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Business Editor

GOVERNMENT has so far saved half-a-trillion dollars through its “value for money” drive, and will continue to mainstream the strategy in order to plug loopholes in the existing public procurement systems, Finance and Economic Development Minister, Professor Mthuli Ncube, said yesterday.

In an endeavour to restore market discipline and price stability, the Government launched the ‘‘value for money’’ exercise in August 2022 to ensure value for money for all transactions in the public procurement space.

The intervention also sought to deal with unethical behaviour exhibited by various suppliers and contractors who were manipulating the foreign exchange market leading to speculative pricing volatility.

Authorities blame market indiscipline as a major drawback to Zimbabwe’s economic transformation with the recent surge in inflationary pressures linked to parallel market exchange rate volatility weakening consumer spending and threatening business viability.

The situation has prompted the Government to take drastic measures, including loosening import regulations, allowing 100 percent forex retention on all domestic sales, and mopping up excess liquidity, among others, in order to restore macro-economic stability. 

In a statement, Prof Ncube said observations from the reviews conducted by the Treasury revealed that overpricing and forward pricing, has been a rampant practice across public sector contracts. 

“To this effect, Government has registered significant savings in expenditures amounting close to half-a-trillion Zimbabwean dollars, thus providing the leverage to channel more resources towards capital expenditure,” he said. 

“Further, Treasury and PRAZ (Procurement Regulatory Authority of Zimbabwe) has developed a national price index to guide all public sector institutions on the price ceilings in the various procurement categories.

“To date, three categories have been issued relating to hotels and conferencing facilities, groceries and office provisions and stationery products and paper raw materials.”

In this regard, under the value-for-money exercise, he directed ministries, departments, and agencies (MDAs) to mainstream due diligence processes aimed at plugging loopholes in the existing procurement systems. 

Following the ministry’s public communication on the blacklisting of companies involved in illegal activities in the black market, Prof Ncube said Zimra is now conducting tax audits and assessments, checking for the full tax compliance of all large transactions. 

“At the same time, continuous strict monitoring by the Financial Intelligence Unit (FIU) on all transactions these companies undertake has also been instituted,” he said. 

“So far three companies have been removed from the blacklist having satisfied Zimra and settling their tax penalties, as well as satisfying the Financial Intelligence Unit of the integrity of the financial transactions.”

Prof Ncube also reprimanded ministries, departments and state agencies that have been affecting advance payments for the procurement of goods and services without following the statutory provisions for advance payments.

In other instances, some of the suppliers ended up not delivering the procured goods and services, he noted. 

“To this end, Treasury has developed a framework to deal with defaulting suppliers/ contractors where advance payments have been made,” said Prof Ncube. 

“Such contractors/suppliers risk being blacklisted and debarred from supplying Government in future.”

The Treasury boss has also reminded public officials to diligently exercise due care in undertaking procurement processes and effecting payments for goods and services by following the statutory provisions so as not to prejudice the Government of the much-needed resources for public service delivery. 

He said officials found to be complicit will be charged with financial misconduct and will have to restitute the Government where losses are incurred.