Zimpapers Logo

salaries as verification and reconciliation of proceeds from diamond sales show that nearly US$167 million has found its way into Treasury.
The verification was ordered following conflicting statements by Minister Biti and Mines and his Mining Development counterpart Obert Mpofu over the actual amount the Government realised from diamond sales.
This was after President Mugabe had in January said civil servants’ salaries should be improved as proceeds from diamond sales were flowing into Government coffers.
But Minister Biti said there were discrepancies in the figures of the money Treasury received, prompting the verification and reconciliation.
Minister Mpofu said the verification and reconciliation has been completed and the two ministers met on Monday to discuss the outcome before reporting to Cabinet at its weekly meeting yesterday.
“Yesterday (Monday) we met with Minister Biti who acknowledged and accepted the reconciliation of the US$174 million and this was reported to Cabinet today (yesterday). That matter has been put to rest,” Minister Mpofu said at a Press conference yesterday.
He said the money should be used to improve the salaries of civil servants as pledged by President Mugabe in January.
“The objective (of the verification and reconciliation) was to address the plight of our civil servants.
“The civil servants’ plight needs our united atten- tion.
“We assist the Ministry of Finance to realise some income which will help address the challenges of our nation and the plight of civil servants and MPs,” he said.
Minister Mpofu said it was only proper for ministers – who are politicians – to leave professional work to professionals and stop grandstanding.
“We want to allow professionals to do their work. Once we start to pretend to be auditors, this tends to be misunderstood.
“This (verification) has been done to the satisfaction of Cabinet,” he said in apparent reference to suggestions by Minister Biti that some of the diamond proceeds could not be accounted for.
Minister Mpofu said even after the verification, there were issues that still continue to be raised that had nothing to do with the reconciliation.
The Herald is reliably informed that Minister Biti raised issues of mechanisms of controlling the diamond money.
But Government officials said these were just bottlenecks being created to justify not awarding civil servants salary increments.
It is also understood that the MDC-T side in the inclusive Government wants the diamond money used for debt servicing, instead of paying civil servants.
Prime Minister Morgan Tsvangirai seemed to confirm this in his address to the Euro Money investment conference in Harare last week.
“So far, about US$300 million worth of diamonds have been sold . . . I strongly believe that this could go a long way in clearing part of our external debt of around US$7 billion,” the PM said.
According to the figures, the Government has received US$166 883 650.67 from March 2010 to February this year.
Last year, the Government received US$110 648 763.48 while so far this year it has realised US$56 194 887.19.
Proceeds from last year were used as Government revenue during that financial year.
The figures also show that part of the money was paid to the Zimbabwe Revenue Authority, which constitutes revenue for budget execution purposes and was therefore used in the respective months it was collected as normal budget support.
Some of it was paid as royalties, corporate tax, value added tax and withholding tax.
Following a directive to reconcile the figures, the Office of the President and Cabinet convened a meeting to reconcile proceeds of US$174 223 814.88 from gross sales of US$313 504 567.17 of diamonds.
The US$4 million difference between US$174 223 814.88 and US$169 371 978.90 (including VAT refund) was in respect of withholding tax paid directly to Zimra by Mbada Diamonds.
Officials from the Ministries of Finance, Mines and Mining Development, Zimbabwe Mining Development Corporation and the Minerals Marketing Corporation took part in the reconciliation.
Zimra Commissioner-General Mr Gershem Pasi was also consulted and he submitted figures from his organisation.
The meeting noted that the mix up in the presentation of figures of the diamond proceeds could have been avoided if there was effective communication between the responsible parastatals and Government Ministries.
It was discovered that statutory obligations in the form of corporate tax, VAT and withholding tax were being incorrectly classified as diamond proceeds.
Minister Mpofu commended Mbada and Marange Resources, the two mining firms from which the proceeds were received.
“The two mines have acquitted themselves well in a manner that has seen Government receive US$2 million in less than six months which has never been seen in some parastatals.
“These are not the only companies that are mining our resources in this country. We have Zimplats (platinum), Murowa (diamonds) and other gold mining companies and no one has asked what they have done with their proceeds.”
It has emerged that the salaries of Ministers will be adjusted to US$1 750, (being US$1 000 basic and a monthly representation allowance of US$750.), according to a statement from the Office of the President and Cabinet.
In addition, the ministers are entitled to US$248 being salaries for two domestic workers and accommodation and transport allowances for the workers of US$60 and US$56 respectively.
President Mugabe approved the adjustments in December last year.
Minister Mpofu said the adjustments were yet to be effected.
“We read that there has been some adjustments but this is yet to be verified. I have not seen my payslip,” he said.