zwnews.com Chief Reporter- Simba Moyo
The Parliamentary Portfolio Committee on Mines and Energy has presented its findings on illicit diamond dealings in the Marange diamond fields, Hon. Dr. Daniel Shumba, presented the report on the consolidation of diamond mining companies in Zimbabwe exposing rampant corruption to the august house yesterday.
He said while the diamond industry plays an important role in the socio-economic development of several African countries, with 65% of the world’s diamonds, and annual value exceeding US$8, 5 billion in Africa, it was worrying that Zimbabwe has not benefitted as how other nations did.
He attributed that to a number of factors, chief among them being corruption.
“Zimbabwe’s diamond scenario has sadly been the opposite of what is happening in other Southern African countries.
After the discovery of huge diamond deposits in Marange in the mid-2000, the expectation was that diamond revenues would contribute significantly to Zimbabwe’s national development, but alas, it has been an equally huge disappointment,” he said.
He added that this sentiment was also expressed in the 2016 National Budget Statement by the Minister of Finance and Economic Development when he said, “this is a resource that seems to have not benefitted the generality of our people…“
The Committee on Mines and Energy had gone on a fact finding mission in the Marange with aim to, unpack causes of the poor performance of the diamond industry, analyse the contribution of diamonds to Treasury; and analyse the socio-economic impact of consolidation of the diamond mines.
“We noticed a lot of irregularities in terms of governance, currently, Zimbabwe Consolidated Diamond Company (ZCDC) has five board Members and the Permanent Secretary of Mines and Mining Development Professor Francis Gudyanga is the acting Chairman, we learnt that all except one of the board Members hail from Manicaland. This is in violation of Section 194 (j) of the Constitution of Zimbabwe.
“The Minister of Mines and Mining Development has continued to prevaricate on the issue of properly constituting the Board of Directors of ZCDC. Secondly, during the Committee’s visit to Chiadzwa, it was noted that almost 90% of the Management Executives of ZCDC were holding their positions in an acting capacity, with almost all of them not having diamond mining experience.
“To the contrary, the management Executives that were relieved of their duties, two months into the consolidation process, had a combined total of 127 years of experience in the diamond industry acquired from well renowned companies such as De Beers,” he said.
“The Committee received evidence from the former acting General Manager of Mining and Mineral Corporation of Zimbabwe (MMCZ) Mr. Richard Chingodza of illicit financial outflows from the extractive sector. Some of these illicit financial flows were aided or facilitated by government officials, in clear violation of government accounting procedures and regulations,” he added.
He added that the MMCZ lost approximately four 4 million America dollars. The money was transferred to Pedstock, an agricultural company, which further transmitted it to an unknown recipient who resides outside the country. The Director of Pedstock, Mr. Jackson Dror admitted before the Committee that he was being used as a conduit to transfer the money from MMCZ to the unnamed recipient.
The Former Acting General Manager of MMCZ was ordered to release this money by the Permanent Secretary of Mines and Mining Development, who is currently the acting board Chairperson of the parastatal. The invoice raised for the money was that it would be used for the Zimbabwe Republic Police (ZRP) Border Control and Minerals Unit operations in curbing leakages and smuggling of minerals.
The Permanent Secretary of Mines and Mining Development Professor F.P Gudyanga admitted to the Committee that the money was sent to the unknown recipient who is a foreigner and his identity could not be disclosed because it will jeopardise the State security operations aimed at curbing leakages and smuggling of minerals. Pedstock made cash payments to the unknown recipient because he refused to open a bank account. Pedstock received a commission for its services.
Furthermore, the Committee learnt that the Permanent Secretary of Mines and Mining Development Professor F.P Gudyanga had both personal and official links with Pedstock, where on several occasions he purchased or benefitted from agricultural equipment from or by the company.
Globally, it is estimated that 10 million people benefit either directly or indirectly from the diamond industry. In Southern Africa, countries such as Botswana, Namibia and South Africa are realising substantial socio-economic gains from the industry.