Biti says mining companies are looting Zimbabwe- country losing more than US$2 billion a year

Opposition legislator and former Minister of Finance Tendai Biti yesterday said Zimbabwe was losing more than US$2 billion a year through illicit financial flows and mining companies such as Zimplats and Unki were the major culprits. 

He told Parliament that Zimbabwe was losing more than $1 billion through gold smuggling, US$1 billion through tobacco smuggling and possibly US$2 billion on lithium.

“What we are losing in terms of illicit financial flows is actually more than what we are getting in terms of diaspora remittances US$1 billion, what we are getting in terms of foreign aid or overseas development assistance and what we are getting in terms of foreign investment which is around $200 million,” Biti said.  

“The major culprits are the mining houses – organisations such as the ZimPlats of this world, the Unkies of this world who are guilty of transfer pricing, thin capitalization, under invoicing and over invoicing.”

Full contribution:

HON. BITI:  Madam Speaker I thank you for allow me to rise on a point of national interest.  Madam Speaker I am concerned about the issue of illicit financial flows in Zimbabwe.  We are losing over US$2 billion annually in illicit financial flows.  What we are losing in terms of illicit financial flows is actually more than what we are getting in terms of diaspora remittances US$1 billion, what we are getting in terms of foreign aid or overseas development assistance and what we are getting in terms of foreign investment which is around $200 million.  The major culprits are the mining houses – organisations such as the ZimPlats of this world, the Unkies of this world who are guilty of transfer pricing, thin capitalization, under invoicing and over invoicing.

The mining sector is bleeding.  It is accounting for $6/$7 billion a year, yet billions are getting out of our country.  We have got 65 minerals but they are not benefiting our country.  Most of the mining model in Zimbabwe is extractive.  You come in, you loot and you get out leaving total destruction, unemployment and so forth.  Look at the status of Mhangura in Mashonaland West Province, it is a ghost town.  Go to Renco in Masvingo, the road there looks like a road that was built in 1492 but they have been getting gold from our country.  So I urge that the Minister of Finance and Minister of Industry and Commerce should come up with legislation that deals with illicit financial flows from this country.  We are losing a billion USD from tobacco smuggling, a billion USD from gold smuggling on its own and we are now losing possibly $2 billion on lithium alone.  Lithium yavakungo pwititika muZimbabwe.  As I am talking to you right now, the price of lithium is US$80 000 a tonne.  That is the new black gold and we have nothing to show for it.  Our people are suffering; 79% of our people are living in extreme poverty, 95% are unemployed, yet on paper we are a very rich country.  So I urge that the authorities come up with legislation on illicit financial flow and push the UN to come up with an international convention that deals with illicit financial flows.  I thank you.

(151 VIEWS)