Some of President Mugabe’s old enemies who propped former Rhodesian rebel leader Ian Smith by busting sanctions at the height of the liberation struggle are now reported to be helping to finance Zimbabwe’s war in the Democratic Republic of Congo.
And one of the financiers, is reported to be telling friends that he is “positioning” Legal Affairs Minister Emmerson Mnangagwa to succeed Mugabe. But a local weekly, The Mirror, said Mnangagwa had, dismissed the report as “rubbish”.
According to the London-based Africa Confidential, businessmen Billy Rautenbach and John Arnold Bredenkamp, are playing a crucial role in procuring and transporting military supplies for Zimbabwean and Congolese troops.
Rautenbach who seems to be playing a more prominent role was born in Harare in 1960. He is reported to be owning 150 companies in 11 African countries, the British Virgin Islands and the United States.
Over 40 of these companies, Africa Confidential says, have been incorporated as international business companies in the BVI to ensure secrecy of ownership.
In Zimbabwe he owns haulage company Wheels of Africa and is also reported to have a stake in Cargo Carriers. He also owns Hyundai Motor Distributors in Botswana. The company, hailed as one of the biggest foreign investments in the country, almost collapsed in June this year.
Rautenbach had more than R27 million in unsecured loans with Wesbank and Bankfin of South Africa and Marubeni Auto in Europe. Reports from South Africa, however, says the debt by Hyundai could be as high as R500 million.
According to Business Day, HMD owes, ABN Amro, ING Barings, Bank Belgolaise, FNB Botswana, Wesbank, Bankfin and Marubeni. He is reported to have negotiated a standstill agreement under which he was supposed to pay US$16 million into HMD by the end of October to avoid insolvency.
He is reported to have complied but most of the money is said to have come from Gecamines in the Democratic Republic of Congo which he is now chief executive of.
Rautenbach was allegedly awarded the mining concessions after the DRC had failed to pay him for the construction of the 300km road linking Matadi and Kinshasa. It was also hoped that profit from the copper mines would be used to finance Zimbabwe’s intervention in the Congolese war.
According to Africa Confidential, part of the agreement, signed on 4 September 1998, stipulates that 62.5 percent of the profits from the sale of Gecamines’ copper and cobalt should go to the Congolese government and 37.5 percent to Rautenbach’s company, Ridgepointe. The DRC government is supposed to pass on 20 to 30 percent of its share to the Zimbabwean government in part payment for military support.
Rautenbach is reported to be in good books with Congolese President Laurent Kabila’s financial strategist and Minister of State in the President’s Office, Pierre-Victor Mpoyo, but he is said to be falling out with Kabila who is reported to be getting increasingly dissatisfied with returns from the copper mines. Kabila is even reported to have sent Mpoyo to Paris this month to negotiate with French and Japanese companies to replace all or part of Rautenbach’s operations.
The confidential says Rautenbach is only hanging on because of pressure from Mnangagwa. The paper says Rautenbach’s problems started in June when he fell out with the UK-based Metal Resources Group, which specialises in cobalt trading.
The company is reported to have been negotiating special deals with Gecamines and Zambian Consolidated Copper Mines which together produce about 40 percent of the world copper. MRG boss Rami Weisfisch had predicted a price hike because supply was only expected to be around 30 000 tonnes while demand was expected to be around 34 000 tonnes.
MRG is now negotiating with Kabila but Rautenbach has won the day for the time being. He is selling his copper through Glencore, a commodity company founded by Marc Rich but now commercially independent of him.
Rich was a leading oil supplier to South Africa during the apartheid era. In 1981, he was indicted in the United States for running the “largest tax evasion scheme ever prosecuted”. Rautenbach is also being investigated for tax evasion by the South Africans.
His companies are alleged to be owing as much as R100 million in income tax and VAT payments but Rautenbach says the South African Revenue Service cleared him on November 12. His offices were once again raided by officers from the directorate for serious economic offences who were accompanied by a representative of the South African Revenue Service on November 18.
This time they said they were investigating the theft of R15 million from Hyundai Motor Distributors and Swedish Truck Distributors, which Rautenbach also owns. According to Business Day, Rautenbach’s Congo escapade has made him unpopular with governments that are unsympathetic to Kabila.
“Unease is being expressed in SA intelligence and diplomatic circles about his rumoured links with controversial leaders such as Kabila and Zimbabwe’s Robert Mugabe,” the paper says. But it adds that Ruatenbach has denied claims that he is close to Mugabe or is a part of a scheme to siphon funds off to the Zimbabwean government.
Bredenkamp seems to be playing a minor role.
Based in Britain, Bredenkamp was a major sanctions buster during the Smith regime and was a key player in the “Zephyr” programme which broke the United Nations sanctions. He even procured Marquetti fighter planes for the regime, but according to Africa Confidential, he was politically rehabilitated by Mnangagwa whom he says he is now “positioning” to succeed Mugabe.
A report in the Financial Gazette at the beginning of this month said Mnangagwa had emerged as the leading candidate to take over from Mugabe and was likely to be elected party chairman at the national congress to be held next month. But party secretary for administration, Didymus Mutasa, who the paper said was going to be axed, dismissed the report saying nothing of the sort had been discussed within the party.
Africa Confidential says this year, Bredenkamp offered US$50 million to bail out the troubled National Oil Company of Zimbabwe (NOCZIM) after its Kuwait suppliers refused to extend further credit.
Bredenkamp is now reported to be the main arms supplier to Congo and Zimbabwe although other players have entered the fray. Bredenkamp is reported to have a villa along the Lake Kariba.
What seems to be disturbing is that the Rautenbach-Bredenkamp partnership has not produced the much needed income for the Zimbabwean government which has been claiming all along that the DRC war is self-financing.
The budget deficit which had been set at 5 percent of GDP is now projected to rise to 7.5 percent. By August expenditure had overshot the target by $6 billion.
The war has already cost the country vital balance of payments support from the International Monetary Fund which had granted the government a standby facility of US$193 million but only disbursed one tranche of US$24 million. The IMF queried government promises that it was spending US$3 million a month in the DRC war claiming it was spending nine times that amount.
But according to Africa Confidential Rautenbach and Bredenkamp’s strongest card in Congo is that as long as they have the political backing of Mnangagwa and Mugabe, Kabila will have to retain them.
Although there seems to be consensus on the need to keep the ceasefire on track with Zimbabwe holding talks with the sponsoring invaders, Uganda and Rwanda, Kabila knows he is at the mercy of Zimbabwe. And Mugabe and those who are benefiting from the war have been arguing that they cannot lose the DRC the way they lost Mozambique to South Africa.
Zimbabwe fought alongside the Frelimo government, under the guise that it was protecting its route to the sea, only to see South Africa grabbing all the major business deals after the peace accord of 1992.