GOVERNMENT should ensure that greater Foreign Direct Investment (FDI) in natural resources translates into higher fiscal revenue that could be spent in priority areas, a leading brokerage firm has said.
Report by our Staff
In a research note, MMC Capital said: “This is of major concern in Zimbabwe since currently, there is no clarity on the actual returns from the sale of the Marange diamonds.”
The call by MMC comes in the wake of concerns raised by Finance minister, Tendai Biti, over the absence of transparency on Marange diamonds.
Biti and civil society organisations have said the process of awarding the concession was not done properly and the country had been prejudiced of millions of dollars.
Four companies — Diamond Mining Corporation (DMC), Mbada, Marange Resources and Anjin — are mining diamonds on the concession owned by the Zimbabwe Mining Development Corporation (ZMDC).
ZMDC wholly owns Marange Resources and has a 50-50 joint venture with foreign partners in DMC and Mbada.
The Chinese and soldiers own Anjin.
Biti accuses Anjin of not remitting anything to the fiscus despite being the largest diamond producer on the Marange diamond fields.
However, the diamond producer —which has ventured into the hospitality and aviation industries — said it had discharged its statutory obligations and had remitted US$30 million to Treasury.
MMC said Zimbabwe should drive a hard bargain to ensure that it maximises the benefits from FDI.
It said FDI flows afforded countries the much-needed revenues and all must be done to avoid the weakening of governance and transparency.
“This means increasingly putting in place measures that enable open and competitive bidding for the exploitation of natural resources, for example in Liberia,” it said.