Last week news broke that the Zimbabwean Treasury had cancelled a tender involving a company that wanted US$9 000 per laptop they intended to supply to the government. Since then a series of spectacular revelations have been made including one where it is claimed ZINARA (the government department in charge of our roads) reportedly paid US$70 million to some third party just so they could be told where a planned road could go. The sad part is these are all tips of the iceberg. Zimbabwe’s public sector is quite rotten.
We have seen supply contracts clearly determined by forward parallel exchange rates, some as high as 2000 to the Zimdollar.
A 2kg pack of chicken was claimed to be worth US$30 when market prices is a maximum US$6 for the same. We have seen a bag of cement being priced at an equivalent of USD18 per bag on some construction projects.
As expected there’s been resistance from various quarters, including accounting officers and suppliers
Finance Minister Mthuli Ncube
Scapegoating the black market
While the government seems determined to blame it all on the black market by suggesting that contractors were using black market rates to obtain ZWL prices and then converting those prices back to USD using the official rate, it doesn’t explain the prices we are seeing in these revelations. What the Finance Minister is describing is also common in the private sector and it does not even explain prices of US$9 000 per laptop.
Here is an example. The laptops in question have a market value of US$1 200 using even a crazy black market rate of $1 000 ZWL as to 1 USD you get $1 200 000 ZWL. If you then go on to divide the price by a modest rate of $500 ZWL you would get US$2 400 per laptop. Generally, before the recent tweaks by the government, the official rate was about half the craziest parallel market rate so the above logic would hold no matter what the specific rates were at most the contractors would have been only justified to charge double.
This is not about black market rates. This is about a rotten public sector that is getting away with every form of corruption imaginable. There is no calculation that would justify a company charging the government US$9 000 per laptop ever. The only reason why this is happening is that bigwigs and higher-ups are benefiting from this corruption.
Auditor-General’s words fell on deaf ears
Practically all parastatals are operating in gross violation of one law or another. Most do not bother to financial reports in a timely fashion and whenever they do the Auditor-General has always highlighted gross irregularities. These have been conveniently ignored in the past by the government that has not punished anyone among those caught with hands in the cookie jar. The corruption we are seeing is the price of catch and release and an anaemic stand against corruption.
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