By Alois Vinga
FINANCE Minister Mthuli Ncube once again ignored Parliament’s advice against mortgaging state resources to support non-essential projects after granting over $ 15 million in guarantees on corporate loans private with the Commercial Bank of Zimbabwe.
Several government departments have faced the wrath of parliament after committing state resources to aid activities that do not benefit the public and could have been avoided otherwise.
In a similar development, the latest Government Gazette states that Ncube, using its powers as enshrined in Articles 20 (1) of the Public Debt Management Act [Chapter 22:21], issued a guarantee binding the Government of Zimbabwe as surety for the repayment of US $ 4 million (40% of the facility) to Sub-Sahara Tobacco (Private) Limited by CBZ.
“In the event of unpaid debts due to the Lender on the maturity date of the guarantee, the guarantor undertakes to make full payment of all sums due by the guarantor under this guarantee at the request of the Lender within thirty (30) calendar days. days, ”the statement read.
A bond was also provided for the 50% repayment of a $ 10 million facility to Mbano Manor Hotel / Mambano Hotels (Private) Limited by the CBZ.
Ncube also made another guarantee binding the Government of Zimbabwe as surety for the 65% repayment of $ 11.1 million to Steel Makers Zimbabwe (Private) Limited of the CBZ.
Over the years, the Public Accounts Committee has criticized the government for making such decisions without the proper approval of the legislature despite the looming burden of using taxpayers’ money to pay off debts.
However, sources in government argue that there is a need to save critical businesses from collapse after the suffocating impact of Covid-19 lockdowns that have significantly eroded corporate profits.
Last year, the government used an $ 18 billion stimulus package to rescue affected businesses through guarantees, but it was not yet clear whether those guarantees were made as part of the pledges. at the time of publication.