Zim loses US$1,3bn in forex leaks

ABOUT US$1,3 billion is being siphoned out of the country every year and the proceeds are benefitting countries that ironically accuse Government of corruption.

This was revealed by the Zimbabwe Anti-Corruption Commission (ZACC) Deputy Chairperson, Commissioner Phineas Murapa, during the commission’s virtual interface with the Parliamentary Portfolio Committee on Justice, Legal and Parliamentary Affairs on Friday.

He was explaining Zimbabwe’s poor record on international corruption perception indexes, which he said are often led by countries benefitting from proceeds of corruption from Zimbabwe.

“This is why we come up with our own country perception and try to see that from a country perspective how corrupt are we,” he said.

“We are not saying there is no corruption, but we are saying if we are going to play the game fairly, those who receive our money, which we understand is upwards of US$1,3 billion every year, they receive that money and they see that as corruption, but when they take it into their coffers, it is not corruption.

“So corruption has to be looked at in both ways, for those who are receiving it and those who are sending it.”

Such acts as transfer pricing, under-invoicing, smuggling of gold and other minerals, have seen the country lose large amounts that could otherwise be injected into the economy.

The Reserve Bank of Zimbabwe has also begun to penalise firms and individuals that fail to account for foreign currency obtained from the Foreign Currency Auction market.

ZACC is currently trying to recover an estimated US$7 billion worth of assets siphoned from the country. The corruption-fighting body has already activated links with private companies and international agencies to recover the loot.

US$1,3 billion is a significant amount that dwarfs resources that were used in projects such as the

US$533 million expansion of Kariba South Hydro Power Station.

Also, US$153 million is being invested to expand Robert Gabriel Mugabe International Airport, while Beitbridge Border Post is being modernised at a cost of US$300 million.

All these critical projects could have potentially been financed from the siphoned resources.

Organisations such as Transparency International Zimbabwe (TIZ) claim the country could have lost over US$12 billion in the three decades to 2015 owing to illicit financial flows (IFFs).

Some IFFs are reportedly facilitated through commercial transactions such as transfer pricing.

It is believed that there are also high levels of IFFs in the mining sector.

According to the African High Level Panel on IFFs, corruption, however, only accounts for 5 percent, criminal activities 35 percent, while commercial transactions account for the 60 percent of the US$50 billion lost in the continent annually.

Economist and member of the Reserve Bank of Zimbabwe Monetary Policy Committee Mr Persistence Gwanyanya said externalisation is rampant in Zimbabwe, as the country is one of the few in the world that use the sought-after United States dollar as official currency.

“With the dollar regime that we have in our country, the temptation to siphon money is very high. Normally we are seen as fertile ground for such nefarious activities which has the effect of the country losing out,” said Mr Gwanyanya.

“I would not know about the (US$1, 3 billion) figure, but the environment itself presents an opportunity for externalisation and loss of the US dollar to the rest of the world,” Mr Gwanyanya said.

“When people sell gold or tobacco across the border outside normal channels, they are externalising because the money that was supposed to be realised would have assisted the economy. If people get money on the RBZ auction at the official rate and they do not use the money to purchase what they promise, if the money finds its way out of the country that is also externalisation. We have what are called exchange control regulations on our exports. They say all exports have to be paid for within 90 days, if it goes beyond without a clear explanation that is also seen as externalisation,” he explained.

Economist Professor Gift Mugano said externalisation was putting a huge strain on domestic resource mobilisation.

“This is enough evidence to show that as a country we have enough money for capital funding and to bust sanctions. If all these monies that are being externalised were to be mobilised, we will have enough to fund capital projects using local resources.

“But that is only possible if we deal with corruption decisively,” he said.

“ZACC has to be given all the powers from investigations, arrests to prosecutions because currently they are relying heavily on other agencies . . .

“We also need to strengthen other security arms such as the police . . . because they have the skills to intercept some of these transactions.”

Speaking during the same interface, ZACC Commissioner Gabriel Chaibva expressed concern over deep-rooted corruption at Harare City Council and other local authorities.

“We have a report which says Kelvin South Road in Graniteside has been repaired when there is not even a brick, and it’s contained in the internal audit of the Harare City Council,” he said.

“The most challenging issues on these local authorities is that almost everybody has become a criminal. Those in the environmental management committee commit their crimes there, those in the car parks they make their money there; no one is superintending over the other, he said.

“This is one of the biggest challenges that we are now fighting. We now have a cartel involving senior officers, and these senior officers are superintending over their juniors in making sure they get their share of the proceeds of crime.”

Another ZACC Commissioner, Ms Sukai Tongogara, said efforts to prosecute perpetrators were being undermined by lack of legal instruments to protect whistleblowers and witnesses.

“Abuse of office has the highest number of cases that we are handling,” she said.

“The witnesses usually are subordinates of those senior officials and to ask them to come and give evidence when we don’t have any legislation protecting them is difficult.

“For example, the case of Zinara (Zimbabwe National Road Administration) took time. After we called witnesses to come to ZACC, they were either transferred or fired through fake disciplinary charges done because these senior officials we arrested were not suspended from work, and they went back to work after they appeared in court.”

She called for officials who have cases pending before the courts to be suspended.

The commission is reportedly aware of corruption by some judges and prosecutors, who are now in its crosshairs.
(The Sunday Mail)

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