Government gives ZISCO and IDC $24 million without signing any loan agreements

Two state enterprises, the Zimbabwe Iron and Steel Company and the Industrial Development Corporation were given more than $24 million without signing any loan agreements, Parliament heard today.

The agreements were only signed after the auditor-general’s office questioned the legality of the advances.

This was revealed today when the chairperson of the Public Accounts Committee Paurina Mpariwa presented her report on the findings by the auditor-general on the 2014 and 2015 appropriation accounts of the Ministry of Industry and Commerce.

She said that during the 2013 audit, it was observed that the Ministry issued loans to Zimbabwe Steel Company (ZISCO) and Industrial Development Corporation (IDC) amounting to $12 658 331 without signing loan agreements.

In 2014, the Ministry further issued $11 663 363 to the same parastatals again without loan agreements.

“The Ministry informed the committee that ZISCO Steel and IDC had contracted loans from the China Exim Bank and experienced challenges in servicing the loans. The Ministry then approached Treasury which in turn paid the amounts in question to the Bank in 2013 and 2014 on behalf of the parastatals,” Mpariwa said.

“The Ministry indicated that loan agreements between the Ministry and the respective parastatals were prepared following the audit observation. Signed copies of the loan agreements were availed for audit inspection and as a result, the audit observation has been cleared.

“The Committee however, noted with concern the payment of over $24 million on behalf of ZISCO Steel and IDC without the corresponding record of the liability in national accounts reflecting these amounts owing to central government. It therefore, makes it difficult for Treasury to adequately record the full extent of sums owing to Government by parastatals.”

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