FORMER finance minister Tendai Biti has condemned the
majority of deals signed by President Emmerson Mnangagwa, describing them as
unconstitutional and void as they were not approved by parliament in
contravention of the standard procedure of acquiring national debt.
Speaking at the launch of International Public Service
Accounting System strategy and plan in Harare on Wednesday, Biti, who is also
the chairperson of parliament’s Public Accounts Committee and a lawyer, said
there was need for transparency given some of the deals had resulted in loans
which had ballooned the national debt.
The country’s total debt stood at US$17,6 billion as at
December 31 2018, with the external debt at US$$8,16 billion, representing
33,2% of gross domestic product.
This means the debt has risen significantly since Mnangagwa
took over power in November 2017 via a military coup which toppled his former
boss, Robert Mugabe.
“Debt has been contracted in Zimbabwe, oblivious to the
requirements of Section 327 of the constitution that requires parliamentary
approval. If it is not approved by parliament, then it is null and void.
Meaning that, the large part of all debt that has been accrued in recent times
which has not been approved by parliament is not only voidable, but is actually
void ab initio (from the beginning),” said Biti.
Biti wilfully highlighted that Mnangagwa has been violating
Section 327 of the constitution, which stipulates that: “An agreement which is
not an international treaty, but which (a) has been concluded or executed by
the President or under the president’s authority with one or more foreign
organisations or entities; and (b) imposes fiscal obligations on Zimbabwe; does
not bind Zimbabwe until it has been approved by the parliament.”
Biti expressed disproval of the current accounting systems,
saying there was no transparency in government financial departments.
The finance ministry had been using a cash-based accounting
system which was condemned in 2017 by Auditor-General Mildred Chiri.
“Personally I am very excited by the migration from cash
accounting, which I considered to be very dishonest to accrual accounting. The
current situation, where if you talk to the Reserve Bank they don’t know what
the national debt is, if you talk to the Ministry of Finance they don’t know
what the debt is, that is unacceptable,” Biti said.
“The 2019 budget had two blue books, up to now I don’t know
why there were two blue books, and then it had a budget statement. In the
budget statement at page 33, the national debt was put at US$17 billion, but
when we went to the fist blue book the national debt was put at US$9 billion,
when we went to the second blue book the national debt was put at US$8 billion,
you would really wonder what is going on.”
According to national budget figures, the foreign debt
stood at US$7,5 billion as at December 2017, while the domestic debt was US$6
billion but during deliberations at the Zimbabwe-South Africa Bi-National
Commission, the government revealed the debt had risen to US$18 billion, split
in half between domestic and international creditors.
Delivering a speech on behalf of Finance minister Mthuli
Ncube, finance secretary George Guvamatanga said his ministry was failing to
deliver the necessary paperwork to the Public Accounts Committee because the
current accounting system was in a shambles.
“I used to run an institution which had a balance sheet of
US$500 million. We had 17 chartered accountants in that institution. I come to
government, and I am asked to run a US$10 billion balance sheet with one
chartered accountant and that is when Honourable Biti calls me and says well
you are not complying in this report. Honourable Biti, you should understand
that it cannot be delivered with one chartered accountant,” Guvamatanga said.
“We are also having ministries with $2 billion budgets, but
no chartered accountants and you are actually expecting them to manage those
huge funds. I could not tell you that Honourable Biti when you asked me in
Parliament, but that is one on the major reasons.
“The biggest organisation in the land, the government of
Zimbabwe has one chartered accountant.”
The head of the United Kingdom’s Department for
International Development (DFID) in Zimbabwe and South Africa, Annabel Gerry,
emphasised the need for transparency and accountability, saying corruption had
taken a toll on countries like Zimbabwe.
“Countries such as Zimbabwe are losing precious public
funds through corruption, which damages their government’s ability to invest in
desperately needed infrastructure, schools and hospitals,” Annabel said.
“We know corruption is bad for people, bad for development,
and bad for business. We know that corruption impairs economic growth, deters
investment and erodes tax revenues. It holds developing countries back. The
uncertainties of bribery stifle business development.”
Gerry added: “It is fair to say that Zimbabwe has room for
improvement on the Open Budget Index. The latest survey found that Zimbabwe
provides the public with minimal budget information. It scored just 23 out of
100 in the 2017 survey.
“Access to fiscal information is right that all governments
should extend to their citizens so they know how their taxes are spent and how
their economy is run. Journalists and civil society organisations are a critical
bridge in interpreting and translating budget data- sharing it with citizens
and parliaments in ways that are meaningful. The scrutiny can galvanise those
with decision-making power to act and reduce malpractice.” Zimbabwe Independent
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