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Examining Illicit Financial Flows in the Extractive and Wildlife Sectors.

Examining Illicit Financial Flows in the Extractive and Wildlife Sectors.

Zimbabwe is currently faced with various economic challenges such as skewed balance of payments and limited investor appetite. These challenges can still be averted given the resources found in Zimbabwe. Increased illicit financial flows act as a stumbling block towards economic recovery. Illicit financial flows (IFFs) can generally be defined as money that is illegally earned, transferred or utilised out of a country in contravention of its national or international laws. Illicit financial flows thrive in a corrupt environment were governance institutions and systems are not strong enough to guard against the abuse of resources.

 

Undoubtable, IFFs have negative impacts on rate at which a country develops economically and the rate at which its citizenry can enjoy basic socio-economic provisions such as health and education. More so, IFFs have the negative consequences of undermining state institutions mandated to detect, investigate and prosecute IFFs, undermining the mechanisms of accountability and enforcement and mechanisms designed to protect its citizenry. However, despite the negative effects of IFFs on the citizens and economy, it remains the least talked about form of corruption amongst the ordinary citizenry.

 

Zimbabwe could have been prejudiced a cumulative US$17 million, if the discrepancies in fish and fish products between Zimbabwe and Zambia are anything to go by. These discrepancies were recorded for 2011 to 2013. The wildlife sector has succumbed to poachers who have been targeting mostly rhino horns and elephant tasks. Most of the trophies are unaccounted for thus prejudicing revenue of the country. TI Z is of the view that to curb IFFs in the wildlife sector there is need to strengthen our porous borders to reduce the increased levels of smuggling.

 

In 2015, the Government of Zimbabwe established the Zimbabwe Consolidated Diamond Company with the aim of centralising all diamond mines thereby increasing revenue inflows to the Treasury. With the creation of the ZCDC, the Government also hoped to plug out smuggling and leakages of diamonds outside the country. Sadly, two years later, the policy has not yielded the desired effects. Ordinary Zimbabweans continue not to benefit from the diamonds and other minerals. A report produced in April 2017 by the Parliamentary Portfolio on Mines and Energy on the consolidation of the diamond mining companies raised eyebrows on the Illicit Financial Flows taking place within the extractives industry with US$ 15 billion of diamonds not accounted for.

 

The Parliamentary Portfolio on Mines and Energy on the consolidation of the diamond mining companies presented the following recommendation specifically on IFFs:

  • The Auditor General, the Anti- Corruption Commission and the Zimbabwe Republic Police investigate these illicit financial outflows before end of June 2017.

TI Z commends the parliamentary portfolio committee on this recommendation. However, as a long-term solution, TI Z is of the view that there is need for political will to enact policies, laws and administrative mechanisms to curb illicit financial flows as well as the need to equip the actors in the Anti-Corruption Value chain to investigate these cases and enhance community participation in monitoring illicit dealings.