Zimbabwe Corruption Report

Police corruption is a very high risk for businesses operating in Zimbabwe. The police suffer from poor working conditions, a lack of training and resources, and low salaries, so corruption is common — especially at lower levels (HRR 2014). Roadblocks are often used to extort goods or bribes (U4, Jan. 2015). The majority of Zimbabweans perceive the police as the most corrupt institution in the country (Afrobarometer, May 2015). One in four survey respondents who had contact with the police paid a bribe to obtain a service or to avoid problems (Afrobarometer, May 2015).

The police are politicized (U4, Jan. 2015) and suffers from a culture of impunity (HRR 2014). Business executives generally demonstrate a low degree of trust in the reliability of the police (GCR 2015-2016).

Corruption is a high risk for businesses acquiring public licenses, permits or utilities — petty corruption is particularly common (ICS 2015). Corruption is driven by a bloated public service, inefficient bureaucracy and an opaque regulatory environment (U4, Jan 2015). Irregular payments in relation to public utilities frequently occur (GCR 2015-2016).

Twenty-five percent of surveyed Zimbabweans who tried to obtain an identity-related document (such as a driver’s license, a passport, or a permit) say they paid a bribe ”once or twice” or “often” to obtain the document (Afrobarometer, May 2015). Ten percent paid a bribe to acquire water, sanitation or an electrical connection (Afrobarometer, May 2015). Starting a business is very cumbersome: It takes 90 days and is twice a costly as the Sub-Saharan Africa regional average (DB 2016).

Corruption is rife in the land administration, and property rights are poorly protected. The land management system is fragmented, and the multiplicity of statutory, customary and religious stakeholders creates ample opportunity for corruption (TI, June 2014). This is further exacerbated by the politicization of land, a weak legal framework and excessive discretionary powers given to some administrators (TI, June 2014).

Additionally, there is a history of uncompensated seizures of privately owned agricultural land that is transferred to civil servants and other regime supporters (BTI 2016). As a consequence, such supporters and members of the security forces occasionally disrupt production on commercial farms, including those owned by foreign investors and covered by bilateral investment agreements (ICS 2015). In a related ongoing trial, the minister of state for Mashonaland Central province, Martin Dinha, has been charged with extorting USD 60,000 from a farmer to protect the farmer from eviction (BBC News, Sep. 2015).

Unlike agricultural land, residential and commercial properties in cities are generally well enforced (ICS 2015) and registering property takes less time than on regional average (DB 2016). Investors should note that dealing with construction permits in Zimbabwe is more cumbersome than in most other countries (DB 2016).

In Zimbabwe, there is a high risk of encountering corruption in the tax administration. Bribes in connection with annual tax payments often occur (GCR 2015-2016). More than 40 percent of Zimbabweans believe tax officials are corrupt (Afrobarometer, Oct. 2015), and most find it hard to know how the government uses tax revenues, indicating a lack of transparency in the tax system (Afrobarometer, Mar. 2014). Preparing, filing and paying taxes takes 242 hours per year (DB 2016).

There is a very high risk of corruption when interacting with Zimbabwe’s customs authorities: Irregular payments are common in the sector (GETR 2014). There are reports of transporters experiencing artificial delays and bribe demands when obtaining necessary documentation (Daily News, Apr. 2015). Companies should note that import procedures are burdensome (GETR 2014) and that the government’s approval criteria heavily favor export-oriented projects (ICS 2015).

Exporting goods takes an average of 72 hours, while importing takes approximately 60 hours (DB 2016).

There is a very high risk of encountering corruption in Zimbabwe’s public procurement sector. Irregular payments or bribes in connection with the awarding of public contracts or licenses are common, favoritism in the decisions of government officials are common, and public funds are often diverted (GCR 2015-2016).

President Mugabe oversees a conglomerate of businesses, and the ruling party owns two companies that hold a range of businesses from which party elites take a share in profits (U4, Jan. 2015). Among state-owned enterprises, corruption is rife and senior executives award themselves exorbitant salaries (ICS 2015). The Procurement Act makes collusion among government contractors and companies illegal; however, the president can limit the Act at his discretion (CatC 2012). Companies are strongly recommended to use a specialized due diligence tool on public procurement to mitigate corruption risks associated with public procurement in Zimbabwe.

Corruption is a very high risk for companies operating in Zimbabwe’s natural resource sector. Senior officials who manage natural resources are frequently involved in corruption, and revenues from the industry are often not reported (U4, Jan. 2015). The mining sector is especially affected by high-level corruption and patronage (BTI 2016).

Corruption and a lack of oversight allowed for an illicit diamond trade, which public officials in the Ministry of Mines are allegedly fully aware of (U4, Jan. 2015). According to President Mugabe, the illicit trade has cost the economy USD 13 billion, leading him to create a new state monopoly in 2016 and ordering all diamond-mining companies to end operations and vacate their premises in the Marange and Chimanimani areas (Bloomberg, Mar. 2016).