New President of Zimbabwe Attempts to Repatriate Hidden Offshore Money
Zimbabwe’s economy has been described as one of the most fragile in the world by the International Monetary Fund (IMF). Recently, the country has welcomed political change with the election of President Mnangagwa, who replaced notorious President Robert Mugabe in November after Mugabe held power for 37 years. Within the first few months of his presidency, Mnangagwa has tried to bring about economic change by demanding the return of illegal funds stashed abroad.
During his tenure, Mugabe printed a large quantity of money to help keep himself in power, which contributed towards Zimbabwe experiencing a case of extreme hyperinflation. The inflation rate reached the staggering figure of almost 89,700,000,000,000,000,000,000 percent by 2008. Since 2009, Zimbabwe has largely abandoned its own currency and has relied on the US dollar as its main form of currency.
At the beginning of his presidency, Mr Mnangagwa made it clear that he would work relentlessly to end corruption in Zimbabwe, and he believes that tackling monetary issues will be key to this effort. Hence, in November 2017, he initiated a plan to bring back Zimbabwean money that has been illegally stashed abroad, offering a three month amnesty for those involved with such practices. At that time, it was warned that the government would prosecute any individual who failed to act accordingly when they reached the end of the three month period.
As of March 19, 2018, Mnangagwa claims that $591 million of the estimated $1.42 billion stashed abroad has been returned to Zimbabwe. He said that a majority of the funds are proceeds from export and import payments that have been hidden offshore. A large majority of these funds are thought to be from the agriculture and mining sectors.
While some have hailed this move as progress, some parties are skeptical about the campaign to retrieve these overseas funds. Dewa Mavhinga from the Human Rights Watch has expressed concerns that this effort has more to do with revenge than with justice and ending corruption within Zimbabwe. Some also believe that the effort has specifically targeted enemies of the new president since his victory in November 2017, which came about after a military takeover.