Zimbabwe’s public account is down to its last $217. The finance minister says the country’s finances “are in paralysis.” How can that be? Zimbabwe’s diamond fields at Marange could hold between two and seven billion carats of raw diamonds, and constitutes a quarter of global diamond output, according to Bernard Chiketo in "Think Africa Press."
As I blogged in June 2012, many think that the revenue from diamonds is bypassing the Treasury and going directly to Robert Mugabe’s ruling Zanu/PF party and its operatives. The four largest companies exploiting the Marange diamond mines are all closely tied to the ruling party. In November, former South African president Thabo Mbeki charged that Zimbabwe’s diamonds were controlled by a “predatory elite.”
Opposition politicians claim that Zanu/PF handed over the Marange fields to allied private companies. This was to ensure the party continued to enjoy a stream of revenue even after it lost control of the Treasury and the National Social Security Authority to the opposition Movement for Democratic Change (MDC) when Mugabe acceded to a unity government under pressure from South Africa and the Southern African Development Community (SADC). And indeed, the current minister of finance, one of the founders of the MDC, has been a vocal critic of the close association between Zanu/PF and the mining companies that hold concessions to the Marange fields, and an advocate of more transparency in diamond revenues.
The political temperature is rising in Zimbabwe. A referendum on a new constitution expected soon, to be followed by presidential elections. In this context, Zanu/PF and MDC operatives are accusing each other of lying about Marange diamonds and the state of the country’s public finances. The opposition MDC is calling for the nationalization of the diamond mines, with joint supervision by the mining and finance ministries. The real issue, however, is the utter lack of transparency with respect to what has become Zimbabwe’s cash cow.