Business and Technology
Zimbabwe Loses $1 Billion Annually to Smuggling
Already reeling from a deep economic decline due to COVID-19, Zimbabwe is losing up to $1 billion in revenue from smuggling along its porous borders, according to industry leaders and government officials.
According to the Zimbabwe National Chamber of Commerce, the sharp revenue decline is due to lax customs and security systems, corruption among top government officials, and inefficiency in revenue collection.
As the country's economy declines, smuggling has become the only means of survival and jobs even as the state loses out on desperately needed revenue.
Along the Limpopo River, smugglers set up camps as clearing houses for receiving and distributing smuggled goods from South Africa. They are sent into Zimbabwe through ferries, inflatable boats and rafts in the river.
Tichaona Nyongo, the officer commanding officer at the Beitbridge district border post, said Zimbabweans are using creative ways to smuggle goods into the country.
"Even donkey carts are being used to smuggle goods," he said.
Wide-range of smiggling
The smugglers allege that security personnel accept bribes to allow smuggling. Some farms on the border are also used as departure points.
A smuggler told Zimbabwe Business that "the protection fee is now high, about 200 rand ($12) a trip. It used to be half that, but this route is now popular since closure of the border."
Reports say Zimbabweans are being smuggled in and out of South Africa for a reported fee of 2,000 rand ($120).
Takunda Mugaga, the chamber's top executive, blamed a lack of infrastructure and a low production of goods in the country as a driving force behind smuggling and corruption.
“There are sub-standard products being sold below the cost of production and government is being short-changed in terms of revenue,” he said.
Mugaga blamed inconsistent government policies for fueling inflation and corruption.
“At one point the government banned second-hand tire imports but we continued to see the products in the market,” he said, adding the underground economy depends on smuggling.
Government response urged
Faith Mazani, the commissioner of the Zimbabwe Revenue Authority, said the government needs to do more to plug loopholes in revenue generation and collection.
“There is an urgent need to allocate more funds towards improving efficiency of border systems in line with global business trends,” she said.
Mazani said modernizing infrastructures would reverse the current declining economic fortunes of the country.
“These is need to digitalize operations at the borders," she said. "There is also the need for border patrols along the Limpopo River to curb smuggling."
Finance and Economic Development Minister Mthuli Ncube told the Zimbabwe Herald newspaper that the government is determined to deal with “deficiencies in customs procedures, border control, and to curb leakage in revenue.”
Zimbabwe relies on customs duty as its largest source of revenue to pay for workers’ salaries, run government offices and key programs.
According to the International Monetary Fund, Zimbabwe faces a long road to economic recovery following decades of corruption and mismanagement of the country’s resources.
