GMB hamstrung by past corruption

GMB General Manager Retired Police Assistant Commissioner Albert Mandizha

The State owned Herald newspaper disclosed that the Grain Marketing Board has gone to the market to borrow money after failing to pay farmers who delivered their produce to the parastatal last season.

It is not clear from the report why the GMB has decided to go borrowing to pay for produce delivered to the corrupt and militarised parastatal.

Mr Zvidzai Makwenda the parastatal’sdeputy general manager marketing reportedly told the inaugural Zvimba District Farmers’ Association meeting in Banket on Saturday, that;

"Government has stopped funding our (GMB) operations and we have had to go on the market to borrow money to pay farmers.

We (GMB) have been engaged in positive talks and we expect a positive answer by Wednesday (tomorrow) as we are on the verge of receiving a loan to pay the farmers."

There was absolute silence as to what happened to the produce the farmers delivered to the GMB last season and why the government had stopped funding the most strategic parastatal in the country in respect of food security.

The truth is that the GMB was at the centre of the food politicisation campaign by Zanu PF. The General Manager Albert Mandizha is a former Zimbabwe Republic Police Assistant Commissioner who was strategically appointed for his political correctness within Zanu PF rather than for his management acumen.

The Zimbabwe government has outlawed all trade in agricultural produce by entrepreneurs and monopolised that through the GMB.

Qualified and experienced managers have been systematically replaced by seconded and retired military personnel with little knowledge about business management but total loyalty to Zanu PF.

This gave the Zanu PF regime easy access to directing operations at the parastatal for party causes rather than national interest.

The parastatal that is meant to manage food security reserves for the nation was forced to go into milling, bread making, retailing and import and export of agricultural produce under its monopolistic control.

The country has been in food sufficiency distress for a very long time and everything else including monkeys, droughts, sanctions, the MDC, the British and Americans have been blamed for the problems at the GMB except Zanu PF interference.

Despite the critical role the parastatal plays it has not been featuring high on priorities of the Coalition government because its operations are being reviewed in the holistic objective of economic stabilisation.

The problem at the GMB has always been unbridled corruption driven by partisan political interests of the ruling elite.

Reserve bank Governor Gideon Gono printed so much paper money and availed it to the GMB to import cereals that were inadequate for national demand but most of the money was used to import maize that was then distributed on political partisan lines to loyal chiefs, headmen and Zanu PF councillors who were not charged anything for the produce.

The same fate befell the local produce deliveries to the parastatal.

So awash was the GMB with RBZ printed money the parastatal had no reason to sell the scarce produce in its possession at market rates preferring rather to be Father Christmas with the produce to Zanu PF zealots.

When the coalition government fiscal policies intervened and made it impossible for the RBZ to doll out money to the GMB the out of sorts management at the parastatal found itself laden with a heavy debt to local producers it has no means to repay.

The intake has already been squandered by Zanu PF beneficiaries who paid nothing for it and cannot be followed up to pay up for the grain they received.

Salaries and wages for employees are increasingly becoming difficult to meet as the fat bank balances the GMB used to pay workers with have been run down and in any event the ZW$ currency has been rendered useless for any transaction until the end of the year when with luck it may be revived as an acceptable medium of exchange.

I remember having a slight brush with the Chairman of the Quill Club sometime in October 2008 because I had said the ZW$ was a useless currency being used because Zimbabweans had lost sense of real monetary value to which he responded it was real money because it still enabled him and everyone else to secure goods and services.

I wonder how the chairman of the popular jurno’s club must now be feeling with the wards of ZW$ littering the streets with nobody interested to pick them up.

Back to the GMB, the reason why the parastatal thinks government has abandoned funding its operations is because the RBZ has been incapacitated to credit its accounts with balances from nowhere to enable it to draw cash and source forex on the black market.

Now the parastatal is forced to source funds from financial institutions and will have to repay the loans and interest thereon from produce it expects to attract from the disillusioned farmers it has not paid for the previous season’s deliveries.

The sick joke though is the GMB thinks all farmers are dimwits.

Recently the bankrupt parastatal announced a maize floor price of US$265 per tonne in a bid to lure the farmers it alienated through non payment of last season’s produce delivered to it at the farmers’ expense.

The parastatal is reportedly prepared to pay the “competitive prices” of up to US$300 per tonne to any farmer who delivers 30 or more tonnes of maize to its intake depots countrywide.

Its “unscrupulous” competitors with ready cash are reportedly buying the same maize from the same farmers at US$150 per tonne.

“The failure by GMB to pay farmers on time, coupled with prices that those in the industry viewed as non-competitive, has prompted many farmers to look for alternative grain markets in recent years,” the Herald accurately observed.

The disillusioned farmers now struggling to raise funds to prepare for the next agricultural season without RBZ generous donations are more than happy to accept the lowly US$150 per tonne from the so called unscrupulous buyers who provide transport to ferry their purchases to wherever they want to keep and use them than wait for mouth watering US$265-300 offer by a GMB that is yet to pay them for their previous deliveries to the parastatal and is unwilling or incapable of providing transportation for the deliveries it expects from farmers.

If the GMB had not corruptly donated the 2007/8 intake to Zanu PF politicking and instead sold it to the people it would be having enough working capital to purchase the current season’s crops at no more than what its competitors are offering to the farmers.

Now because of the blind stupidity on the part of its management it is offering a floor price way beyond its means at the same time it is borrowing at a premium to finance outstanding 2007/8 or face a producer delivery boycott and lose out to competitors.

The cost of borrowing will need to be factored into the GMB’s intake disposal costs and drive retail costs through the roof.

But with the country open to use of multiple currencies, the uncompetitive pricing structure for the GMB will drive consumers to import cheaper produce from elsewhere and saddle the parastatal with stocks it will not be able to move to earn the promised repayments to farmers and this time next year the farmers will once again find themselves squirming about non payment for produce they delivered to the GMB.

Mr Makwenda, is reportedly contented that his organisation has so far managed to payout 85 percent of farmers that delivered wheat last year and has only the unpaid remaining 15 percent to worry about.

The remaining 15% yet to be paid delivered 85% of the wheat intake by the GMB and are thus owed 85% of the parastatal’s 2007/8 liabilities and if they withdraw deliveries will cause an 85% deficit to the already insufficient GMB intake.

"The list of farmers who delivered their produce to GMB last year has been forwarded to the Reserve Bank of Zimbabwe, who will work with the Ministry of Finance to clear the debts owed to farmers," he added.

Why should the Reserve bank and the Ministry of finance be involved in clearing debts of a GMB with the monopoly on grain trade?

In any event is it not the same RBZ that recently introduced the Debt-for-Fertilizer Swap Programme to alleviate the plight of farmers yet to be paid by the State monopoly?

We hope this is not another way of rekindling the quasi-fiscal activities at the central bank that have had disastrous consequences of our economy in the past decade.