News / Local
Zimbabwe govt warns Chinese firms over illicit deals
6 hrs ago | Views
The Office of the President and Cabinet (OPC) has issued a sharp and public rebuke to Chinese businesses operating in Zimbabwe, warning them to immediately halt illicit financial activities, environmental violations, and the flouting of local laws or risk serious consequences.
The warning, delivered by Tafadzwa Muguti, the Secretary for Presidential Affairs, signals a clear shift in tone from the previously accommodating posture Zimbabwe had adopted under its long-standing "Look East" policy, which welcomed Chinese investment as an alternative to strained Western relations. Muguti's remarks underscore rising government frustration amid mounting evidence of financial misconduct, labour abuses, environmental destruction, and cultural insensitivity by some Chinese firms operating in the country.
Speaking during the China-Zimbabwe Business Cooperation Roundtable held in Harare yesterday, Muguti did not mince his words as he accused some Chinese investors of operating outside the formal banking system, hoarding foreign currency, externalising undeclared earnings, and exploiting Zimbabwe's mineral resources without adding value.
"The majority of you business people are not banking [money]. You do not have bank accounts. You are keeping money under your mattress, under the floor, or in the roof. But in China, you don't do that," Muguti said. "If they all take US dollars and Zimbabwe Gold currency (ZiG) and keep them in their houses, it causes our economy to collapse. There will be no liquidity in the market. So starting from now, we are directing you to bank your money."
Muguti emphasised that all business earnings, whether in local or foreign currency, must be deposited into Zimbabwe's formal banking system and processed through the Reserve Bank of Zimbabwe (RBZ) for any outward remittances. He also raised concerns over Chinese nationals entering the country as tourists but conducting business illegally, calling for strict adherence to immigration and investment protocols.
"It's not difficult for Chinese nationals to get investment permits. Why are you coming illegally? Let's follow the protocols. No need to bribe anyone. No need to hide. Let's do things properly," he said.
Going forward, Muguti said all Chinese nationals applying for visas or permits would need a letter of acknowledgment from the Chinese ambassador to ensure government oversight on their activities within Zimbabwe.
The government also criticised the environmental harm caused by Chinese miners, particularly those operating in sacred areas.
"We are noticing that some Chinese companies are going and digging up our ancestors' graves to extract granite or gold. There are some of them picking up the bones, putting them aside and starting to dig. That's the greatest disrespect to any person, even in your culture," Muguti warned.
He urged Chinese nationals to integrate into Zimbabwean society instead of isolating themselves, saying such conduct breeds suspicion and resentment.
President Emmerson Mnangagwa's administration has set a deadline for all mineral exports to be value-added locally. Muguti reiterated the policy, particularly on lithium, stressing the need for local manufacturing of lithium batteries and downstream beneficiation.
"Zimbabwe wants to manufacture lithium batteries here. Let's work together and manufacture locally. From Zimbabwe, you can export to DRC, Zambia, Malawi, South Africa, Botswana, Namibia, Angola. That's what we agreed at the China-Africa Economic Forum," Muguti said.
In response, Steve Ke Zhao, CEO of the China-Zimbabwe Exchange Centre, admitted the government's frustrations were justified but noted that Chinese investors often face red tape and operational bottlenecks that push them to the fringes of legality.
"Unfortunately, at the moment, the Chinese companies are facing a lot of trouble. After investing huge amounts like US$5 million or US$10 million, they're facing challenges," Zhao said. "Some get Zimbabwe Investment and Development Agency (ZIDA) certificates, but can't get work permits. Machinery is sitting idle. They can't be installed. They can't operate. They end up doing something illegal, not because they want to, but because the system delays."
Zhao insisted that most Chinese investors were genuine and eager to contribute positively to Zimbabwe's economy, but lacked knowledge of local laws, regulations, and cultural norms, which he said the Exchange Centre is working to address through workshops and training.
The developments reflect growing tensions between Zimbabwe's government and its largest investor bloc as authorities seek to clamp down on corruption, illegal financial practices, and environmental violations that have marred relations in recent years.
The warning, delivered by Tafadzwa Muguti, the Secretary for Presidential Affairs, signals a clear shift in tone from the previously accommodating posture Zimbabwe had adopted under its long-standing "Look East" policy, which welcomed Chinese investment as an alternative to strained Western relations. Muguti's remarks underscore rising government frustration amid mounting evidence of financial misconduct, labour abuses, environmental destruction, and cultural insensitivity by some Chinese firms operating in the country.
Speaking during the China-Zimbabwe Business Cooperation Roundtable held in Harare yesterday, Muguti did not mince his words as he accused some Chinese investors of operating outside the formal banking system, hoarding foreign currency, externalising undeclared earnings, and exploiting Zimbabwe's mineral resources without adding value.
"The majority of you business people are not banking [money]. You do not have bank accounts. You are keeping money under your mattress, under the floor, or in the roof. But in China, you don't do that," Muguti said. "If they all take US dollars and Zimbabwe Gold currency (ZiG) and keep them in their houses, it causes our economy to collapse. There will be no liquidity in the market. So starting from now, we are directing you to bank your money."
Muguti emphasised that all business earnings, whether in local or foreign currency, must be deposited into Zimbabwe's formal banking system and processed through the Reserve Bank of Zimbabwe (RBZ) for any outward remittances. He also raised concerns over Chinese nationals entering the country as tourists but conducting business illegally, calling for strict adherence to immigration and investment protocols.
"It's not difficult for Chinese nationals to get investment permits. Why are you coming illegally? Let's follow the protocols. No need to bribe anyone. No need to hide. Let's do things properly," he said.
Going forward, Muguti said all Chinese nationals applying for visas or permits would need a letter of acknowledgment from the Chinese ambassador to ensure government oversight on their activities within Zimbabwe.
The government also criticised the environmental harm caused by Chinese miners, particularly those operating in sacred areas.
"We are noticing that some Chinese companies are going and digging up our ancestors' graves to extract granite or gold. There are some of them picking up the bones, putting them aside and starting to dig. That's the greatest disrespect to any person, even in your culture," Muguti warned.
He urged Chinese nationals to integrate into Zimbabwean society instead of isolating themselves, saying such conduct breeds suspicion and resentment.
President Emmerson Mnangagwa's administration has set a deadline for all mineral exports to be value-added locally. Muguti reiterated the policy, particularly on lithium, stressing the need for local manufacturing of lithium batteries and downstream beneficiation.
"Zimbabwe wants to manufacture lithium batteries here. Let's work together and manufacture locally. From Zimbabwe, you can export to DRC, Zambia, Malawi, South Africa, Botswana, Namibia, Angola. That's what we agreed at the China-Africa Economic Forum," Muguti said.
In response, Steve Ke Zhao, CEO of the China-Zimbabwe Exchange Centre, admitted the government's frustrations were justified but noted that Chinese investors often face red tape and operational bottlenecks that push them to the fringes of legality.
"Unfortunately, at the moment, the Chinese companies are facing a lot of trouble. After investing huge amounts like US$5 million or US$10 million, they're facing challenges," Zhao said. "Some get Zimbabwe Investment and Development Agency (ZIDA) certificates, but can't get work permits. Machinery is sitting idle. They can't be installed. They can't operate. They end up doing something illegal, not because they want to, but because the system delays."
Zhao insisted that most Chinese investors were genuine and eager to contribute positively to Zimbabwe's economy, but lacked knowledge of local laws, regulations, and cultural norms, which he said the Exchange Centre is working to address through workshops and training.
The developments reflect growing tensions between Zimbabwe's government and its largest investor bloc as authorities seek to clamp down on corruption, illegal financial practices, and environmental violations that have marred relations in recent years.
Source - Newsday
