Reserve Bank of Zimbabwe (RBZ) governor John Mangudya has urged the Zimbabwean government to improve its record of transparency and accountability in the diamond sector, according to a report in Newsday.
Speaking at an economic symposium in Harare recently, Mangudya said that Zimbabweans might be poor, but that the economy was not – and he sought to address the discrepancy.
He acknowledged that there was transparency in tobacco production in Zimbabwe, but that contributions to the economy from the diamond sector were more opaque, especially when compared to other southern African countries such as Botswana and Namibia.
“There is no fertiliser required for diamonds, we don’t know what has been exported. We need to improve on transparency and accountability, we need to improve on the usage of foreign currency, it’s terrible. We export the commodity and the currency,” he said.
Mangudya said that the key missing ingredient was discipline, and that the concentration of a large percentage of the wealth in the hands of a few was detrimental to the entire economy.
Analysts have also warned that the government’s decision to merge diamond mining companies into the Zimbabwe Consolidated Diamond Corporation (ZCDC) will flounder, unless the lack of transparency and accountability is addressed, according to a report on allafrica.com.
The report states that part of the issue is the presence of existing governmental figures that have done little or nothing to alleviate the murkiness of the diamond industry, and, who will also be present in the new corporation.
Alluvial diamonds from Chiadzwa, a vast diamond field, whose exploration was limited to certain preferred companies, including those linked to the Chinese military, were exhausted nearly two years ago. The consolidation, which according to Minister of Mines and Mining Development Walter Chidhakwa was supposed to improve transparency and accountability among the Chiadzwa companies, did not prevent vast amounts of money leaving the country.
The report also claims that the Zimbabwean government failed to invest in exploration for diamondiferous kimberlites when the alluvial diamonds had been exhausted. Rio Tinto, which used to own a majority of Murowa diamonds, sold its stake in the company, uneasy about what the merger into the ZCDC would mean.
John Robertson, an economic consultant, doubted whether the government has the financial wherewithal to sustain the consolidated diamond entity. He said that deep mining required more financial input and expertise than alluvial mining, claiming that outside investors would not find the economic climate attractive.