At the dawn of independence in 1990, a public servant working in an entry-level position for the state could afford to buy themselves a home, a car, and send his children to school with a lunchbox for break-time. However, the rising cost of living has ushered in a phenomenon referred to as the ‘working poor’ where relatively young people, even those working at supervisory level, cannot afford to buy themselves homes and end up renting apartments in complexes if they are lucky. Many young people, especially in the capital city of Windhoek, have delayed moving out of their parents’ homes because, for them, affording a dwelling of their own is a pipe dream. Houses in Namibia, which are usually financed through a mortgage loan from one of the country’s four commercial banks, are only accessible to the middle class and those with a household income of at least N$35000 (USD 2000) and above.
The average wage in Namibia, according to the Wage Indicator Foundation, is estimated at N$3240 (US$187) per month. Low wages, rising inflation, and high unemployment (which results in black families having the burden of taking care of other family members) are all factors that contribute to the phenomenon of the working poor.
The free-market policies that Namibia’s government assumed at independence can also be seen as a contributing factor to the phenomenon of Namibia’s working poor.
Free Market Fundamentalism
Free market Fundamentalism is a term applied to a strong belief in the ability of unregulated markets to solve most economic and social problems. But what happens in an economy with an oversupply of labor and no industry to absorb that labor?
Well, the principles of supply and demand suggest that labor will be cheap in such a scenario, and employers are spoiled for choice when deciding who to hire and at what cost.
People queuing to withdraw money at an ATM in Windhoek’s Post Street Mall. Credit: Vitalio Angula / Ubuntu Times
In the absence of strong labor unions, the ability for workers to get at least a decent, living minimum wage is eroded!
The absence of a minimum wage for Namibia’s working force is one of the main contributors to the phenomenon of the working poor: people who are formally employed but can’t afford the basics in terms of food, clothing, and shelter, let alone school fees for their offspring, transport, water, and electricity bills.
How Did China Do It?
Following the disastrous Cultural Revolution in China, communist party leader Deng Xiaoping and the Chinese government initiated an open-door strategy aimed at achieving economic growth by actively embracing foreign capital and technology, while simultaneously upholding its socialist principles.
On the other hand, Namibia, at the dawn of independence, adopted a free market economy that they labeled ‘mixed’ and allowed capitalism to reign without proper regulation or oversight by the state.
Deng successfully enhanced the economic well-being of the Chinese populace through the implementation of a political framework characterized by a one-party socialist democracy, with the adoption of a market-oriented economic system.
This meant that there was an improvement in the economic status of Chinese people, which translated into a higher quality of life.
Namibian-based economist Robin Sherbourne states that “in spite of moderate real Gross Domestic Product (GDP) growth rate averaging 4.3 percent and translating into real GDP per capita growth of about 2.3 per year since 1990, this has not sufficiently translated into substantial reduction in poverty, income inequality, and unemployment”.
This was ten years ago, in 2013, and the status quo prevails.
Why has Namibia managed to have year-on-year economic growth that has not translated into employment opportunities, and in instances where those employment opportunities do not translate into a higher living standard for its working class?
Small-scale businesses sell arts and crafts in Windhoek’s Central Business District (CBD). Credit: Vitalio Angula / Ubuntu Times
The answer lies in the extractive industries, which are the mainstay of the economy. On the back of a huge mining sector, Namibia exports raw materials to other countries that manufacture them into finished goods.
Uranium, gold, copper, and diamonds are just some of the natural resources that Namibia is endowed with.
The country also has a huge fishing industry that exports jobs to countries such as Spain and Italy.
The lack of labor legislation and strong trade unions also compounds the tragedy of the working poor because there is no basic (minimum) (living) wage, and workers, especially those who are new entrants into the workforce, take the first offer that is put on the table, which is usually not market-related.
Employers take advantage of the plight of those who are desperate for employment and compensate them a pittance for the output and services they provide.
Inequality and wage disparities are man-made, and there is a need for an ethical dialogue on how to protect the most vulnerable of citizens so that they are protected from an unjust capitalist labor system.
Centre for Natural Resource Governance (CNRG), a Zimbabwe-based NGO advocating for violence-free and conflict-free extraction of natural resources now wants the government to halt the scourge.
“We are gravely concerned on syndicates who abuse their proximity to power and defraud Zimbabweans and the central government of funds that should be expanding the country’s revenue base and improving the socio-economic lives of Zimbabweans,” says Simiso Mlevu, a project and communication for development chief at CNRG.
On May 9, South Africa’s Hawks Serious Organized Crime Investigation team arrested Tashinga Nyasha Masinire at OR Tambo International Airport on charges of illegally possessing 23 pieces of gold valued at $700,000.
The gold was discovered in Masinire’s luggage and he failed to produce a permit that allows him to transport the gold.
According to Mlevu, the arrest of Masinire by South African authorities raises questions about the porosity of Zimbabwe’s ports.
“The smooth departure of Masinire with his loot exposes the complicity of Zimbabwe’s immigration and security authorities in the smuggling of the country’s minerals,” she told Ubuntu Times in an email interview.
The NGO further calls the Zimbabwe Anti-Corruption Commission to investigate the role of the Zimbabwe Miners Federation and politically connected cartels in the smuggling of minerals.
It further wants the judiciary to consider smuggling of minerals as a high-level crime and impose deterrent sentences on members of criminal networks involved in smuggling of minerals
Zimbabwe continues to lose billions of dollars annually to organized criminal syndicates which have spread their wings from diamonds, chrome, gold, semi-precious gemstones, coal to copper, among other minerals.
With the majority of Zimbabwean working population majorly found in the informal sector, many of those living in mineral-rich areas risk their lives digging underground in search of gold to better their lives.
Research by International Crisis Group estimated that over $1.5billion of gold is smuggled out of Zimbabwe each year, denying the cash-strapped economy of crucial foreign-exchange revenues.
The Central bank-owned Fidelity Printers and Refiners (FPR) is the sole legal buyer of extracted gold in Zimbabwe and is also the country’s notes and coins minter.
This, analysts say, could be a major factor for smuggling of gold because of the poor prices offered by FPR to the sellers.
Late last year, as one of the efforts to curb this, announced that it would close down all unmonitored airstrips, install a new radar control system to monitor small aircrafts flying in the country with a belief that they might be used to smuggle minerals out of the country.
On April 18, Zimbabwe celebrated its 41st independence anniversary from British colonial rule amid a presidential promise that the country’s mining sector will contribute US$12 billion dollars in revenue by 2023.
The country’s over sixty mineral resources ranging from diamonds, platinum and gold remain under-explored. According to the country’s minister of Mines and Mining Development Mr. Winston Chitando, “Zimbabwe does not know the estimated value of its mineral wealth.”
Despite the huge wealth in mineral deposits, the lives of many Zimbabweans have not improved. In his independence speech, Zimbabwe’s President Emmerson Mnangagwa reiterated his government’s plan to have the mining sector contribute hugely to the economy and improve the lives of citizens. By 2030, Zimbabwe seeks to achieve an upper-middle-income economic status.
“The mining industry is projected to rebound by eleven percent this year. Guided by the strategy to achieve a US$12 billion industry by 2023, programs that include increased exploration, expansion of existing mining projects, resuscitation of closed mines, opening of new mines, mineral beneficiation and value addition are being prioritized,” said President Mnangagwa in his independence speech.
Zimbabwe’s President Mnangagwa addresses the nation in his Independence Day speech revealing that the country’s mining sector will be a US$12 billion dollar industry by 2023 despite Zimbabwe losing over one billion dollars through gold smuggling and illegal trade of the mineral. Credit: Gibson Nyikadzino / Ubuntu Times
Zimbabwe’s goldfields and other mineral fields are today a contested terrain where even the elite and state institutions including the country’s Defence Forces are scrambling for a slice of the cake. In 2008, Mr. Farai Maguwu, the director of Center for Natural Resource Governance was arrested for bringing to attention the abuses committed by Zimbabwe’s security forces in the Marange diamond fields.
The gold sector has not been spared. According to a 2020 report by the International Crisis Group (ICG) gold buyers linked to President Mnangagwa buy the precious mineral on a premium, deterring the gold panners from selling the gold to Fidelity Printers and Refiners, the sole authorized gold buyer.
Resources Plunder By An Intemperate, Predatory Elite
After his dismissal then as Vice President in November 2017, Mnangagwa was accused of amassing wealth by grabbing mines belonging to small-scale miners. “Mnangagwa also grabbed many mines which belong to small-scale miners. He was abusing his authority as the Vice President to grab whatever he wants. We say Mnangagwa must be arrested because he is corrupt, he must face the music,” said then party official Mr. Dickson Mafios at a rally.
In 2018 former Higher Education Minister in Zimbabwe Prof. Jonathan Moyo also revealed that President Mnangagwa’s activities and those of his close circle are despicable that even the United Nations (UN) had to publish a report about their activities in the Democratic Republic of Congo’s (DRC) second civil war.
“The person who led the plunder of resources in the DRC leading to the United Nations (UN) investigating and coming with a report that is still there is Emmerson Mnangagwa along with the military cabal of General Chiwenga and SB Moyo. The person who brought the Chinese to plunder Chiadzwa Diamond Fields up to a point to which we had at the very least from 2007 to 2014 some US$12 to US$15 billion in diamond revenue that remain unaccounted for that went into the pockets of individuals is Mnangagwa,” Prof. Moyo said.
The report titled Plundering of DR Congo Natural Resources: Final Report of the Panel of Experts (S/2002/1146) was published in October 2002.
President Mnangagwa’s name has been implicated in a scandal of six kilograms of gold that were recovered by the police destined for Dubai, allegedly involving his wife Auxillia, son Collins and close relative Ms. Henrietta Rushwaya. Credit: Gibson Nyikadzino / Ubuntu Times
Today President Mnangagwa and his family’s name continue to ring in illegal gold deals. Illegal gold mining or artisanal small-scale mining in Zimbabwe has been a launchpad for many illicit financial flows and gold smuggling out of the country. Home Affairs minister Mr. Kazembe Kazembe in February this year admitted that smuggling and illegal gold deals are costing the country between US$1.2 billion to US$1.5 billion dollars annually.
The First Lady distanced herself from Ms. Rushwaya’s arrest. “I have no dealings nor involvement with Ms. Rushwaya of any illegal kind,” she said. The gold sector in Zimbabwe has become a vital cog in foreign currency earning with many entrants using President Mnangagwa’s name to make inroads.
A US$12 Billion Election Campaign Promise For 2023?
Mr. Maguwu doubts the sincerity of the Mnangagwa administration in reaching the US$12 billion mining sector contribution to the economy by 2023. He further notes “Zimbabwe has far surpassed that mark.” Late Zimbabwe’s president Robert Mugabe in 2015 claimed the country had not received much from its diamond industry and lost about US$15 billion in the sector.
“We have not received much from the diamond industry at all. Not much by the way of earnings. I don’t think we have exceeded US$2 billion or so and yet we think that well over US$15 billion dollars have been earned in that area,” President Mugabe claimed then.
Zimbabwe is scheduled for general elections in 2023 and according to Mr. Maguwu, the government initiative in the mining sector is a campaign tool similar to the 2013 elections.
In 2010, Zimbabwe had an Employee and Community Share Ownership Scheme (ECSOS) in which foreign-owned companies were expected to cede some of their investments towards employee and community empowerment. After the 2013 elections, the scheme has been dumped.
“To me, it sounds like a political statement targeting the 2023 election, similar to the 2010 community share ownership scheme that was going to empower communities, and it led to the 2013 elections. After that election the whole thing died a natural death, now they are talking about a US$12 billion dollar economy by 2023, which is another election year. There is no feasibility study as to what is wrong with our mining sector. You cannot fix what you do not know. So there is no research carried out to say what is wrong and how do we correct it.”
“This government is silent on mining corruption. They are not talking about it and that is where the money is. It is not about making big statements and making promises to the nation,” Mr. Maguwu said.
Mines Minister Mr. Chitando dismissed critics for insinuating the US$12 billion dollar mining industry sector target by 2023 is a political campaign strategy. In his admission, he said Zimbabwe does not know the cumulative value of its mineral wealth. Credit: Gibson Nyikadzino / Ubuntu Times
Minister Chitando dismissed Mr. Maguwu’s assertion. He says the expected US$12 billion dollar contribution by the mining sector will be revenue streamed into the national fiscas.
“The US$12 billion dollars is the revenue that will be coming to the fiscas from the mining sector. There are projects happening now in the platinum sector, we have three new projects taking place. We have expansion projects taking place and all projects are taking place in reality. The fact that we took a five-year window is because that is the target we are working on,” explained Minister Chitando.
Uphold Rule Of Law To Plug Leakages, Illegality
Mr. Wellington Takavarasha, the chief executive officer of the Zimbabwe Miners Federation (ZMF), an organization owned by President Mnangagwa’s close relative Ms. Rushwaya, highlighted that artisanal small-scale miners contribution to the US$12 billion contribution is dwindling as some miners are being arrested.
Between 2017 and 2020, artisanal small-scale miners contributed a total of sixty tonnes of gold to the sanctioned government buyer, Fidelity Printers and Refiners. Because of arrests of the artisanal small-scale miners, gold output has declined from 60 percent to 47 percent. In 2019, small-scale miners contributed 17 tonnes as opposed to 9.8 tonnes in 2020.
“This year’s first quarter, our output has declined but we have the potential to contribute to the US$12 billion target. Our strategies include having our ventures formalized, mechanized, and have government resuscitate the mining industry loan fund,” said Mr. Takavarasha.
ZMF estimates that a tonne of gold is traded illicitly outside the formal market, which is fuelled by more than 1.3 million unregistered artisanal small-scale miners against its membership of 40,000.
Zimbabwe’s Gold Trade Act prohibits people without licenses to trade in the precious material. “Illegal mining is a livelihood activity that needs to be formalized. As it is, government is not benefiting but the middlemen and police are benefiting,” added Mr. Takavarasha.
Illegal gold dealings and smuggling is no new phenomenon in Zimbabwe. Successive ministers have raised the issue but their principals have turned a blind eye to their calls. Economist Mr. Nyasha Muchichwa says for government to stop the leakages, it needs to “uphold the rule of law and offer a competitive price to stop arbitrage.”
Government sanctioned buyer Fidelity Printers and Refiners is currently buying gold at US$45 per gram while on the illegal market it is US$54 per gram.
“The fact that we can quantify the money we are losing means we know that it is happening and when it has happened. The law should take its course and to those caught on the wrong side to be used as an example on what not to do.”
“When paying for those mining or selling gold, let us pay competitive rates so there is no arbitrage. As long as we have different prices this is when you find people making other means to get more money from the mineral they are holding. We need to address the price, laws that govern the selling, and the issue of our porous borders,” said Mr. Muchichwa.
It’s before sunrise but artisanal gold miner Rose Namukasa is already scouring muddy water for small nuggets of gold in this mining area in Mubende, central Uganda, one of the largest gold mining headlands in the country, where mercury is a staple.
Armed with a basin, the 30-year old mixes muddy water with mercury with her bare hands without protective gloves, ignoring the risk of mercury poisoning, an early link to wide-ranging mercury pollution that has affected most gold mining areas of Uganda.
Women mine for gold using mercury to recover minute pieces of gold that are mixed in soil and sediments. The use of mercury poses health risks for the miners. Diana Taremwa Karakire / Ubuntu Times
“If I don’t work what will my 4 children eat? they will starve, I don’t have money for gloves either,” says the single mother.
A gold rush in Uganda has spiked demand for mercury as artisan miners seek to cash in on the highly demanded precious metal amid climbing international prices.
Namukasa is among the over 300,000 artisan and small-scale gold miners in Uganda who produce most of the country’s gold while they risk their lives every day, working in dangerous conditions.
“Mercury use is totally unacceptable and the government will revoke licenses of miners that are found using this dangerous chemical,” said Sarah Opendi Achieng the Minister of State for Energy and Mineral Development, at a recent national citizens’ conference on mining.
Uganda’s mining sector is dominated by artisan and small scale miners whose activities are largely unmonitored and unregulated. In gold mines, mercury is used to recover pieces of gold mixed in soil and sediments. Mercury and gold are combined together to form a gold-mercury amalgam. Gold is then extracted by vaporizing the mercury. The remnants of this amalgam then percolate into the soil or flow to the nearby environment, eventually finding their way into water streams. This poses a great danger to local communities and the environment in gold mining areas.
Although mercury is a naturally occurring element, it is highly toxic to humans, animals, and the environment when not handled properly. Prolonged and high exposure to mercury by inhalation damages the nervous, digestive, and immune systems.
Artisan gold miners engage in the use of hazardous chemicals to mine gold as mining activities go on unregulated and unmonitored by the government. Diana Taremwa Karakire / Ubuntu Times
A recent research report by Water Governance Institute a local environmental organization titled Mining Industry’s Compliance to Social and Environmental Safeguards in Uganda found that mercury levels around gold mining areas of Kitumbi and Kasana sub-counties in Mubende were four times higher than the safe limit established by the World Health Organization WHO. The researchers analyzed 20 samples of water and soil collected from different gold mining sites where mercury is used including gardens and water bodies around these mining sites.
The report co-author Henry Bazira says that gold mining communities need to be monitored and educated about the dangers of using mercury in gold mining.
“Mercury pollution is a serious issue not just for communities in Mubende but the entire population is at risk of exposure because of the cumulative effect of mercury releases in the environment,” he said.
The report also states that several gold miners interviewed complained of unusual symptoms such as convulsions, loss of muscle coordination, miscarriages, paralysis, anemia, and tremors all of which are symptoms of mercury poisoning.
“No bio-monitoring of mercury effects on humans has been undertaken in Uganda and we lack capacity at medical level to fully diagnose mercury-related ailments,” says Bazira.
He adds that the government should work towards making alternatives such as borax affordable and accessible. “Borax is a better option because it breaks down in water due to its high affinity for oxygen but remains expensive for these communities”
Mercury laced water is disposed off anyhow in the open finding its way into the surrounding environment. Diana Taremwa Karakire / Ubuntu Times
Mercury use in gold mining also flouts the Minamata Convention on mercury which Uganda became a signatory to in 2013. The objective of the convention is to protect human health and the environment from the anthropogenic emissions and releases of mercury and mercury compounds. Article 3 of the convention, seeks to reduce global mercury pollution through complementary measures to minimize mercury supply and demand.
Mercury pollution is also one of the causes of climate change that is already a reality in Uganda. Mercury’s interaction with air forms mercury oxide which contributes to the depletion of the ozone layer. Smuggling of mercury across the country’s porous borders is also common.
Uganda is endowed with a vast array of metallic and industrial minerals that have the potential to be developed commercially however most of these remain essentially under-developed.
The increase in international commodity prices triggered a number of processes in the country including putting in place laws to guide and govern the emerging minerals sector and conducting aerial-magnetic geological studies to determine the mineral deposits in the country.
A World Bank-funded survey divided Uganda into six blocks and found that western Uganda, which borders the mineral-rich but restive Eastern Congo the most endowed. The country’s central region also holds huge potential.
Three years ago, a Belgium-based refinery set up a $20 million gold plant in the country. Statistics from the ministry of trade indicate that gold exports fetch $1 billion every year and have overtaken coffee as Uganda’s leading export commodity.
According to Vincent Kedi the Principal Engineer on mining at the Ministry of Energy and Mineral Development of Uganda, the new legal framework to govern mining activities in the country -the mining and minerals bill 2019 will soon be tabled in Parliament.
The old law which is the mining act of 2003 was lax on enforcing compliance to social and environmental safeguards in mining activities, penalties for noncompliance as well as mitigation and rehabilitation strategies.
“We are trying to expedite the process to put in place a new mining law. The new law has taken great care to address most of the challenges in the sector including mercury use in gold mining and stringent penalties for environmental degradation ”. He added that monitoring mining activities had been affected by the outbreak of COVID-19 and the national lockdown.
Harare — Former Chief Executive Officer of the Zimbabwe Football Association, Henrietta Rushwaya was on Monday nabbed by cops as she attempted to smuggle six kilograms of gold to Dubai.
Based on a police internal memorandum gleaned by Ubuntu Times, Rushwaya who is the Zimbabwe Miners Federation (ZMF) president was arrested Monday at Robert Mugabe International Airport for contravening section 182 of the Customs and Excise Act.
The arrest of Rushwaya comes at a time Zimbabwe reels from corruption at the behest of the ruling elite.
This is not the first time 53-year old Rushwaya is courting controversy in the Southern African country.
In 2016, she (Rushwaya) was embroiled in a match-fixing scandal dubbed Limpopogate, which linked her to a match-fixing syndicate that had been fixing games for the past 6 years prior to 2016, a year later plotting again to fix the Zimbabwe 2017 Nations Cup qualifiers game against Swaziland.
Amongst a slew of other corruption scandals, in yet another match-fixing scandal as ZIFA boss, Rushwaya in 2009 stood accused of having organized a trip by the Zimbabwe national team to Malaysia in December during which matches were said to have been manipulated.
Now, with the leopard apparently not shedding its spots, Rushwaya has hit again, this time attempting to smuggle gold while ironically, she heads the Zimbabwe Miners Federation (ZMF).
ZMF is the brainchild of Zimbabwe’s Ministry of Mines whose formation was marked to represent and contribute to the development and growth of small-scale miners.
According to police, upon her arrest, Rushwaya claimed she obtained the gold from someone only identified as Ali living at number 32 Lanark Road, Alexandra Park, Harare, whom she also claimed was a licensed gold buyer.
But a day after her arrest, Rushwaya appeared in court where she was remanded in custody to the 28th of this month, with the magistrate Ngoni Nduna saying he wanted to consider the conditions agreed by the State and the accused’s defense team.
Meanwhile, the State led by Charles Muchemwa complied that Rushwaya be given $90,000 bail (Zimbabwean dollars).
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