How an uncoordinated approach is holding back the fight against illicit financial flows in Zimbabwe

By John Kachembere

Zimbabwe has made strides in curbing illicit financial flows (IFFs), but a more coordinated approach by the country’s many anti-corruption agencies is needed to stop the bleeding, analysts say.

A 2020 study conducted by Africa Growth Initiative revealed that Zimbabwe lost in excess of US$32 billion in the last two decades through IFFs, which are defined by the United Nations (UN) as illegal movements of money from one country to another by corporates or individuals.

Economic analysts said these financial activities that may involve revenues from illegal activities, tax avoidance, abusive profit-shifting, trade mis-invoicing, human and drug trafficking and corruption have left Zimbabwe with inadequate infrastructure, erratic power supply, and limited access to health, education and broadband internet service for citizens, among other deprivations.


To deal with these illicit financial flows, President Emmerson Mnangagwa’s government tasked various institutions such as the Reserve Bank of Zimbabwe (RBZ), the Zimbabwe Revenue Authority (Zimra), the Zimbabwe Anti-Corruption Commission (ZACC), the Special Anti-Corruption Unit and the National Prosecuting Authority (NPA) to stem the tide.

However, Francis Mukora, the coordinator for the Research and Advocacy at Community Alliance for Human Settlements in Zimbabwe, says in order to effectively combat IFFs, there is need for clear rules to ensure different authorities’ activities do not undermine or interfere with each other.

“The complex network of agencies and authorities make it difficult to implement those policies in a coordinated and effective manner. Practical coordination is, therefore, an essential supplement to policy coherence,” he said.

Mukora added that the government must constitute a national coordination body for specific policy issues related to IFFs, such as money laundering, including all the relevant agencies.

These views were shared by a researcher and tax expert with the Tax Administration Diagnostic Assessment Tool, (Tadat) a regional tax consultancy firm, Moses Chamisa, who noted that currently there is a low understanding of what constitutes IFFs among various government agencies.

“The government should start the process of recognising IFFs as a key risk to economic and social development and incorporate it in national risk assessments and industry-level risk assessments,” he said, and added that enforcement agencies and tax administrations should be amply equipped to deal with IFFs.

“These agencies should be adequately rewarded so as to retain and attract capable staff and to help minimise the risk of corruption that facilitates IFFs,” said Chamisa.

On the other hand, the Zimbabwe Coalition on Debt and Development said the country was struggling to deal with IFFs due to excessive involvement of politically exposed persons, government officials, senior ruling party leaders, and members of the military hierarchy.

“The government should demonstrate political will to curb corruption, plug resource leakages and capital flight through establishing stronger legal frameworks that allow tracking, stopping and recovering of illicit financial resource flows,” the pressure group said.

However, President Mnangagwa said Zimbabwe was putting in place appropriate legislative and institutional arrangements to facilitate greater cooperation with other states as part of measures to deal with IFFs.

“The fight against illicit financial flows cannot be won without full cooperation between both the source and receiving states on these illicit finances,” he said while addressing a virtual UN Special Session of the General Assembly on challenges and measures to prevent and combat corruption and strengthen international cooperation in June.

The President said that in addition to activating ZACC and NPA, his government also enacted the Anti-Money Laundering Act to reduce cases of corruption and cash flows.

“To augment these efforts, my administration set up a special anti-corruption unit to assist the anti-corruption commission in the prosecution of high profile cases,” he said.

ZACC: needing capacity

On its part, ZACC, which recently indicated that Zimbabwe loses US$3 billion to IFFs annually, had its officers trained by the International Commission of Jurists (ICJ) to conduct financial investigations and apply asset tracing techniques in relation to IFFs, corruption and money laundering cases.

ZACC chairperson Justice Loice Matanda-Moyo said while her organisation was committed to fight IFFs and corruption scourges most cases were “generally complex” and required a long time to recover proceeds of crime.

“It takes years and dedication for one to be an expert in asset recovery. As the commission we are looking forward to building teams that are sophisticated and technically sound to conduct thorough investigations, asset tracking and asset recovery,” she said in an interview recently.

ICJ senior legal adviser Blessing Gorejena agreed with Matanda-Moyo that recovering stolen assets was an important process in the fight against corruption and illicit flows as it deters the vices by turning them into high-risk, low-reward activities.

“Additionally, asset recovery is a means to obtain resources for the development of the country, which resources can also be channelled towards strengthening the fight against corruption in Zimbabwe, thus contributing to the greater respect for the rule of law,” he said.


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