Govt takes over $23m private debt

Source: Govt takes over $23m private debt | The Herald July 1, 2016

Zvamaida Murwira Senior Reporter
Government inherited more than $23 million loan advanced to Farmers’ World, a private firm, and paid more than $12 million to the creditor, China Exim Bank, in its bid to maintain good relations with the financial institution and its creditworthiness, Parliament heard yesterday.

The payment was made after Farmers’ World failed to repay its loan after it got the money to secure and distribute agricultural equipment to farmers.

Presenting a Public Accounts Committee report in the National Assembly yesterday on the findings of Auditor- General, Mrs Mildred Chiri, committee chairperson Ms Paurina Mpariwa said Farmers’ World was advanced more than $11 million at a time when it was failing to service an initial loan of $11,5 million and $1 million borrowed separately bringing its indebtedness to more than $24 million.

“Government paid a total of $11 833 443 to China Exim Bank in respect of a debt owed by a private company called the Farmers’ World after it failed to meet its obligations. The Auditor-General failed to establish action taken by Treasury to recover money from beneficiaries of the farm equipment, and the role of the Farmers’ World in recovering the outstanding amounts,” said Ms Mpariwa while presenting the report.

Loan agreements between the bank and the private firm were not availed to Mrs Chiri for examination while it was also noted that the Ministry of Agriculture, Mechanisation and Irrigation Development advanced $11,5 million to the same private firm, bringing the total figure to $23 million.

“The Accountant-General advised the committee that the loan was inherited from the Reserve Bank of Zimbabwe debt and payment to China Exim Bank was important for Government to retain the country’s creditworthiness with the bank and ensure continued lines of credit,” read the committee’s report.

The audit showed that Government assumed another debt of $1 142 407 (including interest) advanced to Farmers’ World which resulted from a payment of $970 000 loan borrowed from China Exim Bank in March 2010.