Singaporean entity Trafigura Pte Ltd this week revealed the purchase of the 51% stake of Trafigura Zimbabwe previously owned by the controversial Kuda Tagwirei owned Sakunda Holdings. This gives them 100% ownership and conveniently comes at a time when Tagwirei through Sakunda is being accused of fuelling corruption in the nation. The allegations are not new but that they come from previously silent corners sheds light on the potentially precarious situation the businessman is in.
Sakunda and Tagwirei are no strangers to controversy as they have been embroiled in the questionable command agriculture financing arrangements that were the subject of Parliamentary Portfolio Committee on Finance discussions. Sakunda also had their bank accounts frozen by the Reserve Bank of Zimbabwe in 2019 as they were believed to be engineering the decline of the Zimbabwean dollar through parallel market activity.
It comes as a surprise then that company not only continues to operate but does with a monopoly over fuel supply in Zimbabwe. The move looks, on the surface at least, to be Trafigura distancing themself from Tagwirei in a move that can only be described as sudden. Interestingly the purchase of the shares according to Trafigura was agreed in December 2019 and awaits regulatory approval. To announce this, without the regulatory approval, at a time when public allegations have been levelled against Tagwirei should certainly be indicative to many. On a bigger scale, it was suggested by Alex Magaisa that Trafigura may have caught wind that Kudakwashe Tagwirei is to be added to the list of people identified as being allies of the ZANU PF government and therefore under US sanctions. This would impact the international commodities trader negatively.
“This will bring improved clarity on Trafigura’s activities in the country, an opportunity for more robust financing of Trafigura Zimbabwe and aims to help improve the security of supply of fuel to Zimbabwe,” the company says.
“Trafigura Zimbabwe will continue to ensure that petroleum products are made available in line with ZERA’s regulated price build-up and quality standards,” the company said.
“USD liquidity remains tight, contributing to a challenging business environment for suppliers and consumers. Nevertheless, Trafigura is committed to continuing to work closely with the Reserve Bank of Zimbabwe to provide credit and flexibility, notwithstanding the company’s limited commercial role in the country.”
With the fuel industry in a shambolic state that is characterized by fairly regular shortages and weekly upward price reviews, it will be interesting to see if this move alone will bring any form of sanity to the table. Under previous law, a foreign entity could not own a 100% stake in a Zimbabwean company. The rules were changed and Trafigura looks to have taken full advantage of it.