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"In the Hotseat" with journalist Dumisani Muleya
Violet Gonda, SW Radio Africa
November 21, 2006

Journalist Violet Gonda speaks with Dumisani Muleya, the news editor of the Zimbabwe Independent newspaper, who has written several reports detailing the free-for-all looting at ZISCO, Zimbabwe’s steel manufacturing company. It’s a saga of corruption and bad management and everyone who is anyone has been named in a confidential report, that has not been made public.

Violet Gonda: On the programme Hot Seat today we took a look at the wholesale looting of Zimbabwe ’s steel making company ZISCO. At one stage, ZISCO was a major foreign currency earner that even oiled the Rhodesian economy, but, senior government officials are among the many who have plundered the company’s resources through dubious contracts and a string of payments allowances. This is an illustration of how the ruling elite are destroying Zimbabwe ’s assets along with the country. Our guest is Dumisani Muleya, the (news) editor of the Zimbabwe Independent newspaper who has written several reports detailing the free-for-all looting at ZISCO. I started by asking him to give us a background of the company.

Dumisani Muleya: Basically, it’s a company that is owned by the government. It’s owned 90% by the Government of Zimbabwe and it has about six other shareholders who hold the other 10%. It is not a parastatal, as it is commonly claimed in the newspapers and elsewhere. It’s certainly not a parastatal but it’s a public company that is owned by the Government. It’s incorporated as a Private Limited Company and ZISCO Steel has a number of subsidiary companies, both here in Zimbabwe and in the region. Locally it owns Lancashire Steel 100%, it also owns Buchwa Iron and Mining Company, it also owns some subsidiaries which basically produces and supplies some agricultural equipment. And then, in the region, it has some two subsidiaries in Botswana ; it has two in South Africa , it has two in Zambia . And locally, I just forgot to mention as well, that it also controls several distribution centres; the Harare Distribution Centre, there’s Bulawayo Distribution Centre, there’s Kwekwe Distribution Centre and Bindura Distribution Centre. So, from that, you can see that it’s a very vast company, in fact, it’s the largest publicly owned company in Zimbabwe and it’s a major exporter of steel products and other related stuff and it’s also a major foreign currency earner as a result.

Violet: And Dumisani I understand that traditionally ZISCO Steel was also a major exporter of steel during the colonial era and was the major foreign currency earner oiling the Rhodesian economy and also the Rhodesian army. Now, how long have individuals been putting money into their own pockets?

Dumisani: Well ZISCO has always been a victim of extended periods of gross mismanagement and also some kind of looting by public officials who have been running it since 1980. It has never really been a profitable company in the sense that it has had to rely a lot on government subsidies in order to sustain its operations. So it has been bedevilled for a long, long time by a serious financial crisis due to poor capitalisation and mounting debts and as a result you find that at the moment it’s operating at below 30% capacity, so it’s a company that is almost a billboard of the incompetence and the corruption that characterised the ZANU PF regime since it came to power about 26 years ago. Coming further to what is happening now at the moment, those kind of issues that I’m talking about, that at the moment bedevil ZISCO, they have actually probably intensified; blown and grown into an extent or to a level where they are now almost threatening the company with collapse.

The Reserve Bank has in the past couple of years; two, three years ago, had to come up with almost a trillion Zimbabwean dollars in the old denominations to ensure that ZISCO continued operating. So at the moment, as you can see I mean from the stories that we are following, the company is in the middle of a crisis which is basically a corruption crisis and that corruption has created a situation in which the company is really hardly a viable entity. At the moment, from the levels that we were talking about during the Rhodesian era, where it was a major foreign currency earner, where it helped the economy, as you said, and indeed, where it sustained the Rhodesian war against the African nationalists. Now it’s really a pale shadow of that because of corruption, because of mismanagement and because of the extended periods of looting that have been going on there.

Violet: Right, and is this proof that public enterprises have been privatised to the detriment of the country?

Dumisani: Well, no. The private companies really, they have been really badly run. I mean the companies that are owned by the government; I mean both public entities which are Private Limited Companies and parastatals, they have been badly run. I mean you look at a whole range of them, look at the National Railways of Zimbabwe, ZESA, you can talk about ZUPCO, you can talk about ZISCO. All of them, they have one thing in common; they are victims of gross mismanagement and corruption. And, that is clearly a result of the culture; the corporate culture, that was created by the current government in which there were no sanctions for looting, there were no sanctions for corruption, there were no sanctions for general incompetence and inefficiency. Those things have now transformed themselves into an ugly corporate culture that is so entrenched that trying to deal with it now - as probably the authorities at the Zimbabwe Reserve Bank have discovered by pouring in money there - it would simply not help unless you have a complete overhaul of those structures.

Right now we are talking about ZISCO; an investigation was done by the National Economic Conduct Inspectorate which is just an elite government crime investigation unit run basically by the State Security and the Minister of Finance. So, they have found that the ZISCO finances were raided through questionable contracts and a string of payments, controversial as they were, covering services that were rendered to company, buying air fares for government officials, making hotel bookings for them, purchases of goods for the company that were done without proper records and which left a lot of loopholes for looting and a lot of deals which were shady which involved large amounts of foreign currency, and payments of Directors’ fees that were simply unaccountable or not transparent at all. Management fees, entertainment allowances, those kinds of things which basically were used as a vehicle for pillaging the company.

Violet: And you have written in your article that senior government officials have been implicated for having milked the company by doing businesses that had nothing to do with ZISCO. Now, who are the major characters involved?

Dumisani: Well, according to the report the major characters involved are a number of government officials including Vice President Joyce Mujuru. She has been named in the ZISCO scandal, in the report compiled by the National Economic Conduct Inspectorate. There are others whose names are also in the report like Vice President Joseph Msika is also named there. Although I should say that the report itself does say that the supporting documents as to whether Msika benefited or not from the ZISCO scandal, were not availed to them. They say they were told, when they asked for those documents to apply to the former MD of ZISCO; Group MD, that is Dr Gabriel Masanga, but they never got the documents. And then, well, the report goes on to mention a number of other officials, like Ministers; Samuel Mumbengegwi, Sithembiso Nyoni, Olivia Muchena, Stan Mudenge and Patrick Chinamasa - and a number of other senior company officials; that is ZISCO officials. And government officials in the Ministries, in particular in the Ministry of Industry and International Trade. So, there has been a lot of names that have come up in that report but some of the names that are repeatedly mentioned throughout the report, they include that of Masanga, they include that of the Marketing Executive of ZISCO, Mr Rodwell Makuni and other senior officials like in the Botswana subsidiary, the MD there at the Botswana Iron and Steel Company, a guy by the name of James Chininga, and his Business Manager there, Shelton Chivhere. So those are some of the key players in the report.

Violet: And you mention people like Joyce Mujuru, but what interests would people like Joyce Mujuru have in a company like ZISCO Steel?

Dumisani: Well, that is what the report was seeking to find out. But, what it does say is Mujuru was paid US$11,000 as allowances by ZISCO subsidiaries in Botswana , Ramotswa/Tswana Iron & Steel some time in 2004 and it does say that at the time in question Mujuru had nothing to do with ZISCO so whatever business she was doing there, it was not ZISCO business. The other point to note is that this foreign currency, basically which they were buying from individuals, from companies; in other words from outside the formal system, which is in the black market, it was acquired not properly and it was not accounted for and it does say that most of it was used to meet advances to visitors. So, there were all sorts of payments that were being made to government officials and to other people who were visiting ZISCO’s companies.

Violet: And reports that she received 30 000 litres of fuel?

Dumisani: Yes, it’s also in one of the reports. That is clearly stated, as we did report last week, that it clearly stated that she got, that is VP Mujuru, got some 30 000 litres of fuel from ZISCO. You see, that was what was happening at the time - that was at the height of the fuel crisis here in Zimbabwe , so ZISCO got into the importation of fuel in bulk. So it would distribute that fuel to some government officials on operations that have nothing to do with ZISCO. For instance, this 30 000 litres of fuel which were given to Mujuru in order to facilitate her celebrations after she was elected Vice President of the ruling party in 2004 and Vice President of the State the following year. It had nothing to do with ZISCO, absolutely nothing. That’s party political business which has nothing to do with ZISCO which is a public entity. So, that on it’s own is a major abuse of the resources of a public company which otherwise should not be used to either enrich or to do some work for some people whose work have nothing to do with the state business, like celebrating a party political election. It is not state business by any stretch of the imagination.

Violet: Now, Mugabe’s spokesperson, George Charamba has denied these claims that Ministers and also senior government officials have been caught up in this scandal. Now, do you think this is an effort by the government to hide this scandal?

Dumisani: Well, I’ve not seen Charamba’s denial of the ZISCO scandal. What I have seen is a column which he allegedly writes in the Herald which says that. But, be that as it may, there have been a great deal of attempts in the government circles to scramble; to bury the ZISCO report in order to hide the disclosures that are made in it. And, Ministers have been making a lot of contradictory statements. Basically, you can see that it was systematic confusion in order to obfuscate the issue. So there’s been an attempt in the government to make sure that this report is suppressed and its contents or details do not come up. But well, as you can see, they have come out and obviously there is very little at the moment to protect because the information is already public you know.

Violet: And I also understand that this systematic looting of public assets over a long period of time was not only done by Zimbabweans, but foreigners as well. You mentioned Botswana individuals but it also included British and Asian companies. Do you know anything about this? Do you have any information about this?

Dumisani: Ya, it does include some companies in South Africa which were dealing with ZISCO Steel. There’s Macsteel International, there’s another accountancy firm, a big firm there. There are some companies in Asia that were linked to ZISCO as well. So it extended beyond the borders of Zimbabwe and in the process payments were made to these companies for services that were allegedly supplied. In some cases you would then discover that the payments that were made were either controversial in the sense that they were not commensurate with the services rendered or indeed, there was overpricing in the payment for those services. And, in the process, there were also cases in which some payments were also questionable to the extent that you had a situation in which, for one transaction for example, US$500 000 could not be accounted for. When ZISCO bought the Botswana subsidiaries for US$3 million in 2001, a payment was made to Botswana for those companies, and that payment was to the tune of US$3,5 million. But, the company, its real cost was supposed to be 3 million, so, it meant that the US$500 000 was not accounted for and up to now it is not known who eventually was the beneficiary of that US$ 500 000.

So, I mean those are the kind of issues, but there are more; other transactions which involve millions of Rands and which involve thousands of US dollars, and of course millions, in some cases, of US dollars. Like, in the cases of Ramotswa/Tswana at the moment, there is a controversial development to it. There are some people, who, I understand, from my information, include some Zimbabwean politicians who are trying to buy those subsidiaries in Botswana by re-paying ZISCO the US$3 million that it paid to buy them back. But obviously, that attempt is driven by the fact that, or in fact, by the realisation that those two subsidiaries are making a lot of money. In Botswana there’s some good business. You know Botswana is a growing economy; there’s a lot of construction going on so some steel products are in huge demand there. So someone is trying to buy those in order to get those subsidiaries, in order to make a lot of money out of them. But, apparently they are buying them using, what basically at the end of the day, are government funds because they are using the money generated by those subsidiaries in order to buy those subsidiaries.

Violet: And, is it known if there are any British or American companies involved in this scandal?

Dumisani: Well really, ZISCO has stopped; it used to deal a lot with British companies but it has stopped dealing with British companies over some years for a number of reasons. Including the fact that it was failing now to service its contracts with the British due to lack of capacity. When it started operating well below capacity its major customers in Europe started seeing it really as an unreliable business and they cut some of the contracts. So they started looking around for new markets, mostly in the region and exploring some markets in Asia , and that has, as a result, seen a lot of its business shift from British or European companies to companies elsewhere.

Violet: And what about Mugabe, Robert Mugabe himself? Is it known if he is involved in this scandal?

Dumisani: The report does not say that he is involved. It does not even insinuate. So, because we are relying on the information that we have gathered, either from the report of independent of the report as well; he is certainly not involved.

Violet: You know the government and Mugabe in particular has said that inflation and corruption are the two biggest problems in Zimbabwe at present and will be the main priority that they will try to fight. Now, with what you have told us it seems the corruption at ZISCO was blatantly transparent, you know there was no effort at all to hide it. How then does the government justify its fight against corruption?

Dumisani: Ya, the government really has been put on the spotlight on this one. If indeed it is genuine that it wants to fight corruption, it wants to combat corruption which everybody knows has damaged the economy in a big way, it’s one of the factors that has obviously undermined the economy in a big way.

The government has to obviously do something about corruption. It’s not good enough really for the government just to make symbolic or rhetorical statements that it is fighting corruption. It has indeed to fight corruption, because announcing that you are fighting corruption whilst you are not doing anything on the ground, it does not help anybody. So the government if it does have the will or is interested in fighting corruption, it has to rise to the occasion now. Let it rise to the occasion and let’s see what they do about people who, according to their own report, were involved in the looting of ZISCO and now that they know them what are they going to do? That is a major test for them.

Violet: ZISCO falls under the Ministry of Trade and Industry. What do you make of Minister Obert Mpofu’s performance in parliament when he lied under oath regarding the ZISCO saga?

Dumisani: Well at the moment that issue is still in the courts. But, what has come out during the past couple of weeks is that the portfolio committee on Foreign Affairs, Industry and Trade is convinced that Minister Mpofu did not tell the truth or he lied under oath, as they are now pushing ahead trying to impeach him. I mean parliament has taken a break, it resumes on November 28 th, we will see what the Speaker of Parliament has to do because he has to rule whether the motion to impeach Mpofu should go ahead or not. But the Committee itself has come out - in many public comments - saying that they were not satisfied by Minister Mpofu’s performance.

In fact, some of them, when you speak to them, they are convinced that there is a case to be made, as they said in parliament, on the basis that when he first appeared, he mentioned that there were people who were looting ZISCO and it was bleeding and he did say some of those people were his colleagues in parliament. And then, when he appeared about a week later he then changed and tried to say ‘no he did not say that’ or ‘he was quoted out of context by some people with agendas who are up to some mischief’. But, the Committee is not impressed at all. And, it does seem that they are determined to get to the bottom of the matter and it may be that Minister Mpofu may become a casualty of the ZISCO scandal early in the game.

Violet: It’s strongly believed that Minister Mpofu had tried to out manoeuvre opponents by trying to endear Amai Mujuru, the Vice President, but he hadn’t seen the first report that had implicated Joyce Mujuru, that’s why he then tried to retract his statements. Do you agree with this?

Dumisani: Well, by and large. That is now a political interpretation of events around ZISCO, and when it comes to interpretation, there are many of them. That is one of them and when I look at it, it does appear that:

1; From reading the information around what Mpofu said to the Portfolio Committee in Parliament and other events outside Parliament, it then appears that point number one, Mpofu had not seen the report.

And no2; It is generally believed politically here that he’s an ally to VP Mujuru and it is said that when he spoke he had not seen, as you are saying, the report, and he thought that probably the report implicated his political opponents in ZANU. It is common cause that ZANU PF has some camps, and obviously Mpofu is in one of the camps, and it is said that he is in the Mujuru camp.

So, it is said that he had not seen the report and he wanted to nail his opponents that he believed were in the report. So, by making those initial tentative disclosures that there were senior people who were involved in the looting of ZISCO, it is widely thought that Mpofu was trying to blow the whistle on that issue believing that his political opponents that were within the ruling party would then be put in a tight spot over the corruption in ZISCO. But, apparently, because he had not seen the report, by his own admission, it became a boomerang. And now he is in a tight spot. He and his colleagues or his allies in the ruling party are now in a tight spot because they are the ones who are named by the report and not necessarily the people he might have wanted to target for political reasons.

Violet: And you know ZANU PF right now is divided by serious infighting. Now, is there a particular faction you know that is pushing for this publication or trying to seize this opportunity to damage their opponents?

Dumisani: Well, I don’t really think that per se there would be a particular faction pushing for that, because some of the names you see that have been mentioned, they overlap both factions. So, I don’t think there is any faction that is going to benefit by saying ‘let this report be published’. If it’s going to be published in full you’ll find officials from both sides of the divide will be mentioned.

However, I’m sure that just like in any political game, when these factions begin to see this report as a political instrument to further their own interests, they would then want obviously to release or to publish information that they think will advance their interests whilst damaging the interests of their opposition parties. But, that is their own agenda, but at the newspapers we work differently. We publish information that we find in the report. We do not care, or mind at all which faction is mentioned there because we do not report or see political events through the lenses of prisms of faction. We see politics broadly as an issue in which we have to deal with it with the public interest in mind.

Violet: Do you think people will go down as a result of this, like what happened with the Willowgate scandal, or this will just be swept under the carpet?

Dumisani: Well really I do not know what will happen, but, well, things have changed. If you look at the times of the Willowgate issue, at the time the government then was pretending a great deal that it was a very clean government; it was a government that was running things in the public interest, and of course there was a lot of political interest around that subject; the Willowgate. There was an interest obviously in getting rid of certain politicians who were seen as standing up to Mugabe and trying to challenge him. You know, Enos Nkala in ZANU PF at the time he was known to be one of the leaders who was a bit short in the ZANU PF politics and necessarily by being a luminary in the ranks of ZANU PF he was one of the people who was eroding, because of the power he wielded, the power of the leader of the party then; Mugabe and that sort of thing.

So the conditions, the political conditions have changed so much since the Willowgate days. Those were the days when the government still pretended to be clean and wanted to act in a way that would have shown that indeed, true to its pretences, it would be seen to be clean. But, now so many other events have taken place and the Government has done nothing about the officials who have been implicated in corruption. Now, I do not think that the sort of reaction that we saw in 1998/ 89 will be similar to what we will see in this period which will be 2006 going to 2007. Obviously at the moment, in this ZISCO thing, there is more big money than the Willowgate scandal you know. There is much more at stake here because its foreign currency, its big money but the reaction from the government will be different for political reasons.

Violet: And also, finally Dumisani, it’s very interesting that you have been able to report about such a sensitive and serious issue involving government officials; senior government officials like the Vice President Joyce Mujuru, Vice President Joseph Msika. Now, as a journalist working for the independent media, have you not had any problems while writing these stories or even getting victimised about this?

Dumisani: Well, when you are writing this kind of story there is always a risk that comes with them because obviously some people will be rubbed the wrong way by these kind of stories. But, what I can say is that I have not had any direct threats made but I have heard so many funny stories including last Friday about people who might be interested in retribution over these kind of stories. So they will generate a lot of rumour mongering and stories around and indeed, issue some threats via their agents like telling their political allies that so and so, this Godfather of this faction is very angry about this, damages their interests. So the whole idea is intended to make sure that that information gets to you and you are either scared off the story or indeed you are made to work as if you are on the run. So, all those kind of things, I mean some calculated intimidatory tactics come along the way, but those are things that will always be happening and sometimes you just have to learn how to deal with them.

Violet: It comes with the territory?

Dumisani: Ya, Ya, it’s just part of the occupational risks that sometimes are inevitable.

Violet: Thank you very much Dumisani Muleya

Dumisani: Thanks

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