Zimbabwe not likely to benefit from its vast mineral resources because of patronage politics

Henrietta Rushwaya, the president of the Zimbabwe Miners’ Federation (ZMF) (an interest organization representing miners from artisanal, small-scale and medium-scale projects) was arrested in October 2022 on a smuggling charge. While flying to Dubai, Rushwaya was allegedly carrying 6 kilograms of gold in her handbag. She says she was transporting the gold for a legal gold buyer, but her claims remain unsubstantiated. 

[National Prosecuting Authority (NPA) top official Tawanda Zvekare said this week Zimbabwe’s prosecuting arm of the judiciary does not have enough evidence to secure a conviction against Rushwaya]

Outdated legislation, poor regulation and widespread corruption in gold mining reflect the problems that plague Zimbabwe’s entire mining industry. The 1961 Mines and Minerals Act mandates that all gold producers in Zimbabwe (whether artisanal, small-scale or industrial) must sell to the Reserve Bank of Zimbabwe via its subsidiary gold buyer, Fidelity Printers and Refiners (FPR). FPR often underpays and is late to pay gold producers, which has caused some of Zimbabwe’s largest gold producers to halt production at some or all of their mines. Several of these companies have also started legal proceedings against the FPR over revenue losses caused by receiving late payments and payments partially allocated in Zimbabwe dollars, which they allege are selective and based on patronage. In addition, FPR’s mismanagement incentivizes gold smuggling, as artisanal miners can receive higher prices for gold per ounce in neighboring countries. Despite extracting 63% of the country’s gold exports, artisanal miners in Zimbabwe also lack legislative protections, which then forces these smaller miners to rely on political connections as well.

An estimated $1.5 billion worth of gold leaves Zimbabwe illegally each year, often ending up in Dubai. Some gold dealers estimate that illegal exports are higher than official deliveries to FPR. 

Petty corruption permeates artisanal mining practices at industrial sites, as members of the police, army and private security firms often require bribes for entry into mining sites or access to nearby housing. Meanwhile, police, magistrates, prosecutors, clerks and court messengers frequently take bribes from artisanal miners operating illegally on industrial sites, which sometimes enable such miners to serve little-to-no jail time for their offenses.

Zimbabwe has a paper-based system for keeping records on who has mining rights in which areas, leaving ample room for error or fraud. In 2020, the country’s Ministry of Mines became embroiled in a ”double allocation” scandal after officials allegedly granted a second claim to an already allocated plot in exchange for bribes — thereby allowing a second party to mine the plot in violation of the original plot holder’s rights. 

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