Zim churches in billion-dollar illicit money trail

ZIMBABWE’S churches may have been unwittingly drawn into a financial underworld in which charitable donations and project funding are allegedly being used to disguise terrorist financing, regulators disclosed this week, saying investigations are underway.

If proved, the Financial Intelligence Unit (FIU)’s disclosures expose a vulnerability that stretches far beyond Zimbabwe’s borders.

The FIU says it has detected suspicious financial flows involving “faith-based organisations and international organisations” operating in Zimbabwe, raising fears that illicit funds may have been channelled through institutions traditionally associated with charity, social welfare and community development.

The revelations are contained in the agency’s 2025 annual report. They are likely to jolt a country with no known history of terrorist activity.

The financial crimes watchdog said its investigations had uncovered suspected attempts to use local individuals to move money under the cover of legitimate charitable and development activities.

“Certain international and/or faith-based organisations were suspected of engaging in TF (terrorist financing) by using locals to move funds that were disguised as donations for charitable works or capital for certain projects,” the FIU said.

“These cases are still under investigation.”

The agency did not disclose the number of organisations under investigation, the amounts involved or the identities of those being probed.

But the disclosures come amid growing scrutiny of large sums flowing into religious organisations, including multimillion-dollar donations and financial commitments from wealthy and politically exposed Zimbabweans. Such donations, by themselves, are not evidence of money laundering or terrorist financing.

The warning strikes at a sensitive intersection between religion, philanthropy and financial crime, and raises the disturbing possibility that institutions established to receive and distribute money for legitimate causes could be exploited to conceal the movement of illicit funds.

The FIU said it had also referred intelligence to the Zimbabwe Anti-Corruption Commission, which “primarily related to suspected corruption and money laundering”.

A recurring pattern involved government officials depositing or receiving substantial amounts of cash and acquiring expensive movable and immovable assets that appeared inconsistent with their known or declared income.

“These properties acquisitions were observed both locally and within the region,” the anti-money laundering watchdog said.

Companies also came under scrutiny for allegedly moving money out of Zimbabwe without properly accounting for the funds.

“It was observed that certain corporates were depositing funds into their local bank accounts and subsequently transferring these funds to their own foreign bank accounts, after which they failed to acquit the amounts within the prescribed 90-day period,” the FIU said.

In other cases, companies were allegedly taking cash directly out of the country.

“Additionally, it was noted that some companies were depositing hard cash into their foreign-domiciled bank accounts,” the FIU said.

The intelligence agency said its investigations into suspected externalisation also covered unregulated money-transfer agencies, widening the financial crime net beyond conventional banking channels.

The risks, the report suggests, are becoming increasingly sophisticated.

For 2026 and 2027, the FIU said it would focus on virtual assets and virtual asset service providers, cross-border illicit financial flows, trade-based money laundering, and the misuse of legal persons and arrangements.

“The FIU will continue strengthening data analytics, inter-agency coordination, and real-time information sharing with law enforcement agencies to enhance the quality, timeliness and operational impact of financial intelligence,” the unit said.

The report also exposes another troubling nexus: gold smuggling, fuel and liquefied petroleum gas (LPG) trading.

The FIU said gold smugglers were using LPG trading to launder illicit proceeds.

Fuel bought in local currency for government projects was allegedly being diverted and resold in US dollars, creating a parallel channel through which illicit proceeds could be recycled.

The study found rapid growth in the fuel and LPG retail sectors despite national fuel consumption remaining largely unchanged, while upstream procurement, production and wholesale activities stagnated.

“The rise in the number of retail fuel and LPG sites was found not to be demand-driven, but emanated from various factors such as criminal activities, specifically illegal dealing in gold, smuggling of gold, fuel and LPG,” the report states.

“Key findings indicate that the fuel and LPG retail sector is increasingly being infiltrated by gold smugglers who are using fuel and LPG trade as channels to launder illicit proceeds generated from gold smuggling.”

The report describes an organised network involving smugglers and a “closed syndicate of couriers”.

The couriers identify local traders in need of fuel and LPG, arrange transport and smuggle the products into Zimbabwe, where they are sold for US dollars.

The proceeds are then channelled back into illegal gold-buying operations.

“The cash generated is then used as working capital for illegal gold buying operations,” the FIU said.

Zimbabwe is estimated to lose between US$1.5 billion and US$2 billion a year through gold smuggling, although the FIU report does not put a monetary value on the losses linked specifically to the fuel and LPG scheme.

The agency said the country was losing substantial foreign currency because “the bulk of the gold smuggling profits are retained offshore”.

The study also found that some cash couriers were supplying local traders with smuggled fast-moving consumer goods, including fuel and LPG, on credit.

The traders were then instructed to deposit the cash proceeds into safe-deposit boxes controlled by the couriers.

“The local traders are subsequently instructed to deposit the cash sales into safe deposit boxes owned and/or controlled by the couriers, allowing couriers to repatriate proceeds of smuggled gold into the country,” the report says.

The FIU said safe-deposit boxes were predominantly used by politically-exposed persons and property developers to store large amounts of undeclared cash.

“This is done to conceal the illicit sources of the cash, as well as evade taxes,” it states.

The study also uncovered the alleged diversion of fuel procured in local currency for government-related projects.

“The study further revealed the unlawful diversion of fuel procured in local currency for government-related projects into the open market,” the report says.

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