Desperate ZANU-PF turns to mining
HTHE ruling ZANU-PF party is venturing into the capital intensive mining sector to shore up its precarious cash flows in what is likely to trigger uproar over possible conflict of interest, the Financial Gazette can reveal.A report submitted at the party’s national conference held in Chinhoyi in December highlighted ZANU-PF’s intentions to go into mining without being definitive about when these plans could be rolled into motion.
The report said there has been a surge in local and foreign companies waiting to do business with the party although it withheld their identities.
“To this end, there are projects at various stages of approval or implementation in particular in the construction industry, mining industry and power generation. Departments and other private organisations and companies have been identified to partner the party for wealth creation and liquidity,” reads part of the report.
While the identities of the potential suitors in the various projects earmarked for investment remained a closely guarded secret, ZANU-PF is known to consider countries in the Far East as its “all-weather friends”.
China has particularly dominated most of the deals struck after President Robert Mugabe’s party fell out with countries in the West over governance issues.
ZANU-PF’s forays into mining suggest that the liquidity crunch rattling the t to act in order to sustain its operations.
The party is heavily reliant on subscriptions, membership fees, the benevolence of deep-pocketed party stalwarts and donors to fund its colossal operations.
Prolonged economic turmoil has however, slowed down inflows into ZANU-PF’s coffers as well-wishers and cadres cut back on spending.
This could have resulted in the ruling party turning to the mining industry to diversify its revenue streams.
The party’s financial records for last year show a huge gap between its income and expenditure.
For instance, expenditure stood at US$9 million against income of US$4, 4 million.
ZANU-PF’s liabilities amounted to US$5,8 million, with bank interest charges standing at US$701 721.
The party’s financial burdens were eased by donations amounting to US$3 million, and the US$1,19 million received under the Political Parties Finance Act.
The dire financial position has resulted in the party struggling to bankroll its activities. Last year, the party’s Masvingo chapter was served with an eviction notice for failing to pay rentals. The Midlands chapter had previously gone through similar embarrassment after defaulting on its rentals.
To set the party on a firm financial footing, ZANU-PF strategists are eyeing riches in the resource sector.
Mining has lately been seen as anchoring Zimbabwe’s economic revival.
Zimbabwe is endowed with an array of minerals, which if properly accounted for can arrest its economic problems, but lack of accountability, especially over diamond revenues, has seen those riches benefitting only a few.
While ZANU-PF has significant investments in the private sector, these have not been spared by the liquidity crunch, resulting in some of them failing to pay their workers.
A report presented at the Chinhoyi conference also alluded to the problems besetting ZANU-PF’s investments. It said the companies were in the red due to various reasons ranging from antiquated machinery and sanctions-induced problems.
Critics however, cite years of mismanagement and corruption as the main reasons for the state of affairs.
Should ZANU-PF succeed in venturing into mining, it will compete with private entities in a development that is likely to create conflict of interest and give it unfair advantage over other players.
It also remains to be seen whether the party has the capacity to run a mining firm as it has struggled to run its other already established companies.
Through M&S Syndicate, its holding company, the party has a vast range of interests, including Treger Holdings, producers of building materials, hardware etc; Ottawa, a property management company; Catercraft, which runs the catering at Harare International Airport and also supplies all domestic and international flights out of Harare; and Zidlee Enterprises, which controls the duty free shops.
The party has shares in one financial institution, FBC Holdings.
ZANU-PF secretary for information and publicity, Rugare Gumbo, referred all question to the party’s secretary for administration Didymus Mutasa when asked to comment on the party’s excursions into mining.
But Mutasa referred questions back to Gumbo.
“Am I the right person to comment on that? Talk to Gumbo. He is in charge of publicity,” said Mutasa.