ZNFU in K13m debt, battles for survival

The Zambia National Farmers Union owes donors and various tax institutions over K13 billion.

And there is a mass exodus of staff at the farmer’s body as those who survived retrenchment have gone unpaid for months.

News Diggers! can reveal that ZNFU owes ZRA K4,701,560, NAPSA K853,182, Workers compensation statutory assessment K40,000 and LIMA K2,435,000. The farmers body also owes K3,800,000 in refunds to donors including SIDA, FINIDA, We Effect. It also owes former workers K1,200,000 in gratuities and salaries while also owing StanChart and ZANACO Staff loans amounting to K269,000.

ZNFU has not paid any of the said debts as of January 2017.

When contacted to explain how he hopped to get the farmers’ body out of the debt, ZNFU president Javis Zimba opted not to comment but said he would call this reporter back.

A source at ZNFU however confirmed the findings and said the institution was cash trapped.

“I’m sure you know that ZNFU has a scheme called LIMA Credit Scheme. That one was meant to operate independent of ZNFU mainstream activities. It has its own bank accounts away from ZNFU accounts. That’s the scheme which basically bridges the gap between small scale farmers and suppliers of inputs like seed and fertilizer. Farmers buy inputs via this scheme. Now ZNFU collects funds from farmers on behalf of suppliers, which they are supposed to pass on to such companies so now that’s the money that ZNFU used to ‘borrow’ but have failed to pay back. So lots of suppliers like ZAMSEED have not yet been paid. I’m sure some of these issues will come up in court. It’s a mess,” the sources said.

The sources said the company was battling for survival.

“I think the last time ZNFU paid its statutory obligations to ZRA was in September 2015 if I am not mistaken and then for NAPSA it must have been in March last year, so your findings are actually accurate. Yes we are trying to put up a face as if everything is working normally here and there but this is a time bomb. As for those soft loan schemes, ZNFU had an arrangement with Zanaco and Stanchart where by employees could get loans through the payroll, ZNFU would then deduct loan repayments from staff and pay the banks. However they have not been doing that from as far back as May last year hence that amount. As we speak, most of us haven’t been paid for the past five months and as for the juniors for them it’s about three months only.”

And the sources revealed that there was a mass staff exodus.

“Of course you can already tell from all that debt that the union obviously wants to trim down its wage bill. So firstly, what’s happening is that those with contracts, which are expiring, are not having them renewed and then also people can clearly see that it seems the union isn’t going anywhere so they are leaving for greener pastures,” said the source.

Last year, donors cut funding to ZNFU and demanded a refund of all the money reported to have been stolen or misapplied in an EMM Corporate Partners audit report, which was upheld by KPMG.

According to the audit report, most of the fraudulent activities were hinged on the institution’s executive director, Ndambo Ndambo who is currently in court facing money laundering charges.

Former ZNFU president Dr Evelyn Nguleka was separately charged for the same offenses but she died last month.

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