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SENATE HANSARD 23 February 2017 26-33
PARLIAMENT OF ZIMBABWE
Thursday, 23rd February, 2017
The Senate met at Half-past Two O’clock p.m.
PRAYERS
(THE HON. PRESIDENT OF THE SENATE in the Chair)
ORAL ANSWERS TO QUESTIONS WITHOUT NOTICE
*HON. SEN. CHIEF MUSARURWA: Thank you Madam
President. My question is directed to the Minister of Industry and Commerce, Hon. Bimha. Please explain what the Government policy is regarding the products which are selected for duty free in the industry; what is the criteria used because people in the constituencies want to know. They want to know which industries are covered by this programme so that they get into business and develop our country. I thank you.
*THE MINISTER OF INDUSTRY AND COMMERCE (HON.
BIMHA): Thank you Madam President. I want to thank Hon. Sen.
Chief Musarurwa for such a pertinent question. The Ministry of Finance and Economic Development is responsible for policies on duty and also selection of products which maybe imported at a certain duty which has been laid down or products which may not be levied a duty. As a
Ministry, we coordinate with the Ministry of Finance and Economic Development on products which may have duty levied on them. When we talk of goods which should have duty imposed on them, these are products similar to those which are manufactured in this country. The aim of this project is to protect our industry. We would want people to be patriotic and buy goods manufactured in the country. As a result, when goods similar to those which are manufactured in Zimbabwe are imported, we call for a high duty so that we prohibit importation of those goods.
There are times whereby we feel these goods are no longer being adequately manufactured in the country; hence we remove the duty so that the goods can come in easily. There are times whereby we ask the Ministry of Finance and Economic Development to reduce or cut off duty completed from other imported goods such as raw materials which we use for manufacturing certain products in this country; hence we say remove the duty or waive very low duty.
On the third part, we also have some duties which are laid out according to the agreements made within trading groups such as SADC, COMESA or AU. As members of these organisations, we have a standard laid down on the products and we have to follow that because we have agreed as member countries that when we import such goods, the amount is so much. Like I have stated, this involves SADC. Again, we may also have agreements between two countries which are bilateral such as agreement between Zimbabwe and Zambia or Zimbabwe and South Africa. When such an agreement has been made, we then take it to the Ministry of Finance and Economic Development for implementation because they are responsible for the fiscus of the nation.
Let me add, at times Madam President, we also have some other statutory instruments which we put in place to protect our industries such as Statutory Instrument No. 64. We did not call for a higher tax but said the goods which we manufacture should definitely be prohibited from coming into the country. The main aim is to support our industry so that we grow it and create jobs. Usually, the Ministry of Finance and Economic Development imposes value added tax on some goods which may seem to be a luxury to other people but for the essential goods, the tax is very low or non-existent. I thank you.
HON. SEN. MUMVURI: My question is also directed to the
Minister of Industry and Commerce. Minister, can you update this House and the nation about the success or failure of S.I. 64 (2016), whether it has met its objectives or not? Thank you
THE MINISTER OF INDUSTRY AND COMMERCE (HON.
BIMHA): Thank you Madam President. I would also like to thank the Hon. Sen. for a very pertinent question.
Madam President, where I come from they say, mushonga unovava ndiwo unorapa. When S.I. 64 (2016) came on board, there was an outcry from within and without but towards the end of last year, my
Ministry was inundated with letters and calls from the producers who were now very happy that Government had put measures that propelled their production. Companies that were about to close were now on an upward scale and there is, every year, an exercise carried out by
Confederation of Zimbabwe Industries (CZI) called the ‘manufacturing sector survey’. In that survey, they will be trying to assess the capacity utilisation of industry. The capacity utilisation as per their last exercise had increased by 13% from 33% to 47% - [HON. SENATORS: Hear,
hear.] – This was the first time in six years for the capacity utilisation to go up. Six years ago, capacity utilisation was on a decline every year by 2% or 3% and only last year it jumped to a 13% point. That is no mean achievement and this is not an exercise carried out by Government, by the way, but carried out by CZI.
If you look at those sectors because this capacity utilisation is an average figure and because it is an average figure, you then want to go and look at those sub-sectors which scored high. When you do that you will find that those sectors that had the support of S.I. 64 were the ones that had put that average upwards. So, in terms of measurement, in a scientific manner, that statistic alone will show you that the measures that we took including S.I. 64 were really beneficial.
Secondly, when those companies that were exporting to Zimbabwe realised that we were having measures to stop the imports, instead of forcing imports, they came to set up shop here which creates employment. For example, there is a company in Mutare called Willowton that used to export cooking oil to Zimbabwe. When we put the S.I. 64, it meant that their brand called, D’lite was no longer coming in. So they decided to say look, because we can no longer export to Zimbabwe, we go to Zimbabwe and put up a factory. They have now put up a factory in Mutare. - [HON. SENATORS: Hear, hear.] – Not only are they going to produce cooking oil, but they are also going to be producing margarine and soap. In so doing, they will be creating employment.
There are so many other investors that have come. There was an investor Madam President, from Zambia. They were exporting a washing powder to Zimbabwe, which I think we all know - ‘Boom’.
They have a factory in Zambia but because of the measures, they have come and set up a factory in our industrial site at the moment. In two months time, we will see the commissioning of that plant. - [HON. SENATORS: Hear, hear.] – They will also be diversifying into potato crisp and other products as a result. They have come in because of the measures that we have taken. The list goes on and on but the facts are there to indicate that the measures that we have taken to support our local industries are really bearing fruit.
The cooking oil industry was probably one of those where we are now experiencing companies now going into exports because they are producing enough cooking to supply our local demand as well as export to other countries. So, in short, the measures are now bearing fruits. What we want to see is supporting those measures. In other words, for example, when we came up with S.I. 64, the idea was to give time to those local producers to retool and re-equip so that they get the modern machinery and technology and that they will have grown and will be able to walk on their own when we open up.
What it means is that they need funding to retool and buy new machinery and there is a targeted fund that has been facilitated by the Reserve Bank of Zimbabwe that those companies that have benefited from S. I. 64 and require funding in terms of re-equipping and retooling access that funding. We also have a similar facility within Common
Market for Eastern and Southern Africa (COMESA), the Preferential Trade Area Bank (PTA bank) and the African Development Bank have also come on board to support that very idea. So, we believe if we continue to come up with measures to support our local producers, but at the same time we must also warn our local producers that support does not mean that it is passport for them to hike prices because of the fact that they are being supported. We also want them to be responsible and give something.
In other words, they have to try and get the prices down because they now enjoy volumes since competition is no longer there. Therefore, when you enjoy volumes, it must push your cost of production down and in the end it must translate into lower prices. That is what we want to look at and make sure they also act responsibly. I thank you.
*HON. SEN. CHIEF CHARUMBIRA: Thank you Madam
President, thank you Minister for the explanation that you have given on the progress in industry. We also hope that you will bring a detailed Ministerial Statement to that effect. The House and the country as a whole would immensely benefit from those statistics. I thank you.
HON. SEN. KHUMALO: My question is also directed to the Minister of Industry and Commerce on the issue of micro-nutrients. It was agreed in 2011 that to improve the nutrition status of Zimbabweans, there has to be addition of micro-nutrients into food stuffs such as mealie-meal and others. How far are you following that so that even the small firms can also make sure that they add those micro-nutrients, i.e. vitamins, irons, iodines and Vitamin A, B and so forth. How far are you supervising and making sure that even the small factories which are cheaper for us, we choose those ones? That is why they also need to be monitored. How far are you monitoring them?
THE MINISTER OF INDUSTRY AND COMMERCE (HON.
BIMHA): Just to thank the Senator for the question. I am not so sure whether I am really qualified to give you the right answer because the issue of these nutrients are more to do with certain standards which are given to the producers and this is beyond us as a Ministry. Our thrust is really to assist those who are in the manufacturing sector to be able to produce and facilitate the growth of factories but in terms of the recipe and requirements of their product is not really within the domain of my Ministry. Obviously, I would think it is an issue that needs to be referred to the appropriate Ministry.
HON. SEN. KHUMALO: Supplementary. There is PPP …
THE HON PRESIDENT OF THE SENATE: Can it be
supplementary when he says the original question does not fall under his Ministry.
HON. SEN. KHUMALO: No, because it says the Ministry of Industry and Commerce is the one which does the PPP with the businesses. It has to be the one which ensures that happens. Ministry of Health cannot go and supervise industry because I thought that is an industry issue.
HON. BIMHA: Well, my understanding of PPP is Private Public
Partnership which is a completely different thing. It is really a way of encouraging investment where we are talking of foreign investors coming into joint ventures with local partners or where Government also participates. That is probably what you are referring to. However, in terms of standards there is the Standards Association of Zimbabwe. Their role is to set standards and encourage players in the manufacturing sector to comply with those standards.
Madam President, as of now the Standards Association of Zimbabwe does not have a regulatory authority to enforce those standards that they come up with. Hence, we are in the process of coming up with a Bill to Parliament on the setting up of a National Standards Regulatory Authority. It could be in the end an issue of restructuring the Standards Association of Zimbabwe but as of now, we do not have the law where Standards Association of Zimbabwe enforces standards but it encourages the conformity to standards. I thank you.
HON. SEN. CHIMHINI: My question to the Minister of Industry and Commerce is, Minister you have given a positive trend in commerce and industry, and it is again common knowledge that the economy is not performing in this country. Do we have any companies you can list that have improved in capacity utilisation, big companies because we are not talking of small companies? For us to talk about the growth of the economy big companies should be performing, not closing down. Can you give examples of those companies?
THE MINISTER OF INDUSTRY AND COMMERCE (HON.
BIMHA): I think the suggestion that was made by Hon. Senator Chief Charumbira would be the only way to cater for this question because there are so many examples which I cannot think of offhand in terms of capacity utilisation. The statement that I will bring to this House will bring the capacity utilisation by sector to say food, plastics and et cetera. Capacity utilisation increase from the previous year (2015) to last year (2016) and I would then zero in on specific companies. Companies like Tregers, Cairns and there are so many of these examples. In the dairy industry and processing, and food industry there are examples that I can give company by company, sector by sector but I think if I bring up a statement here, it will probably be more informative than just giving two or three examples that I can think offhand. I thank you Madam President.
THE HON. PRESIDENT OF THE SENATE: Are you
proposing to the Hon. Senator that he puts his question in writing?
HON. BIMHA: Yes.
HON. SEN. TIMVEOS: My question goes to the Minister of
Industry and Commerce. Minister, can you please explain to the House why ex-ZISCO Steel workers have not been paid up to now and why they were not given any packages when ZISCO folded?
THE MINISTER OF INDUSTRY AND COMMERCE (HON.
BIMHA): Thank you Madam President and Hon. Senator for the question. Any question relating to ZISCO, you cannot just ask in isolation. You need to give the background. It was not just a question of not giving packages. One has to go back to the background then we will give a good context to the answer.
Under normal circumstances, when a company is unable to pay its debts and has borrowed so much money that it is unable to repay, in law that company will be allowed to fold. In most cases, whatever can be recovered from that company will then be distributed pro rata, on how much is owed to the various creditors. In some cases, employees go without anything because the company does not have the money. Now, because this was an institution that Government had an interest in, Government did not go that route to say there is no money so workers you can go. They kept them - giving them the little that they could manage to secure from different types. So much has happened. There are a number of workers who have left. Some have volunteered to go.
It is quite a long story but what I think is more important is where we are now. We still have workers there. Fortunately, just two weeks or so ago, the representatives of the workers and unions were in my office.
I am now giving them on a fortnightly basis an overview of what Government is doing to rehabilitate ZISCO because their interest, apart from their immediate needs, at the end of the day, the issue is there any future for us. We are doing the best we can to make sure that those workers who are still there we find ways of paying them. We are working together with the Minister of Mines and Minister of Finance and Economic Development to ensure that we cater for their needs, particularly in terms of schooling as well as medical expenses. We are putting together a structure to assist them. It is probably too early for me to be able to divulge the details, but we are working on something to ensure that we keep them alive - but more importantly, that we continue to appraise them of what we are doing that ultimately ZISCO comes back on stream. I think this is priority number 1, we do have their interests and we do as I say we are doing a number of things to make sure that we keep our workers and we are keeping them informed. The board and management also is very much in touch with them in terms of giving them the information of where we are and what we are going to do to pay for their welfare needs. I thank you Madam President.
HON. SEN. B. SIBANDA: Thank you Madam President, my
question goes to the Minister of Industry and Commerce. In view of the fact that we have foreign currency shortages, has Government as facilitator, in liaison with various stakeholders, identified priority industrial clusters or sectors that must be resuscitated in sequence?
THE MINISTER OF INDUSTRY AND COMMERCE (HON.
BIMHA): Thank you very much Madam President of the Senate and the Hon. Sen. for the question. My answer will be in two parts. As of now, there is need for us to mobilize as much foreign currency as possible to enable our industrialists to be able to get the much needed raw materials.
The priority has been given to raw materials. As you are aware, the Reserve Bank of Zimbabwe came up with a priority list and raw materials are actually number one. So, the Reserve Bank of Zimbabwe has gone out of its way to assist those companies that require foreign currency for raw materials.
In cases where they do not have the funding, they have also come up with certain structures or packages to assist these companies. One of those schemes is what they call the guarantee system, where the Reserve Bank of Zimbabwe approaches the supplier of raw materials or equipment and gives guarantee that you can supply company X with the raw materials required on the strength of the guarantee of the Reserve Bank of Zimbabwe Governor, without foreign currency being exchanged. Therefore, that has helped a number of our companies to access the raw materials that they require without necessarily money changing hands.
There are other facilities that Reserve Bank of Zimbabwe is working to assist these companies. Having said that, there is also the question of saying is there any priority in terms of sectors’ assistance. The answer is yes; our thrust in terms of industrialization is really on value addition and beneficiation. Therefore, companies that are involved in value addition and beneficiation receive priority.
Companies that are into export receive priority because its exports that will generate the much needed foreign currency. Therefore, we need to support those companies that generate foreign currency so that we also in return grow our economy.
Definitely, there is priority in terms of exporters, priority in terms of those companies in value addition and beneficiation. There is also priority in those sectors that we have identified within ZIM ASSET as critically to our industrial development and one example is food processing. Why food processing? Food processing is very much linked to agriculture and agriculture is our mainstay; so the more we produce from our land the more we can grow our industry because there is a very strong linkage between agriculture and industry. In any case, most of what we produce in industry goes back to agriculture. As a result, we give priority in those sectors. I thank you.
HON. SEN. MARAVA: Thank you Madam President. My
question goes to the Minister of State in Vice President Mnangagwa’s Office, Hon. C. Sibanda. Zimbabwe Government and the United Nations through UNDP have entered into a contract whereby UNDP was going to assist in the procurement of Biometric Voters Roll Equipment (BVR) to use in the forthcoming election. Is this contract still standing, are the two parties still towing their agreement because there is talk that one of the contracting parties might be reneging?
THE HON. PRESIDENT OF THE SENATE: I do not think the
Minister is in a position to answer that question, it is not directed to his ministry.
HON. SEN. MARAVA: I thought through your position this falls right in the Leader of the House’s purview.
THE HON. PRESIDENT OF THE SENATE: Hon. Sibanda is a
Minister in the Vice President Mnangagwa’s Office, not the ministry.
HON. SEN. CHIPANGA: Thank you Madam President. My
question is directed to the Minister of Industry and Commerce. During the first part of this year there was a huge outcry when you introduced Statutory Instrument No. 20, and it was huge because I believe even Ministers were also affected by the increases. We were happy that the instrument was later rescinded. What we see is that prices are still as they were and the argument we get from the shops is that – blame me, I am not an economist. They say they bought...
THE HON. PRESIDENT OF THE SENATE: Order, Hon.
Senator ask your question.
HON. SEN. CHIPANGA: My question is what measures you are
now taking to ensure that the business community complies with the withdrawal of Instrument No. 20?
THE MINISTER OF INDUSTRY AND COMMERCE (HON.
BIMHA): Thank you Madam President. I did not get the question, the withdrawal of with Statutory Instrument, I am not so sure.
THE HON. PRESIDENT OF THE SENATE: This is why I
appeal to the Hon. Senators not to address, pose your question so that you get the answer that you are after. May I appeal to Hon. Sen. Chipanga to pose your question to the Hon. Minister again without preambles?
HON. SEN. CHIPANGA: Statutory Instrument No. 20. I thank
you.
THE MINISTER OF INDUSTRY AND COMMERCE (HON.
BIMHA): I want to assume that the Statutory Instrument referred to was probably addressing the issue of VAT. There was a reversal of an earlier pronouncement on VAT which was VAT on a number of basic commodities such as meat, rice etcetera. This was reversed by the Hon. Minister of Finance and Economic Development. What the Ministry is doing now is to ensure that people comply. What happens is that when the announcement on the reversal was done, there is a possibility that some retailers and some shops did not actually reduce the prices but kept them as they were. This is a problem that normally happens when you pronounce something and the next day you withdraw the pronouncement. Others continue to cling to it and that happens that other people want to capitalise on such happenings but I am sure the responsible Minister is taking measures to make sure that the various parties comply with the new pronouncement.
HON. SEN. MUSAKA: My question is directed to the Minister of Industry and Commerce and has to do with pricing. If you go to a service station, there are two pumps where if you pay cash the price is less than the other pump where you use a card to swipe. Even if you go into some shops, it is cheaper to buy with cash than swiping. What is Government policy on that?
THE MINISTER OF INDUSTRY AND COMMERCE (HON.
BIMHA): It is true and it is not just happening at fuel pumps but it is happening all over the show where there are people capitalising on the issue of the fact that we have different approaches to payment. Hence they are saying there is a different price for swiping and another price for cash. This is not allowed and the relevant Ministry is working on the issue of enforcement. This is the Ministry of Finance together with the Monetary Authorities. They are also very much aware of this particular issue and they are working on ways of making sure that the various parties comply.
HON. SEN D.T. KHUMALO: My question is also to the Minister of Industry and Commerce. What measures are you taking to improve value addition on small grains because they are full of stones and it is not edible? How can you improve that mealie-meal to be edible so that we are interested in eating it?
THE MINISTER OF INDUSTRY AND COMMERCE (HON.
BIMHA): The issue of production, whether it is maize, small grains or tobacco, production per-se is in the purview of the Ministry of Agriculture. They are supposed to ensure that there is production and that the production is up to the standards that they stipulate. We come in when you want to process that which has been produced and when you put up a factory to get your maize through a grinding meal to produce mealie-meal. That is where we come in. I have not experienced buying mealie-meal with stones but surely, even before measures are taken, the moment you produce substandard products, people will not buy it. There is a lot of competition and people can buy elsewhere. So it is incumbent upon any producer to make sure that they meet standards so that they stay in business. Any business person would like to make sure that whatever they do, their product should be accepted by the consumer. These companies also have their own associations and they also conform to certain standards. However, if things get out of hand, we will definitely intervene but I have not yet heard any reports to my Ministry in that regard. I believe that we will continue to have players coming into food processing who comply and conform to set standards.
*HON. SEN. MACHINGAIFA: I would like to find out from the
Minister of Industry of Commerce. Minister, we have heard a lot on the progress in ZISCO Steel. We know there are some minerals which are coming from Buchwa and being taken to ZISCO. Has this issue ever been discussed on the business aspect of it?
*THE MINISTER OF INDUSTRY AND COMMERCE (HON.
BIMHA): When looking at ZISCO operations, we do not separate it but we take it as an integrated project. Even when we are calling for investors, we do not ask them to go and manufacture steel and then ask them to source raw materials from other places. We know that the world over, in countries where we have the necessary ore which is responsible for the manufacture of ore, they should have access to that ore and that is why we say ZISCO is an integrated mining industry. When we are talking of the production or revitalising the projects of ZISCO, we are including all the industries that are involved in that. These are things like ore which is necessary for the production of steel found in Buchwa. So we are saying when ZISCO has been resuscitated and is performing to maximum and Buchwa also has progress. When we talk of the partners who came into ZISCO such as ESSAR, they also looked for some ways where they could source for the iron ore which is used for the manufacture of iron. They went to Chikomba and Manhize so that they could go and examine the ore and see its suitability in the manufacture of iron and steel and the value which they have.
We also remember some researches which had been done in the past in these areas, they were saying the grade was not up to scratch and they could not measure the quantities and quality of that, hence, ESSAR looked at the availability of ore in Buchwa and Chikomba. So in summary, let me say when we are talking of developing and resuscitating ZISCO, we cannot talk about it in isolation neglecting the suppliers of ore and other raw materials.
When we are talking of these partners who want to come and partner with ZISCO Steel and talking with the Mines, we are talking of these subsidiary industries. Remember that in the past, ESSAR wanted to come in and they nearly pulled out of this deal during the time of the inclusive Government. We had Ministers coming from different political parties, ZANU PF and MDC-T, and hence they were giving out different instructions. Now what we are saying is we are one Government, and we have put all the responsibilities under the Ministry of Mines. We are saying ZISCO is an integrated process and we definitely look forward to the success of our programmes. We are saying Buchwa is one of the areas we are interested in.
Let me now turn back to Lancashire Steel, a company which was also sourcing for some products from ZISCO and manufacture other products such as wire and fencing material. We are now saying we want to resuscitate Lancashire Steel, independent from ZISCO Steel as much as possible because we say that we now want to manufacture steel bullets, and we want to export that abroad. After that, we will look for the investor who is going to partner with Lancashire in the manufacture of steel products.
We are also saying we need to resuscitate a company like Zimbabwe Chemicals which manufactures products for the construction of roads such as the Beitbridge to Chirundu Road. This road is now under construction. There are a lot of products which have to be sought from Zimbabwe Chemicals such as tar and other products and hence, the need for us to resuscitate this organisation so that we construct these roads because the company will be operating in full capacity. I thank you.
*HON. SEN. CHIEF CHARUMBIRA: Hon. Minister, what is
Government policy regarding the investment of foreigners in these areas that they should be limited to some certain sectors of the economy and avoid getting into areas which are reserved for the locals because we noticed that in these instances, we have foreigners like Nigerians and the Chinese who are in all sectors which I thought were reserved for indigenous Zimbabweans.
*THE MINISTER OF INDUSTRY AND COMMERCE (HON.
BIMHA): I thank Hon. Sen. Chief Charumbira for this question. When we are talking of reserved areas for indigenous people and foreigners, it really exists, is self explanatory and very clear. We may have a problem in policing the implementation of it because we have set out some areas which we have said, these industries can only be operated by people of Zimbabwe such as small industries like the salons and food outlets. We are saying when investors come; they should start by going to ZIA, which is Zimbabwe Investment Authority. They will give that foreign investor the areas where they can operate from and also give them the direction on how they can go and be told on the way that they can open up businesses in Zimbabwe through the establishment of what we have done as the One-Stop Shop. They will also be given the regulations which are to be followed in Zimbabwe.
We agree that we have some foreigners who come into the country and instead of going to ZIA, they go to local authorities and ask for permission to do some business. The local authorities, because they want money, will allocate those people some businesses which they have to embark on because they want to benefit through taxes. This is mainly happening in the City of Harare. There are some foreigners who are operating in areas which were specifically set aside for indigenous Zimbabweans and they are working because they were given the permission by the local authorities. We are calling for the local authorities to enforce this idea of separation of business industries from those reserved for Zimbabweans and for foreigners. I thank you.
ORAL ANSWER TO QUESTION WITH NOTICE
CHALLENGES POSED BY LACK OF POINT OF SALE FISCAL
MACHINES
- HON. SEN. TIMVEOS asked the Minister of Industry and Commerce to inform the House what plans are in place to alleviate challenges posed by lack of point of sale fiscal machines, in view of the fact that such machines are not readily available in the country, a situation that has affected business.
THE MINISTER OF INDUSTRY AND COMMERCE (HON.
BIMHA): Thank you Madam President. This question is for the Minister of Finance and Economic Development. It is to do with point of sale fiscal machines. It is for the Ministry of Finance and RBZ and not for the Ministry of Industry and Commerce.
THE HON. PRESIDENT OF THE SENATE: Thank you. The
Hon. Senator stands advised.
On the motion of THE MINISTER OF STATE IN THE VICE
PRESIDENT MNANGAGWA’S OFFICE (HON. C. SIBANDA), the
Senate adjourned Twenty Eight Minutes to Four o’clock p.m. until 7th March, 2017.