ZIMBABWE’S civil society organisations have blamed the shadowy shareholding structure of some companies and the militarisation of some mining entities for fuelling illicit financial flows (IFFs) in the country.
Independent estimates show that between 2000 and 2020 Zimbabwe lost over US$32 billion through illicit financial flows. In the shorter period between 2009 and 2013, the country is estimated to have lost US$2.83 billion.
In 2019 alone, according to the chairperson of the Zimbabwe Anti-Corruption Commission, Zimbabwe lost an estimated US$3 billion.
Reports show that Zimbabwe’s military through its proxy companies has interests in mining, media and telecoms, among other key economic sectors.
Experts say like many other countries on the continent, Zimbabwe suffers from IFFs due to porous borders, outdated laws with loopholes and failure to capacitate law enforcement agencies, among other factors.
IFFs are cross-border transfers or movements of money or capital associated with illegal activity. The terms is also extended to cover illegal domestic movements of money or capital.
Rachel Jambo, a field officer at the Centre for Natural Resource Governance, told delegates attending a conference on IFFs held in Bulawayo that the country could be losing much more than the estimated amounts of money due to illegal transactions.
“Alarmingly there is a scary increase in the militarisation and politicisation of minerals in the country (or some form of security services),” Jambo said.
“What does that translate to for the ordinary person or for our policies for economic development? It basically means contracts are very opaque, there is no transparency in the contracts. We do not know the terms when we go to the section of opportunities. There is a lot of mis-invoicing going on or under-pricing going on (because of the opaque shareholding structures).”
Nqobani Tshabangu, head of programmes at Transparency International Zimbabwe, said IFFs thrive on institutions that are weak.
“I also want us to point out the role of the unaccountable who are a law unto themselves,” he said.
“They actually decide on certain things and they are not event accountable to the people that elected them. Politically exposed persons establish companies to do scandals in Zimbabwe that you can think of. High-level scandal. We discovered that the persons are politically connected to the state. That is why you find out that you have some of these challenges as drivers for IFFs.”
Social and economic justice activist Fambai Ngirande said the governmet should enter into contracts with investors which empower communities where the resources are found.