Cartels bay for minister’s blood
PREDATORY cartels of “tenderpreneurs” preying on Zimbabwe’s lax procurement systems, prejudicing government of millions of United States dollars, are baying for the blood of Finance minister Mthuli Ncube and his secretary George Guvamatanga who have been plugging revenue leakages.
Tenderpreneurship — a term widely used in South Africa and has found space in investigative journalism lexicon — describes entities and individuals who leverage on their political connections to clinch lucrative public contracts.
In Zimbabwe’s case, the cartels, colluding with corrupt enablers, mostly influential public officials, were rattled by a recent directive by Treasury to stop ministries and other departments from processing payments pending a review of contracts.
With the government being the largest procuring entity, it is estimated that it pays ZW$50 billion (approximately US$110 million) to various suppliers of goods and services per month, who in turn offload the local currency on the black market in exchange for stable foreign currencies.
According to the Comptroller and Auditor-General (AG) Mildred Chiri’s report on public accounts for 2021, the government failed to account for millions of dollars in United States dollars after various suppliers were paid without supporting documents.
The report was tabled before parliament this week.
As first reported by the Zimbabwe Independent on August 12, Guvamatanga, in a correspondence, directed all ministries, government departments and agencies to suspend payments with suppliers and review all running contracts as authorities battle to contain inflationary pressures.
A fortnight after the directive was issued, Treasury cancelled a tender awarded to a little known company, Blinart Investments, to supply parliament with 173 laptops at a cost of US$1 602 755,77.
Prior to the reversal of the transaction,
the tender had been approved by parliament.
As the Treasury continues to review existing contracts with suppliers, sources, in separate briefings, told the Independent that a number of companies were nudging authorities to process payments for goods and services. This week, addressing a press conference, Ncube admitted that the Treasury was under immense pressure from government officials and supplying firms.
However, Ncube, during the address boldly declared that Treasury would not succumb to pressure from government officials and suppliers as it pursues its reform agenda to strengthen Zimbabwe’s public tender system. Most of the named firms pressurising Treasury to effect payments, the sources added, “were giving hints that they should be paid on account of their solid ties with influential figures and the support they give Zanu PF”.
With Zimbabwe going to elections next year, sources added that indications “were pointing to dubious companies making a beeline to Treasury for payments and declaring their allegiance to the ruling party”.
In a brazen act of defiance, some of the companies, which have since come under the scrutiny of the Zimbabwe AntiCorruption Commission (Zacc), headed by chairperson Justice Loice Matanda-Moyo, sources indicated, were “intimidating and bullying the anti-graft body riding on their political associations to the ruling party”.
“Ncube and Guvamatanga have stepped on the toes of powerful cartels owing to the changes they are effecting on handling tenders. The duo has become very unpopular in some quarters. Basically, they (Ncube and Guvamatanga) are seen as enemies who are blocking self-enrichment schemes, which are designed to milk funds from the weak public procurement system,” a public procurement source told the Independent.
“Other aggrieved suppliers are of the belief that the two were working at the instruction of the President (Emmerson Mnangagwa) through a good-cop, bad-cop arrangement as a way to tame corruption in the public procurement system. At a recent meeting before he left for New York, Mnangagwa told the Finance ministry and Reserve Bank of Zimbabwe officials to keep the foot on the gas pedal and to be relentless in fighting corruption.”
As part of the raft of measures, the central government is rolling out a number of radical and unpopular measures to clean up the public procurement system. All local authorities were instructed to stop importing water treatment chemicals, mostly from neighbouring South Africa and China.
In the case of Harare City Council (HCC), the capital spends an estimated US$3 million a month importing a cocktail of water treatment chemicals.
Most supplying firms contracted by local authorities were supposed to be paid under funds set aside to finance devolution projects by the central government.
Ncube did not respond to questions sent to him while Guvamatanga was also not picking up calls at the time of writing.
Zacc spokesperson John Makamure implored whistleblowers to expose financial misappropriation.
“The constitution is clear that no one can interfere with the work of Zacc, harass or intimidate its officials lawfully carrying out their duties. Any such interference is a serious breach of the constitution and punishable at law,” Makamure said. “Any cases of misappropriation of public funds reported to Zacc are investigated and dockets submitted to NPA (National Prosecuting Authority) for prosecution. We urge whistleblowers to keep bringing such cases to the attention of Zacc.”
Government recently blocked multi-billion dollar supply deals allegedly fuelling currency volatilities, which have weakened the Zimbabwean dollar.
Trusted sources told the Independent that a number of suppliers have been milking the government by indexing prices on projected foreign currency parallel market rates, which are exaggerated. The rates were as high as US$1: ZW$1 500.
After receiving their payments, the contractors would offload the billions on the parallel market pushing up exchange rates.
The indiscipline saw the parallel market rate shooting to US$1:ZW$850, which triggered panic and a wave of price increases. Following a raft of interventions, the exchange rate has been stagnant at around US$1: ZW$650 on the parallel market.
Government ministries have since been directed to buy fuel from state-owned companies, namely CMED (Pvt) Ltd, PetroTrade and Genesis. The government recently busted a syndicate, comprising vehicle suppliers and senior procurement officials in various state institutions, who have been milking the government of millions of US dollars through inflated vehicle supply deals.