"Zimbabwe's financial system is risky" says EU - it is worse, it is rotten to the core N Garikai

“Zimbabwe is among 12 countries put under the spotlight by the European Union because it has deficiencies under its Anti-Money Laundering/ Combating the Financing of Terrorism (AML/CFT) measures,” reported Bulawayo 24.

“The EU wants a new system to tackle money laundering and financial crime and it is considering creating a new authority to police financial crime and monitor banks more strictly. According to a document authored by the commission obtained by NewsDay Business last week, Zimbabwe's financial system is risky.”

This is no surprise!

A few weeks ago, Zimbabwe’s Minister of Finance, Professor Mthuli Ncube, surprise everyone by reporting that country had $3 billion budgetary deficit! The Zimbabwe economy has been in total meltdown for decades and things have got significantly worse these last two years, inflation has soared to over 500%, unemployment has remained stubbornly high at 90% plus, the country has had up to 18 hours per day electricity power cuts, etc., etc.

 So, where the Dickens is the government revenue coming from let alone the conjured surplus!

The truth is Zimbabwe has always had two political systems with two parallel governments. There is the conventional government, more public face, with the executive, cabinet, parliament, Police, civil servant, etc. and then the more shadowy Joint Operations Command (JOC) junta comprising of the top brass in the Police, Army, CIO and Prison Services plus a few select others headed by Mnangagwa and Chiwenga. The junta is the one wielding the real political power.

The junta has had its own secure source of funds, it has creamed off as much cash as it wished from all the conventional government institutions and private sector. JOC has become the Mafia in Zimbabwe to who everyone has had to pay protection money. But by far the greatest source of money for the JOC and the country’s ruling elite is the institutionalised looting.

For example, cabinet has approved the granting of diamond mining concessions to syndicates knowing there will be no records kept of the quantity and quality of diamonds mined, to whom they are sold and for how much and most important of all, who the beneficiaries are. Since no one knows who the beneficiaries of this institutionalised looting are, they in turn do not pay any income tax on their loot.

The real big challenge for the looters has been how to sell their looted wealth and how to spend their ill-got money without raising too suspicion. Senior government leaders like the late Robert Mugabe had no problem using the state institutions including the Minister of Finance and the Banking institutions to help with the cleaning up of their loot.

The US$ 500 million to buy the Hong Kong apartment late Robert Mugabe bought for his daughter Bona when she lived there as a student, was all paid for by the Minister of Finance, for example. On paper, the money was used to pay embassy officials; in reality the money for that came out Mugabe’s account. Job done!

The lesser mortals like Joice Mujuru and her late husband struggled to get rid of their looted wealth. According to media reports, the Mujurus used their daughter and her husband in Spain to try to off load their looted diamonds. The daughter was forced to take back her loot because she failed to explain where the diamonds came from!

When Joice Mujuru and a number of other Zanu PF leaders were booted out of the party in 2014, they formed their own political party. When Mugabe feared the new party was a threat to his own iron grip on power he revealed that the country had been “swindled out of US$15 billion in diamond revenue alone”! He had documentary evidence of how the Mujurus had swindled the nation and was going to release it if she did not back off. Of course, she backed off!

Mnangagwa, just like Mugabe before him, is the Godfather of institutionalised corruption in Zimbabwe. There is a river of dirty money flowing into the country and since the regime controls every facet of Zimbabwean economic activity both the public and private sector are all working in cahoots to filter and clean it up.

Still since we all know the source of the dirty money is the looted Marange and Chiadzwa diamonds it does not need a Sherlock Holmes to uncover who the individual player are; the miners, the syndicate owners, the dealers, mules, etc., etc.

It has become near impossible to dismantle the Zanu PF dictatorship because the ruling elite have become filthy rich and powerful. Countries like China and Russia have not only turned a blind eye to the wholesale corruption but joined in the looting. They have helped to rig elections and other clandestine activities to keep the ruling elite stay in power.

Zimbabwe’s financial system is not just risky, it is rotten to the core. The country’s hopes of dismantling the Zanu PF dictatorship and building a healthy and functioning democratic system of government is dependent on dismantling the institutionalised corruption and the rotten financial system bankrolling the dictatorship.