DAILY MAVERICK WEBINAR
How a Zimbabwean tycoon used food security funds to buy mines
Zimbabwe’s Command Agricultural Programme was meant to improve the country’s food security. Instead, the authorities responsible for safeguarding the country’s finances gave tycoon Kudakwashe Tagwirei preferential deals to further his stronghold over the struggling economy.
Former Zimbabwean finance minister Tendai Biti describes Kudakwashe Tagwirei as a mogul who has worked with President Emmerson Mnangagwa’s faction of Zanu-PF to control an ever-increasing share of the country’s battered economy, while half of Zimbabwe’s citizens are categorised as food insecure.
According to Biti, Tagwirei controls the country’s fuel industry, 60% of its gold mines, two of its largest banks and Zimbabwe’s sole gold refinery.
“He’s now owning everything,” said Biti.
The US and UK have placed sanctions on Tagwirei, whom former US secretary of state Mike Pompeo described as “a notoriously corrupt Zimbabwean businessman” who had assisted “senior Zimbabwean government officials involved in public corruption”.
During a Daily Maverick webinar on Monday, Biti was joined by Nick Donovan, a senior investigator at US-based corruption watchdog The Sentry, to discuss Tagwirei’s role in the country’s Command Agricultural Programme and how he scored tens of millions of dollars, which he used to buy two mines.
The Command Agricultural Programme was launched in 2016, a year before former president Robert Mugabe was overthrown, to help the country once referred to as the continent’s breadbasket achieve food security. Under the plan, the government aimed to support farmers to devote 100,000 hectares to growing maize.
Biti, who investigated the Command Agricultural Programme while he was on Parliament’s Public Accounts Committee (PAC), said it had become “a form of asset-stripping”, “rent-seeking” and “State Capture”.
“It is Zimbabwe that invented State Capture. South Africa is just refining it,” said Biti, who is now campaigning as a member of Nelson Chamisa’s opposition party, Citizens Coalition for Change.
Without an open tender process, Tagwirei’s company Sakunda Holdings, which specialises in oil trading, was awarded a $1-billion concession to run the Command Agricultural Programme. An investigation by The Sentry found the company made around $280-million while running the programme from 2016 to 2019.
Biti and Donovan described how Sakunda received at least $1.28-billion from the government, including more than $1-billion in Treasury Bills and $230-million in cash, in deals that were extremely questionable and probably illegal. To put it in perspective, the Zimbabwean government’s budget for 2021 came in at $8.7-billion.
Biti said the deals breached the country’s Constitution, as the expenditure wasn’t approved by Parliament, and the Treasury Bills were issued by the governor of the Reserve Bank rather than the finance minister.
He said the Command Agricultural Programme had become a parallel budget that increased public debt and scuppered the country’s chances of trying to re-establish a stable Zimbabwean currency.
Donovan explained how Tagwirei’s Sakunda received glaring preferential treatment regarding the Treasury Bills. One bill for $366-million should have been subject to new laws that reduced the US dollar value of assets that were to be converted to Zimbabwean dollars. But Sakunda received inflated rates, not tied to the new standard, which scored the company at least $50-million that it wasn’t entitled to receive.
Donovan said Sakunda’s bills were “protected in a way that other holders of Treasury Bills aren’t protected”. The company claimed the preferential rate was necessary as it had purchased chemicals and fertilisers abroad. The preferential treatment appeared unlawful even on that justification.
Tagwirei used the cash to purchase one mine from a state-owned entity and another from the Zimbabwean military.
Donovan and Biti said there was little evidence that the funds doled out by the Zimbabwean government for the Command Agricultural Programme went to assisting agricultural development. When it was spent on farming, it appeared to have been given to political and military elites.
“The sad thing in Zimbabwe is that the ministry of finance that is the gatekeeper, the Reserve Bank that is the gatekeeper, [yet] they are the gatecrashers,” said Biti.
“The looting has become so primitive and in the face of Kudakwashe Tagwire and Sakunda, it’s actually naive, stupid and idiotic because you can’t try to steal the whole country.”
Biti said while it was unlikely such alleged corruption would be prosecuted under Mnangagwa’s Zanu-PF government, it was important to continue documenting such cases so that one day an independent prosecutor can reverse the dodgy deals and hold those responsible accountable. DM