Mthuli cornered in US $ 10million loan deal
BY MOSE MATENGA
The GOVERNMENT’s insatiable appetite for borrowing has again come under scrutiny after lawmakers on Thursday toasted Finance Minister Mthuli Ncube over the Treasury’s decision to borrow $ 10 million for COVID-19 programs at a time when it ignores the more than $ 220 million donated for the same cause.
Spirits were heated after Ncube revealed that the government was borrowing $ 10 million from the Arab Bank for Economic Development in Africa to fund its COVID-19 response programs.
“The loan term is 25 years and the government will repay the principal in 40 semi-annual installments, repayments made within 30 days of the due date will result in a 0.25% discount on the interest rate. attractive, indeed, ”Ncube said.
He said the loan was intended to complement current efforts to fight the pandemic and reduce its health, economic and social impact.
Irritated MPs took turns bombarding the famous economics professor with questions about accountability and transparency in dealing with COVID-19 donations, claiming that given the government’s record of looting and abuse of public funds, the loan may not be required at this time.
Others also claimed that what the government had received in the form of grants was sufficient, so there was no need to continue borrowing.
The Chair of the Parliamentary Portfolio Committee on Health and Child Care, Ruth Labode, said it was illogical for the government to borrow before giving a full breakdown of how funds donated by supporters, including the Global Fund, were used.
“I am concerned about our borrowing, especially from COVID-19. I would have been more comfortable if the minister had brought a report on all the donations we have received and what they have been used for, especially regarding COVID-19, ”she said.
Labode asked how the government had used the US $ 45 million offered by the Global Fund.
“So I really think that as Zimbabweans we were told immediately after questioning the ZACC [Zimbabwe Anti-Corruption Commission] reported that there were test kits found in Bulawayo worth US $ 12,000. Do we want to borrow so some people can come and steal? She asked rhetorically.
“When the ministry reported on drugs, NatPharm [National Pharmaceuticals of Zimbabwe] seemed to have adequate drugs for COVID-19 and I was even afraid they would expire on us. So my concern is what exactly are we going to use this money for? Do not get into debt unnecessarily.
Norton MP Temba Mliswa (independent) asked Ncube what the government was using as collateral to secure the loan.
Harare North MP Allan Markham (MDC Alliance) has demanded a breakdown of all donations in support of the COVID-19 pandemic, fearing the donations have been misused.
“I think the minister should give us a reconciliation of all the money borrowed in the name of COVID-19 and given in the name of COVID-19 and what it was used for,” he said.
MPs demanded that Ncube issue a ministerial statement on how the money pledged for the COVID-19 pandemic has been used.
Magwegwe MP Anele Ndebele said: “I remember vividly at one point that the minister allocated the equivalent of US $ 10 million for research into COVID-19. It will be interesting for him to detail the research undertaken in the context of COVID-19 in our country, because I honestly believe that any research we do is as good as reinventing the wheel. “
But Ncube said the loan was “a simple vanilla concessional loan” and a good deal.
Ncube said more than $ 220 million has so far been pledged to fight the COVID-19 pandemic, but only half of that has been used.
“Yes, the partners have donated for COVID-19 to the tune of US $ 220 million, but the release of these resources is at their own pace, at their choice and the time is also of their choice and these resources, either. by the way, don’t go through our budget. We do not sit here as a Parliament to deliberate and approve because it is not part of the budget, ”he said.
“The advantage of what we have in front of us, the 10 million US dollars, it seems small, but this is a high impact concessional loan Madam President, very high impact in targeting COVID- 19. We are in control if we need to know the areas where it will be used, ”he said.
On reconciling all COVID-19 donations, Ncube said, “We cannot give you reconciliation. All I can speak to is tell you how much they have pledged and how much they have given us so far, but I cannot give you the details because the donors themselves control this.
He said the Global Fund donations included personal protective equipment and other supports for COVID-19 and so far $ 17.5 million of the $ 45 million pledged has been used.