Mugabe, corruption and the Chiyangwa deal

ON A controversial visit to Malawi to open a road named after him, President Robert Mugabe, said: “Do you really know who I am?”
That prompts the question, who is Robert Mugabe?
Mugabe has been a towering figure in the history of Zimbabwe. Historians, academics, state and non-state practitioners alike will not deny Mugabe a special space in the history of Zimbabwe and indeed in the global space of men and women whose lives have had an indelible impact on human development.
He has been Zimbabwe’s only leader and after twenty six years in power his legacy remains controversial. How will history judge him? Would his colleagues stand by his record when he expires or would they be chameleons who would wish the world to believe that only Mugabe should be culpable and held liable for the economic and political decay of contemporary Zimbabwe?
Mugabe remains an enigma and even his foes appear not to understand him. Mugabe is one of the key founding fathers of Zimbabwe and his role in shaping the history of the country cannot be denied. Like Truman, the buck stops at Mugabe and accordingly it is important to critically examine his record particularly in so far as the world at large and the public in Zimbabwe has accepted gullibly that he is corrupt without providing any substantive evidence on the role of Mugabe personally in corrupt practices.
What is corruption and how does it impact of governance? In broad terms, political corruption is the misuse of public office for private gain. Political corruption encompasses abuses by government officials such as embezzlement and nepotism, as well as abuses linking public and private actors such as bribery, extortion, influence peddling, and fraud.
All forms of government are susceptible in practice to political corruption. Degrees of corruption vary greatly, from minor uses of influence and patronage to do and return favours, to institutionalised bribery and beyond. The end-point of political corruption is kleptocracy, literally rule by thieves, where even the external pretence of honesty is abandoned. Corruption is has a direct and causal relationship with centralization of power and despotism.
While the despot himself may not be directly involved in corrupt activities, it is common cause that by creating a mono power centre he cultivates and nurtures a generally corrupt environment. It is for the public to judge whether Zimbabwe exhibits evidence of corruption and to what extent the President can be identified as culpable and held liable for this cancer to the Zimbabwean society.
Corruption arises in both political and bureaucratic offices and can be petty or grand, organized or unorganized. For the purposes of understanding the problem and devising remedies, it is important to keep crime and corruption analytically distinct. Corruption does pose a serious development challenge. In the political realm, it undermines democracy and good governance by subverting formal processes. Corruption in elections and in legislative bodies reduces accountability and representation in policymaking; corruption in the judiciary suspends the rule of law; and corruption in public administration results in the unequal provision of services.
More generally, corruption erodes the institutional capacity of government as procedures are disregarded, resources are siphoned off, and officials are hired or promoted without regard to performance. At the same time, corruption undermines the legitimacy of government and such democratic values as trust and tolerance. Corruption also undermines economic development by generating considerable distortions and inefficiency.
In the private sector, corruption increases the cost of business through the price of illicit payments themselves, the management cost of negotiating with officials, and the risk of breached agreements or detection. Although some claim corruption reduces costs by cutting red tape, an emerging consensus holds that the availability of bribes induces officials to contrive new rules and delays. Where corruption inflates the cost of business, it also distorts the playing field, shielding firms with connections from competition and thereby sustaining inefficient firms.
Corruption also generates economic distortions in the public sector by diverting public investment into capital projects where bribes and kickbacks are more plentiful. Officials may increase the technical complexity of public sector projects to conceal such dealings, thus further distorting investment.
Corruption also lowers compliance with construction, environmental, or other regulations; reduces the quality of government services and infrastructure; and increases budgetary pressures on government.
olitical corruption is widespread in many countries, and represents a major obstacle to the well-being of the citizens of those countries. It is important to underscore that while the media and developed countries have traditionally seen national governance and corruption as particularly daunting in poorer countries with rich countries generally viewed as exemplary, the reality is more complex. Even rich countries are corrupt and yet emphasis on narrow legalisms often subtly obscures manifestations of mis-governance that afflict rich countries as well. It is generally true that emphasis is usually given to measurement and analysis of mis-governance when the rules of the game have been captured and privatized by the elite through undue influence.
In the case of Zimbabwe, it is important that we study the situation to ascertain whether the rules of the game have not been hijacked by a small cabal led by the actors in the Reserve Bank of Zimbabwe while Mugabe remains like a naked emperor bearing the brunt of public anger against institutionalized corruption and the its impact on governance.
The jury is still out on whether Mugabe has misused public office for any direct and private gain. Having operated in Zimbabwe as a private businessman, I can confirm that I have no personal knowledge of Mugabe ever asking for a bride in return for any favour. Equally, I have not come across anyone with personal knowledge of Mugabe having asked for a personal favour in the conduct of his duties. Is Mugabe dishonest? While all forms of government are susceptible in practice to political corruption, is it necessary true that Mugabe is corrupt? If so, how does the corruption manifest itself?
Corruption takes two to tango and yet no briber has come to the fore to provide evidence that Mugabe takes bribes. Notwithstanding the lack of evidence, the opposition players in Zimbabwe like their international collaborators remain convinced that Mugabe is personally corrupt in a bid to explain why he still clings to power against a background of a debilitating economic crisis that has reduced Zimbabwe from a bread basket to a basket case.
The question is framed as follows: “If Mugabe is indeed not corrupt why is he still in power?”
Some ignore the fact that Mugabe believes in elections and since 1980 elections have been held on time and consistently Zanu PF has won and it is not the obligation of the winner to help the loser. If Mugabe has not missed any election and yet carries the burden of explaining why he has not lost an election then there is need for a serious rethink about the construction of the change agenda in Zimbabwe. Some argue rightly or wrongly that Mugabe has manipulated the constitution to suit his whims and yet fails to provide concrete and cogent evidence of how an incumbent can fail to use the state machinery at his/her disposal to win an election consistently. Even if the constitution of Zimbabwe was amended today, it is not explained how a poorly organized and funded opposition can unseat an incumbent political monster.
In evaluating whether Mugabe is corrupt, should we not go beyond the personal assessment to a more a general and institutional assessment of Zanu PF as an organization that has monopolized state power for more than a quarter of a century with one person at the helm. If Mugabe has defined who Zanu PF is as an institution is it not fair to interrogate the hypothesis that if the government is corrupt then the leader should be the cause. Is it fair to hold Mugabe personally culpable when there is no evidence of personal gain other than the gain he has derived by continuing to hold on to political power?
Some have argued that it is important to locate Zimbabwe’s problems in the ideology that informs Mugabe rather than simplistically concluding that he is personally corrupt. However, if Mugabe is the head of the fish then he cannot and should not escape being held culpable some would argue.
Why is it the case that Zimbabweans have failed to understand Mugabe even after his long stay in the people’s house i.e. State House? Do we really know the man? The many people who I have met including respectable journalists appear not to understand the man. Equally, I am not sure whether Zanu PF even understands its leader. Could it be that people are so petrified of Mugabe that they have chosen deliberately not to understand the man?
It is important to underscore that Mugabe is allergic to the private sector and yet some of us stand accused of being cronies when it is common cause that the party and its president despises the private sector. In generational terms, why is it the case that all the best brains that were privileged to be relevant at the time of Zimbabwe’s independence never graduated to be successful businesspersons and it is only our generation that has succeeded to define a new business architecture for the country? In such an environment it is not unusual for the public to explain any business success in patronage and corrupt terms. In this kind of free for all it is natural that Zanu PF is credited for our success and yet the public fail to identify the counterpart in government who is supposed to have subverted government processes for personal gain.
Last week was an interesting one for Reserve Bank governor Gideon Gono and businessman, Phillip Chiyangwa. The public had come to accept that Mugabe had anointed Gono as his successor and Gono could do no wrong and evil. However, for the first time Mugabe has shown who really is Gono’s boss! It is not the board of governors of the RBZ that forced Gono to make the humiliating U-turn on the bizarre but expected deal allowing Chiyangwa's company, Pinnacle Property Holdings, to sell properties in foreign currency. It was Mugabe.
The special relationship between Chiyangwa and Gono is common cause but the relationship between Mugabe and Chiyangwa has not be adequately discussed and addressed. There is an impression that Mugabe is close to Chiyangwa but this is not the case. What was significant about the Pinnacle debacle is that Gono had approved the deal and it is ludicrous to suggest that Paul Sigauke could personally approve a transaction where the RBZ, on an exclusive basis, would appoint Chiyangwa’s company to sell residential stands to non-resident Zimbabweans for foreign currency without the personal knowledge of the Governor.
If Chiyangwa did not enjoy a special relationship with Gono he would have been processed by the Zimbabwe Republic Police rather than Gono sacrificing the innocent Sigauke to placate the angry Mugabe. Strangely enough, the public is told by Gono that if it was not for the media exposure, the Chiyangwa deal could have proceeded.
If one reads between the lines, it is obvious that the President read about the Chiyangwa deal in the media and he must have summoned Gono to explain whereupon in typical Gono-style he blamed everyone except himself and promised to investigate and bring to book the culpable. If the President was personally corrupt and knowing the implications of the Pinnacle deal on Chiyangwa personally and his government backers, would he have ordered Gono to reverse the transaction?
What is significant about the deal is that while other Zimbabweans have been targeted for dealing in foreign exchange given that the President believes that foreign currency is a national asset, Chiyangwa was given the permission to sell Zimbabwean assets to non-residents in foreign currency when even mining companies are denied the same privilege. What is so special about Chiyangwa that would allow the RBZ to respond in a day with an approval? What other deals are being approved by the RBZ that the President is not told about because the media is manipulated by Gono? Why is it that the opposition is blind to these deals and the media has become the only source of information Mugabe can listen to and respond swiftly?
If anything, last week demonstrated something remarkable that Mugabe would not countenance any corruption and if the opposition demonstrations were targeted at corruption they would enjoy Mugabe’s unequivocal support.
It is critically important to underscore that Mugabe and not Gono is still in charge and that the corruption that has now been a characteristic of Gono’s reign has survived and thrived because Zimbabweans have not found a way of communicating with Mugabe.
Those who know Mugabe very well would agree that he is one man who thinks that an abuse of government office for personal gain is a betrayal of the revolution. Why is it the case that Gono has escaped Mugabe’s wrath? If Chiyangwa had the confidence of pursuing the Pinnacle project fully knowing Mugabe’s views on citizens’ rights to the scare commodity, it is important to question what other deals has he done with the RBZ that have gone unnoticed? Is Chiyangwa alone in getting these special deals? What is the connection between Chiyangwa, Gono, Prof. Jonathan Moyo etc and the Tsholotsho gang? What other deals are taking place in the name of national interests while private gain is the operative word?
As I have said before, the only power the people who do not have power is the power to organize. Is it not ironic that those who are opposed to Mugabe have not taken the time to study the man? I am sure many would have read the Chiyangwa story and not taken time to study the implications on governance and Mugabe’s views on corruption and Gono’s chameleon style of governance. This case alone is pregnant with lessons on governance.
Coming back to Mugabe, it is important that we study carefully what Gono is reported to have said to the media after canceling the Pinnable licence following Mugabe’s intervention.
Gono said: "It is illegal for any institution in Zimbabwe, other than Homelink, to enter into foreign currency deals for the purposes of purchasing or renting property.”
It is important that we get told when precisely Gono knew about the deal. If he did not know about Sigauke’s unauthorized approval, how many other deals are taking place in the RBZ without his knowledge? Where should the buck stop at? Why is it that Gono would not accept responsibility for the obvious governance problem at the RBZ?
"The central bank has nothing against Pinnacle Property Holdings and encourages them and other property developers to try by all means to satisfy local demand for housing before attempting to satisfy external demand," said Gono.
In this statement Gono exposed himself. If the RBZ has nothing against Pinnacle why should he encourage it to pursue property development by any means necessary? Have you heard Gono encouraging exporters to use any means necessary to remain in business? What is so special about Pinnacle and other property developers? Could it be that Gono has an interest in Pinnacle?
"My gratitude goes to the Press for highlighting this issue, which could have gone undetected, were it not for the media," he added.
Why should Gono be grateful to the media? What the hell is happening at the RBZ that all systems and procedures for approving deals are non-existent and we have now to rely on the media to help the Bank? Gono is strangely now a Professor on Good Corporate Governance and yet his own organization needs the media to highlight corrupt deals?
The Herald reported that when contacted, Chiyangwa professed ignorance of the latest developments. He is reported to have said: "I think these are just rumours, no communication has come to me to that effect. Maybe it’s just talk because not everyone is happy with this. If it were true, I would have received a letter from Mr Sigauke. It’s something that has taken long to materialise so it cannot be cancelled just like that."
Chiyangwa was right to express surprise at the turn of events because knowing his special relationship with Gono it was inconceivable that the deal could be reversed without a word from Gono.
The Herald reported that Sigauke had accepted full responsibility for the decision to grant Pinnacle the authority to sell its properties in foreign currency. He is reported to have said: "I behave like a Japanese karateka and I will kill myself for honour. Any mistake made in my division is my mistake as the head of that division. It is a hard decision to take, but I feel I should move on. It is my personal belief that I should persuade the bank to give me a package."
Does Gono think that the public in naïve to accept that Sigauke was the driver of the deal? Why should he take the flak? Should the buck not stop at Gono? Was it a mistake on the part of Sigauke? What other mistakes are taking place at the RBZ? Why should he be given the luxury of persuading the Bank to give him a package when other Zimbabweans are arrested for making the same mistakes?
The Herald then reported that the documents showed that Homelink Private Limited, which had originally been approached by Chiyangwa to enter into a joint venture, turned down the offer last month. The rejection letter from Homelink said: "Under the circumstances having considered corporate governance issues, financial issues and potential benefits to all interested parties, it is the unanimous decision of the Homelink Board that Homelink does not proceed with the joint venture proposed by Native Investments. The board, however, is concerned about a mechanism being established that is exclusive to one particular player/organisation. There are inherent risks with this approach and the board would not like Homelink to be compromised in any way, particularly as this could have a serious knock-on effect to the central bank."
Notwithstanding the position of Homelink, that neither Homelink nor the central bank should in any way be associated with the project, we are told that we should accept Gono’s version that Sigauke was a loose canon who on his return from Brazil received a letter from Chiyangwa urging him to reconsider the Pinnacle application.
It is reported that Chiyangwa’s letter said: "I refer to the above matter. It has been brought to my attention that the Homelink (Private) Limited Board of Directors have declined to proceed with the joint venture with Pinnacle Properties. With the greatest of respect, this is regrettable. In light of the foregoing, we kindly request that you grant us the permission to commence selling our properties in foreign currency."
The next day, Chiyangwa wrote again to Sigauke and submitted a list of properties under Pinnacle. We are not told why Chiyangwa would submit a list of properties without even receiving a response from Sigauke. How did Chiyangwa know that the RBZ wanted a list of properties from him?
We are then told that on the same day, Sigauke "inappropriately and without authority" signed the approval after having advised Chiyangwa that: "Exchange control would wish to advise that the Reserve Bank has approved Pinnacle Property Holdings’ proposal to sell property in foreign currency . . ."
The authority was valid until April 30 2007.
Some may remember that I was one of the pioneers in encouraging non-resident Zimbabweans to invest in the country. At the time, Chiyangwa was very critical of the initiative leading him to name his company, Native Africa Investments, in a bid to highlight the fact that he stood for authentic Zimbabweans and not the sell out Zimbos in the diaspora. He did not see any need in attracting Zimbabweans in the diaspora to invest in Zimbabwe and yet today my idea was nationalized by Gono through the setting up of Homelink and now Chiyangwa has come up with a scheme that he opposed barely ten years ago. It is important that as people concerned about Zimbabwe seek to chart a post-Mugabe era they do so, on the basis of integrity and honesty and not on hypocrisy and duplicity.
Chiyangwa took advantage of my predicament and is now involved in a joint venture with companies whose control was stolen from me by the government of Zimbabwe and in particular Gono. Through his investment vehicle, Phillip Chiyangwa Family Trust, he holds a 20 percent stake in Maitlands Zimbabwe, a joint venture company with CFI (45 percent) and ZimRe (35 percent). I started the project and put together the strategic framework to create an institution that would develop housing solutions for the country while promoting and developing a holistic institutional capacity to respond the challenges facing Zimbabweans.
Through my control of both CFI and Zimre, we put together a framework that has now been hijacked. It is not surprising that Gono has a representative now on the CFI board, Mr. Chiremba, and is effectively in control of both Zimre and CFI. While Emmerson Mnangagwa may have been rightly or wrongly credited for my predicament, he is not alone and the real beneficiaries are obvious.
I strongly believe that Zimbabweans must wake up and smell the coffee. Change may be near but if after twenty six years in power, Mugabe’s real personality remains a mystery, people need to go back to the drawing board lest he may be replaced by chameleons who may legitimately claim that Mugabe alone should be held culpable for corruption while taking advantage of citizens’ ignorance. I trust that people will take time to understand Mugabe the persons without favour or prejudice so that solutions for the country can be appropriately developed in the national interest and those that are culpable are brought to book.
Mugabe’s own naivety presents an opportunity for people like Gono to take advantage of the vacuum while seemingly maintaining a high moral ground by using the state machinery to benefit his friends while targeting his enemies using Mugabe.
I am told that Gono moves around with a file for all his enemies while maintaining amnesia on all the deals done by his friends and cronies. This can only stop if like the Herald did, people focus on where the problem is and stop targeting a grandfather of Zimbabwean politics who may be more of a victim than a villain.