Zanu PF chefs transferring millions outside the country
By Lance Guma
22 July 2008

Senior figures in Mugabe’s regime are transferring millions of US dollars out of the country, amid growing fears of financial scrutiny by a possible new government or expanded targeted sanctions if the crisis remains unresolved. According to the latest report by Africa Confidential most of the transactions are being approved by the Reserve Bank Governor Gideon Gono, despite his pretensions of enforcing strict monetary rules. The report says Zanu PF aligned politicians and businesses are using established western banks and insurance companies to make the transfers. ‘They take advantage of the fact that several big financial institutions quote their shares on the stock exchange in Harare, as well as those in Johannesburg and London,’ the report says.

This makes it easier for the money to be siphoned out of Zimbabwe with little or no scrutiny. The money is then transferred to safer offshore jurisdictions or financial centres in East Asia. Other safe destinations include Namibia and South Africa where the ruling elite have property, usually registered in the names of their spouses or children. But the one-man sham election of June 27 has led to many African countries reviewing their position on the legitimacy of Mugabe’s regime. This has forced some in Zanu PF to move their money to financial institutions in Malaysia and China, using large trading companies or multinational banks. The report blames this capital flight for contributing to the hyper-inflation which has destroyed the country’s economy.

Africa Confidential cited the example of exiled Zanu PF businessman James Makamba holding accounts in Egypt, and former Guruve North MP David Butau, who fled to the UK after transferring his money into an HSBC bank account in the Channel Islands. Other companies are said to be exploiting government US dollar lines of credit which are used to pay for external debts and other current government expenditure. ‘In return, they are given shares for dual-listed companies that they can sell abroad for foreign exchange,’ the report says. Companies cited include Cargill Zimbabwe, African Banking Corporation, Mettalon Gold, owned by South Africa’s Mzi Khumalo and Vulya Investments. All these companies were given Old Mutual shares as security and these were eventually sold outside Zimbabwe.

Some of the key figures implicated in the ‘cash flight’ include former army general Solomon Mujuru and former Metropolitan Bank CEO Enock Kamushinda, who is now thought to be running Mugabe’s business portfolio from Malaysia. Controversial British property tycoon Nicholas van Hoogstraten was also named. Meanwhile the Central Bank is said to have availed US$2 million to AMG Global Nominees, a brief case company that is being used by Mugabe to try and take control of London-listed Africa Resources Limited. Businessman Mutumwa Mawere who owns ARL told Newsreel the report by Africa Confidential served to highlight the dirty deals being done by people in government and yet the same individuals were at the forefront of victimizing other businessmen accused of lesser crimes.