Zimbabwe is losing over US$2 billion in illicit financial flows, revealed Tendai Biti, a former Minister of Finance and Economic Development.
Biti urged the government of Zimbabwe to consider enacting laws to deal with illicit financial flows which he said are bleeding the country.
Speaking in the National Assembly, Biti said he was concerned about the issue of illicit financial flows in Zimbabwe. Open Parly quotes him as saying:
We are losing over US$2 billion annually in illicit financial flows.
What we are losing in terms of illicit financial flows is actually more than what we are getting in terms of diaspora remittances US$1 billion, what we are getting in terms of foreign aid or overseas development assistance and what we are getting in terms of foreign investment which is around $200 million.
The major culprits are the mining houses – organisations such as the ZimPlats of this world, the Unkies of this world who are guilty of transfer pricing, thin capitalization, under-invoicing and over-invoicing.
It (mining sector) is accounting for $6/$7 billion a year, yet billions are getting out of our country. We have got 65 minerals, but they are not benefiting our country. Most of the mining model in Zimbabwe is extractive. You come in, you loot and you get out leaving total destruction, unemployment and so forth.
Look at the status of Mhangura in Mashonaland West Province, it is a ghost town. Go to Renco in Masvingo, the road there looks like a road that was built in 1492 but they have been getting gold from our country.
So I urge that the Minister of Finance and Minister of Industry and Commerce should come up with legislation that deals with illicit financial flows from this country.
We are losing a billion USD from tobacco smuggling, a billion USD from gold smuggling on its own and we are now losing possibly $2 billion on lithium alone. Lithium yavakungo pwititika muZimbabwe.
As I am talking to you right now, the price of lithium is US$80 000 a tonne. That is the new black gold, and we have nothing to show for it. Our people are suffering; 79% of our people are living in extreme poverty, 95% are unemployed, yet on paper, we are a very rich country.
His remarks come as Al Jazeera is set to release a documentary -The Gold Mafia: Laundry Service – on Thursday 23 March 2023 which is allegedly an expose on illicit activities happening in Zimbabwe’s mining sector.
Illicit financial flows are said to be happening in the mining and agriculture sectors which are the key pillars of the economy.
Former President, the late Robert Mugabe at one time claimed that the country had lost about US$15 billion due to illicit deals in the diamond mining sector.
Small Miners Federation president Henrietta Rushwaya was caught at the airport trying to smuggle about 6kgs of purified gold. There have been several others too who have been caught.
Meanwhile, Parliament recently concluded consultations on the Mines and Minerals Bill which is before Parliament and will be getting into Second Reading soon. The Bill is anticipated to bring order in the mining sector, as well as try to plug loopholes for illicit financial flows. – (Pindula)