ZIMBABWE CORRUPTION| Country lost more than $77 billion

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eddie-cross-1Bulawayo South Movement for Democratic Change legislator Eddie Cross said yesterday that Zimbabwe, which is currently operating on an annual budget of $4 billion, has lost more than $60 billion through corruption since independence but this does not include the amount lost from the Marange diamonds.

In addition, the country lost a further $17 billion from the Marange diamonds, he added, a figure that is some $2 billion more than President Robert Mugabe suggested.

Cross said, however, that at least US$1.4 billion of that loss to corruption could be recovered by Parliament if it took effective action.

“We are a nation which is struggling to pay its staff; we are a nation which is struggling to buy medicines for our hospitals; we are a nation which cannot put books on the tables in our schools; we are a nation which cannot finance BEAM and yet there are these very considerable sums of money which are being consumed by corrupt elements in our society in front of us,” he told Parliament in his contribution to Mugabe’s speech on the opening of the current session of Parliament.

“We know how it is being done, we know who is doing it and we know how much is involved.  I am going to ask the Budget and Finance Committee to make a tough stance at the next weeks Budget Seminar in Bulawayo and to demand for example, that we tackle these issues now with vigor, as a country and as a Parliament.”

Below is his contribution in full:

HON. CROSS:  Thank you Madam Speaker.  I appreciate the opportunity this afternoon.  I welcome the opportunity to debate the President’s speech to the opening of this Session of Parliament as an opportunity to raise a couple of issues of what I regard as national importance.  I want to deal this afternoon with two issues specifically.  The first is the issue of corruption in the State and the second is the rule of law.

Madam Speaker, a respectable group of economists have calculated that the total cost of corruption in Zimbabwe since we gained our independence, has been in excess of US$60 billion.  That is equivalent to US$4 500 for every living Zimbabwean, man woman and child.  It is equivalent to US$1.7 billion a year in corruption.  Now, there are many features to this corrupt activity and I will not bother going back historically in any kind of depth, but I do want to emphasise this afternoon that this excludes specifically the cost of Marange.

If we examine the Marange issue, Marange was discovered around the year 2000 and it was abandoned by De Beers who found the discovery in 2006 – [HON. MEMBERS:  Inaudible interjections.] –

THE TEMPORARY SPEAKER (HON. MARUMAHOKO):  Order, order.  Just take a seat Hon. Member.  Order Hon. Members.  Who is that Hon. Member over there near Hon. Guzah?  Who is that?  Hon. Members, if you feel you have a very important issue to discuss with your colleague, you just walk outside and go to the lobby and do your discussions there.  When you are here, lower your whispering please.

HON. ZINDI:  On a point of order, Mr. Speaker Sir.  I just want to bring to your attention that I had almost fallen down as a result of this arm rest on this bench.  So, I thought I should bring this – [HON. MEMBERS:  Inaudible interjections.] –

THE TEMPORARY SPEAKER:  Order please!  What is wrong with you?

HON. ZINDI:  I thought I should bring this to your attention because in the event of an Hon. Member falling and perhaps a serious injury occurring, Parliament can be sued.  So, if this can be rectified.

THE TEMPORARY SPEAKER:  Thank you Hon. Zindi.  Administration will look into that.  There are some repairs going on in Parliament at the moment in this Chamber.

HON. CROSS:  I was referring to the issue of Marange.  I have investigated Marange extensively, Mr. Speaker Sir, and it was discovered in 2000 and was abandoned by De Beers in 2006.  It was then handed over to Small Scale Miners in 2006 by the State and it was taken over by a number of companies in 2008 and they ran Marange for the next six years.

During this time, it is my estimate that US$17 billion worth of raw diamonds were produced at Marange.  The average production per annum was US$2.8 billion and I think it is widely recognised that, at this time, Marange was supplying 25% of global raw diamond demand.  Mr. Speaker, if you add US$17 billion to the US$60 billion, which is the estimate for corruption since 1980 and you get US$77 billion.  That is equivalent to five years of our GDP.  Five years of hard work by the country which has been completely consumed up by greedy individuals and companies.  Also, it should be noted that this was equivalent to another US$1200 per head.  In addition, I estimate that in 2016, the total cost of corruption in Zimbabwe will be equal to US$1.7 billion.

I will be raising this tomorrow in the Budget and Finance Committee meeting which is being held to consider the 2017 Budget, because in my view, at least US$1.4 billion of that loss to corruption could be recovered by this House if it took effective action.  This represents a do or die situation for the nation.

We are a nation which is struggling to pay its staff; we are a nation which is struggling to buy medicines for our hospitals; we are a nation which cannot put books on the tables in our schools; we are a nation which cannot finance BEAM and yet there are these very considerable sums of money which are being consumed by corrupt elements in our society in front of us.  We know how it is being done, we know who is doing it and we know how much is involved.  I am going to ask the Budget and Finance Committee to make a tough stance at the next weeks Budget Seminar in Bulawayo and to demand for example, that we tackle these issues now with vigor, as a country and as a Parliament.

In addition, Mr. Speaker Sir, I want to point out that if we, as Members of Parliament, completed the asset disclosure forms which should be made available to each Member of Parliament…

HON. D. SIBANDA:  On a point of order Mr. Speaker Sir.  We want the Hon. Member to be heard in silence.  There is a lot of noise coming from the right side of the House – [HON. MEMBERS:  Inaudible interjections.] – Mr. Speaker, we are here to represent people and to hear whatever is being said in this House.

THE TEMPORARY SPEAKER:  Order, I am surprised she is the Chief Whip of the Opposition, but she was making noise over there.  So, please desist from that – [HON. MEMBERS:  Inaudible interjections.] – Order, order please!  I mean everybody.  Let us hear the debate in silence.  I am not going to repeat that.  If I get anyone, do not blame me, I will send you out.

HON. CROSS:  Thank you Mr. Speaker Sir, I just want to point out that if we as Members of this House were to honestly disclose our assets and if ZIMRA conducted lifestyle audits on us, we would in fact discover many Members of this House who possess assets vastly in excess of what they are capable of financing from their own resources.

It is my view that the time is long gone when we should be declaring our assets in this House on a transparent basis. I would appeal to you as Speaker of the House of Assembly to insist in coming weeks that this exercise be undertaken as soon as possible. I think members who are living beyond their means must explain where the new wealth is coming from. They must be able to satisfactorily explain to the House that they have paid their taxes on that wealth. Otherwise, they must be condemned as being guilty of corruption along with all the others.

In addition to this issue on the question of corruption in Zimbabwe, I want to point out to the House that for some years, we have observed that the total customs duties and Taxes collected at our border posts on US$6bn worth of foreign trade amounts to a paltry US$384m, which is 5% of the trade. More than US$1.5bn worth of motor cars are imported annually. The import duty on those motor cars ranges from 60 – 100%. On motor cars alone the duty should be more than double the total amount collected at our border posts.

THE TEMPORARY SPEAKER: Order! Hon. Member next to Hon Guzah, please leave the House.

HON. CROSS: We have the spectre of the Commissioner of Taxes being found to possess a luxury motor vehicle worth more than US$170 000 which was declared at the border as a second hand Toyota car worth US$5000. Really, when are we going to get to grips with this situation? This is massive corruption on a large scale and the fact that we cannot finance our Government and this House properly is due to the fact that we are not taking action on these issues.

The other issue which concerns me is that the Minister of Finance and Economic Development declared to this House a couple of weeks ago that US$500m worth of duty free certificates were issued to Government agencies. The two principal agencies involved in this trade was the President’s Office and the military. It covers all sorts of things but it includes large amounts of fuel and even bulk consignments of alcohol. I have evidence which I have taken to ZIMRA and given to them that these goods are being sold on commercial markets in Zimbabwe but coming into the country duty free. Mr. Speaker Sir, this kind of thing – duty free of US$500m a year, that is a lot of money. This simply should not be allowed to happen.

We have the problem of the abuse of public funds. I sit on the Public Accounts Committee and there is not one Statutory Fund account that we have examined in the last 4 years which is being operated properly. Every single fund, we find the Permanent Secretary or the Chief Executive Officer has got his fingers in the till. The latest disclosure about ZIMDEF involving Ministers in this House is just a tip of the iceberg. I can add ZINARA – the chief executive officer of ZINARA was arrested the other day on a US$1.4m scam at ZINARA. He was immediately released by the Vice President, Hon. Mphoko and has not been subsequently charged.

THE TEMPORARY SPEAKER: Order! We need to be very careful with the facts we are talking here. If you are asked to substantiate that, you need to be very careful.

HON. CROSS: Yes, I can substantiate that. I look at the total value of the statutory funds, last year in the Bluebook they were declared at US$828m. That is a lot of money. It is 20% of the National Budget and none of that money goes through this House. None of that money is subject to budget. None of that money is allocated by this House. None of that money is subject to detailed scrutiny by this House. We have said to the Minister of Finance and Economic Development, it is time that these monies were consolidated into the Consolidated Revenue Fund where they can be properly accounted for because the Government’s accounting principles are working well.

For example, last week we interviewed a Permanent Secretary running a fund worth US$30m in the Ministry of Industry and Commerce. This fund is much bigger than the budget of the Ministry which is US$7m.

*HON. CHINOTIMBA: On a point of order. If I heard Hon. Cross clearly, he is saying Ministers were involved in the ZIMDEF issue. Is it all Ministers? If it is one or two Ministers, he should not blanket to say all Ministers were involved. He should give us real facts. I thank you.

THE TEMPORARY SPEAKER: Order! There is no point of order. You may continue Hon. Member.

HON. CROSS: These funds more than 100 of them are badly administered and managed. In the case of the fund involving the Weights and Measures Act, there were no accounting procedures in place even though this fund has been in existence for some years.

Then there is the mystery to me as to why the fuel prices are so high in Zimbabwe. Fuel prices in Zimbabwe are averaging about $1.16 a litre. International bulk wholesale prices for petrol and diesel are $0.32 a litre. I have examined the fuel situation very closely and I have the details to show to the House, if required. It shows to me that about $0.25 a litre is disappearing from the fuel account. I ask the question to this House, why do we import 22% of our imports from Singapore.  18% in 2014 and 22% in 2015. Twenty five cents a litre is disappearing and almost all those payments go through Singapore. One company in Zimbabwe is involved in nearly monopoly conditions here. The name of the company is Puma. This company controls the pipeline to Zimbabwe. This requires investigation and involves up to US$400m a year. One cent on the retail price is US$1.2m a month. This is a lot of money.

What I am saying is that I do not believe that adequate attention is being given to this issue of corruption by either the President, his subordinates or this House. I really think that it is time – I hope next week we will have time to debate this in detail and deal with the nitty-gritties as to how these things are happening and then take action as a House to ensure that these holes are blocked so that the revenues can come to the State; and we can run our country properly on the basis of the resources that we have generated inside Zimbabwe.  Thank you Mr. Speaker Sir.

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