eBusiness Weekly
Business Writers
Sakunda Holdings has recently been awarded a number of Government tenders running into billions of dollars across various sectors of the economy, courting public interest and raising anxiety.
To some, Sakunda is the equivalent of the Guptas Business Empire in South Africa. Through his association with Government Sakunda director Kudakwashe Tagwirei is seen as Zimbabwe’s smarter version of the Guptas.
In stark contrast, Sakunda has participated in major Government projects that are seen as largely beneficial to the nation.
Little though is known about Sakunda except that it is linked to fuel service stations that have now been rebranded under the Puma Energy banner, following a deal in which Trafigura acquired Sakunda’s fuel dealership.
Sakunda’s deals have also spread to gas mining in the country with latest information indicating the company is expected to lead gas exploration.
Sakunda’s business partner Trafigura now solely controls the Feruka oil pipeline, a key national resource linking the port of Beira in Mozambique and Zimbabwe’s capital, Harare, the major storage depot.
Sakunda has managed to cultivate close ties with Government, in the tight economic conditions that have seen revenues plunging and foreign direct investment dwindling, by helping with advance payments running into millions of dollars, for key programmes.
Of note is also Sakunda’s role in the multimillion Command Agriculture programme, which Finance and Economic Development Minister Patrick Chinamasa revealed in his 2016 budget review and 2017 outlook statement that Government sunk more than $500 million to bankroll agriculture, most of which went to the Command Agriculture programme.
Questions have been raised over the funding structure of the programme. Particularly in terms of how the flow of funding is like.
While just under $200 million is said to have been invested in the maize programme, Minister Chinamasa said the initiative accounted for a significant portion of the $900 million budget overrun for 2016.
Although public private partnerships in agriculture have been cited as the missing link in leveraging performance of agriculture to its optimum potential, seeming discrepancies on how much the company funded and what Treasury contributed to the import substitution programme raised eye brows.
Senior Government ministers, among them Minister Chinamasa, Agriculture, Mechanisation and Irrigation Development Minister Joseph Made and his deputy Paddy Zhanda have often bemoaned lack of private sector support to agriculture.
The company also won the tender to spearhead a 200MW power plant at Dema in which millions of dollars are to be paid by Government and where millions of liters of diesel are imported duty free, “for the power plant”.
Industry sources claim while power utility Zesa Holdings was no longer buying power from the Dema diesel power plant, an order was yet to be given for duty-free import of fuel for the plant to be stopped.
This was intriguing though, how such scenario had been allowed to persist given Treasury is operating on shoe string budget, as this meant potential revenue running into hundreds of millions was being lost.
A Google search on the company gives very little information save for news articles that at times have conflicting facts. Bloomberg however listed the company on its profile.
According to the profile Sakunda, through its subsidiaries, engages in energy, logistics, and trading businesses in Zimbabwe.
Tagwirei, listed as chief executive and director, is now a famous figure although he remains media shy, at least compared to the new crop of businessmen like Wicknell Chivayo and Genious Kadungure who are fond of publicity to a point where there is a conflation between their businesses and social lives.
Other individuals listed as Sakunda directors are technical director Edmore Sithole, technical director Gary Mhizha and projects director Smiling Manyara.
The company imports and supplies fuels, such as diesel, petrol, renewable biofuel, and kerosene into Zimbabwe, Malawi, and Zambia; operates and franchise petrol filling stations in Zimbabwe; distributes commercial fuel products for mining, transport, agriculture, industry; and a range of lubricants and chemicals.
The Bloomberg profile says Sakunda also provides fuel transport and haulage services, which include moving of fuel loads out of Beira and Msasa into Zambia and the DRC, as well as fuel loading out of Feruka and Msasa for local transportation through a fleet of cross border trucks and bulk tankers.
The company also transports and distributes diesel, petrol, and paraffin within the Southern Africa.
“In addition, the company engages in trading a range of commodities from fuels to minerals and agricultural products; and procures fuels and markets it to other oil companies and bulk fuel buyers.
It serves Government, parastatals, and corporate clients. Sakunda Holdings Group is based in Harare, Zimbabwe, said Bloomberg.
Sakunda played a significant role at the height of diamond mining in Marange. The company supplied fuel to two companies Anjin and Jinan. The two Chinese companies were joint ventures with the military.
The company is believed to enjoy favourable conditions from Government with little scrutiny as all deals are said to be handled at high levels.
Making a presentation on how fuel fraud occurs an expert in anti-counterfeiting forensics, risk analysis as well as verification and testing industries, Johann van Niekerk said there could be loopholes if subsidies were not monitored.
Mr van Niekerk said disparities in pricing between countries or between fuel imported for various uses in the country, among other reasons, could incentivise illicit trade in fuel.
“There is some diesel that gets allocated to the diesel generators to generate electricity. That diesel is probably at a different price, I’m not too sure, it’s probably going to the diesel generate at a different tax and maybe subsidised.
In some other countries I work in it goes in at cost, there is no taxes and duties levied on it.
If you then take the stuff and book it out as if it’s going through the generators, but it’s not and you are dumping it on the route you can sell it at very attractive prices and you can make a load full of money, ” said van Niekerk Authentix Inc managing director for Southern and East Africa
Economic Society of Zimbabwe president Mr Lovemore Kadenge said Sakunda should go through all formal procedures before getting tenders to ensure free competition.
“What kind of a company gets all tenders across all sectors? It can’t be an expert at everything and this smells like corruption where senior officials in Government benefit,” Mr Kadenge said, adding “this kills competition and the taxpayers will pay the cost of what seems to be corruption.”
“Sakunda should open the corporate veil for everyone to know who exactly is behind it and doing what. I also think that they should publish their audited financial results because we don’t know anything as taxpayers except a few deals that are reported in the media,” he said
Mr Kadenge said Sakunda’s key roles across most economic pillars also poses a risk for the country.
“What if this company fails? All sectors of the economy will be affected and its also worrying that it seems Sakunda’s major customer is Government,” Mr kadenge added.
