The GoZ is going to blacklist more suppliers as it intensifies the monitoring of prices of basic goods to weed out rogue suppliers while at the same time fostering discipline in the public procurement system.
This follows the blacklisting of suppliers by the government towards the end of last year, who were charging outrageous prices. This also came against the backdrop of a scandalous deal to supply Parliament with laptops that triggered a public outcry.
The 19 companies blacklisted so far, include:
- Nariox (Pvt) Ltd,
- New Age Marketers,
- Pepwit Investmentsd,
- Tirumi Investments,
- Mwendo Africa,
- Alg World Investments,
- Lobmer Investments,
- Nisbank Enterprises,
- Sailgroom Enterprises,
- Wayvar Investments,
- Poweride Safaris,
- Azelion Energy,
- Paza Buster,
- Redan Coupon,
- The Best Car Rental,
- The Legacy Car Rental,
- Josam Enterprises and
- Construction Warehouse.
The government is also undertaking a public procurement audit to authenticate prices submitted by suppliers whose payments were withheld pending authentication. Several suppliers have been milking the government by indexing prices based on projected foreign currency parallel market rates, which were exaggerated. The rates were as high as US$1:ZW$1 500.
After receiving payments, the suppliers would offload billions of dollars-worth of local currency on the parallel market pushing up the exchange rate. The indiscipline spiked the parallel market rate triggering panic and a wave of price increases.
A well-placed Treasury source said that a process was underway to draw up another list of “rogue” suppliers, which might lead to another blacklisting. Those targeted include, travel agencies, suppliers of fuel, vehicles, food rations to the military and car hire agencies.
The source further noted that the Treasury was targeting fuel dealers, who have for years been charging extortionate prices to government ministries and agencies. There are also claims that food ration suppliers to the military have been charging exorbitant prices as well as abusing duty-free certificates.
The government is already considering setting up a department to deal with travel logistics for state officials, as a way of cutting off travel agencies that have been profiteering. Treasury source said:
“We continue to review supplier behaviour in terms of pricing and involvement in the illegal black market and more suppliers will be blacklisted.”
Efforts to get a comment from Finance permanent secretary George Guvamatanga were futile as his mobile phone was not reachable. He had not responded to questions sent to him by the time of going to print.
The Treasury has directed all ministries and government agencies to procure fuel from state-owned companies, namely CMED, Petrotrade and Genesis. There were also indications that the government fuel coupon system had become a cash cow for some civil servants.
“Most government officials were now converting coupons to cash and in the process the government has been losing out. These officials have been selling coupons for a discounted price and Treasury is looking at addressing this.”
The government last year also busted a syndicate, comprising vehicle suppliers and senior procurement officials in various state institutions, who have been milking the government of millions of United States dollars through inflated vehicle supply deals.
Some motor vehicle suppliers have been dribbling the government, taking advantage of the Procurement Regulatory Authority of Zimbabwe (PRAZ) decentralised system to invoice government departments different prices on the same product.
According to the new procurement law all ministries, state-owned enterprises and local authorities are supposed to establish Procurement Management Units (PMUs). These units are expected to be manned by professional procurement officers, who are licenced in terms of the Public Procurement and Disposal of Public Assets Act (Chapter 22:23).
The PMUs are responsible for the whole procurement cycle in the public sector from the planning, and adoption of the appropriate method of procurement, preparing bid notices and shortlisting, managing the bids and evaluation processes, preparing evaluation reports to awarding of contracts and overseeing their management and preparing procurement reports.
This according to well-placed sources at Treasury saw motor vehicle suppliers dribbling government systems through invoicing different prices despite delivering the same product with the same specifications to state departments. There are also claims that vehicle suppliers have been overcharging the government due to the state’s failure to meet its financial obligations on time.
Accounting officers, who fail to detect pricing malpractices would be deemed criminally negligent and held personally liable in terms of the Public Finance Management Act while suppliers who generate invoices based on black market exchange rates would be blacklisted.
Zimbabwe is battling to maintain exchange rate stability and contain inflation within sustainable margins. At the bottom of the instability, authorities flagged market indiscipline perpetrated by suppliers of goods and services to the government.