Zimbabwe must do more to stop mineral revenue leakages: Zimcodd

While good mineral resource governance seeks to ensure the exploitation of mineral resources for the benefit of the economy, improvement of the quality of life and poverty reduction (Diallo, 2015), Zimbabwe like most African states presents a divergent picture11 of what has been termed the natural resource curse phenomena.

This was said by the Zimbabwe Coalition on Debt and Development (Zimcodd) in its latest weekly update.

"Evidence suggests that Zimbabwe continues to bleed in mineral revenue while citizens are disenfranchised, exposed to violence and health risks, and are deprived of economic gains," said Zimcodd.

"According to a recent media article12, Zimbabwe continues to export its major minerals in a raw or semi-processed form, resulting in the country losing billions of dollars in potential revenue. ZIMSTAT data (December 2021) revealed that Zimbabwe's main exports were semi-manufactured gold (42%), nickel mattes including platinum group of minerals (PGMs) (18%), nickel ores and concentrates (13%), tobacco (10%), ferro-chromium (3%), platinum unwrought or in powder form (3%), skins and hides13 (1.7%)."

Zimcodd said such revenue leakages due to lack of value addition and beneficiation militates against the attainment of the US$12 billion mining vision. Corruption, state capture and illicit financial flows also play a major role in the proliferation of resources leakages.

"For Zimbabwe, mining is the epicentre of economic growth and development. As it is, mining sits at the top of revenue generation contributing approximately 70% of the country`s foreign earnings14. The minerals sector is undoubtedly the major foreign currency earner with mineral export receipts expected to grow by 8% in 2022 and contributing to over 16% of the country's Gross Domestic Product," Zimcodd said.

"The Zimbabwean President, Emmerson Mnangagwa launched a strategic roadmap in October 2019 which envisions a US$12 billion mining industry by 2023 with the intention to harness and leverage the potential of the mining sector to generate much-needed foreign currency. It is critical to note that attaining a US$12 billion mining industry will turn around Zimbabwe's economic fortunes and make Zimbabwe a competitive investment hub."

Zimcodd said mining has the opportunity to significantly reduce infrastructural and inequality gaps if natural resource proceeds are prudently managed.

"However, the contribution of mineral exploitation to the fiscus at both central and local government level remains a contentious issue as the country has not fully benefited from its mineral resources. Current levels of poverty, inequality, and vulnerability attest both to poor resource management through corruption, opaqueness around disclosure of mineral revenue and illicit financial flows as well as to the lack of investment in value addition and beneficiation," said Zimcodd.