Saturday, 8 February 2014

The State of the Union: Ghanaian Investors and Zimbabwean Diamonds


Illegal miners dig for diamonds in Marange, Zimbabwe. The Marange deposit was estimated to be worth billions, but as most Zimbabweans remain mired in poverty, people are asking where all the money went and who benefited.

Title: Diamonds: Where has all the money gone?
 Millions missing in impoverished country
Dated: October 2013

Despite living in an impoverished country under sanctions, some in Zimbabwe seem awash in money, judging by the Mercedes-Benzes parked at a country club and the private woodland estate with artificial lake and mansion built by the nation's police chief.

The wealth enjoyed by just a few comes, at least in part, from the vast Marange diamond field that was exposed by an earthquake in 2006. The deposit in eastern Zimbabwe is the biggest diamond field found in Africa for a century, worth billions of dollars.

Now, as most Zimbabweans remain mired in poverty, with government coffers short on funds to build and maintain the nation's roads, clinics, utility services and schools, questions are being asked as to where all the money went and who benefited.

A recent bipartisan parliamentary investigation concluded that tens of millions of dollars in diamond earnings are missing from 2012 alone. The lawmakers who wrote the unprecedented and unusually candid report said their "worst fears were confirmed" by evidence of "underhand dealings" and diamond smuggling since 2009.

In a speech opening parliament on Sept. 17, Zimbabwean President Robert Mugabe took the rare step of accusing one top mining official and ruling party loyalist of accepting a $6-million bribe from Ghanaian investors to obtain diamond mining rights in Marange. Mugabe said Godwills Masimirembwa took the bribe when he was head of the state Zimbabwe Mining Development Corporation, which is in charge of mining concessions.

Masimirembwa quit that post to contest the July 31 national election as a candidate for Mugabe's ZANU-PF party but failed to win a seat in parliament. Masimirembwa denies any wrongdoing.

The parliamentary report and a human rights group say diamond mining has led to serious human rights abuses and that diamond concessions were awarded by government officials to enrich top members of the ZANUPF party, of the security forces and Chinese allies.

In declaring his innocence, Masimirembwa said the purported deal with the Ghanaian investors was discussed with national Police Chief Augustine Chihuri and then Mines Minister Obert Mpofu, a longtime business associate of Masimirembwa who is also one of the nation's wealthiest businessmen.

Chihuri and Mpofu have frequently insisted in the state media that their wealth comes from legitimate business empires to make up for poor salaries paid for full-time government duties.

Expected revenues from the Marange diamond fields have scarcely materialized.

Former Zimbabwe finance minister Tendai Biti says he was promised $600 million for economic and development projects from diamond revenues last year but only received $41 million. Nothing was paid into the national treasury up to the disputed July elections that the ZANUPF won, a vote result that caused the end of a coalition government with the MDC party that Biti belonged to, and the loss of his cabinet seat.

Some $2 billion in Zimbabwe's diamond revenues have been unaccounted for since 2008, according to Global Witness, which campaigns against natural resource-related conflict and corruption and associated environmental and human rights abuses.

Zimbabwe is the world's fourth-largest diamond miner, producing an estimated 17 million carats this year, according to the Kimberley Process, which is charged with ensuring that gems reaching world markets don't bear the taint of being "blood diamonds." Marange diamonds have been declared conflict free.
But controversy and secrecy have swirled around Marange since the earth opened up and exposed its riches.

The discovery lured thousands of impoverished Zimbabweans to dig in the alluvial deposit. In 2008, the Zimbabwean army sealed off the 60,000 hectare area to take control of the mining. At least 200 people died in a mass expulsion of people living in the closed area, Global Witness and other rights groups have alleged.

The identities of owners, directors and shareholders in diamond enterprises have never been officially disclosed, though the Zimbabwe Republic Police Trust, a business enterprise of the police force, is publicly listed as holding a 20 per cent stake in the Ghanaian diamond investment project.

The parliamentary panel's report said powerful officials, politicians and police and army commanders repeatedly tried to thwart the probe into diamond dealings.

The chairman of the 22-member panel, Edward Chindori-Chininga, a former Mugabe mines minister, died in a car crash just days after he signed the report in June.

Police said Chindori-Chininga's death was accidental and that his car had veered off the highway and slammed into trees.

Car wrecks or mysterious accidents have taken the lives of 12 senior politicians, all of whom were believed to have bucked official policy, in the past two decades, according to local press reports.

The parliamentary committee's report said several officials lied while giving evidence under subpoena and that diamond earnings are not only shielded from scrutiny but are not channelled into the state coffers. It said the Marange fields in particular are a no-go area, shrouded in secrecy and deception. The mining companies don't even buy food or services from surrounding communities, the report said.

Mugabe's government and ZANUPF have repeatedly denied diamond revenues have been siphoned off.

But Global Witness says otherwise. "Our research has exposed links between Zimbabwe's two largest diamond mining companies and the Zimbabwean military and other ZANU-PF insiders," said Emily Armistead, senior campaigner for Global Witness.

"It is not clear where the money is going," she added.

"It appears there is a mixture of corruption enriching specific individuals and some funds going to security operations. Our concern is that it could be used to fund repression and human rights abuses."

Paulina says: It really doesn't matter which African country you live in or come from, ---African politics is the same everywhere, -----it stinks......

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