THE United States has included Zimbabwe among African countries whose gold is allegedly propping money laundering and helping sanctioned states survive.
This comes three months after Harare courted global attention with reports of unrestricted plunder by powerful “gold mafia”.
Washington’s drastic move is contained in a US State Department Africa Gold Advisory, issued on June 27, which declared Harare’s bullion as risky.
The report, which traced African bullion trade blackspots, exclusively picked Zimbabwe as a Southern Africa outlier where alleged cronyism has been allowed to flourish, with politically-connected individuals enjoying the latitude to spirit gold away for personal gain.
The State Department said it was worried that, with graphic details of theft and plunder of Zimbabwe’s gold, President Emmerson Mnangagwa’s government was not taking action.
“According to Home Affairs minister (Kazembe) Kazembe, the country was losing US$100 million monthly to gold smuggling,” the State Department said, as it queried how a person named in an alleged high-profile gold smuggling case had been allowed to preside over 1,5 million artisanal miners,” the State Department said.
“In October 2020, security officials at Harare International Airport arrested Henrietta Rushwaya, a relative of President Mnangagwa, when she attempted to smuggle approximately US$300 000 worth of gold to Dubai.
“Despite receiving wide publicity at the time, Rushwaya avoided conviction and was reinstated as the president of the Zimbabwe Miners Federation.
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“In May (2021), the South African Revenue Service arrested a Zimbabwean man trying to smuggle US$780 000 worth of gold into South Africa.
“As of November (2022), the investigation had not concluded. Open-source reporting in March and April 2023 documented the array of methods through which smuggling occurs from countries such as Zimbabwe and South Sudan, with a range of techniques, including large-scale corruption, used to move gold illicitly across borders,” the US noted.
One of the most publicised controversies around Zimbabwe’s gold was an explosive four-part documentary series released by Qatar-headquartered broadcaster, Al Jazeera, which sparked off a worldwide outcry in March.
The report claimed that Ubert Angel, an ambassador-at-large in Mnangagwa’s government, businessman Ewan Macmillan, Rushwaya, Kenyan tycoon Kamlesh Pattni and Dubai-based Zimbabwean magnate Simon Rudland, were at the heart of the sleaze estimated to be costing Zimbabwe US$1,5 billion annually.
Others named in the investigation included gold miner, Scott Sakupwanya and Rikki Doolan, Angel’s close associate.
All the individuals have denied benefiting illicitly from gold.
Last month, Sakupwanya filed his papers at the Nomination Court to contests for the Mabvuku–Tafara parliamentary seat under a Zanu PF ticket.
The State Department cautioned investors against trading in gold from the countries on the list. It is the latest US move to deal with a range of political and economic issues affecting the region, after recently hinting at removing South Africa from the Africa Growth Opportunities Act, a lucrative agricultural deal.
“The gold sector is critical to the economies and communities of many Sub-Saharan African countries,” the State Department said. “At the same time, there are numerous risks that are directly and indirectly connected to the mining, refining, trading and selling of gold.
“Without adequate due diligence and appropriate mitigating measures, an industry participant may inadvertently contribute to one or more of these risks, including conflict and terror financing, money laundering activities, sanctions evasion, human rights and labour rights abuses and environmental degradation.
“Building on the US strategy towards Sub-Saharan Africa, this advisory encourages US businesses to consider responsible investment in all aspects of the sector in Africa: mining, trading, refining, manufacturing and retail of key end products.”
The report came as Zimbabwe’s government has been scaling up its global offensive to woo investors under Mnangagwa’s “Zimbabwe is Open for Business” campaign.
Gold is one of the country’s largest exports.
Official data indicates that the country exported just about US$2 billion worth of the metal last year. This figure is expected to double to US$4 billion this year.
Still, resource campaigners say this will only be part of a bigger shipment, most of which will be spirited out of the country through back stage markets.
In the Al Jazeera documentary, Angel claimed that he had links to high offices, which give him power to walk through airport security with bags full of gold.
Reports say most of Zimbabwe’s gold has recently been illicitly exported to Dubai, where it continues to court controversy.
A paper titled Out of The Shadows: Business Relationships Between Industrial Gold Mines in Africa and Refineries published by SwissAid, a Switzerland-based non-governmental entity, confirmed that Zimbabwe’s gold had now flooded Dubai markets, shifting from traditional markets like South Africa.
“The gold produced by FGR (Fidelity Gold Refinery) was sent to, among others, Rand Refinery in South Africa, but this business relationship ended in 2020, according to information provided by the South African refinery to SwissAid,” SwissAid said, in the report published in March 2023.
“When asked about the reasons for changing partners, FGR cited the exploration of new markets and favourable trade agreements.
“First, it confirmed that all gold processed is currently exported to the United Arab Emirates, but refused to mention the names of its partners in that country. Secondly, it stated that some of the gold is sold to local jewellers.
“When asked by SwissAid to confirm its business relationships with industrial mines in Africa, Rand Refinery refused to do so unless SwissAid agree to sign a non-disclosure agreement (NDA).
“In its response, the refinery explained: ‘We are bound by confidentiality in our refining agreements accordingly we need a signed NDA to disclose this’,” SwissAid said.
It further stated that: “SwissAid refused to sign such an agreement, because this would defeat the main purpose of its study, which is to promote transparency in business relationships.
“The refinery did, however, make an exception in relation to Zimbabwe, stating that it had stopped importing gold from that country, in particular from FGR, in 2020.”