Harare City Council's Business Committee chair Councillor Lovemore Makuwerere has sensationally claimed that a loan of more than US$4,5 million advanced to the local authority in 2017 for the recapitalisation of one of its business units, Harare Quarry, has been embezzled.
The Commission of Inquiry into the governance of Harare City Council yesterday heard that seven years after the loan was secured from a local bank, the funds remained unaccounted for to this day and no one had been arrested.
Chaired by retired High Court judge, Justice Maphios Cheda, the five-member commission was appointed by President Mnangagwa in May this year to look into the operations of the council from 2017.
Appearing before the commission, Clr Makuwerere claimed that Harare Quarry, a company specialising in blasting, excavation and processing of granite to produce quarry stones, had been operating in secrecy and failing to declare its revenue, profits or dividends to council since 2018.
In his submissions, Clr Makuwerere said a forensic audit conducted in 2022 uncovered evidence of misuse of the money.
"In 2022, concerns were raised by the then committee regarding Harare Quarry's failure to produce output despite receiving a US$4,5 million loan.
"This led to a recommendation for a forensic audit, which subsequently uncovered evidence of misuse of funds," Clr Makuwerere said.
He said council's business committee passed a resolution that the matter be referred to the Zimbabwe Anti-Corruption Commission (ZACC) for further management, but to date, nothing had been reported.
"Following the forensic audit's findings, the committee adopted a resolution instructing the board chairperson (Harare Quarry Mr Oswell Binha) to report the matter to ZACC and the chairperson did not comply.
"When we reviewed the February report, we questioned the lack of progress in apprehending those involved. Consequently, we resolved that if the board chairperson failed to file the report, the town clerk would assume responsibility for submitting it," said Clr Makuwerere.
The resolution to handover the matter to the town clerk to file a report to ZACC was made in August this year.
Clr Makuwerere claimed that when Mr Binha was asked why he had not reported the matter to ZACC, he said he was not part of the board when the US$4,5m loan was advanced, essentially passing the buck.
At one point, Clr Makuwerere said the business committee requested the Ministry of Local Government and Public Works to sanction a merger with another council business unit, City Parking, but the response was pending.
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He said the committee was eager to remove everyone running Harare Quarry as they had failed to account for the substantial amount of money.
In 2017, The Herald reported that Harare City Council had secured a US$4,5 million loan from a local bank to finance the recapitalisation of Harare Quarry and had appointed its former director of works, Engineer Phillip Pfukwa, to head the city's strategic business unit for six months from the date of release of the funds.
Despite mounting concerns over lack of financial transparency, Harare Quarry had been actively advertising and selling its products.
Notably in 2021, the company announced its transition to digital operations, unveiling an e-commerce platform to enable customers to place orders, buy products online and engage in virtual conversations with staff.
Despite being absent from Harare City Council's financial records, the commission heard, the company continued to operate actively, failing to remit any funds to the council.
According to the forensic audit report, at least US$56 000 was paid to suspected ghost workers at Harare Quarry.
Millions of dollars remained unaccounted for because of lack of payment vouchers and supporting documentation.
