Government Warns Chinese Companies Against Illicit Financial Practices

The Office of the President and Cabinet has warned Chinese businesses operating in Zimbabwe against engaging in illicit financial activities, environmental degradation, and disregard for local regulations.

Speaking at the China-Zimbabwe Business Cooperation Roundtable in Harare on Monday, Tafadzwa Muguti, Secretary for Presidential Affairs in the Office of the President and Cabinet, urged Chinese investors to operate within the confines of Zimbabwe’s laws.

Muguti specifically warned against bypassing formal financial systems and externalising millions of dollars in undeclared earnings. Said Muguti:

The majority of you business people are not banking [money]. You do not have bank accounts. You are keeping money under your mattress, under the floor, or in the roof.

But in China, you don’t do that. If they all take US dollars and Zimbabwe Gold currency and keep them in their houses, it causes our economy to collapse.

There will be no liquidity in the market. So starting from now, we are directing you to bank your money.

Muguti said both local and foreign currency earnings must be channelled through banks, with the Reserve Bank of Zimbabwe used for outward remittances.

He raised concern over the growing number of Chinese nationals entering Zimbabwe as tourists but engaging in illegal business operations.

Muguti questioned why some were avoiding proper investment protocols, despite the availability of clear procedures that require no bribery or concealment.

Going forward, he said all Chinese nationals applying for visas or permits would need a letter of acknowledgment from the Chinese ambassador, allowing government authorities to track who is in the country.

He also criticised environmental violations and cultural insensitivity by some Chinese investors, particularly in the mining sector. Said Muguti:

We are noticing that some Chinese companies are going and digging up our ancestors’ graves to extract granite or gold.

There are some of them picking up the bones, putting them aside and starting to dig. That’s the greatest disrespect to any person, even in your culture.

So if we are not patient with one another, then we can’t work together. Take your children to our schools. Mix with Zimbabweans.

Don’t go and create a Chinese camp. How are you going to know the people of Zimbabwe if you just stay as Chinese?

Muguti reminded Chinese companies of a deadline set by President Emmerson Mnangagwa requiring all mineral exports to be processed locally.

He emphasized Zimbabwe’s goal to manufacture lithium batteries domestically and encouraged collaboration to produce locally for export to countries including DRC, Zambia, Malawi, South Africa, Botswana, Namibia, and Angola, in line with agreements from the China-Africa Economic Forum.

Steve Ke Zhao, CEO of the China-Zimbabwe Exchange Centre, acknowledged government frustrations but stressed that many Chinese investors were encountering operational challenges. Said Zhao:

Unfortunately, at the moment, the Chinese companies are facing a lot of trouble. After investing huge amounts like US$5 million or US$10 million, they’re facing challenges.

Some get ZIDA [Zimbabwe Investment and Development Agency] certificates, but can’t get work permits. Machinery is sitting idle. They can’t be installed. They can’t operate.

They end up doing something illegal, not because they want to, but because the system delays.

He said most Chinese investors were good people who wanted to develop Zimbabwe and comply with the law, but frustration arose from a lack of information and complex processes.

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