adminFarirai Machivenyika Harare Bureau
LEGISLATORS should interrogate all loan deals entered into between government and lending institutions to ensure the country gets value for money, Deputy Foreign Affairs Minister Ambassador Christopher Mutsvangwa has said. Ambassador Mutsvangwa said this in Harare yesterday at a ZimAsset awareness seminar for Parliamentarians.
This followed questions by MPs on why some government projects with foreign lenders were taking long to be completed.
“Parliament needs to be critical of conditions attached to that money. I was in China as ambassador and I was the first one to generate these loans. For example Farmers’ World got $70 million and have nothing to show for it and it (the loan) has gone back to (Finance and Economic Development Minister Patrick) Chinamasa and he has to pay back.
“It is these things that you as parliamentarians should interrogate because it now burdens the budget,” he said.
Farmers’ World, which is 55 percent owned by Zimbabwe Farmers Development Company and 45 percent by Government, got the loan in 2006 to buy farming equipment for resale in the country.
It, however, defaulted on repayments resulting in government – as the guarantor – taking over the debt.
Government paid $27,1 million to clear the debt in 2013.
Last month, commencement of the expansion of Kariba South Hydro Power Station was thrown into doubt after it emerged Government had not met its contractual obligation to provide part of the funding.
The project is expected to cost $355,5 million with China Export and Import Bank providing $320 million, and government, through the Zimbabwe Power Company, supplementing the balance.
The $206 million meant for the rehabilitation of the Plumtree-Bulawayo-Mutare Highway was also suspended early in 2014 after Zimbabwe defaulted on loan repayments to the Development Bank of South Africa, which is funding the project.
The matter has been resolved and rehabilitation work is expected to start after the rainy season.
Dualisation of the Joshua Nkomo Highway is also in limbo because of disagreements between the Harare City Council and its implementing partner, Augur Investments.
The project valued at $80 million, was supposed to be completed in 2010 after council agreed to pay Augur with land.
The project has now been handed over to Zinara for completion.
Online Reporter