The export ban on unprocessed platinum and Chrome in Zimbabwe will take effect within two years in an effort to crackdown on illicit capital flight, a senior finance ministry official said here Thursday.
Willard Manungo, the Permanent Secretary, Finance Ministry, said Harare has issued a two-year ultimatum to all platinum and chrome exporters to ensure the minerals are fully processed in Zimbabwe before export to avoid capital flight.
The Treasury official, who spoke at a meeting of Central Bank Governors, ministers and senior financial experts, said Harare was keen to closing all outlets of illegal financial outflows, mostly through foreign multinationals.
“We are banning the export of raw platinum. We have given a two-year ultimatum. The notice has been put out to companies to ensure all the chrome and platinum are processed locally,” Manungo told the meeting convened by the Nairobi-based African Economic Research Consortium (AERC).
The two-day meeting sought policy directives on how to combat the illicit financial outflows in Africa, which is blamed for restricting Africa’s efforts to access capital for infrastructure investments.
Former Zambian Central Bank Governor Caleb Fundanga, said government officials should not feel offended by expert reports indicating that the mining sector, education and health were major conduits of capital flight from Africa.
“We need to appreciate not be offended by these reports. We need transparent tax administration regimes that are conducive to combat these capital outflows,” said Fundanga, currently the President of the Institute for Finance and Economics.
Zambia and Zimbabwe are both mineral endowed countries. Experts said the lack of transparency amongst senior government officials was part of the challenges leading to continuous outflow of funds from Africa.
Some experts expressed concern at the continuing dominance by Swiss-based firms on African minerals yet Switzerland was rarely the final destination to some of those minerals like copper, which is mostly exported to China.
In Zimbabwe, some companies cited the lack of adequate smelting capacity and shut down operations in the chrome ore sector when the first directives were issued.
Chrome ore is used for making stainless steel. Zimbabwe remains one of the world’s leading platinum producers after South Africa.
The mineral is mostly exploited by Anglo American Platinum, Impala Platinum Holdings and Aquarius Platinum.
Experts cited the lack of capacity amongst African national revenue authorities to effectively audit the foreign multinationals, a factor which they blamed for increasing the bleeding of the capital.