In a shocking display of bravery (or stupidity), Treasury Secretary George Guvamatanga has single-handedly managed to provide an “illegal and unconstitutional” bank guarantee for a US$20 million loan to Valley Seeds, a company linked to the infamous command agriculture corruption scandal. Because, you know, what’s a little corruption among friends?
Guvamatanga’s plan was simple: claim Zimbabwe owes Valley Seeds a whopping US$191,578,835 (because who needs receipts or proof, anyway?) and then magically convince Ecobank to discount this “legacy debt” to a mere US$20 million. And voilà! The treasury gets to pay back this “loan” in instalments of US$5 million over 12 months. It’s like a get-rich-quick scheme, but with taxpayer dollars!
Former Finance Minister Tendai Biti calls this whole ordeal “pure looting, lumpen activity.” And he’s right! Who in their right mind would discount a US$200 million debt to US$20 million? Biti also points out that Guvamatanga has no authority to sign such guarantees, making this whole thing a textbook case of illegal and unconstitutional behavior.
The Public Debt Management Act of 2015 is clear: only the minister can issue guarantees, and even then, it must promote employment or be in the public interest. This guarantee doesn’t seem to fit the bill. And let’s not forget, parliament must approve any debits or credits to the consolidated revenue fund. Guvamatanga seems to have skipped that step.
It looks like Guvamatanga’s plan is a masterclass in corruption, and we’re not sure what’s more shocking – the brazenness of the act or the lack of understanding of the law. Either way, it’s time for some serious questions to be answered.
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