November 21, 2017

Govt to Plug Diamond Revenue Leaks

The Zimbabwe Government plans to issue a Statutory Instrument containing a clear formula for the calculation and remittance of any dividends from diamond producers it has shareholding in, as part of far-reaching reforms to plug diamond revenue leakages.

The plan is part of measures government has undertaken to implement under an International Monetary Fund (IMF)-supported reform programme.

The IMF’s Staff Monitored Programme (SMP) on Zimbabwe approved by the global lender’s managing director, Christine Lagarde, recently runs up to December 2013.

An SMP is an informal agreement between country authorities and the Fund’s staff to monitor the implementation of the authorities’ economic programme. SMPs do not entail financial assistance or endorsement by the IMF Executive Board.

This is Zimbabwe’s first IMF agreement in more than a decade.

The SMP focuses on putting public finances on a sustainable course, while protecting infrastructure investment and priority social spending, strengthening public financial management, increasing diamond revenue transparency, reducing financial sector vulnerabilities, and restructuring the central bank.

The measures on diamond proceeds stem from the new Diamond Policy for Zimbabwe that was approved by Cabinet last year to give Treasury and the Zimbabwe Revenue Authority (Zimra) a right to access trading and financial records for diamond companies.

 

The policy gave joint responsibility to the ministries of Finance and Mines and Mining Development to ensure the accurate computation, accounting and repatriation of diamond proceeds from companies in which government has a stake.

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