BRAZIL has indefinitely withheld disbursing outstanding farming implements worth US$60 million to Zimbabwe under the US$98 million More Food for Africa programme amid allegations of rampant abuse of the facility by top government officials, among other irregularities, the Zimbabwe Independent can reveal.
By Tinashe Kairiza
Although Brazilian embassy officials say the South American country had suspened disbursing the implements due to “mounting economic challenges at home”, sources say Harare had defaulted on repaying the loan facility, which was abused by senior government officials.
The corrupted loan facility was meant to equip small-scale farmers with farming implements.
Zimbabwe in 2015 received implements worth US$38 million as part of the loan facility to benefit small-scale farmers, leaving a balance of US$60 million.
The loan was supposed to be serviced in 15 years at an annual interest of 2%.
Brazil supplied Zimbabwe with 320 red 575,4 Agrale tractors, 450 disc harrows, 310 planters, 100 fertiliser spreaders and 6 650 knapsack sprayers valued at US$38,6 million under the first phase of the US$98 million facility commissioned by President Robert Mugabe.
However, sources privy to the deal say Brazil suspended the loan facility because Harare has defaulted settling accruing arrears. Brazil is also not happy with the distribution of the implements amid revelations some bigwigs benefitted at the expense of big wigs.
The South American country has also extended a similar loan facility to farmers in various African countries which include Senegal, Ghana and Mozambique under the More Food for Africa initiative.
Brazil’s Ambassador to Zimbabwe Ana Maria Pinto Morales, however, said following an assessment of the first phase of the loan disbursement facility, Brazil had decided to withhold disbursement of the remaining implements so that it could deal with its own domestic economic challenges.
“We had a meeting in Brazil on the disbursement of the second tranche of the facility about three weeks ago. Brazil is looking at reassessing its position,” Morales said.
“Brazil has some economic constraints at the moment; I cannot give any timelines and details at this stage as to when the remaining implements will be disbursed,” she said, noting that Brazil was currently battling a “fiscal deficit” among other economic challenges.
However, a source closer to the implements deal says Brazil was choosing a “diplomatic path” to suspend the facility without burning bridges with Harare.
Morales said Brazil was not a “donor country” and, like any other investing country, it was looking for a return from the concessionary loan facility extended to Zimbabwe.
“Brazil is not a donor country; the idea is not to donate but to transform. But we need to examine the best way to do it,” she said.
Morales said Brazil would reconsider resuming the loan facility to Zimbabwe once Brazil has addressed its economic challenges.
Senior officials from the Ministry of Agriculture, Mechanisation and Irrigation Development were summoned by Parliament last month to explain why there were delays in the disbursement of the remaining implements, among other issues.
Sources who attended the meeting at Parliament say Brazil had decided to suspend disbursement of the outsdanding implements under the second phase of the programme because Harare was not honouring its loan repayment obligations.
Under the loan arrangement, Zimbabwe’s beneficiaries are supposed to repay for the implements through Agribank.
Agribank chief executive Sam Malaba would not be drawn into discussing the loan repayment schedule by beneficiaries of the programme.
He referred questions to the Agriculture ministry.
“You can talk to the Ministry of Agriculture. We operate as agents of the ministry on the Brazilian facility,” said Malaba.
The Brazilian project commenced on a controversial note as it was hijacked by former first lady Grace Mugabe who distributed the inputs at her rallies while creating the impression she had independently sourced them.
Opposition parties slammed her for distributing the implements along partisan lines.