via Ministry borrows to purchase luxury Mercedes-Benz cars July 25, 2014 by Herbert Moyo
THE Ministry of Finance is set to purchase luxury Mercedes-Benz vehicles after successfully negotiating a US$1,4 million loan with the African Banking Corporation of Zimbabwe (BancABC), the Zimbabwe Independent has learnt.
Highly-placed ministry sources and bank officials confirmed that the ministry had approached the bank for the loan facility described as “lease hire finance”, which was subsequently approved on July 9.
The bank then wrote to the ministry’s permanent secretary, Willard Manungo, on the same day communicating its decision on the matter.
“BancABC is prepared to place at the ministry’s disposal (US$1,4 million loan facility) subject to the approval of the bank’s board of directors,” reads the letter seen by this newspaper.
The ministry was offered the loan at an interest rate of 15,5% per annum and on condition it repays in “12 monthly instalments starting 30 days after disbursement”.
Desmond Ali, the BancABC country head of marketing referred all questions to the managing director Hashmon Matemera, who had not responded at the time of going to print despite promises from his office to do so.
Finance minister Patrick Chinamasa also did not respond to telephone enquiries despite initially promising to do so during his press conference on the state of the pension fund industry held in Harare. Manungo was also unreachable as his office phones went unanswered.
The letter does not say what type of Mercedes-Benz vehicles the ministry seeks to purchase, who they are for and what they will be used for.
However, government has previously splurged on Mercedes-Benz E350 sedans which cost US$126 000, meaning that the US$1,4 million loan can buy about 11 such vehicles.
The ministry’s car purchases come in the wake of similar purchases for ministers and legislators running into millions of dollars despite the biting liquidity crunch that has seen the country desperately trying to court international financiers for assistance and failing to pay civil servants on time.
A few months ago government spent close to US$20 million on luxury cars, including Mercedes-Benz and SUVs for 26 cabinet ministers, 13 ministers of state and 24 deputies.
The government also spent US$15 million on luxury cars for its 355 legislators in April. Earlier in February, Mercedes-Benz E350 sedans, Toyota Land Cruisers and Range Rover Sport vehicles were bought for provincial ministers.
In the midst of the extravagance, Zimbabwe is battling high unemployment estimated at 80% and Chinamasa has been criss-crossing the globe in search of an elusive financial rescue package to kick-start the moribund economy.
As many as 400 workers are being retrenched on a weekly basis as companies continue to close, while service delivery has deteriorated.