Zimbabwe: State Electricity Officials Nabbed for Alleged US$35m Graft

Published: 08 October 2018

KaribaDamThe Kariba Dam on the Zambia-Zimbabwe border, which supplies electricity to both countries (Photo: Wikipedia, CC BY 2.0)

By Lucy Papachristou

Police arrested last week three top employees of Zimbabwe Electricity Supply Authority (ZESA), the state-owned electricity company, in connection with over US$35 million alleged illicit dealings with an Indian company, the Herald reported.

With no tender procedure, in 2012 the three allegedly awarded PME Power Solutions India Ltd a two-year contract without specified deadlines by which the company was to deliver the agreed equipment and without any performance guarantee, according to NewsDay.

The day following their arrest, the officials were granted bail and freed on bonds of $3,000 each, according to Bloomberg. They were ordered to surrender their passports and title deeds worth $250,000 each, but none of them was asked to enter a plea.

The three officials are ZESA’s chief executive, Joshua Chifamba, 59, the managing director of a ZESA subsidiary, Julian Chinembiri, 53, and the subsidiary’s finance director, Thokozani Dhliwayo, 51.

India-based PME is a manufacturer of power transformers, electrical devices which transfer power from one circuit to another.

ZESA and PME were embroiled in scandal back in 2014 as well, when the Zimbabwean company lost millions of dollars in storage and insurance costs after it received a delivery of transformers worth $16 million from PME it had not ordered. ZENT, ZESA’s investment arm, also spent $100,000 on travel and hotel costs for PME officials who came to Zimbabwe uninvited.

While high-level government officials siphon away funds and resources from the electricity company, Zimbabwe’s citizens languish in darkness, their economy suffering. 

According to October 8 statistics from the Zimbabwe Power Company, the country’s five power stations are currently generating 1,348 megawatts (mw) of electricity, far below 21,000 mw, the figure the Zimbabwe Independent, a leading business weekly, names as the daily peak demand. 

About 61 percent of Zimbabweans lack access to electricity, according to data from the Central Intelligence Agency.

The capital city of Harare was hit by power outages late last month that affected its central business district. 

“We have a transformer backlog of about 4,000 transformers which were working but got vandalised and now require replacement at a cost [of] $25 million,” ZESA public relations manager Fullard Gwasira said.

“Regrettably, customers are being inconvenienced for long periods due to the unavailability of foreign currency to import parts and replacement of materials,” he added. 

Extreme hyperinflation of 89.7 sextillion (10^21) percent caused the Economist to deem the local currency “worthless” in 2008. Although the US dollar is now the official currency, upwards of a half-dozen international currencies are now accepted.

Online forex trading is becoming increasingly popular among urban youth in a country where cash is hard to come by and ATMs are often empty. Even the country’s only Bitcoin ATM ran dry last month.