New Zim president goes for looters

‘Pay back illegally transferred money or face prosecution’

IN A move hailed by ordinary citizens, Zimbabwe’s new president, Emmerson Mnangagwa, said yesterday those who had illegally transferred money outside the country must repatriate it within three months or face prosecution.

The announcement was greeted with glee by longsuffering Zimbabweans, who largely attribute the dire state of the economy to high-level corruption.

The new president’s warning is being taken seriously, after former finance minister Ignatius Chombo was abducted by soldiers for nine days and has appeared in court this week facing allegations of looting prime residential land worth millions of dollars in the capital, Harare.

Severe shortages of foreign currency and local cash have paralysed the country’s economy, which has shrunk significantly since 2013 on the back of low industrial productivity, dwindling foreign direct investment inflows and heightened political risk.

Mnangagwa, who rose to power last week following veteran leader Robert Mugabe’s resignation, said “huge sums of money and assets were illegally externalised by certain individuals and corporates”.

Although he did not reveal the magnitude of the illicit financial flows, official statistics from the Reserve Bank of Zimbabwe show that US$1.8 billion (R25bn) was externalised in 2015 alone.

Mnangagwa’s threat to prosecute the perpetrators of economic crimes has sparked panic among Harare’s business tycoons and wheeler-dealers, who fear the prospect of being caught in the anti-corruption dragnet.

Prominent Zimbabwean lawyer Alex Magaisa said: “As a country we had got to a stage where crooks were being celebrated as clever businessmen. They must face the music, but more importantly they must pay back the money.”

Former education minister and opposition politician David Coltart described the government’s announcement as “an excellent move”.

A Harare-based economist told The Star that Zimbabwe stood to recover more than US$4.5bn.

“This is a good move. I can almost predict with 95% certainty that cash challenges will be a thing of the past by February. The country will have a lot of liquidity as a result of this blitz.

“Here’s the quick maths. Assuming an average trade deficit of US$2.5bn per year since 2009, then US$22.5bn has left the economy up to this year. Assuming 20% of that was illegally moved out, then the country stands to gain US$4.5bn in foreign currency,” said the economist.

But the president of the Bankers’ Association of Zimbabwe, Charity Jinya, said the huge amounts of money held by Zimbabweans in foreign banks was a sign of low public confidence in the country’s financial system.

The association estimates that money held by Zimbabweans in offshore banks stands at $940m.

Mnangagwa’s headache is that the same military that propelled him to power has been implicated by civil society groups in the grand looting of Zimbabwe’s eastern diamond fields.