Zim duped in Congo

Date: 2 September 2004

Source: The Financial Gazette

Author:Thomas Madondoro

Zimbabwe, which played a critical role in propping up the government of the strife-torn Democratic Republic of the Congo (DRC), has emerged bruised after burning its fingers in a flopped US$300 million timber deal sealed in 2001, The Financial Gazette can reveal. News of the deal-that-never-was comes after this paper revealed some three months ago that Zimbabwe, previously seen as key to the resolution of the DRC crisis, risked being written out of the script ahead of the reconstruction of the war-torn diamond-rich country. This was after the United Nations under- secretary general for peacekeeping operations, Jean Marrie Guehenno, visited all the other countries considered key to the DRC problem except Zimbabwe. Diplomats and political observers were agreed that the move by the UN amounted to a snub and belittled the role played by Zimbabwe in the DRC.

This week, Global Witness, an international non-governmental organisation (NGO) privy to the secret deals doled out to allied forces that operated in the DRC, disclosed that Zimbabwe was duped into accepting flawed timber logging concessions worth a staggering $1.68 trillion at yesterday's ruling auction exchange rate. The NGO, which probed the Harare-Kinshasa sweetheart deal, revealed this week that the country was awarded the contract to exploit vast tracts of Congolese forests when Zimbabwean troops were deployed to assist the late president Laurent Kabila, who was under attack from rebel fighters assisted by neighbouring Rwanda and Uganda. It said the timber concessions covered Katanga, Bandundu and Bas-Congo. Corene Crossin, a Global Witness official, said: ". . . Zimbabwe was given a bit of a raw deal in terms of the quality of timber in the concession. As far as we know the deal did not go ahead, and no logging or exploitation of timber in the concession has taken place - thus it is doubtful that any money has been made from it."

Congolese Society for the Exploitation of Timber, whose French acronym is Socebo, was supposed to execute the deal. Socebo is a joint venture between a Kinshasa-based firm linked to the late Kabila called Comiex Congo and Osleg, a business front for the Zimbabwe Defence Industries (ZDI). The deal would have enabled companies linked to Zimbabwe to log 33 million hectares of Congolese trees and produce over 150 000 cubic metres of timber annually. Part of the deal was that the Forestry Company of Zimbabwe would act as technical adviser. Among its possible financiers were Malaysian banks and logging companies from France, Malaysia and Lebanon. Most of the timber was to be transported by rivers because of the poor roads in the DRC, before being exported via Harare and Durban to markets in South East Asia and some European destinations such as France. According to Global Witness, the deal was brokered by the late Kabila as compensation to the Zimbabwean government for its massive losses in money and human lives in the DRC war that sucked in at least seven Southern and East African countries.

Unconfirmed independent estimates indicate that Zimbabwe sank in excess of Z$10 billion in its DRC adventure to save Kabila, who was under siege from invading rebels supported by Rwanda, Burundi and Uganda in 1998. No official figures on the cost of the war have been made public yet. Global Witness claimed that Kabila was keen to appease President Mugabe after the failure of other business ventures between the two governments. The international non-governmental organisation named some of the failed deals as the aborted flotation in London of Oryx Diamonds and the collapse of Congo-Duka, a joint venture between the ZDI and its Congolese partner, General Strategic Reserves. An insider who was a board member of some of the companies established to exploit business opportunities in the DRC yesterday revealed that up until now, no board meeting has been convened as yet. "A lot of things went wrong," he said without elaborating. "And the deal did not succeed." The Minister of Defence, Sydney Sekeramayi, could not say much either. "The defence forces withdrew from the DRC, so we do not have any operations in that country, either commercial or military" he said.