ZIMBABWE has defaulted on a US$200 million Chinese loan used to procure farming equipment handed to farmers who however, failed to pay for the implements.
In her latest report, the comptroller and Auditor General Mildred Chiri said the Agriculture, Engineering and Mechanisation headed by Joseph made was at the centre of the transactions.
Chiri said steps should be taken to effect recoveries from the farmers in order to facilitate repayment of the loan.
“The Irrigation department issued 107 transformers and 440 pumps to various farmers throughout the country on a cost recovery basis,” she said.
“The value of the equipment was not disclosed to the farmers and at the time of the audit no steps had been taken to recover the money from the farmers as the amount was not established.
“The government was however indebted to the Chinese government an amount of US$200 million which was supposed to be repaid from recoveries from the farmers.”
The government’s farm mechanisation scheme which was aimed at helping beneficiaries of the land reform programme make productive use of their lands is also blamed for the Reserve Bank of Zimbabwe’s billion dollar debt.
In a statement last November, RBZ governor Gideon Gono said farmers owed the apex bank some US$198 million after failing to pay for equipment provided by the bank under the scheme.
Zimbabwe has also failed to pay interest on a loan Chinese loan advanced to the Zimbabwe Iron and Steel Company (Ziscosteel) in 1997 and this has blocked the release of a US$145 million China Import and Export Bank (EXIM Bank) facility for Harare city council.
Meanwhile, Chiri’s report added that the irrigation department in the Ministry of Agriculture received US$1million to finance irrigation projects, but US$776,000 was transferred to pay utility bills at the expense of the projects.
Again the ministry’s department of research also transferred US$146,022 to the Agricultural Revolving Fund that was used to pay for goods and services to various suppliers some of whom did not have vendor numbers.