GMB posts $208m net loss for 2017 

Source: GMB posts $208m net loss for 2017 – DailyNews Live

Blessings Mashaya      24 January 2018

HARARE – State grain utility Grain Marketing Board (GMB) posted a net loss
of $208 million last year that it attributed to the impact of a
government-sponsored Command Agriculture that offered a maize subsidy.

GMB general manager Rockie Mutenha told the parliamentary portfolio
committee on Lands, Agriculture and Rural Resettlement yesterday that
government’s decision to buy grain at $390 per tonne while selling it at
$240 per tonne caused the shocking loss.

“The audited financial statements reflect an accumulated loss position of
$208 968 178,” Mutenha said to the bemused committee.

“This has been as a result of pricing policy where GMB is buying maize at
$390 and selling it to millers at $240 to $270 per tonne.”

The GMB received over 500 000 tonnes of maize from farmers who benefited
under Command Agriculture and the Presidential Input Scheme.

The Grain Millers Association of Zimbabwe, a grouping of the 100 biggest
private millers, had agreed to buy 800 000 tonnes of maize from the State
for $194 million last season, or $242,50 a tonne.

At this price, the government would lose $147,50 for every tonne it bought
from farmers and sold to these private millers, totalling $118 million.

Mutenha, who was taken to task by the committee over his appointment and
relationship to former Agriculture minister Joseph Made, said GMB’s
overheads were not fully recovered by storage and handling fees charged to
Treasury.

“The current rates are at $5 per tonne for handling fees and $3 per tonne
per month for storage fees against full recovery rates of $22,26 per tonne
and $10 per tonne per month respectively. The rates were last reviewed in
2009,” he said.

Mutenha told the Justice Mayor Wadyajena-led committee that GMB balance
sheet is not liquid as a result of outstanding fees amounting to $68
million.

“Going forward, in consultations with the accountant-general and
auditor-general, the accounting system will be realigned to recognise as
income from government in respect of direct operational costs such as
transport and storage resources to mitigate against the gravity of losses
being incurred,” he said.

He added:”If the money was to be paid, there will be excess cash of $32
million after liquidation short term debts to amount to $36 million.

“The short term debts are made up of the following; debts carried over
from the Zimbabwe dollar era has outstanding balances of $14 661 429 for
maize and wheat not paid for and fertiliser paid for by farmers but not
collected due to shortage; payroll arrears amounting to $16 601 811 made
up of medical aid, pension fund, housing fund, salary arrears and
(Zimbabwe Revenue Authority) Zimra among others and amounts owing to
sister parastatals such as Zinwa, Zesa, and local authorities amounting to
$4 830 540,” Matenha said.

He proposed that Treasury Bills be issued against outstanding handling and
storage fees from Treasury and the balance be paid as cash to the GMB and
said accumulated loss be written off against capital contribution.”

Meanwhile, the GMB board and top management will go under Parliament
scrutiny after Wadyejena’s committee demanded that they bring their
curriculum vitae (CVs).

They also wanted to know the circumstances that led to his (Mutenha)
appointment as general manger.

Mutenha squirmed under tough probe, as the committee members who include
Norton independent MP Temnba Mliswa, MDC MP for Zengeza West Simon
Chidhakwa and Zanu PF MP for Bindura South Remigious Matangira grilled him
over partisan distribution of inputs, corruption by GMB officials who
demand money from villagers to transport inputs for distribution and also
lack of a clear plan to resurrect the parastatal.

Last year, Mutenha was under the spotlight after going for a lengthy
medical layoff – two months after taking control of the strategic
parastatal.