Diamond sector murky: Mangudya

Reserve Bank of Zimbabwe (RBZ) governor John Mangudya says there should be transparency in the handling of diamonds as well as plugging the loopholes for the economy to move forward.

BY VICTORIA MTOMBA

Addressing delegates at the Economic Symposium held at a hotel in the capital yesterday, Mangudya said he measures the country’s outlook from the potential in the economy’s minerals — diamond, chrome, platinum among others. He said there was need for a balance between potential and the actual production.

“Yes, the people are poor, but the economy is not poor . . . we need to extract resources and put them on the table. We need accountability and transparency,” Mangudya said.

He said there is transparency in the tobacco sector, but there was no transparency in the diamond sector. He added that in other countries such as Botswana and Namibia contributions of the diamond sector were well-known.

“There is no fertiliser required for diamonds, we don’t know what has been exported. We need to improve on transparency and accountability, we need to improve on the usage of foreign currency, it’s terrible. We export the commodity and the currency,” he said.

John Mangudya

John Mangudya

Mangudya’s views tally with observations made by former Finance minister Tendai Biti during the era of the inclusive government when he complained that diamond revenue was not flowing through Treasury. Biti said then that a coterie of individuals were looting diamonds and were not ashamed to flaunt their ill-gotten wealth.

“Some of us (officials) who are benefitting are not afraid to flaunt our monies. We are buying all kinds of assets. I am a government minister and earning $800. How do I buy some of the assets that we are buying? People are now buying private jets because of our diamonds.”

Mangudya said discipline was the missing link in the economy and even if $10 billion was brought in the economy, it would not help if there was a zero retention rate.

“We are concerned by the way that this economy is utilising financial resources. It is unfortunately in the hands of a few people who are using them to the detriment of the whole economy. The loopholes need to be closed and the time is now. The year cannot change itself, but you have to change it yourself and make it a transformative year,” he said.

“We should have a fair share of diamond extraction of a stone. It’s easier than to grow maize, this economy is leaking. We love Lima, but if we have loopholes even if you bring money it will go out again. We need to close the arbitrage in the economy.”

In October, Zimbabwe’s plan to clear its $1,8 billion arrears to the International Monetary Fund, World Bank and African Development Bank was approved at a meeting in Lima, Peru. There are hopes that if Zimbabwe clears the arrears, it would access cheap funding from the three institutions.

Mangudya said the indigenisation plan was now a commercial framework and this was positive for business. Early this year, government unveiled a new indigenisation framework that compels companies to comply by the first quarter of this year.

“The elephant in the living room is the empowerment levy and it is still under discussions,” Mangudya said.

Youth Indigenisation and Economic Empowerment minister Patrick Zhuwao said there was nothing new on the indigenisation law. He said the business community was not reading the law but relying on other sources for interpretation.

“My appetite for the levy is at 10% when you read the framework you have to decide what you want to pay in terms of the levy. You can decide to pay 0% of that levy, 70% of that levy. I will not moderate my appetite for the levy,” he said.

9 Responses to Diamond sector murky: Mangudya

  1. Brian zuze January 22, 2016 at 6:43 am #

    He is allowing corruption so that he will remain in power.its so pathetic!!!!!!!!!

  2. Chinoz January 22, 2016 at 6:50 am #

    Ndiye wacho arikukurudzira corruption.he doznt take any action at all

  3. Wasu January 22, 2016 at 8:17 am #

    Mbada Chairman is ex-pilot for Presidential chopper – still very close to Zim1
    Marange resources was run by the Permanent secretary as the one man Board for 2 years until last december
    the Chinese came at our invitation and are partmership with shadow ZRP and ZNA entities. DMC is in partnership with ZANU linked entity…

    Heres your answer.

  4. Mukanya January 22, 2016 at 12:39 pm #

    Mangudya!! watch out! some of your statements, in particular this one on murky diamond deals, might lead you to join Itai Dzamara.

  5. Harishari January 22, 2016 at 3:13 pm #

    The sad thing is that perhaps we are now closing the stable door when the horse has already bolted. Authoritative sources have confirmed that alluvial diamond deposits have been exhausted. Maybe Mangudya is talking about kimberlite pipes which require extensive capital, of which our Chinese friends seem not prepared no sink. The Marange fiasco will be resolved by the following:
    a) A commission of enquiry, headed by a judge, and named after ChindorI Chininga to ascertain what really took place in Marange Diamond Fields (MDF). The Terms of Reference being; To investigate thoroughly the happenings at MDF from 2005 – to present and provide recommendations for the course of action. Whilst we await the recommendations it is natural that we expect the following in the report:
    1) That the architects of the looting of diamonds be indicted for crimes of treason.
    2) That the lessening the charges of treason be on the condition that the looters repatriate the funds deposited offshore to Zimbabwe, preferably to RBZ.
    3) That the assets acquired from ill-gotten wealth from diamond looting be repossessed and auctioned on a public auction with the proceeds deposited with RBZ, as banker of government.
    4) That all victims of the MDF massacres be accounted for and the circumstances of their demise. Government to see to it that decent burials are performed.
    5) That the victims’ surviving spouses, children and other relatives be compensated.
    6) That the displaced Marange community be compensated adequately.
    7) That all the current dubious mining companies cease their operations and that new mining licenses be awarded in a public auction, under the auspices of Parliament of Zimbabwe and Auditor General’s Office.

  6. Mbareboy January 22, 2016 at 10:39 pm #

    Lack of accountability is by design from the top. For as long as we have this Zanu PF leadership running the country. Forget it. RG wants to remain murky, period!

  7. Wilbert January 23, 2016 at 7:38 am #

    If wishes were horses we would all ride! Mangudya says 2016 will be a transformative year but does give an action plan outlining how to achieve this objective. Instead of whaffling Mangudya should tell us how corruption rooted at the highest level in govt will be eradicated. He should tell us what measures will be taken for diamond revenue to flow into Treasury. Action speaks louder than words!

  8. William January 23, 2016 at 9:42 am #

    The Governor’s observations are correct but extremely worrying. If Zimbabwe’s capital retention rate is zero then why are we taking measures with a view to accessing cheaper funds from IFIs when we know the new loans will be looted? What is being done and by who to stop the leakages? Before accessing new money Zimbabwe must put mechanisms in place to block the loopholes and the leakages. With a “zero retention rate” the new loans will leak. Lets hope IMF,IBRD , AfDB and other creditors have taken note of these revealing comments by the Governor of RBZ.

  9. Harishari January 23, 2016 at 3:28 pm #

    Set up a commission of enquiry and there is work already done by Parliament’s portfolio committee headed by the late Chindori Chininga. So we shall not start from zero. The recommendations of the enquiry should be tabled in Parliament and looters prosecuted and jailed for a very long time, if they fail to account and return the loot to Zimbabwe.

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