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Parly clarifies Command Agriculture figures

by Staff reporter
10 Mar 2022 at 05:52hrs | Views
Parliament's Public Accounts Committee (PAC) has said the Government extended about $1,1 billion to private sector participants in the Command Agriculture Programme instead of the falsely touted US$3,6 billion being bandied around by opposition figures.

Another US$2,5 billion was extended to the Grain Marketing Board during the same period. The actual figure of US$1,1 billion extended to the private sector allocation is far short of the US$3,6 billion opposition politicians and some private media claimed was paid to Sakunda Holdings alone for the programme.

The Public Accounts Committee, one of the most powerful Parliamentary committees draws its membership from both Government and opposition benches and has extensive rights to investigate and demand information on Government spending.

The unfounded figure of US$3,6 billion was used by the opposition to create the impression that there was looting. In particular, ex-legislator Mr Tendai Biti, cited the false figure to lobby the United Kingdom and the United States to impose sanctions on Sakunda Holdings and its chief executive Mr Kudakwashe Tagwirei.

Now, the Third Report of the Public Accounts Committee on the Special Maize Programme, better known as Command Agriculture, as presented to legislators on Thursday last week, has brought clarity to the matter.

The PAC showed that Mr Biti's claims were false, saying: "Total payments to Sakunda for 2017 were US$378 739 319,75 and for 2018 they were US$235 954 143,85."

Several other companies had also benefited from special Cabinet authority to participate in the Command Agriculture programme.

"Total payments in 2017 and 2018 for Presidential Scheme is US$573 392 887,33, paid to FSG - US$392 853 180,22, Quton - US$19 753 638, Pedstock - US$7 538 441,69, Cottco - US$30 898 812,65, Sakunda US$51 205 481,25, Sable Chemicals - US$4 900 000, Seedco - US$40 150 000, Valley Seeds - US$8 700 000, Windmill - US$17 800 000 and ZFC - US$17 750 000," noted the committee.

The contracts were facilitated by special Cabinet authority and thus were not subjected to public tendering processes.

The Government uses this authority in exigent circumstances, as was the case when the State had to move quickly to guarantee national food security between 2016 and 2019. The Government also issued Treasury Bills to at least 10 companies contracted for Command Agriculture and the Presidential Inputs support scheme, the committee found.

Notably, the PAC said Treasury Bills issued to Sakunda were above board, though there were question marks about issues to several other private companies.

A Treasury Bill is a negotiable debt instrument issued by the Government through the Minister of Finance and Economic Development.

"According to the RBZ, Sakunda was paid US$429 944 801 in 2017 and US$233 937 461 in 2018 which comes to a total of US$663 882 262 (in Treasury Bills)," the report notes.

For companies like FSG, Valley Seeds and ZFC, among others, participating in the Presidential Inputs Support Scheme targeting smallholders, treasury Bills totalling "US$258 362 845 (were) paid to suppliers in 2017 and US$263 824 560,69 was paid in 2018".

The Public Accounts Committee says clearly: "Treasury Bills were properly issued to Sakunda Holdings."

However, the committee raised concerns about how Treasury Bills were issued to other companies, as available documentation indicated the instruments were raised at the instance of the Reserve Bank rather than the Finance Minister.

The committee also took exception to apparent poor communication between the Agriculture and Finance ministries, but did not accuse private contractors involved in Command Agriculture of either causing or perpetuating this. Contributing to debate on the report, opposition MDC-A legislator Mr Edwin Mushoriwa said under the circumstances, it would be wrong to "fault the contractors" of Command Agriculture.

Independent MP Mr Temba Mliswa weighed in saying: "The word in town was US$3 billion has been looted. May credit be given to the Public Accounts Committee for doing due diligence to break down the US$3 billion. I remember seeing a headline saying US$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. The programme was noble and it remains noble because farmers need to be empowered. At no point did Sakunda get US$3,6 billion."

Mr Mliswa said "companies like FSG were given over US$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?

"That is why we say at the end of the day, and like the President rightly says, ‘Nyika inovakwa nevene vayo.'"

Zanu-PF legislator Mr Ability Gandawa contributed to the debate saying: "While 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."

The Public Accounts Committee – which across the world is traditionally chaired by legislators from the opposition – said the more than 10 private sector participants had cogently explained how they had used their allocations and delivered on their contractual obligations for both the Command Agriculture and Presidential Inputs Supply initiatives.

Further, the PAC noted that Sakunda's 4,5 percent interest rate was by far the most competitive of private sector participants, many of whom charged 12 percent or more.

Government rolled out Command Agriculture as a maize import substitution scheme to shore up food security, subsequently expanding it to encompass other aspects of agriculture. The successful programme drew the ire of opposition elements like Mr Biti, who claimed it was an opaque initiative designed to loot taxpayers' funds.

Ironically, Mr Biti – as Finance Minister in the inclusive Government (2009-2013) – himself leveraged on Special Cabinet Authority to approve a roads rehabilitation deal with South African construction firm Group Five.

Acting on allegations of malfeasance, the Public Accounts Committee, which Mr Biti chaired after his Cabinet stint, probed the Ministry of Lands, Agriculture, Water and Rural Resettlement's audited accounts for 2017 and 2018 as regards Command Agriculture and the Presidential Inputs Support Scheme.

From May 2019 to March 2020, the Public Accounts Committee received oral and documentary evidence from the Agriculture Ministry, the Ministry of Finance and Economic Development, the Reserve Bank of Zimbabwe, and the Grain Marketing Board.

From the private sector, the committee summoned Sakunda Holdings, Croco Motors, Solution Motors, Valley Seeds, Pedstock, and FSG. In his submissions to the committee, Sakunda Holdings chief operating officer Mr Charles Chitambo said the company – along with about 40 other private sector players – was invited by President Mnangagwa (who at the time was Vice-President) to support Government efforts to improve national food security and the agricultural value chain.

Public Accounts Committee says in its report: "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.

"Mr Chitambo highlighted that the money would cost 4,5 percent (interest) but other companies had proposed 12 percent. Mr Chitambo revealed that inputs were delivered to Grain Marketing Board depots as directed by the (Agriculture Ministry)."

Mr Chitambo said since most farmers did not have security, the Finance Ministry offered Sakunda security in the form of a ring-fenced account of the NOIC Debt Redemption Fund and Treasury Bills. On that basis, in 2016-2017, Sakunda Holdings provided US$85 million for irrigated crops, US$75 million for the non-irrigated facility and US$30 million for the Presidential Inputs Support Scheme.

"The chief operating officer indicated that from October 2016 to February 2017, Sakunda Holdings had used its balance sheet to finance the programme," the PAC report said.

After the first season, Sakunda Holdings also advised the Government on how to make the programme more efficient to ensure inputs reached farmers and that beneficiaries could pay back, in the process contributing greatly to Zimbabwe presently being maize self-sufficient.

Source - The Herald