Zimbabwe’s gold mafia puts spotlight on Southern Africa’s organised crime problem – Piers Pigou ISS

A recent investigative report by Al Jazeera has brought to light a web of gold smugglers allegedly aiding the Zimbabwean government in evading sanctions. The exposé has implicated high-ranking individuals, including diplomats, the President’s niece, and President Emmerson Mnangagwa himself. Piers Pigou,  the Head of the Southern African programme at the Institute for Security Studies, told Biznews that this revelation sheds light on the Southern African region’s struggles in dealing with organised crime. Pigou also questioned why South Africa and Mozambique are on the FATF grey list while Zimbabwe has been removed. – Linda van Tilburg

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Relevant timestamps from the interview

  • 00:46 – Piers Pigou on Al Jazeera’s investigation into gold smuggling
  • 01:30 – On gold becoming the ideal currency for corrupt politicians in SA
  • 02:20 – On the process of gold smuggling
  • 03:10 – On SA’s position in the Al Jazeera investigation
  • 05:32 – On Ramaphosa launching an investigation
  • 06:31 – On Dubai being “the El Dorado” for gold smugglers
  • 08:31 – On the Zimbabwean population’s reaction to the Al Jazeera investigation
  • 11:35 – On the Al Jazeera investigative report and what it means for the upcoming Zimbabwean election
  • 14:03 – On how international investors will react to the Al Jazeera report
  • 16:16 – On the general feelings of Zimbabwean people ahead of the 2024 election

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Excerpts from the interview

Gold has become very central for illicit transfers and business

Gold is and has been for a long time a trusted medium of wealth. It’s one whose origins can be effectively disguised and I think that’s why in terms of illicit transfers and business, gold has become very central to a number of players. Of course, on the African continent, there are multiple sources of gold which can be accessed off the official books, so to speak. So, it provides a very strong base and set of opportunities to access wealth without having to go through formal systems. 

It’s having systems in place where the integrity of the process can be clear. I think one of the issues that were being raised by the Al Jazeera investigation is that they were showing the control process from purchase through to smelting and selling it on, which didn’t enable effective checks and balances to be put in place to be able to ensure the integrity of this. This effectively just creates a parallel process that has a paper trail associated with it, which ticks the boxes of all the legality. 

Read more: Cathy Buckle: Zimbabwe’s bitter harvest – Exposing the gold mafia and corruption

South African exposure is limited, not enough resources to investigate

I think it’s important to remember this wasn’t a criminal investigation. This was not a forensic investigation. This was a journalist investigation and they have uncovered an enormous amount of very useful information and related documentation, which lends to the fact that there’s prima facie evidence on multiple fronts for a proper independent forensic investigation. The question is: Will that happen? On the South African side of the fence with the banks; there’s been different responses from different banks with some having already acted on the information, and others saying that they reject any form of bad behaviour and that they would be looking into this. As far as I’m aware, the materials that were gleaned during the Al Jazeera investigation have been passed on to the requisite authorities in South Africa and so we wait to see what will happen. But, I wouldn’t hold your breath because we’re dealing with, in South Africa, a multitude of priorities when it comes to prosecuting authority. This is compounded by the fact that we have a very thin bandwidth for forensic financial investigations and competencies, to be able to pursue that. This is why so many of these issues are left up in the air. 

Dubai the El Dorado for Gold Smugglers?

The euphemism you might want to take tongue in cheek. There are some differences between Qatar and the UAE. So, you could argue that they’re having an opportunity to swipe at each other. But certainly, we have seen consistently over a number of years, the problem of lack of transparency and accountability with the way that gold imports are dealt with in the UAE and whilst the UAE denies categorically that it is involved in this, increasingly we see fingers pointed at them. 

I think what’s important is that we need to see these issues tied to a broader discussion about illicit transfers of funds out of the continent, a focus that has been given by former president Mbeki and the Economic Commission of Africa. So, we need to see this problem as part of a wider component of problems around how money and financial interests are being addressed in the continent.

Read more: Inside the ‘izinyoka’ – copper thieving gangs collapsing SA’s infrastructure. Brilliant.

Gold bar in Mnangagwa’s niece’s handbag, and Zim President implicated

At the centre of all these allegations is the president himself. Before becoming president, he was known to be the key character in the illicit gold market and that he’d made an enormous amount of money. The fact that his niece was caught with gold in a handbag, trying to smuggle that out of the airport and that those charges appear to have gone nowhere at this juncture yet is indicative of the kind of rot that we’re dealing with. The Zimbabwean authorities have launched their own inquiries, the financial intelligence unit, that the Reserve Bank has cleared, those that were identified, saying nothing untoward going on inside those bank accounts, etc., etc. So although there are going to be other related investigations supposedly by the Zimbabwe anti-corruption unit, the Parliament, as far as I’m aware, has been prevented from inquiring into these issues in Zimbabwe. So, we’re likely to see a kind of containment strategy coupled with avoidance and denial. That’s the standard pattern that we see around these issues.

SADC organised crime problem

Certainly what we’re seeing does raise significant problems for the region in terms of organised crime and in terms of the capacity to address organised crime. SADC has an organised crime strategy which the Institute for Security Studies helped facilitate, but the implementation of that strategy is some way off. So, there are lots of moving parts out there which are trying to address these issues with different levels of support and prioritisation from member states of SADC. But what we’re seeing at the moment is kind of a politics of the way these things are handled. I do believe that across the board in the region the tendency is towards denial and avoidance of these issues, particularly in the face of international exposures which have been somewhat embarrassing for countries such as Zimbabwe and South Africa. 

Read more: SA and Zimbabwe: A shared destiny to power-supply Armageddon

Impact of corruption allegations on Zimbabweans and 2024 Elections

There’s been lots of reporting around some of the fundamentals of state capture in Zimbabwe, but it hasn’t generated a convergence of action from Zimbabweans. I think that this in many ways reflects the state of mental health in some ways in terms of coping. People are aware that this stuff is going on, they’ve got no means of dealing with it. Not only are they burying their heads in the sand but navigate around it. I think this is the somewhat desperate space that we’re in. What’s going to be more interesting than whether this impacts the elections is to see whether these kinds of exposures impact at all on the discussions that are underway to deal with debt arrears and where the president of the African Development Bank that is underwriting this process, that is being mediated by Joaquim Chissano, the former Mozambican president. The issue is now whether there’s going to be a more honest conversation about the issues of concern that are on the table that have prevented the debt arrears process moving forward, and that includes discussions about governance, state capture, and rights violations.

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