FINANCE minister Mthuli Ncube on Wednesday held crunch talks with China’s Deputy Ambassador to Zimbabwe Zhao Baogang following a nasty fallout over development-partner support figures presented in the 2020 National Budget statement at a time the Chinese remain concerned about the raiding of project funds totalling US$10 million from an escrow account held with a local commercial bank.
In his budget presentation last Thursday, Ncube stated that bilateral support provided by China stood at US$3 631 500.The figure attracted interest on social media with a number of people questioning how China, which is regarded as an all-weather friend and strategic partner to Zimbabwe, had been dwarfed in its contribution by the United States and Britain which contributed US$50 million each while the European Union provided US$41 million.
Chinese embassy officials, including Ambassador Guo Shaochun and Zhao, immediately refuted the figures.The Chinese embassy on Tuesday issued a statement saying China had provided US$136,8 million between January and September.
“…The Embassy has noted that in the statement, among Development Partner Support received by the Zimbabwean government through bilateral channels, the figure of bilateral support provided by China to Zimbabwe is 3 631 500 USD. This is very different from the actual situation on the ground,” the Chinese embassy said.
“According to our record, from January to September 2019, the actual bilateral support provided to Zimbabwe by China is 136.8 million USD. Such a figure does not include the other bilateral supports such as the expense of expert assistance, embassy’s donations to local vulnerable groups and so on.”
The embassy requested that the government makes “comprehensive assessments on the statistics of bilateral supports and accurately reflect its actual situation when formulating budget statement”.
Following the public spate, Ncube met Baogang shortly after arriving from Dubai where he had accompanied President Emmerson Mnangagwa on a state visit.
He was accompanied by his permanent secretary George Guvamatanga and directors in the Ministry.
“It was clear that the Chinese were not happy with the bungling and wanted the matter addressed. They came for the meeting with proof that they had channelled USD$136,8 million between January and September. Ministry officials acknowledged that there was a mistake on their part,” a government official said.
“The meeting agreed that Ministry of Finance would correct the anomaly, resulting in Mthuli (Ncube) issuing a statement on Wednesday evening.”
In his statement, Ncube however fell short of acknowledging that he had made a mistake although an admission was made during the closed-door bilateral meeting.
“The government of Zimbabwe acknowledges the assistance received from the People’s Republic of China on the following: upgrading of the Robert Gabriel Mugabe international Airport, the new parliament building, rehabilitation of Hwange 7 and 8, Cyclone Idai, Mahusekwa District Hospital, food aid and borehole drilling programme,” Ncube said.
“Further the People’s Republic of China has provided the Republic of Zimbabwe with loans and grants for other projects.“The two sides have reached an agreement on the facts and figures contained in the statement issued by the embassy on the 19th of November 2019 and the national 2020 Budget Statement.”
Government officials said although the Chinese were disappointed by the misrepresentation of their support to Zimbabwe, they expressed desire to deepen bilateral cooperation between the two nations.
Officials said the US$10 million project funds raided from the Stanbic Bank escrow account was not on the agenda as the matter had been discussed between the parties in previous meetings.
The money put three infrastructural projects—the US$1,1 billion Hwange Thermal Power Station units 7 and 8 refurbishment, US$153 million Robert Mugabe International Airport expansion and the US$71 million NetOne expansion—at risk, after the China Exim Bank stopped funding the projects until the money is returned.
“The government has made a commitment to return the money although it has not yet reflected in the escrow account. So as it stands, the matter has not been resolved,” he said.
“The Chinese have been patient on the matter and want the projects to continue. The projects are continuing using funds provided by the contracting companies. But for the projects to be completed the China Exim Bank funding is needed.”