SMUGGLED MONEY BLEEDS ZIM ECONOMY
By Lovemore Ranga Mataire
HARARE – ZIMBABWE’S private sector illegally smuggled out US$2 billion foreign currency in 2015 and the figure is likely to be double for last year, a former cabinet minister has revealed..
In a research paper made available to the media this week, Fay Chung, the sole cabinet minister of Chinese decent in government in the early independence period revealed that illegal expatriation of money has been rampant for many decades and has been response for the current economic morass.
“Illegal expatriation of funds has been rampant for many decades; very common in the pre-independence period and continuing to date. Expatriation became ‘legal’ under the ‘free funds’ policy of government after the adoption of multi-currency in 2009.
“This policy was very popular with those who had access to US dollars, but was tragically destructive of the economy as a whole,” Chung said.
Chung said Zimbabwe must start looking inwards and stop clamouring for outside donors and investors to commit funds to develop the country.
She said it was disturbing to note that both government and the private sector have invested very little into economic development and infrastructure.
The former minister said her research revealed that if the US$2 billion being expatriated by Zimbabweans were to be invested into the country, it would be four times more than the FDI accrued in 2015 or 2016.
She said according to the United Nations Conference on Trade and Development (UNCTAD) World Investment Report, FDI into Zimbabwe was US$545 million in 2015 and US$421 million in 2016.
“If the government were to devote 25 percent of its budget to infrastructure and economic development, this would amount to more than US$1 billion a year. Diaspora has contributed about US$1.8 billion a year to the country, but little of this is into development.
“Mainly it has been for the importation of food and cars and the construction of houses. If the Diaspora were prepared to invest 25 percent of their inputs into
development, this could amount to US$450 million a year, an equivalent to FDI in 2016.”
Chung said the figures prove that Zimbabwe has enough local money to spearhead its own development if mechanisms are put in place to curb corruption and prioritise developing essential critical sectors of the economy.
She urged the private sector, government and Zimbabweans in the Diaspora to concertedly harness human and financial resources to achieve set goals to achieve economic growth focusing on employment creation and doubling of food and agriculture production.
“The growth of the manufacturing industries is a must because most jobs will be created by agriculture and manufacturing. This means the state must assist in formal industries to update their technologies while at the same time enabling informal industries to grow commensurately.”
Chung said the envisaged goals of the government’s economic blueprint, ZIMASSET can only be realised if there was national consensus and unity of purpose among all sectors that include political parties, traditional leaders, government, armed forces, war veterans, private sector and trade union organisations.
She said the major shortcoming of ZIMASSET was that its sole implementer and FDI are the only funders.
“It is obviously impossible for the Government to achieve so much on its own: even raising the US$28 billion estimated for ZIMASSET would take several decades.
“As FDI now comes to about US$500 million a year, it would take about 56 years to obtain this amount if Zimbabwe relied solely on FDI. Also it should be noted that the present investment is mainly for tobacco and minerals, which have limited possibilities of creating work for all,” Chung said.
Another weakness of ZIMASSET is its lack of prioritisation, with all sectors and all programmes enjoying equal emphasis, yet some programmes need to precede others.
Finance Minister Patrick Chinamasa recently told a Chinese business delegation that the government was prepared to amend its laws to attract more foreign direct investment.
Attempts to contact the minister over the alleged siphoning of the US$2 billion by the private sector were futile, as he was said to be attending several meetings.