Finance Minister Tito Mboweni says National Treasury is considering centralising procurement for COVID-19 related tenders and contracts, together with the Department of Health. This follows allegations that some of these contracts have been awarded irregularly.
Mboweni was responding to the debate on the Adjustment Appropriation Bill.
The bill was before the National Assembly for approval. 226 lawmakers voted in favour, while 129 voted against it.
The bill aims to reprioritise about R130 billion to essential service departments to fight the COVID-19 pandemic.
But the Finance Minister used the occasion to dispel what he called “various myths.”
Mboweni says the R70 billion loan from the International Monetary Fund is insignificant compared to the weekly domestic borrowings and international bonds that government takes up.
The Minister says the IMF loan attracts much lower interests compared to the international bonds, adding that if needs be, government could take up additional loans with the World Bank to boost the fiscus.
He has denied that the R500 billion stimulus package has disappeared, saying that government has had technical difficulties in disbursing the R200 billion loan guarantee scheme to support struggling businesses.
He’s also denied that all COVID-19 related contracts are corrupt.
The Minister also vaguely touched on the awarding of the R125 million Personal Protective Equipment (PPE) contract to Sakhisizwe Diko, the husband of Presidential Spokesperson, Khusela Diko.
The Diko’s have since countered, saying they requested the contract to be cancelled.
Mboweni says, “There is an urban legend that R500 billion has disappeared, but nothing could be further from the truth. How could R500 billion disappear? There is nothing of that sort. We have experienced technical difficulties in the loan guarantee scheme with the Reserve Bank, National Treasury and banks are working on it to restart to give a better boost to the economy. Related to that is, to assume that every tender related to COVID-19 is corrupt is incorrect.”
Opposition parties react to IMF loan
The Democratic Alliance’s Geordin Hill-Lewis says the IMF loan is a shame for the country.
“The fact that the government relies on lending from the IMF is the first in the history of this country because of years of mismanagement and not growing the economy has forced borrowing from the IMF. The ANC must not celebrate, but feel ashamed due to mismanagement and corruption. The IMF loan is a turning point in South Africa.”
Economic Freedom Fighters Chief Whip, Floyd Shivambu says, “It is evident now that National Treasury has lost the plot on COVID-19 despite the issue of emergency procurement guidelines. Provincial departments have lined up relatives, friends, boyfriends, wives and girlfriends to be suppliers of PPEs at unreasonable rates. This is a reflection of the National Treasury’s incapacity.”
Inkatha Freedom Party’s, Mkhuleko Hlengwa says, “The reprioritisation of the budget will be a target of corrupt elements who want to steal the money we don’t have; whether in KZN with blankets for social relief, or Gauteng with PPEs, or in the Eastern Cape with the so-called scooters and dodgy invoices.”
Freedom Front Plus leader, Dr. Pieter Groenewald says, “The Honourable President when he announced the R500 billion, (we) said we will ensure there is no misappropriation of the monies and budget and what do we see? We read papers and see all the corruption that is taking place. Gauteng alone … more than R2 billion to corruption.”
African Christian Democratic Party, Steve Swart says, “Minister, let’s remind you, the president said on the 4th of April – 3 months ago – we’re going to keep an owl’s eyes in how the money is going to be spent. So, please excuse us as the ACDP for not holding our breath for the expectation of speedy action, but fortunately, internal audits will pick up the irregularities.”
United Democratic Movement Chief Whip, Nqabayomzi Kwankwa says, “There is this talk in government that there is R500 billion stimulus package, which does not exist in real terms. One wonders if the government borrowed over R1 trillion since 2006/07, that has not dented unemployment rate and inequality. One wonders if this imaginary R500 billion, whether this money is spent in the manner it is intended (for). I doubt very much.”
Chairperson of Appropriations Committee, Sifiso Buthelezi says, “We have learnt with concerns (about) corruption and misuse of funds by companies colluding and overcharging government and we are glad the competition commission is taking up the matter and we must criminalise such companies who are getting away with murder.”