CMED fuel scandal tests government’s integrity

via CMED fuel scandal tests government’s integrity – The Zimbabwe Independent June 27, 2014 by Herbert Moyo

LAST week’s revelations of a US$3 million CMED fuel scandal in which National Oil Infrastructure Company and Petrotrade chief executive officers Wilfred Matukeni and Tanaka Sikwila were fingered are sure to test government’s resolve in dealing with corruption at state enterprises.

Matukeni and Sikwila reportedly “lied that First Oil had three million litres of fuel at its Msasa depot when its tanks were dry,” resulting in CMED losing US$3 million which the parastatal had borrowed from ZB Bank to procure three million litres of diesel from First Oil.

Despite knowledge of their suspicious activities, Energy and Power Development minister Dzikamai Mavhaire went ahead to appoint the duo to the board of Petrotrade, a move all the more difficult to fathom coming at a time government has been waxing lyrical about appointing individuals of honesty and integrity in line with its new National Code of Corporate Governance.

The code is aimed at providing a “holistic solution to corporate failure and poor corporate governance”.

Tellingly, when quizzed by the media, Mavhaire suggested Mugabe backed the appointments saying: “It is as good as you are questioning why President Mugabe approved those boards.”

But to ordinary Zimbabweans such appointments, like the appointment of Goodwills Masimirembwa as chairman of the board by Transport and Infrastructure Development minister Obert Mpofu, sap confidence.

“If at all the government has been thinking of starting on a clean slate where parastatal appointments will be free from corruption, then this (Mavhaire’s statements) represent a bad beginning,” said political commentator Godwin Phiri.

“It is difficult to see how such an arrogant attitude that brooks no criticism can be helpful in making the right decisions for the country.”

Mavhaire also defended his appointments claiming he had considered skills, qualification, gender and regional representation.

“We need technical people and political direction in appointing people and that is why there are a lot of engineers, doctors and financial gurus on those boards.”

But Mpofu was last week singing a different tune, confirming that the CMED scandal involving the duo had been reported to the police and calling for justice to prevail.

“There have been claims that these guys are untouchable but we are going to touch them,” Mpofu reportedly said.

“We do not want any bureaucratic approach to this matter because this will tarnish the image of the institution… The matter has been reported to the police. It is not money that was stolen from CMED but it is money that was collected by characters and businesspeople who are well known. Their businesses and premises of operation are known.”

The two ministers’ actions and utterances reveal the two faces of the Zanu PF government that Zimbabweans have become accustomed to over the past 34 years of the party’s rule since Independence in 1980, one that has paid lip service to impropriety and corruption in appointing individuals to public enterprises, and another which has shown signs of dealing with the scourge but remaining woefully short on actual delivery.

The question that most Zimbabweans are asking is whether the new code which government is moving fast to turn into an act of parliament can be implemented to stem the tide of corruption?

State enterprises (SEPs), which have the potential to contribute 40% to the country’s Gross Domestic Product, can only make a meaningful contribution when run professionally and not the current shadowy approach where appointments are made on partisan grounds.

Zimbabwe Environmental Lawyers Association finance officer Mukasiri Sibanda expressed optimism that the “state capitalism”

which Zimbabwe is pursuing by employing parastatals and state enterprises as vehicles of economic development could well succeed as it has in China if government adopts the “zero corruption stance” as contained in the Corporate Governance Code.

“State capitalism is flourishing in China precisely because there is zero tolerance to corruption while failing in our own country despite our fondness for Looking East,” Sibanda said.

“Good corporate governance is the injection that is needed in Zimbabwe otherwise the parastatals will continue draining the fiscus, crowding out other critical socio-economic sectors,” said Sibanda.

But Mavhaire’s board appointments — even as the governance code was being crafted — show that there is very little to suggest any real commitment to dealing with corruption.

Instead patronage continues to take precedence in ministerial appointments.

Analyst and academic Ibbo Mandaza, who is former chairperson of the parastatals commission (1988-1990), said it is unlikely that the new code will influence a drastic change of behaviour in a government which failed to stamp out corruption despite setting up commissions of inquiry and even establishing a Parastatals Commission from 1988 to 1990.

“Any talk of corporate governance flies in the face of the culture of patronage which is so common the world over but particularly poignant in the Zimbabwean case due to an economic and leadership crisis,” said Mandaza, adding, “clearly the patronage culture is too strong and uncontrollable. It has become worse with an ailing president.”

He added: “Way back Mugabe appointed the Justice Smith Commission of inquiry as well as the Parastatals Commission to arrest patronage. He would go through every board, every appointment of the chief executive officers as he did with respect to the appointment of ministers. As is natural as he got older he has commensurately lacked the capacity of oversight.”

This country already has a reputation for ambitious well-meaning policy documents which have failed to make a positive impact on socio-economic development due to lack of political will to implement them.

For long-suffering Zimbabweans, the CMED scandal will be viewed as a test case to ascertain the government’s new-found resolve in implementing its latest governance code to tackle corruption.

But Phiri pointed out that: “The proof of the pudding will be in the eating but the code may well lead to concrete action because the economy is bleeding from various causes, chief of which is the scourge of corruption in the parastatals and civil service. The Zanu PF government does not want the economy to totally collapse and ruin Mugabe’s legacy.”