ZimbabweDefence Industries evading ZIMRA?

THREE months ago, the Zimbabwe Defence Industries (ZDI) opened a new line of business — procuring foodstuffs on behalf of the Zimbabwe Defence Forces (ZDF). The initiative has caused a storm, amid accusation that ZDI could be evading duty at the borders and that the parastatal is contributing to de-industrialisation. The Financial Gazette (FG) sat down with retired colonel Tshinga Dube (TD), the general manager of ZDI, to get his side of the story. Here are the excerpts from the interview.

FG: We have heard of a simmering dispute between ZDI and the Zimbabwe Revenue Authority (ZIMRA) over the importation of foodstuffs for consumption by the ZDF. What is the source of contention between yourselves and ZIMRA?
TD: I do not know of any simmering dispute between ZDI and ZIMRA. We work together very well in our respective duties. Whenever there is something that needs clarification, we meet and make explanations. We recently had a meeting regarding some imports we had received and the discussions were amicable and helpful and the matter was resolved.

FG: How far have the two parties gone in resolving this dispute?
TD: As I have said, we have no dispute, ZIMRA is a respectable organisation which is there to assist us and all law abiding citizens. They are to serve us all. So there cannot be any dispute between ourselves.

FG: Can you tell us a bit more about how you came to be involved in the importation of food for the army? Was there any tender involved?
TD: ZDI is a defence forces company and it has no boundaries as far as supplying the requirements of defence forces, be it stores or food rations i.e. any other logistics. It must be noted that these activities are actually in line with the company’s Memorandum of and articles of Association. It is not a secret that our forces are not adequately supplied, as a result ZDI had to think outside the box and work to combat the unsustainably low levels of supplies which were affecting their programmes and consequently threatening national defence and security. ZDI’s core business is to be a leading manufacturer and distributor of military hardware, uniforms, tents, field equipment and ration packs. ZDI offered ZDF favourable credit terms which no other supplier could provide. ZDI and ZDF are but one entity.

FG: How did you obtain these duty free certificates in the first instance? Was the process above board?
TD: Duty-free certificates are only given to the government departments. They are official government documents and the process can only be above board.

FG: How do you respond to those who are saying that your actions should be condemned in the strongest of terms?
TD: I do not blame them; they do not understand the truth of the matter. We should be given medals instead of getting vituperation. Our aim is to have happy defence forces, respectable and healthy. Remember that Napoleon once said an army marches on their stomachs.

FG: Do you have any reason to suspect that there could be more to this dispute than meets the eye?
TD: Certainly, yes. Some people are so afraid of competition so much so that they would create fantasies if they think that there is strong competition. Our supermarkets are 90 percent full of imported goods. How do they come in? ZDI has only been in this business for three months but there is so much outcry when those who have been doing it for years have made billions of dollars without anyone saying a word. Is this not curious?

FG: Indications, from what has been picked up and discussed by Cabinet are that the foodstuffs went through the country’s borders without the payment of duty and that government is being fleeced through overpricing. Could it be true that you haven’t been paying duties to ZIMRA and that you are making super-profits from this arrangement?
TD: I am not privy to what is discussed in Cabinet, but I cannot answer this question as I do not know all. I know that there is an abundance of imports of foodstuff into the country. Go to any supermarket in town, the only local product you can see is mazoe orange if at all. We at ZDI only import for defence forces and, if anything finds its doors to the open market, then it is wrong. The process is that we apply to the Ministry of Trade and Commerce and then get a purchase order from the defence forces. Anything else is illegal and we do not support it.

FG: There is a Buy Zimbabwe campaign currently underway: It therefore baffles us to hear that there are government institutions that are buying foodstuffs from external sources instead of promoting our own industries. Can you explain this seemingly contradiction?
TD: Once more, let us be realistic, our manufacturing industry is as good as dead. Remove milk imports from South Africa, let us see how many people will access their milk; remove cooking oil imports from South Africa, let us see how much edible oil will be available. Our manufacturing industry has almost collapsed. Yes, sanctions have not helped us at all. We shall continue to nosedive until all sanctions are removed in total. If there is sufficient local product, there would not be any need for importing the same.

FG: A leading industrialist, Kumbirai Katsande was in the news recently bemoaning troubles at Nestle due to an influx of cheaper, imported substitutes, obviously in reference to your activities, among other things. How do you respond to what he said?
TD: Cde Kumbirai Katsande of Nestlé must know that there is nothing wrong with market competition. After all Nestlé products are not suffering from sanctions like us. Secondly, the items manufactured by Nestlé such as chocolates and milk powder are not our priority. We consider them a luxury. Once more, I wish to emphasise that our imports are for the consumption of defence forces only.

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