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Source: Govt should keep debt level in check – The Zimbabwe Independent March 8, 2019

IT was quite a dramatic coincidence this week that, just as Finance minister Mthuli Ncube was arriving in the United States, President Donald Trump was extending sanctions on Zimbabwe.

To understand what was happening, you had to pay close attention to both these developments, unrelated as they may have initially appeared.

Politicians and their advisers are free to say what they want, but the inescapable truth is that Zimbabwe needs the support of the international community. In that connection, the US plays a key role — in view of the significant voice it enjoys in international financial institutions (IFIs) and the global markets in general. It’s the biggest economy in the world and only super power after all.

As we report elsewhere in this issue, Ncube is struggling to accelerate the debt clearance roadmap which has been on the table since 2015. He hit a brick wall in Washington DC. Clearing arrears is important for the country to restore international funding, access fresh lines of credit, rebuild confidence in the market, as well as stabilise the financial services sector, particularly in view of currency volatility.

In Washington DC this week, Ncube has held discussions with the World Bank and the International Monetary Fund (IMF). The country cannot avoid engaging with the Bretton Woods institutions. Zimbabwe’s debt to the World Bank stands at US$1,3 billion — and if these obligations are not settled, it will remain virtually impossible to unlock fresh funding from IFIs. With the IMF, Ncube has discussed the staff-monitored programme. Although Zimbabwe cleared its US$107,9 million debt to the IMF in 2016, the IFI remains a crucial component of the debt clearance matrix. The European Investment Bank is owed US$308 million.

In recent weeks, the government’s international re-engagement drive has suffered significant setbacks. Senior officials have appeared to regress to default mode: contemptuously dismissing the misgivings of foreign governments over repression and what is a rapidly deteriorating human rights record.

Western governments are not making outlandish and unreasonable demands on Zimbabwe. They are simply saying the country should implement its own home-grown agenda of economic and political reform — and in line with constitutional stipulations. Why would anyone oppose this?
The World Bank and the IMF are not the only creditors the minister must negotiate with. The African Development Bank (AfDB), which is owed US$680 million by Zimbabwe, says it is waiting for the government to table a payment plan, after Harare missed its own pledge to avail a clearance schedule by November 2018.

It seems the government has taken longer than anticipated in drafting a comprehensive debt clearance plan because, among other factors, the authorities are determined to come up with an inclusive schedule that takes into account all the major creditors. If that is the case, we hope to see that plan sooner than later.

While all this is happening, it is vital for the government to ensure that debt levels are kept at a sustainable level in the long-term. It is unsustainable for a country to seek solutions to a debt crisis, while recklessly plunging into deeper debt at the same time.

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Source: Dismantle self-imposed internal sanctions first – The Zimbabwe Independent March 8, 2019

ONE of the enduring lessons I learnt while covering the international diamond trade is that there is no shortage of lobbyists and public relations strategists under the sun.

Candid Comment,Brezh Malaba
bmalaba@zimind.co.zw

Be it in Washington DC, Dubai or London, these self-styled “strategic communications experts” come in all shapes and sizes. The phenomenon is particularly insidious in the US seat of power, where dangerously ambitious men in dapper suits are often seen criss-crossing the corridors of major hotels and conference halls, briefing clients and hunting for new business.

Lobbyists are in the business of making money — first and foremost — despite their sweet talk designed to trick you into believing that they are motivated solely by the glorious idea of serving your best interests.

On February 13, the Zimbabwean government signed a controversial contract with an American consulting firm, Ballard Partners Inc.
There were two signatories to the agreement. The government was represented by the Minister of Foreign Affairs and International Trade, Sibusiso Moyo. Brian Ballard — a prominent lobbyist in Washington DC and president of Ballard Partners Inc — signed for the consultancy.

According to the terms of the contract, the US company will lobby on behalf of the Zimbabwean government and provide advice on communications strategy. Harare will pay an annual fee of US$500 000 for two years. Where is the controversy? Well, for starters, why is a broke government blowing so much money on what is, quite frankly, a totally unnecessary expense?

Just last week, the head of United Nations humanitarian affairs, Mark Lowcock, was in Harare to launch a campaign to raise US$234 million to buy food for 5,3 million hungry Zimbabweans who face starvation in the next few months if they are not assisted with emergency aid.
There has been lots of bombastic anti-imperialist bluster this week following the extension of US sanctions by President Donald Trump.
The sanctions issue is routinely used as a convenient excuse by Zimbabwean leaders for their breath-taking incompetence and gross mismanagement of the economy.

Sanctions have affected this country, there is no doubt about it. But to disingenuously attribute everything that goes wrong to the “Western sanctions” is the height of deception. Cuba has been under US sanctions since 1960, but the country produces world-class medical doctors and athletes. You will not see the UN providing emergency food aid to 5,3 million Cubans.

The inconvenient truth, though, is that the most devastating sanctions are self-imposed internal sanctions. These sanctions can be scrapped overnight and the government does not have to spend a cent in doing so.

What internal sanctions am I referring to?

There is no shortage of those: corruption-induced poverty; criminalisation of dissent; extra-judicial killings; cronyism; economic incompetence; patronage; tribal hegemony, nepotism.

Mnangagwa’s government can easily scrap all these self-imposed sanctions overnight—instead of wasting millions of dollars on offshore spin doctors.

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Source: Police bosses in US$4m housing scandal | Theindependent (Zimbabwe)

The post Police bosses in US$4m housing scandal appeared first on The Zimbabwe Independent.

The post Police bosses in US$4m housing scandal appeared first on Zimbabwe Situation.

Harare ‑ Zimbabwe needs an effective overall monetary policy framework if its currency reforms move is to succeed, the International Monetary Fund (IMF) has said. Addressing the media Thursday in Washington DC, the United States, [...]

Source: Massive fraud hits City of Harare – The Zimbabwe Independent March 8, 2019

AN audit has unearthed massive fraud at City of Harare where unregistered point of sale (POS) machines are being used to carry out billing transactions outside the municipality’s official financial systems, raising fears of substantial revenue leakage.

BY LISA TAZVIINGA

The internal audit conducted by City of Harare audit manager Archibald Nyamurova has revealed that some officials supplied council’s district offices with POS machines without going through the finance department.

There are fears that council did not benefit from transactions which were processed using the 19 machines, according to the findings of council’s audit committee.

Minutes of the meeting seen by the Zimbabwe Independent indicate that the audit, which covered all of Harare’s 43 district offices, also established that some of the machines had dual identification codes, making them vulnerable to abuse and manipulation.

The meeting, held at Town House on February 14 this year, was chaired by Ward 18 councillor Ian Makone, his deputy, Ward 43 councillor Panganai Charumbira, town clerk Hosiah Chisango and other senior municipal officials.

The unregistered POS machines have been operated for more than two years, the audit found out.

“The audit manager reported that some of the bank officials went straight to the district offices to deliver point of sale machines without going through the finance department, hence audit could not get a record of register of such machines, except for Glen View and Budiriro. A 100% stock count of 43 district offices and other council revenue-collecting centres revealed a total of 188 point of sale machines, there were 19 POS Machines that were located on district offices but could not be found on the bank list,” minutes of the meeting read.

After checking individual banks against their BIQ cashbooks, council officials established that the transactions could not be traced as the POS machines were not linked to their respected cash books. BIQ is a German-developed electronic accounting system which the City of Harare adopted in 2010 to manage its financials, but has never been fully operationalised.

The system captures all of the city’s transactions, from water bills and rates payments to all procurements and any other payments that the city could make.

The audit discovered that transactions made using the unregistered POS machines did not reflect in the BIQ system.

“Audit checked on all the six banks (FBC, Steward Bank, Ecobank, BancABC, CABS and CBZ) using client’s duplicate receipts and merchant copies to trace sampled transactions for POS machines ID to debtor’s account, bank account and cash book. However, the procedure did not yield the intended results as the POS machines were not linked to their respective cashbooks. It was noted that some of the banks did not have corresponding BIQ cashbook, hence audit could not extract the BIQ cashbook for such banks,” the audit found.

The audit manager also advised that efforts to trace the FBC July 2017 transactions to the respective bank were made impossible by the book-keeping policy that allowed all transactions to be recorded in the same cashbook without highlighting which bank the money was being transferred to, hence the reconciliation for FBC Bank for that period was not checked.

“Cashiers were allowed to use one cashbook per day despite having a number of POS machines from different banks. For instance, a cashier who opened the day to use CABS BIQ Cash Book will have all transactions for the day hitting CABS BIQ cash book despite also having used FBC or Steward POS Machines. This made it impossible to reconcile the accounts.

“Some of the banks with which the city holds or is using their point of sale machines do not have corresponding BIQ cash book. Audit could not extract the BIQ cashbook for FBC, Ecobank and Steward banks. This means the transactions from such bank accounts are being posted into the cashbook which will be in use on the day.”

City of Harare corporate communications manager Michael Chideme said the actual prejudice has not yet been established.

“I cannot give you an estimate figure as it can be way above or below the mark. You can only get the figures during the next committee meeting,” he said.

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