By Kudzai Chimhangwa.
Harare, ZIMBABWE.(News of The South) – The extractive sector remains an enclave that is largely detached from the economy and is plagued by illicit financial flows, which have contributed to the current liquidity crunch, industry experts have said.
According to the Reserve Bank of Zimbabwe, mineral exports increased by 27% to US$ 852 million from January to May this year alone.
The 2018 National Budget projects US$3, 7 billion in export earnings next year from mining, from US$3, 4 billion generated this year.
However these mines have returned very little in terms of revenue as evidenced by the current liquidity crisis in the banking sector which shows little foreign currency trickling into the country.
The Centre for Natural Resource Governance (CNRG) in partnership with SAPES Trust recently conducted a seminar which sought to interrogate the relationship between the mining sector and Zimbabwe’s ruling elites, including the military and to assess whether such a relationship makes it possible for the sector to contribute to the fiscus as it should.
Participants heard that the sector is riddled with unfair labour practices, violence, land dispossessions, water grabbing, displacements and catastrophic environmental degradation but government has taken no action to remedy the situation.
Mulungushi University of Zambia lecturer Shakespear Hamauswa argued that the control, extraction and utilisation of natural resources in Zimbabwe have always been embroiled with controversies and entrenched political struggles.
“State capture and rent-seeking in Zimbabwe have resulted in a weak bureaucracy which cannot implement regulations governing the extraction of mineral resources in the country. Legal instruments have been captured and manipulated to protect illegal interests,” said Hamauswa.
He questioned whose interests the mining industry is serving in Zimbabwe yet all mining communities are languishing in poverty.
CNRG Director Farai Maguwu said since the often violent fast track land reform program of the early 2000s which benefitted the military top brass, the military has muscled its way into the extractive sector as part of sharing the spoils of the 1970s war of liberation.
“The coup itself was a resource conflict as the military wants control of resources. The forced removal of the diamond firms from Marange had nothing to do with transparency and accountability but was an offshoot of ZANU PF power struggles as evidenced by the continued violence against the Marange community by Zimbabwe Consolidated Diamond Company (ZCDC) security,” he noted.
He said mining communities in Zimbabwe continue to suffer complex and severe forms of repression, adding that they seem to be different republics with their own set of laws and lifestyles. Maguwu gave the example of Marange Community which he described as an imprisoned community as visitors to the community must first obtain a pass from the Ministry of Home Affairs.
“After obtaining a normal vehicle licence which ever other motorist is required to have, villagers in Marange must obtain an additional permit from Home Affairs to be allowed to drive their vehicles in the community,” said Maguwu.
“Illicit financial flows are the hallmark of extractivism in Zimbabwe. If government reasserts its control over natural resources, it can generate over $40 billion annually,” he said.
He highlighted that as of 2014 Zimbabwe had more than 800 mines ranging from artisanal, small scale, medium to large scale world class mines. He pointed out that government was not interested in revenue collection and reducing illicit financial flows as evidenced by the absence of ZIMRA officials at the mines.
Dr Ibbo Mandaza of SAPES Trust chronicled the recent military take-over of the State and the dominant questions on the impacts of these developments on governance in general and the extractive sector in particular.
He said the military takeover will affect how the extractive sector is governed, adding that the military has had a growing involvement in the mining sector since 2008 when it moved to take over Marange diamond fields.
“Many questions on Marange diamonds remain unanswered. Although the seminar was called to discuss the capture of the Zimbabwean state by extractive industries, the unfolding political events can’t be ignored,” he said.
University of Zimbabwe lecturer Rudo Gaidzanwa said extractive industries have an iron grip on influential persons in government who are enjoying direct or indirect benefits from the mines.
She said that government institutions are now captured as they remain silent on human rights violations being perpetrated by the mining companies.
“The communities themselves have been captured as they now resemble prison conditions. The destruction of the people’s environs in the mining communities is reminiscent of what happened to the Tangwena people in the 50s. Like the Marange community today, these people lived in keeps, needing renewable passes and permits in order to live in their ancestral land,” she said.
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