Telegraph (UK)

Mugabe's friends siphon off nine tenths of EU aid to Zimbabwe's poor

By David Bamber, Home Affairs Editor

(Filed: 29/02/2004)

Some of Robert Mugabe's closest allies have creamed off more than £100
million in British and European Union aid which was intended to tackle
AIDS and poverty in Zimbabwe.

Internal EU documents seen by The Telegraph show that 89 per cent of
all its aid to Zimbabwe disappears into the coffers of aides of
President Mugabe and his ruling Zanu-PF Party. Only 11 per cent is
spent on the humanitarian purposes for which it is intended.

The disclosure has prompted Hilary Benn, the International Development
Secretary, to launch an official investigation into the alleged theft.

Despite the imposition of sanctions in 2001, the EU has provided ?30
million in aid to Zimbabwe since then. Britain has paid a further £62
million on top of the EU figure, distributed via the EU, while other
European countries have also handed over additional amounts, taking
the total received via the EU to about £115 million.

This money is provided for humanitarian purposes and, under EU
sanctions, cannot be used directly by the Zimbabwean government or for
political purposes. An EU audit has found, however, that the majority
of it has been channelled through charities, government-linked
agencies and businesses owned by members of Mr Mugabe's ruling Zanu-PF
party. The audit report, which assesses the use of the aid budget for
2002, states that Zimbabwean organisations "reduced the value of the
EU resources by 89 per cent, to the detriment of the people".

The report adds that these Zimbabwean organisations are mostly
controlled by allies of President Mugabe or his relatives. For legal
reasons, no companies are named. An EU official said: "It is an
absolute scandal. Taxpayers' money is going straight into the pockets
of gangsters."

The scam operated by the Zimbabweans is simple. The organisations
funded by the EU are, in theory, meant to buy goods in Zimbabwe at the
official exchange rate of $1 to $15 Zimbabwean dollars. On the black
market, however, $1 is actually worth $1,500 Zimbabwean dollars. This
means that Mr Mugabe's associates can buy the goods required under
their EU contracts using the black market exchange rate, while telling
the EU that they have paid at the official exchange rate. The result
is a huge profit for Mr Mugabe's Zanu-PF friends.

John Bercow, the shadow international development minister, said that
the EU had been slow to recognise that aid money was being siphoned
off. He also accused it of hiding the results of the audit in obscure
documents. He added: "This is an outrageous abuse of taxpayers' money.
It could be doing so much more to help poverty stricken and ill
Zimbabweans." Officials at the Department for International
Development are now examining ways of preventing money being diverted
to Zanu-PF followers.