$20m youth fund scam

via $20m youth fund scam – DailyNews Live by Kudzai Chawafambira  23 MARCH 2014

The unfolding scandal surrounding a $20 million private and public sector fund to “empower youths” is symptomatic of Zanu PF’s failed policies and culture of looting, analysts said yesterday.

While party bigwigs and spin-doctors have been desperate to project the current economic malaise on non-consequential issues such as public sector executive salaries, the latest scandal to hit President Robert Mugabe’s government is also indicative of the party’s penchant for politicising everything.

In another view, the unfolding scandal — exposed by Justice Mayor Wadyajena’s parliamentary committee on indigenisation and empowerment — has echoes of the unprecedented looting and collapse of the late Roger Boka’s Universal Merchant Bank, the unplanned land redistribution and the war victims’ compensation fund.

This also comes amid revelations that regions outside the main Mashonaland provinces benefitted less or virtually nothing, in what has been viewed as tribal considerations in distributing the funds.

Ibbo Mandaza, a political analyst, strongly suggested yesterday that the funds were liable for abuse because they were a Zanu PF political gimmick.

“I never understood that thing (youth fund). At best, it was linked to elections and now that elections are done, so was its death,” the Southern African Political and Economic Series founder said.

With the Gokwe-Nembudziya legislator’s committee facing immense political pressure in its quest to fully understand the mess created by former Empowerment minister Savior Kasukuwere, the funds under scrutiny related to those supported by the Central African Building Society (Cabs) and its parent Old Mutual (OM), and that backed by John Moxon’s Meikles Group (Meikles).

In particular, the Kurera-Ukondla Youth Fund — disbursed by Kevin Terry’s Cabs in conjunction with Kasukuwere’s ministry and a board of trustees — spent funds only on youths affiliated with the ruling Zanu PF, who are now failing to pay back the loans.

As it is, the Mount Darwin South Member of Parliament is facing allegations that he “hijacked the whole process” and solely gave the funds to Zanu PF members and youths, mainly from Mashonaland provinces.

A report submitted to the key parliamentary portfolio committee shows that the OM kitty — squeezed out of the international financial group when it was facing immense pressure to indigenise — and another one given via the Infrastructure Development Bank of Zimbabwe (IDBZ), suffered a high default rate and those who benefited leveraged on their links with Zanu PF.

The report, which exposed deep-rooted cronyism in Mugabe’s Zanu PF, showed that relatives of top government officials were among those who benefited and are now failing to pay back.

In particular, the IBDZ report makes reference to a

$5 000 loan to Rashfin Investments (Rashfin), a company reportedly owned by Kasukuwere’s younger brother, Tongai, and who is struggling to repay the money – under the Youth Development Fund (YDF).

Failure to pay back the loans is now stalling the loan scheme which is supposed to be revolving.

Rashfin is among five companies from Mashonaland Central that received loans in the government initiated programme.

When contacted for comment last Thursday, Kasukuwere’s young brother denied receiving cash from the fund.

“I have got nothing to do with Rashfin,” he said. “Do you think I can borrow such a paltry amount and fail to service it? My friend, you are free to visit my farm to see if it is not performing (well).”

The report shows that in 2012, Meikles availed $200 000 in collaboration with the Youth and Indigenisation ministry as part of efforts to support the YF.

Charles Chikaura, the IDBZ chief executive, told the parliamentary committee last week that they were considering litigation to recover the funds from Zanu PF beneficiaries.

“At this stage these loans are non-performing. There is still a chance to recover the money from the projects if the economic environment improves,” he said.

“But if all fails, we will have to litigate. That will be the normal procedure but we stand guided on that matter by the government,” the IBDZ boss said.

Chikaura told legislators that out of $450 750 it disbursed, only $197 391 was recovered.

He noted that most of the beneficiaries were reluctant to pay back.

“There were a lot of factors that contributed to this poor repayment rate,” the ex-Reserve Bank of Zimbabwe senior staffer said.

“These include frost that affected five projects, poor planning and project management as well as unwillingness to pay by others”.

John Mushosho’s OM indicated to the parliamentary committee that 72 percent of the fund’s recipients had failed to repay the loans.

Terry, the Cabs boss, also told Wadyajena’s committee that so far, the society has approved 3 622 applications worth $5,2 million and had disbursed $4,5 million.

The average loan size was $1 438.

“Of the $4,4 million  that we have disbursed, the arrears currently stand at $2,3 million with a total of non-performing balances of just over $3,1 million,” he said.

The committee also dismissed Terry, who is the deputy OM chief executive, on the basis that he did not bring a detailed report that had been requested in writing by the committee.

“We need details on the beneficiaries of the fund, their addresses, proof of age and a summary of disbursements, province by province,” Wadyajena told Terry.

“We don’t run your organisation. You should come back with all the required information and be well-prepared. You are dismissed.”

This was after Terry had presented a summarised report. Observers say the looting of the Youth Fund mirrors deep rooted corruption in the country.

About 34 years into independence, Zimbabwe’s government, has failed to deal with corruption which has become endemic.

Even though Boka’s bank collapsed amid allegations that he had sold faked bonds, the material fact also remains that funds doled out to several party bigwigs, including Justice minister Emmerson Mnangagwa, were largely unreturned or paid.

At that time, the self-styled empowerment guru was trying to curry favour with authorities under the guise that traditional banks were discriminating against blacks by demanding ample collateral.

And as the barrage of corruption scandals continue to unfold in Zimbabwe, each one of them has become more brazen — than the one before — and has exposed just how pervasive and pernicious the stealing has become in the country.

Deep-rooted corruption in the upper echelons of government and the ruling party  dates back to 1988 in what came to be dubbed the “Willowgate” scandal.