Veteran economist and ED’s biographer Eddie Cross exposes rampant corruption in Zimbabwe

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By Eddie Cross

I HAVE been involved in the Zimbabwean economy for over 60 years and have seen just about everything during that period. The Federation, Unilateral Declaration of Independence, the liberation war, the transition to Zimbabwe, the total collapse in the years up to 2008, the military-assisted transition in 2017. In this period, we have made many mistakes, some deliberate, others just because we felt we had to and others forced on us.

However, right now there are some things that need our attention! Perhaps the first is corruption. Despite the formation of the Corruption Commission and many declarations, we still suffer from massive leakages of economic output and income.

When I was in Parliament in 2012, I raised the wholesale theft of diamonds from the newly discovered Marange diamond fields. These covered nearly 100 000 hectares and in that year, I estimated that we produced more carats than Botswana. Production from this alluvial deposit started in 2006 and continues today.

It was discovered by De Beers and then a small public company in London, was taken over illegally by the ministry of Mines and then exploited by six companies, all linked to powerful elements in the government, including the state president. My personal estimate is that Marange has produced nearly US$30 billion in raw diamonds since then. A third was probably absorbed in costs but the rest has disappeared.

Mr Mugabe famously asked where US$15 billion had gone since mining had started. He knew the answer to that as I think he personally took US$1.3 billion. Then the ongoing corruption in the fuel industry. This started soon after Independence with the formation of a state trading organisation for importing and distributing fuel.

This was dismantled in the Government of National Unity from 2009 to 2013 by an MDC minister but was reinstated soon after Zanu took back power in 2013.

It has become a culture just as the former head of the Kenyan Anti-Corruption Agency wrote “it was our time to eat”. This scourge also infects the private sector. There is a statement by the Dubai Gold Exchange that in 2023 they bought nearly 450 tonnes of gold from informal origins in Africa. That is US$32 billion dollars’ worth, a third from Zimbabwe. No wonder we are awash in US dollars in cash.

Right now, up to 700 000 small-scale informal miners are out there mining gold to feed their families, that is why we do not really have a food crisis in what has been a disastrous season. But much of this huge flow of cash never comes home.

However, there are pressing matters that demand our attention right now, starting with corruption. Despite the establishment of the Corruption Commission and numerous declarations, our economy continues to suffer from massive leaks in terms of economic output and income. Back in 2012, during my tenure in Parliament, I raised concerns about the wholesale theft of diamonds from the Marange diamond fields. These fields covered nearly 100,000 hectares and, at that time, we were estimated to have produced more carats than Botswana. The production from these alluvial deposits began in 2006 and continues to this day.

Unfortunately, the Marange diamond fields were discovered by De Beers and then illegally taken over by the Ministry of Mines, allowing six companies linked to powerful elements in the government, including the state president, to exploit them. My personal estimate is that Marange has generated nearly US$30 billion in raw diamonds since its discovery. However, a third of this revenue was most likely absorbed in costs, while the rest has mysteriously disappeared. Even former President Mugabe himself questioned the whereabouts of US$15 billion, suspecting that a significant portion had been misappropriated, with reports suggesting he personally took US$1.3 billion.

Another ongoing issue is corruption within the fuel industry. This problem emerged shortly after Independence, with the establishment of a state trading organization responsible for fuel importation and distribution. Although it was dismantled during the Government of National Unity from 2009 to 2013, when an MDC minister was in power, it was reinstated as soon as Zanu regained control in 2013. These corrupt practices reached their peak from 2014 to 2017 when world market prices for fuel plummeted, yet prices in Zimbabwe remained artificially high. Once again, the president was a major beneficiary during this period.

Since the Second Republic, the new government has made significant efforts to dismantle this network of corruption. However, there is still confusion surrounding the sudden emergence of numerous independent filling stations. While rumors suggest that these stations are involved in money laundering, I suspect that millions of liters of fuel are entering the country without paying the required taxes and levies, resulting in a substantial loss to the national treasury, potentially comparable to our annual health expenditure.

Furthermore, due to US sanctions disabling the Minerals Marketing Corporation of Zimbabwe, under-pricing of exports has become a widespread issue. The suspicious circumstances surrounding the murder of the corporation’s CEO and the head of the Zimbabwe Investment and Development Agency further highlight the prevalence of corruption within various sectors of the government.

In fact, corruption has permeated every facet of government activities. A recent incident involved a ministry clerk who falsified the importation of 3,000 vehicles duty-free using her senior’s signature, resulting in a loss of approximately US$20 million to the national treasury. She has since fled. In 2022, the state collected a mere US$484 million in customs duties, despite importing cars alone worth US$1.4 billion and over US$7 billion in total imports. The math clearly indicates that tax revenues should have been several times higher.

It is well-known that in certain ministries, one must pay for decisions or favors. I personally experienced this when a senior civil servant requested a bribe for signing a letter, to which I questioned why it was necessary, as it seemed to be part of their job. The response I received was telling: “Do you think we do this sort of thing for nothing?” I refused to pay the bribe and consequently did not receive the requested letter. This culture of corruption is reminiscent of what the former head of the Kenyan Anti-Corruption Agency described as “our time to eat.”

Regrettably, corruption also plagues the private sector. The Dubai Gold Exchange reported that in 2023, they purchased nearly 450 tonnes of gold from informal sources in Africa, with a third of that amount originating from Zimbabwe. This influx of cash in US dollars explains why we seem to be awash with cash despite challenging economic conditions. Currently, up to 700,000 small-scale informal miners are diligently mining gold to support their families, which is partially why we do not face a severe food crisis despite the disastrous season we have experienced. However, a significant portion of this cash flow never finds its way back into our economy.

These serious issues demand immediate attention and action. Corruption continues to cripple our nation, undermining economic growth and compromising the well-being of our citizens. It is high time we address these challenges head-on and work towards a more transparent, accountable, and prosperous Zimbabwe.

About the writer: Edward Graham Cross is a prominent Zimbabwean economist, President Emmerson Mnangagwa’s biographer and former opposition politician