Corruption: How two British investors lost their investment in Kafue

Corruption: How two British investors lost their investment in Kafue

By Peter Jones

Despite promises of well-balanced investment opportunities for overseas operators to consider Zambia as a priority area for tourism investment, evidence of incompetence and Corruption are unfolding.  One couple’s story of the nightmare of bureaucracy, inconsistencies and blatant attempts at Corruption should make any potential future investor pause for thought.

Lucy and Steven Rufus selected Zambia as the location for their world class product of 7 day specialist safari holidays on horseback.  The Zambian Wildlife Authority (ZAWA) offered a warm welcome and strong support, identifying for them the Kafue National Park as the perfect base for the operation.  Lucy and Steve invested large sums in building a full lodge, importing assets, and creating an international marketing program to attract the much needed foreign currency from overseas guests.

www.zambiahorsesafaris.com

With the local community, Lucy and Steve established a business model that would enable not only the employment of 60 locals, but also a community profit sharing deal that was estimated to deliver more than $25k a year to contribute to the improvement of local schools and clinics.

Zambian law requires a myriad of processes, documents, consultations and authority approval to set up any business. Despite full adherence to these regulations, the former Minister of Tourism Catherine Namugala intervened and instructed the then Director of ZAWA to expire the agreements.  In 2009 she claimed that Lucy and Steve acted fraudulently – although it is interesting to note that these claims have only ever been made verbally and the Minister’s only written instructions from her office state that their company would be ‘considered’ to be allowed to trade again only if they removed themselves from the site of the lodge foregoing their previous investment.

As a result of her claims, the couple were investigated on three separate occasions by three separate Zambian governmental bodies, including the Central Fraud Squad, ZAWA Investigation Unit and the Council of Itezhi-tezhi where they were based. They were totally exonerated in writing by the Council, exonerated VERBALLY by ZAWA and to date the Fraud Squad deny any such investigation took place despite detaining Steven Rufus for 5 days at Central Police Station.

Notwithstanding the fact the Police neither placed a charge, arrested any directors or refuted the allegations The Ministry of Land declined to process the tenure for the site claiming fraudulent activity and have subsequently ‘lost’ the relevant file. The Immigration Department also refused to issue relevant investment / work permits even though these were paid for in full and approved by the ZDA (Zambian Development Agency) and as a result the Rufus’s have been on report orders since 2009 and denied ability to work.

There is no protection for any investors, who encounter such issues – and the Rufus’s are not alone – the ZDA who encourage overseas investment and profess to guide them through the mine field of legalisation are powerless to act against more influential bodies. The only option left then is the judicial system which is antiquated and produces the perverse result of allowing the government to disappear behind their system and play the waiting game.

And this story doesn’t just affect the Rufus’s  – the 60 local people who were employed to work on the venture were re trenched as a result – denying the local community of not only much needed employment opportunities but also, crucially, the opportunity for profit sharing in the business with an estimated 25k annually for the improvement of schools and clinics.

These monies were desperately needed in a terribly impoverished region, an area where regardless of the millions of overseas aid that pours in to Zambia each year the only clinic was unable to buy even simple beds for patients nor a fridge for essential vaccines.

 

Share this post