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This article participates on the following special index pages:
Marange, Chiadzwa and other diamond fields and the Kimberley Process - Index of articles
November 22, 2013
Last week I attended
a National Endowment for Democracy (NED) roundtable discussion on
Africa’s resource curse led by eminent scholar Larry Diamond.
The Council on Foreign
Relations recently published Diamond’s article Petroleum to
the People, co-authored by Jack Mosbacher, in which they explain
how Africa’s vast oil deposits could be a curse as politicians
and those connected to them collect rents and use them to entrench
their power at the expense of social and economic development. They
make a number of poignant observations, which I found compelling
as I reflected on Zimbabwe’s diamonds.
They suggest Africa’s
rich oil endowment has become a curse as it has fuelled corruption
and bad governance in countries reaping revenues from it and those
that are yet to exploit their deposits are likely to suffer the
same fate unless there is a change in the way the revenues are used.
They cite the case of Equatorial Guinea to illustrate their point.
Blessed with one of Africa’s richest oil deposits estimated
at one billion barrels, Equatorial Guinea started selling oil in
1995 and has earned billions of dollars, but its citizens remain
poor, thanks to massive corruption by President Teodoro Obiang Nguema
Mbasogo and those close to him.
Teodoro Obiang Mangue,
son to the president, lives like a rock star. In the United States
he allegedly has a multi-million dollar mansion in Malibu, California,
a fleet of luxury cars, a collection of speedboats worth millions
of dollars and Michael Jackson memorabilia valued at US$3,2 million
I remember reading last
year that French authorities had seized a US$200 million property
in a wealthy Paris suburb that belonged to the Nguema dynasty, where
a collection of art, antiques and fine wines was found. Ironically
three quarters of the citizens of Equatorial Guinea subsist on less
than US$2 a day and those opposed to the regime often find themselves
at the notorious “Black Beach” prison where torture,
beatings and starvation are the order of the day.
Nguema is one
of Africa’s most vile dictators and counts Zimbabwe’s
President Robert Mugabe among his closest allies. Nine years ago
a group of mercenaries led by Simon Mann was intercepted and captured
at Harare International Airport as it attempted to make its way
to Malabo to depose Nguema’s government in a coup. Mugabe
promptly handed Mann and his gang over to Nguema who sent them to
“Black Beach”. Since then the two have been close allies.
The opposition MDC-T party alleges Nguema has doled millions of
dollars to Mugabe and his party in times of need; including the
election campaign for the recently-held national polls which Mugabe’s
Zanu PF won by a
landslide amid allegations of vote-rigging and systematic disenfranchisement.
The Nguema dynasty’s
profligacy will not surprise many Zimbabweans. Since the discovery
in Marange district in the country’s eastern province
of Manicaland, Zimbabwe’s ruling class has developed a keener
taste for the finer things in life. There are reports of luxurious
homes with helipads owned by the political elite. Harare reportedly
has more Mercedes Benz vehicles than any other city in the world
Two years ago a Zimbabwean
government minister who officially earned US$300 a month paid nearly
US$30 million cash to acquire a majority stake for his family trust
in a local bank. Just last year the Mail & Guardian newspaper
of South Africa reported that Zimbabwean businessman Robert Mhlanga,
chairman of Mbada Diamonds - one of the companies awarded a mining
concession in Marange - had splashed close to US$20 million on prime
real estate in that country.
Mugabe has publicly acknowledged
the existence of corruption in the murky diamond sector but has
done little to curb it. Three months ago he publicly claimed former
chairman of government-owned Zimbabwe Mining Development Corporation
(ZMDC), a state-owned company with diamond mining concessions in
Marange, had received a US$6million bribe from a Ghanaian investor
and vowed to take action. The accused, Godwills Masimirembwa, remains
a free man. Investigators could have developed cold feet after realising
the net would catch some really big fish.
In a country where proceeds
from crime have been used to buy political influence, it is probable
that part of the US$6 million bribe found its way into the ruling
The majority of Zimbabwean
citizens live in grinding poverty. About eight in 10 of those eligible
to work are jobless. Citizens spend hours in darkness as the country
cannot meet its energy requirements. Infrastructure is derelict
and companies are closing, rendering thousands jobless. Government
has shelved the announcement of the annual budget scheduled for
November because it has no money. Ironically in Surat, a diamond
trading hub in India, the price of diamonds has plummeted because
of an oversupply of the precious stones. The source? Zimbabwe’s
Marange diamond fields. Diamonds are being illicitly exported and
the proceeds are lining the pockets of political elites and their
Another point Diamond
and Mosbacher make, which rings true for Zimbabwe, is that the resource
curse breaks the “social contract between a population and
its government”. When governments no longer have to tax citizens
or tax them less because they are deriving revenues from the sale
of natural resources, they have no incentive to serve the people.
Citizens are unlikely to demand that government delivers jobs and
social services from the tax revenues, while government becomes
less accountable and uses the patronage system to retain political
While in Zimbabwe
the social contract was already breached before the discovery of
diamonds in Marange, thanks to repression, rapid economic decline,
joblessness and citizen despondency, the discovery of the precious
gems threw a financial lifeline to a regime that was on the verge
of collapse. By the time elections were held in 2008 Mugabe had
become so severely weakened that he could not financially sustain
the election rigging machinery, resulting in him losing
to MDC-T leader Morgan Tsvangirai in the first round of a presidential
Forced to share power
with the opposition following a sham second round election, Mugabe
set out to regain his stranglehold on the polity and to build robust
infrastructure for election rigging. He deployed the military to
take control of the diamond fields before awarding mining concessions
to Chinese companies that went into joint venture agreements with
state security linked firms.
He then ran a parallel
government in which Treasury, by then controlled by the former opposition,
was bypassed as revenues from diamonds were deployed to strategic
institutions such as state intelligence, the military, the police
and party structures. Diamond revenues were said to have been used
to buy support from African leaders ahead of the July 31 election.
He also allegedly paid millions of dollars to an Israeli firm to
forge the voters’ register in his favour.
Diamond and Mosbacher
suggest African countries can avoid the resource curse by distributing
oil revenues to citizens through what they call an “oil-to-cash”
system where the government transfers cash to citizens directly
and then taxes them a portion of it. The idea is that the pain of
taxation will force citizens to demand service delivery and accountability,
thereby maintaining the social contract between the population and
the government. For such a system to work it must be born out of
citizen agency and must not be pushed from outside. As long as Zimbabweans
do not demand accountability in the mining and sale of the country’s
diamonds and other natural resources, politicians and their associates
will continue to line their pockets and the country will not prosper.
Mangongera is a Zimbabwean researcher. He is currently a Reagan-Fascell
Democracy Fellow at the National Endowment for Democracy (NED) in
Washington DC. He writes in his personal capacity.
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