Al Jazeera released the first of four parts to their explosive documentary on corruption and looting in Zimbabwe yesterday. Titled ‘Gold Mafia’ the documentary exposes the dealings of some government officials, prophets, pastors, and businesspeople profiting from the illegal movement of gold.
Reactions to the docu have been mixed. Some feel Al Jazeera overpromised and underdelivered. They feel that all that Al Jazeera did was put names and faces to what we already knew was happening. I think it’s premature to think this, there are still three parts to go.
Some are rightly angry and disheartened by the revelations. Gold worth billions is being smuggled out of the country, depriving the country of much-needed revenue. I still grieve when I think about the $15 billion that went missing all those years ago and to find out billions are still leaking every year is maddening.
That may be but even among those that think the docu is enlightening, the question is ‘what does this mean for the country?’ Is it a big deal that we can put faces and names to the illicit dealings we all suspected were going on? Does this documentary have the same impact as a news story telling you that a man in Shurugwi stole a goat from his neighbour?
Govt institutions complicit in money laundering
The scariest part of the documentary is how the Reserve Bank of Zimbabwe, through its subsidiaries seems to be negligent when it comes to anti-money laundering and counter-terrorism financing, at the very least.
Some of the bad actors in the docu made it sound like Fidelity Printers and Refiners, an RBZ subsidiary, is available to them to wash dirty money with no questions asked. That will not fly with the international community.
Zimbabwe is already under sanctions but it could always get worse. As you know the sanctions are ‘targeted’ and our institutions are not under sanctions themselves. Of course, in reality, the institutions are affected by those ‘targeted sanctions’ as even Al Jazeera notes,
the nation faces a strict international sanctions regime, and even though its gold trade is not in itself banned by the West, the broader strictures against Zimbabwe make it harder to export the precious metal through official channels.
So, in some way, those sanctions are partly responsible for Zimbabwe having to turn to shady characters to get Zimbabwean gold on the market.
Anyway, as one former FBI agent interviewed in the docu admits, they would like to bar Zimbabwe from the global financial system completely.
If it can be proven that indeed Zimbabwe has been complicit in money laundering then that can be arranged. Here we are talking about sanctions being placed on our central bank and its affiliates.
Sanctions on the RBZ
The main aim of sanctions on a central bank is to prevent it from accessing its assets at private institutions and central banks outside its country’s borders. The central bank would not be able to make international payments or even supply its own country’s banks with forex in times of need.
Not being able to access those foreign reserves also has the effect of making it hard for the central bank to keep its currency stable. Zimbabweans don’t need telling what an unstable currency entails.
Looking at this, one feels that the RBZ being placed on sanctions would not be that big of a deal. World Bank data had Zimbabwe’s net foreign assets at -335 million in 2020.
The RBZ says it had foreign assets of ZW$423bn and foreign liabilities of ZW$2.9 trillion, for a net of negative ZW$2.5 trillion in September 2022. See RBZ Quarterly Economic Review for more.
This is partly to blame for the Zimbabwe dollar’s struggles. The ZW$ is useless on the international market and it would not be any either way with our central bank powerless on that market.
So, to have the negative balances above frozen does not feel like that big of a deal. Zimbabwe has pretty much had to operate outside of the global financial system anyway. Our banks have been losing correspondence partnerships even without the central bank under sanctions.
That’s not to say sanctions on the RBZ would not affect us at all. They would make a bad situation worse but probably not by much. I guess when you are already close to rock bottom, you don’t have far to sink.
You, personally, might lose out
That may be but at the personal level, we could have a lot to lose.
As we saw in Russia, we could have global players decide to exclude Zimbabwe. You know how PayPal already gives Zimbabweans a bad deal? We could end up with the likes of Western Union, Moneygram, Payoneer etc excluding Zimbabwe.
E-commerce players may be close behind them in leaving Zimbabwe. Imagine Amazon and eBay shutting us out. I don’t even know if Aliexpress would be able to keep serving us.
Then we could have Netfix, Spotify and the like pack up and leave too. Oh, now you care huh? What if Starlink ends up deciding Zimbabwe is too hot to handle? All of us a sudden it feels like a nightmare.
We only scratched the surface of what our institutions being placed on sanctions could mean. We are already in a tough spot, we could without more sanctions. So, yeah, the revelations in the Al Jazeera documentary are serious.
I understand the sentiment that says, ‘those implicated by the documentary will most likely not face any consequences.’ Instead, those doing the ‘exposing’ might be the ones to face serious consequences.
That reality makes people not care about the documentary. We should care though. As we discussed, we personally have a lot to lose out on. A bad situation could get worse.
What do you guys think? In what other ways could the revelations in the documentary end up biting us? Do let us know in the comments section below.
Also read:
Biden extended sanctions on Zimbabwe and revealed it’s all about safeguarding US interests
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