THE GOVERNMENT is set to move in and plug leakages in the mining sector where minerals have been spirited out of the country, Mines and Mining Development minister Walter Chidhakwa has said.
NDAMU SANDU CHIEF BUSINESS REPORTER
Chidhakwa said on Monday the government was working on a raft of measures to put a stop to the smuggling of minerals and the end was nigh for smugglers.
“We know where the problem is or was — the various cases of smuggling. We are addressing those one by one. We know there are those that do not react to a carrot, but to a stick,” he said.
“Whoever is doing it, the end is nigh. We are coming because this country is more important than you are (smuggler).”
Measures on smuggling come at a time the country is losing billions through leakages.
Preliminary results of a study conducted by the Zimbabwe Economic Policy Analysis Research Unit showed that the country could have lost about $2,7 billion in illicit financial out flows in mining during the period 2009 to 2012.
The report attributed the illicit financial out flows to gaps in the legislative framework governing the sector thereby creating opportunities for corruption.
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The results showed that there was information asymmetry between the government and investors in the mining sector contributing to tax avoidance through under-reporting of the quantity, quality and composition of minerals.
It said diamond trade restrictions had also undermined the transparency of diamond trading in Zimbabwe.
Chidhakwa, described by President Robert Mugabe as an “honest, hardworking young man” has been on a crusade to bring transparency in the mining sector.
He is advocating the consolidation of the Marange diamond producers amid indication that little was flowing to treasury coffers.
Former Finance minister Tendai Biti complained during the reign of the inclusive government that despite diamond producers increasing output, nothing was flowing to treasury coffers forcing him to adjust his national budgets.
Under a supervised economic reform programme by the International Monetary Fund, Zimbabwe undertook to amend the Mines and Minerals Act for the legislation to be effective in regulating the industry.
Chidhakwa said the ministry had gone through every clause of the Act and submitted its recommendations to the Attorney-General’s (AG) office for drafting.
He said the AG’s office is working on about 200 legislations that have to comply with the new Constitution.
The government was supposed to issue a Statutory Instrument establishing a formula for calculating dividends from entities in which the government is a shareholder.
It failed to do so owing to the absence of enabling legislation.
