Chaos in Zimbabwe’s gold sector major obstacle in efforts to lift of sanctions

Last week South Africa’s President, Cyril Ramaphosa, pleaded with the newly appointed British monarch and newly appointed Prime Minister to lift sanctions on Zimbabwe. Ramaphosa argues the West’s sanctions imposed on Zimbabwe have caused a ripple effect on the surrounding countries. Those fleeing Zimbabwe’s harsh living conditions find themselves in countries like South Africa, which puts additional pressure on the governments and economies.

To make matters worse for the average Zimbabwean, this week all power to the country was lost and remains off, after running out of energy generated from Kariba dam. The government are reportedly seeking to quash political dissent by distributing large number of payments to officials and other power brokers, in an age-old tactic.

South African President Cyril Ramaphosa has been pleading with the UK for sanctions against Zimbabwe to be removed.

Whilst these backroom deals may sometimes buy time for the government, it only further the total economic collapse of the country and any international investor confidence.

Stories of fraud, bribery, and corruption leaking out of Zimbabwe are relentless, with the gold mining sector at the front and centre for its nefarious schemes. Zimbabwe’s lucrative gold market makes for many financial opportunities however time after time criminals rob investors and tarnish Zimbabwe’s ‘open for business’ image.

The latest high-profile scandal to emerge from Harare Reports is of an embezzlement case involving a Singapore trading firm in the gold trading business, who are said to be owed more than $65m after entering into a deal with companies close to Fidelity Printers and Refiners.

Centre to this deal is Scott [Pedzai] Sakupwanya, a ZANU-PF Councillor and close associate of the President, who runs the controversial brokerage house BetterBrands Investment. Through dealings with two Singapore based businessmen, a deal was thought to be have been put together which has led to the embezzlement of almost $60m.

This follows a separate case involving Scott last year when the faced arrest after he was accused of snatching 132 gold mining blocks from Redwing Mine in Penhalonga.  

Scott Sakupwanya, owner of BetterBrands Investment

The matter came to light after another company, Probadek Investments, approached the police and courts claiming that they had earlier entered into an agreement with Redwing through Madondo – who at the time was in remand prison facing charges of fraud over the Sakupwanya deal – to mine on the same blocks that were later awarded to Sakupwanya’s BetterBrands. 

Probadek’s owners said they invested over US$300,000 as initial payments and were shocked Madondo signed a deal with Sakupwanya.

The dispute reportedly attracted the attention of the Special Anti-Corruption Unit. According to the report, BetterBrands agreed to invest US$3 million, but the company paid US$50,000 to get the deal.

Sakupwanya has also been accused of violent tactics in Zimbabwe and Farai Maguwu, who reportedly exposed Sakupwanya and the ongoings at Redwing Mine, has since received death threats. Sakupwanya has previously remained untouchable due to his private security operations and powerful connections within the government, however the veil is slowly being lifted.

It is no wonder the people of Zimbabwe and its neighbours are fed up with the on-going criminal activity pretending to be legitimate business dealings. Each case further shatters the image the country has been trying so desperately to restore­ — to the detriment of Zimbabwean civilians and their economy. The current tumultuous environment has almost reached boiling point and recently resulted in Zimbabwe passing an extremely controversial law criminalising Zimbabweans who advocate for sanctions.

However, President Mnangagwa’s effort to suppress Zimbabwean voices may only galvanise international voices to fight the corruption. As long as criminals like Scott Sakupwanya are supported by President Mnangagwa and keep operating unscathed, sanctions are unlikely to change ahead of next year’s presidential election. However, the international community will keep a close eye on how the latest large-scale investment fraud in the Zimbabwean gold sector develops, prior to any decisions being taken.