News / National
'Mnangagwa govt's dodgy multi-billion dollar deals illegal'
05 Apr 2019 at 05:02hrs | Views
FORMER finance minister Tendai Biti has condemned the majority of deals signed by President Emmerson Mnangagwa, describing them as unconstitutional and void as they were not approved by parliament in contravention of the standard procedure of acquiring national debt.
Speaking at the launch of International Public Service Accounting System strategy and plan in Harare on Wednesday, Biti, who is also the chairperson of parliament's Public Accounts Committee and a lawyer, said there was need for transparency given some of the deals had resulted in loans which had ballooned the national debt.
The country's total debt stood at US$17,6 billion as at December 31 2018, with the external debt at US$$8,16 billion, representing 33,2% of gross domestic product.
This means the debt has risen significantly since Mnangagwa took over power in November 2017 via a military coup which toppled his former boss, Robert Mugabe.
"Debt has been contracted in Zimbabwe, oblivious to the requirements of Section 327 of the constitution that requires parliamentary approval. If it is not approved by parliament, then it is null and void. Meaning that, the large part of all debt that has been accrued in recent times which has not been approved by parliament is not only voidable, but is actually void ab initio (from the beginning)," said Biti.
Biti wilfully highlighted that Mnangagwa has been violating Section 327 of the constitution, which stipulates that: "An agreement which is not an international treaty, but which (a) has been concluded or executed by the President or under the president's authority with one or more foreign organisations or entities; and (b) imposes fiscal obligations on Zimbabwe; does not bind Zimbabwe until it has been approved by the parliament."
Biti expressed disproval of the current accounting systems, saying there was no transparency in government financial departments.
The finance ministry had been using a cash-based accounting system which was condemned in 2017 by Auditor-General Mildred Chiri.
"Personally I am very excited by the migration from cash accounting, which I considered to be very dishonest to accrual accounting. The current situation, where if you talk to the Reserve Bank they don't know what the national debt is, if you talk to the Ministry of Finance they don't know what the debt is, that is unacceptable," Biti said.
"The 2019 budget had two blue books, up to now I don't know why there were two blue books, and then it had a budget statement. In the budget statement at page 33, the national debt was put at US$17 billion, but when we went to the fist blue book the national debt was put at US$9 billion, when we went to the second blue book the national debt was put at US$8 billion, you would really wonder what is going on."
According to national budget figures, the foreign debt stood at US$7,5 billion as at December 2017, while the domestic debt was US$6 billion but during deliberations at the Zimbabwe-South Africa Bi-National Commission, the government revealed the debt had risen to US$18 billion, split in half between domestic and international creditors.
Delivering a speech on behalf of Finance minister Mthuli Ncube, finance secretary George Guvamatanga said his ministry was failing to deliver the necessary paperwork to the Public Accounts Committee because the current accounting system was in a shambles.
"I used to run an institution which had a balance sheet of US$500 million. We had 17 chartered accountants in that institution. I come to government, and I am asked to run a US$10 billion balance sheet with one chartered accountant and that is when Honourable Biti calls me and says well you are not complying in this report. Honourable Biti, you should understand that it cannot be delivered with one chartered accountant," Guvamatanga said.
"We are also having ministries with $2 billion budgets, but no chartered accountants and you are actually expecting them to manage those huge funds. I could not tell you that Honourable Biti when you asked me in Parliament, but that is one on the major reasons.
"The biggest organisation in the land, the government of Zimbabwe has one chartered accountant."
The head of the United Kingdom's Department for International Development (DFID) in Zimbabwe and South Africa, Annabel Gerry, emphasised the need for transparency and accountability, saying corruption had taken a toll on countries like Zimbabwe.
"Countries such as Zimbabwe are losing precious public funds through corruption, which damages their government's ability to invest in desperately needed infrastructure, schools and hospitals," Annabel said.
"We know corruption is bad for people, bad for development, and bad for business. We know that corruption impairs economic growth, deters investment and erodes tax revenues. It holds developing countries back. The uncertainties of bribery stifle business development."
Gerry added: "It is fair to say that Zimbabwe has room for improvement on the Open Budget Index. The latest survey found that Zimbabwe provides the public with minimal budget information. It scored just 23 out of 100 in the 2017 survey.
"Access to fiscal information is right that all governments should extend to their citizens so they know how their taxes are spent and how their economy is run. Journalists and civil society organisations are a critical bridge in interpreting and translating budget data- sharing it with citizens and parliaments in ways that are meaningful. The scrutiny can galvanise those with decision-making power to act and reduce malpractice."
Speaking at the launch of International Public Service Accounting System strategy and plan in Harare on Wednesday, Biti, who is also the chairperson of parliament's Public Accounts Committee and a lawyer, said there was need for transparency given some of the deals had resulted in loans which had ballooned the national debt.
The country's total debt stood at US$17,6 billion as at December 31 2018, with the external debt at US$$8,16 billion, representing 33,2% of gross domestic product.
This means the debt has risen significantly since Mnangagwa took over power in November 2017 via a military coup which toppled his former boss, Robert Mugabe.
"Debt has been contracted in Zimbabwe, oblivious to the requirements of Section 327 of the constitution that requires parliamentary approval. If it is not approved by parliament, then it is null and void. Meaning that, the large part of all debt that has been accrued in recent times which has not been approved by parliament is not only voidable, but is actually void ab initio (from the beginning)," said Biti.
Biti wilfully highlighted that Mnangagwa has been violating Section 327 of the constitution, which stipulates that: "An agreement which is not an international treaty, but which (a) has been concluded or executed by the President or under the president's authority with one or more foreign organisations or entities; and (b) imposes fiscal obligations on Zimbabwe; does not bind Zimbabwe until it has been approved by the parliament."
Biti expressed disproval of the current accounting systems, saying there was no transparency in government financial departments.
The finance ministry had been using a cash-based accounting system which was condemned in 2017 by Auditor-General Mildred Chiri.
"Personally I am very excited by the migration from cash accounting, which I considered to be very dishonest to accrual accounting. The current situation, where if you talk to the Reserve Bank they don't know what the national debt is, if you talk to the Ministry of Finance they don't know what the debt is, that is unacceptable," Biti said.
"The 2019 budget had two blue books, up to now I don't know why there were two blue books, and then it had a budget statement. In the budget statement at page 33, the national debt was put at US$17 billion, but when we went to the fist blue book the national debt was put at US$9 billion, when we went to the second blue book the national debt was put at US$8 billion, you would really wonder what is going on."
According to national budget figures, the foreign debt stood at US$7,5 billion as at December 2017, while the domestic debt was US$6 billion but during deliberations at the Zimbabwe-South Africa Bi-National Commission, the government revealed the debt had risen to US$18 billion, split in half between domestic and international creditors.
Delivering a speech on behalf of Finance minister Mthuli Ncube, finance secretary George Guvamatanga said his ministry was failing to deliver the necessary paperwork to the Public Accounts Committee because the current accounting system was in a shambles.
"I used to run an institution which had a balance sheet of US$500 million. We had 17 chartered accountants in that institution. I come to government, and I am asked to run a US$10 billion balance sheet with one chartered accountant and that is when Honourable Biti calls me and says well you are not complying in this report. Honourable Biti, you should understand that it cannot be delivered with one chartered accountant," Guvamatanga said.
"We are also having ministries with $2 billion budgets, but no chartered accountants and you are actually expecting them to manage those huge funds. I could not tell you that Honourable Biti when you asked me in Parliament, but that is one on the major reasons.
"The biggest organisation in the land, the government of Zimbabwe has one chartered accountant."
The head of the United Kingdom's Department for International Development (DFID) in Zimbabwe and South Africa, Annabel Gerry, emphasised the need for transparency and accountability, saying corruption had taken a toll on countries like Zimbabwe.
"Countries such as Zimbabwe are losing precious public funds through corruption, which damages their government's ability to invest in desperately needed infrastructure, schools and hospitals," Annabel said.
"We know corruption is bad for people, bad for development, and bad for business. We know that corruption impairs economic growth, deters investment and erodes tax revenues. It holds developing countries back. The uncertainties of bribery stifle business development."
Gerry added: "It is fair to say that Zimbabwe has room for improvement on the Open Budget Index. The latest survey found that Zimbabwe provides the public with minimal budget information. It scored just 23 out of 100 in the 2017 survey.
"Access to fiscal information is right that all governments should extend to their citizens so they know how their taxes are spent and how their economy is run. Journalists and civil society organisations are a critical bridge in interpreting and translating budget data- sharing it with citizens and parliaments in ways that are meaningful. The scrutiny can galvanise those with decision-making power to act and reduce malpractice."
Source - the independnet
