HARARE – The finance ministry authorised the payment of US$1 million for a consignment of Covid-19 equipment at inflated prices from a company linked to President Emmerson Mnangagwa’s son, according to a leaked document.
The broke Zimbabwe government, desperate for Covid-19 test kits and other essentials like masks, lifted its own restrictions on buying from third party vendors to approve the deal – but the country could end up paying two times more, our investigations reveal.
The company at the centre of the scandal is Drax International, which is owned by Delish Nguwaya, a business partner of Collins Mnangagwa.
Drax International got registered as a government supplier after stating its headquarters as Switzerland, but on its website, it says it was registered in Dubai, the United Arab Emirates, in 2020. The company uses a bank account held with Bank One Limited in Mauritius.
A leaked May 8 memo signed by finance ministry permanent secretary George Guvamatanga, and addressed to then health ministry permanent secretary, Agnes Mahomva, gave a special dispensation for Drax to deliver its consignment worth US$987,720.
Days earlier, on April 28, Guvamombe had directed Mahomva, in another letter, to terminate supplier contracts under force majeure, a common clause in contracts that essentially frees both parties from liability or obligation when an extraordinary event or circumstance beyond the control of the parties occurs. The finance ministry, Guvamombe said, wanted to “mitigate against escalation in the amount of debt to the said suppliers with Treasury is clearly now not going to be able to meet.”
Drax International has signed deals with the government worth over US$60 million for the supply of drugs to NatPharm, the state-owned drugs supplier.
Directing Mahomva to disregard his April 28 letter, Guvamatanga said he was “exceptionally authorising” the release of the Drax consignment which he said was already at the Robert Gabriel Mugabe International Airport in Harare.
He cited the “urgent need for test kits… in the ongoing fight to fight the Covid-19 pandemic.”
Guvamombe added: “Treasury will provide funding for the consignment guided by the contract.”
The items to be procured included 5,040 N95 masks at a cost of US$28 per unit, 15,000 Covid-19 test kits at US$34 each and 3,740 coveralls for US$90 each.
The masks cost an average US$5 per unit or less with suppliers in Dubai, where Drax is registered, while the coveralls cost an average US$30. The government bought the Covid-19 rapid test kits from a Namibian supplier, Jaji Investments, at US$15 each in March.
Based on our calculations, the consignment should have cost between US$500,000 and US$550,000, meaning Drax International stands to profit by nearly half-a-million United States dollars.
Drax International does not appear to have gone through a tender process to land the deals with NatPharm, raising questions over how the company got the preferential treatment.
On Wednesday evening, Guvamatanga said he had done nothing wrong.
“It is true that we authorised the release of 15,000 test kits that were at the airport. It is false that a payment of US41 million was authorised, neither was it paid nor will it be paid,” Guvamatanga said on Twitter, without elaborating.
The possible involvement of President Mnangagwa’s son in the deal shines a new light into how the first family has used its political muscle to force through deals to fleece the already broke government, which finance minister Mthuli Ncube warned in April faces an “economic catastrophe” if it doesn’t get a massive financial bailout from international lenders.
Last week, it was revealed in another leaked finance ministry memo that controversial businessman Kudakwashe Tagwirei bought 162 buses from Belarus, which he was now selling at a huge profit to the state-owned bus company, ZUPCO. Tagwirei has partnered another of Mnangagwa’s children, Emmerson Junior, in shady deals that are bleeding the country’s coffers. – ZimLive