What is the drought fund being used for?

With the country running out of its own maize stocks this month and now relying on imports from South Africa, questions are being raised as to what happened to the Drought Relief levy collected in 1984-85 to ensure the country had enough reserves in case of drought.

The Drought Relief levy was announced in Finance Minister, Bernard Chidzero’s 1984-85 budget and was effective from October 1984. Chidzero said a five per cent levy was going to be deducted from all workers except those on the then lower level income tax group from October 1984 to September 1985 while a 10 per cent levy was going to be deducted from companies from October to March. He said the move was expected to raise $50 million with $26 million coming from companies.

Comment on what the money was used for or how it will be used in future was sought from the ministry six months ago but there has been no reply up to now.

In his 1985-86 budget Chidzero announced that $26.8 million had been raised from companies while by the end of June individuals had contributed $13.7 million for the levy.

A story in the local press in October 1985, which announced the end of the levy also said that a National Drought Insurance Fund which was going to be used to finance programmes against drought including irrigation schemes, had already been set up. Investigations by The Insider have, however, revealed that a National Drought Fund was set up instead.

According to the auditor-general’s report for the year ended June 1986, in which the fund is covered the drought relief tax collected was $49.2 million of which $5 million was transferred to the National Drought Fund leaving a balance of $44.2 million being held in the Exchequer account. The cost of administering the fund was reported to be $450 and only $27 123 was accrued as interest.

By the following year the amount had jumped to $56.5 million and the cost of administering it was put at $1 000.

The report pointed out that interest for the previous year had been miscalculated and was only for 22 days instead of 231 days. The interest was therefore adjusted to $2 775 255 and, together with interest for that year of $4 486 636, total interest accrued rose to $7 261 891.

The report also indicated that all the money had now been deposited into the fund’s bank account.

In 1988 the fund had dropped to $51.7 million with $1.2 million having been paid to the Ministry of Energy and Water Resources and Development. A further $8.1 million was paid to the Ministry of Labour, Manpower Planning and Social Welfare for drought related projects.

The cost of administering the fund had jumped to $3 450 while only $38 million was reported as “investment at cost.”

The Insider was unable to obtain audit reports for 1989 and 1990 which should have shed more light on how the fund was being used.

The audit reports clearly state that the “fund was established to alleviate the effects of drought and other natural hazards adversely influencing food security and to promote the development of food production designed to counteract drought and for purposes incidental thereto.”

With Matebeleland being one of the most drought prone provinces and Bulawayo having only three months’ supply of water left, some people are querying why money from this fund should not be used on the proposed Zambezi Water Project.

The government has so far claimed it does not have money to support the project.

The Ministry of Labour, Manpower Planning and Social Welfare which is responsible for drought relief has its own budget specifically for this.

The Ministry was allocated $65 million in the current financial year. It is clearly stated that money for this cannot be transferred without prior treasury approval.

In 1988 only $17 million was spent on drought relief while a mere $5 million was allocated in 1989 only to jump up to $48 million the following year.

Reports say some two million people are in need of drought relief.

(78 VIEWS)