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What If There Was Never Any $15 Billion To Start With?

Robert Mugabe

I almost wrote this article five weeks ago but I aborted mission. First, I asked myself what mining had to do with Techzim and then I was a bit scared to antagonise the readership here with nothing but my conjecture. Why have I written the article now? First, it’s about the macro economics not mining and second, this is no longer merely my conjecture.

The long serving presidential spokesperson, George Charamba recently said that when Robert Mugabe claimed that the country had lost $15 billion he just pulled the big number out of thin air and meant it ‘figuratively.’ By the way, in case you’re lost, the $15 billion I refer to is the money that Former President Robert Mugabe claimed was never accounted for and had gone missing in the diamond mining operations in Marange. What made me question the existence of the $15 billion in the first place?

The Math Doesn’t Add Up

I bumped into global diamond production and revenue figures for 2016 and I was surprised. Botswana is the second largest diamond producer in the world (behind Russia) and Botswana produces about 22% of the world’s diamond carats. This translates to just above $3 billion in the year 2016. Say what?

Output of diamond has been increasing in the world since the Marange days but let’s assume the output was at this level back then. It would have taken the world’s second largest producer of diamond 5 years to get $15 billion as revenue.

Canada is considered the most active nation in the diamond mining market although it is at number 3 in output terms producing 14% of the world’s carats. This puts their revenue at just below $2 billion per year according to 2016 figures. The most active diamond mining nation would need more than 7 years to reach revenues of $15 billion.

The total global diamond mining industry had revenue of $14.1 billion in 2016 and was forecast  to be $15.9 billion in 2017. I haven’t found the actual figures for 2017 yet.

Now, the former president declared that the Zimbabwe government had lost $15 billion. This means this was not total revenue but the profit after operations and at that, not total profit because the government was not entitled to 100% of the profit.

Diamonds from Marange were sold from 2010 to 2012. Can we really expect that we produced in three years what Botswana can only produce in 5 years? Was our technology (well the one brought by the mining firms that partnered the Zim government) sufficient to produce at those levels?

Marange fields are considered to be the largest diamond find this century but this is in carats not in value terms. Rough diamonds sell at around $100 per carat. Zimbabwe’s diamonds were on average below $50 per carat when sold in 2010 through to 2012.

We sold about 28.9 million carats during this time which would make gross sales of about $1.4 billion if we assume $50 per carat. The math is just all wrong.

Where Did The $15 Billion Figure Come From?

George Charamba says Robert Mugabe said he just pulled the number out of thin air. I think that part is true. Charamba then says Bob told him he just said the figure to stress a point because he was angry. I don’t believe that is the reason for saying $15 billion. That part is probably untrue.

I am not saying Charamba was not told that line by Bob. Whether that’s what Mugabe said or not, it is probably not the reason why that number was pronounced. I think the figure was calculated by a crafty mind to change the discourse of conversation in Zimbabwe and it worked.

First thing that was created was something else to point to besides Uncle Bob himself as the cause of all our economic problems. Yes people laid responsibility on Mugabe but the rhetoric became, “deal with this issue of $15 billion, we want our $15 billion…” That was a far better discourse than, “Uncle Bob what are you still doing in office? How is the economy going to improve?” These answers VaMugabe did not have.

We must always remember that economics is a behavioral science that tries to explain phenomena that is driven by public perception more than anything else. If you can influence perception and sentiment you can influence much in the economy and in politics. Bob influenced what the conversation became after his $15 billion declaration on Thursday 3 March 2016.

I think this was always the end game.

Civil Society and Opposition Politicians

Civil society and opposition politicians played right into the play book of the maestro. Their rallying call became, “Bring back our $15 billion.” I don’t know of anyone in those spheres who questioned the figure stated. In the myopia of having something to rally up crowds and leverage public anger the opposition did not care to question the math.

Mugabe was happy for that diversion. As long as it was someone’s fault somewhere who had defrauded the country of billions then he was somewhat safe. The conversation essentially gave the illusion that, had Zimbabwe not lost $15 billion then everything would have been OK. After all $15 billion is nearly four times the yearly national budget expenditure.

I am one of those who did not question the figure. In fact I am worse because I reasoned that if Mugabe admitted to $15 billion then it meant that the fiscus lost much more than that. That is exactly what Gushungo wanted me to think…

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38 thoughts on “What If There Was Never Any $15 Billion To Start With?

  1. The figure never made sense and that was around the time when government was struggling to pay its employees on time and pensioners would get their monies on the 14 – 20th day of the following month. Those were the real issues but everyone was blinded by the $15 billion. It was one of the tactics used by Mugabe to sway people away from real issues, he would reshuffle his cabinet weeks would go by people deep into cabinet reshuffle discussions,

  2. Your point makes interesting reading. I have posted it onto the various platforms so as to garner debate. I hope we will find out what others think.

  3. We said Bob is not dead. Let him come and correct the figures himself. So, what is the correct figure that was stolen? $400,000? Or nothing was stolen at all?

  4. Stolen diamonds are never accounted for in official channels. They are traded in the black market and some through Bitcoin as it is anonymous…but the figures you will never know…What f RGM was correct…because you can not got to Belgium to sell stolen diamonds from Zimbabwe…those guys have strict procedures

    1. Yes stolen diamonds are not sold on the open market. The capacity though to reach 15bn given the quality of the Marange diamonds? And here we will be talking about the gross revenue head. 15bn after costs in 3 years? Quite tricky
      Looting occurred big time though

      1. For context, 4 ZMDC employees were recently arrested for stealing half a million. This was a security guard, diamond sorter e.t.c

        The small guys by any stretch. If small guys can steal half a million dollars, what about the big guys over the last 10 years

        The diamonds were stolen in one attempt, how many times did they steal and were not caught

        So yes 15 billion was just a number for emphasis, but the diamonds stolen are certainly more than $1 billion usd

        1. Yes I think that more than a billion was diverted from fiscus is very feasible. It may not be 15 billion but a substantial amount was stolen there

  5. Chiyadzwa diamonds were discovered in 2006 $15 is cumulative from 2006 to 2015 thats 9 years, thats around $1.6 billon per year the figure makes sense.

    1. Davison, remember 2006 is when the diamonds were ‘discovered.’ This was succeeded by a rush to the place by makorokoza and the so called syndicates. Then after that the military stepped in. Mining proper started in 2009. Sales of diamonds started in 2010 after a High Court ruling permitted it

  6. Tinashe. Your article makes an interesting and thought provoking read. Your critics make angry diatribes, which is beyond the point. Yes we all have this anger and dispondency……angry that we have so many low thieves in high places but that on its own does not provide empirical evidence for the $15 bn or any other suchlike figure “pulled out of the hat”.

    I have shared you post in my well populated Whatsapp Group. You may want join that.

    1. Thanks much for sharing Caleb. Some of the points people raise are valid. There is need for a more thorough probe. I for one I do not think Mugabe was sincere enough to state a figure like that in a truthful manner without some political scheme at play. That guy was a master tactician, he had a play chete.

      If you send the link I will join the group thank you

      1. What was RG’s cut off for the figure? 2010, 2006, 1960? Tthere were ACR, makorokoza and others before the 2010 lot. Then there’s the qiestion of quantification. How do you quantify black market trade? Well, it could be $150bn!

        1. Oh if he meant from pre-colonial times to date, 15bn could be pocket change indeed.
          The were so called farmers in that area who were exploiting the resource under the state radar for ages!
          His context though was from 2010
          why I believe it was scheme, Bob was never asked a question he didn’t want asked on those birthday interviews. It’s not like he was caught unawares. He did the asante sana even there

  7. tell us about the USD30million the diamond dealer fleeced the country in Dubai in one transaction. By the way Marange Diamond mining started in the 1990s with the government pretending DeBeers was only taking samples of the precious stone while a few in government were been oiled to keep quiet. Then zviru zvana Mai Mujuru before proper mining started. A few companies were given licenses to mine without any capital, they use their pickings to finance the operations from scratch. I shall not talk about the politicking during the first days and a few individuals went from rags to riches having obtained free passes. Over close to 30 years, 15 billion is not far fetched

    1. Hi Ndini Ndadaro (Cool name)
      Yes I think looting started way back when. I wouldn’t know how to estimate how much worth was looted for that long long history. Maybe it gets to 15bn
      Mugabe’s context though was from the ‘formalisation’ of operations going forward and that number doesn’t even come close. It gets worse when you consider what the state was actually entitled to and then you subtract the little amounts they did get

  8. Raw diamond price mined on land price closer to average $100 a carat, not $1000 dollars.
    His 15 billion figure stolen I think far fetched. Maybe even one billion dollars seems high in my opinion considering all the variables. But that is just my take.

    1. Oh is it $100? Let me do a quick search and fix the estimate I used
      I think the amount is stretched by a mile, I don’t know if I would say it was below a billion though. Even so, it is way closer to a billion than to 15!

        1. 15 billion is just unrealistic and unfortunately Zim has become so polarised that the voice of reason seems to be difficult these days.Average price of maranage diamond on the official market was around 50usd per carat,way below industry standards.The first auction of Zim diamonds they sold for as low as 33usd a carat.If the diamonds were to be sold on the black market,they would have sold at a much lower price than that . . . its difficult to determine how and why people still insist 15billion was looted.

          1. I think the figure helped us sleep better at night. “If only we didn’t lose 15bn” became our convenient scapegoat in a hopeless situation. I understand that. My theory is that was the intention

  9. The article comes both at the right and wrong time but its still good though bcoz its a clear Eye-opener into possible tactics that all Zimbabweans have been fooled around with by the people in power. You never know the supposedly ‘coup or not coup’ or maybe should I say ‘Operation Restore Legacy’ was also one tactic to sway people minds. Food for thought.

    1. I hear exactly what you saying… spilt milk right?
      Scary thought you put across there!!!
      We were kind of manipulated into the current ‘dispensation’ as they call it but I think it is as fresh enough a start as any and I am very optimistic

  10. next time you will tell the nation that RG just made up the numbers that the opposition won the election by over 60%!! The statistics on production and sales are from official sources, right. If those were correct, do you know of the unofficial trade smugglers that RG knew? Any way you also need to know when production at Marange started. I guess only RG would know when this began. Those figures were not made up man!! There is need for better research before we appear to be working for those that took the loot!!!!

    1. That notion of who are you working for is very wrong. The media has been accused by people in power for working for the opposition or the west or whoever else. It seems also that if the narrative is not as condemning of government it means we now work for ZANU PF? That is not progressive. Let both sides of the coin be evaluated, those are the conversations we need to have.

      Yes we can factor in what was looted through unofficial channels BUT we must remember that there are production capacity limitations so for example if the total capacity was to produce 3 stones per year and the total that was accounted for officially was 1 stone per year. The maximum that could have been looted still remains at 2 per year. The breakdown above is quite conservative if you probe at it.
      My other question: so now we trust Bob to speak truth? When it’s convenient we want to believe him because we want to be angry about 15bn and when it’s other matters he can not be trusted and we don’t believe him at all. Are those not double standards?

      1. Good response Tinashe.

        Angry tirades have never produced any worthwhile outcomes. We are all angry about what happened to our country and our resources, but not all of us believe that barking up the moon is the way to go.

      2. Well said.. I have noticed this worrying attitude amongst us Zimbabweans to hate something / someone to the point of becoming irrational… and one sided. I think it is one of our weaknesses as a people… despite having high levels of literacy we tend to be swayed to aways going with the crowd …one influential person says something and everyone must agree, if you think differently or try to think rationally you are ostarcized and called all sorts of names.. this is also seen in the the levels of superstition which seem to be increasing with time and education instead of decreasing !!!

        1. I like the sound of the angle you are taking Roberto “…….seizure of tthe Diamond fields as eventually happened…!!!” Who would complain when a thief’s loot is “returned to it’s rightful owner”!

        2. O yes well put. Worrying how superstition and gross abuses continue reigning because of believing what we want to believe without questioning

    1. Still diversion to me. Let me know if anyone is ever going to be indicted or when there is proof that there was a 15bn to be missed. That figure came out of one man in an interview on his 92nd birthday and suddenly we are all sure that there is a missing 15bn. Parliameent yapererwa, clutching at straws

      1. From the article:
        In 2012, long before Mugabe alleged that the $15 billion had been spirited away, a watchdog group campaigning against “blood” diamonds had also released a damning report in which it alleged that more than $2 billion worth of diamonds had been stolen from the Marange fields.

        It also claimed that Mugabe’s inner circle, together with some international dealers and a large network of criminals had connived in “the biggest single plunder of diamonds the world has seen since Cecil Rhodes”.

        They estimated $2bn, it could have been less than that

  11. Very good article — I have always said same that this $15 billion figure was outlandish and didn’t make sense. More importantly I think the general populace wanted that number to be true… the other problem was that the govt had hyped up to the nation that Diamonds would solve all our problems.. and the state itself was deluded.. It was the Diesel from rocks mind sent — symptomatic of the economic despair that was once again being felt by our nation. It seems that when desperation kicks in reality flies out the door … Miracle money, gold in the streets, walking on water, spiritual spectacles, 1 day pregnancy etc etc … whats wrong with us !!!! Another angle would be that the Old Man boobed and couldn’t retract from that position or that they were setting the stage by creating the justification for seizure of the Diamond fields as eventually happened…!!!

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