Johannesburg – A new study on Zimbabwe’s strong cartels has revealed how tobacco firms are secretly infiltrating the South African market while simultaneously evading the local taxpayer. The study entitled Report on Cartel Power Dynamics in Zimbabwe, written by unidentified stakeholders in Zimbabwe, details in a report released by the Maverick Citizen how cartels have crippled state institutions in Zimbabwe and that there is no political will for the issues to be addressed.
It reports that more than $5bn (about R73bn) is lost through illicit deals led by Zimbabwe’s cigarette, fuel and agricultural cartels. The study explains how cigarettes are smuggled into South Africa, where they are no longer responsible for 40% of excise duty and are then sold cheaper on the local market than tobacco products manufactured locally. 27% of cigarettes consumed in SA are smuggled into the country by cartels, the study states.
The key cigarette smuggling cartels consist of 1) political bosses who allow the cartels to operate with impunity, 2) cigarette-ferry transport companies and 3) South African distribution networks,” the report said.” The report alleges that the Pacific Cigarette Group, which is owned by Adam Molai, the former nephew-in-law of Zimbabwean President Robert Mugabe, whose cigarettes are smuggled to the country by rail, road and air, and Gold Leaf Tobacco Zimbabwe, which is owned by the Rudland family, which is also owned by FastJet, a trucking company and airline, are some of the key players in the cigarette industry.
Cigarette smuggling has continued to flourish under the (Zimbabwean President Emerson) Mnangagwa government, and the money men’s operations have been unhindered. “During the Covid-19 pandemic in South Africa, the ban on the sale of cigarettes significantly increased the market and prices for smuggled cigarettes,” said the study. It claimed that role players were crippled in Zimbabwe who were supposed to counter cartel-like behaviour in the cigarette trade room.
There are opportunities for stakeholders to combat cartels, despite the challenges, and a limited number of individuals and organizations with a certain commitment and political will to fight cartels exist. There is very little political will for the Zimbabwean government to stop the cartels, enabling Zanu-PF to hold power.