HomeBusiness DigestParly queries Chinamasa’s role in TBs

Parly queries Chinamasa’s role in TBs

BY MTHANDAZO NYONI

FORMER finance and economic development minister Patrick Chinamasa approved a Treasury Bill (TB) worth over US$737, 9 million while his term had expired, a damning parliamentary report on the Command Agricultural programme revealed last week.

The 2018 general elections were held on July 30, 2018.

The former finance minister’s term expired on July 29, 2018, the report noted.

It said his role in government at the time that he approved the TBs was that of a caretaker for emergency purposes only, until President Emmerson Mnangagwa was sworn in.

According to Parliament’s Public Accounts Committee’s report presented in Parliament last week following a two-year probe on how funds were used under the special maize programme, better known as Command Agriculture, Chinamasa on  August 10, 2018 approved a huge TB in the sum of US$737 904 758.

“A further concern is the approval provided for by Honourable minister Chinamasa on the 10th August 2018 of a huge Treasury Bill in the sum of US$737 904 758,” the report by the committee, chaired by Gweru Urban Member of Parliament Brian Dube,states.

“The committee finds it totally remiss that an individual without power would create indebtedness to the State to the tune of almost a billion United States dollars. This was unacceptable conduct.

“Also questionable was the action of the Reserve Bank of Zimbabwe (RBZ) governor, John Mangudya, in trying to clear the RBZ’s mess by asking an individual without power to approve huge amounts of payments for its own external indebtedness acquired without Parliament approval as required by section 327 of the Constitution before a new minister comes in,” reads the report.

The report further says: “Nothing can be more roguish than the bank asking for a powerless minister to approve an indebtedness of almost a billion dollars without Parliament’s approval.” It alleges that Chinamasa and the RBZ superintended over a murky and illegal process through dubious approvals of Treasury Bills that have saddled the government with a debt of nearly US$1,6 billion.

Members of Parliament have called on the Zimbabwe Anti-Corruption Commission to probe their actions.

Parliamentarians have also called for a forensic audit to establish how much the country lost in the arrangement, done outside the tender process.

The committee said the government violated tender procedures when it appointed companies that participated in the Command programme. It said it was also concerned that some companies contracted to supply the scheme’s requirements indicated that they had their own foreign currency to source goods. However, the committee said it observed that companies that participated in the scheme received foreign currency from the RBZ.  It said it was unsatisfied with explanations over the contrasting information on the programme coming from different government agencies.

The committee received submissions from the Ministry of Finance, the Ministry of Agriculture and the RBZ.

“When pressed further the Ministry of Finance and Economic Development officials testified that Treasury had no money in 2017 and 2018 and therefore asked the RBZ to make payments on its behalf,” the report states.

“As a result of fiscal challenges, the ministry officials testified that Command Agriculture suppliers were appointed without going to tender and without respect of the Public Procurement Act with those companies such as Sakunda who had indicated that they had their own foreign currency and thus were able to supply government on credit.  When it was put to them that in fact all Command Agriculture suppliers had received huge amounts of foreign currency from the RBZ, contrary to their indication that they would source forex on their own, the ministry officials had no satisfactory response. The ministry officials acknowledged that whilst they had some documents, only the Reserve Bank could answer on specific beneficiaries of the amounts met under Command Agriculture,” the report reads.

It said the Ministry of Finance admitted that it incurred “unauthorised expenditure” through the Command Agriculture programme in 2017 and 2018. This had also been raised by the auditor-general’s statements for 2017 and 2018.

The report said Finance ministry officials also accepted that they acted outside the law when they incurred the excess expenditure before they sought parliamentary approval as these were made outside the budget.

“The ministry officials acknowledged that they erred in making direct payments to suppliers and contractors outside the line ministry, which is the Ministry of Lands, Agriculture, Water and Rural Resettlement,” states the report.

“The Ministry of Agriculture officials appointed Command Agriculture suppliers without going to tender in contravention of the Public Procurement Act with companies such as Sakunda.

“The Ministry of Finance should adhere to the provisions of the Constitution, Public Finance Management Act and the Public Procurement and Disposal of Public Assets Act, with immediate effect.

“The Ministry of Finance must desist from making direct payments to suppliers. All disbursements should be made to line ministries to avoid improper accounting of disbursements, with immediate effect,” it reads.

The report added to several red flags that have previously been raised over the programme, but it said it was mostly concerned that loans issued to some companies under the programme had not been repaid.

The report said it was difficult to understand, which government agency was in charge of the programme and urged authorities to make sure that funds loaned out to firms were collected.

“The Ministry of Agriculture indicated to the Committee that they had no knowledge of the funding of Command Agriculture,” the committee said in the report.

“However, the committee noted that in the Auditor General report, they had acknowledged transactions with Sakunda under the Special Maize Production Programme (US$16 302 201) and Loans under the Pedstock Facility (US$16 815 940), under Command Agriculture.

“Only US$94 753 was recovered under Pedstock, and no recovery was made under Sakunda. The Ministry of Agriculture was not proactive and should have played a meaningful role in their operations by interrogating their role in the whole maize production matrix. In their evidence the Ministry of Lands, Agriculture, Water and Rural Resettlement repeatedly made the point that although theoretically they were being made to account for Command Agriculture, they had no knowledge of the same.

“In simple terms they disowned Command Agriculture,” reads the report.

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