A lack of transparency in the sale of diamonds remains a major problem in Zimbabwe and activists fear diamond revenues may be used to fund the campaign of President Robert Mugabe's party in an election due to take place early next year.
In 2009 an international ban was imposed on the sale of Zimbabwe’s diamonds. That came as a result of allegations that some mines were controlled by the military and that funds were diverted to Mugabe's ZANU-PF.
Last year that decision was reversed and a diamond watchdog body, the Kimberley Process, gave Zimbabwe the green light to sell its diamonds on the international market.
Troubling issues linger
Farai Maguwu, director of the Centre for Natural Resource Governance in eastern Zimbabwe, said major problems remain unsolved.
Most importantly, he said, it’s unclear where revenue from the sale of diamonds is ending up.
“On the issue of revenue transparency nothing has changed. I think the conditions are getting even worse and worse," said Maguwu. "We have the minister of finance on record saying he is not getting much of the diamond revenues in the treasury, which means individuals and other groups of people are profiting from the diamonds at the expense of the nation.”
In July, Finance Minister Tendai Biti slashed Zimbabwe’s 2012 budget, saying funds from diamond mines had failed to bolster the treasury.
National security questions
The Zimbabwe Mining Development Corporation said it expects to earn $150 million from the sale of diamonds this year, rather than the $600 million predicted. That's a 75 percent shortfall.
The low profits, it said, are a result of international sanctions, especially from the United States.
Maguwu said the military continues to play a leading role in Zimbabwe’s mining industry and that, he said, raises serious questions about national security.
“There are quite a number of security officials who are involved in diamond mining," he said. "Some of them are on the boards of the diamond mining companies and when you have got individuals becoming richer than the state and you have the military abdicating from their role of providing national security to get involved in commercial activities - that is a recipe for political instability in the country.”
A major diamond conference is due to take place in Zimbabwe’s Victoria Falls later this month.
Maguwu said the decision to bring Zimbabwe back into the Kimberley Process should be assessed, looking at whether the situation in Zimbabwe has improved since the ban was lifted.
Meanwhile, Mugabe has called for elections to take place in March.
Human Rights Watch Africa Advocacy Director Tiseke Kasambala said she is concerned that diamond revenue is likely to fund violence ahead of the polls.
“The conditions on the ground are not conducive to the holding of free and fair elections in Zimbabwe," said Kasambala. "The military retains control of Marange diamond revenue and this is the same military that was involved in widespread abuses in 2008 and was not held accountable for those abuses.”
The 2008 elections were marred by violence, most of it by ZANU-PF supporters against the opposition MDC party.
Months of political turmoil followed the elections - the end result was that Mugabe agreed to form a power-sharing deal with the MDC party, led by Morgan Tsvangirai. Mugabe has said he wants elections in order to end that arrangement. The MDC has said elections hinge on passage of a new constitution.