Transparency International Zimbabwe (TIZ) said IFFs have cost Zimbabwe over US$12 billion in last three decades ending in 2015, with corruption acting not only as a direct source, but a conduit facilitating other commercial forms of illicit flows.
Addressing the Mines and Mineral Development- Parliamentary Portfolio Committee, TIZ programs director Tafadzwa Chikumbu said across the mining value chain there are gaps for capital flight, hence the need for Parliament to step up its oversight role and improve capacity to drive the sector towards its ambitious US$12 billion target.
"The severity of IFFs is huge through commercial transactions, yet it's important to note that where such transactions take place even criminal activities like smuggling, there is an element of corruption involved.
"In this regard corruption is a form of illicit flow at the same time a conduit for facilitating other forms of IFFs which drain government resources and foreign currency reserves. So a bribe paid to politician once can facilitate tax evasion by an investor for five years.
"We need to plug all these loophole to ensure that revenue that is due to Zimbabwe flows into coffers of the country instead of going into private hands and Parliament is key in ensuring transparency and accountability across sectors," he said.
According to the Corruption Perception Index released annually by TI ranking 180 countries in terms of how business perceive corruption Zimbabwe scored a low score of 24 out of a possible 100, ranking 157 out of 180.
Despite this gloomy picture of progress in fighting corruption, contract transparency can a panacea to enhance good governance and transparency in the extractives, says Rangarirai Chikova, a policy analyst with the African Forum on Debt and Development (AFRODAD).
Chikova said open contracting entails providing disaggregated data to all key stakeholders across the value chain and eases performance monitoring as the mining sector is perennially failing to translate potential into economic development.
"Contracts must be transparent and clearly show revenue sharing structures between government and investors and also ensure that cost and risk is shared as contracts in the sector are impacted by high levels of uncertainty.
"Fair and transparent contracts are critical to optimize the benefits of the mining sector to resource rich countries which are still trapped in the resource curse," he said.
Extractive sectors are associated with high levels of IFFs, from 2000-2009 more than half of the IFFs from the African continent arose from the oil precious metals and minerals, iron and steel and copper.
According to the African High Level Panel on IFFs, corruption however only accounts for five percent, criminal activities 35 percent, while commercial transactions account for the 60 percent of the US$50 billion lost in the continent annually.