eBusiness Weekly
Tawanda Musarurwa
The national budget authorizes Government to raise revenues, incur debts and effect expenditures in order to achieve certain goals.
And in the achievement of those goals, public entities – which are funded through the fiscus – should effectively account for the monies they are allocated to achieve certain targets.
Oversight of Government spending is therefore critical, but it also important that accountability starts at the micro-level.
One popular example is the example of the Zimbabwe National Roads Administration (ZINARA), a parastatal responsible for the management, maintenance and development of the country’s road network.
Earlier this year, outcomes of a probe into the arrangements between ZINARA the and a private firm, Univern Enterprises, by the Parliamentary Public Accounts Committee highlighted that the former breached the law by granting the latter deals without going to tender.
But that is only the tip of the ice-berg.
ZINARA and Univern Enterprises are (still) engaged in a number of deals, ranging from software provision, supply of graders, stationary, vehicle licencing, and radio and television licensing among others.
Univern management confirmed that all its deals had not gone to tender as they had “made an unsolicited approach to ZINARA.”
Notwithstanding the flouted tender processes, the PAC questioned the structuring of the numerous deals, which PAC chairman Tendai Biti says are “abnormal” and “grossly inflated”.
Under the contract for vehicle licensing, as a case in point, indications are that ZINARA paid Univern over US$33 million within a four-year period, as well as US$10 million under the tollgate contract between 2013 and 2015.
It also came out from the questioning that Univern Enterprises signed contracts running for as long as 10 years for provision of software for vehicle licensing, tollgates, supply of graders.
The company also gets a lion’s share from license fee collections, vehicle transit fees and fuel levy as well as road access fees.
And the benefits to Univern vary according to contract, with earnings ranging from 12 percent to as high as high as 22 percent of ZINARA’s gross earnings per category.
The alleged corruption at ZINARA were exposed in a forensic audit of the parastatal carried out by Grant Thornton.
Univern Enterprises is also alleged to have been paid US$3 million over a three-year period to supply the parastatal with stationery and also supplied graders that were said to be fit only for use in snow in one of the contracts they signed.
ZINARA has also been implicated in several other cases of alleged corruption.
An audit by Grant Thornton shows that cumulatively, ZINARA paid an unregistered company – Bermipools – US$589 748, 94 in two years.
Grant Thornton also established that Bermipools is one of the companies that were used by Twalumba Holdings to get a contract from ZINARA.
Twalumba Holdings was once investigated by the Zimbabwe Anti-Corruption Commission (ZACC) over a US$2 million road rehabilitation tender involving Notify Enterprises, one of its shelf companies.
In other cases, outlined by the audit, ZINARA paid out over half a million United States dollars to a non-existent company between 2012 and 2013 under its ‘special projects arrangement’.
The state of unaccountability highlighted in this Parliamentary probe into ZINARA shows the extent to which unethical financial practices can compromise the intended outcomes of a (national) budget plan.
At the broader level, the Ministry of Finance and Economic Development provides quarterly Treasury bulletins, capturing quarterly macro-economic and fiscal developments, in addition to the Consolidated Monthly Financial Statements published monthly in line with the Public Finance Management Act.
But these do not necessarily capture some, or perhaps most, of the financial shenanigans that take place within public entities.
“Budget accountability can only be achieved if the general public has full access to government budgetary information which is being disseminated sparingly in Zimbabwe,” says economist Tinashe Kaduwo.
Although Government has now moved to restructure ZINARA, that is, returning it to its legislated mandate of collecting road user fees for disbursement to local authorities after stopping the entity from direct involvement in implementing road building and repairs itself, the ‘lost’ public funds may be unrecoverable.
Questions sent to Finance and Economic Development Minister Mthuli Ncube on how Government can better enhance parastatals’ financial accountability were unanswered by the time of publication.
