Mnangagwa ally faces probe in $3bn scandal

Mnangagwa ally faces probe in $3bn scandal
Published: 21 July 2019 (88 Views)
The Zimbabwe Anti-Corruption Commission (Zacc) is investigating possible abuse of funds under the controversial command agriculture scheme amid claims that there are no records of how close to US$3 billion was disbursed.

One of President Emmerson Mnangagwa's advisors and ally, Kuda Tagwirei, was heavily involved in the scheme that started in 2016 as his company Sakunda was the financier.

The Agriculture ministry on Friday told Parliament's public accounts committee chaired by former Finance minister Tendai Biti that they had no idea how US$2,9 billion disbursed for command agriculture was utilised.

Zacc chairperson Justice Loice Matanda-Moyo told The Standard that Zacc had already opened an investigation into possible abuse of funds meant for the scheme.

"We opened investigations into that matter (command agriculture)," she said.

"Generally, the report said there was abuse of resources and this is what we are going to investigate."

The government insists that lack of records does not necessarily mean the funds were abused.

Information, Publicity and Broadcasting Services permanent secretary Nick Mangwana said the issue was not about misappropriation of funds.

"On the 15th of July 2019, the Zacc boss Justice Matanda-Moyo made it clear that all issues pertaining to command agriculture will be investigated," he said.

"At this point, we are dealing with accounting issues, not issues of misappropriation of public funds unless you have more information than I have.

"What came out in Parliament was that the appropriation of the command agriculture funds was done through a different institution rather than the ministry, which was expected to lead."

The army was instrumental in the implementation of command agriculture with Agriculture minister Perrance Shiri, who was Air Force commander, leading the programme.

Mangwana said the programme was a "special project", hence the non-involvement of the Agriculture ministry.

"Let us not forget that there are special projects, which by their extraordinary nature are not run through the line ministry expected, but other institutions of the state, which are also accountable to the public, so unless the money is deemed missing, being administered through a different account does not automatically spell corruption," he said.

Shiri could not be reached for comment as he was not picking up calls yesterday.

Biti said it was worrying that the Agriculture ministry could not account for nearly $3 billion.

"How do you pay $1,5 billion and $1,4 billion to a ministry that knows nothing about these transactions?

"The permanent secretary and the finance director virtually don't know anything about the $1,5 and $1,4 billion, close to $3 billion," he said.

"You were innocent bystanders. The parent ministry for command agriculture does not know anything about it. Someone must answer to this."

The Auditor General's report of 2017-2018 showed the Ministry of Lands could not account for an expenditure of close to $1 billion dollars after the ministry of finance had made direct payments to suppliers on their behalf without providing details of the transactions.

Agriculture ministry's finance director Peter Mudzamiri told Biti's committee that Treasury was responsible for disbursing funds to ministries.

He said under command agriculture, treasury had not given the money to the Agriculture ministry.

Mudzamiri said treasury later sent a letter to ministry advising them to adopt an expenditure fee of US$847 954 752 in their accounts, without providing necessary documents .

"Treasury initiates the agreed budgets and it also has the computer proof to upload the figures into the computer system," he said.

"Once the figures are in the computer system and the budget is released, that is when then we are able to spend.

"In this particular case, nothing was released into our system so the amount did not go through the ministry."

"What we received later on was a single letter which was saying we needed to adopt US$847 954 752 figure in our accounting records.

"We were complaining about this request to where treasury directly made payments on our behalf and then asking us to adopt an expenditure, which we might not know about and especially without supporting documents."

Mudzamiri said attempts to investigate the issue proved futile.

"What we did as a ministry was to investigate this issue and we even demanded to be given vouchers pertaining to these transactions from the director of budgets but because of pressure for the need to close the financial period, we adopted this figure although we did so under protest," he said.

He said the system whereby treasury made payments on behalf of ministries opened doors to fraudulent payments going unnoticed.

"The undertaking which we had from some of the officers in treasury was that they will stop paying on our behalf in future and try by all means to pay via your board," Mudzamiri said.

Biti said the committee would investigate the missing funds.

"We are seriously concerned about breaches of the law and budget and good governance," he said.

In 2017, a leaked advisory note generated by the public debt management office in the Finance ministry showed that the government was aware that the facility was open to abuse.

Some of the concerns raised in the advisory were that "Sakunda have traded all the issued treasury bills in breach of the non-tradability features on the TBs.

"In other words, the trading of the TBs by Sakunda plus the repayments of the loan through both the Noczim Debt Redemption Fund and the budget is tantamount to Government funding the whole programme albeit, at a very high cost," the advisory note reads.
"Government should have traded its TBs directly to the market without involving third parties.'

It also said; "there is potential conflict of interest, lack of checks and balances and no competitive bidding, which is against good corporate governance and in violation of State Procurement Board regulations.

"For example, the financier is responsible for procurement of all inputs and there is a huge risk of overpricing."

- the standrad

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