ED pulled the plug on shady Covid-19 deals: Charamba. . . Chamisa told to stop being big-headed

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©️  WITH the advent of the global pandemic, coronavirus (Covid-19), many civil society organisations have called for transparency in the use of various donations that the government has been receiving.

Of late, allegations of corruption have been swirling around the First Family and senior government officials, suggesting that they were using Covid-19 resources and exploiting the situation for self-enrichment.

The Daily News on Sunday Senior Reporter Sindiso Mhlophe on Wednesday sat down with presidential spokesperson George Charamba at his Munhumutapa office in Harare to discuss these and other issues in greater detail. Below are the excerpts of the interview.

Q: The first family is allegedly embroiled in a corruption scandal with regards to procurement of Covid-19 items, what is their position with regards to this?
A: To begin with, you don’t establish culpability on the basis of a picture let alone an invite which is available to the generality of Zimbabweans. There are so many people we invite and we don’t invite them on the basis of moral rectitude. You can be a guest of the president today and become a criminal tomorrow.

What are the facts? Drax International alongside many other companies was tendered to supply personal protective equipment (PPEs) to Zimbabwe. As it emerges, they won the tender and this is a matter that was between them and the ministry of Health.

But you see, unfortunately, when it comes to procurement rules you can then revisit your pricing. The tendering price is not necessarily the supply price. You can argue that there were new developments like the fact that in this case every nation was rushing for PPEs, so, there was a major difference between the quoted and the procurement price.

Then the difference caught the attention of the government. This was well before this issue had been publicised.
At this point in time something else was happening. There was absolute fear because these were the early days of the coronavirus and we were terribly unprepared in terms of PPEs. That was also the time when doctors were up in arms, threatening industrial action and we knew they were ill-equipped to deal with Covid-19.

Meanwhile, Drax International’s equipment had already arrived at the airport and had been there for months. The reason why the equipment was held at the airport was that we were haggling over the price. Then out of desperation, we said whilst we negotiate for a downward movement in the pricing, let’s accept the consignment and close the gap which is there.

That is how the equipment was admitted into our own system minus the payment, because the payment was still being negotiated. We were putting pressure on them and we were saying if you don’t reduce your prices, we will not pay you; we are a government.

So, what has now happened is that the payment of the money that is being talked about has been divorced from the quantities. If you read the amounts paid out against the quantities received you will realise that the unit price does not get anywhere close to the US$28 that is being quoted for propaganda purposes.

Something else also happened and this is the unsaid story.
Godwin Matanga, the police commissioner-general, then brought a security report from Interpol which said this company (Drax International) had been blacklisted by Interpol. No one knows that. People are busy focusing on the pricing issue. Cabinet then took a decision that over and above the company’s abuse of pricing they are also on the

Interpol blacklist, that supply contract must be cancelled. So, this letter that is being quoted in the media is just a matter of delays in the communication process.

As far as we are concerned there is no connection between Drax International and the first family. Secondly, this is not a live issue. The government had long dealt with this issue well before it even hit the headlines. What you are looking at is not even smoke, these are dead ambers of a fire that was long put out.

The instruction to stop and cancel the supply came from the president; it was not even the Cabinet. It came from the president. In fact the matter was raised from the president’s office. Remember the president’s office is not only reliant on information from line ministers, we have our own sources of information. There is not a single minister who is privy to the security report, the security report is for the president’s eyes only and that is where the Interpol issue was raised and he (the president) took a decision based on that.

Q: How is the procurement process being handled given that with the Drax International issue, ministries, the National Pharmaceutical Company of Zimbabwe (Natpharm) and the Procurement Regulatory Authority of Zimbabwe (Praz) have all been distancing themselves from the procurement question?
A: We took a policy decision a long time ago to increasingly move out of middle people and try to arrive at supply agreements with governments. We have done that with India and we are trying to do the same with China. There are two main issues which need to be addressed.

Firstly, there is the whole supply chain of the procurement of drugs where western middlemen have been dominating the supply chain. So, you will never have a Zimbabwe, which will go to the manufacturer, but you will have a Zimbabwe which reaches the manufacturer through a middleman and of course this makes the whole procurement process expensive.

Secondly, and this has been a problem which we have had for a very long time, the licensing of drugs is riddled with corruption. We are not talking of corruption on a small scale; it’s on a massive scale as global powers disapproved some drugs from coming to Zimbabwe.

These are drugs which are cheap and coming from non-western manufactures such as the Indians, Chinese and Iranians. Their drugs are blocked at the registration stage. This is a challenge because if a pharmacist dispenses drugs which have not been licensed by the drug council, the punishment is not visited upon the business, but on the dispensing pharmacist in his personal capacity. So, there has been that problem in the same way that there is a problem in registering foreign doctors to practice in the country.

Of course, Natpharm has its challenges and the minister of Health, Obadiah Moyo, has been instructed to dig a little deeper in that matter to unearth just how that (Drax International) contract was awarded. Natpharm has historically been a bad entity and I think the cleansing process is not yet completed because so many bad things have happened there.

In terms of the tender process, if you are a permanent secretary you may not participate in the tendering process of a parastatal under you because if there are problems people come to report to you. Now, if you are already part and parcel of the tendering process, you can’t stand in judgment. So, there has been a lot of leeway that has been given which has historically resulted in challenges.

How tenders are handled has also worsened because we have adjusted the Praz role. Praz no longer participates in the procurement process; it now sets the broad policy parameters because it’s now an authority.

Some purchases can actually be done with minimum involvement from Praz because in the past many people were complaining that Praz was slowing down the procurement process, more so due to currency volatility issues.

If someone had an allocation by the time Praz finishes the process, the money would only buy a few items. So, the idea was then to release the ministries to speed up procurement decisions while Praz plays an oversight role. That’s why Praz can say we were not intimately involved in the decision.

However, the error that we made was that as we loosened Praz’s involvement, we didn’t trigger the processes which would ensure that there is an accompanying growth of capacity and integrity from the emerging procurement entities. That balance is what we are trying to deal with. Procurement is complex and an economy is as good as it procures, if you don’t get it, it affects economic performance.

Q: Business and other stakeholders have made calls to re-introduce the US dollar as the anchor currency as the local currency is losing value, what is the head of State’s position on this matter?
A: The country is already dollarised and business cannot ask for dollarisation because it’s already there. The recommendation to reintroduce the local currency came from the Presidential Advisory Council (Pac) after consultations with business.

Their argument for the reintroduction of the dollar, which really held water, was that our export competitor, which is South Africa, their rand was trading between R14/17 per US dollar while we were pegging our prices in US dollars.

This meant that for every US dollar, South Africa had R17 to play around with, so when you got to the end product it would be 17 times as expensive, which meant that we were completely out of competition.

So, a combination of old technology, the exchange rate and that we were producing using a very strong currency meant that we were doubly uncompetitive in relation to South Africa. Business then said let us reintroduce our own currency and allow it to find its own level and if you notice the first attempt in floating the US dollar was to bring it as close to the Rand as was possible.

The idea was to restore viability. Now, these guys are retreating from their original position, meanwhile they are not earning the US dollar. We have enterprises which are not earning a single US dollar agitating for full redollarisation, how are they going to pay their employees?

Q: How then is the issue of salaries supposed to be resolved given that they have been eroded and workers, including civil servants, are demanding payment in US dollars?
A: Indeed civil servants’ buying power has been weakened and that’s why we have initiated discussions with the Finance minister. So, there is that huge sympathy. I don’t think the question is whether or not we will adjust the wages, but the question is the level of the adjustment.

We can’t do the US dollar because we don’t have it. You don’t resolve a weak currency by migrating to another currency which you don’t have. You solve the problems of a weak currency by tackling the underlying factors that undermine the value of your currency. The underlying problems are lack of production, exports and multiple pricing because of distortions in the exchange rate. Currently, we have the Old Mutual Implied Rate, customs, parallel, RTGS and cash — one economy four exchange rates.

Our exchange rates are increasing at the pace of an amoeba and that is where we are. This is precisely because of a weak export thrust and a weak production thrust, successive droughts made worse by the Covid-19 pandemic, but most importantly indiscipline.

When you look at the earnings we make in terms of foreign currency and compare them to Rwanda, which is a lot more stable and disciplined, Rwanda gets three times less than we do, but they are running a stable economy. So, our earnings are not small and more so when you read them against depressed production. Our earnings are coming from gold, platinum and tobacco and those have been performing, but all that money is just going into a sinkhole.

Q: Various stakeholders have called for political dialogue between President Mnangagwa and opposition leader Nelson Chamisa, what is the president’s position with regards to this matter?
A: The president invited Chamisa to the table a long time ago. What he will not do is to prepare and organise a palaver with Chamisa outside of the framework already existing. It amounts to privileging Chamisa above all other opposition parties and there is absolutely no reason to do so.

The essence of dialogue is not about revisiting the 2018 results, it is to move forward in a cooperative environment seeking to solve the country’s economic challenges.

So, really you cannot revoke the 2018 results because if we were to use that logic then the president has no reason to invite him. If the Constitution says 50 plus one you govern and the opposition opposes, this means that the measure of the interaction with them is extra-constitutional and its basis cannot be founded on the results of the elections. It just doesn’t make sense.

What we are refusing is this big headedness on the part of Chamisa, to say I’m the second biggest brother after the president, but to also bring to the table his squabbles with his peers in the MDC.

The biggest stumbling block in Chamisa’s participation in Polad is not Polad it is the fact of sharing the seat with Thokozani Khupe, that’s what he can’t countenance. He doesn’t want Khuphe to appear at all. He has no difficulty working with the likes of Welshman Ncube who got far less votes compared to him or Tendai Biti, but he has a problem with sitting in the context of Polad with Khupe whom he acknowledges got the most votes after him.

What is the logic? So, he was hoping that his interaction with President Mnangagwa would be an extra string in his bow so that he shoots better at competition within his own party and that can’t be our basis for dialogue.
We have no reason absolutely to oblige him on such a motive, that’s not our purpose. We want to unite

Zimbabweans across the political divide and tackle welfare issues, not so that we help a besieged politician to settle squabbles in his political party. Zanu PF doesn’t bring its personal issues to Polad.

Q: There is this notion that Zanu PF is involved in what is going on in the MDC, what is your response to that?
A: First of all people must not pretend like they don’t know the rules of litigation. Zanu PF is not a litigant so how then does it become party to a legal dispute that it has no stake in.

The whole idea is that pitting Chamisa against Khuphe doesn’t resonate with the donor community. You need to have ED as an opponent for you to become a sympathy figure and for you to be worth investing in because the world out there will not be appeased by anything short of ousting Zanu PF.

So, if you oust Khuphe it has no political value to the donors. You have to be seen fighting Zanu PF which is the archenemy of the Western countries. So what better way to gain that sympathy than to drag in a non-party to a legal process who happens to be the enemy of your donors. They took each other to court on their own.

They appealed and brought misfortunes to themselves. When they lose they blame others for their loss.
The fact that judges dealing with their cases are arriving at different positions is a vindication of the autonomy of the judiciary system, because a judge is allowed to treat a case individually and interpret the law. So, really the long and short of it is that there is never going to be a separate platform to accommodate Chamisa.

If he feels nationalistic enough to want to participate in national processes, the Polad door stands ajar for him to walk in. Thankfully, he is so slim and the door is so wide that he doesn’t have to squeeze in.

He can walk in freely. Also as he walks in by the door step, could he leave his party’s problems so that he comes on to the table with a mind which predisposes him to focus on solving national issues.

 

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1 Comment
  1. Magnus says

    17 times more expensive seems like an exaggeration, labour is cheaper in Zim and most other utilities and inputs too. The Rand is only favourable when it loses value which has been a trend but not a norm hence it is less risky to be invoiced in ZAR rather than USD. This is the difference between charging USD and ZAR. This can easily be offset by revising taxation and duties in a manner favourable to exporters. Mechanisation of industry is the biggest challenge. One has to wonder though why we are still buying top of the range vehicles for government and army top posts when industry is reeling in disarray. Even the interviewer should be able to pick up on these issues alas he seems like he was interviewing himself. We indeed make more forex than Rwanda but lack discipline in deciding where to allocate this forex(cars instead of machinery). The fuel prices are an additional subsidy GOZ cannot afford. In terms of tendering and negotiating, we just have no clue as to what we are doing. A person cannot quote something and when the prices change go on the provide the same items without communicating the changes. Why tender in the first place??? The Govt cannot also force someone to drop their prices because they “are the govt”. Would you continue to do business with a govt like that in future, say setup a factory to supply protective equipment in Zimbabwe(investment risks) . If the contract does not provide for variances why not go back to tender? The holes in Mr Charamba’s arguments lead one to wonder if the govt is competent or expressing ignorance. I applaud him for not mentioning sanctions though!

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