eBusiness Weekly
Sakunda Holdings a company involved in wide ranging activities in the energy, logistics, and commodities sector remains an enigmatic entity. This is ironic considering its level of involvement in high profile deals, many of which it partners with the Government of Zimbabwe.
Indeed then, the public’s curiosity and its vested interest in information disclosure is warranted. Sakunda is commonly the financier in a number of huge Governmental projects. As the Government of Zimbabwe is the guarantor of projects such as Command Agriculture, for instance, it is ultimately the taxpayers who are bearing the promissory obligation of payment. Moreover, in transactions where any one of Sakunda Holdings’ subsidiaries act in a private capacity as Governmental supplier, such as power provision from Dema power plant, it is through the public disclosure mandate of state procurement that further information should be divulged in regards to Sakunda Holdings.
Consider a few ventures in which Sakunda has a hand in. It is apparently the significant financier of maize and wheat production. Just this week, it was suggested by Agriculture Deputy Minister, Davison Marapira that Sakunda will also potentially be financing irrigation infrastructure worth about $18 million. Unfortunately, for financing provision that are guaranteed by the Government, there is little disclosure on how the deals are to be structured. However, in terms of maize, the GMB has committed to a purchasing price of $390 per tonne, regardless of comparatively lower regional prices of $220 per tonne. This higher price can be explained in some ways as subsidy to farmers, however, that does not warrant a premium to a private entity that is Sakunda if alternative financiers could be found. Understandably, there is a need for food security which has been the strongest justification of Governmental extension into agricultural sector even compromising fiscal balance, however, through its partnership with Sakunda, the question must be asked. Is the Government not inadvertently capacitating a private enterprise in Sakunda Holdings to become a monopolistic agribusiness that has a hold across the entire agri-value chain? The only other competitor of such magnitude to come to mind being CFI Holdings and National Foods, a publicly traded entity on the ZSE.
Sakunda Holdings was also awarded construction tender of the Dema diesel power plant. It was reported that Sakunda had initially not applied for the tender. A tender process ensures that the selection process is fair and transparent. It would demand technical, financial, and material capacity to construct such a plant at the lowest cost to Government, with a time consideration of project finality. There is also the issue of the Feruka pipeline, an underground pipeline intended to increase the capacity of fuel importation into Zimbabwe from Beira.
This would enable Zimbabwe to potentially become a regional hub for fuel supplies. Sakunda was yet again awarded the construction tender. In March 2017, however, at a SADC Petroleum and Gas Committee meeting in Harare, the Government announced that it had reduced the Feruka pipeline tariff by 2 cents per litre to encourage the usage of the facility which has capacity to pump 6 million litres daily for regional consumption.
The enigma that is Sakunda Holdings is a matter of concern with regards to tender procedures, fair market competition, utility pricing, and tax payer guarantee. These are all matters that require public disclosure, not to mention they delve into the same structural reform matters that have hindered the macro-economy for years. Sakunda Holdings to this point has shown a notable level of commitment and diligence to execute its contractual obligations.
This is a corporate characteristic in contrast to other entities in similar matters of interest, and with more flamboyant corporate figure heads.
Sakunda executive, Kuda Tagwireyi, carries himself with dignified demeanor, and without the aforementioned instances to tarnish Sakunda’s profile, a nation starved off corporate figureheads would hope for Sakunda’s success. However, matters of tendering, fair competition, and taxpayer equity, deserve transparency and fair representation.
Hoping for a new dawn that relieves the economy from the plague of patronage and rent seeking, there should be assurance in Sakunda ascent.
