Ian Senior, Corruption,the World’s Big C: Cases, Causes, Consequences, Cures (2006), asserts no significant correlations between high degrees of personal honesty and religious practice and less bribe-taking around the world.
What do we learn from this significant conclusion on corruption? It means even the most ethical, religious & morally astute societies can be infested with the corruption scourge. Because corrupt states make it impossible to play or move without paying.
Under Roman statutes corruption was defined as

“whenever money is taken and a publicly-conferred duty is violated.”

An example may suffice to illustrate.

Why do governments erect toll gates? Let’s think of this in simple terms
Citizens already pay taxes. In Zim. 99% of vehicles are imported. Taxes for most vehicles are 100%. Then there is vehicle licenses/taxes for the life of the car. For the car to move one pays 100% in fuel taxes. One of the highest in the world.

So why pay for toll gates?
The real reason for toll gates was in federal governments were taxes are collected at a local level. Therefore when a vehicle from out of state entered a new state it had to pay for access.
The nature of our Zimbabwean centralized government is that all that was required was to increase license fees. Or make better use of all the vehicle related taxes. And not build toll gates. After all. Toll gate money goes back into a centralized pot.
I will use another example.

Command Agriculture budget to date is anyway between US$3.5bn to US$7bn. I will use the minimum total cash that has been outlayed. At most 25% of recipients have payed back. How on earth they can get away with it is another matter.
During the Dollar era. Zim’s total private sector credit was about US$3.8bn. This involved more than 200 lending institutions & lending to all from Delta to informal traders. The economy ticked on this credit.
Command Agriculture replaced the total private sector credit. Through a simple directive from central government. No tender. No competitive bidding or due diligence of any kind. By a stroke of pen, money was taken away from private sector credit
What was the wisdom of diverting money from private credit to one man? Lending is a highly complex enterprise involving lots of decisions.

Could Sakunda, with Zero lending capability replace as one entity the entire financial sector of Zim? Or even compete?
The diversion of capital from private sector to command agriculture was world beating. The world bank highlighted this fact, as illustrated in the picture. Agriculture contributes 9.3% of GDP yet took most of GOZ resources & support.
Sakunda went further to take over the full value chain in Agriculture. A value chain existed before Sakunda. But Sakunda replaced it with it’s own preferred firms & associates. Through Command, Sakunda operations became bigger than the entire turnover of ZSE firms combined!
During this period of the Sakunda madness, GOZ borrowings increased by US$10bn. While private sector credit shrunk to US$400m. Private sector credit has recovered to US$800m. Minuscule compared to it’s highs. Tax payer debt increased. Yet economy worsened.
Zimbabwe did not need toll gates nor Command Agriculture. Yet here we are. The tax payer has recently been slapped with a 2% transaction tax to pay for the sins of the past. The ZWL collapsed because of the profligacy. These are consequences of corruption. Depositors lost.
What is the empirical evidence elsewhere?

According to Transparent International 42% of people interviewed confirmed they had paid a political bribe in Africa. This compares to 1% and 2% in Canada and America. In Cameroon its as high as 79%. Asia its 22%.
In Europe corruption is high in former soviet states in Eastern Europe & highest in Russia & its satellites. The same prevails in Latin America & Asia. Where ever Communism or socialism is high, corruption resides. Why?
As illustrated in my examples in Zimbabwe corruption is a function of the power & control of the state in the market place. Where GOZ dictates & intervenes in the market. Directing capital away from private sector to one company. & protecting those who failed to pay back
Zim’s GDP per capita with a population of 17m is less than US$1000. That is less than it’s per capita in 1980.

Corruption diverts national resources from best use to most politically favored uses. Despite the consequences. US$100m of gold is smuggled every month.
This money ends up in Singapore, Dubai etc developing those countries and not Zimbabwe. When policy was right. Zim got 33tonnes of gold in 2018. Wrong policy & almost half the gold disappears. Rolls Royce & the British economy is the major beneficiary.
The civil servant now earns US$150. They used to earn US$500, five years ago. The Fx Auction takes by decree 40% of exporters money & gives it to a chosen few at a discount of 70%. Why would any sane person believe this policy works. Yet civil servants languish in poverty?
Back to the theory. Ian Senior in explaining corruption causes finds
“ A far stronger explanation can be found in the relationship between the level of corruption in society and the degree of government intervention in the marketplace”
Corruption is high when politicians can dish out favours. Remember how Telecel & Netone despite failure to meet GOZ terms got licenses? Econet had to fight in the courts to get a license.What happens today, when one goes to the judiciary?
R.M Ebeling makes the case for markets in solving corruption. “Under these circumstances,government officials have few regulatory or redistributive responsibilities, and therefore they have few special favors, privileges, benefits, or dispensations to “sell”.
In Roman times corruption is extended to mean “concussio”or extortion. Meaning a powerful person builds a toll gate. Any business or person to function must pay for access. It’s easier to just pay.That’s how society becomes complicit.

That’s why Zim is full of toll gates.

• • •

Missing some Tweet in this thread? You can try to force a refresh

Keep Current with Tinashe

Tinashe Profile picture

Stay in touch and get notified when new unrolls are available from this author!

Read all threads

This Thread may be Removed Anytime!


Twitter may remove this content at anytime! Save it as PDF for later use!

Try unrolling a thread yourself!

how to unroll video
  1. Follow @ThreadReaderApp to mention us!

  2. From a Twitter thread mention us with a keyword "unroll"
@threadreaderapp unroll

Practice here first or read more on our help page!

More from @baba_nyenyedzi

18 Jul
Ken Flower the head of the CIO went to complain to Ian Smith about dodgy touts becoming government’s business partners.These individuals were meant to be in jail. Smith thought he could control these chaps. These chaps eventually funded Smith’s downfall. Unscrupulous.
Fay Chung in her book explains how a large donation came from Tiny Rowland. Chiwara, the Zanu representative in London was excited & relayed information to Lusaka. But , but, Ndaba Sithole chose to hide this information.. he wanted it for himself! He was forced to share.😂😂
Miles Tendi book on Mujuru recounts a Public Accounts Commitee led by Mangwende on MOD during Nhongo’s reign. It was a fest of irregularities & claims of untouchables & commanders resigning after allegedly receiving kick-backs from tenders. Mugabe turned a blind eye.
Read 4 tweets
7 Jul
Suppose the RBZ & general analysts were correct that replacing RTGS with printed notes & coins is innocuous.

Then why would RBZ not print enough notes & coins for the convenience of the public?

$2& $5ZWL cannot buy anything in Zim. Why keep them in circulation?
Why print a $50 ZWL note that cannot buy bread.

Imagine a US$100 or 200ZAR that is not enough for a kombi ride or bread?

The rural economy is a cash society. If replacing RTGS with cash is innocuous why has this not happened already? Why punish the rural folks?
In Feb 2021. Money supply was $100bn ZWL. While notes & coins was $3bn. Of which only $1.2bn was in circulation ( banking system).

This tells us the RBZ is systemically starving the economy of notes & coins.

But why?

Afterall it matters not whether RTGS OR notes.
Read 5 tweets
1 Jul
Twitter and Economists

In Zim to be specific & Africa in general there is a stiff neck attitude amongst scholars & economic thought leaders to avoid Twitter & social media.

This is most unfortunate & JH university has articulated the impact of social media on Economics

In their words

“The technological progress in our modern societies has witnessed the emergence of persons who deploy different means of communication across social networks, seeking to generate an impact among their audiences.

These efforts in social media communications attempt to alter consumption preferences and patterns, political choices, as well as reinforce or modify opinions of all sorts and stripes. Individuals who attain greater relevance due to effects they trigger on third parties are
Read 9 tweets
24 Jun
Kuvimba declares US$5.2m in dividend. How in the world of the living, this is a good thing is beyond me. Perhaps a reflection of our tolerance for pain & suffering as a people.

Firstly, it's not even clear to the tax payer how these assets were acquired and at what cost
How do farmers, War vets, Datvest nominees & other investment vehicles own what was private companies that owed creditors north of US$100m. To whom erstwhile shareholders were paid out north of US$100m. The cost of investment must be established & how the money was paid.
Secondly. GOZ is mandated by our constitution to take care of public health facilities & schools. How many people have died, kids failed for lack of investment. Therefore resources were diverted to buy mining companies & declare a dividend to spurious causes outside the mandate..
Read 6 tweets
19 Jun

Economic survey by Afrobarometer .. my thoughts

The survey was carried out between April and May. After the Agriculture harvest.

It comes after the WB report that 49% of citizens live under extreme poverty

It’s worth considering what the people themselves are saying.
The 67% of people believe the country is going in the wrong direction.

There is a gapping disparity between what GOZ says & lived reality.

Agriculture contributes 9.3% of GDP. A good harvest impact on our economy is now negligible. GOZ is out of touch with reality.
Does it mean GOZ will change course? Especially after launching its National Development Strategy NDS1?

Despite the rejection of NDS1 by the people, GOZ will not change direction. Because of GOZ paternalistic attitudes. Even in the face of hard facts & evidence.
Read 11 tweets
16 Jun
Who is the risk taker in business?

I realize most people even Economists don’t understand risk taking. This thread hopes to bring to fore risk taking in an enterprise.

I will illustrate with an example that is familiar with many of us in Zimbabwe. A diaspora investment
Imagine a Zimbabwean working in the City in London and earning £10k a month and living a very comfortable life. No serious worries except long hours at work & the occasion rant from the girlfriend.
They visit Zim one Christmas holiday and meet up with friends. As often happens in these meet up’s- ideas are exchanged and opportunities explored. One of which is a tomato drying factory. Seems like a good idea enough.
Read 15 tweets

Did Thread Reader help you today?

Support us! We are indie developers!

This site is made by just two indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3/month or $30/year) and get exclusive features!

Become Premium

Too expensive? Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal Become our Patreon

Thank you for your support!

Follow Us on Twitter!