Mbudzi US$88m controversy: Mthuli Ncube told to explain
PARLIAMENT’S Public Accounts Committee chairperson Brian Dube says Finance and Economic Development minister Mthuli Ncube should explain the decision to borrow US$88 million to fund the construction of the Mbudzi Interchange in Harare, yet the government previously stated that it had allocated the project US$144 million from International Monetary Fund Special Drawing Rights.
Dube was speaking to The NewsHawks after Ncube announced in the Government Gazette that he had borrowed US$88m.
“The responsibility of Parliament is to have oversight over the transaction and what must happen as soon as possible is that the minister must be summoned to appear before the portfolio committee on Transport and answer to the issues because the Public Accounts Committee will then deal with issues at a later stage during audit stage, so at times it will already be too late. So my view is that the portfolio committee must summon the minister even by Monday to come and answer to the issue or on Wednesday to give a ministerial statement explaining these issues,” he said.
Dube added that every government borrows, but the money has to be procured transparently.
“It is always good for government to use borrowing as a source of funds, but it must be transparent and have an advantage to the nation and in this case it is very tricky, ” he added.
Contacted for comment, the chairperson of the Transport portfolio committee, Oscar Gorerino, advised The NewsHawks to contact the Finance ministry.
“Talk to the ministry guys, they are the ones dealing with that loan. When you fail to understand each other, then come to us,” he said.
In General Notice 131B of 2023, Finance minister Ncube said the loan agreement was signed on 6 December 2021 for the sole purpose of funding the Mbudzi Interchange project.
“The loan facility shall be utilised for the sole purpose of funding the construction of the Mbudzi Interchange and Divergence Routes Road Infrastructure Project. The financier shall oversee the project implementation and disburse directly towards the project implementation,” read the notice.
But, in the three-year strategic plan on the utilisation of IMF SDR allocations to Zimbabwe that was tabled before Parliament in November 2022, the same project was allocated US$144m under infrastructure development.
“As approved by Cabinet and Parliament in November 2021, the 3 year utilisation plan is as reflected in the table, Transport Sector- Harare Beitbridge Road, Masvingo Road Interchange Development Project (Mbudzi) and Emergency Road Rehabilitation Project, 144 million,” reads the strategic plan.
The interest rate on the US$88m loan shall be London interbank offered rate plus 5% per annum. The grace period is a period of nine months on the principal amount. The final maturity date for the loan is 6 June 2025.
Fossil Mines, the company that was awarded the tender, is sister company to Fossil Mines (Private) Limited which is involved in the construction of the Mbudzi Interchange.
Contacted for comment, the Finance ministry’s public relations director, Clive Mphambela, said there has been a bit of confusion on the matter, adding that a comprehensive statement would be released In due course.
“We are already working on a public statement on the matter because there is indeed some confusion. There is no double allocation of resources, firstly it is not unusual for a contractor to pre-finance a turnkey project, so in that respect a loan agreement is a statutory requirement,” he said.
He added that the SDR allocation would be used to repay the US$80m loan.
“Secondly, the SDR utilisation allocation is precisely what it is, it’s an allocation of the SDRs and part of that has been allocated to the project, so those SDRs will be the source of repayment of the loan. Meanwhile, the SDRs remain in national reserves but reserved for those purposes outlined,” said Mphambela.