MUTARE– Communities in the resource rich Manicaland province have added their voice to a growing chorus of concerned anticorruption and civil groups over rampant gold smuggling syndicates linked to political elites.
The organisations include Zivai Community Empowerment Trust (ZICET), Penhalonga Youth Development Trust (PYDT), Amalgamated Chiadzwa Development Communities Trust (ACDCT) Chimanimani Development Trust (CDT), Penhalonga Residents and Ratepayers Trust (PRRT) and the Centre for Research and Development (CRD).
Green Governance Zimbabwe Trust (GGZT) initially appeared to be a lone voice, after it condemned increased bullion smuggling, calling for government to institute a Commission of Inquiry to stop this form of illicit financial flow.
GGZT also urged government to join the Extractive Industry Transparency Initiative (EITI) which requires that its member states publish company beneficial ownership of its oil, gas and mining companies.
EITI countries are committing to adopting public registers, to bring greater transparency and accountability in the murky but lucrative natural resources sector, a source of illicit financial flows and dealings.
Global Financial Integrity (GFI), defines Illicit financial flows (IFFs) typically used to conceal illegal activities and evade taxes as “illegal movements of money or capital … that is illegally earned, transferred or spent across international borders…” including through smuggling and trafficking of minerals.
GFI estimates that the developing world lost around US$7.85 trillion in illicit outflows between 2004 and 2013, thorough tax evasion and avoidance, mostly in the form of trade mis-invoicing, which accounts for 60 to 65 per cent.
GFI states that this capital ends up in offshore financial centres (45%) while the rest (55%) goes to developed countries, at the expense of national development of resource rich countries whose macroeconomic conditions allow for this capital flight.
“Research highlighted that the presence of challenging macro-economic conditions in developing countries, especially from Africa, including indebtedness, high inflation, low growth rate and public deficits, significantly contribute to facilitating illicit financial flight.
“Poor governance and lack of state capacity, is a factor which has several dimensions as it is linked to anti-corruption compliance, policing and preventing the prosperity of underground and illicit economies, maintaining financial transparency among political elites and corporations, and, most importantly, enforcing taxation,” says GFI.
In response to the reported cases of gold smuggling, community based organisations released joint communique alleging that the targeted US$12 billion mining economy would remain a pipe dream if leakages are not addressed.
Communities say they are feeling the pinch of IFFs as they hamper socio-economic development calling on government to promote and demonstrate commitment to transparency and accountability in the entire mining sector.
“We call upon the government to develop a Gold Trade Policy that provides policy direction on marketing of gold including creating scope for responsible gold production and sourcing systems. Fidelity Printers and Refiners should review their gold prices in line with the London Bullion Market Association (LBMA) for competitive pricing,” said ZICET in a statement.
Youths operating under the Penhalonga Youth Development Trust (PYDT) had more forceful demands for government to ‘immediately cancel mining contracts for middleman investors’ in gold mining.
PYDT said because of high levels of unemployment over 90%, and high informality youths in Zimbabwe desperate for livelihoods are being subcontracted by middlemen investors’ gold without any regards to human safety.
“These investors are the major players behind gold smuggling and the flourishing black market in Zimbabwe. They are abusing their political connectedness to engage youth in unregulated and high risk mining activities in our communities,” said PYDT.
Communities said the challenge of smuggling was not peculiar to the gold sector, but is also rampant in the diamond sector in Marange, said Amalgamated Chiadzwa Development Communities Trust (ACDCT).
“It is common practice in Chiadzwa that on a rotational basis state security operatives have been central in facilitating illegal diamond digging and smuggling activities ever since the government took over the diamond fields from African Consolidated Resources in 2006,” read a statement by ACDCT.
