8 February 2017

Zimbabwe: Govt Explains $11m China Debt

Government has instituted recovery measures for $11 million that it paid on behalf of Farmers' World to a Chinese financial institution after the private firm failed to settle the debt that it acquired for the distribution of agricultural equipment to various farmers, legislators heard yesterday. Finance and Economic Development Minister Patrick Chinamasa said the money was paid to creditor, China Eximbank in order to avoid compromising continued access of lines of credit with the Asian country.

Minister Chinamasa said this in the National Assembly while responding to a report by the Public Accounts committee chaired by Mufakose MP Ms Pauline Mpariwa-Gwanyanya (MDC-T).

The committee had asked Treasury to explain why Government was using public resources to meet obligations of a private nature. Legislators from the committee had also asked the prudence of advancing Farmers' World another loan when it had failed to repay an initial loan of $11,5 million which brought its indebtedness to $23 million.

"I agree with the committee's recommendation that public resources cannot be used to meet obligations of a private nature," said Minister Chinamasa.

"Considerable effort has gone into tracing the debtor, Farmers' World and I am advised that the debtor has not only been located, but that it has been established that Farmers' World is recovering money from those to whom they provided equipment.

"Treasury has written to the Ministry of Agriculture, Mechanisation and Irrigation Development in order to institute debt recovery arrangements. "This remains work in progress, but is something that I keep in view.

"When it became clear that we would not be able to access additional Chinese funding, we paid off this loan and thus Farmers' World became our debtor." The committee had also expressed concern on why Government was maintaining the Infrastructur + e Development Bank of Zimbabwe, given its financial woes. "Government has no intention of dissolving IDBZ and has in fact recapitalised the bank," said Minister Chinamasa.

"The bank's financial performance is expected to improve significantly in 2017 and should be in a position to report a profit in 2017." Meanwhile, the Public Procurement and Disposal of Public Assets Bill, which seeks to limit the powers and duties of the State Procurement Board, was read for the second time yesterday.

Presenting a portfolio committee report on Budget and Finance, Mutoko South MP, Cde David Chapfika said the Bill, if implemented to the letter and spirit of its objectives, it will achieve fairness, transparency and honesty.

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