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Leonard Ncube, Victoria Falls Reporter

GOVERNMENT has entered a deal to buy vehicles for Cabinet Ministers at a cost of US$16 million through a letter of credit.

A letter of credit is a letter from a bank guaranteeing that a buyer’s payment to a seller will be received on time.

 In the event that the buyer is unable to make the payment, the bank will be required to pay the money.

Responding to questions from Members of Parliament at the ongoing 2019 pre-budget seminar here, Reserve Bank Governor Dr John Mangudya said arrangements have been made with the supplier and bank towards the purchase of the Ministers’ vehicles.

He however did not  reveal the supplier or the bank providing the letter of credit.

“The Minister gave me an assignment about purchase of Ministers’ vehicles and we have agreed with the supplier of vehicles. We are going to buy these vehicles through a letter of credit so that you all get them in one lot,” said Dr Mangudya. 

He said the vehicles will cost US$16 million and the money will be drawn from foreign currency generated from exports.

 Finance and Economic Development Minister Professor Mthuli Ncube recently said Government was considering buying ministerial and parliamentary vehicles from local assemblers.

This, he said, is meant to promote domestic industry and reduce foreign currency expenditure in line with austerity measures being undertaken by Government.

“What is of importance to note right now is that Government has not bought or ordered cars for ministers. Most of the ministers and permanent secretaries are driving vehicles that they had in the past or which are pool cars in their respective ministries or parastatals,” said Prof Ncube recently.

Vehicle assemblers, Quest Motors and Willowvale Motor Industries (WMI), have said they have capacity to produce quality vehicles and have implored Government to implement a directive issued by the Office of the President and Cabinet that compels them to buy vehicles from local assemblers.—@ncubeleon