By Cosmas Sunguro and Proud Nyakuni. Dated 16-07-2020
trucks loading diamond ore in Chiadzwa.
The road map towards the attainment of 12 Billion dollar economy as pronounced by government of Zimbabwe is under siege due to emerging impediments. The disclosure was made at a workshop hosted and facilitated by Zimbabwe Environmental Lawyers Association ( ZELA ). It was coordinated with assistance of Councilor Mujaji on 09 July 2020 at Gandidzanwa Primary school in Ward 3 of Mutare North constituency. All pointers showed that there are spikes on the road towards attainment of the USD$12 Billion economy. Barely a year it has been launched by the government amidst fanfare and aplomb.
The meeting was attended by Zimbabwe Diamonds and Allied Workers union ( ZIDAWU ), Mutare Rural District Council CEO Mr S Chinaka, ARDT, Ward 3 of Arda WARDCO, VIRDCO, SDC committees , village heads and Mr Zuze a nurse in charge at Arda Transau clinic. The meeting was on local development with regards to tax justice, resource mobilisation, responsible mining and community engagement and participation. From the deliberations it was revealed that mining companies are failing to pay mining levies and it is alleged the major diamond mining company is running bankrupt. This left one rethinking on the achievement of $12 Billion USD economy in the midst of all this chaos and maladministration of the natural resources in the face of the major diamond mining company Zimbabwe Consolidated Diamonds Company ( ZCDC ) allegedly going bankrupt.
Reception of the vision at first
When the vision was first spelt out by the Ministry of Mines official at a District Mining Indaba/LESSDD at Musangano Lodge on 11March, which was organised by ZELA, as ZIDAWU and other community members we had our reservations. Scribes and other independent writers have written articles expressing their reservations and making recommendations of what should be considered for the nation to realize the vision.Our reservations were based on poor resource governance of natural resources that has led the system to be foisted with corruption, illicit cash flows, lack of transparency and accountability and non-remittance of mining levies. The reveal made by Chief executive officer of Mutare Rural District Council Mr. S Chinaka at the Ward 3 meeting is slowly confirming our fears about the ability of the authorities to create a conducive environment and system to achieve the USD $12 Billion economy vision. With the allegations that Zimbabwe Consolidated Diamonds Company ( ZCDC ) is bankrupt and had recently borrowed a loan from a local bank ( name reserved) to finance the wage bill of running for four months overdue. Of late it also has been failing to run its day to day business operations with challenges in providing employees with decent meals (food), poor working conditions, accommodation services, salary arrears and health precautions in the face of the COVID-19 pandemic.
COVID -19 effect
The issue of covid-19 as a factor to this chaos falls away with reference to the article by ZIDAWU way before the effects of covid19 were in full force ( https://wp.me/p8EhiU-1Y Government response to covid 19 pandemic shows… Sparkling). Also the fact that there is no meaningful development that can be attributed to ZCDC since its inception takes away Covid -19 pandemic as a justification for its alleged bankruptcy. Issue of transparency and accountability has always been questionable since long, with some Board members of ZCDC resigning due to transparency issues. It is worth noting that it is not the first time, sometime early 2019 some board members resigned also. Adminstrative lapses remain a big challenge in the diamond mining sector.
Reasoning behind formation of ZCDC and its mandate
It is recalled that the formation of ZCDC was premised on the argument that there was no transparency in the diamond mining sector as stated by then Minister of Mines Honourable Walter Chidhakwa in 2015. This led to dissolution of seven companies that were mining in Chiadzwa forming ZCDC bringing it at the helm of diamond mining in Chiadzwa controlled by the state.The hope was that it will drive the diamond mining sector to desired levels and bring about reasonable socio-economic development expected from the mining of diamonds.
Fulfillment of the mandate
Coming into play they managed to secure machinery and equipment from Bellarus gearing for conglomerate mining having realised that alluvial mining is slowly depreciating. Moreso, one acknowledges lack of fuel having been hampering production as ZCDC workers stationed at Chimanimani were not working regularly from mid June. However, all this confirms the reservations expressed earlier. The performance levels of mining companies since 2009 has been questionable and ZCDC just proved that it is no exception.
Hence, in clamoring to achieve the USD $ 12 Billion economy by 2030 with upper middle class citizens, the reveal that mining companies ZCDC and Anjin had not been remitting mining levies is disheartening and takes away all the hope and the slightest confidence we had in the mining companies to carry our vision. The situation is also similar in gold mining sector where there is no good working rapport among government departments as each seems to be fighting in their corner . For example, the local authorities are failing to recoup levies from gold claim owners because they claim they are not mining yet they are on the field day in-day out. Ministry of Mines is not tightening screws or availing the information as to operations to the local authorities, stated CEO Chinaka. This has allowed gold mining companies to evade tax paying taking advantage of the discordance between these departments.
Gold sector in Manicaland and remission of levies
Moreso, the cases of illicit gold deals is reportedly to be on the increase in Manicaland and the nation at large as gold miners are opting to sell to Mozambique buyers receiving full payment in foreign currency hence no remission to Zimbabwe’s Fidelity Printers and Refiners. Bigger mining companies are also contributing to making it impossible to achieve the USD $ 12 Billion mining economy vision. For example, Redwing mine is allegedly now being operated by cartels headed by top political heavyweights enriching their own pockets at the expense of the national treasury. Worse still denying the workers their remuneration and allowances for more than 16 months further drawing economic class lines, and derailing an upper middle class citizen economy and USD 12 billion economy. Of late gold production has fallen and a recent article(story by Tinashe Kairiza in the Zimbabwe Independent of 10-16 July 2020, page 2) states that the nation has lost 60 percent of gold to smuggling cartels annually, which shows a recurring trend and with no effective action take against it.
Government’s role in derailing the vision
The government itself has not been holistic in its approach to natural mineral resources governance and its role in ensuring policy mechanisms are in place to help drive the vision. For long now it has been lenient to political heavyweights and government officials involved in ceding mining claims and aiding illicit cash and gold flows. Its shift in policy in paying mining taxes and luring of foreign direct investment has also not helped. For example, the recent ZIDA whose several provisions favor investors at the expense of the citizens and local development from natural resources.
Furthermore, the government is not willing to commit itself to policies, regional or International instruments that promote transparency and accountability as evidenced by its slow response to the Extractive Industry Transparency Initiative (EITI) and the African Mining vision of February 2009. Moreso, evidenced by the non disclosure of mining contracts negotiated by Minister of Mines and Minerals. Infact, it is shocking and heart breaking that they are proposing the ammendment of the Constitution to give the president autonomous powers to sign and negotiate contracts with foreign banks and institutions without the parliament oversight role. It is no secret that collateral security for any contract/loan negotiated with most African counties is natural minerals and there is no exception in this. The desire to have one person gambling with the resources that is suppose to benefit the nation is pure selfishness and capitalistic which shows that the government has no people’s interests at heart. Consequently, forcing one to opine that this vision like other previous visions is only in print and not in the hearts of our leaders hence no proper articulation or strategy in place for it to be achievable.
1. Government has to commit itself to transparency and accountability in natural resource governance to promote responsible mining index and curb corruption, illicit cashflows to clear the spikes on the road towards usd $ 12 Billion economy vision.
2. Need to relook into the Consolidation of mining companies in light that ZCDC has failed to bring the desired and intended results, and also reconsidering the Diamond Policy that establishes ZCDC as the major mining company yet small companies has to contract with it. With it failing and alleged to be bankrupt is it economically ideal for small companies to contract with it. The Diamond Policy has to be revised in this regard.
3. ZCDC to be more professional in its approach and refocus, restrategise and reengage in its business dealings to rise and bring the results intended as articulated in its establishment.
4. Civil society organisations to continue pushing for the promotion of issues of transparency and accountability, citizen engagement and participation, resource mobilisation and tax justice
5. Government departments to work together for effective resource mobilisation, tax justice and curb corruption to assist in clearing the spikes in the road towards the realization of the $ 12 Billion mining vision.
Zimbabwe like any other African countries is vested and endowed with minerals resources accounting for plus 45 confirmed ones. Section 3 and 13 of the constitution provides for revenue sharing of proceeds from natural resources. These can not remain on paper, our leadership is not blind to what is happening on the ground, it is fully aware. This article aims to persuade our leadership to relook at our vision that if achieved we have no doubt that it will take us to the upper middle class that is socio – economically developed and emancipated. We just need our government to be holistic in its approach and sincere to the interests of the people. The indicators are there and if action is not taken urgently in the mining sector against these mining companies, we can as well forget about the USD$12 billion vision because it will surely die a natural death and remain a printed paper with no results to show. We really urge the government and its agents in natural resource governance to remove the spikes in the road so we achieve the vision.
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