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NATIONAL ASSEMBLY HANSARD 04 August 2015 41-62
PARLIAMENT OF ZIMBABWE
Tuesday, 4th August, 2015
The National Assembly met at a Quarter-past Two O’clock p.m
(MR. SPEAKER in the Chair)
FINANCE BILL: 2015 MID-TERM FISCAL POLICY REVIEW
First Order read: Adjourned debate on motion that leave be granted to bring in a Finance Bill.
Question again proposed.
- HOLDER: Thank you Mr. Speaker for allowing me to
contribute to this noble debate. Mr. Speaker Sir…
- SPEAKER: Order! Sorry to interrupt you, I just want to confirm with the Clerks at the Table.
Order, order, I believe there is a slight hitch; the Chairperson should be here any time. So, in the interest of time, the Acting Chief Whip may rise and take the floor.
BUSINESS OF THE HOUSE
- CHIKWAMA: Mr. Speaker Sir, I move that Orders of the Day numbers 1 to 3 be stood over until Order number 4 has been disposed off.
- MUKWANGWARIWA: I second.
Motion put and agreed to.
PRESIDENTIAL SPEECH: DEBATE ON ADDRESS
Fourth Order read: Adjourned debate on motion in reply to the Presidential Speech.
Question again proposed.
- MLILO: I would like to thank you Mr. Speaker Sir for affording me this opportunity to give my maiden speech today. Furthermore, I would like to thank the people of Luveve Constituency for having confidence in me to represent them as their Member of Parliament which primarily is the reason I am here. I also would like to salute …
- SPEAKER: Order, order, please allow the hon. member
who is having the floor to be heard in silence.
- MLILO: Mr. Speaker Sir, I salute our President, His
Excellency, Cde Robert Gabriel Mugabe who also happens to be the
Commander-in- Chief of the Defence Forces, Chairperson of SADC and Chairperson of AU. I also want to salute our war veterans, chimbwidos, ex detainees, our lost gallant sons of the soil for their part in liberating this country, for without independence, I would not be standing in this august House.
I also want to salute our First Lady. On behalf of my family, headed by Engineer Milio G. S, on behalf of my Constituency Luveve, I would like to congratulate Amai Dr. Grace Mugabe on her 50th Birthday Anniversary. She has been and still is an illustrious daughter of the soil as she dedicates her life to acts of benevolence and support in all ways for the underprivileged and marginalised vulnerable members of our society. May the good Lord bless her and her family abundantly.
I also like to thank Dr Amai Grace Mugabe for the donation that she made to Thembiso Children’s Home, an orphanage in my constituency. The donation will surely go a long way in bringing smiles, joy and happiness to the children.
Mr. Speaker Sir, Luveve Constituency is an agglomeration of three wards namely, New and Old Luveve, which make up Ward 15,
Gwabalanda which is Ward 16 and Cowdry Park which is Ward 28. Ward 15 and 16 are predominantly old suburbs and the infrastructure is up to a point with regards…
- SPEAKER: Order, order, Hon. Labode, can you leave the august
Hon. Labode was escorted out of the House by the Serjeant-AtArms.
- MLILO: Mr. Speaker Sir, with regards to education, business, sport and culture, recreation - ward 28 is a new growing suburb and is in dire need of infrastructure. Ward 15 and 16 comprise mainly of senior citizens, and youth of ages 21 to 40. The senior citizens, most whom have just retired or are in the process of retiring. Their biggest challenge is accessing their pensions. Most have gone countless times to the Government Complex in Bulawayo to make applications of their pensions and come back with nothing but promises. Those who are lucky to have money end up commuting to Harare to get this done.
Mr. Speaker Sir, I would like to make an appeal to the relevant minister to make some moves of either decentralising the current system or alternatively investigate and implement desired solutions to these problems. The youth are in dire need of jobs. Allow me Mr. Speaker
Sir, to draw from the Speech presented by His Excellency when he said, “our people should not be reduced to mere appendages of economic processes of their country”. What is evident in my constituency is that at some point, people are being reduced to mere appendages of the economic processes.
It is unfortunate that when His Excellency speaks of the Look East policy, laymen misinterpret it as simply going to Asia to purchase blankets, phones, TVs, decoders, suits and laptops for resale in our country. This is completely wrong. We are expected to go and tap into the knowledge base of Asians with a view of coming back to our country and applying the knowledge for ultimately positioning our country as a manufacturing base. Worldwide, it is known that small to medium scale enterprises contribute to the growth of the economy mainly in manufacturing than in retail. I therefore, Mr. Speaker Sir, would like to encourage the Minister of Small and Medium Enterprises and Cooperative Development to formulate programmes pro-manufacturing and target my area with a view of reducing unemployment.
Mr. Speaker Sir, Ward 28 is more of rural set up in an urban environment. This is characterised by blair toilets, no electricity, no access roads and communal taps for water. I am happy to say that I have met and sat down with the Minister of Local Government, Public Works and National Housing. Plans are already under way to avert a looming health disaster. As we speak, the Ministry is in consultation with the Bulawayo City Council to come up with a road map of eradicating deurbanisation in Cowdry Park.
Mr. Speaker Sir, with regards to education, Cowdry Park, which is Ward 28 has a population of 24 000 homes and these homes are serviced by one secondary school and three primary schools. The fourth primary school is a makeshift structure. The suburb has no library, community hall and recreation facilities. Mr. Speaker Sir, the main challenge here is building and upgrading educational facilities for my people. I therefore appeal that the Ministry of Primary and Secondary Education moves fast to build good formal classrooms for the proper discharge of learning in my constituency.
Mr. Speaker Sir, Ward 28 has a small four roomed house which is being used as a clinic. This house came as a donation from a building contractor and it is failing to service the continuously growing community. I therefore would like to appeal to the Ministry of Health and Child Care to make plans to build and commission a referral hospital as the current population in this ward cannot be adequately serviced by a clinic.
It is a welcome gesture that Bulawayo is listed under Special Economic Zones. We hope this will stimulate growth in foreign direct investment, technology transfer and also lead to employment creation.
Mr. Speaker Sir, it is my prayer that the Ministry of Education initiates strategic partnerships in schools from developed countries to facilitate information technology transfer in the I.C.T sector. This will lead to a high rise of I.C.T appreciation in our education sector. I also would like to implore the telecommunication players to support the schools through creation of cheap, affordable and reliable internet facilities for the schools. A couple of schools in my constituency are recipients of the Presidential donation of computers but these computers need connectivity for them to be effectively used.
Lastly Mr. Speaker Sir, I would like to say that the effects of sanctions are felt mainly eight to twelve years after being effected. It is therefore not surprising that our people are going through hardships currently. The only positive thing is that these sanctions have taught us to be self-reliant and we have thus thickened our skin towards them. I would like to encourage our fellow brothers and sisters from the Movement for Democratic Change to come and work with us in earnest towards fighting for the lifting of sanctions. These sanctions know no race, colour or origin; they affect the general populace of the country.
As Members of Parliament, let us unite in the fight against sanctions and also fulfill our mandate to our constituents.
Heroes day is fast approaching. Let us take this time to look back and see where we come from. One wise man once said, “if you forget where you come from, you will never make it where you are going.” So, I would like to implore you all fellow Members of Parliament to reflect back and look at the sacrifices that were made by our brothers and sisters who went to war to liberate this country and commemorate this day as this day has made us who we are and put the country where it is.
In conclusion, I would want to say, together and united I believe we can do it; we can make Zimbabwe a better country for ourselves and future generations. I thank you.
- J. GUMBO: Mr. Speaker, I move that the debate do now adjourn.
- CHIKWAMA: I second.
Motion put and agreed to.
Debate to resume: Wednesday, 5th August, 2015.
FINANCE BILL: 2015 MID-TERM FISCAL POLICY REVIEW
Following the presentation of the 2015 Mid-Year Fiscal Policy Statement by the Hon. Minister of Finance and Economic Development, your Committee on Finance and Economic Development met to review the measures proposed to take the country to the end of this year. Your
Committee in welcoming the Minister’s statement, wishes to bring to the attention of this august House issues that the Hon. Minister should attend to. The current economic environment requires a total paradigm shift in respect of Government policy intervention to turnaround the economy.
AREAS OF CONCERN
Your Committee noted with concern the lack of adequate measures put in place by the Hon. Minister to address the decline in the growth of the economy, which has been revised downwards to 1.5% from the initial projection 3.2%. The fiscal space has contracted and the key to progress is to grow the national economy so as to be able to achieve our national objectives, consistent with ZIM ASSET. Your Committee proposes that the Hon. Minister needs to seriously consider effective deployment of the country’s natural resources to unlock value to finance
The Hon. Minister admitted in his report that the poor performance of the agricultural sector, by and large, attributed the downward revision of the country’s economic growth. It is therefore, imperative that our policies should promote the growth of this sector. Whilst the Committee welcomes the measure proposed by the Hon. Minister aimed at protecting the local fertilizer companies. Your Committee is however concerned that the Hon. Minister acknowledges that this is a critical sector and is proposing to impose duty at 25%, thereby making an agricultural input very expensive and would negatively impact this sector.
Your Committee feels that the overall objective to boost production of fertilizer will not be achieved given that the manufacturing companies have a host of other challenges such as lack of working capital, obsolete equipment and high cost of production among others. Further, this introduction is coming well into the preparation of the agricultural season where farmers have already taken positions
Further, the introduction of this tax will increase the cost of agriculture, which will have a ripple effect on the rest of the economy, given that Zimbabwean economy is, by and large agro-based. The Committee therefore strongly recommends that the import duty should not be introduced.
Your Committee notes with concern, development in the seed manufacturing sector, where for example seed houses purchase seed maize from growers, at about US$ 700 per tonne and resell same after processing at US$ 2400 per tonne. Your Committee calls for the justification of the huge variance between the two, conscious of the fact that the seed manufacturers only grade, treat and package the maize seed. All businesses in general, should desist from the practice of profiteering which characterised the pricing models during the hyperinflationary period.
Your Committee also noted with concern the lack of prioritisation by the Hon. Minister to adequately fund the 2015/2016 agricultural season. The Hon. Minister stated that a total of US$1.7 billion is required for the season and that Government shall only finance a paltry US$91.33 million (5.37%). The lack of adequate mechanisms put in place by Treasury to address food security in the country is a direct contravention of the constitutional provisions as outlined under Chapter
4, Section 77(b).
Your Committee strongly recommends that the Hon. Minister provides for the payment of the farmers who delivered grain to the GMB to enable them to finance their input. Your Committee therefore commends the Hon Minister’s initiative to develop the irrigation infrastructure to avoid farmers’ reliance on normal rainfall, thereby mitigating the effects of droughts.
The Hon. Minister projects a 3.5% growth in the sector against the initial projection of 3.1%. Your Committee has reservations concerning the 500 000 tonnes projection of chrome output given that only 96 000 tonnes was produced during the first half of 2015. This exponential trajectory seems inconstant with the first half performance, even when one factors in the lifting of the ban on the export of raw chrome.
In respect to diamond production, the first half projection at 1.44 million carat is more or less the same as that in 2014. Your Committee noted with concern the apparent contradiction with reported reduced activity in that sector given the pending consolidation of the sector. In addition to this, the shift from mining of alluvial diamonds to kimberlite, which requires more investment.
Your Committee has also observed with reservations the projected coal output of 2.8 million in 2015 against an annual projection of 7.8 tonnes. The two fold increase of the first half performance appears unrealistic even after taking into account improved production capacity at Hwange Colliery, which is projected at 300 000 tonnes per month. At this rate, Hwange Colliery will only be able to produce about 1.8 million tonnes during the second half of the year. Further, not much is expected from the other coal mining houses such Makomo Resources, who have scaled down operations.
The Hon. Minister’s statement is devoid of bold strategies to retool the manufacturing industry to make them competitive. Your Committee welcomes the Hon. Minister’s initiatives taken by the Minister to protect the local industry.
To enable the manufacturing sector to be competitive, your Committee recommends that duty on raw materials in the manufacturing sector be scraped. To further protect the local manufacturing industry,
Government should also impose stiff penalties on any imported finished products which are manufactured locally, e.g. building and packaging material. Your Committee also recommends that Government should also monitor the importation of manufactured goods in violation of the SADC rules of origin and also impose stiff penalties on offenders.
Your Committee also noted with concern the high cost of utilities in Zimbabwe, water, electricity and other inputs and urged the Minister to continue revising these issues to ensure that businesses are revised.
Your Committee noted with concern the high cost of borrowing which your Committee felt is extortionist in nature and not serving the intended objective of advancing national growth. It is the Committee’s hope that the issue of high interest rates and the repeated charging of arrangements fees and other charges on rolling over of loans to avoid the in duplum rule should be addressed by the Governor of the Reserve
Bank of Zimbabwe’ Monetary Policy Statement expected soon.
Micro Finance Institutions
Your Committee also noted with concern the high interest rates charged by the micro-finance institutions and urges Government to monitor the sector.
In an effort to enhance revenue collection by the Ministry of Finance, your Committee recommends that a simplified tax formula be adopted.
Whilst your Committee acknowledges the significant role played by the various Government agencies in collecting revenue, it is prudent that all the revenue collected is channeled to Consolidated Revenue
The Hon. Minister proposes to reduce employment cost from about 8% to 40% of total expenditure, without stating how he intends to achieve this. It is your Committee’s view that to achieve this; the Hon. Minister will either reduce the size of the Civil Service or reduce the salary levels of the current workforce. The challenge is that Government does not have the resources for retrenchment packages should it lay off some of its employees nor can it effect a salary cut as this would be in violation of our labour statute. The Committee requests the Hon.
Minister to explain how he intends to deal with this matter.
Your Committee submits this report to the House for consideration and hope that the Hon. Minister will take on board the Committee’s recommendations.
- KEREKE: Thank you Mr. Speaker Sir. I rise to debate the motion at hand, which is a motion on the proposed amendments to the
Finance Bill, 2015. Before I come to the substantives of the Budget Mr. Speaker Sir, I need to underscore that the Finance Bill and amendments thereto is a critical piece of legislation which the august House is rightfully discussing.
Mr. Speaker Sir, we have noted the current turmoil that is characterising the labour market whereupon workers and civil servants are being thrown on to the streets like literal garbage. This is against a background of legal processes that are following the law. What this means is that as Parliament, we need to learn from errors of past parliaments in passing laws that have ‘teeth’ that bite innocent citizens.
Mr. Speaker Sir, I want to advocate that, as we analyse these proposed amendments to the Finance Bill, we look at the extent to which the provisions protect the welfare of the people. The issue of food security lies at the centre of the welfare of our nation. It is a critical point, which we urge the Treasury to listen to with a heart for the people. We have a food deficit of 700 000 metric tonnes and the budget is only attending to 2% and hope that the private sector will bring food to our grandmothers in the rural areas. It is not only unfair, it is impractical and unconstitutional. It is our hope that the right amendments arising from the discussions of this House would be looked at to ensure that we promote food availability to the disadvantaged communities.
Mr. Speaker Sir, when we look at the Constitution, Chapter 4 has a pronounced bearing in the laws that we create. The Bill of Rights pronounced in Chapter 4, at all times, these are principles that must be observed without any reservation. Other areas of the Constitution would require compliance over time as resources permit. However, on matters of food security, which is protected under Section 77(b) of the Constitution, it is important that this budget attends to it.
Mr. Speaker Sir, I move on to the adequacy of how we are prepared as a country to deal with the coming agricultural season. The hon. Minister indicated in the budget that we will need a total US$1.7 billion to finance our agriculture. It is prudent that as a nation, we ask how this money can be raised. First of all, will the private sector be able to meet this requirement when we look at the status of our banking sector? The budget indicated that total loans to the economy in the banking sector rose from US$3.8 billion in June 2014 to US$4 billion in June 2015, which is an increase over the year of only US$200 million.
So, for our economy’s banking sector – the total lending only rose by US$200 million in the year. It is therefore next to impossible to hope that within this season alone, the banking sector can solely raise the
US$1.7 billion that we require for our agriculture.
Mr. Speaker Sir, this means that we need to look elsewhere for strategic partners that can fund our agriculture either in cash or kind. Facilities could be negotiated whereupon suppliers of fertilizer can supply into the economy on the basis that on harvesting, the inputs can be paid for. There is a worrying constraint Mr. Speaker Sir, where the
International Monetary Fund (IMF) has placed a ceiling on
Government’s capacity to borrow and this is serious. For those hon. members who have a copy of the full text of the budget, I refer to pages 246 and 247. Mr. Speaker Sir, those show in explicit terms, the targets and limits that have been imposed on the country by the IMF who say
Government’s non-concessional borrowing must not go beyond US$400m on a cumulative basis. Given that, as at December 2014, we were at US$369m, the IMF is saying to the economy do not borrow US$31m, yet we want US$1.7m to sustain our economy. So it means our hands as a country, have literally been tied and it is time that we need to introspect and assess the virtues and constraints that comes with the policies we get.
Mr. Speaker Sir, another area which I think needs to be looked at is debate on whether adopting the stance of austerity measures is the right policy mix, given where we are as a country. Austerity means cut your expenditure, retrench, stop projects, reduce spending and this in our case would include reduction of expenditure on the social sectors of the economy. Again Mr. Speaker, when we look at the IMF staff monitored targets which are in the budget, we are being given floor ceilings of US$35m spending on social sectors, what is that? Even a village would not sustain itself, if we really talk of serious infrastructure but as a country, we are being given that as a target and we must comply. For what purpose, it is not clear. So, the point is that we need to introspect and realize that the IMF at this point will not give us money unless ZIDERA is removed - but to the extent it is there, I think we need to take some of their policy measures with a pinch of salt.
Mr. Speaker Sir, when we look at the proposed land tax, the draft Bill proposes that the Ministry of Lands and Rural Resettlement collects and puts the money in the Consolidated Revenue Fund as the Chair of the Committee has clearly stated. We would want that that principle be spread to all other agents of Government so that we pool our resources together as opposed to a case where individual departments and ministries claim to collect and retain revenue whilst the sender does not have money.
Mr. Speaker Sir, on the issue of the mining sector, the budget does not articulate fully the silence and the invisibility of the diamond sector in our balance of payments statistics. We would want that as a country we implement all measures as possible to re-ignite activity in this critical sector which had become one of the flagships in terms of promoting economic performance and employment creation. The proposed measures are that let us increase import duties to protect local industries. Whilst theoretically, this is a plausible argument, it is an argument which is losing traction in contemporary economics. We want to say, when we see our citizens importing bails of used clothes, some of them are not really used. They come in bails because it reduces packaging costs.
The issue is when we define the people’s welfare, what exactly do we mean? In my view Mr. Speaker and I speak for the constituencies as well - when a household is getting t-shirts, dresses, decent clothing at a dollar, it is not necessarily a bad thing given our circumstances and the hardships that the communities are facing. Imposing duty on second hand clothes in terms of revenue raised, it will not raise much,rather we need to say how can Government fund local industry to retool using new technologies that reduce costs not to go and build a high tariff road. It will only work to build apprehensions internally and social stresses that divert attention from productive focus into needless conflict and fighting.
Mr. Speaker Sir, with regard to the financial services sector, I need to amplify the point that until they realize that the charges that banks are imposing on the economy are one of the largest impairments in our systems, we continue on the downward spiral. GDP growth of 1.5% this year, we need to debate, we need to recommend policies to the Hon.
Minister to say Zimbabwe, we need a higher growth for this year, let us find the solutions and it is doable. Thank you Sir. . – [HON
MEMBERS: Hear, hear.]
- P. D. SIBANDA: Thank you Mr. Speaker for allowing me to also add my voice to the review of the review of the fiscal policy by the Minister of Finance and Economic Development. I am going to echo my debate basically on the rational expectations of economic agents such as the people of Binga North and generally everybody in the economy. Obviously when people heard that there is going to be a policy review or fiscal policy review, there are certain expectations that they had on what the Minister was going to do. I would like to say Mr. Speaker, when we talk of fiscal policy, there is usually expectations that the Government is going to intervene with certain instruments in order to stimulate favourable macro-economic conditions for favourable welfare outcomes in the economy.
Ordinarily, Mr. Speaker, when the Hon. Minister comes in to review the policy, the expectations are that he is going to deal with the macro-economic problems and variables such as unemployment, depressed aggregate demand, increased productivity, increased inflow of investment and capital, general economic growth, consumption levels, saving levels; so those are the expectations that will be there outside in the economy. Therefore, as I debate, I am going to measure the policy statement that was given on Thursday, in line with these variables and problems that are expected to be dealt with by the community. The previous speakers, Mr. Speaker have spoken that indeed what we expected were policies and instruments from the Hon. Minister that would generally stimulate growth in the economy and not a downward revision of the GDP. We generally expected the Minister to pronounce policies that were going to deal with unemployment rather than increasing levels of unemployment by encouraging a flexible labour market practice in the economy.
We expected policies from the Minister that encourage aggregate demand, that encouraged more consumption by the consumers in the market and when we are talking of a deflationary economy that we have currently with an inflation of minus 2.18%. Instead of celebrating that prices are re-adjusting, we should actually see that to be a reflection of the increase in the level of poverty in our economy. It actually reflects that more and more people are unable to purchase commodities in the market. A low inflation or a deflation that we are experiencing is actually an indication that we are having more goods that are chasing less money within the economy. Instead of increasing taxes on imports that come in, one expected that the Minister of Finance and Economic Development was going to reduce the taxes so that we can then stimulate more consumption within the economy.
The danger of increasing import duties like the Minister did is that, at the end of the day we are actually increasing the poverty levels. We are also promoting inefficiency in our local production processes. We are saying, our local producers will be therefore at liberty to increase prices as they want and it means that the people who have more purchasing power because we know by the statistics of inflation that we have that it is an indication that people do not have the power to purchase whatever they want. Therefore, that power is going to be reduced and the ability by consumers to buy is going to be reduced further. That translates to a situation where even our PDL is going to rise from the current $530 to something like $700 or $800 and poverty levels are going to increase if the stance that was pronounced by the Minister is allowed to go on. Therefore, I agree with the previous speakers that we need to revise the element of increasing import duties until at a time that we can be able to say, our own domestic industry has been capacitated enough to compete efficiently with the foreign producers.
Mr. Speaker Sir, the banning of the importation of second-hand clothes as already been said, the impact of that on the general economy is that, the majority of vendors who are the people that are keeping the aggregate demand at the level that it is currently on will no longer have disposable income to spend within this economy. Therefore, at the end of the day, it is going even to depress inflation to lower and lower levels.
Importation of second hand clothes is one of the very few sources of income that are available to Zimbabweans in these days of high unemployment rate. In my view, instead of dealing with these peripherals that the Minister touched on, I believe that it was important for the policy to touch on real issues – structural issues that are affecting this economy that we need to deal with bravely so that our economy can be able to kick start. These issues are – Hon. Kereke has just mentioned about the diamond levels, that they are not reflecting the sales of diamonds and they are also not reflecting on our BOP levels. The reason for that is that for a long time, the deals of diamonds in this country have been murky. They are not transparent.
We need to come out clearly and be transparent to the nation and say, what is it exactly that is happening in the diamond sector. Unless we begin to account for each and every sale that is coming from there, our economy will continue to be depressed. There are a lot of questions that are being asked and everybody knows that it is not very clear who Anjin is and who are the shareholders of Anjin, Mbada Diamonds or of most of the companies that are operating there and how they are operating the mining of diamonds in that area. We need therefore that kind of transparency so that if we can deal with them, then the inflow of resources and foreign currency into the country can be increased.
Mr. Speaker, I also believe that, one issue that was mentioned by the Minister of Finance and Economic Development when he was presenting the 2015 budget was low investor confidence in the economy. Therefore, one expected that in this policy review, the Minister should have touched on the factors that are contributing towards low investor confidence in this economy. There is no way Mr. Speaker, that this economy on its own, can pull itself out of the situation that we are in, unless we get investors coming in to pour in resources in this economy. We should be asking ourselves questions of why it is that, at a time when we are getting only about $400 million in Foreign Direct
Investment, Mozambique is getting something like $8 billion and Zambia is getting something like $6 billion. Why do we remain the lowest recipients of Foreign Direct Investment even within the region? Why do we not then try to look at those factors so that we may be able to address them?
Mr. Speaker, I believe that time has come for us as a nation to be honest with ourselves. We cannot continue dilly-dallying and wanting to point fingers at others all the time without making some self introspection. We need to look at ourselves seriously and say, we are charged as leaders with the responsibility to ensure that the welfare of all those people that elected us is improved. Unless we do that and we continue to blame everybody except ourselves, Mr. Speaker, I believe that will not take us anywhere as a country.
Mr. Speaker, I also thought that some of the measures that the Minister of Finance and Economic Development was supposed to talk about are issues to do with transparency in our debt and mega-deals. I want to just give an example. Very recently, we were in Belarus to buy tractors. The question that I asked myself was, have we really made a thorough research and then discovered that the real problem that we have in this country in our economy are tractors, such that we should go and borrow more tractors. The question that I asked myself was, why are we going to borrow more tractors at a time when the Brazilian facility of mechanisation has not yet been unpacked to everybody so that we know what kind of result we are going to expect from that facility?
Why should we go to look for tractors at a time when even the farm mechanisation programmes that we recently buried as a carcass in the RBZ Debt Assumption Bill has not been studied as to its effects? What impact did the Farm Mechanisation Programme have on the general economy? Therefore Mr. Speaker, it is my view that we need to be more transparent and we need to be more economic on issues to do with more and more debt and facilities that we are getting.
Mr. Speaker, I also believe that, one of the major problems that has continued to haunt us as a country, especially on the challenges of the economy, include budgetary indiscipline. It is only a few weeks ago that the Auditor General was reporting that about $3 billion had leaked from the economy. What measures are we taking as a country to ensure that we deal with those leakages? I believe that we also need to deal with our history. Our history includes situations where we have invaded private accounts of investors in this country and used that money for whatever purposes without their consent. It is that kind of a scenario that keeps investors outside the country because they are afraid that once we walk in, their money can be simply taken away from their accounts without any recourse. Unless we deal with that kind of history that we have, investor confidence in this country will continue to be low.
Let me speak about retrenchments and downsizing Government human resources. I think we need to show serious political will in that area. We can only show that political will if we do not only retrench those that are at the bottom but we retrench ourselves up there. I believe that in times of such economic problems that we have, we cannot continue to have a Cabinet that is as huge as a Cabinet that existed in 1982, when our economy was still kicking. It is time that we need to look at ourselves and say ‘with the size of Cabinet that we have, are these ministries that we have adding any economic value to this country or we are just keeping them there?’ I am looking at a situation where one Cabinet Minister goes with a whole lot of bureaucracy behind him and the cost behind that whole ministry is so huge. Do we make an analysis of the value being added to the economy of this country by the whole ministry or we are just keeping friends and relatives warming benches whilst the economy is not moving. So, it is my view that we need to show that serious political will. Why should we not show as a leadership that if we want to retrench the man on the ground, we can start by trimming our Cabinet? Why do we not show that we can start by saying we want to reduce our trips oversees so that we try to save the little foreign currency we have in this country. Why should we sacrifice the person on the ground all the time without sacrificing ourselves? I think that lack of political will, will not pull us out of the situation that we are in.
Finally, let me talk of the need for us to have a policy direction.
Let us try to move away from policies that are hostile to investors. Honestly speaking, the Minister spoke about that but without doing anything, for example to the Indigenisation and Empowerment Act, we are not showing any serious will that we want to come up with better policies. I think we need to start by making sure we do the right actions. Let us set aside that piece of legislation. It is a good piece of legislation in the national interest and for the people but not at this particular moment. I believe that it is time that we set it aside and start to build our economy, then after that we can then try to bring it in.
I do not agree with the previous speaker on the issue that we should throw away IMF policies. It is not the time to alienate ourselves from the rest of the world. I think this is the time that we need everybody and it is not time for us to look East only but time for us to look everywhere and bring everybody aboard to try and assist us to build our economy. Remember Mr. Speaker, when the Chinese were turning around their economy said, as long as it is a cat, black or white, if it catches mice we want it. So, let us not be selective but let us also embrace everybody and move with everyone’s policies so that we build our economy for the welfare of our people. I thank you Mr. Speaker.
ANNOUNCEMENT BY MR. SPEAKER
NON ADVERSE REPORT RECEIVED FROM THE
PARLIAMENTARY LEGAL COMMITTEE
- SPEAKER: I want to announce that the Chair has received a non adverse certificate for the Joint Ventures Bill H.B.4A, 2015, from the Parliamentary Legal Committee.
VARIATION OF DEBATING TIME
- SPEAKER: Also because of the interest being shown to debate the issue, the Chair rules as follows: In terms of Standing Order No 52; In order to facilitate business of the House or for any other reasons, the Speaker may in his or her discretion suspend business or varying the time laid down for the interruption of the suspension of the business and must as soon as possible inform the House of his or her intention to do so. I am therefore cutting down the 20 minutes debate to 10 minutes so that everybody has the chance to debate.
- HOLDER: Mr. Speaker Sir, I note that in his presentation, the hon. Minister did mention that some of the presentations that he had done in the debate would be with effect from 1st August and I see today is the 4th August, 2015. Allow me just to clarify and find out whether our debate is going to change anything or are we going to rubber stamp what has been presented to this House. I am not going to touch on many issues that the hon. Minister touched in his budget but I am going to focus on the Mines and Mining department. I feel that the hon. Minister, on presenting his Budget to this House regarding the mining sector, there were things that were said in the last Budget that was presented in 2015 on Section 601 on the exemption of the 15% raw platinum exported.
- SPEAKER: Order, may I correct the impression that we are debating the Budget. We are debating the Policy Review Statement and not the Budget. Could you please stick to the policy statement?
- HOLDER: Thank you Mr. Speaker Sir. I have taken note of that. The reason why I had said that is because in the last presentation, he spoke about the 15% exemption of raw platinum which was to be exported but the problem is, when we say something here and it is not implemented it does not make a good impression out there. I note with concern that the Minister was very silent when it came to that 15% on the platinum sector. I feel that he should have said something regarding the platinum sector so that we could actually build investor confidence in platinum mining. The problem is when something is not said and the policy is inconsistent, investors tend to panic. Looking at the current scenario that we are living in where platinum prices are going down, we are predicting gold prices to also go right down to about at least US$500 – US$800 per troy ounce.
Mr. Speaker Sir, you find that the 15% which was supposed to be exempted then was not exempted. They were actually paying and instead for us to push these platinum mines to increase production by least 50% or 80% to expand, we were penny wise and pound foolish. In other words, we are charging 15% tax instead of giving them a chance to increase. The more they produce, the more the country will benefit.
I am actually pleased that the Minister spoke about the royalty from 3% down to 1%. That was a very good initiative. There are other issues that are pertaining to the same problem where we are looking at
3% down to 1% and yet we have a reputation where custom milling pays
$8000, special grants are $5000 and custom millers are there to help the small scale miner to mine but you find that this custom miller has to first pay $8000 to help somebody. When you pay so much money and you want to help somebody to produce, it becomes a problem. I think the Minister should have intervened in the policy regarding these fees that are exorbitant.
When looking at other countries, he spoke about stock exchange in the industries but the mining sector does not have a stock exchange. We have countries such as Canada and Australia that have a stock exchange where, proven on the resource, the stocks go up. We have people who come to this country and get agreements and go back to their countries and raise money from there. If this stock exchange was here, I think we would also raise money based on the proven resources which are in the ground.
Looking at the other sectors regarding the policies in the Mines and Minerals Act, that has not come through. I feel Mr. Speaker Sir, that he should have addressed this more sincerely because mining plays a pivotal in the recovery of the economy. If we do not do something about that, we will not be able to get people to mine and produce. Looking at the metal prices that are coming down continuously, we need to cushion ourselves now so that we will be able to produce.
One of the recommendations which I think the Minister should have taken into consideration is to exempt that 15% tax on raw materials exported and ask these big mining companies to expand by 50% to improve on production, noting also that the prices of metal have come down from $1500 to $980 per ounce. It is continuing to drop. If we do not do something now to cushion ourselves, we will be hit very badly.
MRS. MISIHAIRABWI-MUSHONGA: Thank you Mr. Speaker
Sir. Let me start by thanking the Minister for the review. I am only going to deal with two issues in the review and I would like to thank you personally for the guidance that you have given us in terms of speaking around issues that are also in the Constitution so that as we speak to the things that would have come to the House, we are able to link them to the constitutional provisions.
I am going to speak to two issues that are in the Constitution, which are Section 17 which speaks to issues of gender balance and Section 18 which speaks to issues around fair regional representation.
Let me start with the subject that I already hear some of the hon. members speaking to which is the banning of second hand imported clothing. Mr. Speaker Sir, unfortunately you were not in the House when I raised this particular issue. This particular issue was very specific. It was specific to issues to do with under garments. Let me say that I still hold that position. I hold that position and I hope the doctors that are here will be able to buttress that particular point because I am not a medical doctor.
The issues of second hand garments cannot be allowed. They cannot continue primarily because when you are talking about under garments, you are talking about people putting on these things on the most sensitive part of the human anatomy. It brings with it – I know this is why a lot of people are shocked around panties because I was worried why the issue of panties was creating such problems until I realised that people are probably mistaking panties for me speaking to the human anatomy. It is as if when I was showing panties, I was showing the human anatomy of the woman which was not the idea. The issue was to try and prove because if I had spoken to it without showing those undergarments, I am sure Hon. Chinamasa would have thought I was being a drama queen.
The undergarments are a health hazard Mr. Speaker. They are put inside those things. They are taken for hours. If there is a fungal issue that is there, it provides for the kind of environment that ensures the fungus grows. We have issues like pubic lice and so, it is not about women’s health but men’s health too because they will get in contact with those women one way or the other. The issue of undergarments remains a problem. I can see and this is the unfortunate thing in having to debate when people have not completely read what the Minister has put in. Even as he speaks about those issues of banning second hand clothing, I think he is clear because when I heard that he had banned, I equally went into the mode that my other colleagues are in to say if you ban and you have not given an alternative, what is the issue?
He does speak and I think it is on Section 1027 of his document. He speaks about providing a manufacturers rebate, which means what he is saying is that if you are going to import raw materials and machinery to make those things – because the problem that we have with the textile industry, is about the inability and lack of capacity to produce at the level where if you go into his document, he speaks about providing a manufacturer’s rebate. Basically, it means what he is saying is, if you are going to import raw materials or machinery to make those things, because the problem that we have with the textile industry is about the inability and the lack of capacity to produce at the level where you can produce some of these cheap products that are coming in. I totally agree, though I do not usually agree with Hon. Kereke, that perhaps we need to finance these processes.
Whilst we can look at undergarments and say this is totally unacceptable, I do not think anyone can call the issue of undergarments a frivolous issue. It is problematic, wrong morally and ethically and we need to deal with it but we also need to begin to acknowledge the issue of second-hand clothing and say to ourselves, given where we are right now, does a ban stop or help the entire community? I am sure we are all agreed that if we ban, then what will people put on, because we do not have an alternative at the moment.
Let me quickly rush to the issue around the regional representation.
One of the problems that I have with the review is that whilst the Minister speaks and goes at length about the agricultural inputs, he behaves as if livestock is not part of agriculture. If you look at it, he does articulate the problems that are there around agriculture but he does not spend as much time saying what he is going to do with livestock. We know about the areas that have problems with livestock are which areas.
They are areas that are in Matebeleland.
If we come here and say we are not happy with our regional representation, it is those things that we are talking about because you cannot talk about agriculture as if agriculture is about Mashonaland. We know that Mashonaland is a region which can produce things like maize, that we know and he indicates in his review how much of the yields that Matebeleland has found. So, if you are going to articulate and say this is the amount of money we are going to give to Mashonaland for purposes of agriculture or crop production, you equally have to do the same with the issues around livestock [HON. MEMBERS: Hear, hear].
What makes it worse Mr. Speaker around that issue is that he did very well last time by taking out the 25% export tax on raw hides. He takes away that right now knowing that in that community, we still do not have the capacity to be able to do leather on our own. In fact, you have not given anything to the livestock for people in Matebeleland. You also go beyond and punish them by introducing another 25% which is on export.
Lastly Mr. Speaker, it is to do with irrigation. That one is what really made me very cross and I must say so Mr. Speaker. He does a list of the places in which he is going to assist around irrigation. In that entire list, you find that Mashonaland East is going to have three places where they are going to have irrigation schemes that are going to be rehabilitated. There is Mashonaland Central, Mashonaland West and of course, Matebeleland North. There is absolutely nothing in
Matebeleland South. What are we saying Mr. Speaker? We are saying that the irrigation schemes that are in Matebeleland South should not get anything that is there. This is why I said Mr. Speaker, I thank you because you have taught to us to link the issues that are in the
Constitution to the issues that are in the policy. That is not fair regional representation. For everything that we are doing, we need to say if I am going to do this for this particular region, I equally have to do that.
Lastly, he deals with the issues around education. I brought a motion here around the problems that are happening both in
Matebeleland North and Matebeleland South. It seemed one of the major problems that we have is not having the schools that have the capacity to have science laboratories. I even counted and brought the figures to this House Mr. Speaker. When he puts in the schools that are going to be rehabilitated in his review, what does he do? He gives one primary school in Matebeleland South. We do not need a primary school; we need an organised science school so that the children there can have the access to get into NUST and UZ because they are unable to get into those places because they have not been trained in the sciences. I think the more we begin to listen to what people are saying, the better that our review is.
Like I said, I thank you. At least he did listen to one of the issues that we brought to the House and I hope that as people speak right now, he is also beginning to speak. Like I said, he should go back to Section 17 and 18. He was part of the negotiators and knows why we put those sections. This is not in compliance with the Constitution, the issues of gender and issues around regional representation which are not properly dealt with in this particular review. Mr. Speaker, I will stop there because of time. I thank you Sir – [HON. MEMBERS: Hear, hear.].
- MUDEREDZWA: Thank you Mr. Speaker Sir, for giving
me the opportunity to make my contribution to the Minister’s Mid-Year Fiscal Policy Review Statement. Let me begin by thanking the Minister for coming up with this statement at a very difficult time in terms of how our economy is performing. I would like to thank him as he has tried his level best to come up with at least policies that can drive the economy towards growth but there are certain areas that I would like to highlight. Most of the areas have been highlighted by other speakers that spoke before me. I would like to start by agreeing with the Minister that the overall economic growth performance of 1, 5% in a situation where we have planned for 3, 2% is not good performance at all. Something should be done to ensure that we stimulate that economic growth rate.
I will start with agriculture. I am concerned with importation of maize from Zambia, Malawi and other places. I would like to thank the Minister for realizing that there is need to support small scale farmers so that we can also grow maize in adequacy but my worry is that each and every year, the farmers receive these inputs late. It is not good enough to provide farmers with input in November, December or January because that season will have elapsed. I am urging the hon. Minister to say this time around, let it be planned such that the farmers get inputs much earlier, September or October is ideal not the trend that we have gone through for the last period.
I would also like to make a comment on tobacco. I am concerned with agriculture because agriculture comes second from mining in terms of stimulating growth in this country. I applaud the Minister for supporting contracting farming especially in the area of tobacco but we should also realise that, there are individual farmers who would like to grow as individual farmers. We should not direct most of energy on contract farming because we realise that of recent, the people who are doing this contracting farming, if not the companies from China, Asia and other places, are the white farmers who used to be the owners of those pieces of land. They have come back in earnest and we are not at all comfortable having them as the people who are doing the farming the people who are doing the farming. We would like to ensure that our indigenous farmers are supported so that they are able to do farming. Along this reasoning, I would like to say Agribank is the bank that they should support to ensure that we grow. The 30 million that was
provided to Agribank by way of capitalization is not enough. We need more funds to be directed to Agribank.
If I happen to talk about marketing of tobacco, you will realise that the public auction system is slowly dying because it appears as if Government is supporting the contract farming system and the contract marketing system. This is against logic Mr. Speaker Sir, because all crops across the world are sold at a public auction. So why is it that we are now pursuing the contract farming practice as if it is the bastion of our farming programmes. We need to ensure that individual farmers are given support so that they grow and in that process, we are going to develop as a nation.
I would also like to touch on the aspect of the One Stop Shop Investment Centre. Mr. Speaker Sir, the Minister indicated that the concept was started in December 2010, now it is July 2015; we have not concluded. The respective ministries have not seconded their staff to form this investment centre. It is very difficult in this country to form a company and operate. There are a lot of papers that should be filled from different ministries; you run from one ministry to the other. It might be different from other countries where things are done at one place. We need to get rid of the paper dragon in this country. We need to simplify systems so that we are able to perform better as a nation.
Mr. Speaker Sir, I would also want to touch on the aspect of how our economy is performing in terms of how it is generating national income. It is not good enough for us to depend heavily on taxation, we need foreign direct investment. We need an injection in our economy so that the economy grows. In that respect, it is prudent for our
Government to make sure that we re-look at our investment policies. I am happy that the Hon. Minister has you have come up with the Joint Venture Bill, eventually maybe when it is in operation; it is going to attract investors because it has got a cocktail of ways in which people can invest. We need to relook at our investment policy because it is the one that is deterring investors into Zimbabwe, if you compare with what is happening in other countries that are next to us.
Mr. Speaker Sir, I want to touch on the energy sector. I am happy that there are a number of initiatives that are taking place in terms of the energy generation but I take concern that the Rural Electrification Authority is being underfunded by ZESA. The six percent that is given is not enough. Right now, if we look at the projections of this year, it is supposed to be given 6 million but of late, it has been given 1.5 million REA is underfunded, it is being given 6% of what ZESA is earning and we are saying it is possible to increase this figure to 10% so that REA is shouldered with the responsibility of ensuring that power is given to people in the rural areas. We cannot talk of development when we look at urban areas only. Some of us come from rural areas and my constituency is in the rural areas where there is no electricity. When rural business centres do not have electricity, it means that economic activity in those respective areas is not pronounced. So, the Minister should relate with his counterparts in Government so that at least there is a re-look at what REA is getting from ZESA.
I do also want to look at transport in terms of what ZINARA is doing. It is doing a lot of good work to the rural district councils, urban councils including DDF.
- SPEAKER: Order, hon. member. Your time is up.
- MARIDADI: Thank you Mr. Speaker. I might not be able to cover all the areas that I had intended but I would want to premise my debate on the following: economic growth, revenue collection, food security, mining sector, protection of domestic industry, wage bill reduction and employment creation as well as labour market flexibility.
Mr. Speaker, I want to look at the statement that was presented by the Minister. He revealed that the projected growth of 3, 2% has been revised downwards to about 1,5%, which means it has been reduced downwards by more than 50%. The Minster talked about the agriculture sector as the backbone of this economy but I think the industrial sector if it is properly funded will replace the declines in the agricultural productivity and stir the economy.
The focus of policy towards the re-capitalization of the manufacturing sector will be essential in order to increase productivity in the economy. The Minister did not however sufficiently deal with efforts to restore the manufacturing sector in the recapitalization of the sector. I think what we need to do now Madam Speaker, is to be honest with each other and also tell each other the truth. As the previous speaker has said, there are policies that we have in this country that do not do anything to encourage foreign direct investment. The Minister talks about different types of taxation and he did not talk about foreign direct investment. I think what this country needs more than anything else is foreign direct investment. Prevailing double digits in lending rates on the financial markets are preventing the recovery of the universal sector because money is very expensive. So, companies cannot borrow. Interest rates are up to 20% and a company cannot borrow and expect to pay back at an interest of 20%. What kind of business will one be engaging in for one to raise that 20%?
Madam Speaker, I want to go on and say the Government has to make conscious efforts to deal with three underlying macro-economic challenges that we have while at the same time putting in place formulas to deal with corruption and poor management of public funds. The 2015 National Budget proposed a focus on the forms to promote accountability and management of public resources. The financial audits of 10 major parastatals have not been done except for ZBC. ZBC is the only one out of 10 important parastatal that had an audit done, the rest of them audits have not been done because it is under the supervision of Hon. Prof. J. Moyo. The proposed Public Sector Government Bill that will seek to ensure compliance as well as illegally enforce corporate governance in state enterprises and parastatals. That is what we need to put in place.
In terms of accountability, Madam Speaker, the Auditor General reports that for 2014, 2014 clearly exposes the lack of compliance with approved frameworks, that is taking place in Government departments and in ministries. Mismanagement of resources is one of the major deterrents to service delivery in the country and this impacts on the effectiveness of the national development agenda. Madam Speaker, it is not sufficient to just mention that the Government is already working on development of necessary mechanisms for accountability, as stated by the Minister in his statement. Government needs to design ways to deal with this matter. Political will will also be required to ensure that public funds are used for their rightful purpose. If you look at the Auditor
General’s report on the various parastatals, it appears parastatals are not sticking to their mandate that there is a lot of pilferage
I do not necessarily agree with Hon. Kereke when he said that we must not talk to international organisations like the International
Monetary Fund and the World Bank. If you look at page 197 of the
Minister’s statement, the Minister says “on 16th February, 2015,
Zimbabwe and EU signed the National Indicative Programme under the
11th European Development Fund for the period 2014 to 2020”. Under this the Minister goes on to say “the National Indicative Programme (NIP) is programmed on an indicative amount of US$234 million and outlines the following areas of support:–
Health - 88 million Euro
Agriculture - 88 million Euro
Government and institution buildings - 45 million Euro”
He goes on to give a list of the money that will be received by this
Government totaling about 250 million Euro. The Minister says
“However, you will be aware that Zimbabwe has not been benefiting from the IFAD initiatives due to our current arrear situation in line with finance governing laws”. The Minister does not talk about sanctions. He talks about Zimbabwe’s arrears, which is the money that we are not paying. He says that “I am therefore pleased to advice that Government is involved in negotiations with IFAD on finding a solution to our arrears situation which will facilitate the resumption of IFAD support to our agricultural sector. The amount of arrears due to IFAD is 16.6 million Euro which is equivalent to US$ 23.1 million”. So, when people are debating on the Minister’s statement, it is important that people read the statement…
THE ACTING SPEAKER: Hon. Maridadi, you are left with two minutes.
- MARIDADI: Madam Speaker, I will leave everything that I wanted to debate and go on to ask the following questions to the Minister. What is Government policy in ensuring that the improvements that have taken place in the health sector as a result of the Health Transition Fund are sustained given the fund is approaching its expiry date? What has Government put in place to ensure there is speeding up of beneficiation of minerals such as gold, platinum and chrome among others? What is Government policy on the recapitalisation of local manufacturing industries? What has Government put in place to ensure employment creation through the Youth Employment Creation Fund? What measures have been put in place to cater for the salaries that are being owed by parastatals, namely the NRZ, Air Zimbabwe and the
GMB? Lastly, what is Government doing to ensure that small holder farmers, in particular, are able to access irrigation equipment so that they can sustain their productivity if they face unreliable rains as experienced in the 2014/2015 season?
Madam Speaker, while I am on that, looking at what the Minister said in terms of retrenchment, you cannot talk about retrenchments at the moment. ZIM ASSET, which is the economic bible of this country, talks about the creation of two million jobs. We spoke about the creation of two million jobs at the elections in 2013. Hardly two years later, we are talking of retrenching people. I think this is actionable by the workers. Workers can take Government to an international court and
Government will lose because instead of creating two million jobs, the Government wants to cut on employment – [HON. MEMBERS:
Inaudible interjections] -. We talk of a pro-poor budget. Is a pro-poor budget there to reduce poverty or induce poverty? The statement that was presented by the Minister in this House is a statement that will increase poverty.
Madam Speaker, we cannot talk about retrenchments. We know the chaos that is going on in the private sector. Government cannot ride on that chaos and also try to induce that chaos in the public sector. I think Zimbabweans reserve the right, if they are retrenched by this Government, especially civil servants, to take this Government to an international court and sue this Government. I know that the
Zimbabweans will be able to win. I thank you Madam Speaker – [HON.
MEMBERS: Inaudible interjections] -.
- ZINDI: Madam Speaker I also rise to contribute to this Mid
Year Fiscal Policy Review which was presented by the Minister of Finance and Economic Development on 30th July, 2015. The presentation by the Minister of Finance is in compliance with Section 72 (a) of the Public Finance Management Act. I shall raise my concerns on economic growth, revenue collection, food security, tourism and protection of jobs.
Madam Speaker, on the issue of economic growth for example, the
Minister revealed that the projected growth of 3.2% will not be achieved and the country is expecting to only achieve 1.5% growth. An analysis of that tells us that it is actually less or maybe 50% of the initial projected growth of our economy. The impact of the low agricultural productivity, which the Minister actually said was precipitated by drought or shortfall or poor rains, was sighted as having the effect on the economic decline. Thus, what I then suggest for the Government to do is to ensure that the farmers, be they communal farmers, small holder farmers or the newly resettled farmers, there should be that proactiveness on the part of Government to ensure that irrigation is made available to the farmers for food security.
Furthermore, on the question of the FDIs, which is the Foreign
Direct Investment in the country, Madam Speaker, I urge the Government to be consistant in terms of policy. We do not want to continue to hear of policy inconsistencies, that this minister is saying this and the other minister is saying that and this minister is contradicting the other minister. That does not create a conducive environment for the investors. So therefore, I appeal to our Government to have policy consistency as an issue that should be addressed with immediate urgency it requires.
Secondly, on the issue of investment environment, Madam Speaker, we need to deal with corruption as it is not conducive for investors. We need to deal with that as a matter of urgency.
Further, we have gone through the Auditor-General’s Report of 2014 and the Auditor-General made it very clear that there is no compliance by our Ministers, ministries or public officials in terms of compliance in public expenditure. Therefore, that is also equally required on the part of our Government to ensure that there is compliance … - [HON. MEMBERS: Hear, hear] –
Madam Speaker, due to time limitations, I may not end up raising all issues but of importance to me, is the issue of revenue collection. The Minister revealed that Government will not be able to collect the expected projected revenue which was actually at $3.99billion. So far, that has been revised to $3.6billion which is about 90.2% of the initial required revenue. The country expects a further deficit to the tune of about $400million which will negatively affect service provision especially in the social services.
Thus in an effort Madam Speaker, to increase the revenue base, our Minister of Finance and Economic Development had to propose other areas in order to enhance revenue increase and this is to do with the amendment of tax legislation to include taxation of income derived from profit oriented business entities that is from 1st January, 2016.
Further, in view of the improved capacity of the tax administration, the Minister proposed to extend VAT to transactions or short-term insurance with effect from 1st September, 2015 and also on imported motor vehicles which are five years and above from the date of importation to attract a surtax charge of 35% with effect from 1st September, 2015. This is to increase efficiency in revenue collection and ZIMRA again will set up a platform to receive data from the already installed devices of 4 176 Category ‘C’ operators by 31st October, 2015.
On the issue of food security, Madam Speaker, the removal for example of rebate on groceries by families, I think it is a cause for concern. I am saying so because on the issue of food security, most families have been able to go to South Africa and it is mostly women who travel to South Africa and bring groceries that are cheaper than what is locally produced. Therefore, removal of that rebate will expose more families to hunger.
I am saying, according to the Minister, we are supposed to import over 700 000 tonnes of maize. If we look into the statistics of what has been imported so far, the Government has managed to purchase 16 670 supported by the private sector that has been able to bring in 101 716 tonnes and in total, that gives us about 17% of the food that has been imported.
Therefore, at this rate if the Government is to remove the rebate on groceries that are being imported by families, this is going to expose more families to hunger. It is therefore my concern particularly when it is mostly women who are involved in the cross border business, bringing in groceries for their families and also to get some extra income. We realise the fact that most women are the backbone of the informal sector.
I would still propose and say that we need the Government to review the rebate on groceries.
THE TEMPORARY SPEAKER: Order, order, Hon. Zindi, you
are left with two minutes.
- ZINDI: Thank you Madam Speaker. Then on the issue of employment creation, we saw an amount of $500 000.00 that was made available for Youth Employment Creation. We would need justification from our Government, for accountability purposes, so then we know and understand how far that money was used; how much and how many in terms of job creation have been undertaken by the disbursement of the half a million dollars that I am talking about when the unemployment rate is at 80% and youths are the most affected.
I am, therefore, appealing for justification and explanation on the use of the $500 000.00 that was meant for employment creation so then at least we have an idea of how much employment has been created and how many of the youths have been employed as a result of the $500
000.00. I thank you.
- HLONGWANE: Thank you Madam Speaker for allowing
me to add my voice to the debate on the Mid-Year Fiscal Policy Review Statement.
The Minister of Finance and Economic Development obviously operating in a very difficult operating environment had to make a lot of compromises. I was very encouraged by the fact that he made a few admissions in respect of the performance of the economy. He was in fact candid about the direction that needs to be taken. It is obviously not the best policy statement but I think in the given circumstances overally, the Minister tried his best to do a balancing act.
The first thing that I want to allude to in respect of the admission by the Minister, is on how to finance our economy’s productive sector through banks. The Minister admitted that the double-digit lending rates which is the cost of money, borrowing and lending is very expensive, unsustainable and is preventing recovery by the economy’s manufacturing sector. I think that is an important admission by the
Minister and I think that the Minister would want to have gone on to say, how then do you regulate the issue of interest rates down to single digit levels so that the productive sector can be able to borrow and finance production in our economy, therefore expanding the growth of our Gross Domestic Product (GDP).
I think that in respect of the same matter, Madam Speaker, it is important that there be financial innovation to deal with issues of production. Issues of long term funding are very important to assist productivity … - [HON. MEMBERS: Inaudible interjections] - …
THE TEMPORARY SPEAKER: Order, order hon. members,
may the hon. member be heard in silence.
- HLONGWANE: Thank you Madam Speaker. Issues of
long term and cheap financing are very important in terms of bringing life to the productive sector of our economy. The other economies, especially those in East Asia that have been able to rise rapidly from circumstances such as ours have set up models of development banks. The models of development banks are financed so that they are able to onward lend, cheap finance, long term finance at very minimum interest rates. I think that is important; what is the role of our own Development Bank in Zimbabwe? How do we assist the Zimbabwe Development
Bank to attract investment for onward lending to the productive sector of our economy as well as infrastructure development? That was the very
The second aspect is in respect of the reduction of the cost of utilities in this particular view, energy. Minister Chinamasa did reduce in fact the cost of energy to the manufacturing sector. That is very important for me because when you are dealing with the manufacturing sector you are dealing with the supply side of the economy. You are dealing with the real economy; you are not dealing with none essentials.
This reduction of the cost of power is important in terms of …
THE TEMPORARY SPEAKER: Order, order, Hon.
Munengami, can you please behave yourself in the House.
- HLONGWANE: It is common cause that the cost of utility has been one of the many albatrosses around the neck of our economy especially the supply side of our economy, which is the productive sector. With the reduction of the cost of power to six cents per kilowatt, I think it is very important and will go a long way in stimulating activities within the productive sector.
I am not a financial expert myself but I think that the Minister did allude to the challenges out of salary arrears in very important companies such as the NRZ. NRZ is a very important strategic company in terms of the movement of bulk goods and so forth as well as the Grain Marketing Board and Air Zimbabwe. I think that there must be an approach from the fiscal authorities to first and foremost identify those strategic assets that are Government owned such as the NRZ and others. Madam Speaker, the Government should then say, how do we deal with the issue of debt that is causing these companies to fail to attract investment? If that issue is dealt with, new investments can be obtained for those assets and we can begin to see a stimulus economic activity.
The other point Madam Speaker is in respect of bringing down the wage bill. The Minister did speak to the effect that he wants to bring down the wage bill to about 40% of national revenue. The international standard is 30%, I think this is something that is laudable. What is lacking in respect of this in as far as the presentation is concerned is the modus operandi, how actually is this going to be implemented. I think that it must be done in a way that tries to avoid hostility; it must be done in a way that encourages investment in that area.
Madam Speaker, I differ with the other speakers on the issue of second hand clothes. I think protecting domestic industry is a fundamental of what we should be doing in respect of our economy right now. What we should be focusing on is how to revive the cotton industry, to say how does Gokwe come back to life as far as the cotton industry is concerned? Also, how does the South Eastern Lowveld come back to life as far as the cotton industry is concerned? How do we activate the downstream industries, the linkage industries that are associated with the production of cotton that includes our ginneries and cone textiles that are located in many of our major cities. I think that is important for us to do that, for us to save jobs and also to create those kind of jobs that we have lost.
Madam Speaker, in respect of protecting our local textile and shoe industry, I think that raising tariffs on second hand clothes will also stimulate activities in as far as the cattle industry is concerned because as you know, hides are obtained in that area to the extent that we are importing most of these things. It means that there is no serious attention being paid to the cattle industry.
The last point I want speak to Madam Speaker, is the issue of the ease of doing business, another admission again by the Minister of Finance and Economic Development that we need to address the ease of doing business in our country…
THE TEMPORARY SPEAKER: Order, order, Hon. Chibaya
and Hon. Mutseyami, can you please behave yourself in the House.
- HLONGWANE: I think the Minister needs to engage in reforms that are much bolder, that will be accelerated in terms of implementation as far as the ease of doing business is concerned. The ease of doing business in Zimbabwe is one of the issues that has been an albatross around the neck of this economy from a point of view of attracting foreign direct investment; be it the issue of talking about how long it takes to register a company, be it the issue of labour market or repatriation of profits and several other things. I think that the ease of doing business environment in Zimbabwe really needs to be addressed.
Finally, we need to have clearly defined path for engagement. We have ZIDERA which continues to haunt our economy. We still have sanctions on the President, First Lady and the Zimbabwe Defence Industries. We need a very clearly defined path for engagement in order to engage international partners for the removal of these sanctions. These sanctions are continuing to hemorrhage our economy by either imposing a direct clean up on our economy or by way of a stigma that continues to haunt us in this economy.
On the issue of the IMF that Dr. Kereke mentioned, I just want to give an example Madam Speaker Sir, that as far as Dr. Kereke is concerned, I think he is not saying that we should not be talking to the IMF. I want to give an example that during the rise of the Asian Tigers in the late 90s, most of the East Asian economies avoided engaging the IMF. There is one country that did so, which is called Thailand.
Thailand did engage IMF and true to what was predicted in 1998, the Thai currency collapsed, and the economy went down with it. Those countries that avoided the IMF became stronger and have continued on a growth trajectory. So, it is very important that we understand given the context of our relations, the IMF is continuing surveillance on our economy, we need to be careful on how far we can go in as far as that engagement process is concerned.
*MS. MPARIWA: Thank you Mr. Speaker. I would like to thank the Minister for the Mid-Term Fiscal Review Policy Statement. Firstly, I want to deal with issues pertaining to women. I am in agreement with him that the imports of agricultural produce should not be encouraged. I further also noted that the Hon. Minister did not clearly spell out how we are going to have sufficient implements for farming. Food security was also talked about. It is given that God is responsible for rainfall. It is common because year- in year-out in Zimbabwe, we have a deficit in our bread basket. There was need for better clarity by the Minister so
that we know what we should do for farmers, so that we can be self sufficient. We also want to utilise the irrigation in all parts of the country so that the farmers have sufficient support which will lead to a good harvest on small grains like in Matabeleland so that we can assist such farmers. The Minister should have gone further and indicated what we need to do so that we have enough food. In the last five years, we have never been self sufficient. We know that the Government is responsible for food deficits. If we have drought, it is a legal requirement in our Constitution talking of the vulnerable groups such as orphans and the aged.
I will move on to second hand clothes. It is a difficult issue that when you look at the industry, there is nothing going on. Those children that are between 15 to 24 years are unemployed. Some of them are gold panners and street vendors and the mothers are busy selling vegetables and second hand clothes. Once we remove second hand clothes from the streets, we need safety nets for those vulnerable groups and these are the children and the women, before we pass this death sentence on them by unilaterally declaring that there should be no second hand clothes.
Hon. Misihairabwi-Mushonga talked about undergarments. She reiterated the same statement today. You cannot give a death sentence by declaring in a country where there are less privileged people such as the elderly who do not have any other means of livelihoods. The Minister should also look at other means to ensure that these vulnerable groups have a livelihood. My appeal to the Minister is that he should look into this and he should reconsider uplifting the ban on second hand clothes, because the protection of the industry is not necessary as we do not have money and we no longer have thieves, because people were busy selling their second hand jackets which are sold for $1 for two. If you ask the people who are here - how many have been to
Mupedzanhamo? If you had done that survey, 93% would have gone to Mupedzanhamo to buy second hand clothes.
For us to be able to support our constituencies, we were making our livelihoods from Mupedzanhamo. The Minister should reconsider this because as vulnerable groups, poor people and as MPs, we have the elderly, orphans and widows whom we were looking after by using second hand clothes. On the issue of groceries, it means we do not want those goods to be imported into the country. There was one thing that I saw and it is sanitary wear. It was coming from there. We urge the Minister to include it as part of the duty free items.
On page 74, the Labour Market and Flexibility on paragraph 333, if you hit the messenger, he will tell you who has sent him. Three weeks ago, we were not aware that this was already in the Minister’s Statement that employees are being retrenched without benefits or this was a precursor to this thing. We notice that teachers are now going to be sacked. This is not good in a country where there is no employment to talk about.
In this country, we have social partners. When the Minister makes such statements, may he consult social partners so that he takes that into consideration - the employers and employees so that members of the tripartite agreement are consulted and if this was done, paragraph 3 would not be in this document. It is difficult for this country where there are insufficient jobs. How can people without any special skills be retrenched without anything? We belong to ILO and we should not be encouraging workers to be retrenched without packages.
Lastly, I have noticed that there is a warning that my time is up. I was thinking that the Kadoma Declaration that was launched by President Mugabe in 2010, Hon. Chimanikire talked about it two weeks ago. He said we have sufficient in terms of the economy. We have people who go to industries where we can reduce the country’s risk factor and workers can add to this promotion. The three groups need to come together to ensure that industry can go well. It takes two to tango hon. Speaker. We should work together and there should be a social contract from the three social partners that comes after a negotiation. This is the best practice in countries that subscribe to the ILO. We should walk our talk and we should practice what we preach so that as a member of the international community, we will be seen to be a member befitting that stature in the international community. I thank you hon.
- MGUNI: Thank you Mr. Speaker, for giving me this opportunity to debate on this very important budget that was presented by the Minister. Zimbabwe is a God obeying country. In a Godly manner, we have to feed our people. Therefore, maize, sorghum, beef, cotton and poultry should be driven first because if you look at God’s commandments, tobacco must be the last, but we see that tobacco comes in front. I urge the Minister to give more priority to staple foods where people must be fed in this country. Mr. Speaker Sir, ZIMRA, the revenue collectors should have a mandate of collecting maximum revenue that is due to the State while protecting local industry and facilitating trade. If that is not balanced correctly, everything will be bizarre, because once they are on enforcement only the revenue that they have battled to collect may not come. This is because they need to balance all these three that I have mentioned. Mr. Speaker, I have seen that there are funds that are given to DDF, RDC and the Ministry of Transport and Infrastructural Development. I have seen success of collaboration within these three departments in some of the districts whereby they work together because there is no way DDF can go and work on this road without travelling on the State road or passing through the RDC road. Therefore, there should be a policy formulated to make them learn how to work within the budget of the little funds available to them.
Mr. Speaker Sir, I welcome the economic zones. However, there is the Distressed Industries and Marginalised Areas Fund (DIMAF). We have to check and scrutinize who we are giving this fund because the last batch that was given, some of them were already outside the country; they just received the money and retrenched the workers. They are not reviving these factories. There is a Ndebele saying Uvuswa evukayo, there is no way you can go to a dead cow and try to wake it up.
It is gone.
The Rhodesians went through sanctions, but they relied on ZISCO
Steel. This was used to counter those sanctions because it produced some things which other countries in the world needed. They could not do without those goods. I am appealing to the Minister to give priority to ZISCO Steel because it is where the heart of Zimbabwe is. Some of the countries demand what comes from ZISCO Steel. That is how we can beat sanctions.
Mr. Speaker Sir, banks have to play a pivotal role in formalising the informal and micro-businesses. In other countries, banks approach those informal business people and offer them good banking rates with reasonable interest rates from 2 to 5% against any money deposited per month. From there, the bank will encourage those people to register with the department of trade, industry and commerce. Industry and commerce is the department that will link them with ZIMRA. However, you will find that ZIMRA is in the forefront of bringing those people down and people are scared to go and formalise. They fear that monster which came before they could be managed, skilled and brought up correctly.
Mr. Speaker, let me close my debate by saying, under the circumstances we have in Zimbabwe, the Minister has tried his best because of the sanctions – [HON. MEMBERS: Inaudible interjections] – that is the only truthful way to come up with such a budget. People must reconsider and think of it that we are in a situation which is not normal in Zimbabwe due to the pressure given by the Western countries trying to force the regime change. I thank you Mr. Speaker.
- CROSS: Thank you Mr. Speaker Sir. I think the central problem that the Minister has presented to us in his Mid Term Review Statement is how to achieve economic growth. If you look at the fundamental problems, they are all ready to the fact that our economy is simply not expanding at a fast enough rate to meet our social and economic needs. I think we really have to concentrate on this issue of how to grow the cake and not just look at how it is going to be distributed. Until we get Zimbabwe back on a growth path, we are simply going nowhere.
Mr. Speaker Sir, we have to recognize again, the potential of this country. We are a country with the highest ratio of natural resources to population in the world. We are richer in natural resources than Saudi Arabia. This wealth, which is under our feet, is simply not being translated into production and income for the nation. That is our central problem. How do we do that?
Mr. Speaker Sir, when it comes to resources, we have to recognise that in the world market, there are almost unlimited resources for developing a country like this. If you take a country like China, its national debt is 200% of its Gross Domestic Product (GDP). China has brought its economic miracle on debt, they borrowed the money from the world market, and they pay extremely low interest rates, 2 to 3% at most. At those kinds of interest rates, you can do just about anything, you can build infrastructure, establish and rebuild your factories, reequip your plants or build modern infrastructure.
We do not have access to those kinds of resources because of our political isolation. I think we have to be frank with each other; these are not easy things to deal with. My colleagues on the left side are constantly talking about sanctions, they have to understand that sanctions were imposed on this country simply because of our misbehaviour in the political realm – [HON. MEMBERS: Inaudible interjections] – until we correct that Mr. Speaker Sir, there can be no resolution in terms of our economic problems. We have to fix the political problems that we face first. The Minister himself has acknowledged that. The thing that I find astonishing is that we know what to do. Why are we not doing it? That is the issue.
In so far as the Financial Draft Bill is concerned, I have a few queries to register. The first one is the question of land rentals. I learnt that the rental on A2 farm has gone to US$5 per hectare. I just pointed out to my colleagues, I come from Matebeleland and in Region 5, and you need 25 hectares for one mature beast. Maximum gross revenue on a 25 hectare plot is about US$200 a year. US$125 a year in tax is simply not sustainable. I do not know why they have not differentiated the rental of land depending on the agro-economic zones. For me, it makes no sense to have a similar rental on land in Regions 1 to 3 to Regions 4 to 6 yet the former have high levels of production. This is something that needs to be noted.
The second issue is that of second hand clothes. We are a country where only 6% of our population is on paid employment. 94% of our population is unemployed. Today, we have a situation where 2,5 million people make their living from selling things on the street. We cannot avoid that. That is the reality. We have 500 000 people operating makorokozas, those are the symptoms of our economic crisis; let us face up to it. Banning importation of clothes will deny our people access to cheap clothing, which is a fundamental welfare issue.
Mr. Speaker Sir, I remember a few years ago, I was the Managing
Director of the Beira Corridor Group. The first time I went to Mozambique, I will never forget the things that I saw. I saw naked women hiding themselves by the side of the road. When I came home, I appealed to my Church to raise second hand clothing to send to
Mozambique and we did that. We had boxes and truck loads of second hand clothing sent to Mozambique to help those desperately poor people.
Believe me Mr. Speaker; our people depend on second hand clothing, not only for income but for basic necessities. If you are going to force them to buy new clothing, let me tell you, they will simply go naked, they do not have the capacity to do that – [HON. MEMBERS: Inaudible interjections] – I do not know what kind of world my colleagues live in.
The next thing Mr. Speaker Sir, I want to welcome what the Minister has done in respect to churches. When I read that they were considering taxing the churches, I was apprehensive but I see that the
Minister has been very sensible in the way in which he tackled about.
The next thing is maize marketing, the GMB has bought 10 thousand tonnes of maize in this season and we have not paid for it. Ten thousand maize is 2 days consumption. We are consuming 5 thousands tonnes a day, thus is one and a half million dollars worth of maize a day. Let us get real, the answer is not the GMB. Peasant farmers are being paid as low as US$130 a tonne for maize. Right now, there are commercial farmers who cannot sell the maize that they produce here because we are importing cheap maize from Zambia.
Mr. Speaker, please we have to have sanity in this maize marketing. What we need is a commodity exchange, what we need is an agreement that we will not import maize until the local crop has been exhausted. We need to make sure that farmers are paid. We are paying cash to Irvines, National Foods and National Foods is importing 40 thousand tonnes a month, paying cash for that. They are paying cash to Zambian farmers while our farmers are not receiving cash for their crops. This is something that needs the urgent attention of the
Government. Why is it not being attended to? I simply do not know.
The last thing I want to say Mr. Speaker Sir, in my contribution this afternoon, is to welcome the very sharp growth in the volume of foreign aid to Zimbabwe. I note for example for the first time, there was US$400m financial assistance from various international agencies that has been channeled through the Budget. This growth from a point of view zero a few years ago is very, very welcome. I think the House needs to note that 50%, half of our health budget is being funded by the international community today [AN HONOUR MEMBER: It is more
than that] – it is more than that. This is a major contribution by the international community and I think we need to express gratitude to our international parties for this assistance.
I also note, despite all the criticism, that the World Bank is one of our major contributors and this is in the form of grant funds and not in the form of loans. I would like to see a 100% of all foreign aid to Zimbabwe going through the Budget but we are not there yet. International organisations paying US$1.1b in Zimbabwe this year, if that went through the Budget we would make a major contribution to our national needs.
Mr. Speaker, I think the Minister’s statement was excellent. I think it was fantastic to have a comprehensive review of national activities like this and I want to compliment him for it, but I just want to say this; I think his estimate of growth is optimistic. I think in fact the economy of Zimbabwe today is actually shrinking. Thank you Mr.
- MHLANGA: Thank you Mr. Speaker for recognizing me. I begin by thanking Hon. Chinamasa, our Minister of Finance and Economic Development for always painting a true picture of how our economy is performing and also for this timeous presentation of the midterm fiscal policy review statement to the nation, seeing enhancing competitiveness through increased productivity, value addition and beneficiation.
Mr. Speaker Sir, I need to point out that the statement has adequately dealt with the issues that were sticking out in the budgetary plan of 2015. I will begin by speaking to the trade deficit. The imbalance of exports to imports, which is cause for concern to the nation. Our country now manifests this giant warehouse where countries come to dump their cheap products including those with a short shelf life or short span life to the detriment of our industry.
Mr. Speaker Sir, the containment measures, therefore that Hon. Chinamasa has spelt out will help reduce the Import Bill which is mainly consumptive in nature. This year Mr. Speaker, the imports will continue to grow against the background of the poor agricultural season that our country has had and this has also necessitated the importation of food, mainly grain to augment whatever is available in the country. Exports growth on the other hand, will decline as opposed to the desired effect of rising. Our exports hinge on mineral resources which also are exported in raw form. This in turn means that our exports are only fetching lower prices, coupled with the prevailing poor prices in the international markets.
A vibrant export drive Mr. Speaker, guarantees formal jobs and the inflows to the fiscus are also augmented by these efforts. At the moment, our exports are stagnant. We note the ban that has been imposed by Hon. Chinamasa on hides and skin and we commend this effort as our country has huge potential for the shoe and leather industry.
On the other hand the Import Bill includes such items as poor quality shoes and second hand shoes, an irony in terms of these economic fundamentals.
Mr. Speaker Sir, we await the special economic zones with eagerness as these are set to give life into the exports and ultimately, to our economy. We commend our Government for spreading these special economic zones to various towns and cities which are otherwise sleeping giants that are just waiting to leap up. This in turn Mr. Speaker Sir, are ripple effects of creating employment and also putting money in the country’s space.
Industrial capitalization and utilization - related to the trade deficit issue Mr. Speaker Sir is, also our low industry utilization. This in essence is attributed to our low business confidence. On low business confidence, the talk of policy inconsistencies, sending divergent signals in terms of important policy pronouncements. They also talk of lack of international finance as well as that finance voters are available but also expensive.
Mr. Speaker Sir, our industrial infrastructure is now dilapidated and obsolete and also under this environment capital, is also very expensive. Our industry needs to adapt to new technologies in order to achieve efficiencies and cost effectiveness.
On the competitiveness radar, our companies still lag behind and there is need to work on the doing business notion like what Hon. Hlongwane alluded to. The one stop shop that was mooted in 2010 can come into play to reduce the various stages, authorities and agencies that a new business has to pass through before they can commence operations in our country.
Investors complain that these stages are cumbersome and take an average of 91 days compared to just under a week in countries like Uganda. Surely, if other countries are waiting for these investors, is this not shooting ourselves on the foot? Consequently Mr. Speaker Sir, we are ranked very low in terms of things of doing business and we need to vigorously work on these bureaucratic hurdles.
A positive in the market has seen the prices decline, which we want to appreciate, where relevant authorities and stakeholders have worked together to correct domestic price structures and also the alignment of prices to our trading partners, mostly South Africa. This has seen us becoming more competitive. Mr. Speaker Sir, it should be noted that, manufacturing is on a positive growth index of 1.6%, which we should appreciate as it signifies stimulation.
Mr. Speaker Sir, the reply to industry incapacitation is also FDI.
We continue to clamour at the fact that countries like Zambia, Mozambique and South Africa, even though in South Africa it has declined, we continue to clamour for a rise in our FDI which in 2014 stood at $545 million. However, FDI is set to grow this year 2015 but on the bedrock of global economic re-engagement.
Perhaps the most contentious topic at the moment is that of our wage bill. The issue of reducing the wage bill from a hovering 75% to about 80% down to 40% is noble. But, like other speakers have said, the question is how we achieve this. Mr. Speaker Sir, not reducing our
wage bill undermines the ZIM ASSET agenda as most funds are gobbled by the wage bill. The wage bill also infringes on developmental expenditure as well as the provision of services to the generality of our population. The wage bill continues to nag the fiscus as it is unsustainable, so we have to grow the economy in order to meet our wage obligations. Mr. Speaker Sir, if this continues unabated, we are violating Chapter 13 of the Constitution of Zimbabwe in terms of national development as only a small section of the population is benefiting from the country’s collected revenues and resources. Hon. Chinamasa and the Government are clear on the need to identify all areas of scope for savings in terms of the wage bill. The removal of duplication and overlaps which are real on the stimulus roles and functions; some of these measures Mr. Speaker Sir, include the audit on the Civil Service which has begun to bear fruits with anomalies being detected.
Mr. Speaker Sir, on a positive note, inrods have been made in roads and bridges construction. We applaud the upgrading of the Victoria Falls Airport.
Mining reforms that are also taking place on the consolidation of the diamond mines is a positive sign and we hope that this can bring more transparency and accountability to this important sector. Thank you Mr. Speaker Sir.
*MR. CHINOTIMBA: Thank you Mr. Speaker. I am not going to be talking much about the Mid-Term Fiscal Policy Review that was announced by Minister Chinamasa, suffice to say that I am in agreement with the previous speakers. I believe that in the manner in which we have conducted our debate, we are in agreement and this is not a protracted debate by the two protagonists or parties.
The issue that I wanted to speak about is the issue on pants and clothes that Hon. Misihairabwi-Mushonga spoke about. Undergarments and second-hand clothes could have been worn by someone with measles. It also affects - whether you have skin diseases or rashes, it still can be passed on to another person but I believe that, by banning second-hand clothes, it does not ensure that we have eliminated poverty in this country.
At the moment, we have people who are losing their jobs. There are institutes like the City of Harare where workers have gone for four months without pay and it becomes difficult for a man or a woman to go into a shop and buy new clothes. It would be better for them to go and buy second-hand clothes because they would cover their poverty by wearing these second-hand clothes. If they do not work, they will put on skin loins as was the case with our ancestors and they would be exposing their buttocks.
I would want to believe that you were not in the House Hon. Speaker, but when we were in this House, Hon. Chinamasa said that he was going to ban the importation of second-hand clothes. I am saying, as Members of Parliament, we should make constructive debate as Ministers also weigh to see if what is being said is good or bad. I am not in agreement that the banning of second-hand clothes be done.
The problem is that we are greedy and we become so greedy and forget that we are blacks. If we would look at the issue of fertilizer that is now being taxed, if you go to Malawi, you will buy a bag of fertilizer for $10 and in South Africa it is $11. But, when it is brought to Zimbabwe, it costs $40. I believe that if the Minister is saying that instead of protecting the companies, he is now killing people because the same companies that the Minister wants to protect will never reduce their prices to $9. They will even raise their price to $40 per bag. So, there is no protection that the Minister is doing to these companies. What we have done is to cover corruption. In fact, we are covering thieves. Two litres of D’light cooking oil, you will buy it for $1.50 in South Africa and in Zimbabwe, it is going for $3.40 or $4. They are imported for $1.50 and instead of being landed for $2, they are now sold at $3.40 or $4. There is nothing that we are going to achieve by this protection.
I believe that before the Minister looks at his Mid-Term Policy Review, he should ask people to go into the regional markets and see how our other colleagues are doing things. Then thereafter, we will use best practice methods. They can do research. He has people that can do research and has advisors.
He should be careful about them because most of the time, industrialists come to the Minister and advocate their position without realising that the country has gone down by being misled. The Ministers, not only Mr. Chinamasa but all of them should be pro-people first before they talk about anything. This Mid Term Fiscal Review Policy needs scrutiny before it is passed. It should be scrutinized and sent back to him and what we will have urged him to do should be implemented.
However, there are certain things that we many advocate for but cannot be undone. There is the issue of retrenchment which can be done but once we have retrenched these people, what are we going to give them? What are we going to do with the people that we will have retrenched? Those are the fundamental issues that have to be looked into. I am not saying that people should not be retrenched but we would want to know what life becomes after retrenchment. We have moved them from the central business district and they are now out of Harare.
Now, we have banned the importation of second hand clothing. What are they going to be selling at these new points? I would want to be in agreement with those who have spoken before about ministries. Yes of course, people may say this and that but if there is transparency and accountability for instance at ZUPCO, buses are bought but the monies are used by ZUPCO and nothing comes to Government though we want the money to be there. Once the funds are there and money has been collected from the farms, where will this money go? We should look at some of these things. Surely, I am in agreement.
We are going to be off-loading parastatals and we are doing away with people who are paid US$1 and leaving behind those that earn US$5000. We heard that Air Zimbabwe is now top heavy and when it came to retrenchment – well, I am not talking about the retrenchment of Ministers but those that remain behind are the ones who draw a lot from the wage bill. So, I am saying that the budget should be revisited so that people will not face hardships.
Food security – the staple food is maize and if we take it lightly, there is not going to be any meaningful farming because people do not have money. GMB has not repaid the farmers so that they can buy fertilizer. Once there is taxation on fertilizer, it is going to be sold at US$50. So it will be better to talk to the companies that are importing this fertilizer so that they reduce their prices. It will be best if the Minister comes up with a price for fertiliser because if he does not do that, everything will go down the drain. Let me tell you about the tractors that we are getting outside the country. We do not ask how much a single tractor cost but just bring them in and we pay exorbitant prices. I looked for a tractor in Britain and when I found it the cost was US$1,500. If it were to be sold in Zimbabwe it would be US$20,000. So, these tractors that we import into this country, we are paying for them through the nose. I implore the Minister of Finance and Economic Development to do due diligence. IMF gives us money and we do not tax it but when they want their money back, they want it with interest. I want to thank you Mr. Speaker.
- LABODE: I want to contribute on the second hand clothing because I think Hon. Chinotimba and others have spoken about it. The status of our economy does not allow us to ban second hand clothing. At the same time, I agree with Hon. Misihairabwi-Mushonga that maybe you can ban pants but not everything. I fail to understand that the Minister actually believes that if you ban second hand clothing you can revive the textile industry. That is impossible. The issues surrounding the textile industry go beyond second hand clothing. Even if today, you removed the duty or the VAT on the textile industry, we were told by the Minister that the cost of energy is very high. We are using obsolete equipment, which means where we should be producing one million dresses per day we will produce ten because the machines are moving slowly. Generally, most of these factories are very old. They need refurbishment, water is not available and there is no capital. To borrow capital for a company is very expensive and when you add up everything, anything that is made in this country especially textile will be very expensive, unless we invest a lot of money in refurbishing all these factories. This cannot be done with a little bit of money called
DiMAF because what DiMAF does is enable you to go and import your fabric which pays VAT when it comes in, manufacture the dress and when you take it to the shop, you pay VAT again. How can that dress be buyable? If we are to ensure that our textile industry survives, we have to increase the duty on finished products from China. Then, we will have helped the textile industry to a certain extent. Failure to do that, we will have done nothing.
My issue here is, I am begging Hon. Chinamasa to remove the sentence that says, ban second hand clothing. So, I strongly feel that we should look at our people. They are poor. We have removed them from their vending sites, we are chasing them from employment and now you are saying you are removing second hand clothing. How are they going to survive? Let us sit and reflect on the status of our people. Our people are poor and we are a poor nation. Thank you Mr. Speaker.
MR SPEAKER: In terms of Standing Order No. 75, I shall not allow any repetition. Any member who stands up must come up with new ideas.
*MRS. MNANGAGWA: What I am going to say has already been said by other hon. members –[AN HON MEMBER: Hanzi no repetition] – Mira mhani nditaure saAmai, semunhu womudzimai.
The banning of these bales will cause problems and children will go without livelihoods. As women parliamentarians, we have constituencies where people are making a livelihood out of the use of second hand clothes and we were able to look after our constituents. May he consider that issue? I do not know what the Government is saying because the same people who are going to face the hardships, do not have money for electricity, food, they cannot plough and they have no seeds - how are they going to eke out a living? We beg and implore the Minister to reconsider his position because by so doing, this will cause a lot of social upheavals such as rape cases, divorces and a lot of intertwining issues that are going to be cutting across this statement.
Thank you so much Mr. Speaker.
- SARUWAKA: I just want to add my voice on the motion by
the Minister. My intervention is on food security and nutrition cluster in which the Minister spoke about introducing the Presidential Input
Support Scheme. This scheme’s intentions are always positive but my experience has been that it is a drain on our fiscus without the attendant benefits because of the way we manage the Presidential Input Scheme. I want to say we must consider taking the allocation for the Presidential Input Scheme to pay for the grain that has been delivered by those farmers that have already produced.
What has happened is that we are giving people in the hope that they are going to produce and the same people do not produce that food. So, rather take that amount and coincidentally if you look at the figures that the Minister presented, the farmers who have delivered grain to
GMB are owed around $29m and the allocation of the Presidential Input Scheme for the coming season is around $28m. It is actually better to use that money to pay the farmers that have delivered grain to GMB so that they can go back to the field than to give these people who are given on partisan lines.
The other issue that I want to highlight is to do with the Special Economic Zones highlighted by the Minister in terms of pushing our economy forward. It is correct that the Minister then identified Victoria Falls as a tourism hub. For the diamond sector, I do not know why he then put Mutare and Harare. Why did he include Harare as part of the diamond Special Economic Zone? Manicaland and Mutare must be the hub where diamond production is concentrated. The unfortunate situation about spreading the economic zone for diamond from Harare to Mutare is that you then lose the benefit of concentrating your operation in one area. According to my submission, there is no reason to include Harare as part of the Special Economic Zone for the diamond sector. The only reason I can think of is the half hearted approach towards developing areas outside Harare. If we indeed appreciate that the bulk of our diamond deposits are in Manicaland, then that Special Economic Zone status must only be given to Manicaland and Mutare – not Harare for diamond exploitations.
I need to add another dimension on the second hand clothing. My dimension is that there is no one who buys second hand clothing out of choice. We all want to dress in Foschini and Giovanni. That is what we want. No one wants to wear second hand underwear but the reason why someone goes to buy that is because of the situation. We must not pretend as if we are not a poor nation. We have impoverished ourselves to an extent where we are now depending on the second hand clothing. I differ totally with all hon. members that are saying we must limit the second hand ban to the under garment. The reason why someone goes to buy that under garment is not that they do not know that it is an under garment, they know it. Are we saying that people then go naked without under garments because they cannot buy it firsthand?
If you look at the reasons that were proffered by the Minister for banning the under garments, it was the supposed non-fumigation of the clothing. Has the Minister done any investigations to find out whether they are not properly fumigated? In the policy statement, he did not show that the investigations were done. It was a suggestion. I am saying if the Minister then goes to do the investigation and finds out that they are properly fumigated, is he going to reverse the position. As far as I am concerned, Zimbabweans are in this position not by choice. We must continue until we are able to buy the brand new ones.
The other issue that I wanted to contribute on clothing is that you would realise that all the reasons that were proffered on why we are imposing duty is to try and protect the industry and not to protect the individuals or people of Zimbabwe. All the duty that we are imposing is meant to resuscitate the dead industry. Are we not flogging a dead horse here? For now, we must accept that we are in a global world where if our cost of production is too high, what we are managing to achieve by banning second hand clothing and imposing duty on the imports is to make life more difficult for Zimbabweans. We must court investors that will produce goods at competitive prices so that they can sell outside and not to say we want to limit our own people to buy expensive goods in the name of trying to protect our own industry. We must open the borders and allow the flow of affordable goods for Zimbabweans because we are at a stage where we cannot afford expensive goods.
My last contribution is that, I believe there are a number of opportunities for the Minister of Finance and Economic Development to save money for this country. Others have talked about the bloated Government. I want to come to the issue of the civil servants, the ghost workers that we know because I can tell you, from the constituency that I come from, we have on average three youth officers per ward that do not do anything productive for this country but they continue to draw money from our fiscus. If we multiply the average number of three officers for about 2000 wards, we talk of about 6 000 youth officers that are earning no less than $2, 4 million per month. That money can be used to build a hospital or many schools each month using the savings from the money we are paying people that are not doing any productive work. For me, that is an opportunity which Government can take advantage of.
I want to believe Mr. Speaker that we can also help this economy by stopping unnecessary freebies and payouts to some of our people. In this particular case, allow me to say that it is not bad to pay our war vets if our economy is healthy but at this stage, if we go into our Constitution, the definition of the people that are supposed to benefit from the war veterans funds is such that there are so many people. So, I want to believe that we can remove the Ministry of Psychomotor Activities in Education and also cut on the Ministry of Welfare Services for War Veterans, War Collaborators, Former Political Detainees and Restrictees. If we have got any war veterans who are disabled, they must be catered for under the disabled funds. If we have got aged war veterans, then they must be served under the old people because those war veterans fought so that we get equal treatment, not that they get more out of our economy. I thank you.
- E. GUMBO: On a point of order Mr. Speaker, by the new rulings you said 70 makes a quorum. I am of the opinion that there is no quorum in the House – [HON. MEMBERS: Aa-h!] – The Speaker said so – [HON. MEMBERS: Inaudible interjections.].
- SPEAKER: Order, order. You remember I read for you last week and the issue of points of order was put in your pigeon holes. One of them is you can raise your point of order relative to the quorum, so the hon. member is correct in raising that point of order, but I will exercise – [HON. MEMBERS: Hear, hear.] – Wait a minute. I will exercise my prerogative. I want the Clerks-at-the-Table, to count the numbers without dividing the House. Please, stay where you are –
[HON. MEMBERS: Inaudible interjections.] –
Counting by the Clerks-at-the-Table.
- SPEAKER: Hon. Gumbo from Gwanda, I thank you for your observation and as result, we have more than 70 hon. members. I hope they will not go out to allow us to conclude – [HON. MEMBERS: Inaudible interjections] – Order, order. I hope the hon. members who have come and others who are still coming will not go out again until we conclude the matter. The point of order should therefore be withdrawn.
- E. GUMBO: Thank you Mr. Speaker. I withdraw the point of order and I hope that I get the chance to debate too.
- NDUNA: I want to add a lighter moment to this debate and congratulate Highlanders Football Club for finally beating – [HON. MEMBERS: Hear, hear.] – Highlanders Football Club iteam yelizwe lonke for finally beating Dynamos Football Club – [HON. MEMBERS:
Inaudible interjections] –
- SPEAKER: Order, Order. I will not allow the politics of sports here. We are discussing the fiscal statement so may I request Hon.
Nduna to please, be so directed.
- NDUNA: Thank you Mr. Speaker. I want to add my voice to the Mid-Year Fiscal Policy Review Statement by Hon. Chinamasa, Minister of Finance and Economic Development. I want to touch on a few things that are very pertinent that he touched on. One of these issues is the issue of special economic zones. I will ask you to allow me to keep referring to my notes as this is very pertinent and key. You have asked us to go through this volume in two days. This is akin to writing O’ level after only two months.
However, the issue of special economic zones, in my view is good that it has come out loud and clear that it is now going to be operationalised. What now needs to be done is for the Bill to come to the House for us to debate on it. However Mr. Speaker Sir, you do not restrict special economic zones. Special economic zones should be a preserve of the constituencies or the places from which its market is derived because a special economic zone has a way of reversing de-industrialisation and if optimally given its space, I believe Zimbabwe can become an economic giant like it was before, not only in the region but in Africa and globally. The Special economic zones are a very innovative instrument for national economic development. It has helped major economies like China and Turkey which are global power houses.
In special economic zones, we invite global class companies that have capital technology and management expertise to Zimbabwe. It is like inviting Adidas to come and put in a shop for creating a brand which is second to none,which is globally recognized. It is like having all people coming to Zimbabwe and buy Adidas. The jacket that I am wearing is made in Turkey, if you bring in a Turkish manufacturer, he will put in the relative infrastructure, and it will woo workers that have expertise from Zimbabwe because we have workers that are second to none. We have spruced up the economy of South Africa, Mr. Speaker Sir. This brings to mind the issue of the engineers in 2010, when the South Africans hosted the World Cup. Our engineers went to South Africa en masse and we, hedging on our expertise, propped up the economy of South Africa during a needy time and the global community gives thanks to Zimbabwe as a result.
Mr. Speaker Sir, I also want to say what Government is going to derive out of the establishment of special economic zones, out of the establishment of those companies and its infrastructure here in Zimbabwe is huge. As they go Mr. Speaker Sir, they will never take away the infrastructure with them, they will leave that infrastructure and expertise here in Zimbabwe, and we are going to enjoy that infrastructure, expertise, facilities for long after they have gone.
Zimbabwe has the human skills second to none of global class. We have educated labour force with discipline; they will work hard to produce goods and services for the global market. We must find goods in supermarkets that have a brand or that have a label ‘made in
Zimbabwe’, in global supermarkets. So, this is why the establishment of special economic zones is very key and I am actually proud that I moved a motion on special economic zones and it has knee-jerked the Executive into action to make sure that we have a nationalistic policy that establishes special economic zones.
The issue of tourism Mr. Speaker Sir, the Minister touched on the border post in Beitbridge. What I need to let this House know is that a delay of three days for a 30 tonne truck Mr. Speaker Sir loaded with sugar at the Beitbridge border post or any other boarder post for argument sake; is equal to two and half percent of price added on to that commodity. It is 3% for a 30 tonne or 30 000 litre tanker or fuel that is 3% added on the value of fuel. So, we are shooting ourselves in the foot if we do not spruce up the border posts. So, I should congratulate the Minister for observing that we cannot delay our goods and we cannot congest our border posts. How do we de-congest our boarder post Mr. Speaker Sir – by making sure that we separate vehicular traffic and our tourists as well as our cross boarder buyers? How do we do this? We do that by establishing a robust ICT sector at that border post.
Mr. Speaker Sir, you will realise that in the past year, I do not remember the Minister mentioning it, but he alluded to the fact that we are losing tourist traffic through Beitbridge border post and any other border post because of congestion. We lost half the tourists coming in through the Beitbridge border post purely because of congestion which needs to be addressed expeditiously and immediately. We could basically bring, in the same vein, goods from South Africa and warehouse them in Beitbridge in a bonded ware house Mr. Speaker Sir. It is possible. We just need to be innovative and create policies that are close to special economic zone policies.
The issue of removing the 15% VAT on tourism services, it is not too late to reverse that entity, Mr. Speaker Sir. It is not too late to reverse that entity, it is not too late to reverse that instruction even if it was put in, in January we need to swallow our pride and look at other ways of raising income. There are a lot of revenue streams than punishing the tourist. Tourists will never say that they have been punished; they will just stay in South Africa, visit the majestic Victoria Falls and then fly out on the same day. We need them to stay here and at least spend, that is the whole point why we need tourists here. By introducing the 15% VAT, we are only disincentivising the tourists including the tourism sector. Tourism does not only reside in the
Victoria Falls, if we charge them 15% VAT on one of the Seven Wonders of the World, what happens then to village tourism? We have got the Nyau dancers in Chegutu West and that is called cultural tourism. If we have to charge 15% VAT on top of tourists coming to see the Nyau dancers, we are basically shooting ourselves in the foot, we are disincentivising that sector. We will never have tourists in Chegutu and
Masvingo in the Khami Ruins, Bulawayo and other sectors.
Mr. Speaker Sir, I need to touch on the industry, Chegutu West in particular because it is the headquarters of David Whitehead. We need to call a spade a spade. David Whitehead is in Chegutu, Gweru, Kadoma, Bulawayo and Harare but headquartered in Chegutu, it used to employ more than 4 000 employees. The issue of DIMAF does not arise when you talk of David Whitehead; it has legacy, historic issues that border on corruption, collusion, nepotism and fraud. Why do I say so Mr. Speaker Sir – it is a company that has gone through three judicial managers. It is now time for it.
- SPEAKER: Your time is up.
- NDUNA: I just need one more minute. Mr. Speaker Sir. It is very important that I talk of mining. The issue of mining, the Minister has alluded to the fact that…
- SPEAKER: I thought I had given you time to wind up on
- NDUNA: Thank you Mr. Speaker Sir. David Whitehead needs to pursue legal issues in terms of prosecution. What it needs is not DIMAF. We need to prosecute those that are the perpetrators of fraud at
David Whitehead and we also need to make sure we do not give into DIMAF. DIMAF is going to give it about US$1.8 million where it has issues that border on US$20 million, in terms of deficit and what it is owing. I want to thank you Mr. Speaker Sir, but issues to do with mining are very clear – [HON. MEMBERS: Inaudible interjections] -.
We need to decriminalise chikorokoza. I thank you.
*MR. MATAMBANADZO: Thank you for the time you have given me to add my voice on the Mid-Term Fiscal Statement made by Hon. Minister Chinamasa. I would like to thank the Minister for the tremendous efforts that he is making to ensure that our country develops. I will thank him by adding the following words, where I am going to give my own contributions and pointers.
On the issue of foreign companies, those that would want to come and work with us and run ZISCO Steel for instance, those that come and mislead the country that they are going to open up the country and then renege on that promise. Five years down the line, they have not done anything and then they are allowed to go scot-free. I would have thought it prudent that such companies should also be warned in this fiscal policy statement, that if they would have reneged on running ZISCO Steel and opening it up, they should be penalised. This will act as a deterrent to would be same minded investors. ZISCO Steel is the mainstay of the country. Without ZISCO Steel, there is no industry, building and no railway. The railway would not be resuscitated. We cannot even have aircrafts because we do not have the material to construct aircrafts.
I am of the belief that if such things were allowed to go on unabated, we will go nowhere. There are others amongst us who go there to ask for sanctions and these are nations or companies who impose sanctions on us. If we look at the scenario at ZISCO Steel, the mainstay of the country, Essar caused the loss of lives at ZISCO Steel. School children did not go to school, children of workers at ZISCO Steel failed to write their Ordinary Levels, even others failed to attend Grade 1 because of the actions of Essar and they were allowed to go scot-free without being taken to task, without any compensation or payment to show that what they did was bad. I urge that this issue be looked into.
Yes, I heard that Zambia. Botswana and Mozambique were given billions of dollars for loans for development. I had a big question on why that had been done, but the person who made that suggestion observed that this was bad, but the same person is the one who imposed the sanctions to be imposed on us, thus rendering us unable to receive such foreign direct investment or loans. I would like to say the key ministries, such as parastatals, should be wary of advisors of this sort.
They give you advice which is ill informed and they do a summersault. We were shown undergarments that are being sold and it was condemned. But you hear them making a summersault saying it is not bad. One shudders to think what this mentality is, what advice are they giving us. They are throwing spanners into the works of this economy. It is detrimental to suggest on one hand and condemn the use of second hand undergarments. Once it has been banned, you then remonstrate and say this is wrong. What exactly are you standing on?
We hear that there are children who are failing to access sanitary wear, that they are using leaves and cow dung. We heard it in this august House. If we were to put cow dung on one side and leaves on the other and put the second hand panty next to these two, what is better for use? The second hand pant is better than the cow dung or the leaf in comparison. It is also part and parcel of this monitory review because if our people do not have the second hand clothes – they are brought into this country via Mozambique.
I once paid a visit to that country with a view to find out what was happening. I am told that these bales are brought into Mozambique free of charge because their Government said that their industry was destroyed and that their people were moving naked and they were asked to come and get used clothes for free. They go out of the country select the clothes and bale them and have them delivered to Mozambique for free. When Mozambique realised that they had been afforded this opportunity, they used those second hand clothes to clothe their people. The used clothes were fumigated because you know white people have problems with skin diseases, their skins peel off. They suffer from that ailment, so these clothes would be fumigated. How many Mozambicans died because of skin cancers? How many died from these skin diseases? So, are we wise in Zimbabwe to realise that our people can die from using these second hand clothes. We urge our Minister to turn a blind eye to this issue and allow people in Zimbabwe to make a living out of selling these second hand clothes.
450 people in my constituency in ZIMASCO had been retrenched. 500 were retrenched last month. I now have 1 040 people who have been retrenched, all those people need to have a livelihood and to be clothed. The secondhand clothes that go for a dollar for two or a dollar are quite affordable to them so that they can protect themselves from the scourge of going naked on the streets.
Mozambique is now taking advantage of the second hand clothes that it is now selling to us and would have acquired for free. Why should our Minister also not look for a way for us to access these secondhand clothes and avoid the middle men in Mozambique? We are teaching our children to be illegal operators as they are now smuggling these secondhand clothes through the border areas where they face the risk of landmines. Some of them are losing their limbs as they smuggle these bales into Zimbabwe. I urge the Minister to open up the issue of second hand clothing so that they can be freely brought into the country.
I also want to look at other ways on which we can turn around our economy. We should look at money earners, what exactly should we look at? We should identify the means of livelihood our people are engaging in. We can then make money from the livelihoods that our people are having. Are they making a livelihood out of the flea markets or out of the selling of fruits such as oranges or second hand clothes? Find out the quantities of the people involved and thereafter, we find a way of ensuring that the money does not go out of the country.
For example Mr. Speaker Sir, our people are going to buy clothes
*MR. SPEAKER: Order, order hon. member, your time has
*MR. MATAMBANADZO: May I please have an extension of a few minutes?
*MR. SPEAKER: Your time has run out … - [HON.
MEMBERS: Inaudible interjections] –
*MR. MATAMBANADZO: I am talking to Mr. Speaker.
*MR. SPEAKER: Order, order hon. member your time has
elapsed. Thank you, your time has elapsed.
*MR. MATAMBANADZO: Thank you Mr. Speaker.
- BHEBHE: I rise to add my voice on the Mid-Year Fiscal
Review Policy Statement …
An hon. member having walked towards an exit point.
- SPEAKER: Order, order hon. member carrying a bag, where are you going to? We agreed that no one was going to leave the
House, are you still here?
*MR. CHIVAMBA: I am not going out Mr. Speaker. I was coming to have a word with Hon. Anastancia Ndhlovu.
- BHEBHE: Thank you very much Mr. Speaker, as advised
by you, I will thoroughly differ with the rest of the members who debated on this motion.
Mr. Speaker Sir, I want to preamble by saying, the easiest way to learn is to accept failure… - [HON. MEMBERS: Hear, hear.] - Mr. Speaker Sir, the problem that we have that I want to highlight on is that as a country, we have actually gone in the Guinness Book of Record by recording the highest inflation in the world using our own currency that we failed to administer. We have reverted to foreign currency that we believe is stable. We are now seen again, sliding backwards. Our inflation as we speak and as alluded to by the Minister in his statement, is 2.8% showing that we are already on deflation. So, for us to dream that we are going to turn this economy around is just but saying we do not want to accept failure. – [HON. MEMBERS: Hear, hear] – This statement that is premised by the thinking that the cause of our failure is as a result of sanctions, I want to address and debate that and put it to rest.
Mr. Speaker, in any social club or any business dealing, there are rules and regulations and punishments that go with those rules. As a country Zimbabwe, we are now lamenting about sanctions that we applied for to be applied on us. Rules were laid down and particularly, we are a member of the IMF which is a world body that we are a signatory to and that we agreed to abide by the rules.
The rules are very clear, they were very clear that sanctions are going to be applied on that member if they break any one of those rules. So, when the sanctions are being applied on the member, why then are we crying that sanctions have been applied on Zimbabwe when we applied for them ourselves? – [HON. MEMBERS: Inaudible interjections] - It is high time we disabuse ourselves by keeping on talking about sanctions instead of accepting failure. – [HON. MEMBERS: Inaudible interjections] – I just want to highlight a few indicators that are showing that we have to accept failure because it is indicating from the Minister’s statement that we are already going in the
Mr. Speaker, if you compare the figures of the beef slaughter, for instance on page 33. In 2004, round about this time, the amount of beef that we had slaughtered is less than what we have slaughtered at the same time this year. This is a very clear indicator that we are facing serious hunger as people have already started slaughtering more of their beasts and thus applying for poverty.
It is very clear with the Minister acknowledging that it is happening but not putting any measures in place to try and stop what is happening. I do not see this economy managing to support the restocking that would cover the gap that we will have created. It is a very clear sign that we are going in the wrong direction.
The second point that I just want to highlight on is that, it was also highlighted by the Minister, is the input scheme. We have always seen the issue of the input scheme coming up in every statement by the
Minister but if we look at the amount of abuse of those input schemes, it is shocking. We always see the same people who were given those inputs selling the inputs, meaning that they were distributed on political and partisan lines and they do not deserve to get them because they do not know how to use the input scheme. – [HON. MEMBERS: Hear,
They then go around selling them because they do not know how to use the inputs. So, it is very clear that those are clearly grave signs of failure. We implore and ask the Government that you have been given time for 25 years yet you failed to deliver. The honest and honourable thing is to accept failure and accepting failure means that you pass on the baton.
Mr. Speaker, I want to move on to the mining sector. We have always heard the Government talking about beneficiation. If you talk of beneficiation without actually dealing with the laws that govern mining in this country, it is a waste of time. I do not want to give examples. If we were to come up with a law that allows those that have got financial capital to come and invest here; any investment that they do in the mining sector should be guaranteed by that particular applicant, having in mind to also process the minerals that are mined in this country. It will assist in a long way because you are already giving a window to the people that are planning to come and invest here in Zimbabwe knowing that our products need at least to be value added before they are exported.
So, if we do not put those laws in place, we are busy talking without adjusting our laws to accommodate beneficiation, it is a waste of time Mr. Speaker. For instance, if you take platinum - platinum is doing very well. So, there is need for us to build a refinery here in Zimbabwe but that refinery should not be the card that is played by the Government but the card should be played by the private sector. If the private sector takes a leading role in coming up with a refinery, that refinery will come to fruition. If it is the Government that is making the loudest noise, I can bet you and guarantee you my last dollar, no one is going to come and invest in Zimbabwe because of the previous transgressions Mr. Speaker.
History in business is the one that drives an investor to come and invest in the country.
- ANASTANCIA NDHLOVU: Thank you Mr. Speaker for
affording me this opportunity to very briefly add my voice to this debate. I am not going to touch on areas already touched by my colleagues from both sides of the House. I want to start by congratulating the Hon. Minister Chinamasa for delivery this Mid-Term Fiscal Policy Statement which, in my view, managed to portray the true picture of how our economy is perfoming today.
Mr. Speaker Sir, I will talk about the issue which made me to rise and seek permission to speak on the tourism sector as outlined from pages 88 up to 92…
- SPEAKER: Order, order, can you assist the Chair by referring to paragraphs so that we are together.
- ANASTANCIA NDHLOVU: The Honourable Minister of
Finance and Economic Development once again stressed the point that the tourism sector is one of the key sectors with potential to drive our economy from paragraph 402 on page 88, I quote “this year the tourism sector is projected to grow by 5.1% , this is aggressive destination efforts” the Hon. Minister of Finance made reference to the fact that Government has supported efforts to market the country as a must visit destination but on page 89 paragraph 505, he goes on to acknowledge the fact that there has been a marginal decline in arrivals during the first quarter of the year. The decline is from 388 732 to 387 557.
Mr. Speaker Sir, the Honourable Minister spoke to this decline being caused by the Ebola outbreak but in my view, the major reason of this big decline in the first quarter of 2015 is the introduction of the 15% VAT on accommodation of foreign tourists. To my surprise Mr. Speaker Sir, the Hon. Minister spoke about the issue that needs to be addressed which contributes to the sector improving its performance but he chose to be very silent on this 15% VAT. I think he needs to rethink and look at the removal of this 15%VAT as recommended by your
Portfolio Committee’s report which we presented in this august House, last week.
I strongly feel that if this is removed, the tourism sector…
- SPEAKER: Order, order, hon. member, I thought that issue has been raised adequately by Hon. Nduna.
- ANASTANCIA NDHLOVU: Mr. Speaker Sir, I already rest my case on the 15% VAT. I now move on to mention very briefly with regards to issues of water and sanitation by way of just commending progress made to date. I will specifically speak about the Morton Jaffary works in Norton which has seen the supply of water improving in Harare Metropolitan Province. I want to urge the Minister to also concentrate on other cities such as Bulawayo and find resources to improve water supplies in Bulawayo.
Mr. Speaker Sir, once again, with your permission, I will applaud the Government on efforts made in supporting the energy sector. The energy sector is key in achieving the economic blueprint. However, I want to encourage the Minister of Finance to consider supporting renewable or clean energy. This country enjoys a lot of sunlight, almost three quarters of the year but we are failing to harness that potential which will add value to the energy sector. Mr. Speaker Sir, I would like to thank you for affording me this opportunity. I do not need to finish the whole ten minutes because most of the issues have been raised by the other hon. members. The Minister needs to do away with the 15% VAT on tourism.
- M. KHUMALO: Thank you Mr. Speaker Sir. I rise to also thank the Minister of Finance and Economic Development for bringing this Mid-Term Fiscal Policy Statement. I want to only indicate those things that are missing in this review. I am afraid that Hon.
Misihairabwi-Mushonga is away. I want to collaborate with her when she talks about the Constitution in terms of gender and also in terms of regional representation, even in terms of the resources that are budgeted for. I come from a region which is in the southern part of the country. When I look at this statement Mr. Speaker Sir, on agriculture, if you look at the $48 million which is outstanding payment for farmers - the Minister says he has paid about $18 million and he is left with $29 million. I just calculated how many months it took him to pay this amount over the period of deliveries. He does not indicate when this $29 million is going to be paid to farmers. To me, in the six months to come, I see the Minister failing to honour the farmers on this money that is left and this money dates back to last year and the other year.
Mr. Speaker, I went to Mashonaland Central and the Press has indicated that Mashonaland Central has a slight surplus this year. When I went there personally, I found that people have not harvested and the Minister does not even indicate how GMB is going to mobilise that maize in
Mashonaland Central, Mashonaland West and parts of Mashonaland East. When you look at this Budget Statement, you find the Minister has indicated that Government has bought thousands of tonnes of maize outside the country and he has given permits to the private sector to bring in thousands of tonnes and these tonnes were paid cash, more than what the Government owes to farmers. This is not sincere to our local farmers. So we are suggesting Hon. Speaker that Government must take its time in mobilising all the maize which is a surplus in the country before it takes the money outside the country. For that reason, I want to talk to Matabeleland North for example. The area is full of wildlife and wildlife has brought a lot of money into this country. In this Policy Statement, nothing talks about the National Parks where our elephants were banned from export. -[HON. MEMBERS: Inaudible interjection]- I will come to Cecil.
Lupane, where I come from, has an abundant methane gas which has been exploited which will provide over 300 MW of power into the grid. The deposits have been exploited. The Gwayi Mine, even in the budget, it is said that it is going to provide some power over 600 MW this year, but in the statement, it does not even indicate how that contribution is going to affect the economy. If you look at Hwange Colliery, the machinery was provided and the statement says a lot of coal is going to be produced. The Minister does not speak about the National Railways of Zimbabwe which is going to carry that coal to where it is needed, this side of the country. The Afrochine, with chrome there – you know the ban on the export of chrome has been lifted. It is using trucks to damage this road, the Plumtree/Mutare road and the Minister is not indicating how all this abandoned chrome which is going to be exported is going to be ferried without the NRZ. We are so worried Mr. Speaker Sir.
When you look at the funds that have been raised towards Cecil, the people in Matabeleland, particularly in Lupane, Hwange and Binga where you come from Mr. Speaker, have lost thousands of cattle because of elephants and hyenas. They have heard that $500 000 have been raised by the Western countries to support the disappearance of the death of Cecil the lion. I feel ashamed to refund this lion without refunding the people of Matabeleland, the thousands of livestock that they lost through, probably this lion. For your information, the people in Hwange and Lupane where I come from are celebrating the disappearance of
Cecil because over the time, no killings have happened in their livestock.
They think that this Cecil the lion was killing their livestock. –
Mr. Speaker Sir, I think as I said, I wanted to support my colleague
Mrs. Misihairabwi-Mushonga that surely, if you read this statement, I come from that region which is Midlands and Matabeleland areas, there is little you say about what is going to happen in the next six months. Surely, we ask the Minister to be sincere about this document and revise it and put things that are happening that side. Thank you Mr. Speaker.
- MUDARIKWA: Thank you Mr. Speaker Sir. I think to do
justice to this debate, most of the things have been said and I am just there to sum up. –[Laughter]- The issue of economics is everybody’s business. You only realise that you are economically wrong when after five years you see the Master of High Court wanting to say something. So, let us look at these things in a proper way. The first thing that I observed in this country is that as long as we do not have plastic money, we are running a black market economy. This august House must say all border posts, all essential Government departments must pay through plastic money. That is the beginning of everything. Corruption is there and you cannot stop people from doing whatever they are doing when they are handling cash. That is why plastic money must be introduced in all these hotels and everywhere. So, our starting point is to say Government must introduce plastic money in all institutions. You will see that the collection levels will go up.
The issue of importation has been mentioned. I went to school from selling vegetables. This is our constitutional right. People from
Murehwa, Mutoko, Chinamhora and Seke, and when you come to the stage where people are importing mbambaira, sweet potatoes, madhorofiya and magogoya, then there is something fundamentally wrong. It is uneconomic and sad. When we are at that stage, we are lost economically because those supermarkets which are importing sweet potatoes, why can they not also import customers? They must import their own customers because we will have import phobia as time goes on when we deal with those situations or where you do not allow things to happen the way it is happening. Then the issue of easy ways of doing business, people are just saying we must do this. We have mentioned this several times.
I did my military training in Yugoslavia. My comrades from
Yugoslavia came here wanting to establish a Five Star Hotel at Chivake on our way to Murehwa. They almost paid. They were supposed to pay more than 60 statutory fees, starting with the Environmental Management Agency (EMA). The truck which was carrying sand needed EMA permit. We went to the Rural District Council (RDC), Zimbabwe Electricity Supply Authority (ZESA), the regulatory authority of the building industry and so on. There is a percentage of the engineers.
From there, you have to go and apply for hotel licence, liquor licence, hair dressing licence, fire arms licence and so on. You also want to keep animals there and you have to apply to the National Parks. A bus that carries customers from the airport, you need to have certificate of fitness of the driver, the bus, television and radio licence in the bus. There should be a television licence in all the rooms, whether they are empty or not. We continued and we also had to pay at the toll gates. In order to establish that hotel, these Yugoslavians had to pay
US$6.5 upfront and they said, ‘we are going.’ This is what we must look at.
There is also this issue about Zimbabweans of saying these people are cheating us, everyone is cheating you. Where are you, are you sleep? We must wake up and understand that when people come here to do business, they have to make a profitable margin. Jesus Christ is not in business, in business, we want to make a profit. These are some of the things that we must deal with.
Mr. Speaker Sir, there is the issue of mining industry. I am personally involved with the mining industry. I run a company that exports ±US$15 million per year. However, my major problem is that I have to pay an export permit of US$10 000 per quarter for me to export. Exports are bringing in new money to the economy, which is critical for the development of this economy. Even the use of those diamond companies in Murowa Diamonds, they are paying ground rental of
US$3000 per hectare per year. If you look at that figure, it goes up to US$119 million which they are supposed to pay. That money does not go into Government coffers; it goes to a particular ministry. We must have a centralised collection of revenue. There is no way we can have this ministry getting money, another one is getting money, the constitutional obligation of collecting money rests with the Ministry of Finance and Economic Development. We must limit to say the maximum a ministry can collect is US$300 and anything more than that must be submitted to the central coffers – [HON. MEMBERS: Hear, hear] – the Ministry of Finance and Economic Development.
On the issue of chrome, people are saying that we must not export raw chrome, we must beneficiate. We are debating from a wrong dimension about chrome mining. Most of these chrome markets require a certain percentage of chrome. If your chrome is less than 35%, they will not take it. What do we do with that chrome? Mr. Speaker Sir, we are sitting on how many millions of chrome? We have a reserved chrome of more than 400 years, are we going to live for more than 400 years? Let us eat now and make sure that the economy is up and running whilst we are still alive.
Then we come to the issue of gold panning. This must be understood in its historical and economic context. The Munhumutapa Kingdom was there because of gold panning. It is an intellectual right that we inherited from our forefathers that we must be proud of. We must never stop gold panning on this planet, but it must be controlled in such a way that it does not destroy the environment. As time passed by, we have seen the Chinese coming with 80 tonne excavators to the middle of Mazoe River. This is not beneficial. Let us allow our people to do gold panning because it is a right and it is a skill that we acquired from Munhumutapa. Today, our gold is in China and Israel. We must continue producing gold in the interest of our people.
Mr. Speaker Sir, our decision on agriculture makes it very difficult. We have 5 million cattle in Zimbabwe. We fail to insure the cattle and securitise them so that they have a commercial value. If we insure the 5 million cattle, it amounts to US$1.6 billion and people can borrow against the 5 million cattle. These cattle continue to be ceremonial, that can never be put into commercial use.
In my conclusion Mr. Speaker Sir, poverty is the inability to utilize the resources around you for your personal and national benefit. So we are failing to utilise the cattle around us for our personal benefit. This is why we look at these situations and say, let us create a commercial value so that we can have a benefit. I worked in Government for 28 years and the way we continue doing business must be changed. Even the way we debate in this august House must also change. People must research; we must see Members of Parliament with ipads and laptops for the purpose of researching. We must have an informed debate which is there to benefit. People may talk about historical inflation, but what is important is …
- SPEAIKER: Order, order, unfortunately your time is up.
- MUDARIKWA: Mr. Speaker Sir, I want to thank you very much for allowing me to debate. I want to thank hon. members for listening to an intelligent and constructive debate – [HON. MEMBERS:
- E. GUMBO: Thank you Mr. Speaker Sir. It is difficult to debate such an intelligent debate. However, a lot has been said about the
Mid-Year Fiscal Policy Statement. I would like to thank the hon.
Minister for trying to address a lot of opposing issues and also for addressing issues from a point of very little resources. However, I need to thank him because he did an excellent job to craft it in a difficult time.
In the interest of time, I would like to draw attention to very urgent issues that I think need to be addressed, issues of tomorrow and not next month, the issue of agriculture. There is hardly any provision for agriculture, yet the agricultural season is around the corner. This is the time that we should prepare. There is very little money that has been provided for agriculture - [AN HON. MEMBER: It has been said.] – the point I am driving at is that there is no money provided for the household inputs. Last year we had US$1.2b, what is going to happen to the household people? Not even to say enough – there, will talk of that. We have not provided for them but we are then but putting a duty of 25% on fertilizers. That really I think is a bit of double blow on them. I will point out that farmers benefited very much from no duty on fertilizer. They formed groups and importing the fertilizer on their own from South Africa; that way they were curbing the middleman. That is a very important aspect and I think the duty on fertilizer must be removed to support those farmers, especially on the essence that we are not giving them any inputs. Even if the duty is to be put, it is bad timing to be done now on fertilizer. People have already planned and wholesalers have already stopped. They will withhold the fertilizer because there is a duty to be put there. So they will sell it at a higher price. The fertilizer in the country now will not be available to the farmers, thereby farmers will be inconvenienced more by not putting the inputs in time. I think we should remove it for the sake of progress. If necessary, it must be brought in later, may be in January.
On the issue of clothing, I am not going to say what everybody has said. If you ban clothing you know who benefits, it is Edgars. It is the biggest importer of textiles from China. So if you stop the old clothes, all you do is that you are making a big market for Edgars and Truworths because they are the biggest importers. Is that why you want our people to suffer so that you promote Edgars? I will not dwell too much on it because of the sake of time, but if you ban old clothing you are promoting imports of new textiles. If you ban, the people might as well buy old textiles; it must not be one sided. We also need to look at the aspect of improving conditions of doing business in Zimbabwe because confidence is the highway in which business people live on. I will not dwell too much into this because of time but it is worth mentioning.
Another thing which worries us - we want to grow and produce for ourselves but we should look at the capital investment because to produce we need capital. The Budget only provides for 1.5% out of the US$2b that is needed for the half year, 1.5% that is not enough to do anything. It will not make our industry competitive, I think we need to devote more resources towards capital and also make laws like the customs duty to be removed on capital goods, the ones that we used to produce.
Then there is another aspect - we should also look at what we can do as Zimbabweans and do what we call import substitution. If I can prove that I can do all the aluminium in this country and I can do it effectively, the Government must come on board, stop importing aluminium and support local people. We should look at import substitution. As long as the plan is there, we will show that there is a local industry that we can match and compete, even if it means we put prohibitive tariffs to stop other things coming in…
ANNOUNCEMENT BY MR. SPEAKER
SUSPENSION OF COMMITTEE BUSINESS
- SPEAKER: I just have one announcement. I wish to inform the House that the business of all Committees of Parliament will be suspended today until the 31st of August, 2015. Only activities approved prior to the 4th of August will be allowed to proceed, especially Committees that will be going out on certain schedules approved by the Speaker.
May I also recognize the commendable spirit of debate today. You have clocked one of the few feats of having debated for four hours and eleven minutes – [HON. MEMBERS: Hear, hear] – I hope you will continue. This other side is sleeping. Why are you not accepting with me? You do not sound like the people who know themselves. I was going to say, hon. members, on behalf of those who have just gone away, you keep up the good spirit of debate. [HON. MEMBERS: Hear, hear]-
It being Seven o’clock p.m. MR. SPEAKER automatically adjourned the House without putting any question until 1st September,