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.
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.”
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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.
