Treasury plugs overpricing by suppliers

Treasury plugs overpricing by suppliers

By Stanley James, Business Editor

THE Government’s Value for Money Process that seeks to get rid of suppliers who inflate prices is on track after Treasury paid ZWL$184 billion to compliant suppliers and contractors in the last six weeks.

The Value for Money process was introduced on the 18th of August this year upon realising that the pricing of goods and services offered by suppliers to the central government was being inflated.

Findings by Treasury also showed that supply contracts had prices that were being determined using forward parallel market rates.

Giving an update on the Value for Money Process in Harare this Monday, the Minister of Finance and Economic Development, Professor Mthuli Ncube said while there was resistance from some quarters, government is not going back on the decision.

“These payments have been made to various players in the market, so it is not a fact that Government is not paying for goods and services. As we move ahead to implement the Value for Money Process, we are committed to honoring all our obligations provided that they are priced correctly in the public interest and such payments will not adversely impact the exchange rate and cause inflation,” said the minister.

Treasury also noted that the overpricing behavior was eroding budgets, leading to price hikes and exchange rate instabilities.

“Treasury is assuring the nation that the Value for Money Process has since corrected the previous challenges,” said George Guvamatanga, the Permanent Secretary in the Ministry of Finance and Economic Development.

The process is also expected to result in stiff measures on government officials found to be involved in overpricing and procurement irregularities, while suppliers found on the wrong side of the law will be blacklisted.