Zimbabwe should negotiate better deals with foreign capital to curb illicit financial flows in the country, United Refineries Ltd chief executive Busisa Moyo has said.
“We have to be smart about how we structure foreign direct investment (FDI) in this country so that we don’t experience high levels of illicit flows, because that is where they start. There are some deals that are just not good for us in the long-term. You can look at Malaysia back at 1965 and see that such investment has brought benefits. We want those kinds of deals where partners come in with private equity fund, time horizons and decent rates,” said Mr Moyo.
He was speaking at the ongoing CEO Africa Roundtable 2019 in Victoria Falls yesterday.
“The challenge that we have got are these illicit deals that come at a cost, for instance, 36 percent in United States dollar terms, you know you are just signing your life away. And that is the real challenge in structuring these inward FDI.”
Moyo said Zimbabwe is prone to bad deals to the extent that the country is in urgent need of foreign currency and financing in general.
“The challenge is that we are welcoming strangers with lots of money, but the question is, what is it that the strangers want.”
Illicit financial flows have been on the increase in Zimbabwe over the past couple of decades.
It has been noted that illicit financial flows in Zimbabwe have been rampant in the mining, fisheries, timber and wildlife sectors.
According to a study in 2014, at least $2,85 billion may have been taken out of the country through illicit financial flows between 2009 to 2012.
The Zimbabwe Coalition for Debt and Development (ZiMCODD) is on record saying lost revenue through illicit financial flows has far reaching consequences on the fulfilment of social and economic development.