Blog post 11/14: Corrupt handling of diamond revenue protects Mugabe’s regime

            African countries such as Zimbabwe and the Ivory Coast, rich in diamond deposits, are looking towards their state leaders wondering where diamond revenues are going. Most citizens have a pretty good idea as to where the financial profits are not being invested – infrastructure, healthcare, education – but rather the lavish lifestyles of state leaders and even businessmen in foreign countries.

            In Zimbabwe, under the famed presidency of Mugabe, public watchdogs recently reported that more than $2 billion in diamond revenue has been taken by Mugabe’s ruling elite, calling it "perhaps the biggest single plunder of diamonds the world has seen since Cecil Rhodes” (the Guardian). One of the biggest beneficiaries from the revenues of the Marange diamond mines in Zimbabwe is Obert Mpofu, a close friend of Mugabe and mines minister since 2009. It is estimated that he has spent over $20 million in cash over the past three years and claims that the lack of diamond revenue is from economic sanction imposed by western states that have lowered diamond prices in the international market. Promised by Mugabe that he would receive $600 million of diamond revenues for schools, hospitals and public services, Zimbabwean Finance Minister Tendai Biti said that he received only a quarter of that figure. The area surrounding the Marange diamond fields, discovered in 2006, is one of Zimbabwe’s most impoverished areas. There is a missing link – and Biti attributes it to a lack of capability of Zimbabweans to monitor where this revenue travels.  

            Al-Jazeera did a really fascinating investigation into how the money from diamond fields is disappearing. The reporter went to Seychelles where he found “Premiere Off-Shore Ltd,” a service through which he could set up his own diamond company through a false identity. This effectually allows individuals to set up a company for themselves, most-often for resources such as oil and diamonds in Africa, and the corrupt revenue goes directly into their bank account and their identity is disguised throughout the process, rendering the revenue recipients untraceable. The reporter made a false application with the service in Seychelles and called the experience “a crash course in money laundering.” The mostly white foreign businessmen aiding the reporter were more than happy to help him, as they also profit from the diamond revenues, and offered many tips on how to evade the law and “get your money quietly.”

            Africa loses $148 billion a year from corruption. There is no doubt that this type of corruption can be found in the U.S. and nations worldwide, but when Africa is so impoverished and has resources such as diamonds that could significantly boost their economies, why does the revenue continue to disappear without question? Leaders like Mugabe are ignoring the Kimberly Process. Groups such as Partnership Africa Canada are finding evidence in corruptive pratices in handling diamond revenue, but until the West presents stronger sanctions or challenges Mugabe’s leadership in the UN, this cycle will persist in Zimbabwe. Why does the West allow this to persist? Is it because we profit from exploitation of African resources?

Aremeyaw Anas, Anas. "How to Rob Africa - People & Power." Al Jazeera. N.p., 8 Nov. 2012. Web. 13 Nov. 2012. <http://www.aljazeera.com/programmes/peopleandpower/2012/11/201211714649852604.html>.

Smith, David. "Zimbabwe Regime Accused of Stealing $2bn in Diamonds." The Guardian. Guardian News and Media, 12 Nov. 2012. Web. 13 Nov. 2012. <http://www.guardian.co.uk/world/2012/nov/12/zimbabwe-diamonds-mugabe-marange-fields>.