Mortgaging of minerals for arms a misplaced priority

ANDREW KUNAMBURA

RECENT revelations that government is mortgaging the country’s mineral wealth to Russian companies in exchange for arms and fuel are a damning indictment on the authorities’ penchant for murky and opaque deals in which strategic national resources are abused by the rich and the ruling elite at the expense of the citizenry.

The Zimbabwe Independent, on January 10, reported that government would soon take delivery of fighter jets, among other armaments from Russia, in a deal that has seen Harare mortgaging some of its minerals, particularly chrome and platinum, to Moscow.

The deal is seen as part of Zimbabwe’s efforts to revamp its antiquated military hardware, although government critics have said it is an attempt by President Emmerson Mnangagwa to consolidate power by strengthening the state’s military might, given that he has not hesitated to make full use of the troops even at the slightest threat.

The total platinum concession being offered to the Kremlin is worth a staggering US$3 billion — an amount which beggars belief. It remains a mystery what sort of weaponry the country requires to warrant a deal that size.

Public policy expert Tawanda Zinyama rightly notes: “If this is real, then I think the Russians cannot believe their luck. This is a huge bargain on their part.”

Last week, the Independent further reported another barter trade deal in which Russia’s state-owned petroleum and gas company, Tatneft, is eyeing Zimbabwe’s diamonds in a murky fuel-for-gems deal, which desperate officials in Harare believe will ease the acute shortage of the commodity.

Both deals were negotiated during Mnangagwa’s visit to Moscow in January last year.Zimbabwe is in the throes of a deepening economic crisis characterised by severe fuel shortages compounded by an acute foreign currency crunch.

Then, there is one man with absolute control of the entire fuel sector, business tycoon Kuda Tagwirei. Tagwirei was in Russia with Mnangagwa when the deals were negotiated.

“It’s an undeniable fact that there are a few individuals and the ruling elite enjoying the fat of the land on behalf of everybody else and this is not what should be happening,” Zinyama, who is also a lecturer at the University of Zimbabwe, said.

Tagwirei has been repeatedly accused of holding the Zimbabwean government to ransom. The latest accusation this week came from the Zanu PF Youth League top brass — deputy secretary Lewis Matutu and national commissar for the wing, Godfrey Tsenengamu — who labelled him the most corrupt man in Zimbabwe.

What has fuelled doubts about the sincerity of government in negotiating these deals is its dark history when it comes to managing public goods.There are many examples from the recent past to fully illustrate this aspect.

In 2008, for instance, a massive shipment of Chinese small arms bound for Zimbabwe was stopped from docking in Durban, South Africa, just before the March general election.

The shipment was coming from state-owned Chinese arms manufacturer Norinco, which the previous year had reportedly been included in a joint venture agreement to start mining on platinum concessions seized from Anglo Platinum and Implats. Those concessions were seized as part of a loan agreement that saw US$100 million being handed to Zanu PF ahead of elections that year.

Norinco had invested in Zimbabwe either directly or through subsidiary units partnering the state-owned Zimbabwe Mining Development Corporation. Through its subsidiary companies, Wanbao and Zimbao, Norinco has held platinum claims in Chegutu, mineral rights for copper mining at a Sanyati mine and gold claims in Chimanimani.

Zimbabwe’s mineral resources were handed to China instead of cash in 2009, in order for the Ministry of Defence to purchase 12 K-8 jet-trainer aircraft worth US$240 million.

Only a fraction of the costs were covered by money from the Reserve Bank of Zimbabwe, but the payments were made, leading to the delivery of the aircraft and in 2011 it was also reported that the Chinese government had sent a shipment of 20 000 AK-47 assault rifles to the Zimbabwe Defence Forces.

The deals may help explain why Mnangagwa’s administration has frustrated Finance minister Mthuli Ncube’s efforts to help Zimbabwe join the Extractive Industry Transparency Initiative (Eiti), an international organisation whose chief mission is to promote transparency and accountability in the extractive sector.

“It doesn’t make sense at all. Instead, we have proven to be disastrous with accounting for resource rents,” charged Centre for Natural Resource Governance (CNRG) director Farai Maguwu.

“I would recommend minerals-for-infrastructure deals where foreign companies are given specific deliverables such as road, rail and dam construction in exchange for mining rights.

“Given the billions we have lost to corruption in the extractive sector, had we invested in minerals-for-infrastructure deals, Zimbabwe will be boasting of world-class road and rail infrastructure which is a precursor to industrial revolution. The mines-for-weapons deals demonstrate misplaced priorities.

“Whilst government has a duty to ensure our military is well equipped for the purpose of national security, I think the biggest security threat we are facing now is a failing economy which is in urgent need of capital injection. Government must consult citizens and stakeholders on strategies for an economic turnaround and setting of priorities.”

James Mupfumi of the Centre for Research and Development said government contracts evaded parliamentary oversight because of “kleptocracy”.
“The best opportunity for citizens to control the governance of their resources is to force government to implement a democratic devolution process that will give locals power over their resources,” Mupfumi said.

“The overarching indication in all this is that the current government has learnt nothing and forgotten nothing insofar as managing mineral resources is concerned and, for citizens, it is heads you lose, tails you lose.”

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