Doing the Right things for their Own Sake

I was astonished at the reaction to the Minister of Finance’s leaked letter to the International Monetary Fund. At home, there was widespread comment on the frank disclosure of policy failures and missteps and of the critical nature of the situation we face and our need for some support.

Source: Doing the Right things for their Own Sake – The Zimbabwean

Eddie Cross

In Washington the response was equally rapid and harsh – a friend in the system there called me and said it was very concerning that there was absolutely no appetite for any sort of assistance to Zimbabwe, none.

If we did not know it before, we now know that we are on our own.

It’s largely our own fault. We have done virtually nothing about widespread and endemic corruption that is absorbing billions of dollars every year and has been going on for decades. If we stopped all the leakages, we would not need assistance, our critics say, and they are right. The scale of these leakages is stunning – Transparency International say US$100 billion since Independence in 1980, I was one of those who disclosed that US$23 billion or more had been extracted from the alluvial diamond discovery at Marange and simply vanished.

We know that our oil industry is fraught with corrupt activity. The last time international crude oil prices collapsed in 2014, prices plunged from US$137 per barrel to US$35 – yet prices in Zimbabwe did not fall, politicians and cartels skimming off the increased margin and banking it abroad. Again billions were involved. During the GNU this corruption was dealt with by the change of control in the Ministry and the appointment of an honest and capable Minister of Energy. What he did was not rocket science and it was achieved in days and without any State expenditure. Despite all our undertakings and the disclosure of widespread corruption in all parts of the oil industry – no one has been prosecuted. Do we know what is going on, yes! Do we do anything about it, no!

Then we have the gold industry here – I have credible information that our national gold trading is now over 100 tonnes per annum. This is over US$5 billion in gross revenues. Just do the maths – we have 600 formal sector mines, 500 000 small scale informal miners. If each formal mine produces 4 kilograms a month, their production is 30 tonnes a year, if the informal miners just produce 2 grams each per week, their production is over 50 tonnes a year. I understand that a significant amount of gold is also traded here and that this emanates from other Central African States. To support this view, South African gold refineries say they handle about 85 tonnes of gold a year from Zimbabwean sources. The Reserve Bank handled 30 tonnes in 2018 and 27,6 tonnes in 2019.

If we traded our gold production properly – paying our gold producers the full price in hard currency, not only would we stop all smuggling activity in its tracks, we would increase the incomes of the millions of our people who live off the proceeds and give a real boost to the formal sector. The Chamber of Mines says that Zimbabwe has sites for 200 “mega mines” which would be able to increase our formal sector mining output to over 100 tonnes a year. That would put Zimbabwe into the top bracket of gold producers along with Australia, Russia and South Africa. It would unlock US$5 billion in new investment.

Instead, we spend nearly US$3 billion of our own existing export proceeds and Diaspora remittances each year on buying gold – two-thirds of which are then smuggled out of the country and does not come back in any form. There are any number of organisations and companies who would buy every ounce of gold produced and traded in Zimbabwe, for 100 per cent of the international price, tomorrow. Why don’t we do it? Answer; corruption and self-interest. Do the authorities know what is going on and who is doing it, yes! Are they doing anything about it, no!!

If you add up just these three items – the sums run to many billions of dollars every year if we took effective action, and this is 100 per cent in our hands, we would not need any handouts from anyone. We could service our debts and get Zimbabwe on the road to becoming a middle-income state in a decade.

For political reasons we mounted an ill-considered land reform exercise in 2000 and nationalised 8 million hectares of farmland, displacing nearly 5000 farmers and their 250 000 workers and their families. Output from agriculture, which was half our exports, a quarter of our GDP and 60 per cent of industry and commerce, collapsed by 70 per cent. We have never recovered. It not only collapsed in the commercial sector but even more in the peasant sector because of the synergies between the two.

The result, rural and urban poverty has escalated, hunger stalks the land and half our population needs food aid. We import everything and as a result, whereas prior to 2000 Zimbabweans generally paid for their needs at export parity prices, we now pay import parity and this has cost us our competitive edge in economic terms. But it is worse than that, we have taught our people that it is OK to violate property rights, it is OK to take what does not belong to you and for which you have not worked. We have shown our people that you can beat and even kill a farmer if he resists and nothing will happen to you. The failure to maintain law and order and to protect private property is costing us foreign investment and even worse, investment by our own people because there is no security.

To rectify matters we have to compensate the people who used to own the land and all the improvements. We owe them many billions of dollars. It’s not just a moral obligation, it’s what is written down in international law, it is part of the UN Charter. Even our own Judges in the SADC Tribunal agreed, we must pay compensation. We know that, how many times have we assured the international community that we would. What have we done? Nothing. In the meantime, these people, the majority of whom are Zimbabweans, are living destitute and dying of old age, it is a gross violation of their legal and moral rights. We cannot restore our agriculture or move into the future until this is addressed and properly. If we fail, the farmers and their descendants will have us in court for another 20 years.

For the community of nations, we have not even managed our affairs in accordance with our own Constitution. We agreed to draft our own constitution after 33 years under a colonial arrangement imposed on us in 1980. We consulted our people and in the end they overwhelmingly agreed that this is how they wanted to be governed. Yet I doubt if 10 per cent of the terms of that far reaching supreme law, has been implemented properly. We know that over 400 laws will have to be amended. We know that if this is carried out many of the objectionable features of our legal and political system will be addressed. But again, we have made promises and then done very little and half-heartedly.

A leading member of the Zanla Command during the Liberation war once said to me that the fight was for the freedom of the people of Zimbabwe. In 2018, a group of elderly men talking around a fire in the rural areas described to me that they lived in a detention camp, similar to how the Nationalists were held for 10 years by the Smith Government, except that then they got three decent meals a day. In the Book of Isaiah in the Bible he said to the leadership of Israel, “you pretend to be religious, but you oppress the poor and place a yoke on the necks of your people”. Give us our freedom as you promised, break the yoke of corruption that is dragging us down, and you will see a new dawn break over Zimbabwe, and it will not come from Washington, London or Beijing.