Fiscal transparency and accountability in the context of devolution

Beaven Dhliwayo

Devolution funds have become an avenue for self-enrichment by Local Authorities’ officials who have taken advantage of loose controls to abuse monies meant for the betterment of the populations countrywide.

Several local authorities are under investigation by the Zimbabwe Anti-Corruption Commission (ZACC) with regard to their devolution funds expenditure between 2019 and 2021.

These include Guruve Rural District Council, Mutoko Rural District Council, Norton Town Council, Umzingwane Rural District Council and Umguza Rural District Council.

Between 2019 and 2021 statistics show that the Zimbabwe government disbursed a total of ZW$2.2 billion to local councils as devolution funds.

But this was done without following due processes for transparency and accountability, which has given authorities an opportunity to abuse funds meant for the betterment of the population countrywide.

ZACC arrested Guruve Chief Executive Officer Tinos Marisa on abuse of office charges, theft of bricks, drilling boreholes at his farm using council property, and misuse of devolution funds.

it is alleged that the CEO drilled a borehole at his farm using devolution funds. Given the tight fiscal space that councils operate under, every cent counts.

The devolution fund could have been used for procuring fuel for waste collection, road maintenance, and or catering for public health delivery gaps in Guruve district.

Contacted for comment on the arrest and alleged misuse of devolution funds, Guruve CEO, Tinos Marisa’s mobile number continued to go to voicemail during the course of the investigation.

Efforts to get a comment from Guruve Rural district council chairperson Ngoni Jeke were fruitless as his mobile phone could not connect due to poor network. He did not respond to the WhatsApp messages sent to him on September 28,2022.

Meanwhile, Seke Ward 10 councilor, Maplan Ngwenya said Marisa was under suspension awaiting the finalization of the ZACC investigation. This, Ngwenya said is, stalling council business since there is now a division among councilors and council staff, and this compromises service delivery to the residents.

“As councilors, we now await the ZACC to conduct its investigations so that we map the way forward. We pray that people at Guruve Rural District council unite so that we serve the people. I can tell you a lot happened and the people in our communities are the ones who suffer,” said Ngwenya. Guruve Residents Association chairperson, Mr. Marx Busiyao said the whole system has to be investigated.

“Suspending the CEO alone is just ZACC succumbing to the pressure of the association in regards to calls of rampant abuse of devolution funds by Guruve rural district council,” said Busiyao.

“Even the Council Chair, Mr Ngoni Jeke is implicated in the abuse of devolution funds because he okayed all the transactions made by the council. He is a beneficiary together with a number of staff members at the rural council. The Acting CEO used to work under Marisa hence we are afraid that he will work in cohorts with other staff members to clear the suspended CEO.

“ZACC should investigate the whole administration and bring all the perpetrators to book. The arrest is just a drama because the same people who were working with Marisa are still in office and are busy destroying the evidence,” said Busiyao.
ZACC spokesperson John Makamure said the commission was investigating Guruve Rural District Council and several councils but would not comment further on criminal cases under investigation.

“I can confirm that ZACC has carried out systems and compliance checks at these
local authorities and many others to ensure that they adhere to the highest
standards of good corporate governance and rules and regulations governing
public finance management and procurement.

“The Commission is pleased that several of its recommendations are being
implemented by the local authorities concerned. I will not comment on specific
criminal cases under investigation,” he said.

There are several cases that show a lot of loopholes in terms of fiscal transparency and accountability of devolution funds among local authorities.

According to the 2019 findings of the Auditor General by Mildred Chiri on local authorities, Mutare City Council for instance, in 2012 paid a supplier US$330 000 for the supply of water pipes not yet delivered to date.

The US$330 000 that was paid for undelivered water pipes affects citizens in such a way that some places still do not have adequate water supply.

The report further noted that in places like Hobhouse, residents still travel to kuChitubu -spring to fetch water. For two decades now, some Dangamvura residents are yet to access tap water forcing residents to opt for water from unprotected wells, which makes them vulnerable to water-borne diseases like
typhoid and cholera.

Moreover, the audit report pointed out that Bindura municipality in December 2018 paid US$90 850 for purchasing a front-end-loader which was never delivered. Given that it’s now almost four years after a front loader had been paid for and not delivered, there is a high likelihood that the municipal could lose

Chiri noted that the paid-for but undelivered front-end loader also undermines the municipality’s capacity to deliver public services at the expense of the beneficiaries

Recently, Bulawayo East MP Ilois Nyoni claimed to have channeled his entire $10 million Constituency Development Fund (CDF) toward drilling three boreholes in the Constituency.

At the parallel market rate of 1:750, this will amount to about USD13 300. This will imply that each borehole was drilled at a cost of USD 4 400. Yet most drilling companies are charging less than that.

A survey for quotations at several companies in Harare showed that for siting and survey they charge US$100, for drilling and casting US$1 500, and for installation which is usually on a fix and supply. This totals to US$2 700 against the $4 400 charged at the parallel market rate. This may point to inflated prices to drill one borehole.

According to the 2019 Auditor general report, the Ruwa Board bought 5 Titan tablet phones at $7 609 in November 2018 but not been delivered as of February 2020.

Unaccounted 8 860 litres of diesel and 3 125 litres of petrol coupons. Again, Chiri pointed out that no contract was availed between the council and a local company to construct a water pipeline from Nora Dam to Ruwa Local Board.

The undelivered tablets prejudiced the local authority of funds that could have been utilized for local service delivery. Public fuel could have been used for private business. Public procurement procedures could not have been followed and this could have fuelled leakages of public resources in the process.

A recent visit meant to understand the welfare of Masvingo residents by the Parliamentary Portfolio Committee on Local Government led by Miriam Chikukwa where members of Parliament were investigating issues raised by residents in a petition to the August House in 2021 where the residents claimed deteriorating service delivery and alleged misuse of devolution funds.

The city of Masvingo got $125 million under devolution and part of the money was used to construct Rujeko Secondary School. The remainder was used in the construction of Runyararo West Clinic and the city’s main sewage trunk.

The residents accused the local authority of acting unilaterally in the utilization of the funds. This could have prejudiced the locals in how they wanted their funds to be utilized. They claimed deteriorating service delivery and alleged misuse of devolution funds.

Speaking at the meeting, Tracy Musakarukwa, a resident from ward one, said the council did not conduct consultative meetings before using the funds.

At the same visit, Mayor Collins Maboke promised to consult residents next time before using public funds. He also urged Parliament to craft legislation to give guidance on the use of devolution funds. There is a high likelihood that the building materials could have been overpriced or public procurement procedures could not have been followed.

Other examples of cases of abuse of devolution funds include the questionable Belarus fire tenders. A letter dated July 22, 2022, from the Local Government ministry stated: “As you would recall the matter to do with the supply of fire tenders and other emergency vehicles from Belarus has been under negotiation for more than a year, it involved consultations with local authorities and other stakeholders, over a long period of time.

“In order to ensure a coordinated payment modality, the government shall be paying the foreign currency equivalent directly to the supplier. Please be advised that your Zimbabwean dollar contribution towards the monthly installments is the first charge against your devolution envelope.

“It is, therefore, critical that the amount for fire tenders and related equipment for your local authority is accommodated in your budget for utilization of devolution funds. You can engage the ministry through the Financial Advisory Services for updates on devolution funding, taking into account this

But councilors and residents view the issue of fire tenders as not a priority and devolution funds should be for other pressing issues after full consultations with the residents on how the money is supposed to be used.

There is no clear guideline, as in an Act of Parliament that stipulates how devolutions funds are handled, hence the Ministry dictates how it deems necessary for the funds to be used and this is susceptible to diversion of funds and in extreme cases illicit financial flows where goods are overpriced for the benefit of few elites.

The Pomona waste-to-energy project was awarded to Geogenix BV, which requires Harare City Council to pay US$22 000 per day for waste, and part of the Pomona deal agreed between Harare and Geogenix BV states that government will use devolution funds.

“Government undertakes to protect all guarantees made in this agreement against policy changes for a period of 30 years. Government undertakes to support the City of Harare through devolution funds to meet its financial obligations, for the gate entry fees, for the minimum guaranteed quantities of
waste and to enhance its refuse collection fleet for a period of 5 years,” the Ministry of Local Government and Public Works promised in a statement.

The seeming imposition of how the money will be used by the central government thus spanks of centralized power and decision making which is in contravention of the aims and objectives of devolution.

Hence the country may be losing millions of dollars annually due to the absence of a transparent model in regard to the use of devolution funds and a lack of risk management policy cultivates a breeding ground for corruption, especially in financial management. Financial risks go undetected.

Permanent secretary in the Ministry of Finance and Economic Development, George Guvamatanga did not respond to a WhatsApp message sent to him on September 2022, in regards to the ministry’s position on the abuse of devolution funds and if the Treasury has any model, they use in the allocation of funds that promotes transparency and accountability, although he received and read the messages.

Guvamatanga did not answer telephone calls by the time of publication. Tax Justice Network Africa advisor, Mr. Mukasiri Sibanda pointed out that, to expedite the devolution process, there is a need to align legislative pieces to the constitution and the amendment of the entire Chapter 14 through public
consultations and debates.

“The most critical objective is the devolution of power from central government to local government, a fundamental principle of good governance which was virtually absent in a centralized system of governance.

The Government continues to play the big brother role in revenue sharing and of late, late disbursements have affected the purchasing power of funds (taxpayer’s money), especially in
Zimbabwe’s inflationary environment,” he said.

Midlands State University Lecturer Dr. Vincent Chakunda said Zimbabwe has a serious problem and devolution funds will continue to be abused since the constitution does not have a provision for such.

He said the Constitution has a provision for an equalization grant in terms of Section 301.

“But simply because of a trend that points to the perpetuation of centralization, it appears that the reigning political elites are interested in giving what they call devolution funds. Why, because it will leave them with a margin of discretion that is quite heavy on how these funds are disbursed, and how they are used at the local level,” said Dr. Chakunda.

“If we are talking of devolution, we are basically giving power to local communities to decide on the policy or administrative issues within a defined geographical area. But now we have a central government that is specifically directing local authorities as to how to use the so-called devolution funds, which then defeats the very logic of these funds.

“Look at this case, we are saying we are devolving power to communities so that they can decide on a policy, prioritization of programs, and funding mechanisms on it.

“But Central Government is coming now directly to decide on how the resources should be used which is an error. So, I am saying we must leave devolution as pronounced in the Constitution, let’s allow people to decide on how the resource should be used in terms of identifying projects and programs funded specifically by the fund.

“Now we also have a problem with Section 301, there is a specific clause in the Constitution where we are saying, an Act of Parliament should provide for the model that is going to be used in the sharing of these resources. But currently, there is no model that Government uses in the sharing of resources.

“Otherwise, what we have is an ad-hoc framework. If the Ministry of Finance and Economic Development is using some kind of model, then that model is not what the Constitution is talking about.

“Why because we are saying that model should be in an Act of Parliament. So, what we want first is an Act of Parliament, containing a model that will be used in the allocation of that grant,” said Dr. Chakunda.

The story is published under the Voluntary Media Council of Zimbabwe (VMCZ)
Investigative Journalism Fund

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