Monday, September 6, 2010

More corruption ahead for diamond industry

By Alex Bell
03 September 2010

Corruption in the already tainted diamond industry is set to deepen, as known ZANU PF aligned businesses are set to venture into diamond processing.

The Affirmative Action Group (AAG) has announced that it has ten members lined up to venture into diamond cutting and polishing, at a multi million dollar diamond plant under construction in Harare. The Zimbabwe Diamond and Technology Centre is set to be fully operational in the next six months, and will be the central hub for Zimbabwe’s diamonds to be cut and polished.

The Centre is being constructed by Canadile Mining, one of the government approved firms illegally mining in Chiadzwa. Once fully completed, the US$20 million centre will have, among other things, banks, a diamond processing college and even insurance firms.On the surface, the Centre has the chance to create massive employment opportunities and lead the way in indeginisation and economic empowerment. But critics are warning that the involvement of the AAG will merely see more corruption take root in the diamond sector.

Commentator Professor John Makumbe told SW Radio Africa on Friday that the public must be concerned that AAG members are being funneled into diamond processing, under the guise of empowerment and indiginisation. Makumbe warned that the AAG is “a well known group of mainly ZANU PF aligned business people,” who have been “looting the economy for several years.”

“It is likely that these groups are flooding into the (Diamond Technology) Centre to have unbridled access to diamonds,” Makumbe said. “The state is unlikely then to benefit significantly from these diamonds until proper legislation is put in place to stop this kind of corruption.”

Zimbabwe is pegged as becoming the number one diamond producer in the world, with a Belgian expert this week saying that the Chiadzwa alluvial fields could produce up to 40 million carats of diamonds a year.
International diamond consultant Fillipe van Laere said, on the sidelines of a ceremony to mark the establishment of the Diamond Technology Centre, that Zimbabwe will be “propelled to the number one spot as the world's most important diamond producer in the next two or three years.”

But there is growing scepticism that any profits from diamonds sales will benefit the state in any significant way, as currently no legislation exists on how diamond profits will be handled. Over the past year US$30 million dollars worth of diamonds were sold illegally, despite a ban on international trade over rampant human rights abuses in Chiadzwa.

Those profits were never seen by the Treasury. Finance Minister Tendai Biti has proposed a Diamond Law, to be debated in parliament, that will try and end corruption in the sector and ensure that diamond proceeds benefit the country. Biti has said that the diamond profits will rescue the shattered economy if they are steered into the State coffers. But there is no policy in place on how this will happen.
SW Radio Africa news

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