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TRANSPARENCY IN THE DIAMOND INDUSTRY KEY TO REDUCING POVERTY

Zimbabwe, like many African countries, is endowed with vast natural resources which, if well managed, rampant have the potential to unlock financial resources needed to combat rampant underdevelopment. With the country currently standing at 173 out of 187 on the 2011 United Nations Development Program (UNDP) Human Development Index (HDI), it is estimated that about 70% of households live below the current poverty datum line of US$540. An external debt of over US$10billion is crippling the economy and, once regarded as the bread basket of Southern Africa, Zimbabwe has become a net food importer and has been reduced to the waste basket of Africa. The country has failed to access lines of credit to revive the economy, production remains squeezed while disposable incomes have not changed significantly. All this is attributed to years of conflicts, mismanagement and corruption.

Agriculture was the backbone of the economy for more than two decades and a cushion for the poor.   The ill-advised and chaotic land reform program weakened the sector adversely affecting the cost of living.

With the discovery, eight years ago, of what is said to be one of the world's largest diamond fields, one would be forgiven for thinking that by now Zimbabwe would be on track towards lowering its poverty levels and improving its standings on development indices like the HDI and even the Gender-Related Development Index (GDI). However, poverty levels are actually on the rise with the gap between the rich and the poor widening due to poor management and uneven distribution of resources. Meanwhile, the government is pushing more people into poverty by coming up with laws that continue to slice workers' and ordinary people's earnings while no clear policies are enacted to ensure salaries and production in industry is improved. This year NSSA announced that contributions will go up from 3 percent to 4 percent of the insured portion of salary and a rise in the insured limit from US$700 to US$1 000. The move will see contributions rocketing from the US$12 to US$80. [i]

The diamond mining sector is beleaguered by massive corruption and lootings and lack of transparency, security and accountability in how revenue is being managed. The media has carried stories of Zimbabwean diamonds illegally making their way to India. Recently, an Israeli pilot was found in possession of diamonds worth over US$2 million at the Harare International Airport. Such reports, coupled with those of how some government officials are looting the diamonds to fatten their pockets at the expense of the people of Zimbabwe, are indeed worrying and leave one to wonder just how much of the proceeds are going into the national treasury.

Revelations made recently, that several top officials, listed as directors in a diamond mining firm in Chiadzwa, are ZANU PF loyalists have also brought questions as to who the beneficiaries of the diamond proceeds are. Fears have risen that ZANU PF is bent on using diamond proceeds to finance its elections campaign and oil its terror machine. The same can also be said for the alluvial gold deposits discovered in Sherwood Block, Kwekwe earlier this year, where ZANU PF bigwig, Emmerson Mnangagwa is said to have taken over and is using this as a campaign tool where only those who produce ZANU PF membership tickets can be allowed to pan.

The fact that 20% of the country's 2012 National Budget is expected to be financed by diamond sales is reason enough for the importance of that proper diamond tracking in order to avoid deficits. The predicament facing other diamond-rich countries like Angola and the Democratic Republic of Congo, of poor citizens yet the countries possess vast natural resources, is avoidable for Zimbabwe if government puts in place stringent mechanisms that ensure that diamond revenue and; every other revenue the country gets, goes into the treasury so that it can finance key sectors including health, education, tourism, industry, agriculture, infrastructure development and in turn, the overall development of the country.

Corruption and lack of accountability, fuelled by years of bad governance, have led to primitive accumulation of wealth by the political elites at the expense of the poor majority. Despite the availability of natural resources which could change the fortunes of the country, 70% of Zimbabweans live in abject poverty. . It is crucial that the government re-directs its efforts to ensure rule of law in the management of national resources. This will ensure that all Zimbabweans, including the grassroots communities, benefit. The poor in Zimbabwe should not only benefit equitably from economic growth; they should have the opportunity to actively contribute to its generation.

 



[i] http://www.sundaynews.co.zw/index.php?option=com_content&view=article&id=26131:more-people-sink-into-poverty&catid=41:business&Itemid=133

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