HomePoliticsCabinet squeezes US$60m from firms

Cabinet squeezes US$60m from firms

THE cash-strapped coalition government has within a week managed to squeeze US$60 million from diamond mining and telecommunications companies in a desperate bid to raise US$250 million for the constitutional referendum due in three weeks’ time, and general elections later this year.

Elias Mambo/Paidamoyo Muzulu

Top government sources told the Zimbabwe Independent this week three companies — Econet Wireless, Mbada Diamonds and Anjin Investments — have under pressure contributed US$20 million each towards the referendum and elections.

This came as it emerged the United Nations Development Programme (UNDP) from which government recently sought US$250 million, was unlikely to release any money before the referendum set for March 16 due to bureaucratic procedures.

Fearing a disastrous failure to secure money to fund elections, government quickly put together a three-member cabinet committee comprising Deputy Prime Minister Arthur Mutambara, Finance minister Tendai Biti and Justice minister Patrick Chinamasa to scrounge for the US$250 million from local private companies operating in a market gripped by a liquidity crunch, with US$100 million urgently needed to fund the referendum.

The remainder would then be raised later either from the private sector, UNDP or countries like China, India, Venezuela and Iran.

Government principals — Mugabe, Prime Minister Morgan Tsvangirai and Mutambara — set the March 16 date for the referendum without money or knowing how to fund it. Government has budgeted only a paltry US$25 million for both the referendum and elections — a drop in the ocean.

Official sources say the principals thought UNDP would just and throw money at them after it provided a significant chunk of the US$50,7 million splashed on the controversial constitution-making process. Government provided US$28,6 million, while donors weighed in with US$22,1 million.

However, when it dawned on them the UNDP would not fast-track its processes to meet Zimbabwe’s political calendar and electoral events, principals hastily set up the cabinet team to raid the private sector for funds.

Sources said various options were considered, with some suggesting the money should come through donations, while others felt since a lot of companies were struggling government should look for loans.

However, it now appears authorities settled for a funding structure which would include giving companies tax credits and payment of licence fees in advance at a discount in the case of telecoms firms.Mutambara, who is chairing the cabinet committee, confirmed government was scrounging for funds from the private sector, although he could not confirm how much has been raised and from where.

“As government we have targeted three key sectors to borrow money from to fund our national activities and foreign agencies such as the UNDP can only complement our efforts,” he said.

“We have approached the mining sector, mobile telecoms companies and financial services firms. Although it is premature to announce the outcomes of our efforts so as to protect the integrity and privacy of our partners; all we can say is that they have responded positively and we have registered tremendous progress.”

Sources, however, said Econet, Mbada and Anjin have already chipped in with US$60 million. Mbada has been donating to different national causes, including social corporate responsibilities. It also donated US$89 000 to buy Mugabe’s birthday cake. Mugabe, now frail, turned 89 yesterday, but will be seeking re-election.

Diplomatic sources said the referendum date was too close for the UNDP to meet. “Once the team arrives, it will require a week or more to make an assessment, and then return to the UN headquarters in New York to present its findings before a decision can be made,” the source said.

UNDP resident representative and UN co-ordinator Alain Noudehou said a decision would follow the mission’s visit.

“As per the UN guidelines on electoral support, the request was transmitted to the UN focal point on electoral assistance at the UN headquarters. The UN focal point has since reviewed the request and responded in a letter sent to government on 11 February,” Noudehou said.

“The UN focal point has commended government for the progress made on the constitution-making process and advised that a UN needs assessment mission would need to be dispatched to assess how the UN can best support.”

Government wrote to the UNDP on February 4 asking for money to fund elections after principals on January 11 instructed Treasury, Tsvangirai’s office, to mobilise resources for the referendum and elections.

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