“The second Republic will not tolerate siphoning of public funds through various nefarious activities for personal gain. Those found wanting will face the full wrath of the law,” ‘ED warns against abuse of funds’ – Herald, 09 November, 2018
As COVID-19 resources continue to be donated from local and international players to strengthen the Zimbabwean response to the pandemic, the Zimbabwe Coalition on Debt and Development (ZIMCODD), Transparency International Zimbabwe (TI-Z) and Magamba Network are concerned about allegations of abuse of public funds, weak procurement processes and limited systems of checks and balances within government. These continue to threaten the key facets of transparency, accountability and integrity in the management of public funds.
The media for the past few weeks has pointed out skewed procurement procedures and price gouging in the procurement of Covid-19 related supplies. For instance, Drax International LLC is said to have been awarded a contract to supply personal protective equipment (PPEs) worth US$987 720 against a local market value of US$325 000. Additionally, briefcase organisations such as Jaji Investments, a company registered in Namibia, is alleged to have been awarded contracts to supply Covid-19 equipment to the Ministry of Health and Child Care without going through a competitive bidding process. These cases illustrate endemic levels of corruption that flouts procurement rules and regulations. Corruption of this nature indicates institutional weakness in procurement processes and lack of transparency processes in selection on government suppliers. Precautionary measures must therefore be taken to guard against “tenderpreneurship” in which individuals and companies are awarded government tenders without going through the open contracting processes as provided for in Public Procurement and Disposal of Public Assets Act of 2017.
The three organisations cited herein have taken notice that one Delish Nguwaya, a representative of Drax International, has been charged with fraud and the matter is pending at the courts. It is our expectation and that of every Zimbabwean that due process of the law will take its course and this case does not fall victim of the “catch and release” phenomena synonymous with many cases of grand corruption in Zimbabwe.
Zimbabwe Coalition on Debt and Development (ZIMCODD), Transparency International Zimbabwe (TI-Z) and Magamba Network are therefore concerned about the following: The massive looting of public resources under the guise of Covid-19 procurement. Several reports by the Auditor-General’s Office and parliamentary portfolio committees, have in the past exposed poor public finance management by public institutions and individuals whose interests are to plunder wealth, including donations; Public contracting continues to be shrouded in secrecy as evidenced by the lack of open contracting in COV1D-19 procurement and the sidestepping of procurement procedures and regulations in the Covid-19 related procurement; State capture characterised by the collusion between the private sector and political exposed persons that have created a vicious circle that undermines the respect for rule of law and the effective functioning of democratic institutions in as far as public procurement is concerned.
In light of the above, we recommend that the Government of Zimbabwe to:
- Ensure public disclosure of beneficial ownership of companies awarded public contracts by creating an online beneficial ownership register to inculcate a culture of transparency when awarding public procurement contracts;
- Set up electronic procurement system (e-procurement) for Covid-19 and other public procurement systems. Countries like Rwanda, Tanzania and Kenya have successfully established online open contracting systems and Zimbabwe should emulate the same in advancing transparency and accountability;
- Guarantee protection of whistle-blowers by enacting fit-for-purpose whistle-blowers legislation;
- Conduct due diligence of the companies before awarding public contracts. Establish the management and ownership of the company, when the company was registered, authenticity, company capitalisation, physical location, revenue and margin trends, market size and market growth, stock price history, tax compliance, competition among other critical factors;
- Release fortnightly procurement updates: what we need and what has been bought for the same period;
- Reinforce oversight bodies and anti-corruption agencies to alleviate the abuse of COVID-19 earmarked resources. Such institutions include the Parliament of Zimbabwe, Procurement Regulatory Authority of Zimbabwe (PRAZ), Zimbabwe Anti-Corruption Commission (ZACC) and the Competition Tariff Commission;
- Take action against those that do not comply with procurement procedures as provided for by the Public Finance Management Act and the Public Procurement and Disposal of Public Assets Act to ensure that public procurement is conducted in a manner that is transparent, fair, honest, cost- effective and competitive.
Source: Zimbabwe Coalition on Debt and Development (ZIMCODD); Transparency International Zimbabwe (Ti Z); Magamba Network