A fierce war is brewing behind the scenes for control of
Zimbabwe’s fuel industry pitting President Emmerson Mnangagwa and
Vice-President Constantino Chiwenga’s allies following a bid by a South African
firm to break the Sakunda monopoly, it has been revealed.
Investigations have revealed that the fuel scandal that
exploded last week was linked to plans to construct a second pipeline to move
the commodity from Beira, Mozambique, by the South African company linked to
Mnangagwa’s allies.
Sakunda boss Kudakwashe Tagwirei, whose company controls
the Beira-to-Harare pipeline that supplies Zimbabwe with most of its fuel, is
allegedly resisting the construction of the second pipeline that will go as far
as Botswana.
Tagwirei, a Zanu PF benefactor, is allegedly arguing that
his company recently invested US$11 million in the refurbishment of the
Beira-Feruka oil pipeline and does not want the Sakunda monopoly broken.
The businessman’s stance has allegedly put him at
loggerheads with Mnangagwa’s allies, who are pushing for the new pipeline deal
with South African fuel giant Mining, Oil and Gas Service (MOGS).
The fight has turned political and pits Mnangagwa’s allies
against those of Chiwenga, who is said to be fighting in Tagwirei’s corner.
The disclosure by Zanu PF apologist William Mutumanje, aka
Acie Lumamba, last week that Tagwirei was behind an alleged cartel controlling
the fuel industry moved the fight to the political arena.
Mutumanje, who had been hired by Finance minister Mthuli
Ncube to lead a taskforce to popularise government’s new economic policies,
claimed Tagwirei’s alleged clandestine deals with Reserve Bank of Zimbabwe
(RBZ) officials were bleeding the country.
He claimed Tagwirei, through his fuel trading company
Sakunda, was manipulating foreign currency allocations by the RBZ.
The central bank immediately suspended four directors that
were named by Mutumanje.
Sources familiar with the behind-the-scenes tussle for
control of the fuel industry said although there were concerns about Sakunda’s
opaque deals with the state, the elephant in the room was the proposed MOGS
deal.
MOGS is said to have the backing of Mnangagwa’s advisor
Chris Mutsvangwa, who has been linked to Mutumanje’s alleged exposé.
The deal was initially tabled in 2009, but did not take off
because of resistance from former president Robert Mugabe.
Mugabe was a close ally of Tagwirei, who was in a
partnership with his son-in-law Simba Chikore in the controversial Dema power
plant project.
The proposed MOGS pipeline would move about 500 million
litres of fuel in the country compared to the 110 million litres supplied
through the Sakunda-controlled facility.
As a sweetener, MOGS is promising Zimbabwe six months’
steady supply of fuel and to provide government with foreign currency to assist
in the stabilisation of the economy.
“Tagwirei does not want MOGS in the market because he has
invested a lot in the Feruka-Msasa pipeline after having made an advance
payment of $120 million to refurbish the pipeline in 2014,” a senior government
official said.
“He also parted with huge sums of money to construct the
Mabvuku fuel gantry under a public/private partnership.
“He put in more than $11 million into that project and he
now feels his investment would go to waste if MOGS comes into the market.”
Last year the government ordered that all fuel other than
Jet A1 should be imported through the Feruka pipeline.
The authorities claimed the pipeline was a cheaper option
and imposed a levy that is payable to Trafigura which owns Sakunda. Truckers
bringing fuel to Zimbabwe are not exempt from paying the levy.
A senior government official said Mnangagwa was backing the
new pipeline deal, which has put him at loggerheads with Tagwirei and his
backers such as Chiwenga.
“But to do so, the relationship between him and Kuda
(Tagwirei) has to be affected,” the source said.
“Financial authorities also argue that Tagwirei has been
abusing his relationship with Mnangagwa for his personal benefit and they want
the Sakunda monopoly broken.”
Energy minister Joram Gumbo confirmed that the MOGS
proposal had been made to government, but said feasibility studies were yet to
be done.
“I have seen their proposal, but we are yet to look into
the matter seriously,” he said.
“As government, I have said that we need a second pipeline,
which would enable us to become a fuel hub in the region, but we have not yet
done a feasibility study on the deal and we are yet to reach a decision on
whether we indeed need it or not.”
Gumbo added: “My plan is to have a pipeline that can supply
up to Bulawayo and then be able to supply countries such as Botswana and parts
of South Africa.
“We need to be a hub that can supply countries like DRC
(Democratic Republic of Congo) and Zambia.”
Zimbabwe is currently facing serious fuel shortages and
Sakunda recently came to the government’s rescue with a “soft loan”.
Sakunda and partners last week loaned the government 100
million litres of fuel, which would be repaid through treasury bills.
According to government officials, 70 million litres will
be sold through the normal channels while 30 millions litres is earmarked for
strategic reserves.
Mnangagwa last week told the Zanu PF central committee that
the government had bought fuel three times more than the required supplies and
would soon flood the market to end shortages.
It is believed that he was referring to the Sakunda deal
that has been criticised by some in government, who say it entrenches
Tagwirei’s stranglehold on the fuel industry.
Tagwirei, who is in a partnership with Singapore firm
Trafigura, also has a significant stake in Trek Petroleum.
The wealthy businessman is believed to be a very close ally
to Chiwenga and Mnangagwa’s sons.
Last week, Tagwirei was allegedly summoned for questioning
by the police following Mutumanje’s Facebook broadcast where he made
allegations about the fuel cartel.
Mutsvangwa said although he was not behind Mutumanje’s
Facebook rant, he was against Tagwirei’s monopoly.
“Since 2015, I have been fighting against the monopoly in
the fuel industry,” he said.
“We can’t have one person eating for everyone and crafting
artificial fuel shortages.
“I don’t have respect for such businesspeople who rely on
allocation of foreign currency from the Reserve Bank.”
Sakunda is one of the three companies that were given
priority by RBZ in the allocation of foreign currency for importation of fuel.
Others are Praise and Strauss. The arrangement has been
blamed for the biting fuel shortages.
Besides interests in the fuel sector, Sakunda is into
mining through Africa Chrome Fields.
The company reportedly took over shares that were
previously owned by the army.
It is in a partnership with South African businessman and
close Mnangagwa ally Zunaid Moti.
During the Mugabe era, the chrome mining concern received
preferential treatment from government and was exempted from paying import duty
on the fuel it uses at its plant.
The same privileges were extended to the Dema power project
amid allegations that the facility was abused.
Sakunda funds command agriculture, a Mnangagwa pet project.
Some government officials say the funding of the
agricultural initiative is opaque and is open to abuse. Standard
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