Parliament clarifies command agriculture expenditure

By ZBC Reporter

THE Parliamentary Portfolio Committee on Public Accounts Committee (PAC) says Government extended around US$1,1 billion to private sector participants in the Command Agriculture Programme (2016-2019), while the Grain Marketing Board was allocated $2,5 billion under the same period.

The revelations by PAC fall short of the touted figure of US$3 billion which was alleged to have been used under the Command Agriculture Programme.

The unfounded allegations of looting were used by the opposition political parties as well as other retrogressive organisations bent to tarnish the country’s image and companies that participated in the agriculture scheme.

Former legislator Mr Tendai Biti has been at the forefront lobbying the United Kingdom and the United States to sanction Sakunda Holdings and its Chief Executive Officer, Mr Kudakwashe Tagwirei.

Mr Biti successfully campaigned for an economic embargo on Sakunda Holdings and Mr Kudakwashe Tagwirei on false claims of having abused US$3 billion as revealed by the PAC report which shows only US$1.1 billion was allocated to Sakunda and was fully accounted for.

Now, the Third Report of the PAC on the Special Maize Programme, better known as Command Agriculture, as presented to legislators on March 3, 2022 has brought clarity to the matter.

The PAC put the lie to Mr Biti’s claims, saying: “Total payments to Sakunda for 2017 was US$378,739,319.75 and for 2018 it was US$235,954,143.85.”

It pointed out that several other companies had also benefited from the Special Cabinet Authority to participate in the programme.

“Total payments in 2017 and 2018 for Presidential Scheme is US$573,392,887.33 paid to FSG – US$ 392,853,180.22; Quton – US$19,753,638.00; Pedstock – US$7,538,441.69; Cottco – US$30,898,812.65; Sakunda US$51,205,481.25; Sable Chemicals – US$4,900,00; Seedco – $40,150,000.00; Valley Seeds – US$8,700,000; Windmill – US$17,800,000; and ZFC – US$17,750,000.”

The contracts were facilitated by the Special Cabinet Authority and thus were not subjected to public tendering processes. The Government uses the Special Cabinet Authority in exigent circumstances, as was the case when the State had to move quickly to guarantee national food security between 2016 and 2019.

The Government also issued Treasury Bills to at least 10 companies contracted for Command Agriculture and the Presidential Inputs Support Scheme.

Notably, the PAC said Treasury Bills issued to Sakunda were above board, though there were question marks about issuances to several other private companies. A Treasury Bill is a negotiable debt instrument issued by the Government through the Minister of Finance and Economic Development.

“According to the RBZ, Sakunda was paid $ 429,944,801 in 2017 and $233,937,461 in 2018 which comes to a total of $663,882,262.00 in Treasury Bills,” the report notes.

For companies like FSG, Valley Seeds and ZFC, among others, participating in the Presidential Inputs Support Scheme targeting smallholders, Treasury Bills totalling “US$258,362,845 were paid to suppliers in 2017 and US$263,824,560.69 was paid in 2018.”

The PAC adds, “Treasury Bills were properly issued to Sakunda Holdings.”

However, the committee raised concerns about how Treasury Bills were issued to other companies, as available documentation indicated the instruments were raised at the instance of the Reserve Bank rather than the Finance Minister.

The committee also took exception to apparent poor communication between the Agriculture and Finance ministries but did not accuse private contractors involved in Command Agriculture of either causing or perpetuating this.

The PAC – which across the world is traditionally chaired by legislators from the opposition – also said the more than 10 private sector participants had cogently explained how they had used their allocations and delivered on their contractual obligations for both the Command Agriculture and Presidential Inputs Supply initiatives.

Further, the PAC noted that Sakunda’s 4,5 per cent interest rate was by far the most competitive of private sector participants, many of whom charged 12 per cent or more.

The government rolled out Command Agriculture as a maize import substitution scheme to shore up food security, subsequently expanding it to encompass other aspects of agriculture.

The successful programme drew the ire of opposition elements, like Mr Biti, who claimed it was an opaque initiative designed to loot taxpayers’ funds.

Ironically, Mr Biti – as Finance Minister in the inclusive Government 2009-2013, himself leveraged on Special Cabinet Authority to approve a roads rehabilitation deal with South African construction firm Group Five.

Acting on allegations of malfeasance, the PAC, which Mr Biti chaired after his Cabinet stint, probed the Ministry of Lands, Agriculture, Water and Rural Resettlement’s audited accounts for 2017 and 2018 as regards Command Agriculture and the Presidential Inputs Support Scheme.

From May 2019 to March 2020, the PAC received oral and documentary evidence from the Agriculture Ministry, the Ministry of Finance and Economic Development, the Reserve Bank of Zimbabwe, and the Grain Marketing Board.

From the private sector, the committee summoned Sakunda Holdings, Croco Motors, Solution Motors, Valley Seeds, Pedstock, and FSG (Ferts, Seed and Grain.

In his submissions to the PAC, Sakunda Holdings Chief Operating Officer Mr Charles Chitambo said the company – along with about 40 other private sector players – was invited by President Emmerson Mnangagwa who at the time was Vice-President, to support Government efforts to improve national food security and the agricultural value chain.

PAC says in its report, “He stated that Sakunda Holdings submitted a proposal to finance maize and wheat production and was advised to work out the terms with the Ministry of Finance and Economic Development. Mr Chitambo highlighted that the money would cost four and a half per cent interest, but other companies had proposed 12 per cent. Mr Chitambo revealed that inputs were delivered to Grain Marketing Board depots as directed by the Agriculture Ministry.”

Mr Chitambo said since most farmers did not have security, the Finance Ministry offered Sakunda security in the form of a ring-fenced account of the NOIC Debt Redemption Fund and Treasury Bills.

On that basis, in 2016-2017, Sakunda provided US$85 million for irrigated crops, US$75 million for the non-irrigated facility and US$30 million for the Presidential Inputs Support Scheme.

“The Chief Operating Officer indicated that from October 2016 to February 2017, Sakunda Holdings had used its balance sheet to finance the programme,” the PAC report said.

After the first season, Sakunda Holdings also advised the Government on how to make the programme more efficient to ensure inputs reached farmers and that beneficiaries could payback, in the process contributing greatly to Zimbabwe presently being maize self-sufficient.

Contributing to debate on the PAC report, opposition MDC-A legislator Mr Edwin Mushoriwa said under the circumstances, it would be wrong to “fault the contractors”.

Independent MP Mr Temba Mliswa weighed in saying: “The word in town was US$3 billion has been looted. May credit be given to the Public Accounts Committee for doing due diligence to break down the US$3 billion. I remember seeing a headline saying US$3 billion goes to Sakunda – Parliament in its role of oversight then called everybody to understand exactly what happened.”

He went on, “The special programme on maize production for import substitution, which was known as Command Agriculture, was inclusive … The programme was noble and it remains noble because farmers need to be empowered … at no point did Sakunda get US$3,6 billion.”

Mr Mliswa said “companies like FSG were given over US$100 million foreign currency. What for? We do not know. PHI, which is part of INNSCOR was given more money.

“What pains me at the end of the day is, we seem to be giving more money to white-owned companies and not to black-owned companies. Why was this money not given to the blacks so that they are empowered?
“… That is why we say at the end of the day, and like the President rightly says, ‘Nyika inovakwa nevene vayo.’”

Zanu-PF legislator Mr Ability Gandawa contributed to the debate saying: “Whilst it is important that we also get to the bottom of the matter in terms of how Command Agriculture was managed before, I think it is important to highlight that the thinking behind Command Agriculture was to improve self-sufficiency within Zimbabwe.”

“The key thing is that we were geared as the country to say let us support agriculture, producing our food then become importers of food.”