest producer in the world by 2020, as well as supplying 25% of global demand.

Embattled former ruling party Zanu PF, reeling under targeted sanctions imposed by the West, even touted the diamonds as "sanctions busting".

However, as has become the norm in Zimbabwe, that optimism quickly gave way to despair, accusations and counter-accusations among the Zanu PF and MDC coalition partners following paltry remittances to national treasury headed by Finance minister Tendai Biti.

The Zimbabwe Revenue Authority (Zimra) revealed only US$136 million was realised by treasury in 2012, a far cry from the US$600 million Biti anticipated would flow into his empty coffers.

Partnership Africa Canada (PAC), a group campaigning against "blood diamonds" accused President Robert Mugabe's Zanu PF elite of conniving with international dealers and criminals to loot diamonds in perhaps the biggest single plunder of diamonds the world has seen since Cecil (John) Rhodes.

"Revenue that could have revived the country's ailing economy has been channelled into a parallel government of police, military officers and government officials loyal to Mugabe," wrote the PAC last year in a report titled Reap What You Sow: Greed and Corruption in Zimbabwe's Marange Diamond Fields.

Mines minister Obert Mpofu has led spirited denials by Zanu PF of any wrong-doing claiming everything is transparent and above board in the diamond sector, but even he would be hard pressed to explain the shady nature of the relationship between his party and the diamond companies.

This follows revelations last week that Zanu PF Manicaland provincial chairperson Mike Madiro and four colleagues allegedly solicited money from Mbada Diamonds and Anjin, purportedly for party activities including preparations for the party's annual conference in Gweru last December, which they converted to their own use.

It was only last month that Mugabe fumed at the conference in Gweru after former South African president Thabo Mbeki told him -- and provided evidence -- that senior Zanu PF ministers had demanded a US$10 million bribe to facilitate a US$1 billion investment by African National Congress (ANC)-linked investors.

Is it any wonder Zimbabwe has failed to attract significant foreign direct investment despite an energetic campaign by Biti and others to court international investors?

It now seems as though even provincial party officials have taken a cue from their seniors to embark on an orgy of self-aggrandisement.

Zanu PF may claim these were just individuals acting on their own selfish initiative and bringing the party's name into disrepute by allegedly demanding and getting US$750 000 from the companies, but the entire episode demonstrates how the country's resources are being used to benefit one political party. This also gives credence to fears Zanu PF is using diamonds to fund its election war chest.

"It obviously means they have been abusing the country's mineral resources and there is need to investigate the broader implications of this whole saga which may only be a tip of the ice berg," said Habakkuk Trust chief executive officer Dumisani Nkomo.

"After the collapse of the Zimbabwe dollar and the end of the quasi-financial activities of the Reserve Bank which used to prop up the party, Zanu PF is now preying on the diamond sector to fund its activities," Nkomo added.

Zanu PF officials, including party chairman Simon Khaya Moyo and secretary for administration Didymus Mutasa, confirmed the fraud allegations adding the accused were under investigation by the party's disciplinary committee.

However, the five are not being investigated for extorting money for party activities, but merely for converting the money to their own use. Clearly Zanu PF can demand money from companies to fund its activities, something the MDCs and any other party could never do without attracting a backlash. In fact sources within Zanu PF say Mbada Diamonds made cash donations to the party as it prepared for the annual conference in Gweru last month.

Pedzisayi Ruhanya of the Zimbabwe Democracy Institute questioned how a political party could extort money from companies in that manner, adding that the issue pointed to a "corrupt patron-client relationship between Zanu PF and these companies".

Corruption involving senior Zanu PF politicians is nothing new, but they have almost always walked away scot-free.

Zanu PF officials and those linked to the then ruling party looted a VIP housing scheme in 1995 but nobody has ever been held to account, while civil servants who contributed the money remain homeless to this day.

Security chiefs and senior party officials, including former war veterans' leader (the late) Chenjerai Hunzvi, were let off the hook after fraudulently claiming massive disability pay-outs from the War Victims' Compensation Fund set up in 1997 to help those who were injured during the liberation struggle.

"If small people like those provincial officials can abuse such large sums of money what does it tell us about situations involving senior Zanu PF officials and the security apparatus for instance?" Ruhanya asked.

When the abuse of the funds came to light last year, police deputy Commissioner-General Levi Sibanda, who was acting commissioner-general at the time, wrote to then acting President Joice Mujuru a two-lined letter -- with the police report attached --- seeking advice on what action to take since the issue involved party bigwigs.

Mujuru wrote to Khaya Moyo telling him to take action. This points to an unholy alliance between the police and Zanu PF, in which the police seek guidance on criminal matters from Zanu PF when cases involve party activists. It also raises questions as to how many other cases involving Zanu PF officials have been swept under the carpet.

"The most tragic dimension in all this is that Zanu PF's predatory behaviour is being abetted by pivotal state officials," said Jabusile Shumba of the Institute for a Democratic Alternative for Zimbabwe.

"Regrettably, there is a collective structure of power which surrounds and even controls the police and judiciary," said Shumba.

As the fraud saga involving Zanu PF officials unfolds, the failure of law enforcement agents in dealing with corruption where it concerns the party is yet again a talking point. With crucial elections expected later this year, the police's readiness to deal with electoral offences involving Zanu PF officials comes under scrutiny.

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