Fuel, mines and banks the Tagwirei method

TAGWIREI has built up his wealth in large part through a long-standing partnership with major commodities trader Trafigura, which has been trying to distance its operations from him as he faces international commercial and political sanctions. Yet Tagwirei retains his sway in Mnangagwa's government, as it is rocked by the coronavirus pandemic (AC Vol 61 No 5, Oil, guns and politics).

Zimbabwe, currently a pariah on international money markets, has been unable to secure funding from the International Monetary Fund, the World Bank and the African Development Bank due to arrears to the latter two.

Mnangagwa's plans to repay these debts and re-establish relations with international lenders have floundered, leaving Zimbabwe to rely largely on other lenders, mainly Afreximbank, owned by member states of the AfDB (AC Vol 61 No 25, The State's parallel economy).

Tagwirei has been an opaque source of funds to Zanu-PF politicians and projects, including the Command Agriculture programme, which has consumed some US$2 billion of State resources without credible accounting.

In 2019, Tagwirei was reported, via an entity under his direct control, to have purchased a 30% stake in CBZ Holdings, the country's biggest lender. Officials at the bank, conscious of the implications of such a stake for its US dollar business, insist that Tagwirei has no managerial or policy role in the bank nor have they linked any of the bank's shareholders to entities controlled by him.

Despite the country's macro-economic crisis, CBZ's financial position has strengthened in recent months. Bloomberg News reports that CBZ was in talks with the RBZ to buy several smaller lenders in a consolidation drive to create fewer, stronger institutions.

Late last year, a company linked to Tagwirei was reported to have acquired a 37,79% stake in banking group ZB Financial Holdings, from compulsory pension fund the National Social Security Authority.

The shares are now held through Datvest, a unit of CBZ. Former Finance minister Tendai Biti, who is chair of Parliament's Public Accounts Committee, described it as "a bank heist". "Now [the] target is First Mutual Holdings," he said, referring to reports that Tagwirei plans to acquire another listed financial services group.

The move on ZB Financial Holdings is also strategic in the scheme to acquire the refinery: ZB Bank is possibly the largest gold buying agent for Fidelity in the country.

Tagwirei's steady embrace of banking stakes and his moves on Zimbabwe's gold industry look closely connected.