News / Local
Biti corners Mthuli Ncube into shock revelation
25 Aug 2022 at 21:28hrs | Views
FINANCE Minister Professor Mthuli Ncube revealed in Parliament Wednesday that Zimbabwe used platinum reserves worth more than US$26 billion as security for a US$200m loan from China.
Worse still, the loan was used to give high ranking Zanu PF officials, legislators, as well as judges and other politically connected individuals expensive farm equipment which they then never paid for under the infamous Agriculture Mechanisation Programme run by the central bank in 2007/8.
Speaking to newzimbabwe.com Thursday evening, opposition CCC Harare East legislator Tendai Biti described Professor Ncube's revelation as the "biggest shock of the year".
It was also Biti's forensic eye for detail which exposed the enormity of the huge mortgage the Zanu PF administration imposed on the country.
A few weeks back, CCC legislator Allan Markham asked Professor Ncube to bring a statement to Parliament itemising and detailing the value of agreements Zimbabwe has over the years entered into with China.
Prof. Ncube duly brought the statement to Parliament Wednesday, revealing that, altogether, Harare owes China US$2.7 billion.
However, included in that amount was a 2006 loan of US$200 million which was used for the infamous agriculture mechanisation programme.
"Government contracted a US$200 loan in October, 2006 for the farm mechanisation equipment," said Prof Ncube.
"The loan was collateralised with mining rights to the 26 million ounces of platinum resources in Selous which were owned by Government through the Zimbabwe Mining Development (ZMDC).
"The loan is currently in arrears amounting to US$172 million."
As the Minister was reading his statement, Biti was working his maths, finding out the how much 26 million ounces of platinum was worth at today's prices.
"My substantive question, however, pertains to the loan you referred to of 2006 which was for US$200m," said the erstwhile coalition government finance minister.
"So, Government of Zimbabwe borrowed US$200m from China to purchase farm mechanisation equipment but you said this loan was collateralised by 26m ounces of platinum.
"If you do rough mathematics, assuming the price of platinum for an ounce is US$2000, you are talking of US$52b for the 26m ounces. How is it possible that the Government can borrow US$200m from China and give an asset which in gross terms is US$52b?"
Even at 2006 platinum prices, the loan was secured at a huge collateral cost.
According to historical data available at macrotrends.net, platinum closed the year at $1,118.00 per ounces, meaning the Zanu PF government was comfortable giving security of over US$26 billion for a US$200m loan.
Prof Ncube had nowhere to hide in the august House and conceded that the deal needed a relook.
"This arrangement was struck way back in October 2006, I think before the buoyant prices that you see in the PGM sector were available for us to enjoy," said the Minister.
"So, I think in a sense, he is requesting that some of these arrangements should be looked into given the high prices that are currently out there.
"Certainly, for me as the Finance Minister is something I would want to look at closely and see how best this can be structured so that a good will loan from China is dealt with and serviced properly on the back of a properly valued asset.
"That is what I said at the end that this arrangement is subject to proper resource evaluation and the current prices that he mentioned matter.
"We will look into it to ensure that the lender is dealt with fairly for their good gesture while the debtor, who is ourselves, is adequately treated the right way in this regard."
Speaking to newzimbabwe.com last night, Biti also confirmed that the loan was the same amount used by then central bank governor Gideon Gono for the infamous 2007/08 farm mechanisation scheme.
Under the programme, powerful politicians, judges, Zanu PF officials, member of the clergy secured expensive agriculture equipment such as tractors, combine harvesters and other implements.
None ever paid for the equipment. Gono would later tell state media that they were not required to pay.
"… No beneficiary of the farm mechanisation programme ever refused to pay for the equipment that they got and neither were they asked to pay."
Worse still, the loan was used to give high ranking Zanu PF officials, legislators, as well as judges and other politically connected individuals expensive farm equipment which they then never paid for under the infamous Agriculture Mechanisation Programme run by the central bank in 2007/8.
Speaking to newzimbabwe.com Thursday evening, opposition CCC Harare East legislator Tendai Biti described Professor Ncube's revelation as the "biggest shock of the year".
It was also Biti's forensic eye for detail which exposed the enormity of the huge mortgage the Zanu PF administration imposed on the country.
A few weeks back, CCC legislator Allan Markham asked Professor Ncube to bring a statement to Parliament itemising and detailing the value of agreements Zimbabwe has over the years entered into with China.
Prof. Ncube duly brought the statement to Parliament Wednesday, revealing that, altogether, Harare owes China US$2.7 billion.
However, included in that amount was a 2006 loan of US$200 million which was used for the infamous agriculture mechanisation programme.
"Government contracted a US$200 loan in October, 2006 for the farm mechanisation equipment," said Prof Ncube.
"The loan was collateralised with mining rights to the 26 million ounces of platinum resources in Selous which were owned by Government through the Zimbabwe Mining Development (ZMDC).
"The loan is currently in arrears amounting to US$172 million."
As the Minister was reading his statement, Biti was working his maths, finding out the how much 26 million ounces of platinum was worth at today's prices.
"My substantive question, however, pertains to the loan you referred to of 2006 which was for US$200m," said the erstwhile coalition government finance minister.
"So, Government of Zimbabwe borrowed US$200m from China to purchase farm mechanisation equipment but you said this loan was collateralised by 26m ounces of platinum.
Even at 2006 platinum prices, the loan was secured at a huge collateral cost.
According to historical data available at macrotrends.net, platinum closed the year at $1,118.00 per ounces, meaning the Zanu PF government was comfortable giving security of over US$26 billion for a US$200m loan.
Prof Ncube had nowhere to hide in the august House and conceded that the deal needed a relook.
"This arrangement was struck way back in October 2006, I think before the buoyant prices that you see in the PGM sector were available for us to enjoy," said the Minister.
"So, I think in a sense, he is requesting that some of these arrangements should be looked into given the high prices that are currently out there.
"Certainly, for me as the Finance Minister is something I would want to look at closely and see how best this can be structured so that a good will loan from China is dealt with and serviced properly on the back of a properly valued asset.
"That is what I said at the end that this arrangement is subject to proper resource evaluation and the current prices that he mentioned matter.
"We will look into it to ensure that the lender is dealt with fairly for their good gesture while the debtor, who is ourselves, is adequately treated the right way in this regard."
Speaking to newzimbabwe.com last night, Biti also confirmed that the loan was the same amount used by then central bank governor Gideon Gono for the infamous 2007/08 farm mechanisation scheme.
Under the programme, powerful politicians, judges, Zanu PF officials, member of the clergy secured expensive agriculture equipment such as tractors, combine harvesters and other implements.
None ever paid for the equipment. Gono would later tell state media that they were not required to pay.
"… No beneficiary of the farm mechanisation programme ever refused to pay for the equipment that they got and neither were they asked to pay."
Source - NewZimbabwe
