Vusumuzi Dube
Judith Phiri , Business Reporter
THE Government has registered significant savings in expenditure amounting close to ZW$500 billion following the launch of the Value for Money (VFM) exercise that plugged loopholes in the procurement system.
VFM came about as the Government moved to restore market discipline and price stability, while also ensuring value for money for all transactions in the public procurement space. The exercise was also introduced to deal with unethical behaviour exhibited by various suppliers and contractors who have been manipulating the foreign exchange market.
In a statement on Friday, Finance and Economic Development Minister Professor Mthuli Ncube said to date the VFM exercise has provided the Government power to channel more resources towards capital expenditure.
“Observations from the reviews conducted by Treasury revealed that overpricing and forward pricing have been a rampant practice across public sector contracts. In this regard, under the VFM exercise, Ministries, Departments and Agencies (MDAs) have been tasked to mainstream due diligence processes aimed at plugging loopholes in the existing procurement systems.
To this effect, Government has registered significant savings in expenditure amounting close to half a trillion Zimbabwean dollars, thus providing the leverage to channel more resources towards capital expenditure.”
He said Treasury and Procurement Regulatory Authority of Zimbabwe (PRAZ) have developed a National Price Index to guide all public sector institutions on the price ceilings in the various procurement categories.
Prof Ncube said to date three categories have been issued relating to Hotels and Conferencing Facilities, Groceries and Office Provisions and Stationery Products and Paper Raw Materials.
“Following the Ministry’s public communication on the blacklisting of companies involved in illegal activities in the black market, Zimbabwe Revenue Authority (Zimra) is now conducting tax audits and assessments, checking for the full tax compliance of all large transactions.
At the same time, continuous strict monitoring by the Financial Intelligence Unit (FIU) on all transactions these companies undertake has also been instituted.”
The Minister said so far three companies have been removed from the blacklist having satisfied Zimra and settling their tax penalties as well as satisfying the Financial Intelligence Unit of the integrity of the financial transactions.
He said it has been observed that MDAs have been effecting advance payments for the procurement of goods and services without following the statutory provisions for advance payments and in other instances, some of the suppliers ended up not delivering the procured goods and services.
He said officials found to be complicit will be charged with financial misconduct and will have to restitute Government where losses are incurred.
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