Mthuli Ncube Says Government Is Being Overcharged For Services. Threatens To Blacklist Suppliers
In a press statement yesterday, Finance Minister Mthuli Ncube said the government will punish its officials who are complicit in government being overcharged for service.
Ncube said that overpricing has resulted in distortions on the exchange market and that the government had been complicit in letting itself be charged unfairly.
Said Nube in the statement:
Government has noted with concern pricing of goods and services offered by suppliers to Ministries, Departments and Agencies as well as Parastatals and Local Authorities. The pricing framework adopted by suppliers is characterised by a behavioural tendency for forward pricing models and benchmarking prices to front loaded parallel market exchange rates. These pricing models are leading to extortionist, pricing of goods and services supplied to the Govemment Ministries, Departments and Agents not anchored on economic fundamentals.
Government has also noted with concern the fact that substantial differences in pricing are obtaining in the market for goods and services supplied to the Government as compared to other customers.
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Part of the problem the minister said, is that officials have been following rules to the letter, instead of using the spirit of the rules. Onward, the minister said the government will be stricter – officials will be punished and suppliers overcharging will be blacklisted.
…Punitive measures shall be taken against officials found to be complicit to overpricing and procurement malpractices while suppliers will be blacklisted for future supply contracts. All existing contracts are now subject to a value for money audit review before payments are made.
In recent weeks several government officials have acknowledged that government is the one that has been causing runaway inflation through local currency payments to infrastructure development suppliers. These suppliers, the officials have said, have been taking the money to the black market to buy US dollars to preserve its value.