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US$200m deal under threat

A US$200 million deal between Grain Millers’ Association of Zimbabwe (GMAZ) and the state-run Grain Marketing Board (GMB) is under threat after Agriculture minister Joseph Made recently appointed Rockie Mutenha as new GMB general manager instead of GMAZ chairman Tafadzwa Musarara as initially agreed.

Staff Writers.

Government sources said GMAZ is now threatening to pull out of the deal because Musarara was overlooked despite an initial mutually agreed arrangement with government over the issue. This is further worsened by that Musarara reportedly came first in the official selection process and interviews for the new GMB boss.

As part of the deal to ensure bankability and sustainability of the US$500 million command agriculture project, government had initially agreed to appoint Musarara as GMB general manager to bring in funds and safeguard millers’ interests.

As a result a deal had been struck by GMAZ, GMB and government, through the co-ordinator of the command agriculture programme Vice-President Emmerson Mnangagwa. As part of the deal, GMAZ was supposed to mobilise US$208 million to buy 800 000 tonnes of maize from farmers through the GMB at US$250 per tonne and renovate GMB silos.

Of the expected money, US$200 million was to be used to buy maize from farmers through a revolving facility. The remaining US$8 million would be used to renovate GMB silos. GMAZ was supposed to fund the deal through its working capital estimated at US$70 million and bank loans.

It is anticipated two million tonnes will be produced under the command agriculture programme. GMAZ had pledged to pay US$40 million upfront to enable the GMB to pay farmers and service loans.

Government secured the main loan from Sakunda for the purchase of seed, among other inputs for the programme. GMAZ’s funding and marketing deal was expected to make the agricultural project viable, as GMB has no capacity to pay farmers alone.

The command agriculture programme is Zanu PF’s 2018 elections campaign centrepiece, and the failure of the marketing deal would be a major setback for the ruling party, farmers and funders.

The maize produce has to be properly harvested, stored and distributed before the programme can be declared a runaway success. In order to limit the potential damage of the harvest, GMAZ wanted the GMB’s old concrete silos to be renovated or replaced with steel facilities which are easier to maintain.

However, the deal was on condition that Musarara would be appointed general manager of the GMB. But Made in May selected Mutenha ahead of Musarara. Mutenha, formerly with the Agricultural Marketing Authority, replaced Lawrence Jasi who was holding the position in an acting capacity.

The last substantive GMB general manager, Albert Mandizha, left the organisation in 2014.

Sources said Mutenha’s appointment has forced GMAZ to consider pulling out of the agreement as they feel the new GM boss would not consummate the deal.

This could see the millers buying maize directly from farmers, in direct competition to the cash-strapped GMB; a development that would not only make the parastatal redundant, but also severely hamper the command agriculture programme.

Sources said there have also been questions over Mutenha’s selection as the GMB board chaired by Charles Chikaura had opted for Musarara who, according to insiders, emerged tops in interviews, ahead of Millicent Mombeshora, Mutenha, and Mabel Hungwe.

“Made, who is sympathetic to the Zanu PF G40 faction, appointed Mutenha as he did not want Musarara who is perceived to be a Mnangagwa sympathiser,” a source said. “The Mnangagwa faction is seeing this as an act of sabotage. Factional politics is at play here.”

Contacted over the issue, Musarara declined to comment. Efforts to contact Made were fruitless as his phone was not being answered.

This came as bureaucratic bungling is undermining the command wheat programme which was supposed to begin this early month.

“May 1, which traditionally marks the start of the winter wheat planting season, has now come and gone and yet a lot of bureaucratic bungling, shortage of fuel and planting seed has bogged down the planting of wheat on the ground,” said a senior government official.

“When government announced its intention to fund the winter wheat programme under the command agriculture scheme, they promised farmers that they would get all the necessary inputs well in time. However, recently only fuel, which has been available in dribs and drabs, has been made available. Most farmers were yet to receive the necessary seed, fertilisers and chemicals.

“Diesel is required by farmers to prepare their lands so that they can plant wheat. However, up until recently, only small quantities of diesel had been made available.”

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