Zimbabwe


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One of the poorest countries in the world, Zimbabwe depended on the extractive industries for 36 percent of export earnings in 2010. After the violently contested 2008 presidential election, a power-sharing agreement divided key government ministries between President Robert Mugabe's Zimbabwe African National Union-Patriotic Front (ZANU-PF) and the opposition Movement for Democratic Change (MDC). A ZANU-PF member heads the Mines and Mining Development Ministry, which regulates the minerals sector, while an MDC member controls the Finance Ministry, which oversees revenue collection. As a result, the political climate surrounding Zimbabwe's extractive sector is characterized by hostility, mistrust, and lack of transparency.


Zimbabwe's Performance on the Resource Governance Index

Zimbabwe received a "failing" score of 31, ranking 51st out of 58 countries. A "partial" score on Safeguards & Quality Controls contrasted with a particularly low Enabling Environment score.

Rank
(out of 58)
Score
(out of 100)
51 Composite Score 31
44 Institutional & Legal Setting 48
Freedom of information law 67
Comprehensive sector legislation 100
EITI participation 0
Independent licensing process 50
Environmental and social impact assessments required 50
Clarity in revenue collection 67
Comprehensive public sector balance 50
SOC financial reports required 0
Fund rules defined in law N/A
Subnational transfer rules defined in law N/A
52 Reporting Practices 23
Licensing process 50
Contracts 0
Environmental and social impact assessments 17
Exploration data 67
Production volumes 33
Production value 67
Primary sources of revenue 33
Secondary sources of revenue 17
Subsidies 33
Operating company names 33
Comprehensive SOC reports 0
SOC production data 0
SOC revenue data 0
SOC quasi fiscal activities 0
SOC board of directors 0
Fund rules N/A
Comprehensive fund reports N/A
Subnational transfer rules N/A
Comprehensive subnational transfer reports N/A
Subnational reporting of transfers N/A
29 Safeguards & Quality Controls 56
Checks on licensing process 22
Checks on budgetary process 67
Quality of government reports 42
Government disclosure of conflicts of interest 100
Quality of SOC reports 0
SOC reports audited 17
SOC use of international accounting standards 100
SOC disclosure of conflicts of interest 100
Quality of fund reports N/A
Fund reports audited N/A
Government follows fund rules N/A
Checks on fund spending N/A
Fund disclosure of conflicts of interest N/A
Quality of subnational transfer reports N/A
Government follows subnational transfer rules N/A
55 Enabling Environment 6
Corruption (TI Corruption Perceptions Index & WGI control of corruption) 9
Open Budget (IBP Index) N/A
Accountability & democracy (EIU Democracy Index & WGI voice and accountability) 10
Government effectiveness (WGI) 4
Rule of law (WGI) 1
Satisfactory Weak
Partial Failing
To explore all data and compare
scores, use the RGI Data Tool.

Institutional & Legal Setting (Rank: 44th/58, Score: 48/100) learn more

Zimbabwe's "weak" score of 48 reflects a non-competitive licensing process and the lack of mechanisms to promote public accountability in the mining sector.

Mineral exploitation rights are vested in the president. The Mining Affairs Board and the Mines and Mining Development Ministry review license applications and the president approves them. Major companies often negotiate contract terms directly with the government, and industry representatives, including officials of state-owned companies, sit on the Mining Affairs Board, compromising its independence.

National law requires that licensing decisions be made in the "national interest." In the face of sanctions against Mugabe's government by Western countries, the "national interest" clause has been used to subvert the normal bidding process and award mining licenses to companies from countries considered friendly to Zimbabwe, such as China, the United Arab Emirates, Russia, South Africa, and India.

The Zimbabwe Revenue Authority collects taxes, but the Finance Ministry has complained that a significant portion of mineral revenues never reach the treasury. Legal provisions establishing the public's right to information include broad exceptions limiting access to mining data. Companies must perform environmental impact assessments, but sometimes complete them only after extraction has already begun.

Reporting Practices (Rank: 52nd/58, Score: 23/100) learn more

The government provides very little useful data on the mining industry, resulting in a "failing" score of 23.

Zimbabwe's disclosure policies ostensibly promote transparency and public oversight of the extractive industries. In reality, the public—and even other government agencies—know very little about licensing processes and contractual arrangements with mining companies. Contracts are not disclosed and environmental impact assessments are available only for very high fees.

The Finance Ministry publishes current information on mineral production, prices, exports, investment, production costs, royalties, and dividends. The Zimbabwe Revenue Authority does not provide sector-specific revenue data, and the Mines and Mining Development Ministry publishes little or no information on extraction. The Reserve Bank of Zimbabwe publishes historical data only.

Safeguards & Quality Controls (Rank: 29th/58, Score: 56/100) learn more

Zimbabwe received a "partial" score of 56, reflecting marginal legislative oversight and incomplete auditing mechanisms.

The president has wide discretion in licensing, allowing favored applicants to bypass the bidding process. Some companies appear to have been exempted from taxation in return for their investment in critical industries. Parliament rarely exercises its right to review contracts with mining companies; in any case, the president has no obligation to act on Parliament's decisions.

The Office of the Comptroller and Auditor-General is required to review public accounts and report to lawmakers. However, the state's limited resources and highly charged political climate have weakened the oversight role of parliament, and government auditors lack the capacity to review mining revenues effectively. Audit reports are not published.

Enabling Environment (Rank: 55th/58, Score: 6/100) learn more

Zimbabwe's "failing" score of 6 is the product of extremely low global rankings on the rule of law and government effectiveness.


State-Owned Companies (Rank: 37th/45, Score: 22/100) learn more

There are many state-owned mining companies, including the Zimbabwe Mining Development Corporation (ZMDC), which is entirely government-owned. With insufficient funds in the treasury, state-owned companies sometimes act as quasi-governmental agencies, funding academic programs or paying civil servant salaries. The business dealings of these companies are opaque; they do not publish annual reports and have been accused by the Finance Ministry of failing to pay taxes. While audits of ZMDC are required, the reports are not available to the public.

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