There is a rush by President Robert Mugabe’s lieutenants to salvage his legacy, and the latest ploy in that race – a university named after him – may cost the taxpayer at least $1 billion.

Higher and Tertiary Education Minister Jonathan Moyo announced on Wednesday that the Robert Gabriel Mugabe University is to be built in Mazowe, where Mugabe and his wife, Grace, already run an exclusive private school, an orphanage, a large estate and a dairy.

Education has always been seen as one of the early successes of the Mugabe administration. However, over the last 20 years, he has rolled back what success he had achieved in education, as school dropout numbers soared and the quality of education collapsed.

Now, amid a scramble by his officials for a place at Mugabe’s feet, Government has promised $1 billion in taxpayer funds to please Mugabe and cheer the First Lady in her dream to build an empire in the Mazowe valley.

While few will argue against a new university, it is the cost of the proposed university, and how it will be funded, that is raising controversy. “Cabinet has approved a grant of $800m towards the construction of the Robert Gabriel Mugabe University, and a grant of $200m towards the establishment of the University’s Endowment Fund for Research and Innovation,” Moyo announced in a statement.

There is no detail as to how this money will be raised. To put the size of the grant in context; at $1 billion, the grant would take up a quarter of the nation’s entire annual budget. The Government would be spending more on a single university than the $800 million that it allocated for primary and secondary education this year.

The $1billion grant would leave the heads of other state universities scratching their heads. The figure is about a thousand times more than what Lupane University gets in fees. “My enrolment is only 2 500 students and with payments of $500 per student per semester, it is almost impossible to operate a university with a gross figure of

$1,2 million that we get per year,” Lupane University chancellor Pardon Kuipa told MPs earlier this year.

Government is already struggling to fund construction of planned new universities. This year, Treasury disbursed $45 000 for Gwanda State University, $45 000 for Manicaland State University of Applied Sciences, and just $25 000 for Marondera University of Agricultural Science and Technology.

These are funds enough to build a basic rural classroom block, but nowhere enough for a modern university. The $200m grant pledged towards the Robert Gabriel Mugabe University’s “Endowment Fund for Research and Innovation” matches the entire $200m budget allocation for the Ministry of Higher Education. There is not much research the Ministry will support with that allocation, as $172.5 million of it will go to salaries.

What makes the grant even more surprising is that Government has been sweeping corners and lifting sofa cushions searching for coins to refurbish decaying colleges. The Government has leaned on banks such as CBZ and IDBZ to float bonds and help source cash to build student hostels and other infrastructure.

An 18-page, 3000-word “incubation plan” for the new university lays out grand plans but provides no concrete strategies on funding, beyond the grant. What it does, however, is reveal how Government is prepared to spend a billion of tax dollars to fund what is really a private university.

“In order to ensure that President R.G. Mugabe’s legacy is preserved and passed on to future generations, the international R.G. Mugabe University will have a Responsible Authority under the auspices of the Robert Mugabe Foundation whose Founding Trustees are His Excellency President Robert Gabriel Mugabe and the First Lady, Amai Dr Grace Mugabe,” the document says.

In real terms, the President is paying himself a billion from state coffers to run a private university. The college will lead in the “industrialisation and modernisation of the country”, the document says. “RGMU” will have a capacity of at least 15 000 students. A Finance and Revenue Working Group will be set up to “explore potential for the state to provide funding for construction costs”. The group will also “determine financial resources that might be sourced from potential friends of the R.G. Mugabe University”.

The working group has until the end of the year to come up with “fundraising strategies required for start-up and (the) first 10 years of operation of the new University”. The college will “create comfortable, attractive, and stimulating environments that support collaboration and diverse learning styles and opportunities”. According to Finance Minister Patrick Chinamasa in this budget, poor funding of the education operations and capital budgets, “meant that challenges remain outstanding with regards to improving access and quality of education on account of inadequate infrastructure, shortage of teaching and learning materials”.

Government cannot pay salaries, is begging for an arrears clearance plan on the $1.4 billion it owes to the World Bank and AfDB, has a $1.4 billion deficit, can’t support the 24 000 graduates that leave college each year, and cannot provide basic healthcare.

Yet, somehow, it has found a spare billion dollars to try salvage Mugabe’s legacy, and to bring the First Lady’s grand schemes in Mazowe to life. This is the sort of economic management that they don’t teach at conventional universities.

 

This article was originally published on The Source

 

 

Zimbabwe’s President Robert Mugabe last week officially launched the start of work on the dualisation of the Harare-Beitbridge highway for $984 million.

The highway is Zimbabwe’s busiest and most economically significant, it is part of the North-South Corridor that directly links landlocked Zimbabwe and Zambia with access to the Indian Ocean ports of Durban and Richards Bay in South Africa.

Mugabe called the rehabilitation ‘a game changer’ with a multiplier effect for the economy. “This ground breaking ceremony is a major breakthrough as Zimbabwe forges ahead with the implementation of ZimAsset, our economic blueprint since 2013,” said Mugabe in Chirumanzu, central Zimbabwe.

Austrian contractor Geiger International was last year awarded the tender for the 580 kilometres road, which will be built under a Build-Operate-Transfer model.

Transport minister Joram Gumbo, however, said government signed a memorandum of understanding for the contract with Geiger International (GI) in 2012 but the absence of a legal framework until 2016 delayed the deal. This is despite the deal being officially announced in June last year, when government named GI and China Harbour Engineering Company (CHEC) as the tender winners for the Harare-Beitbridge and Harare-Chirundu roads.

GI vice-president Eric Geiger said the negotiations for the deal had taken six years, ‘punctuated by tenders and legal issues. “Geiger International has mobilised resources for the design and construction of the road and will be responsible for collecting maintaining the toll gates during the concession period,through a company in which government will have shares,” said Geiger.

“Proceeds from toll operations will be used to meet operating costs, loan repayments, interest, dividend payments to investors, and shareholders including the government. At the end of the concession period, Geiger will hand over the road to government, which would have to be responsible for its maintenance. Actual work on the road will start after three months if the designs are approved, he said.

Local companies will participate in the construction project to the tune of 40 percent of contract value. The project is expected to take up to 3 years under the terms of the contract. Geiger said the government had guaranteed the safety of its investment. The road was the beginning of more business deals with government, with more to follow, he added. Gumbo said more toll gates will be added on the route as Geiger seeks to recoup their investment.

Negotiations for the loan to fund the Harare-Chirundu road are not yet complete, Gumbo added.

 

- The Source

President Robert Mugabe’s government announced a late Monday afternoon deal to hand its employees $180 million in 2016 bonuses, only just managing to head off a planned strike.

With an election due next year, the Mugabe government is keen to keep a lid on passions, at whatever cost.

As news of the bonus deal broke, statutory pension fund National Social Security Authority (NSSA) announced the government had given it treasury bills worth $181 million, primarily to clear arrears for the three years when the state could not remit its contributions to the fund as an employer. It is no secret that government has been struggling to meet payroll and, equally, not surprising that it has defaulted on its employees’ pension contributions and medical insurance.

Last year, it took government six months to eventually pay off all 2015 government bonuses. Even so, this came at a price as government defaulted on the June payroll, triggering a civil servants’ strike that was seized upon by some anti-government activists to create the biggest protest against Mugabe in recent years.

The situation is similar this year, with payments staggered over five months to August. There are compelling arguments against the payment of automatic bonuses to a bloated workforce of a government President Robert Mugabewhose fiscal position is, at best, fragile. But that’s not an argument a wasteful government which splurges on luxury cars and avoidable foreign travel can make.

Finance Minister Patrick Chinamasa, who has fought a losing battle to at least suspend the bonuses over the past two years, put on a brave face on Monday as he told reporters “government will certainly mobilise the resources.”

Recent history points to one obvious source of funding: paper. Government paper.

Money on trees. Literally.

As it has done with reckless abandon since 2012, government will issue treasury bills, mop up cash from the domestic financial market and crowd out the productive sector, as Chinamasa himself admitted during his 2016 mid-term budget statement. At the time, the Treasury chief had also warned about a runaway budget deficit as government was a third into $1.2 billion budget deficit for the year.

For a government which had virtually no domestic debt between 2009 and 2011, the explosion of local borrowings from around $300 million in 2012 to $3.7 billion by October 2016 is alarming.

The bulk of the debt is in the form of government paper which, according to central bank governor John Mangudya, currently stands at $2.1 billion. Analysts have criticised the government for going into overdrive with its treasury bill issues, worsening a liquidity crisis that has hobbled the economy.

Not that government will listen to any advice to curb its appetite to spend, or institute the necessary reforms that will see it moving away from the current ridiculous situation where 97 cents out of every dollar the state raises go towards employment costs. Last year, Mugabe’s Cabinet publicly rebuked Chinamasa for proposing 25,000 job cuts and suspending bonuses among other cost-reduction measures which he said would save $355 million over two years.

As Zimbabwe heads to next year’s election, government’s instinct will be to spend more, not less. And, over the years, Mugabe has shown that he is not averse to making bold, costly promises to segments of the electorate he views integral to his electoral ambitions. But there are limits to kicking the can down the road each time you’re faced with difficult decisions.

This is why Zimbabwe’s current path to financial ruin is worryingly familiar.

The economic meltdown which reached its peak in 2008 was the outcome of a series of poor decisions — price controls, unrestrained money printing — by a government which insists on turning economic orthodoxy on its head.

 

- The Source

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