Zanu PF must come clean on diamond proceeds

A POPULAR adage says diamonds are forever, but this may not be true for Zimbabwe’s gems. After a few years of behaving like a bull in a china shop and threatening to disrupt world diamond sales, it seems Zimbabwe was punching above its weight.

Zimbabwe’s diamonds were meant to be a game changer to announce the country’s arrival on the world stage with a bang, but they have been nothing more than a flash in the pan.

The anti-climax of Zimbabwe’s diamond industry came on Monday, when Mines and Mining Development minister Walter Chidakwa announced that licences for nine mining firms were not being renewed due to their failure to amalgamate into one conglomerate.

RESERVE-BANK-GOVERNOR-JOHN-MANGUDYA-(2) Reserve Bank of Zimbabwe governor John Mangudya

The government has been trying, with no success, to force the companies to merge into one corporation jointly owning half of the company while the remaining 50% would be owned by the State.

This position came about after authorities realised that the revenue they expected from diamond sales was not commensurate with what was going into State coffers.
Reserve Bank of Zimbabwe governor John Mangudya highlighted this frustration recently at the monetary policy presentation, pointing out that the country’s diamond sales were cloaked in secrecy and were not benefiting the country.

This vindicates the opposition and civil society organisations, who have always called for transparency in the sector, but have met an unyielding brick wall in the form of Zanu PF.

Former Finance minister Tendai Biti sounded like a broken record each time he spoke about diamond revenue, but Zanu PF pretended they knew nothing about what he was complaining about.

Barely four years later, the country’s diamond sector is all, but on its knees and this is only when the government acts.

If only Zanu PF had not been selfish and shortsighted a few years back, then reform of the diamond mining sector would have been top of the agenda.

A cursory glance will show that diamond revenues dropped from $336 million in 2014 to $180 million in 2015, with production declining from 4,77 million carats to 3,36 million during that period and while Chidakwa might be well meaning in his actions, the sad reality is that the horses have long bolted.

Due to lack of reform in the past half a decade, Zimbabwean diamonds became synonymous with smuggling and corruption, with reports that the country’s mining sector was financing a village in India.

Trade in the diamonds was murky and Zanu PF resisted all reform efforts and now the chickens are coming home to roost.

Chidakwa’s predecessor, Obert Mpofu, once boasted of a revenue stream of $2 billion annually and that the country would never have to beg again, but so far the opposite is true.

It is sad that the government views calls for reform as an opposition agenda rather than a legitimate exercise and is often averse to it. But had the government acted when civil society organisations raised the red flag, it would have been able to plug leakages and push up revenues without the drastic action of forcing the mining companies to either amalgamate or face closure.

When it comes to poor diamond revenue, Zanu PF made its bed and, sadly, it is the whole Zimbabwe that has to lie in it.

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