The IMF has privately warned Zimbabwe that state payouts to a company linked to global commodities trader Trafigura were pushing the shortages-plagued economy to the brink, reviving fears of corruption at the highest level of government.
Payouts to Sakunda Holdings, a fuel company owned by an ally of President Emmerson Mnangagwa, were in effect met by the central bank’s printing money. The transactions severely undermined the country’s currency — the Zimbabwe dollar — only months after it was introduced, the Washington-based institution told Harare this month, according to two people with knowledge of the discussions.
The payments have shed light on the financial links between the state and Sakunda’s chief executive, Kudakwashe Tagwirei, a businessman close to the ruling Zanu- PF party. Sakunda also owns a stake in Trafigura Zimbabwe, a joint venture with Trafigura, one of the world’s largest oil traders.
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Sakunda received $366m in government bonds as payments for supplying “Command Agriculture”, a state farm subsidy scheme that Mr Mnangagwa has championed. However, when Sakunda redeemed some of the bonds, the payouts were made in Zimbabwe dollars at an exchange rate that translated into massive money printing.
The redemptions led to a 80 per cent surge in Zimbabwe’s monetary base — money in circulation including bank reserves. The IMF’S programme with Harare has set a target of 8 to 10 per cent for this year.
Following the IMF warning, Zimbabwe’s regulators last week froze the bank accounts of Sakunda and other companies. The move temporarily halted a sharp decline in the Zimbabwe dollar, also known as the RTGS dollar.
However, the consequences of the payments to Sakunda have added to disquiet in Zimbabwe over allegations of “state capture” — the exploitation of public institutions and funds for private interests. Opposition politicians have accused Mr Tagwirei of using his connections to the ruling party and the central bank to build his business.
Tendai Biti, a former finance minister and lawmaker with the opposition, said: “If ever there was state capture, it is Sakunda.”
Since replacing the late dictator Robert Mugabe following a 2017 coup, Mr Mnangagwa has vowed to make Zimbabwe “open for business”.
