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NATIONAL ASSEMBLY HANSARD 3 MARCH 2022 VOL 48 NO 28

PARLIAMENT OF ZIMBABWE

 Thursday, 3rd March, 2022

The National Assembly met at a Quarter-past Two O’clock p.m.

PRAYERS

(THE HON. DEPUYT SPEAKER in the Chair)

ANNOUNCEMENT BY THE HON. DEPUTY SPEAKER

COMPLETION OF KOHA REGISTRATION FORMS

          THE HON. DEPUTY SPEAKER: I have to inform Hon. Members that the Parliament Library is now fully automated using the KOHA Database. All book transactions will now be done on line. Therefore, all Hon. Members are kindly requested to complete KOHA registration forms which will be availed by staff stationed in the Members’ Dining Room.

          HON. MAVETERA: On a point of privilege Madam Speaker,

          THE HON. DEPUTY SPEAKER: What is your point of privilege?

          HON. MAVETERA: I rise on a point of privilege. For the first time in Zimbabwe, we have attained the highest belt in Zimbabwe’s boxing history. This was done by a 26-year old Kudakwashe Chivandire also called ‘Take Money’. She managed to get the WBC Belt. Indeed, it is a girl child who has done this and she makes us proud. I would like to take this opportunity to congratulate her for having this WBC title which is the World Boxing Council interim Super Bantam- weight and she is the Super Bantamweight champion here in Zimbabwe. We are happy this new dispensation has afforded an opportunity through His Excellency Dr. E. D. Mnangagwa where we see young women and sports doing very well. To be honest with you, for us this is applaudable and we feel that the young women and sport is doing well because of the opportunity and environment that is being created in this new dispensation. Indeed, let me congratulate Kudakwashe Chivandire. We are saying this is an opportunity that we see when our artists or sports people are being recognised worldwide for doing well. It is good for us as a country to be appreciated and I commend them. It would have been good if we have such people awarded diplomatic passports for they would have represented the county very well. I thank you.

          THE HON. SPEAKER: Thank you Hon. Mavetera. That is very commendable. Congratulations to Kudakwashe Chivandire.

          *HON. NYABANI: Thank you Madam Speaker. I am back again to this august House. Last year I cited in this very House that children have a right to education. I did bring the attention of this House that in Rushinga Constituency, there are no teachers. Since last year, some schools do not have even one teacher from when the schools were opened and children are not going to school. It is the right of children to go to school. I have tried to run around, the Ministry of Education said the Ministry responsible for recruiting teachers is the Ministry of Public Service. The Ministry of Public Service also says the Ministry of Finance is responsible for paying the teachers. I implore Parliament to investigate or form a committee that will go to Rushinga and determine what is happening in Rushinga. How will children in Rushinga survive when they are deprived of their right to education? From last year, children in Rushinga are getting Os. Thank you Madam Speaker.

          THE HON. DEPUTY SPEAKER: Thank you Hon. Nyabani. We will implore the Committee on Primary and Secondary Education to go to Rushinga and investigate the issue.

          HON. MARKHAM: Thank you Madam Speaker. Good afternoon.

          THE HON. DEPUTY SPEAKER: Good afternoon.

HON. MARKHAM: My point of national importance is on the recently signed document on waste management by the City of Harare done on Tuesday. My concern is on the people that are signing the contract. I have an issue on the whole contract that they want to sign. City of Harare has no capacity and transport to move the waste from where it is to Pomona, that is the issue. They need 46 trucks and as of today, only six are running. They remain with that problem; they sign a contract with a group who are going to put waste to energy programme and this will not solve the problem, how are they going to get the waste from where it is to the dumb site? On top of that, when they get to the dump, they have to pay those people $40 a tonne.  They have to produce and transport a thousand tonnes a day. They have no capacity to do that and they have not solved the problem. They will end up paying someone $40 000 a day because they cannot do the job. The dump which is many hectors is being given on a lease for 30 years for nothing. We do the transportation, we pay the running costs, we give them land and they sell the electricity to ZESA and they get it for free, they get the money. What is City of Harare going to get?  These deals are happening all the time, they have to stop.  I can tell you now, two tenders were flighted when I was a councillor, both tenders had very good applicants and some of them were Zimbabweans.  The second tender, they were seven; they did not get an answer from either the Ministry or City of Harare. How do you flight a tender and not tell people, ‘thank you but we have cancelled it?’ They did nothing. 

Now this one is being rushed and I will tell you why, because Cabinet approved it, then they go back to council and give it to them.  How can Cabinet approve something before council?  The feasibility study on City of Harare does not stop with City of Harare, there has to be a feasibility study on waste, not only on the quantity but on the quality.  Is it going to be recycled, what are the health hazards?  None of these has been done and my biggest concerns are:

  1.      POZ has given a special licence, however they circumvent themselves, so they do not have to look at them;
  2.      No stakeholder has been approached. There are very good stakeholders at the City of Harare or the University of Zimbabwe can help us solve this, they have been ignored totally. 

I can tell you now that they also have one more thing, a walk-out if things do not work where, if City of Harare wants to pull out they are going to pay them $3.5 million - for what?  Why do you price a contract in US$...

THE HON. DEPUTY SPEAKER: Hon. Markham, your point of national interest is very valid.  I think you better ask during question time to the responsible Minister who is the Minister of Local Government and Public Works on Wednesday.

HON. MARKHAM: I will be very pleased to Madam Speaker Ma’am, provided that I am given the opportunity.  My last point is, this whole contract is US$s and residents are paying in ZW$s, the exchange rate is going to be carried by the City of Harare.  This programme is set up to fail, I thank you.

(v)*HON. NDUNA: Firstly, I would like to thank the President who is going to visit Chegutu West Constituency tomorrow for a clean- up campaign, cleanliness is next to godliness.  Secondly Madam Speaker Ma’am, unless it has already been presented; in your Papers’ Office, are the Auditor General’s Reports on [Technical glitch] –

HON. T. MLISWA: Thank you Madam Speaker and a very good afternoon to you.  My point of order arises from Hon. Markham’s findings on the Harare City Council deal which he is talking about. A number of issues have been mentioned pertaining to the processes and procedures not being followed; before a council resolution, Cabinet approves.  It is important that we get sight of the agreement and the Minister never comes to Parliament or to any Portfolio Committee meeting.  Just on Monday, all the chiefs in the country were waiting for him and the Local Government Portfolio, again he was absent.  So he will never come.  I do not know if we can get a Ministerial Statement on that and can we get the contract so that we go through it and understand it because this is a serious matter. If we do not do that we will equally be blamed for allowing corruption to rear its head.  Thank you Madam Speaker.

THE HON. DEPUTY SPEAKER: On that one, maybe we may ask Hon. Kazembe who is the Acting Leader of Government Business to advise the Hon. Minister to come to this House with a Ministerial Statement regarding that issue.  Thank you.

(v)HON. MUSHORIWA: Thank you Madam Speaker.  My point of privilege arises from the fact that Zimbabwe, as you may be aware, was allocated close to US$1 billion in Special Drawing Rights (SDR)  You will recall that the Minister of Finance and Economic Development in the Budget presentation for this year had indicated areas upon which the SDRs are going to be directed to.

I stood up to simply say that we request that your Chair allows the Hon. Minister of Finance and Economic Development to present a Ministerial Statement pertaining to the utilisation of the funds and the challenges thereto.  Given the fact that this cannot be properly answered in a question time, but requires the Ministry to actually apprise the nation pertaining to the effect on the ground in respect to the monies that were allocated under the SDRs, I request your Chair Madam Speaker to help us.

THE HON. DEPUTY SPEAKER: Thank you Hon. Mushoriwa, I am sure the Acting Leader of Government Business has taken note of that.  He will advise the responsible Minister to come to the House with a Ministerial Statement.  I thank you.

(v)HON. MOKONE: Good afternoon to you Madam Speaker.  I rise on an issue of national importance.  This is a follow up to the monetary and pricing issue that I brought before this august House regarding the Gwanda Town Council water crisis.  To be precise, I brought it on the 12th of August, 2021.  It is with a heavy heart that I stand before the august House today on the same issue.   After the response by the Minister in this august House, we visited the town and handing over the plant to Gwanda Municipality was done but up to now, there has been no implementation. 

As I am talking to you now, ZINWA has introduced a system of pre-paid water system.  This has seen the town running dry for some days, including hospitals.  There is no water in the town as I am talking to you right now and it is almost a week now since the town has run dry.  I had a question yesterday on the same issue but unfortunately the Minister responsible for that was not available to respond.  I see this lack of water as a breach of the Constitution, Section 77 of the Zimbabwean Constitution which stipulates that everyone has a right to safe and clean water.  I am therefore appealing to you Madam Speaker, to make sure that the responsible Minister explains to this august House whether he is reneging from his earlier position so that the residents of Gwanda may know the current position.  I thank you.

THE HON. DEPUTY SPEAKER: Thank you Hon. Mokone.  I think the best thing to do on this issue is to write a question to the Minister so that even if the Minister  failed to come  to the House, the technocrats at the Ministry can prepare the answer and the Deputy Minister or the Minister can bring the response to the House. Also, I think if you remind me, I will assist you with follow up on that issue. Thank you.

(v)HON. NDUNA: Madam Speaker, if you can indulge me, I just want to know if my point of privilege went through well because I was having network challenges.

THE HON. DEPUTY SPEAKER: You were not audible.

(v)HON. NDUNA: May I go ahead whilst I am still there Madam Speaker?

THE HON. DEPUTY SPEAKER: Yes, please go ahead.

(v)HON. NDUNA: Thank you Madam Speaker. I had thanked His Excellency the President, Cde. E. D. Mnangagwa for coming to Chegutu tomorrow on a clean-up campaign of the first Friday of every month. Secondly, I had asked your office to ask the Minister of Finance to table the report on the State Owned Enterprises, the Ministry’s and that on local governance, 2020 Auditor General’s Report. They are there in your Papers Office with your officials. If it pleases you, please may that be expeditiously tabled in the House by the Ministry of Finance? I thank you.

THE HON. DEPUTY SPEAKER: Hon. Nduna!

(v)HON. NDUNA: I am here Madam Speaker. Your servant is here. You may direct your chat to him.

THE HON. DEPUTY SPEAKER: Thank you. I am being advised that the Journals’ Office is handling that issue of the report so that it can be tabled in the august House.

(v)HON. NDUNA: Thank you Madam Speaker. You can see it in your Journals Office because they might do it in a lackadaisical manner.

THE HON. DEPUTY SPEAKER: Hmm, I hear you Hon. Nduna.

MOTION

BUSINESS OF THE HOUSE

HON. T. MOYO: Madam Speaker, I move that Orders of the Day, Nos.  1 to 32 be stood over until Order of the Day, No. 33 has been disposed of.

HON. L. SIBANDA:  I second.

Motion put and agreed to.

MOTION

REPORT OF THE PORTFOLIO COMMITTEE ON LANDS, AGRICULTURE, WATER, FISHERIES AND RURAL RESETTLEMENT ON THE CASE OF THE ELUSIVE US28.2 MILLION DISTRIBUTED BY THE RBZ TO THE GRAIN MILLERS ASSOCIATION

Thirty Third Order read: Adjourned debate on motion on the First Report of the Portfolio Committee on Lands, Agriculture, Fisheries, Water and Rural Development on the case of the elusive US28.2 million distributed by the Reserve Bank of Zimbabwe to the Grain Millers Association of Zimbabwe (GMAZ) for wheat imports.

Question again proposed.

HON. WADYAJENA: Thank you Madam Speaker. I move that the debate be adjourned.

(v)HON. T. ZHOU: I second.

Motion put and agreed to.

Debate to resume: Tuesday, 10th May, 2022.

MOTION

BUSINESS OF THE HOUSE

HON. T. MOYO: Madam Speaker, I move that we revert to Order of the Day, No. 14.

HON. L. SIBANDA:  I second.

Motion put and agreed to.

MOTION

THIRD REPORT OF THE PUBLIC ACCOUNTS COMMITTEE ON THE SPECIAL MAIZE PROGRAMME/COMMAND AGRICULTURE

(v)HON. B. DUBE: Thank you Madam Speaker. I move the motion standing in my name that this House considers and adopts the Third Report of the Public Accounts Committee on the Special Maize Programme/Command Agriculture.

HON. T. MLISWA: I second.

(v)HON. B. DUBE:

INTRODUCTION

1.1 Section 119 of the Constitution, gives Parliament power to ensure that provisions of the Constitution are “upheld and that the State and all institutions and agencies of government at every level act constitutionally and in the national interest.”

1.2      Section 299 of the Constitution confers the Public Accounts Committee with unlimited oversight powers over all State revenues and expenditure. It states that

(a)       “Parliament must monitor and oversee expenditure by the State and all Commissions and institutions and agencies of Government at every level, including statutory bodies, government-controlled entities, provincial and metropolitan councils and local authorities...” 

1.3 Accordingly, Parliament in general and the Public Accounts Committee in particular, has the responsibility to ensure accountability and openness of the State through oversight of activities of the executive and its auxiliary bodies.  

1.4 The Public Accounts Committee is constituted in terms of Standing Order No. 16 of the Standing Rules and Orders of the National Assembly, which reads: 

There must be a Committee on Public Accounts, for the examination of the sums granted by Parliament to meet the public expenditure and of such other accounts laid before Parliament as the committee may think fit.” 

1.5 In doing its work, not only does the Committee measure compliance arising from reports of the Auditor-General or other reports but the Committee also looks at constitutional and statutory compliance in so far as it relates to financial and audit matters.   

1.6 In short, the Committee exercises its oversight function by examining both the technical accounting issues as identified in audit reports as well as technical legal compliance issues. 

2.  Background to the Inquiry

2.1 This Report is a by-product of the Committee’s examination of the Ministry of Lands, Agriculture, Water and Rural Resettlement’s Audited Accounts for the years 2017 and 2018.  

2.2 What started off as a normal routine audit examination of the Public Accounts Committee quickly imploded into a major inquiry when the Committee noted a huge amount of an Unallocated Reserve amounting to US$1 559 713 867. 

2.3 In the process of receiving oral evidence, it became clear to the Committee that Command Agriculture on its own was a huge entity, much bigger than amounts appropriated originally to Vote 8 in both 2017 and 2018.  

2.4 That being so, the Committee found itself conducting two separate enquiries, the routine inquiry on Vote 8 and the separate inquiry on Command Agriculture.

2.5 As a result the Committee compiled ended up compiling two Reports, one on Vote 8, which is the Committee’s Second Report and the other one on Command Agriculture, which is the Committee’s Third Report.  

2.6 In preparing both parts of the report, the Committee received oral evidence from officials in the Ministry of Lands, Agriculture, Water and Rural Resettlement, the Ministry of Finance and Economic Development, the Reserve Bank Governor Dr. John Panonetsa Mangundya, his deputy Dr. Khuphukile Mlambo and senior officials from the Reserve Bank. The Committee also received evidence from the Grain Marketing Board and from selected private companies that were involved with Command Agriculture that included Croco Motors, Solution Motors, Valley Seeds, Pedstock, Ferts, Seed and Grain and Sakunda. 

2.7 The Committee also received extensive documentation, particularly from the Ministry of Finance and the Reserve Bank. The Committee expresses its indebtedness for these documents which were invaluable in its work. 

Challenges with the enquiry  

2.8 The Committee commenced its work in May 2019 but only completed receiving oral evidence in March 2020. The Committee met several challenges which included the refusal of witnesses and companies to come and testify.  

2.9 The Committee also faced challenges with the Reserve Bank of Zimbabwe. First were delays experienced due to the absence of the Governor, Dr. John Panonetsa Mangundya who at one stage in October 2019 was said to be attending annual meetings of the World

Bank and IMF in Washington DC. 

2.10    Second was the Bank’s refusal to provide the Committee with information, particularly correspondence between the Reserve Bank Governor, Dr. Mangundya and the Minister of Finance and Economic Development, Hon P. Chinamasa relating to Treasury Bills. 

2.11 Third was the Bank’s delay and refusal to answer material questions arising out of discrepancies in respect of Treasury Bills. As the Committee’s report on Command Agriculture will show, those discrepancies were never properly addressed up to the present moment in time.  

2.12 The Covid-19 pandemic paralysed the operations of Parliament for at least four months. This naturally delayed production of this report on Vote 8.  

 COMMITTEE’S FINDINGS 

1.0.     Context 

1.1.  The 2017 Auditor General’s Report on the Ministry of Lands, Agriculture, Water and Rural Resettlement established a variance of US$1 559 713 867 between the Unallocated Reserve figure disclosed in the Ministry’s accounts and Treasury records the Committee received.

 1.2.  According to a schedule received from the Auditor-General, the Ministry of Agriculture was supposed to have received US$ 1 633 617 652 from Treasury. However as at 10 May 2018, the Ministry of Agriculture confirmed having received only 73 903 785 

1.3. A similar observation was made in 2018. The Ministry was allocated through the budget the sum of US$ 497 381 000. However, there were no supporting documents for a sum of US$ 847 954 752 directly paid by the Ministry of Finance and Economic Development to various service providers.

 1.4.  Although the Auditor-General’s Reports relate the figures to the ‘Unallocated Reserve’, the amounts referred to above were in fact unbudgeted for expenditure spent outside Parliament’s approved budget as shown in the figures in the Appropriation Account, the Budget and the Blue Book.

 1.5. The Public Accounts Committee was gravely concerned with these huge amounts spent outside the Appropriation Act, in breach of the Constitution of Zimbabwe and the Public Finance Management Act. The Committee, therefore, summoned before it the Ministry of Lands, Agriculture, Water and Rural Resettlement.  

2.0.     Oral evidence from the Ministry of Agriculture, Lands, Water and Rural Resettlement

 2.1.1 The Committee received oral evidence from the Ministry of Lands, Agriculture, Water and Rural Resettlement which was represented by its Permanent Secretary and Accounting Officer, Mr. Chitsiko and its Finance Director, Mr. P. Mudzamiri, Mr. M. Nyamangara the Director of Mechanisation, Mr. Gumbo, Director of Mechanisation, Mr. Zawe, Director Irrigation, Mr. A. B. Mudzinganyama Chief Accountant, Mr. A. Chirinjani Chief Accountant, Dr. P. Makaya, Acting Director of Veterinary Services and other officers Mr. R. Muzamhindo and Mrs. R. Manzou. 

2.1.2 Through Mr. Ringford Chitsiko, the Permanent Secretary and Mr. P. Mudzamiri, the Finance Director in the Ministry of Lands, Agriculture, Water and Rural Resettlement explained to the Committee that they had no knowledge nor any idea about the huge amounts captured as an Unallocated Reserve from the Auditor-General’s statements.

2.1.3 They explained that the Ministry of Finance and Economic Development was in charge of Command Agriculture and dealt directly with contractors, suppliers and beneficiaries. 

2.1.4 They further explained that the Ministry of Finance and Economic Development only wrote to them in May 2019 asking the same to account for the expenditure in their books.

2.1.5 The following are three critical passages from the testimony of the Ministry officials:  

The Finance Director defined the Unallocated Reserve as the Contingent Reserve. He stated that the Ministry writes to Treasury seeking an extra budgetary allocation under the control and management of the Ministry of Finance and Economic Development. He explained that if Treasury allocates the amount to the Ministry, Treasury is supposed to write a letter to the Ministry of Lands, Agriculture, Water, Climate and Rural Resettlement and the Ministry should enter the amount into its books. The Finance Director highlighted that the difference in figures arose when Treasury released funds but did not notify the Ministry. He informed the Committee that letters from Treasury had come after the returns had been prepared. The Permanent Secretary admitted that the variance was huge. He pointed out that there was need for an improvement in the movement of documents between

Treasury and the Ministry of Lands, Agriculture, Water, Climate and Rural Resettlement.”

The Finance Director, informed the Committee that payment to parastatals can be in two parts. He indicated that payment can be through the Ministry which in turn pays the parastatals. He explained that in the case of the $ 1 559 713 867, Treasury paid directly to the beneficiaries and nothing about the payment had been communicated to the Ministry by 28 February by which date returns should have been submitted. He informed the Committee that letters of communication were received by the Ministry in May 2019. He argued that since the money was not loaded into the Ministry’s accounts, the amount could not be put into the system and that the supporting evidence has to be with Treasury.”

The Finance Director indicated that Treasury initiates agreed budgets and uploads the figures in the computers at which point the Ministry can spend the money. He informed the Committee that a total amount of $847 954 752 did not pass through the Ministry. The Ministry had only received letters from Treasury requesting the Ministry to adopt the disbursement without supporting evidence. He suggested that the issue of direct payments be revisited. The Finance Director submitted that he had made a number of follow ups, some in writing to the Director Budgets requesting for supporting evidence but nothing had been availed. The Ministry had adopted the amount under protest.”

2.1.6 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.

2.1.7 When asked specifically who was responsible for Command Agriculture, more specifically who was the Accounting Officer for Command Agriculture, Mr. Ringford Chitsiko accepted that legally (de jure) he was but de facto he was not. The PAC minutes of the 19th July 2019 record the following statement:

“The Permanent Secretary indicated that he was supposed to be the accounting officer but he was accounting officer for the support to officers in terms of money. He added that at the end of the year figures are submitted to the Ministry for accounting purposes. He argued that the Ministry of Finance and Economic Development was in control in terms of operations and for day to day activities there was a Command Centre which was replicated at provincial level.”

2.1.8 The Ministry of Lands, Agriculture, Water and Rural Resettlement officials then produced  letters from the Ministry of Finance and Economic Development, one letter dated 20 March 2017, four separate letters dated 29 December 2017 and one dated 1 March 2018 (but received by the Ministry on 18 May 2018), wherein the Ministry of Finance and Economic Development directed that the Ministry of Lands, Agriculture, Water and Rural Resettlement should retrospectively account for Command Agriculture expenditure already incurred. 

2.2      These letters are marked Annexures A1 to A6, in the bundle of documents that support this report (herein referred to as ‘the bundle’). The minutes of the 9th and 15th July 2019 are Annexures B1 and B2 of the Bundle, respectively.

 

2.3 The Committee requested the necessary vouchers and documents to support the over expenditure in the sum of for $2 703 597 368 for 2017 and $ 3 356 315 865 for 2018. 

2.4 The Ministry of Lands, Agriculture, Water and Rural Resettlement officials were categorical that they would not be able to obtain any vouchers for the year 2018 but would endeavor to get vouchers for 2017. 

2.5 Subsequently they wrote to the Committee that they were unable to secure any voucher even for 2017. 

Committee’s Observations

2.13. The Ministry of Agriculture indicated to the Committee that they had no knowledge of the funding of Command Agriculture. However, the Committee noted that in the Auditor General report, they had acknowledged transactions with Sakunda under the Special Maize Production Programme ($16 302 201) and Loans under the Pedstock Facility ($16 815 940), under Command Agriculture.

2.14. Only $94 753 was recovered under Pedstock, and no recovery was made under Sakunda.

2.15. 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. 

Recommendations

2.16 The Ministry of Agriculture should ensure that loans issued to beneficiaries are recovered so that the State is able to service the debt.

2.17. The Ministry of Agriculture should be proactive and play a meaningful role in its operations by interrogating the whole maize production matrix in the country from now and in future programmes.

3.0 Oral Evidence by the Ministry of Finance and Economic Development  

3.1. The Committee received evidence from the Ministry of Finance and Economic Development officials represented by Mr. Z. Churu, Principal Director Budgets, the late Mr. Daniel Muchemwa, then Accountant General, Mr. A. N. Bvumbe, Head Public Debt Management Office, Mr. Fidelis Ngorora, Director Capital Expenditure, Mrs. Mugwenhi and Mrs. Tirivanhu. 

3.2.  The Ministry officials were candid in their acceptance that there had been unauthorized expenditure through Command Agriculture for the year 2017 and 2018 as captured in the Auditor General’s Statements for 2017 and 2018. 

3.3.  They also accepted that they acted outside the law in incurring excess expenditure without Parliamentary approval and outside the Budget. 

3.4.  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. 

3.5.  They however insisted that all payments made had been made at the special instance and direction of the Ministry of Lands, Agriculture, Water and Rural Resettlement. 

3.6.     The following passages from the minutes of the 5th of August 2019 are critical: Mr. Churu indicated that there was no legal basis for the Ministry of Finance and Economic Development to make such payments and for that reason the Ministry had erred. He went on to explain that for all payments Treasury desires to make which are outside the budget, the Ministry should first consult Parliament. He also indicated that in the event of failing to consult Parliament, the Ministry must approach Parliament for condonation within 60 days.”

Mr. Churu submitted that the Minister of Finance and Economic Development would be regularising the payments by seeking condonation. 

Mr. Churu explained that there are many reasons upon which the Ministry had to spend outside its budget. He pointed out that one of the reasons was that the salary bill had increased from 24% to 80% of the Country’s revenue in years 2012 to 2014. He indicated that the other reason had been the realisation that certain areas required large payments for example in agriculture, and the payments could not be made from within the budget.

He went on to explain that in a dollarized economy it was not easy for the Ministry of Finance and Economic Development to borrow. As such, payments had been made from money raised by Reserve Bank of Zimbabwe from the market.  He explained that the money had to be accounted for at the end of the reporting period.

Mr. Ngorora pointed out that the budget for 2017, which was presented end of 2016 did not provide for the poor harvest which was recognized in March 2017. He also pointed out that there was need to capacitate farmers to enable them to produce food in the coming season hence the payment was done under Command Agriculture.

Mr. Churu indicated that there was no political pressure and the payments had nothing to do with elections. He stated that the driver was Government and the money was for agriculture. He argued that agriculture generated demand and the money had been used to purchase inputs with extension officers being involved in the programme.

Mr. Churu explained that Government did not have fiscal space as it is the case in a dollarized economy and the Ministry had to ask the RBZ to secure funds. He indicated that some of the funds were secured late. He acknowledged that the laws of the country must be conformed to and highlighted that the Ministry of Finance and Economic Development at the same time had a duty to see to it that there was enough food for the people.  

3.7.  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. 

3.8.  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. 

3.9.  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.

 3.10.  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.

 3.11. The Ministry Officials however availed to the Committee important documents which included the following:

  1. Agreements it had entered into with Sakunda.
  2. Agreements with the following suppliers Pedstock, FSG, Croco Motors, Valley Seeds
  3. A schedule with payments for over expenditure made in 2017 in the total sum of $ 2 703 597 368.
  4. A schedule with payments for over expenditure made in 2018 in the total sum of $ 3 356 315 865.
  1. Committee’s Observations

3.12 The Ministry of Finance admitted that they incurred unauthorized expenditure through Command Agriculture for the year 2017 and 2018 as captured in the Auditor General’s Statements for 2017 and 2018. They further accepted that they acted outside the law in incurring excess expenditure without Parliamentary approval and outside the Budget.

3.13 The Ministry officials acknowledged that they erred in making direct payments to suppliers and contractors outside the line Ministry, which  - the Ministry of Lands, Agriculture, Water and Rural Resettlement.

3.14 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.

 Recommendations

3.15. 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.

3.16. 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.

4.0 Oral Evidence from the Reserve Bank of Zimbabwe  

4.1.  Faced with a situation where the Ministry of Lands, Agriculture. Water and Rural Resettlement had passed the buck to the Ministry of Finance and Economic Development which then passed the buck to the RBZ, the Committee then summoned the RBZ. 

4.2.  The RBZ was represented by the Deputy Governor Dr. K. Mlambo, Ms. T. G. Hungwe Director of Finance and Administration, Mr. F. Shavanhi Deputy Director Finance and Mr. Manhimanzi, Deputy Director Financial and Capital Markets.

4.3.  On the second occasion, the RBZ was represented by Governor, Dr. John Panonetsa Mangudya, Deputy Governor Dr. K. Mlambo, Mr A. Gumbo the Deputy Director Finance and one Mr. E Matiza, who features prominently in Treasury Bill letters the Committee discusses below. 

4.4 Through the RBZ Governor and Dr. K. Mlambo, the RBZ agreed that it had made direct payments to contractors and suppliers involved in Command Agriculture but only did so at the special instance and request of the Ministry of Finance and Economic Development.

4.5.  Furthermore, the RBZ through Dr. Mlambo, testified that it financed all payments through Treasury Bills which were issued and directed by the Ministry of Finance and Economic Development.

4.6.  The RBZ further denied any agency on its part but insisted that it was a mere vehicle acting for and on behalf of the Ministry of Finance and Economic Development.

4.7 As to why it dealt with companies such as Sakunda whose contracts had been awarded without going to tender, the RBZ testified that the issue of contracting was the sole responsibility of the Ministry of Finance and Economic Development.

4.8. On being questioned why the RBZ ran a parallel government through Treasury Bills that exceeded amounts approved in the Budget, the RBZ insisted that it only acted on instruction.

4.9.  As to why it did not provide resources to the relevant line Ministry, the Ministry of Lands, Agriculture, Water and Rural Resettlement for implementation and execution of Command Agriculture, once again, the RBZ insisted that it only acted on instructions from the Ministry of Finance and Economic Development.

4.10.  The RBZ, through the Deputy Governor Dr. Mlambo insisted that the sole role of the RBZ in Command Agriculture was to finance purchases. He further testified that it was the role of the GMB to ensure that suppliers and contractors supplied the contracted volumes and that they fulfilled all the material conditions of their contracts.

4.11.  In relation to its control of Command Agriculture, the RBZ officials maintained  that demand was generated by the Ministry of Finance and Economic Development with the RBZ only providing the finance and the GMB involved in all demand side issues, including logistics, deliveries by contractors and distribution to beneficiaries.

4.12.  Dr. Mlambo explained that Command Agriculture as a programme fully was paid by the Government through issuance of Treasury Bills as directed by the Government.  

4.13.  The RBZ supplied the following documents:

  • A letter dated 29 September 2019 containing information on foreign currency inflows for the period 2017 and 2018.
  • A revised schedule showing all Sakunda TBs issued under Command Agriculture. ii) A schedule showing Treasury Bills issued by the RBZ for 2017 and 2018 amounting to US$2 162 149 492 and US$ 1 539 740 080
  • Figures for the Government Fuel Supply Subsidy amounting to $ 1 514 767 300, 86 iv) Letters between the RBZ and Ministry of Finance and Economic Development in connection with requests and approvals for the issuance of Treasury Bills.

 4.14.  The essence of the Governor’s evidence was that the RBZ, could engage in quasi-fiscal

activities and in any expenditure as a result of Sections 6 and 8 of the RBZ Act.

 4.15.  As far as the RBZ quasi-fiscal activities are concerned, the Bank’s involvement in Command Agriculture and the issue of running a budget deficit outside Parliament, was according to the Governor the Ministry of Finance and Economic Development’s problem.

 4.16.  The Governor felt that the issues of compliance with the Constitution and the law were not his problem but were the Ministry of Finance and Economic Development’s problem. 

 4.17.  The Governor did not seem to accept that Treasury Bills could only be issued by the Ministry of Finance and Economic Development and not the RBZ as was the case during the period under discussion. (this issue is exhausted below)

 4.18. The following evidence from the Governor portrayed a disturbing reflection of impunity and lack of respect for the country’s laws:  

4.19. The Governor submitted that RBZ is banker to Government and other banks and that the Central Bank acts as advisor to Government. The Governor argued that the mandate to spend money came from the Minister of Finance and Economic Development and the Governor is bound by the Act to follow the instructions.

 4.20. The Committee is however aware now that there was additional over expenditure which the Government has now acknowledged through the Financial Adjustment Bill, [H.B. 19, 2019].

5.0. Payments Made to Suppliers for Command Agriculture and the Presidential Support Scheme through Treasury Bills in 2017 and 2018

5.1. The Ministry of Finance and Economic Development provided the Committee with a schedule of payment made for Command Agriculture and the Presidential Input Scheme in 2017 and 2018 to suppliers.

     5.2          This schedule shows a total amount of US$573 392 877.

5.3. The Committee reproduces the Ministry’s schedule 2 indicated in Table 3 below:

 

Table 3 – Payments made to Suppliers in 2017

Creditor

Date of

Instruction

- Memo

Rate

Amount

Issued

Payment Date

Amount Paid

Command

Agriculture

 

 

 

 

 

2017

 

 

 

 

 

Sakunda

12/21/2016

5pc

31,800,000.00

    1/9/2018

31,800,000.00

Sakunda

12/21/2016

5pc

  8,831,719.75

  3/23/2018

  8,831,719.75

Sakunda

07/20/2017

0.00001pc

16,738,000.00

12/10/2018

16,738,000.00

Sakunda

07/20/2017

0.00001pc

16,738,000.00

  11/5/2018

16,738,000.00

Sakunda

07/20/2017

0.00001pc

16,738,000.00

10/15/2018

16,738,000.00

Sakunda

07/20/2017

0.00001pc

16,738,000.00

  9/11/2018

16,738,000.00

Sakunda

07/20/2017

0.00001pc

16,738,000.00

    8/7/2018

16,738,000.00

Sakunda

07/20/2017

4pc

  3,347,600.00

  7/31/2018

  3,347,600.00

Sakunda

08/25/2017

0.00001pc

83,690,000.00

  8/31/2018

83,690,000.00

Sakunda

08/28/2017

0.00001pc

83,690,000.00

  9/14/2018

83,690,000.00

Sakunda

12/19/2017

0.00001pc

83,690,000.00

12/21/2018

83,690,000.00

 

 

 

 

378,739,319.75

 

Payments made to Suppliers in 2018

Sakunda

 

0.00001pc

127,817,681.00

3/13/2019

127,817,681.00

Sakunda

  3/9/2018

0pc

106,119,780.00

4/16/2019

106,119,780.00

Sakunda

7/25/2018

 

    2,016,682.85

  8/7/2020

    2,016,682.85

 

 

 

 

 

235.954,143.85

  Table 3 can be summarized as follows: 

Total payments to Sakunda for 2017 was $378 739 319,75 and for 2018 it was $235 954 143,85 

Total payments in 2017 and 2018 for Presidential Scheme is $ 573 392 887, 33 - broken down as follows:

Creditor

Amount Issued

Amount Paid

FSG

$  392,853,180.22

 

$  392,853,180.22 

Quton

$    19,753,638.00 

 

$  19,753,638.00 

Pedstock

$  7,538,441.69 

 

$  7,538,441.69 

 

Cottco

$  30,898,812.65 

 

$  30,898,812.65 

 

Sakunda

$  51,205,481.25 

 

$  51,205,481.25 

 

Sable Chemicals

$  4,900,000.00 

 

$  4,900,000.00 

 

Seedco

$  40,150,000.00 

 

$  40,150,000.00 

 

Valley Seeds

$  8,700,000.00 

 

$  8,700,000.00 

 

Windmill

$  17,800,000.00 

 

$  17,800,000.00 

 

ZFC

$  17,750,000.00 

 

$  17,750,000.00 

 

 

 

5.4. Under separate cover, the RBZ also provided us with its own breakdown of the same figures for 2017 and 2018. Table 4 herein, is a summary of TBs paid to Sakunda for 2017 and 2018

 Table 4

   2017

TB. No. 

Date

Issued 

Payment Date

Amount Paid

Programme

 

ZTB365

201701098B

at 5pc

9 Jan 2017

9 Jan 2018 

31,800,000,00

Command

Agriculture

 

ZTB438

20170109C 

at 5pc 

9 Jan 2018

23 Mar

2018

8,831,719.75

Command

Agriculture

 

ZTB357

20170419A

at 0pc

19 Jan

2017

11 Nov 2018

26,253.750.00

Command

Agriculture

 

ZTB365

201701515C

at 4pc

15 May

2017

15 May

2018

     756,731.25

Command

Agriculture

 

ZTB365

20170515A  at 0,00001pc

15 May

2017

15 May

2018

24,195,000.00

Command

Agriculture

 

ZTB500

20170728G at 0,00001pc

28 July

2017

10 Dec 2018

16,738,000.00

Command

Agriculture

 

Z465

20170728H at 0,00001pc

28 July

2017

5 Nov 2018

16,738,000.00

Command

Agriculture

 

 

 

 

 

 

 

ZTB444

20170728I at

0,00001pc

28 July

2017

15 Oct 2018

16,738.000.00

Command

Agriculture

 

ZTB410

20170728J at

0,00001pc

28 July

2017

11 Sep 2018

16,738,000.00

Command

Agriculture

 

ZTB375

201700728K at 0,00001pc

28 July

2017

7 Aug 2018

16,738,000.00

Command

Agriculture

 

ZTB365

20170731 at

4pc

31 July

2017

31 July 2018

3,347,600.00

Command

Agriculture

 

ZTB365

201700831B at 0,00001pc

31 Aug

2017

31 Aug 2018

83,690,000.00

Command

Agriculture

 

ZTB364

201700915C at 0,00001pc

15 Sep

2017

14 Sep 2018

83,690,000.00

Command

Agriculture

 

ZTB365

20171221B at 0,00001pc

21 Dec

2017

21 Dec 2018

83,690,000.00

Command

Agriculture

 

 

 

 

429,944,801.00

 

 

2018

T. B. No. 

 

Issue Date

Payment Date

Amount Paid

Programme

 

ZTB364

20180314A at 0,00001pc

14 Mar

2018

13 Mar 2019

127,817,681.00

Command

Agriculture

 

ZTB365

20180416B

at 0pc

16 Apr

2018

16 Apr 2019

106,119,80.00

Command

Agriculture

 

 

 

 

233,937,461.00

 

 

TOTAL

 

 

 

663,882,262.00

 

 

 

5.5. According to the RBZ and as reflected in Table 4 Sakunda was paid $ 429 944 801 in 2017 and $ 233 937 461 in 2018 which comes to a total of $ 663 882 262, 00.

 5.6. Table 5 below is the RBZ’s schedule outlining Treasury Bills paid for the Presidential Support Scheme paid in 2017 and 2018. 

 5.7. Table 5 shows that a total of US$258 362 845, was paid to suppliers in 2017 and US$ 263 824 560,69 was paid in 2018.  

  5.8. The figures provided by the RBZ and Ministry of Finance and Economic Development seem to tally and the RBZ in Table 5 provides the following reconciliation:

   Table 5

Creditor

Rate

Date Issued

Payment Date

Amount

2017

 

 

 

 

FSG

5pc

22 Feb 2017

22 Feb 2018

3,613,500.00

FSG

5pc

23 Feb 2017

23 Feb 2018

6,000,000.00

FSG

5pc

29May 2017

8 Aug 2018

2,101,628.50

FSG

5pc

2 Aug 2017

31 Jul 2018

7,033,280.00

FSG

5pc

2 Aug 2017

3 Aug 2018

7,033,280.00

FSG

5pc

2 Aug 2017

6 Aug 2018

7,033,280.00

FSG

5pc

2 Aug 2017

8 Aug 2018

7,033,280.00

FSG

5pc

2 Aug 2017

10 Aug 2018

7,033,280.00

FSG

5pc

2 Aug 2017

15 Aug 2018

8.791,600.00

FSG

5pc

22 Aug 2017

2 Jan 2019

9,303,333.33

FSG

5pc

22 Aug 2017

4 Jan 2019

9,303,333.33

FSG

5pc

22 Aug 2017

4 Feb 2019

9,303,333.33

FSG

5pc

22 Aug 2017

9 Aug 2019

9.303,333.34

FSG

5pc

22 Aug 2017

2 Nov 2019

9,303,333.34

FSG

5pc

22 Aug 2017

4 April 2019

9,303,333.34

Quton

5pc

12 Sep 2017

3 Jan 2019

8.160.000.00

ZFC & Windmill (RBZ)

5pc

3 Oct 2017

28 Jun 2019

8,890,000.00

Seedco

5pc

4 Oct 2017

4 Oct 2018

32,120.000.00

Windmill

5pc

4 Oct 2017

4 Oct 2018

12,460.000.00

ZFC

5pc

4 Oct 2017

4 Oct 2018

14,200,000.00

Sable Chemicals

5pc 

4Oct 2017

4 Oct 2018

3,920,000.00

Seedco and Sable Chemicals

5pc

9 Oct 2017

20 May 2019

9,010.000.00

Cottco

5pc

29 Dec 2017

3 Feb 2021

29,898,812.65

Pedstock

5pc

29 Dec 2017

1 Apr 2021

7,613,881.00

Cottco

5pc 

29 Dec 2017

1 Apr 2021

1,000,000.00

FSG

5pc

29 Dec 2017

1 Apr 2021

19,597,023.20

 

 

 

 

 

2017 Total 

 

 

 

258,362.845.36

 

Treasury Bills paid for the Presidential Support Scheme paid in 2018

FSG

5pc

20 Jun 2018

20 Jun 2019

48,406,362.00

Quiton

5pc

20 Jun 2018

18 Mar 2019

11,593,638.00

FSC & RBZ-FSG

5pc

20 Jun 2018

20 Jun 2019

194,750,000.00

Valley Seeds

5pc

25 Jul 2018

25 Jul 2019

8,700,000.00

Pedstock

5pc

12 Sep 2018

12 Sep 2020

374,560.69

 

 

 

 

 

2018 Total

 

 

 

263,284,560,69

 

 

 

 

 

Grand Total

 

 

 

522,187.406.05

 

 

RECONCILLIATION 

 

Ministry of Finance Balance                            573,392,750.33

Less

 RBZ classified under 

SAKUNDA                        ZTB357 20170419 at OPC      26,253,750.00   

Command agriculture                                 

RBZ classified under

SAKUNDA                        ZTB365 20170525A AT 1PC 24,195,000.00   

Command agriculture                               RBZ classified under

SAKUNDA                        ZTB365 20170515C AT 4PC     756,731.25   

Command agriculture

RBZ Balance                                                                     522,187,406.08

 

Treasury Bills

 5.9.1. The RBZ provided the Committee with schedules of payments it made through Treasury Bill it issued during the relevant period 2017/2018.

5.10    Table 4 and 5 above show that a total of USD 809 347 030. 18 was issued for payments to Sakunda and Presidential Input Support Scheme.  

5.11 The Committee was further supplied with a schedule totaling US$ 2 193 607 782, 47. 

6.0 Authorization of the Treasury Bills 

6.1 The RBZ furnished the Committee with a correspondence in respect of which they argued was the source of authority for issuance of Treasury Bills. Most of the letters submitted were in fact letters from the Ministry of Finance and Economic Development signed by Minister Chinamasa. The RBZ failed to supply the Committee with letters of origination from it to the Ministry of Finance and Economic Development.  

6.2  These are some of the letters which were supplied to the Committee: 

 

NO

DATE

SOURCE

SUBJECT

AMOUNT

1

28 October

2016

RBZ

Presidential

Cotton Input Scheme

US $ 42 000 000

2

31 October

2016

Minister of Finance

Presidential Agricultural Input Support Scheme

US30 000000

 

3

27 March

2017

RBZ

Presidential

Cotton Input Scheme

US $70 000 000

4

30 April 2018

RBZ

Presidential

Agricultural Input

Scheme 

US$ 258 072 000

 

 

 

5

18 May 2018

Minister of Finance (responding to RBZ request dated 30 April 2018)

Presidential

Agriculture Input

Scheme

US$ 258 072 000

6

13 July 2018

RBZ 

Presidential

Agriculture Input

Scheme: Valley

Seeds

US $8 700 000

7

16 July 2018

Minister of Finance

(responding to RBZ

8request of 13 July 2018)

Presidential

Agricultural Input

Scheme: Valley

Seeds

US$ 8 700 000

8

24 July 2018 

RBZ 

Centre pivots from Pedstock

US 16 000 000

9

25 July 2018

Minister of Finance (responding to RBZ request of 24 July 2018)

Centre pivots from Pedstock

US $ 16 000 000

10

21/12/16

Minister of Finance  in response to RBZ’s letter dated 21/12/16

US$ 52.8 million

to fund

Government

“Special Projects”

US$ 52.8 million

11

09/11/16

Minister of Finance  in response to RBZ letter dated 28/10/16

US$42 million for procurement of cotton inputs for the 2016/2017 agricultural season

US$ 42 million

12

13/02/17

Minister of Finance  responding to RBZ letter dated 13/02/17

US$ 6 million for additional inputs under the

Presidential

Agricultural Input

Scheme payable to

FSG

US$ 6 million

13

18/05/17

Minister of Finance  responding to RBZ letter dated 17/05/17

US$2 101 628.50 payment to FSG for supply of additional 10 000

metric tonnes under the

Presidential Inputs

Programme for the 2016/2017

summer season

US$2 101 628,50

14

10/07/17

Minister of Finance requesting the RBZ Governor to issue Treasury Bills.   

US$ 60 million to support 2017/18 Presidential 

Cotton Production Input Scheme targeting 400 000 households

US$ 60 million

15

05/04/17

Minister of Finance responding to RBZ letter of 28/03/17

Open ended standing authority given to the RBZ for the procurement of maize, small grains and wheat by the GMB for the 2017 intake

Open ended

(blank cheque)

16

31/12/16

Treasury Bill

Issuance note number

50/2016 issued by Deputy Accountant General E.

Zvandasara. Being properly issued with amount, tenure, interest rate, timing, purpose and features.

US$ 40 631

719,73 issued to Sakunda Holdings

for Command

Agriculture

US$ 40 631 719,73

17

19/04/17

Treasury Bill

Issuance note number 20/2017 issued by the Accountant

General Mr. D. Muchemwa. Being a properly issued Treasury Bill note by the Ministry of Finance with amount, tenure, interest rate,

timing, purpose and features.

US$ 26 253 750 issued to Sakunda Holdings in respect of funding of Agricultural

Inputs

US$ 26 253 750

18

12/05/17

Treasury Bill

Issuance note number 21/2017 issued by the Accountant

General Mr. D. Muchemwa. Being a properly issued Treasury Bill note by Ministry of Finance with amount, tenure, interest rate, timing, purpose and features.

US$ 756 731, 25 issued to Sakunda Holding for financing of

Agricultural

Inputs

US$ 756 731, 25

19

12/05/17

Treasury Bill

Issuance note number 21/2017 issued by the Accountant General D.

Muchemwa. Being properly issued Treasury Bill note by the Ministry of Finance with amount, tenure, interest rate, timing, purpose and features.

US$ 24 195 000 issued to Sakunda

Holdings for

Agricultural

Inputs

US$ 24 195 000

20

20/07/17

TB issuance note number 35/2017 issued by Minister P. A. Chinamasa.

US$ 83 690 000 issued to Sakunda Holdings Pvt Ltd for Command

Agriculture financing.

US$ 83 690 000

21

20/07/17

TB issued by Hon Chinamasa. Being properly issued TB note by Minister of Finance with amount, tenure, interest rate,

timing, purpose and features. 

US$ 3 347 600 issued to Sakunda Holdings for

Command Agric

inputs

US$ 3 347 600

22

25/08/17

Treasury Bill

Issuance note number 40/2017 issued by Min Chinamasa. Being properly issued Treasury Bill note by the Minister of Finance with amount, tenure, interest rate, timing, purpose and features.

US$ 83 690 000 issued to Sakunda

Holdings for

Command

Agriculture financing

US$ 83 690 000

23

28/08/17

Treasury Bill

Issuance note number 41/2017 issued by the Minister of

Finance (Hon. P. A.

Chinamasa)

US$ 83 690 000 for 

Command

Agriculture financing

US$ 83 690 000

24

19/12/17

Treasury Bill

Issuance note number

57/2017 by the

Minister of Finance

(Hon. P.A

Chinamasa)

US$ 83 690 000 issued to Sakunda

Holdings for

Command

Agriculture Financing

US$ 83 690 000

 

  Legal Status of the Treasury Bills

6.3.  In terms of Section 52 of the Public Finance Management Act [Chapter 22:19], the President may authorize the Minister of Finance to borrow.

 6.4 Section 53 allows the Minister of Finance to borrow for the following purposes only: 

(a) to refinance a maturing debt or a loan paid before the redemption date; or 

        • to finance national budget deficits; or
        • to obtain foreign currency for any Government undertaking; or
  •                        to maintain credit balances on a bank account of the Consolidated Revenue Fund; or
  •                       to regulate internal monetary conditions should the necessity arise; or
  •                        any other purpose approved by the House of Assembly by special resolution.

 6.5.  The power of the Minister of Finance to contract debt at the pleasure of the President is thus codified in the PFMA. No other person, including the RBZ has no such power or authority. In term of Section 54 (3) of the Public Finance Management Act, the Minister of Finance may borrow money by way of:

   (a) the issue of bonds or stock; or          (b) the issue of Treasury Bills; or        (c) an advance or bank overdraft. 

 6.6.  A Treasury Bill, is thus a negotiable debt instrument issued by the Government through the Minister of Finance and Economic Development with specific features that include the following 

  • the TB number;
  • the amount;
  • tenure;
  • coupon;
  • rate;
  • purpose;
  • duration;
  • features; and

          (i) status.

6.7.  Both the Minister of Finance and RBZ Governor were well aware of what a proper Treasury 

            Bill is.

6.8.     Treasury Bills were properly issued to Sakunda Holdings as shown above in Table 6. 

 6.9.  Save on these occasions and these instruments, there were no proper and legitimate TBs that were issued by the Minister of Finance and Economic Development.

6.10.  Both the Minister of Finance and Economic Development and the RBZ, breached the provisions of the PFMA in purporting to issue Treasury Bills that were not in compliance the law.

 6.11.  A careful perusal of all the correspondence dealing with Treasury Bills as captured in Table 6 above, shows that it was the RBZ which asked the Minister of Finance and Economic Development to approve its (RBZ) issuance of Treasury Bills.

 6.12.  In other words, the party that was dominant and created demand was not the Ministry of Finance and Economic Development, but rather the RBZ.

 6.13.  But this over-zealousness and exuberance to embark on what were clearly quasi-fiscal activities is not supported by the law, both the PFMA and RBZ Act.

6.14.  To show that the RBZ was the dominant part the Committee produces three (3) sample          letters by the Minister of Finance and Economic Development and a sample letter by the RBZ.

 6.15.  On the 10th of August 2018 in response to a letter written to him by the RBZ Governor, the Minister of Finance and Economic Development wrote: 

“I write to approve the request to issue Treasury Bills to the tune of US$ 737 904 758”

 6.16.  On 16 July 2018, the then Minister of Finance and Economic Development, Mr. Chinamasa wrote back to the RBZ Governor in the following terms:

           “I write to approve the request to issue Treasury Bills to the tune of US$ 8.7 million”

 6.17.  On the very same letter that came from the Ministry, the Governor J P Mangudya in longhand, gave an instruction to Mr. Manhimanzi to urgently process TB on 24 July 2018. On 25 July 2018, Mr. Manhimanzi instructed Mr. Kaseke to process the Bill at the tenure of one year at 5%.

6.18.  On 24 July 2018 the Governor of the RBZ wrote to Minister Chinamasa requesting US$ 16 million for centre pivots.

6.19.  His letter read as follows:

  “We write to advise that the centre pivots procured by the Ministry of Lands, Agriculture and Rural Resettlement under a financial structure arranged by Stanbic Bank in an amount of US$ 16 has not been paid for by Government.

   Under these circumstances, it is imperative, Hon. Minister, that authority be granted to the Bank to settle this outstanding amount under the credit finance structure put in place by Stanbic by way of a two- year Treasury Bills at a coupon rate of 5% per annum.

 

  We are advised, Hon. Minister, that the pivots have already been distributed to various farmers under the Command Agriculture Scheme.” 

 6.20.  On 25 July 2018 Minister Chinamasa wrote back to Governor Mangudya “approving his   request to issue Treasury Bills to the tune of $16 million”.

 6.21 On the very same letter the Governor gave Mr. Saburi an instruction for the RBZ to act. He gave this instruction on the 6th August 2018.

 6.22.  On 6th August 2018 Mr. Saburi gave an instruction to Mr. Matiza to act. His instruction is on the very same letter from the Ministry.

 6.23.  On 7th August 2018 at 1053hrs Mr. Matiza acted. He gave the following instructions:

  “process US$2 016 682,82 at 5% for 2 years.”

 6.24.  The Minister’s letter of 25 July 2018 and the handwritten inscriptions by officials from the Ministry of Finance and Economic Development is as shocking as it is revealing

6.25.  Firstly, it is clear that it was RBZ officials, in particular, on Mr. W. Manhimhanzi, the Deputy Director for Capital Markets who was defining the terms of the Treasury Bills particularly the coupon rate.

6.26.  In the majority of these letters from the Minister of Finance, where he gave his “approval” to the RBZ to issue Treasury Bills it was Mr. Manhimanzi who defined the tenure of the debt instrument, Treasury Bills. Yet in terms of the law, only the Minister of Finance and Economic Development can do this.

 6.27.  Thus, the RBZ usurped the powers of the Minister of Finance and Economic Development defined in Part VI of the PFMA.

6.28.  As the Committee pointed out to the Governor during his testimony of 24 July 2019, once the Minister of Finance and Economic Development has ‘approved’ a Treasury Bill the RBZ ought to write back to the same, requesting for a Treasury Bill note as is reflected in the Treasury Bill of Sakunda as reflected above in Table 6. 

6.29.  The conduct of Hon. Minister Chinamasa raises eyebrows. The Minister himself, a former Attorney General knew the law. After all he had properly issued Treasury Bill notes in favor of Sakunda Holdings as shown above in Table 6.

 6.30.  He is accountable for manipulating the Central Bank.

 6.31.   Another concern arises from the splitting of Treasury Bills as shown in Mr. Matiza’s inscription on the Minister’s letter of 25th July 2018.

 6.32.  As shown above, approval had been given to issue a Treasury Bill to Stanbic for US$ 16 million in respect of pivots for Command Agriculture. Yet Mr. Matiza directed a Treasury Bill of $ 2 016 682, 85 at the rate of 5% for 2 years be issued.

6.33.  A Treasury Bill is an indivisible debt instrument. 

6.34.  Like a cheque, it cannot be split.

 6.35.  This was not the only time the RBZ split Treasury Bills. The RBZ did so with regards to the following: 

  1. i) Treasury Bills of US $60 million and US $43 958 000 processed (for Presidential Cotton Production Input Scheme);
  2. ii) Treasury Bills of US $42 million and US $3 613 500 processed (for the procurement of cotton inputs for the 2016/2017 agricultural season;

iii) Treasury Bills of US $258.72 million and processed batches of US $9 681 272 – RBZ portfolio, US $38 725 090 – FSG and US $11 593 638 – Quinton (for the Presidential

Input Scheme); and iv) Treasury Bills of US $40 631 719. 75 and processed $31.8 million (for Sakunda Holdings).

 6.36.  The actions of the RBZ of splitting Treasury Bills is illegal and dangerous. One of the questions that arises is what did the RBZ do with the remainder of the monies in respect of which there is no record of issuance of Treasury Bills. What stops the RBZ from having issued Treasury Bills for other purposes other than those defined by the Minister in his letter of “approval”

 6.37. The situation is made extremely tenuous and vulnerable considering that Treasury Instruments are instruments which cannot be and are not accounted for in the books of the Central bank, but in the Ministry of Finance and Economic Development. That means they are beyond the scrutiny of the auditors of the RBZ.

6.38.  A risk was created and a risk which can only be partially mitigated by the conducting of a forensic audit for all Treasury Bills issued between 2015 and 2018.

 6.39.  A further concern to the Committee is the Treasury Bill approval made by the Minister of Finance 05/04/17 in respect of purchases of grain and wheat to the GMB for the 2017 season.

 6.40.  The said Treasury Bill was open ended and a blank cheque. That instruction from the Minister of Finance and Economic Development was irresponsible. He created conditions for vulnerability and abuse.

6.41.  Further concern is the evidence that the RBZ was discounting Treasury Bills to itself and for its own benefit. The RBZ only acts as an agent of the state in processing these loans as defined in the RBZ Act. It cannot be the holder of the debt instrument.

 6.42.  On the Minister’s letter dated 13 June 2017 but incorrectly dated 13th June 2013 where he approved TBs worth US$20 to the Women’s Microfinace Bank, Mr. Manhimanzi wrote:

“Approved to disburse $ 5 million to the Women’s Bank for RBZ Holding of TB.”

 6.43.  The Committee saw the mention of this RBZ portfolio once more on 18th May 2017.

 6.44.  On 20 May 2017. Minister Chinamasa wrote approving the issuance of a Treasury Bill in the sum of US$2 101 628, 50 due to FSG for the supply of an additional 10 000 metric tonnes of urea under the Presidential Input Programme. 

6.45.  On 29 May 2017, Mr. Manhimanzi inscripted on the Minister’s letter the following: 

               “TBs for RBZ portfolio cash already paid to FSG”

 6.46.  Similarly, on 18 May 2018, the Minister approved a Treasury Bill of US$ 258, 72 million for the Presidential Input Scheme. In the process of processing the same, on 20 June 2018 Mr. Manhimanzi wrote on the Minister’s letter that US$ 9 681 272 was for the RBZ portfolio against cash payments.

6.47.  The question that arises is what is this RBZ Portfolio? What is its legal basis? How are amounts deposited into the same, accounted for in the balance sheet of the Bank if at all? What withdrawals were made from the same and for what purposes and who were the beneficiaries? 

 6.48.  A further concern is the approval provided for by Hon. Minister Chinamasa on the 10th August 2018 of a huge Treasury Bill in the sum of US$ 737 904 758. 00.

 6.49.  The 2018 election was held on the 30th July 2018, therefore Hon. Minister Chinamasa’s term of office expired on the 29th July 2018. His position was that of a caretaker for emergency purposes only until the President was sworn in.

  6.50.  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.

6.51.  Also questionable was the action of the RBZ Governor 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.

 6.52.  In the Committee’s report to Parliament on the RBZ, the Committee accused the Bank of rogue behavior. 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.

7.0      AUDIT AND ACCOUNTING CHALLENGES PERTAINING TO TREASURY BILLS

7.1. Apart from the legal issues the Committee has dealt with above, the TBs issued by the RBZ had many other auditing and accounting challenges which can only be remedied by a proper forensic audit of the entire process. 

7.2.    These challenges include the following matters which the Committee will now examine in detail below:

  1. i) The existence of Treasury Bills without supporting documentation from the Minister of Finance and Economic Development as reflected in Table 7 below;
  2. ii) Differences and lack of reconciliation between RBZ and Ministry of Finance and Economic Development as reflected in Table 8 below:

 7.3.   Table 7: Treasury Bills without supporting letters on file.

 Table 7: TBs without supporting authorising letters on file

DATE

PAYABLE TO/FOR

AMOUNT (USD)

2017/18

Presidential Input Scheme

397 814 277.52

2017/18

Command Agriculture

3 347 600.00

 

PURCHASE OF LAND AND USER RIGHTS

6 112 703.00

 

7.4.1. Since September 2019, the Public Accounts Committee has sought explanations and reconciliations from the RBZ on the above discrepancies and differences. The Committee has not received any reconciliations to date. 

7.4.2. The Committee now provides detail on the above two issues.

SUPPORT TO AGRICULTURE

7.5. TREASURY BILLS ISSUED FOR PRESIDENTIAL INPUT SCHEME 2017/18

Table 9: Treasury Bills without Treasury Bills Issuance Notes (no tenure, no rate, no duration, no status)

DATE

PAYABLE TO

AMOUNT (USD)

22/2/17

NOT DISCLOSED

3 613 500.00

23/2/17

FSG

6 000 000.00

5/4/17

NOT DISCLOSED

70 000 000.00

29/05/17

FSG

2 101 628.50

2/8/17

FSG

43 958 000.00

20/06/18

NOT DISCLOSED

60 000 000.00

25/7/18

VALLEY SEEDS

8 700 000.00

 

 

US$194 373 128.50

 

7.7 Table 10: List of TBs issued in 2017 for Presidential Input Scheme with no supporting  authorising letters from the Ministry of Finance and Economic Development on file:- 

Supplier

T. B. No. 

Date Issued

Payment Date

Amount in USD

FSG

ZTB498 20170822A at 5pc

22 Aug 17

02 Jan 19

9 303 333.33

FSG

ZTB500 20170822B at 5pc

22 Aug 17

04 Jan 19

9 303 333.33

FSG

ZTB531 20170822C at 5pc

22 Aug 17

04 Feb 19

9 303 333.33

FSG

ZTB717 20170822E at 5pc

22 Aug 17

09 Aug 19

9 303 333.33

FSG

ZTB802 20170822F at 5pc

22 Aug 17

02 Nov 19

9 303 333.33

FSG

ZTB902017170822D at 5pc

22 Aug 17

04 Apr 19

9 303 333.33

QUTON

ZTB478 20170912B at 5pc

12 Sep 17

03 Jan 19

8 160 000.00

ZFC and

Windmill (RBZ)

ZTB633 20171993A at 5pc

03 Oct 17

28 Jun 19

8 890 000.00

Seedco

ZTB365 20171004U at 5

pc

04 Oct 17 

04 Oct 18

32 120 000.00

Windmill

ZTB365 20171994U at 5

pc

04 Oct 17

04 Oct 18

12 460 000.00

ZFC

ZTB365 20171994U at 5

pc

04 Oct 17

04 Oct 18

14 200 000.00

SABLE

Chemicals

ZTB365 20171004U at 5pc

04 Oct 17

04 Oct 18

3 920 000.00

Seedco and

Sable Chem

ZTB588 20171009A at 5

pc

09 Oct 17

20 May 19

9 010 000.00

Cottco

ZTB1132 20171229C at 5

pc

29 Dec 17

03 Feb 21

29 898 812.65

Pedsock

ZTB1189 20171229F at 5

pc

29 Dec 17

01 Apr 21

7 613 881.00

Cottco

ZTB1189B 20171229F at 5 pc

29 Dec 17

01 Apr 21

1 000 000.00

FSG

ZTB1189 20171229F at 5

pc

29 Dec 17

01 Apr 21

19 597 023.20

Total

 

 

 

US$202 689 716.83

2018

 

 

 

 

 

FSG and RBZFSG

ZTB365 20180620C at 5pc

20 Jun 18

20 Jun 19

194 750 000.00

Pedstock

ZTB731 20180912A at 5pc

12 Sep 18

12 Sep 20

374 560.69

Total 

 

 

 

US$195 124 560.69

 

 

 

 

 

Grand Total 

 

 

 

US$397 814 277.52

  TREASURY BILLS ISSUED FOR COMMAND AGRICULTURE 2017/18

Table 11: Treasury Bills not supported by Treasury Bill Issuance Note, (No TB number, Amount, Tenor, Coupon, rate, Purpose, Timing and Features). (Also for table 10)

DATE

PAYABLE TO/FOR

AMOUNT (USD)

09/01/17

SAKUNDA

31 800 000.00

07/08/18

NOT DISCLOSED

2 101 682.50

 

 

US$33 901 682.50

 

Table 12: Treasury Bills issued in 2017 for Command Agriculture with no supporting letters from Ministry of Finance and Economic Development

Supplier

T. B. No. 

Date Issued

Payment Date

Amount in USD

Programme

SAKUNDA

ZTB365

20170731B at 4pc

7/31/2017

7/31/2018

3,347,600,00

COMMAND

AGRICULTURE

 

COMMITTEE’S OBSERVATIONS

7.8. The RBZ issued Treasury Bills unprocedurally in violation Section 54 (3) of the Public Finance Management Act. 

7.9. The RBZ violated the RBZ Act by failing to play its advisory role to Government.

7.10. The RBZ split Treasury Bills between different suppliers.

7.11. There were Treasury Bills issued without supporting documentation from the Minister of Finance and Economic Development. Some TBs were undisclosed, had no amount, no tenure, no interest rate, no timing, purpose and features.

7.12. There was lack of reconciliation of TBs between RBZ and Ministry of Finance and Economic Development.

7.13. The Ministry of Agriculture is the one which was supposed to generate demand for Treasury Bills, rather that RBZ and Treasury.

 RECOMMENDATIONS

7.14. A forensic audit should be conducted on TBs issued by the RBZ during 2017/18 for the Special Maize Programme/Command Agriculture, within 90 days.

7.15. The RBZ should abide by the Constitution, the PFMA, RBZ Act as well as the Public Procurement and Disposal of Assets Act, with immediate effect.

8.0.      Oral Evidence from the GMB

8.1 The Committee received oral evidence from the GMB represented by Mr. C. Guta Chief Operating Officer and Mrs. C. Dzenga the Acting Financial Controller. The officials submitted the following:

  • GMB had no role other than that of merely storing inputs for Command Agriculture and recording the quantities delivered to it;
  • GMB had no supervisory role and did not run Command Agriculture; and
  • That Command Agriculture was run by Sakunda.

 8.5.  The Operations Director indicated that the $847 million might not be the correct amount. He explained that the role of the Grain Marketing Board in Command Agriculture was to receive inputs and distribute to beneficiaries since the parastatal was not the procuring authority. Mr. Guta also explained that the parastatal had signed a contract with the suppliers as a receiving agent and the Reserve Bank of Zimbabwe was responsible for payments. He submitted that in 2017 the Reserve Bank of Zimbabwe had paid for the inputs. He explained that farmers would get vouchers which they redeemed. He stated that the beneficiaries of the inputs were identified by the local leadership. 

 Inputs received by the GMB for Command Agriculture in 2017/2018 season

8.6. The Operations Director indicated that GMB had received Compound D and Ammonium Nitrate fertilizers, maize seed and sorghum from suppliers such as FSG, PHI Seeds and Pioneer. He stated that the following quantities had been received against the corresponding targets:

Compound D                           88 319 tonnes against 90 000 tonnes

Ammonium Nitrate                 93 438 tonnes against 98 000 tonnes

Maize seed                   17 342 tonnes against 18 000 tonnes

Committee’s Observation

8.7. The GMB received the inputs as per the contract but recoveries were not made due to non-processing of stop orders by the Ministry of Lands, Agriculture, Water and Rural Resettlement.

 RECOMMENDATION

8.8. The Ministry of Lands, Agriculture, Water and Rural Resettlement must come up with clear instructions as to how the stop orders would be made to enable the GMB to effect stop orders to make recoveries within 90 days of tabling of this Report.

9.0 Oral Evidence from Suppliers

 Sakunda Holdings 

9.1 Mr. Chitambo led the delegation in responding to the Committee’s questions. He indicated that in 2016, His Excellency the President, Hon. Mnangagwa, then Vice President invited about 40 businesses to a meeting to discuss how the private sector could assist Government in an import substitution programme for soya beans, wheat and maize production. He stated that Sakunda Holdings submitted a proposal to finance maize and wheat production and was advised to work out the terms with the Ministry of Finance and Economic Development. 

9.2      He also indicated that the Ministry of Lands, Agriculture, Water and Rural Resettlement would advise Sakunda Holdings on the seed, fuel and fertilizer requirements for the summer and winter seasons. Mr. Chitambo highlighted that the money would cost four and half percent but other companies had proposed twelve percent. He also informed the Committee that Sakunda Holdings had been asked to buy inputs, protective wear and cars from selected suppliers. He emphasized that Sakunda also applied its rigorous selection criteria when procuring the inputs. Mr. Chitambo submitted that it was agreed with Ministries of Finance and Economic Development and Lands, Agriculture, Water, Climate and Rural Resettlement that Government would provide foreign currency required on a weekly basis.

 9.3     Mr. Chitambo indicated that Sakunda Holdings supplied eight land cruisers, ten twin cabs and twenty motor cycles. He also indicated that ten vehicles were provided for ten   monitoring and evaluation teams comprising of three government officials and one from Sakunda Holdings. He informed the Committee that some payments made to Sakunda had been in United Sates dollars and some in Zimbabwean dollars

9.4 Mr. Chitambo revealed that inputs were delivered to Grain Marketing Board (GMB) depots as directed by the Ministry of Lands, Agriculture, Water, Climate and Rural Resettlement. For all inputs delivered, Mr. Chitambo reported that there would be a goods received voucher (GRV). He explained that the Ministry of Finance and Economic Development was the borrower of funds made available by Sakunda. 

 9.5 Mr. Chitambo indicated that the parties agreed to a facility fee. He revealed that, since the farmers did not have security, Ministry of Finance and Economic Development offered Sakunda Holdings security in the form of a ring-fenced account of the NOIC Debt

Redemption Fund and Treasury Bills. He indicated that in the first season (2016 -2017), Sakunda had provided $85 million for the irrigated facility, $75 million for the non-irrigated facility and $30 million for the Presidential Input Scheme. He stated that the financing of the Presidential Input Scheme had soon after been scrapped by Sakunda. 

9.6 Mr. Chitambo stated that Sakunda had attended the first meeting with the intention of securing a contract for the supply of fuel since there was a requirement of thirty-six million litres. He stated that Sakunda had then submitted its proposal after an invitation had been extended to all the companies to structure a financing programme. 

 9.7 The Chief Operating Officer indicated that from October 2016 to February 2017, Sakunda Holdings had used its balance sheet to finance the programme. The Chief Operating Officer indicated that the amount paid to Sakunda totaled US $ 1.1 billion. 

9.8 The Chief Operating Officer informed the Committee that what was normal was to deliver the inputs to GMB depots. He explained that in some cases Government would direct that a delivery should be taken to a certain farmer in order to decongest the depots and to avoid the impression that chefs were getting the inputs. The Chief Operating Officer indicated that the accounting process was the same as the one for deliveries made to GMB depots, where the farmer would sign for the delivery made. 

 9.9 Mr. Chitambo indicated that the Company had prepared a dossier on what could have been done differently. He submitted that the programme could do better by identifying paying farmers and also putting in place measures that ensure that farmers have the inputs.   Mr. Chitambo highlighted that contrary to public perception he did not think that Sakunda Holdings had captured the State. He submitted that Sakunda had used the best skill it had to help Government and had worked within the price limits set by the Ministry of Lands, Agriculture, Water, Climate and Rural Resettlement. He argued that the Company had helped the Government to achieve maize import substitution. 

9.10 The Chief Operating Officer indicated that Sakunda Holdings was 100% indigenous. He indicated that they worked hard and tried to seize opportunities available. Mr. Chitambo stated that there were no politicians in Sakunda. He identified the shareholders as Mrs. S. Mupunga with 44% shareholding and Mr. K. Tagwirei with 56%. 

Pedstock Investments 

10.1 Mr. Jackson stated that Pedstock Investments supplied centre-pivots to farmers in Zimbabwe. He indicated that he needed to verify the figure of USD12 396 367.74 on the schedule of payments as they did not tally with his figures. He submitted that in general, the amounts were paid for centre-pivots and that the Company had supplied all the equipment paid for. He indicated that his total payment was $ 6 911 138, 75. Mr. Jackson indicated that payments to Pedstock were made through bank transfers and highlighted that the company did not receive any payment through Treasury Bills. 

10.2   Mr. Jackson submitted that the contracts were signed with the Ministry of Lands, Agriculture, Water, Climate and Rural Resettlement and payment came from the Ministry. He professed ignorance on the initiator of the payments. 

 10.3 Mr. Jackson stated that the specific contract was an unsolicited bid which had been awarded to Pedstock Investments. He stated that there was another contract where five machines were supplied and another contract which was an ongoing contract. 

10.4 Mr. Jackson indicated that in the past, the Ministry of Finance and Economic Development had assisted the company but the company had been using commercial banks to secure foreign currency. 

FSG

11.1     Mr. Morland, Managing Director for FSG, submitted that the transactions with Government were based on contracts for the supply of inputs. He explained that FSG had a structure involving stock in Zimbabwe held under collateral management agreement, where stocks are released when payment has been made.      

11.2   He indicated that payment for the supplies had been made in local currency. 

Mr. Morland indicated that the first contract had been signed in 2016 followed by contracts in 2017 and 2018. He stated that FSG was asked to indicate what the company was able to supply in each of those years.

  11.3    He submitted that he had never received any tender document apart from the offer of a contract and he was not aware of the legal requirements. He also submitted that he believed that because of the turmoil with regards to unavailability of foreign currency, Government had power to contract FSG and he believed that FSG was compliant. 

Mr. Morland indicated that the company had supplied seeds and fertilizers. Mr. Morland confirmed receipt of about 95 million. 

11.4   Mr. Morland submitted that supplies were made to GMB and the Cotton Company of Zimbabwe (Cottco). Mr. Morland indicated that all payments were made in TBs and RTGS. He argued that although the ratio of RTGS to US $ was 1:1, FSG could not transfer the amounts outside the country. Mr. Morland explained that all the foreign currency FSG got was through the 180 days’ letters of credit. Mr. Morland insisted that Government paid FSG in RTGS and through issuance of Treasury Bills. He stated that the point of reference was in US dollars but payments were made in RTGS.

11.5    Mr. Morland pointed out that FSG’s holding group and headquarters was in Mauritius. He stated that they had other companies in Malawi, Mozambique and Zambia. He insisted that there were contracts and FSG had supplied inputs for which payments had been made. He highlighted that payments were sometimes made well after delivery and he was not too sure how Government managed its payments. Mr. Morland informed the Committee that FSG charged its products supplied to Government in US dollars but invoiced the products in RTGS. He argued that those who charged in RTGS would get their payments promptly or even in advance of delivery. Mr. Morland advised the Committee that FSG had one contract with a total value of US$ 140 million. Mr. Morland informed the Committee that the Company paid the Commercial Bank at a rate of about 8 percent but when the situation deteriorated, the rate would be between 20 and 40 percent.

Committee’s Observations

12.1      Sakunda Holdings, Pedstock and FSG entered into contracts with Government without going to tender in violation of the Public Procurement and Disposal of Public Assets Act. 12.2       The above-mentioned companies were awarded a ‘Special Cabinet Authority’ to supply agricultural inputs and equipment.

 Recommendations

12.3    Government should implement programmes through the responsible Government Ministries or Departments to ensure implementation is done through laid down rules and procedures and ensure transparency and accountability. 

12.4   Government should always adhere to the requirements of the Public Procurement   and Disposal of Public Assets Act in order to get competitive prices and value for money.

12.5     The provisions of the Public Procurement and Disposal of Public Assets should be applied even where there is Cabinet Authority.

 CONCLUSION

13.0 In conclusion, the Committee is very concerned with the Ministry of Finance’s recurring habit of making direct payments to service providers without providing relevant documentation to line Ministries. The Committee trusts that the Executive shall react with urgency to the findings of this Report, especially that the Ministry of Finance desists from making any direct payments to suppliers. All public institutions should act in accordance with the Constitution, Public Finance Management Act, the Public Procurement and Disposal of Assets Act, and adhere to principles of good governance transparency, openness and accountability as spelt out in Chapter 9 of the Constitution of Zimbabwe.  I thank you.

          HON. MUSHORIWA: Thank you Madam Speaker for giving me the opportunity to debate on the motion that has been brought by Hon. B. Dube, with regards to the report on Public Accounts on Command Agriculture.

          Let me premise my debate by saying that food provisions in the country are very important and agriculture plays a pivotal role in the economy of this country.  When you look into this report, the question is not whether or not the issue of doing all the necessary things to make sure there is sufficiency in terms of food production has been done.  It is a very noble thing for this country to feed its people.  It is also noble that Zimbabwe gets back to the position where it was as the breadbasket of Southern Africa. 

          The challenge is the manner in which the Command Agriculture or the Special Maize Programme was done.  As indicated by the Chairperson, the Ministry of Agriculture claims they are the ones that are responsible for agriculture, they claimed that all the payments that were done under the Command Agriculture, they were not aware of.  They were given instructions by the Ministry of Finance and Economic Development to process.  When we asked the Minister of Finance to explain, the Minister of Finance instead of properly answering the question, passed the buck to the RBZ saying most of the payments were made by the RBZ.

          However, when we asked the RBZ to appear before the Parliamentary Committee, Public Accounts Committee in order to explain, the RBZ in turn passed back the buck to the Ministry of Finance and Economic Development to simply say we were operating on instructions from the Minister of Finance.

Madam Speaker, the Minister of Agriculture was not aware that the RBZ was making direct payments to the supplier outside the knowledge of the Ministry of Agriculture.  The Central Bank was also busy making payments to suppliers outside the law because payments and accruing of debts should not happen without the involvement of Parliament because we are the owners of the purse.

          If you then check, you will realise that in 2017, for instance we spent more than USD 18 billion and we also spent a further USD 12 billion in respect of the Command Agriculture.  The challenge we then face is the manner in which most of the transactions are being done.  When we asked the Minister of Agriculture to give us the documentary evidence so that the Auditor General could go through the vouchers, the Ministry of Agriculture failed to produce the documents.  There is no documentary proof, expenditure was being done without any documents.  There is no way we can have a Central Government just doing payments without any proof of documentation and it is an indictment on our part as a Government, we should not allow these things to happen.

          Secondly, you will realise that even when the funds were disbursed as loans under Command Agriculture in terms of fertilizers, diesel and other machinery; the challenge we faced when we asked GMB was the question of the process that linked the Ministry of Finance and Economic Development, Agriculture, the RBZ and GMB in terms of recovery through stop orders, left a lot to be desired.

          This means that quite a number of beneficiaries during the 2017 and 2018 season did not do anything in terms of paying back the money that they had received through the various inputs. However, that is a red flag in terms of how we should conduct our business during Public Finance Management. 

The third issue relates to the behaviour of our Central Bank. Madam Speaker, if you go through this report, the amount of Treasury Bills that the RBZ was issuing against the law, is unbelievable.  The RBZ, according to the law does not issue Treasury Bills unless instructed by the President through the Ministry of Finance.  However, in our case, it was the RBZ that was initiating Treasury Bills and later on requesting the Minister of Finance to rubber stamp.  Such behaviour by the Central Bank creates an unstable economic environment in that those are the things that ensure inflation goes up.

          The RBZ Governor and the bank overally played a pivotal role in this quasi fiscal activity thereby generating a lot of money.  The report states that there is need for a forensic audit because some of the things that were happening are beyond basic banking ethic. There is no way a Treasury Bill can be split but it was happening under the RBZ.  Such behaviour does not meet the minimum standard stipulated within our Constitution and the Public Finance Management. The RBZ was also  not adhering  to the provisions of the Reserve Bank of Zimbabwe Act and I fully support that there be a forensic audit to just check and find out where some of the money was distributed to because not all the money went to agriculture and contractors

          The fourth issue is this question of having suppliers like Sakunda, FCG, all these companies there was no tender. They were simply given huge tenders amounting to billions of USD and that is against the provisions of the Public Finance Management Act.  It is also contrary to the provisions of the Public Procurement and Assets Disposal Act.  Those things do not do us well as a nation. Right now, one of the major challenges, because there was no proper coordination, is it is difficult to know whether these suppliers and contractors did their part in terms of supplying this information.  You cannot fault the contractors because the contractors wanted business.  Whom do we fault?  We fault our people who work within the ministries, who work at the RBZ, people who are supposed to open their eyes to safeguard the national purse.  They allowed mediocrity to happen; they allowed thieves to just go.  For that reason, Zimbabwe will not know what really transpired. 

You will also recall Madam Speaker, that in 2020 after we had a meeting with the Ministry of Finance and Economic Development pertaining to these Treasury Bills and the abuse of the Unallocated Reserves, the Minister of Finance and Economic Development had to come up with a Financial Adjustment Bill (19 of 2019).  When we then said we need these monies to be audited by the Auditor General, the Minister of Finance then withdrew the Bill and up to now, Parliament has not yet approved the excess expenditures which were done from 2017 to 2020, monies which were spent outside Parliament’s approval. 

The Constitution is clear that whenever the Minister spends more money than allocated by Parliament, he should actually bring a Bill before the House so that Parliament can make a decision of allowing and approving such expenditure.  However, the Minister has not done that.

The other issue which I think is clear is that we want a situation where as a nation we come up with proper systems to support our agriculture and other various sectors of the economy.  We do not want to have a situation where we do have calculations in terms of the monies that – [Technical glitch] –

THE HON. DEPUTY SPEAKER: Hon. Mushoriwa, you are not audible.  I think we lost him.

(v)HON. SANSOLE:  Thank you Madam Speaker for the opportunity. I just want to point out that it is important to note that this report is actually a by-product of another report on the Ministry of Agriculture. It has come about due to the Committee having stumbled upon certain information that was contained in that report relating to the $1.5 billion unallocated reserves.  Of interest is that the inquiry took almost a year to complete because of challenges relating to the refusal by witnesses to give oral evidence and refusal by RBZ to provide correspondence, particularly relating to Treasury Bills.

It is important for the entities being audited to realise that they have to cooperate with the audit; they must avail all information that is required by the auditors because whilst auditing will not check everything, everything must be availed for audit purposes.  So it is worrying to have officials refusing to provide evidence, particularly officials in the Reserve Bank and Ministry of Finance.  As pointed out by the previous speaker, it is worrying that the discrepancy which they have uncovered has still not been resolved up to this date.  These variances are up to US$1.5 billion, an astronomical amount of money.

Madam Speaker, the Committee has mentioned that there was no supporting documentation, so $847 million paid directly by the Ministry of Finance to suppliers – how does one account for expenditure without supporting documentation?  It is very shocking Madam Speaker.  The figure represents an unbudgeted for expenditure.  In other words, it was not authorised and it also indicates a violation of regulations and statutes that have been put in place to regulate the behaviour of the Ministry of Finance, the violation of the Public Finance Management Act by the Ministry of Finance and Economic Development. 

It is also worrying that the Permanent Secretary in the Ministry of Agriculture had no knowledge of these discrepancies yet he is the accounting officer, so how does he account without any knowledge of these discrepancies?  Even the Finance Director in the Ministry was simply instructed to adopt the figures without any supporting documentation.  In other words, he was supposed to put in his expenditure, figures which he could not support with any documentation.  Effectively, the Permanent Secretary was not responsible for Command Agriculture, that is what we can say in short.

The Ministry of Agriculture was only instructed to account for Command Agriculture in retrospect, after the money had been spent, which is tantamount to closing the stable door after the horses have bolted Madam Speaker.  I also agree with the recommendation that all loans that were advanced to beneficiaries must be recovered.  There is this culture of refusing to pay loans which are advanced to beneficiaries and also by beneficiaries of the Ministry of Agriculture.

I also want to refer to the oral evidence that the Committee did with the Ministry of Finance where suppliers of Command Agriculture inputs were appointed without going to tender in violation of the Public Procurement and Disposal of Assets Act.  The Act requires that you go to tender for any such processes but the Ministry ignored that and appointed the likes of Sakunda and others to supply without going to tender.  The suppliers also misled the Ministry to believe that they had their own foreign currency and could supply on credit when in fact they were getting huge amounts of foreign currency from the RBZ. 

This kind of dishonesty is alarming Madam Speaker, and I want to support the Committee’s recommendations that the Ministry of Finance and Economic Development must abide by the Public Procurement and Disposal of Assets Act and desist from making direct payments on behalf of ministries.  There is no need for the Ministry of Finance to baby-sit ministries such as the Ministry of Agriculture. 

The conduct of RBZ is very worrying, like what the previous speaker said, that each one blames the next.  The RBZ would blame the Ministry of Finance for what was happening – [Technical glitch] – but they were aware of what they were doing.  Of concern is that the RBZ exceeded its mandate in the issuance of Treasury Bills which exceeded budgeted expenditure.  This culture of impunity and lack of respect for the laws of the country is indeed worrying, Madam Speaker. It is interesting to see the amounts that were paid, especially to Sakunda. There was $663 million in 2017 and 2018.

Also worrying Madam Speaker, is the unacceptable conduct by the then Minister of Finance, Hon. Chinamasa who is mentioned in the report. His approval of a huge Treasury Bill US$737 million, almost a billion United States dollars when on the 10th of August 2018, his term of office had already expired on 30th July on election day. The effect of this was to put the State into huge indebtedness when he knew that he no longer had that authority as caretaker minister.

The RBZ, as we have seen according to the report, issued Treasury Bills unprocedurally and they violated the Public Finance Management Act. They also violated their own RBZ Act and by failing to advise Government accordingly, they also issued Treasury Bills without supporting documentation. This was common throughout and has been reported several times in the report.

In conclusion Madam Speaker, I want to record my support for the recommendation, particularly the forensic audit on all Treasury Bills issued by the RBZ during the years 2017 and 2018. This forensic audit is long overdue. As you are aware, it has taken time – [technical glitch] – Finally, I do not want to dwell on what was done by the GMB except to emphasise the need to ensure that stop orders for recovering money from beneficiaries who were supporting – [technical glitch] – Thank you very much Madam Speaker.

(v)HON. MOLOKELA-TSIYE: Thank you Madam Speaker. Are you able to hear me, I am on the road?

THE HON. DEPUTY SPEAKER: Yes, I can. Go ahead.

(v)HON. MOLOKELA-TSIYE: Thank you so much. I am happy to make a contribution. I am not a member of the Committee; I only want to make some comments based on the report of the Committee. The first and most important observation is that as a country, it looks like we are fighting a losing war in the fight against corruption which is the biggest cancer that is affecting us as a country. This report is clearly indicating that there is still a lot that we need to do as Zimbabwe to win the fight against corruption.

It is clear from the report’s observation and recommendations that there is a lot that is happening and whatever the report is pointing out is just a tip of the iceberg. What makes it even more disturbing is the fact that the very Ministry that is supposed to take leadership role when it comes to accountability and transparency of public funds, the Ministry of Finance and Economic Development is also having itself being caught pants down. It is the same Ministry that should show leadership from a moral point of view to other ministries when it comes to public expenditure. I am very disappointed that this Ministry is being caught pants down.

It is important to bring this Ministry before the National Assembly or a ministerial statement by the Minister, Hon. M. Ncube to explain the Ministry’s position. Right now, what is clear is that this report is showing that there is a lot of mis-governance and corruption that is associated with this Ministry. Added to that, the Reserve Bank of Zimbabwe is being caught also pants down and it is very important for the Governor of the Reserve Bank to clear the name of the Reserve Bank. If we are serious about fighting corruption, then these two key institutions must be seen at the forefront of accountability and transparency. This report paints a dark picture in the corridors of power within this Ministry and also the Reserve Bank of Zimbabwe.

I want to encourage the National Assembly to summon the Governor and also the Minister, through this Committee, to explain the situation. If we allow this report to sail through without further public scrutiny, then we are clearly not going to win the war against corruption. I also wanted to comment about the fact that private companies were given tenders without any public notification, without any competitive processes. This is one of the most forms of corruption you can have in any country. It is a sad indictment on Zimbabwe that we still, at this day and time, have this kind of basic corruption. If a tender involves a lot of money like millions and billions of dollars, there is no other option except to put it under public process and the most deserving contractor wins.

The fact that private players were allowed to get contracts of such big amounts and allowed also without any proof that they have capacity to fund themselves and credit auctions, because they will eventually get money from the RBZ, is clearly failure of leadership. Someone should be held accountable for that. It is important that the so-called private players who got these tenders without any competition, without any public scrutiny must also be brought before Parliament to explain their behaviour and conduct which clearly insinuates collusion with the public officials and the Government officials. This is very sad for Zimbabwe that we have this kind of maladministration and mis-governance.

It is also clear that the laws that we have in this country are still not strong enough to prevent this kind of rampant and open abuse of office. It is important that as Parliament, especially through this Committee, we take some time to review some of the laws that we have. We have to tighten them to reduce the risk of this kind happening again. I am also worried and concerned about the fact that a lot of people in this country talk a lot about corruption but when it comes to walking the talk, everyone takes a back seat.

Therefore, I am challenging us as Parliament of Zimbabwe and as people of Zimbabwe, when we read this report, to look at ourselves and challenge ourselves. We can surely do something more. Right now our public health care system needs a lot of funding. Our education system needs a lot of funding. Our roads system needs repairs. There is a lot of infrastructure that needs funding. Whilst we are at it, a lot of money is being transferred to individual companies in ways that are clearly showing that there is resemblance of corruption and maladministration.

Last but not least Madam Speaker, I am very disappointed to learn that the Ministry of Agriculture was not at the forefront of the implementation or administration of the funds that were allocated for Command Agriculture. I heard that the Permanent Secretary of the Ministry was more at the back than at the front. It is very disappointing to have this kind of administration. I would like the Permanent Secretary to be also brought before the Parliamentary Committee to account and clear their name and the Ministry of Agriculture so that this report can have a sense of conclusion.

I want to appeal to the Zimbabwe Anti-Corruption Commission to take this report seriously and ensure that there is further follow up on this report. I heard a recommendation that there is going to be a forensic audit and I fully endorse it. If we are to win the fight against corruption in Zimbabwe, we need to show leadership with regards to the action in response to this Committee report. We need to show leadership in terms of making sure that there are consequences for those who are indicted or implicated in this report. I thank you Madam Speaker.

HON. T. MLISWA: Thank you very much Madam Speaker for allowing me to debate debate this motion moved by Hon. Brian Dube the capable Chairperson of the Public Accounts Committee. The word in town was $3 billion has been looted.  May credit be given to the Public Accounts Committee for doing due diligence to break down the $3 billion. I remember seeing a headline saying $3 billion goes to Sakunda - Parliament in its role of oversight then called everybody to understand exactly what happened. 

The special programme on maize production for import substitution which was known as command agriculture was inclusive.  First of all, it was open to every Zimbabwean who was satisfied to qualifying criteria laid down by the Government.  If one is a farmer, has a farm and needs input then they would get them.  The programme was noble and it remains noble because farmers need to be empowered.  There needed to be some interventions in terms of empowering the farmers.  The banks were not doing it and I think this is where the aspect of command agriculture emanated from. 

Command agriculture also emanated from the fact that we needed to deal with food security which is critical to any nation to have peace and tranquillity plus law and order.  A hungry nation is an angry nation. First of all, there was need to identify farmers with irrigation facilities. For example in Mashonaland Central, they would say 10 000; Mashonaland West 10 000 bearing in mind that there are other regions in the country like Matabeleland where the water table and the climatic conditions are not good; this is also not a good rainfall area.  It is not within the 1, 2, 3 zones where agriculture takes place.  They have got to be supported by provinces which are able to grow and feed them.  Once the farmers were identified, they were given the inputs when there was an outcry to say what about us who do not have water; what then happens to us – then it was opened for everyone.

Command agriculture helped farmers who had acquired land under the land redistribution programme against which they could obtain finance from the banking sector to obtain inputs.  Now they could go and farm.  Remember the banks were not willing to lend money.  That added the practice implementation of agriculture in addressing the key constraints to the new farmers.  The new key constraint was borrowing.  It remains that.  The offer land which the new farmers have does not access capital or loan – so does the 99-year lease.  Extraordinary measures had to come through. The reason why it is important for us to bring this before we go into the bad apples of this programme is also to talk about the importance of it and remaining important in what we want to do. 

The principal charge to those responsible for the programme at Government level was to ensure food nutrition and self sufficiency.  The objective has been clear.  This facility came about in 2016-2017 cropping season and there was a problem in that.  What were the roles of the companies?  It is important to understand the roles of the companies.  Then we go to the accountability of the roles of the companies.  When we did the oversight role, Sakunda’s role was to buy imports costs; efficiently and faithfully deliver them to the agreed drop off points.  This meant that they had been given the contract to be able to supply and drop inputs in terms of the convenience of the farmers.

Typically, deliveries were made to GMB depots.  In certain circumstances, inputs were sent directly to named farms.  In all cases, goods delivered vouchers were obtained as proof of delivery.  Once the inputs were cited, the Government was responsible for orderly distribution of individual inputs.  This is critical in that the inputs were taken from GMB by the farmers or could be delivered directly to the farmers.  What was critical was the accountability, the vouchers which the farmers had to go through Agritex. Government was involved in all these in terms of authorising the farmers to be able to do this after an assessment had been done by Agritex.  What became a problem was how the farmers abused this scheme whilst Government was generous in doing that.  

Some farmers started selling these inputs as you know and this is tax payers’ money which is meant to go towards food security.  Fortunately, those farmers like myself took advantage of this and the inflation at that time helped us at that point in time as farmers.  There was no way we were going to pay back these inputs in terms of real normal or value.  In life, you just strike it once.  I must be grateful to God for it made me richer than any other time.  I took advantage of inflation and from what I harvested, I paid next to nothing.  At the same time, I was sitting with a lot of inputs for the next season.  That is strategic in farming.  As long as my inputs are going into agriculture and cropping, that is critical. 

There was abuse by the farmers and there was no proper accountability like what the other Hon. Members contributed to from the Government departments.  We need to dissect that we, as people responsible for accountability – rightfully so, GMB, Agritex and so forth were responsible.  The programme is continuous. In the next season, you were then supposed to look at the farmers who had delivered so that you keep giving them inputs. 

Corruption and looting of these inputs escalated.  Instead of basing it on GMB records that Hon. Moyo, Hon. Kazembe, Hon. Mhona, Hon. Mliswa and Hon. Gezi have done well – show us your records, we give you more inputs but that was not done.  That was supposed to be the basis of empowering the farmer and keeping the programme going. Agona agona, anogutsa nyika, mupei zvakawanda. Instead, some were not able to get that yet they had done well.  Others continued looting.

The report is oral evidence demonstrating that far from the madding crowd, there was a feeding fuse on the hyper hall exaggeration of winners innuendo provided by the print media.  This is the breakdown in electronic or social media claiming that $3.6 billion disappeared in command agriculture. The facts are rather simple and straight forward in the period under discussion, the programme received $3.6 billion.  This is the breakdown of the $3.6 billion which the Committee on Public Accounts managed to come up with in the inquiry.   $2.5 billion was for GMB, $1.1 billion was for Sakunda.  So that is $3.6 billion.  So, there is no way it disappeared but what was not there was the accountability which was critical at the end of the day. The period under discussion, the programme received $1, 1 billion and it was fully accounted for and the reconciliation was there.

          It is important for us not at times to be political about certain

entities. Those who are in the Committee, Sakunda had Mr. Chitambo

who was the Chief Operations Officer. If there is anything and Hon. Biti

was the Chairman at the time, actually thank him for educating us

because we were all on the $3 billion which went missing until he

started to break it down that at no point did Sakunda get $3,6 billion.

Sakunda got $1,1 billion and it was accounted for to a point that there

was an invitation to say come and see our records, the offices are there

and so forth.

Government could not account and in not accounting like other Hon. Members of Parliament said, that is where the problem arose. So, when Government fails to account, that is where the problem is. The report is evidence that the Command Agriculture Programme is returning this country to viable production of maize, wheat and soya beans. It basically has Zimbabwe farming again. The programme’s contribution to the national maize harvest was 1,2 million in 2016/17 and that had never been attained. So, these are some of the positives which were out of these programmes.

In 2016/17 Madam Speaker, 1,28 million tonnes  - we seem to lose some of the good things at times and want to go for the bad things and so forth. Unfortunately, most people without farms see it as an opportunity to punish those with farms, yet the Land Reform Programme was open for everyone. What is important is for us to support the farmers and that programme cannot stop in supporting the farmers and so forth. The GMB depots must have got 1, 28 million tonnes in 2017 and 550 000 tonnes in 2018/19 reflecting the effect of the drought. In 2016/17, the GMB depots were filled and outside storage was used for the first time since 1980.

I am a farmer who benefitted from the land reform and I am happy to have contributed to this. Even during the Rhodesian time, the white farmers did not attain this. They were not interested in maize anymore. The farms that they had, they were only interested in doing one hectare of horticulture yet they have got a farm of 2 000 ha and so forth. The peasant farmers as you know are the ones who sustained the aspect of maize. They were already doing it at the end of the day.                               

 By the time the report was done, there were 78 000 farmers on command agriculture; youths, men and women empowered to farm by the programme that was well thought-out in design and execution. Let it be recalled that each income earner in Zimbabwe has at least five other people, depending on them for their upkeep. This means that it translates to 390 000 people directly sustained by the scheme. The impact of the course went beyond that local and international companies were able to do business and in the process employ Zimbabweans.

This is where now the debate comes in that the Ministry of Agriculture was very reckless, like Members of Parliament said in the way they accounted. They did not account for anything and you wonder what they are doing in office. The Auditor General’s Office has been very clear in terms of the way they have run things. They have no clue. It took Mr. Chitambo from Sakunda to tell GMB how much they have been given and what the money was for. The officials of GMB did nothing at all and that is when he even pushed that these guys need to be fired at the end of the day because what they are doing, it baffles my mind that they are still in office after failing to know the money that they had been given. They could not reconcile at all on what was happening. In that process, who then do you blame for doing that?

What is important Madam Speaker, is for us to have a Government that has people who understand the system. Companies like FSG were given over $100 million foreign currency. What for, we do not know. PHI, which is part of INNSCOR was given more money. What really pains me at the end of the day is, we seem to be giving more money to white owned companies and not to black-owned companies. Why was this money not given to the blacks so that they are empowered? We cannot be shy and we cannot make excuses that we are black in this country and even the whites are Zimbabweans but it is our turn as black people to be empowered. We cannot have a system where white companies are given money. FSG could not account for the offshore account. They were taking money to Mauritius and that is an issue that needs to be investigated. Hon. Molokela-Tsiye was right in saying that ZACC needs to come in as well and investigate this so that we are able to see exactly if this money was used for the rightful things or not. They created offshore accounts, take the money from Zimbabwe and do not bring the profit back. How does the country grow when you are not able to bring back your own money that you have been giving to people?                                                                          

 That is why we say at the end of the day and like the President rightly says, “Nyika inovakwa nevene vayo. Vene venyika ngavapihwe futi mari nekuti vakasapihwa mari varungu havagari muno, mari dzavo vanoisa kunze kwenyika. Isusu tinogara munomu ndikapihwa mari ndinochengetera munomu ichi adder value but ivo vano driver ma Rolls Royce uko kunoku vodriver ma Double Cab, Sunny and MAZDA 323 vachiti havana mari asi vachiendesa mari kunze kwenyika. Imari yedu yenyika, so we must be empowering our people. I must be very clear that we must see black businesses growing up, seizing these Government opportunities so that we are able to be a nation which is able to do quite a lot for ourselves.

Madam Speaker, it is very important in closing, that we appreciate the good of Command Agriculture. We also look at the bad in terms of failure to account for it by the Ministry of Agriculture and rightfully so, it has now moved to the banks because with the banks, there is proper accountability. You have to put your title deeds and so forth. Unfortunately, those who did not benefit from Command Agriculture when inflation was really high and as a farmer, you would certainly make more money from it - you are really lost. Opportunity knocks at your doorstep once and when it goes, it goes.

Like I said, I was grateful for Command Agriculture and we are now farming properly, good practices so that food security remains and Government still has to come with an intervention to support the farmers through subsidising inputs, fuel and other things. There is no country that can grow in the world wherever you go without subsidising farmers. Farmers must be subsidised at the end of the day, especially with us going for a drought.

I want to appreciate the Chairman of the Committee, Hon. Brian Dube who came in. This report was hanging for a long time and now that it has been tabled, I think we have done a wonderful job. Also, Hon. T. Biti who was the Chairman at the time also did a hell lot of work to be able to present this. It was a great opportunity to see Parliament being at its best in terms of oversight. The right figures and facts were done. In moving forward, we can only be a credible institution when we are able to execute our duties the way we did. Thank you Madam Speaker.

          (v)HON. NYOKANHETE:  Thank you very much Madam Speaker, for giving me this opportunity to add my voice on this good report, which has been tabled by the Chairperson of the Public Accounts Committee, Hon. Brian Dube.  I want to contribute especially on the issue of the financing part of the Command Agriculture, looking at the issuance of Treasury Bills.  I have just seen that there are many things which have been highlighted on the issue of Treasury Bills which were issued.  I would want to highlight about five issues.  The first issue is on the Treasury Bills which were issued unprocedurally in violation of the Public Finance Management Act.

          The second issue is on the Treasury Bills which were issued without supporting documents.  We have some figures of about 2,2 billion and also 3,3 billion which were mentioned that the Treasury Bills were issued without these supporting documents for these amounts.  Thirdly, is the issue of Treasury Bills between RBZ and Ministry of Finance and Economic Development which were not reconciled.  Fourthly, there were some individuals who were abusing this system doing approvals and payments which were beyond their powers.  We found out that there are some individuals, some officers from RBZ and Ministry of Finance who were abusing their offices in doing some payments which were beyond their powers.  Lastly, we have the issue of direct payments by the Ministry of Finance.  They were spending outside the Appropriation Act and also breaching the Constitution of Zimbabwe and the Public Finance Management Act. 

          Madam Speaker, I just want to say Parliament has the role to approve the Budget.  We approve the Budget on behalf of the people of Zimbabwe, so when Treasury does payments without the approval of Parliament and also they spend beyond what they give them; it means that they do not respect the people of Zimbabwe.  They do not respect Parliament, they are the masters of themselves and they do not report to anyone.  So, it is something which is very important.  As Parliament of Zimbabwe, we need to be a Parliament with teeth.  Hon. Nduna and Hon. Mliswa always say, “tinofanira kunge tiine mazino.”  We need to have teeth and we need to have power as Parliament, not to be a Parliament that does rubberstamping of all the payments which have been done beyond our approval.  That is something which is not in good books for us as the parliamentarians. 

          Also something which is very important, in the accounting field, the absence of supporting documents when you are doing any payments, means there will be possibilities of fraud and many things.  With lack of supporting documents, it means the programme itself and all its processes have been red flagged.  If the programme has been red flagged, it means something wrong has happened especially for the programme.  Let me just say, this programme of supporting agriculture is a noble cause.  Personally, I agree that agriculture needs to be supported by the Government.  There is need for subsidies by the Government, especially for the agricultural sector because as a country, agriculture and mining are the backbone which make our economy move and progress, so we need to support agriculture.  What is wrong in this programme was the process, especially the financing process.  We are seeing that people were just doing whatever they want.  The programme was red flagged and affected negatively because of the things which have been done by the officers. 

          Madam Speaker, we are also seeing that the Auditor-General’s report clearly shows that she has lost confidence in the internal controls of the Ministry of Finance.  When the Auditor-General produces such kind of reports, we need to support her.  We appeal that the Ministry of Finance needs to do the good thing because they are the pacesetters, they are the ones who supervise every accounting part of the public finance.  They are the overseers of all the finances that flow in the country, the finances in the parastatals, local authorities and all ministries.  So, if the overseers are failing to have some compliance with procedures, it means we are having challenges. 

Madam Speaker, we are urging that the Ministry of Finance needs to do things in a proper way.  We need professional people in the Ministry of Finance and the Reserve Bank of Zimbabwe who do things according to the book.  Also, we see that lack of documentation can increase the risk of errors in the financial statements.  Otherwise, we are not sure about all the financial statements which are being produced by the Ministry of Finance on whether they are correct or not.

 In the absence of supporting documents, it means something is not good and needs to be corrected.  We doubt every financial statement which has been produced because they are just producing but there are no supporting documents.  Every figure in the financial statement needs to be backed by the supporting document.  It is not an issue of just punching a figure.  Every figure must be backed by a supporting document. In the accounting field, absence of accounting documents means something is wrong. 

Madam Speaker, there is one thing which I want to say, these abusers of office in the Ministry of Finance and RBZ are still enjoying good perks that they are being given for their jobs.  They are still there whilst they have done something not good.  My appeal is, Zimbabwe has many learned and professional people who hold their offices with high integrity and professionalism.  Those people who are abusing public offices need to be chucked out from these offices.  Zimbabwe has many educated people.  We have Chartered Accountants and so on.  When we are keeping people who abuse their offices in such a way, it means we are disadvantaging the learned people who are in Zimbabwe who can come and contribute something positive.  We need to call for a proper investigation.  If it is forensic audit, let it be done for this good programme, the Command Agriculture.  We want to see every person who has not done their role in a proper way being held accountable.  These are public funds which need to be accounted for in a proper way. 

Madam Speaker, ignoring whatever wrong was done makes the same act to be repeated in future.  We need office bearers and all these people who did not do well to be known.  The Minister of Finance must be a responsible person.  We are seeing many things which have been done by the then Minister of Finance, Hon. Chinamasa in terms of the Treasury Bills being issued sometimes without approval.  We need a Minister of Finance to be a responsible Minister who knows that he or she is accountable to the people of Zimbabwe, a person who respects the laws of the land, otherwise there is this thing that says; ‘there is no one who is above the law’.  If the Minister of Finance does wrong, he also needs to be brought to book and to be held accountable.

          In Zimbabwe, they know that any person who does something wrong, the next time you see that person being transferred to another Ministry.  When you are starting an investigation, s/he will not be there he or she will be in another ministry, otherwise avoiding some questions on whatever wrong they would have done.  So we need these Ministers to be accountable to the people of Zimbabwe.  They need to come and answer to whatever they would have done.  Otherwise we do not want people who have done something wrong to be promoted. We want to move in a professional way because whatever we are doing, we are doing it for the benefit of the people of Zimbabwe.  I thank you.

          HON. GANDAWA: Thank you Madam Speaker for the opportunity that you have given me to debate on this important discussion that we are having in Parliament.  I am not a Member of this Committee but I have a few remarks to make with regards to the discussion.

          Whilst it is important that we also get to the bottom of the matter in terms of how Command Agriculture was managed before, I think it is important to highlight that the thinking behind Command Agriculture was to improve self sufficiency within Zimbabwe.  The key thing is that we were geared as the country to say let us support agriculture, producing our own food then become importers of food.  I appreciate here and there, there could have been misnomers in terms of allocation of resources but it is quite key to note that much as resources could have been misled, the Ministry of Agriculture, the Ministry of Finance at the moment has to say how best do we recover the resources that were deployed when Command Agriculture started.

          The idea behind Command Agriculture was noble and important for the good of our country.  Therefore, going forward, I would suggest that instead of us penalising people for what happened in the past, why not focus on recovering what had already been lost from the farmers that benefited from Command Agriculture.  Some of them I know did side selling but obviously when people went to GMB to collect inputs and to the bank to collect working capital financing, there was some form of record which was kept by GMB or the financial institutions that supported them.  So, let that financial institution or that GMB office be able to give us evidence and record to say this person benefited so much in terms of inputs that they got from GMB under Command Agriculture. 

          We need to recover from the farmers who were working with us, we need to recover from the farmers who said I am going to plant 20 or 50 hectares.  Otherwise if we do not get to recover what farmers benefited from in terms inputs or working capital, we are just going in circles. 

My prayer is let the institutions that were responsible for issuing out Command Inputs or Command working capital be able to identify which farmers benefited and we all go and get to recover what they benefited. Thank you

(v)HON. CHIDHAKWA: Madam Speaker, I would like to thank Hon. B. Dube for coming up with this important report. Firstly, I would like to acknowledge that Zimbabwe was once a breadbasket, this was because of our ability to do farming.  Farming remains key to our survival as a nation.

 However, when I was listening to the report, so many issues touched my heart that in our nation, citizens are hungry.  So the biggest questions that are arising from this report is why the Ministry of Finance and the RBZ were paying directly to the suppliers.  Is this the norm and what was the motive in doing corruption and loopholes of illicit financial flaws?

  Why did we conduct agriculture tenders outside the Ministry of Agriculture, do we doubt their capacity? Why then do we have a quasi-Ministry that is doing the same thing that the Ministry of Agriculture should be doing?  In the eyes of the public, it is motivated by corruption and that touches so many people’s hearts.

When the Ministry or the RBZ avoid going to tender, what does that mean Madam Speaker? We respect the Government, Parliament, these big institutions, the Public Finance Management Act but when the issues of transparency arise, it becomes a cause for concern.

On the other hand, we also have the RBZ acquiring unauthorised debt outside Parliament which is also against Public Finance Management.  Do we still have the rule of law in this country?  This is the biggest question I am posing.  If we do not change as leaders, then we are going to face a serious challenge.  To me, we are doing a disservice to this beloved nation.

These people who got inputs like fertlisers and other farming equipment and did not pay, even up to now, they are still quiet; it is a burden to the tax payer and citizens.  So, what is going to happen to all these people who are being fingered in this report?  What would be our role as Parliamentarians in all this because we protect public funds and tax payer’s money? 

In conclusion, I urge Parliament to recommend a forensic audit so that whoever is fingered must face the consequences so that we restore confidence in this country.  I thank you.

 

          HON. T. MOYO: Thank you Madam Speaker. I move that the debate do now adjourn.

          HON. PETER MOYO: I second.

          Motion put and agreed to.

          Debate to resume: Tuesday, 8th March, 2022.

MOTION

BUSINESS OF THE HOUSE

          HON. T. MOYO:  Thank you Madam Speaker. I move that we revert to Order of the Day, No. 1.

          HON. PETER MOYO: I second.

          Motion put and agreed to.

MOTION

RATIFICATION OF THE BILATERAL AIR SERVICES AGREEMENT BETWEEN THE REPUBLIC OF ZIMBABWE AND THE UNITED ARAB EMIRATES

          THE MINISTER OF TRANSPORT AND INFRASTRUCTURAL DEVELOPMENT (HON. MHONA): Thank you Madam Speaker for affording me this very important time to address the august House on the ratification of Bilateral of Air Service Agreement between United Arab Emirates and our beautiful country, Zimbabwe. I am glad that I have seen the agreement has been circulated by our secretariat and let me thank them for that initiative.

          The purpose of the memorandum is to advise the House on the general provisions and ratification by the Republic of Zimbabwe, of the bilateral air service agreement signed between the Government of the Republic of Zimbabwe and the United Arab Emirates.

          Furthermore, a motion was moved by the Minister of Transport and Infrastructural Development for the ratification of this agreement in terms of section 327 (2) of the Constitution of Zimbabwe. The background of this agreement is that the Ministry of Transport and Infrastructural Development has the aeronautical authority and is responsible for the negotiation and conclusion of bilateral air service agreement known as BASA with the United Arab Emirates. The entry into force of this agreement is subject to the parties notifying each other through diplomatic channels that their respective internal legal requirements for entry into force of the agreement have been fulfilled.

          As such, the Constitution of Zimbabwe provides for ratification of international agreements through the approval by both Houses of Parliament in terms of Section 372 (2).

          Furthermore, the Ministry has received communication for the United Arab Emirates requesting the status of ratification, particularly the BASA between Zimbabwe and UAE, so as to ensure the entry into force of the agreement. The ratification of the BASA before a scheduled visit to the UAE by His Excellency, the President of the Republic of Zimbabwe, Dr. E. D. Mnangagwa between the 13th to the 16th of March, 2022, is therefore of paramount importance. 

          Key Objectives:

          The Republic of Zimbabwe and the UAE are parties to the Convention on International Civil Aviation of 1944 (the Chicago Convention).

          As such, the UAE concluded the BASA with the Republic of Zimbabwe in conformity with the Chicago Convention for the purpose of establishing and operating air services between and beyond their respective territories. The major goal of the agreement in air transportation is to create and foster friendship understanding and cooperation, as well as enhance the expansion of international air transport opportunities.

          Salient Provisions

          General Provisions: - The preamble and Article 1 outline the major objectives of the agreement and lists key definitions of terms stated within the agreement. The parties acknowledge the importance of air transportation as a means of fostering cooperation and thus conclude an agreement which is in line with the letter and spirit of the Convention on International Civil Aviation of 1944 (Chicago Convention). This agreement will go towards facilitating cooperation and coordination between the two States, and towards the development of an integrated and sustainable air transport system consistent with the best international practices in civil aviation.

          Grant of Rights – Article 2 states that each of the designated airlines of the parties shall enjoy certain rights, which include flying across the territory of the other contracting party, making stops in the territory of the other party for the purposes of discharging or taking international traffic in passengers, baggage or cargo.

          Designation, Authorisation, Revocation and Limitation of operating authorisation – Article 3 gives the aeronautical authority of each party the right to designate one or more airlines for the purpose of operating the agreed services and to withdraw or alter the designation of any such airline for one previously designated. Article 4 then gives each aeronautical authority the right to revoke or suspend an authorisation, as it may deem necessary, in certain circumstances.

          Principles governing operation of agreed services – Article 5 lays out five principles and these include:

  •     Allowing the designated airlines to compete freely in providing air transportation;
  •     Taking appropriate measures to eliminate all forms of discrimination and anti-competitive practices;
  •     No restrictions on the capacity and number of frequencies or types of aircraft to be operated by each designated airline;
  •      No limitations by either party on the volume of traffic frequencies and regularity of service or aircraft types by the designated airlines;
  •      No imposition of a first refusal requirement, uplift ratio, no objection fee or any other requirement with respect to capacity, frequencies or traffic which would be inconsistent with the purposes of this agreement.

Customs and Duties – Article 6 provides for exemptions on customs duties, other charges and taxes for designated airlines while operating in the respective territories.

Application of National Laws and Regulations – Article 7 emphasises on the compliance to the national laws of the respective territories while operating.

Code Sharing – Article 8 provides that the designated airlines of each party may freely enter into cooperative marketing arrangements, which include blocked space or code share arrangements with any other airline or airlines.  Liability of each party is to be specifically stated in this case.

Certificates of Air Worthiness and Competency – Article 9 provides that such certificates issued shall be recognised as valid by the other contracting party, however each party reserves the right to refuse such certifications granted to its own nationals by the other contracting party.

Safety, User Charges and Aviation Security – Article 10 gives each party the right to request consultations at any time on the safety standards in any area relating to airline operations used by the other party.  Article 11 provides that user charges imposed by either party ought to be just and reasonable. Article 12 states that each party ought to reaffirm  their obligations to each other to protect the security of civil aviation against acts of unlawful interference forms an integral part of the agreement.

Commercial Activities – Article 13 gives each party the right to establish in the territory of the other party, offices for the purposes of promoting air transportation and/or other products and services offered, in accordance with the laws of that territory.

Transfer of Funds – Article 14 provides that the parties shall grant the respective designated airlines the rights to transfer freely excess expenditure earned by such airlines within its territory in connection with the services offered.

Approval of Timetables – Article 15 provides that each party shall submit for approval to the aeronautical authority of the other party, prior to its inauguration of services, the timetable of intended services with specification on the type of aircraft, frequency and period of validity.

Tariffs – Article 16 provides that each party shall allow tariffs to be established by each designated airline based on commercial considerations in the market.

Exchange of Information, Consultations and Amendment of the Agreement – Articles 17 and 18 respectively provide for the prompt exchange of information relating to their operation within the territories of the other party and consultation on the implementation, application or amendment of the agreement. Article 20 provides for the circumstances under which this agreement may be amended and the procedures that ought to be followed.

Settlement of Disputes - Article 19 provides for the procedures to be followed for prompt and effective settlement of disputes and for alternative disputes resolution mechanisms.

Registration and Termination – Article 21 provides for the submission of this agreement, together with any amendments and annexures to the International Civil Aviation Organisation for registration. Article 22 then provides for the procedures to be followed where either party wishes to terminate the agreement in compliance with administrative procedures.

Entry into Force – Article 23 provides that this agreement shall enter into force on the day that the last written notification is received through diplomatic channels, confirming that the parties have fulfilled all the respective internal procedures required for the entry into force of this agreement.  Such internal procedures, in the case of Zimbabwe, involve the ratification of this agreement in terms of Section 327 of the Constitution.

Conclusion

The BASA has mostly been necessitated by the need to enhance the expansion of international air transport opportunities and strengthen international cooperation in the aviation sector.  The ratification of this agreement shall then solidify these efforts and activates its entry into force. 

Recommendation

The above BASA between the Republic of Zimbabwe and the UAE is hereby tabled in this august House for ratification.  I thank you Madam President.

          HON. T. MOYO: Thank you Madam Speaker, I rise to contribute to the motion that has been moved by the Hon. Minister of Transport referring to ratification of the BASA agreement.  It is important for this House to adopt this BASA agreement so that this agreement will be adopted.  This is because of economic reasons.  Ratification of the BASA agreement and its adoption will enhance cooperation and create good international relations between Zimbabwe and United Arab Emirates. There is no doubt that there are a number of opportunities that are going to be created for the two countries.  We are going to experience good relations between Zimbabwe and United Arab Emirates and this is going to create good social relations between the people of Zimbabwe and those of United Arab Emirates.  Thousands of Zimbabweans do visit UAE regularly for trade to purchase goods which they bring here for marketing in Zimbabwe and vice versa Zimbabweans will also be taking their goods to the UAE. So it is very important and imperative that this august House should adopt this BASA agreement.

          (V)HON. S. BANDA: Thank you Madam Speaker, I want to thank you very much for giving me this opportunity to be able to contribute to this debate. I will be just brief and I want to thank the Minister for bringing forth the ratification. The UAE is a country which we have never had problems with and which has got a potential for great business. I think the Hon. Minister used wisdom indeed to create a relationship with such a great nation. I also add my hand to say the House must run in common and support this worthy ratification deal.  I support the deal Madam Speaker.

          THE MINISTER OF TRANSPORT AND INFRASTRUCTURAL DEVELOPMENT (HON. MHONA): Thank you Madam Speaker.  Let me also hasten to thank Hon. Torerai Moyo for the intervention. It is true Hon. Speaker the cooperation that is going be enhanced because of this ratification of this very important BASA cannot be over emphasized and I want to concur with Hon. Torerai Moyo that we have got the agenda 2030 where we are trying to increase the Cargo capacity of the airline and having such a wonderful agreement would also necessitate the airline flying directly into UAE and especially in terms of cargo management.  I want to thank you very much Hon. Moyo for raising that.  That has also been buttressed by Hon. Banda that the great relations that have been cemented by our great leaders, His Excellency, Cde. Dr. Emmerson Dambudzo Mnangagwa, through his engagement and re-engagement efforts has resulted in this kind of a relationship that we are witnessing today and that I am seeking concurrence of the august House to be ratified.  I want to thank the Hon. Members for the contribution and support that they have given towards the ratification of BASA.  I thank you Hon. Madam Speaker Ma’am.

          (v)HON. MUSHORIWA: Madam Speaker, I have no challenges in terms of ratification of this bilateral agreement but there are issues that are crucial.  That bilateral agreement was signed, I think around 2014.  The Minister did not explain to us why there was such a delay to bring this before Parliament.  At least we wanted to understand what was the

cause, I think it is proper. 

The other issue which I wanted to raise which does not have anything to do with the Minister has to do with the timing to bring these papers.  These papers were posted today, in due course, I think it is only proper that we are given adequate notice by having these papers sent to our emails in time.  I thank you.

THE MINISTER OF TRANSPORT AND INFRASTRUCTURAL DEVELOPMENT (HON. MHONA: Thank you Madam Speaker Ma’am.  Let me also thank Hon. Pastor Mushoriwa for the wise intervention.  It is true that the agreement was signed in September, 2014 and I want to also repeat and reiterate that the inertia that has been demonstrated over the years and the approach towards business has changed in the Second Republic.

This is one of the agreements that were supposed to come before this august House and I have a number of such agreements.  We have been working tirelessly as a Ministry to bring these agreements and we will see a number of them coming through for ratification.  In other jurisdictions, we should then sign an agreement; it has been taken for granted, not taking into cognisant that Section 237 is very clear that no agreement is binding unless it is brought before the august House.  I want to thank the Hon. Member for raising that and also taking the urgency and the relations that we have, especially, like I alluded to earlier own.  The visit by His Excellency, next week to UAE has also necessitated that when he is interacting with his counterpart, we would not be having any pending issues.  I want to say, you will see a number of all those outstanding BASA agreements that we have under the Ministry coming before this august House.  Surely, with this kind of work ethic, you will not see the lackadaisical approach that was there in the First Republic.  We say, all the outstanding agreements will be tabled before this august House.  Thank you so much.

THE TEMPORARY SPEAKER: Thank you very much Hon. Minister.  That needs to be applauded, I think this is something that Parliament has always longed for and indeed, thank you very much for that.

Motion put and agreed to.

CONSIDERATION STAGE

GUARDIANSHIP OF MINORS AMENDMENT BILL [H. B. 7A, 2021]

Amendments to Clauses 1, 3, 5, 6 and 13 put and agreed to.

Bill, as amended, adopted.

Third Reading: With leave, forthwith.

THIRD READING

GUARDIANSHIP OF MINORS AMENDMENT BILL [H. B. 7A, 2021]

THE MINISTER OF TRANSPORT AND INFRASTRUCTURAL DEVELOPMENT (HON. MHONA) on behalf of THE MINISTER OF JUSTICE, LEGAL AND PARLIAMENTARY AFFAIRS (HON. ZIYAMBI): I move that the Bill be read the third time.

Motion put and agreed to.

Bill read the third time.

On the motion of HON T. MOYO, seconded by HON. PETER MOYO the House adjourned at Seven minutes to Five o’clock p.m. until Tuesday, 8th March, 2022.

 

 

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