Finance minister Patrick Chinamasa last week came out guns blazing as he tried to defend government’s controversial command agriculture programme after The Standard revealed that a scandal could be brewing over the financing model.
news in depth BY OBEY MANAYITI/EVERSON MUSHAVA
According to an advisory note by the Finance ministry’s public debt management office, government could be prejudiced of millions of dollars after Sakunda Holdings, the financier of the programme allegedly breached some provisions of its agreement with the state.
Initially, Chinamasa went ballistic accusing The Standard of sabotage and an unnamed Cabinet minister, believed to be Higher and Tertiary Education minister Jonathan Moyo of leaking the information.
After he was challenged to address the serious allegations raised in the advisory note, the minister issued a press statement claiming the issues had since been addressed.
Chinamasa also fielded questions in the National Assembly, but he was still evasive.
Army Commander General Constantino Chiwenga leapt to the Finance minister’s defence and issued a stark warning to Moyo, describing him as a threat to national security for criticising the programme championed by Vice-President Emmerson Mnangagwa.
Our reporters Everson Mushava (EM) and Obey Manayiti (OM) on Friday interviewed former Finance minister Tendai Biti (TB) and ex-Economic Planning minister Tapiwa Mashakada on what the revelations mean about Zimbabwe’s future.
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The two politicians did not mince their words, warning that Zanu PF would plunge Zimbabwe deeper into the economic quagmire if nothing is done to stop command agriculture.
OM: In light of the debate raised by the publication of the story by The Standard exposing serious flaws in the funding model for command agriculture, what is your assessment of the programme?
TB: Command agriculture is an illegal parallel activity of this government that is basically amounting to a political platform designed for 2018 elections and that is why soldiers are running it, yet constitutionally, they have nothing to do with normal civilian operations.
(Agriculture minister) Joseph Made and the ministry of Agriculture are innocent bystanders when it comes to command agriculture. That is why you have never heard the ministry of Agriculture commenting on it because it is not their project.
It is a commandist securocratic project and that is why its face is (Vice-President) Emmerson Mnangagwa, who is the face of the fascist element of the State. It is being funded again through a parallel process. Kuda Tagwirei and Sakunda representing Trafigura are the ones funding this thing.
South Africa has its own Guptas and here in Zimbabwe we have Trafigura and Kuda Tagwirei.
They have done state capture throughVice-President Mnangagwa. All decent people should fight command agriculture because it is derailing our democracy.
OM: Can you break it down to an ordinary reader, how the government has been prejudiced through the financing model used for the programme?
TB: The government runs a budget which is called a consolidated revenue fund.
All expenditures from the state and all income from the State must be accounted to the consolidated revenue fund.
That fund is controlled by the people of Zimbabwe through chosen members of Parliament, so it is Parliament that approves budgets, it is Parliament that approves every cent that goes out of the consolidated revenue fund and it is Parliament that approves and oversees every cent that comes in, which is why the public accounts committee and the budget committee are two of Parliament’s most important committees and also the Auditor-General because they follow where money is going.
Now government begins to run a parallel process and command agriculture is a parallel illegitimate process. We have a problem.
Money is being borrowed from Sakunda, but nobody knows about it.
Parliament is not approving, so we are accumulating domestic debt which will be paid by you and I, yet Parliament — the gatekeeper— is not being informed. So, it is not just the government and treasury that is being prejudiced, but it is the people of Zimbabwe who are going to pay this debt. What interests are Trafigura and Kuda Tagwirei charging? We don’t know. What are the repayment terms? We don’t know.
As right thinking Zimbabweans, we should be concerned about the stock of domestic debt, which is now $6 billion and that is over 60% of GDP.
Our budget deficit is 43% of expenditure, so it is ridiculous.
We thought they were running a parallel government when the government of national unity was there when they were stealing diamonds, but we never thought they would run a parallel government on their own, and this is a disaster.
OM: The government says it settled for Sakunda Holdings because there were no financiers that were prepared to give it money at reasonable rates. Do you believe this?
TB: Banks can finance things that are transparent. This is not transparent because Kuda Tagwirei and Sakunda are capturing the state.
This is state capture and this is why you find Mnangagwa there, the army there and Chinamasa there; they are the people talking loudly about this because it is state capture and the thing with state capture is that its basis is personal aggrandisement.
OM: Do you think Zimbabweans have been told the full story about command agriculture?
TB: Absolutely not
OM:… and what should be done to force Chinamasa to make a full disclosure?
TB: There must be a judiciary commission of inquiry. A retired judge must chair a judiciary commission of inquiry which must report to Parliament about the on-goings of Trafigura, Kuda Tagwirei, Sakunda and Mnangagwa.
OM: What implications do such programmes have on Zimbabwe’s public debt?
TB: Debt is a thief. It steals future investments because future governments, instead of building schools and roads for our children and grandchildren they will be paying what was eaten in the past.
That is why I used to say in the inclusive government that we eat what we kill because I didn’t want to create complications for future citizens.
What is unacceptable about the current government’s madness is that they borrow for recurrent expenditure, they borrow for consumption now and they borrow for the toilet.
If they were borrowing to build roads, schools, community dams, power in Hwange we could say they are borrowing for future generations because the future generations will use the railway but they are borrowing for today’s consumption which is why I graphically said they are borrowing for the toilet.
OM: How sustainable is government’s reliance on treasury bills to fund capital projects?
TB: It is not sustainable; you don’t run an economy by borrowing.
I said it before that this government suffers from a disease called fiscalitis, which is a belief that you can borrow, borrow, borrow, borrow.
The solution is for industry produce, lets resuscitate the companies that have collapsed in Kwekwe, Bulawayo, Mutare, Harare, NRZ, Zeco to name a few.
Instead of creating 2,2 million jobs as they boasted, they have destroyed two million jobs so we have a weevil, a parasite and that is the government itself, a government of bandits.
OM: As former Finance minister would you say it is normal practice for the army to be running the show in a programme that is supposed to be implemented by a line ministry?
TB: It is unconstitutional. Section 280 and section 210 of the Constitution of Zimbabwe are clear.
The role of the army is to defend and uphold the Constitution, defend and uphold the citizen and then to keep away from politics.
The Constitution actually says that the army shall not deploy its personnel to government civilian institutions. You and I know that the National Prosecuting Authority is 60% full of people from the army, the budget office at the ministry of Finance is now 80% full of people from the army.
They are everywhere, they are ubiquitous and that is unconstitutional. They have no business in command agriculture and Chiwenga has no business opening his big loud mouth to talk about command agriculture.
OM: What are your views on government’s movement towards a command economy?
TB: It is madness. It doesn’t work. It didn’t work in Eastern Europe and it will not work in Zimbabwe. Command economy is just a by phrase of command looting and that is what Zanu PG knows, command looting.
. . .why Mnangagwa’s programme is illegal
Everson Mushava: What is your assessment of the command agriculture programme in light of issues raised around its funding model?
Tapiwa Mashakada: Zimbabwe is an agro-based economy. There is no doubt that agricultural recovery will spur growth and enhance food security.
The chaotic land reform programme decimated agriculture and reduced land to dead capital. Zimbabwe lost its breadbasket status and since 2000, food imports have taken a huge chunk of the budget.
So in principle, there is nothing wrong with government’s attempts to ratchet up production. The bone of contention has always been the manner in which Zanu PF implements its policies and programmes.
In relation to command agriculture, there is a serious concern about the corruption and abuse of public resources and the lack of transparency surrounding the whole programme.
To this extent, command agriculture is now degenerating into a “commandgate”.
EM: How has the government been prejudiced in the financing model for the programme?
TM: The financing of the command agriculture is shrouded in secrecy because it violates the provisions of both the Constitution and the Public Financial Management Act.
The programme is now being run as a private venture involving financial arrangements with private companies.
This approach is virtually subverting parliamentary oversight. Government cannot borrow $500 million without Parliamentary approval.
Government cannot spend $500 million without Parliamentary approval.
The Constitution is very clear that all revenues received by the state should go into the Consolidated Revenue Fund.
The Constitution also provides that no public expenditure can be incurred without the express approval of Parliament.
In this regard, by allowing Sakunda, the Trafigura subsidiary to finance the programme without involving Parliament, the deal becomes a subterranean deal which is likely to prejudice Zimbabwe because citizens do not know the term-sheet.
And given that Trafigura is a multi-national commodity firm interested in oil and gas, nobody knows the value of coal bed methane gas concessions that government has ceded. The coal bed methane deposits could be worth many billions of United States dollars.
EM: Did the government have any choice in picking a financier given claims that banks were not forthcoming?
TM: The government-Sakunda deal is a public investment deal which has precluded the financial market.
It is not true that there were no financiers. Every agricultural season in Zimbabwe has been funded either through agro-bonds or treasury bills.
Yes, the funding might not have been adequate because of security of tenure issues but the financial sector has been buying government paper. By unilaterally choosing one player, government has flouted public tender procedures.
EM: Do you think Zimbabweans are being told the whole story about how command agriculture is being funded?
TM: When asked in Parliament to present a ministerial statement on command agriculture, Chinamasa panicked and became jittery.
He categorically refused to do so and this is on the Hansard record.
The question is why would Chinamasa be afraid to issue a ministerial statement on a subject of public interest?
The answer is very clear — he knows that the programme will not pass the transparency test. As a result, the public only have very scant information on command agriculture. Even Parliament has been kept in the dark.
EM: What impact will this have on Zimbabwe’s already unsustainable public debt?
TM: The Constitution provides for Parliamentary approval of all public and public guaranteed debt.
In this case, Chinamasa has not brought to Parliament the borrowing proposals.
This makes the financing of command agriculture illegal and subject to litigation.
Parliament must be seized with the term sheet. But you can see that as we inch closer to elections government will incur so many expenditures that are nugatory and in violation of the Constitution and the Public Finance Management Act.
This kind of impunity is only possible in Zimbabwe.
EM: How sustainable is government’s reliance on treasury bills to finance such programmes?
TM: Treasury Bills have never been intended to fund the public sector investment programme (PSIP).
TBs are short-term financial instruments to provide working capital to bridge the budgetary gap (to fund the budget deficit). Capital raising is done through the issuance of bonds and syndicated loans.
EM: What are your views on the army’s involvement in the programme?
TM: Since the programme is a command one, it is fit for purpose to rope in the army at least from the point of view of Zanu PF.
But from an agrarian point of view, the ministry of Agriculture should preside over the programme. But you see the army is sometimes abused in order to cover irregular financial tracks.
By saying that command agriculture was under Joseph Made, (President Robert) Mugabe was trying to camouflage the illegalities of the financial arrangements.
At the back of his mind, he knows that things should have been done differently so it’s like he betrayed his guilt conscience and bared out his soul.
This, however, is a case of too little too late. Mugabe is closing the gates when the horses have already bolted out.
Command Agriculture is a typical case of bungling by the government. Minister Made has been reduced to a bystander and over his watch the paternity of command agriculture has shifted to the military.
EM: What are your views on the Zanu PF government’s leaning towards command economics?
TM: You have to understand the motivation of Zanu PF is double edged. They are good at christening projects to give them a populist aura.
Command agriculture has now been turned into a political capital and obviously it is now a Zanu PF manifesto. Command agriculture is used for rent-seeking and clientilism.
The Zanu PF aristocracy and landed elite is benefitting from public resources. That is how Zanu PF has survived. It has created another social that is feeding from the troughs of the Treasury without any iota of accountability.
TM: Do you share Jonathan Moyo’s views on command agriculture?
Command Agriculture is Zanu PF programme endorsed by Cabinet which by its tenets, operates on the basis of collective responsibility.
Moyo and Mnangagwa are jointly and severally culpable for the Command Agriculture debacle
EM: Mugabe has just defended Mnangagwa on command agriculture. What does this tell us about the programme?
President Mugabe’s pronouncements at the Masvingo Youth Rally were in my view meant to balance factions.
Mugabe is like Bismarck in that he always draws out his political cards carefully.
Why would a junior minister have the audacity to challenge a whole Vice President if it’s not that the President is giving him the tacit approval? Rebuking Jonathan Moyo at a public rally is not being sincere.
Mugabe is just playing each faction against the other. He makes sure no faction emerges smarter than the other.
He is playing a shrewd balancing act. As David Thomson wrote about the rivalry between the Triple Alliance and the Tripple Entente, “as one combination developed or strengthened, its growth alarmed other members outside its orbit and thereby setting another counter-combination”
This is exactly what is happening with Zanu PF factions which Mugabe so loves to exist.
ED: Do you think Moyo’s criticism of the programme warranted the strong response by Chiwenga?
The factional war in Zanu PF has reached alarming proportions. In this process we are now beginning to witness proxy factional sparring.
Such thing happens when a party is on the verge of an implosion. So you must see the Chiwenga-Moyo fights in this context. The centre can no longer hold.
EM: Any other thoughts on command agriculture?
I have explained earlier on the provisions of the constitution on state borrowing and use of public resources.
Command Agriculture is ultra-vires the Constitution. It is a shady deal that is was conceived and executed below the radar.
