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NATIONAL ASSEMBLY HANSARD 07 FEBRUARY 2017 43-32 2

PARLIAMENT OF ZIMBABWE

Tuesday, 7^th February, 2017

The National Assembly met at a Quarter-past Two O’clock p.m.

PRAYERS

(THE HON. SPEAKER in the Chair)

ANNOUNCEMENT BY THE HON. SPEAKER

INVITATION TO A NETWORKING DINNER FOR COTTON

GROWERS

          THE HON. SPEAKER:  I wish to inform the House that

Members of Parliament from cotton growing areas are invited by the Cotton Company of Zimbabwe to a networking dinner on Wednesday 15^th February, 2017, at 1800 hours at the Rainbow Towers Hotel. Members interested in attending the dinner should confirm attendance with Mr. M. Godzongere, from the Public Relations Department, Office 516, Fifth Floor, South Wing at Pax House, not later than end of the day on Thursday 10^th February, 2017.

MOTION

BUSINESS OF THE HOUSE

THE MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. CHINAMASA): I crave the indulgence of

the House to move that Order Number 1 of the day be stood over until Order Numbers 38, 2 and 3 have been disposed of in that order.

MOTION

THIRD REPORT OF THE PUBLIC ACCOUNTS COMMITTEE ON

THE FINDINGS BY THE AUDITOR GENERAL ON THE 2014

APPROPRIATION ACCOUNTS FOR THE MINISTRY OF FINANCE

AND ECONOMIC DEVELOPMENT

             Thirty-eighth Order read:  Adjourned debate on motion the Third

Report of the Public Accounts Committee on the findings by the Auditor General on the 2014 Appropriation Accounts for the Ministry of Finance and Economic Development and other Statements under its purview.

          THE MINISTER OF FINANCE AND ECONOMIC

DEVELOPMENT (HON. CHINAMASA): Mr. Speaker, you have

raised directly with me and other line Ministries your concerns that we are not responding to reports submitted in this House by different Portfolio Committees.  I want to assure you that during the first quarter of this year, I should have complied with all the reports that I have to respond to, raised concerning my Ministry.  Administratively, we have been able to put our act together and we think that we can comply with that request.

          I am standing to respond to the report by the Public Accounts Committee which was raised concerning my Ministry.  I have done my response in a tabular form showing the concerns and recommendations of the Committee and the response I gave to that recommendation.  The first concern raised is that: 

	Issue of concern to the Committee’ concern	Committee Recommendation	Response
1	The Public Finance Management System (PFMS) Audit Module not enabled	Treasury should purchase the additional servers to allow the activation of the Audit Module within the system by	The Treasury has purchased additional servers and the equipment was received on 28th January, 2017.  The processing

	in the new version of the SAP system (EHP7)	30th September, 2016.	capacity will be enhanced as soon as the new servers are functional.  Government will have a parallel processing capacity installed in Bulawayo, which will ensure that we will have an effective Disaster Recovery Plan.  Should the Harare servers fail, we will be able to switch immediately to the Bulawayo based server.  As soon as the new servers are installed, i.e. by mid-February, 2017, the Audit Module will be enabled on the system
2	Upload of expenditure by Ministry of Foreign Affairs in the SAP System after the 13th period of one month after the end of a financial year.	Enforce the cut-off period in line with best practices.  In this regard, the Ministry of Foreign Affairs should observe the 13th period cutoff deadline and close its books of accounts for the current year by 31st January, 2017.	The Accountant General and the Director of Finance in the Ministry of Foreign Affairs are working on this and they are confident that this issue will have been resolved by 31st December, 2017.  Once that has been done, the Accountant General expects to produce a Treasury Minute that will be submitted to the House.
3	Failure by the PFMS System to display asset register for the Ministries of Finance and Economic Development, Information Communication Technology, Postal and Courier Services and Foreign Affairs.	1.      Training on maintenance of asset registers across Ministries by 30 September, 2016. 2.      Accounting Officers should closely monitor this area and ensure asset registers are checked for completeness and accuracy by 31st January every year.	The installation of new servers and the related increased processing capacity will allow for a complete set of Asset Registers to be installed and maintained in the 2017 Financial year.  The system has been designed so as to ensure that there is: a.       A composite Government Assets Register maintained by the Treasury and b.      Individual Assets Registers maintained by each Ministry c.       In addition once the system is fully functional, the Accountant General’s team will provide training support to all line

			Ministries.  The training will cover a.       Assets requisition and procurement b.      Upload of existing assets c.       Depreciation policies and processes d.      An understanding of the circumstances that should lead to Board of Survey Procedures.
4.	Variance observed between the 2013 returns submitted by line Ministries and those by Treasury as well as balances in the SAP system	Training should be undertaken by the first half of 2016 to avoid recurrences in the next round of audits.	Treasury has provided training on the production of annual returns and the incidence of inaccurate returns produced by the Ministry has declined.  This training, however, remains an ongoing exercise as new problems are identified and new officers are recruited to the relevant grades.  The training will therefore be ongoing but there has been noticeable improvement in the quality of returns produced for the 2015 financial year.
5.	Direct payments to service providers	Treasury must formulate procedures for handling direct payments to facilitate proper and systematic capturing of such transactions and curb recurrences of the audit observation in future.  This should be done by 30th September, 2016.	Formal instructions have now been issued under Treasury Circular Number 3 of 2016 covering the issue of direct payments.  The Circular was issued on 15th April, 2016.
6.	Misappropriation of funds	i. Treasury to come up with a risk management framework by 30th September, 2016, which will allow close monitoring of high risk areas	Treasury managed to carry out training of staff in the identification, assessment and prioritization of risks.  Treasury is now in the process of engaging a

		and curb losses through fraudulent activities.     ii. Given the central role played by the Accountant General’s office, the Civil Service Commission should by 30th September, 2016, fill in the critical vacancies occasioned by this incident.  The staff is critical in ensuring that audit recommendations across line Ministries, parastatals and local authorities are acted upon.	consultant to help in coming up with a draft risk management framework.  The consultant will be engaged by the end of April, 2017 as funding has been secured for that purpose.     Ten additional positions in the Accountant General’s office were exempted from the Public Service freeze during the fourth quarter of 2016.  Interviews have been carried out and the 10 officers are expected to be in post on 1st February, 2017. The positions are expected to be filled by 1st March, 2017.
7.	Failure to review Treasury Instructions after the introduction of the multi-currency system.	New regulations should be operational by 30th June, 2016 as the Ministry indicated.	A draft set of Public Finance Management Regulations and Treasury Instructions will be submitted to the Auditor General in February, 2017.  Both documents could not be finalised by 30th June, 2016 for different reasons.  On Treasury instructions, when the Accountant General reviewed the draft, he established that there was a gap in the provisions, with respect to guidance on dealing with epayments.  As we moved as a country towards payments, it became clear that we needed to develop a new set of rules and controls.  On the Public Finance Management Regulations, the World Bank kindly offered the

				Government of Zimbabwe technical support in the form of a senior Finance Advisor.  Unfortunately, the advisor was only available in November, 2016.
8.	Failure to revalue Government assets from the Zimbabwean dollar to the United States dollar.	Treasury should by 30th September, 2016, provide guidance to fund managers to enable them to revalue noncurrent assets that were in Zimbabwe dollar currency.		While the Committee recommends that these assets be revalued, I have taken a different approach.  As an accurate record of each asset is available and these assets have been in operation for eight or more years, I have retained these assets in the assets registers at a nominal value of one dollar.  As these assets are disposed of, a Board of Survey is established.  Included among the responsibilities of Boards of Survey is the determination of current market value and the most appropriate disposal method.  I have taken this view given the high cost of asset valuation.  In some instances, assets valuation costs would exceed the respective asset value.
9.	Non-disclosure of and incomplete accounting records for Public Financial Assets	The PFMS should be configured to capture all payments made for equity and lending by 30th September, 2016. The PFMS should be configured by 30th September, 2016, to capture take-on balances, loans, investments, recoveries and adjustments to ensure proper accountability of public financial assets.		The PFMS has been configured to take-on all Public Financial Assets records and I am confident that the 2016 audit will confirm this position.  A new consolidated Public Financial Assets Register is now available and is maintained up to date.  All equity and lending payments are now made through the system as recommended by the Committee.  We are working on ensuring that, for 2017, all reconciliations will be effected on a monthly basis.
11	Opening take on balances which did not agree with closing balances.		1. All payments for equity and lending must, with immediate effect, be made through the system and line Ministries should be advised of payments done through		A public finance assets register has been established and will be maintained up to date. Payments made on behalf of any Ministry are

		IDBZ to enable them to record such loans.     2. Ministry of Finance and Economic Development should speed up the process of compiling a new consolidated register for public financial assets and ensure that its available by the end of 2016 and going forward, ensure that reconciliations by line Ministries are timeously carried out.	communicated to the line Ministries so that the line Ministries records are accurate.
12	Variances between the balances reflected on the returns from line Ministries and those from Treasury rendering Statement on Public Financial Assets unreliable.	Ministry of Finance should instruct line Ministries to ensure that all State enterprises provide up to date returns to their parent Ministries by 31st January, 2017.	Considerable work has gone into ensuring that State enterprises bring their accounting records up to date. Unfortunately, some State enterprises are still lagging behind and have failed to produce timely returns as well as audited financial statements. At this moment, some State enterprises are still playing catch up in bringing their records up to date. Attached is a list of SEPs which have submitted the 2015 audited financial statements.
13	Revenue Collection and Debt Recovery: Farmers’ World debt worth $11 833 433.	Government must institute measures to recover the debt from either Farmers’ World or from beneficiaries of farm machinery and implements. Treasury should by 30 September, 2016, explain fully to the Committee why Farmers’ World was advanced the latter loan reported in 2014 when it was failing to pay back the initial loan and also report on progress made towards recovery of the debt.	I agree with the Committee’s recommendation that “public resources cannot be used to meet obligations of a private nature”.  Considerable effort has gone into tracing the debtor, Farmers’World and I am advised that the debtor has not only been located but that it has been established that Farmers’ World is recovering money from those to whom they provided equipment. Treasury has written to the Ministry of Agriculture.,

			Mechanisation and Irrigation Development in order to institute debt recovery arrangements. This remains work in progress but is something that I keep in view.   Farmers’ World has two separate loans as follows:- •      A loan that was granted by the Treasury under the National Development Fund; and •      A loan that the Treasury inherited from the Reserve Bank. When it became clear that we would not be able to access additional Chinese funding, we paid off this loan and thus Farmers’ World became our debtor.
14	Variances in National Development Fund 2013 Accounts receivable figures.	The Ministry, by 30 September, 2016, should put in place measures to avoid the co-mingling of the NDF and PSIP funds.	Treasury has put in place measures to ensure that there will be no co-mingling of NDF and PSIP funds.
15	Non-recovery of outstanding project loans disbursed through IBDZ.	1.                  Treasury should by 30 September, 2016 provide an explanation to the Committee why it was maintaining IDBZ given its perennial financial woes.                         2.                  Government should with immediate effect, stop lending funds to non-performing entities.	Government has no intention of dissolving IDBZ and has in fact recapitalised the Bank. The bank’s financial performance is expected to improve significantly in 2017 and should be in a position to report a profit in 2017. The House needs to know that we hired a former Deputy President of the African Development Bank to head this bank and there are discernable improvements in the manner and in the way that it is now performing.   The recommendations have been noted and Government will in future carry out due

		3. Government should with immediate effect institute recoveries from entities such as ZINARA since it was collecting a lot of revenue.	diligence on the institutions to be supported. However, some of these entities are Government linked and strategic in nature. Under the Public Sector Reform Initiative, we are working on improving the performance of State enterprises, parastatals and local authorities. Among the improvements, is a draft Governance Bill that will be presented to this House soon.   Recommendation noted, Government will schedule meetings with the institutions that have prospects of repaying the funds and request for payment plans with a view to clear the outstanding support extended.
16	Non provision of information on the Zimbabwe Economic Trade Revival Facility (ZETREF)	Minister of Finance should provide a full report on the status of the facility to the Committee by 30 September, 2016.	When the Zimbabwe Economic Trade Revival Facility was established by Government, the proper documentation procedures may not have been followed. My officers have engaged the relevant bank to try and obtain the original agreement with limited success. We look to resolve this issue by March 31, 2017.
17	Outstanding Farmers’ World debt	Government should with immediate effect, institute recoveries of the debt from either Farmers’ World or the agricultural machinery	See 13 above
18.	The Committee with concern that the Fund like other funds in line Ministries, had been prone to abuse, hence there was need for better control and supervision	Going forward, all those found to violate Fund resources should be penalized in terms of Section 91 of the Public Finance Management Act.	As indicated in my Budget speech, Fund Accounts shall only be used for the purposes specified in the Blue Book and there shall be no variations without Treasury Authority. Failure to comply

	by accounting officers.		will be dealt with in terms of Section 91 of the Public Finance Management Act.
19.	Inadequate security for housing loans disbursed to senior officers.	Ministry of Finance should examine the functions of the Fund from a governance point of view in that the Committee noted that it was inappropriate for the fund to be administered by potential beneficiaries. The Ministry should provide an explanation by 30 September, 2016.	The Committee’s comments have been noted and a set of Accounting Officers’ Instructions have been issued that direct the Fund Manager to adhere to proper Governance Procedures including ensuring that: -          All loans are supported by adequate security; -          No single officer shall be issued more than one loan; and -          All loans will be issued with on the prescribed limits.
20.	SERA failure to renew contract of employment	The Ministry should fully justify the continued existence of SERA by 30 September, 2016.	I note that the Committee questions the relevance of SERA. For the record, SERA has been supportive of the reform process as a technical advisor and cannot, in all fairness be blamed for lack of progress in the implementation of Government decisions. You may be aware that we are working on a Governance Bill that will soon be submitted to the House for consideration. In addition to work carried out by SERA in the crafting of the Bill, I am satisfied that their inputs on Turnaround Strategies and Developing Performance Measure have been invaluable to Government.

In conclusion, I want to thank the work that the Public Accounts Committee has put into this matter.  I think that it is very clear; they raised very pertinent issues and I think that I have done my best to respond to each of those pertinent issues.  As I pointed out earlier, I think that I will be in a position to fulfill all the requests for replies and responses by end of March this year.

HON. MPARIWA: Thank you Hon. Speaker.  Through you Mr.

Speaker Sir, let me begin by thanking the Hon. Minister of Finance and Economic Development, Hon. Chinamasa for the response.  Indeed, I am humbled that at least some movements are being done as reflected in the response by the Minister.  I hope and trust that as we do our oversight role, we will be able to be getting responses from the Executive because it is our responsibility to carry out oversight over the actions of the Executive.  Hon. Speaker, may I also appeal that the

Ministers that are not here who also have received reports from the

Public Accounts Committee, do the same like the Hon. Minister who is responsible for national purse of the country has done.  He allocates resources to the various departments of Government and really I want to thank him.  Indeed, this actually promotes parliamentary democracy and good governance and team work will never fail.

Let me end by a quote from the Bible Hon. Speaker…

HON. CHAMISA:  On a point of order Hon. Speaker.  This is a very important development in the processes of Parliament and I was going to seek your indulgence.  You may know that in terms of the rules, once the Chairperson of the Committee articulates the response that closes the avenue for other members just to add views.  So, I was going to seek that through your indulgence Hon. Speaker, if you may allow Members who may want to just sink their teeth in this very important response from the Minister; then we have the Chairperson to conclude, that will help us.  If that is okay with you, we would really appreciate.  I for one do not want to debate, but I just feel that there are others who may want to just respond to this one, because there is nothing that stops us from appreciating…

          Hon. Chamisa was asked to approach the Chair.

HON. CHAMISA: I have since heard what you have said Hon.

Speaker; you make a lot of sense that we delayed a bit.

THE HON. SPEAKER:  What I have said makes some sense.  I

make a lot of sense.  There is a big difference.

HON. CHAMISA:  Thank you Hon. Speaker.  In fact I was

hesitant to give you all the due credit.

THE HON. SPEAKER:  No, no.

HON. CHAMISA:  Thank you.  What you said makes sense and we oblige Hon. Speaker.  I hear you and I think I will not persist. – [AN

HON. MEMBER:  Inaudible interjections.] -

HON. ZINDI: On a point of order Hon. Speaker. We are not privy to what Hon. Chamisa is referring as what you have said makes a lot of sense and you also responded Hon. Speaker – I have made a lot of sense – [Laughter.] – What is it that I have made a lot of sense out of that, we want to know.

THE HON. SPEAKER: Order, order.  Hon. Zindi, I hear you.  I think Hon. Chamisa was going to explain the sense.  Allow him to wind up.

HON. CHAMISA: Thank you Hon. Speaker.  Let me share with the House the sense that we got from our esteemed Hon. Speaker.  As you know, we had requested that we would have Hon. Members also making commendation and appreciating the good work by the Minister of Finance because it is not often that we have Ministers making their diligent effort to come to Parliament to appreciate the role of

Parliamentarians and Portfolio Committees – [HON. MEMBERS: Hear, hear.] – so we wanted to appreciate that.  However, the Speaker indicated that the problem is that we were a bit late in responding before the Chairperson of the Portfolio Committee took the stand.  The problem now is that if we were to have Hon. Members of Parliament debating, the Hon. Minister will not be able to respond to our input unless if we have made prior arrangements.  I think it does make good sense.  That is what was explained.  On that score, we ask our Chairperson to make the necessary submissions.

HON. MPARIWA: Thank you Hon. Speaker.  Let me just appeal to the other Ministers who have not responded to Committee reports and recommendations to do the same like what the Hon. Minister of Finance and Economic Development has done.  I think that will also address the concern from my colleague Hon. Zindi.  It is very relevant and pertinent that Ministers should come and respond to questions and reports recommendations.

Finally, let me end by quoting the Bible Hon. Speaker, which is

James 2:17, “Faith without action is dead.”  Hon. Speaker, I mean that the Hon. Minister has made a lot of commitments in other areas in terms of responses, but without implementation, we will remain with the same problems as observed in the report of the Auditor- General.

With these remarks Hon. Speaker, I move that the report be adopted.

Motion that the Third Report of the Public Accounts Committee on the findings by the Auditor General on the 2014 Appropriation Accounts for the Ministry of Finance and Economic Development and other Statements under its purview, put and agreed to.

SECOND READING

PUBLIC PROCUREMENT AND DISPOSAL OF PUBLIC ASSETS

BILL [H.B. 5, 2016]

          Second Order read: Adjourned debate on motion on the Second Reading of the Public Procurement and Disposal of Public Assets Bill, (H.B.5, 2016).

          HON. CHAPFIKA: Thank you Mr. Speaker Sir.  I rise to present the report of the Portfolio on Finance and Economic Development on Public Procurement and Disposal of Public Assets Bill.  

 1.1 Introduction

The Public Procurement and Disposal of Public Assets Bill, (H. B.

5, 2016) was gazetted on 17 November 2016. This Bill repeals the Procurement Act [Chapter 22: 14]. The Bill is a welcome development given the challenges the country continuously face with the existing Act under which the State Procurement Board conducted procurement on  behalf of government entities. Some of the challenges relate to delayed procurement of goods and services owing to the centralised nature of procurement, the alleged corruption which could have had a huge cost effect to the economy and consequently loss of faith in the process by both procuring entities and suppliers of goods and services.  

1.1 The Committee believes that the Bill when implemented to the letter and spirit of its objectives, fairness, transparency and honesty will be achieved. The proposed changes are in line with global trends where equivalents of the State Procurement Board have been transformed into regulatory bodies while the procurement function has been decentralised to procuring entities.

1.2 The Committee commends the Office of the President and Cabinet for the extensive consultations conducted on the Bill with relevant stakeholders. Six Committees from the National Assembly and one from the Senate were consulted on two occasions in February and October 2016. These consultations afforded Parliamentarians an opportunity to input into the draft Bill before its gazetting. The Committee on Finance and Economic Development is, therefore, generally in support of the Bill save for few issues that require fine tuning before approval by Parliament.

1.3 The Committee in compliance with Section 141 of the Constitution relating to consultations with the public on Bills being considered by Parliament conducted public hearings from 29 November to 3rd

December 2016, in Gweru, Bulawayo, Gwanda, Lupane, Masvingo, Mutare, Marondera, Harare, Chinhoyi and Bindura. The majority of the people who were consulted and those who sent their inputs via email welcomed the Bill and suggested a few improvements which will be highlighted below.

2.0 Submissions Received from the Public  

2.1 Application of the Act

2.1.1Members of the public commended the Bill for containing provisions that promote transparency and fairness. Whilst acknowledging that some procurement by Security departments needed to be kept secret, they recommended that strong mechanisms for oversight be put in place to ensure that nontransparent procurement is not open to abuse.  

2.2 Statutory Tariffs

2.2.1Stakeholders raised concerns on Section 3 (4) relating to the application of the Act in relation to the provision of professional services and Part VIII relating to the procurement of consultancy services. They argued that the quality and cost based selection method would be detrimental to project delivery and proposed that the current method of gazetted scale of fees which is based on the value of works and is on a sliding scale be retained. They submitted that the quality and cost based selection method needs highly skilled clients and that the influence of price could be detrimental to quality of the service.

2.3Objectives of the Bill

• 1Members of the public welcomed the Bill and indicated that the proposal should be approved as it will address the challenges that were being faced associated with current procurement processes particularly, the perceived corrupt activities. The Bill was hailed as a piece of legislation that was comparable to world best practice especially with the procurement law in Tanzania.

2.4 Establishment of the Procurement Regulatory Authority of

Zimbabwe

2.4.1The proposed abolition of the State Procurement Board and the decentralisation of the procurement function to ministries, parastatals and local authorities under the supervision of the Procurement Regulatory Authority of Zimbabwe was well received by stakeholders. Members of the public noted that by decentralising procurement, procurement processes were likely to be conducted much faster than before. However, Government was called upon to ensure that the proposed Procurement Regulatory Authority has sufficient powers, independence and financial and human resources to effectively perform its role.

2.5Board of Authority

2.5.1Some members of the public proposed that the Board should consist of either eleven or thirteen Members as opposed to seven of

nine in the Bill. The rationale was for each of the country’s provinces to be represented thus ensuring consistency with section 18 of the Constitution relating to the principle of fair regional representation. They also proposed a reasonable percentage in terms of youth representation on the Board.  

2.6Procurement Preparation

2.6.1Members of the public submitted that the requirement in Section 20 that procuring entities have adequate funds for the proposed works is laudable as it will ensure the sustainability of the construction industry in Zimbabwe. It was submitted that most of the consultants and contractors were being crippled by doing work for clients that do not pay for work done.

 2.7Domestic Preference

 2.7.1Some stakeholders welcomed the provisions of Section 29 which allow for a preference to Zimbabwean local suppliers and manufacturers in accordance with the Indigenisation and Economic Empowerment Act. They, however, argued that the provision was discriminatory against Zimbabweans who do not fall under the

definition of Indigenous and is open to constitutional challenge. They proposed an amendment that would reflect domestic preference to Zimbabwe citizens instead, as is the case with the

Tanzanian Public Procurement Act.

3.0 Committee’s Observations and Recommendations

3.1 To ensure regional representation on the Board, the Committee recommends that the number of Board Members be revised to eleven in order to cater for a representative from each province and the eleventh Member being the Chairperson of the Board.

3.2 Treasury should ensure that the Authority is adequately resourced to enable it to execute its mandate effectively.

4.0Conclusion

4.1 The Committee was pleased with the Bill and recommends it to the

House for adoption with those few recommendations.

HON. CROSS: Thank you Mr. Speaker Sir.  I want to endorse the views of the Committee and just emphasise one or two points which the Committee raised for the benefit of the Minister.  The first is the question of the provision of services of a professional nature by engineers, architects and accountants when they are providing services to clients. At the moment, the Bill provides for these to be tendered in the same way as other goods and services.  Your Committee had representation from the professions saying that they do not think that this was a good idea.  The present practice of each individual professional association publishing their fees and then seeking to win jobs on the basis of the quality of the services they can provide is in fact a better solution and the Committee strongly agreed with this recommendation.  So, we would like to see that particular element attended to…

          THE HON. SPEAKER: Hon. Matambanadzo and the other two

there, please listen.  Thank you.

          HON. CROSS: The second thing I want to emphasis for the

Minister’s consideration is the issue of the number of board members and the need to have representation from each province in the country.   When the board sits to consider its oversight function of procurement activities within provinces, local knowledge and information is going to be critical.  I believe that by having one representative from each province on the board will enable those members to in fact represent  their provinces and report back to the board the information they are receiving regarding procurement activity by local authorities and other state enterprises within their provinces.  I think this is going to be critical to the efficient function of the oversight responsibilities of the board.

Thank you.

          HON. NDUNA: Thank you Mr. Speaker for giving me the opportunity to add my voice – [HON. MEMBERS: Inaudible

interjections.]-

          THE HON. SPEAKER: Order, order! The chorus for the diesel is over now – [Laughter.]-

          HON. MARIDADI: On a point of order! When Hon. Mkupe

walked in, I heard the murmurs of diesel, fuel and water.  Well, I do not know what that means but I would like to welcome him and wish him well for the reminder of the day – [Laughter.] - Thank you.

         HON. NDUNA: Thank you Mr. Speaker for allowing me to add

my voice.  I want to applaud the Minister for bringing this Bill of Public Procurement and Disposal of Public Assets.  Mr. Speaker Sir, it actually gets me elated in that it brings a sense of independence and also a board that can oversee on a procurement or entity or Committee.

          Now, therefore, Mr. Speaker, one would want to now look at and interrogate the credentials of the procurement Committee and compositions of all those that are disintegrated.  For instance in councils, where I come from, where you would want a Committee to be composed of people who in themselves have no history of land misappropriation;  who themselves have no history of disposing of houses for the citizenry in a manner that is not formal or that is not mainstream.  In the same way that I would also call for representation to also come from all the provinces, up from nine members to what the Committee Chair alludes and accedes to of 11 members; I strongly feel that those credentials should be interrogated and the members found wanting and those that are a delinquent modus operandi and those that have a history that is checkered with misappropriating land and houses should not be involved in procurement Committees at council levels.

          I also want to add my voice as has been alluded to by Hon. Cross in that we have Engineers Council Zimbabwe and Zimbabwe Institute of Engineers, which two bodies are established by an Act of Parliament, separately.  They require about 5% of any infrastructure development monies so that they can have clear and good oversight in the operations of any infrastructure development in Zimbabwe.   You will see that we have had the plant to Mutare highway, where our Zimbabwe Institute of Engineers and Engineers Council of Zimbabwe had little or no participation whatsoever because they were hamstrung in that they 5% that is supposed to accrue to them never got to them for them to effectively and efficiently carry their oversight and mandate.  I call and I make a clarion call that this 5% starts accruing to them as enunciated in the Act that establishes them, so that they carry effectively their oversight role beginning with the Beitbridge-Chirundu highway, where I believe 5% of US$984 million on the Beitbridge-Harare highway would be about US$10 million.  Then they can effectively carryout their oversight role, if they are capacitated in that manner.  With those few words, I want to thank  you for giving me this opportunity.  I support this Bill in its entirety.  I wish and hope that it has a good lifespan.

          HON. MISIHAIRABWI-MUSHONGA: Thank you Mr.

Speaker.  I stand to also add my voice to the report by the Committee. I think it raises fundamental issues around the issue of procurement.

Firstly, I would like to thank the Minister for bringing that whole aspect.  Particularly, as we begin to look at our economy and considering the things that we can do in trying to save money.   The area around procurement….

Hon. Ministers Made and Chinamasa making noise.

          It will be nice Hon. Minister Made and Minister Chinamasa to listen a bit.  Thank you.  I am sorry, Mr. Speaker, it was not meant to be like that.  My apologies before you reprimand me.

          Mr. Speaker Sir, the area around procurement is one area in which leakages take place.  Those people that have done analysis around issues of procurement will find that even as Government procures things like pens, you lose a lot of money if you calculate the number of pens that you buy for a Government Ministry, if you are not able to save 2 cents from it.  This is where most of the corruption takes place and I am not sure how the Bill is going to address this.

          One of the biggest problems that we have had with procurement in this country has to do with the issue around the State Procurement Board then, which was asking for vendor numbers.  What it meant is that it did not matter that if you did an analysis in your Ministry and found that you could buy a ballpoint pen at 10 cents, if you do not have somebody who is going to supply you, who has a vendor number, you are forced to buy the same ballpoint pen at 15 cents.

          Also, the issue of allocating vendor numbers had itself become an area of corruption because you needed to know somebody in this State

Procurement Board who would then provide you with a vendor number – [HON. MEMBERS: Hear, hear.] – Unfortunately, the vendor number means absolutely nothing.  When you get a vendor number, no one has done due diligence to say we are giving Priscilla a vendor number for purposes of her providing sanitary wear, for example, my favourite subject.

          You were basically given a vendor number for anything.  So, the moment you have a vendor number, you have a vendor number of providing from vehicles to an aircraft down to a ballpoint pen.  That in itself becomes an area that is problematic, particularly if we are beginning to live in an area where we are dealing with the latest methods around ICT.  Most of the countries, to be able deal with issues of corruption, have now moved into what they call E-procurement.

          What happens is you do not have to see the face of the individual.  There is no negotiation.  You flight a tender, somebody goes on and puts in the things that they are able to provide.  So, the basis is made on the selection.  You do not even need somebody who now sits and says what has come in.  You set up a system that in itself automatically selects the particular person who is the best supplier.  So, I view the issues about having board members to provide oversight but in terms of where we have moved in terms of technology, you actually do not need human beings, to be able to do that because they have noticed that in the area of procurement, the moment you put it in the hands of human beings, they can be subjective and are open to issues of corruption.

          I am bringing this so that as we begin to debate the issues around procurement, we are discussing it in the context where the world has gone to.  It is only here where you are told this road cannot be fixed because we are still waiting for the board to meet, so that they can discuss and they can then give a tender to someone.  In other countries, it is a matter of 24 hours, it is put out there, people feed in and the system produces for you who the best person is.

          I am however, not necessarily saying the issue that is being suggested about making sure that you have provincial representation is wrong.  As you know Mr. Speaker, one of my favourite subject is the issue around devolution and the issues around representation.  So, I agree but I do not want us to then address it in a manner where we are saying this particular individual who is representing the province will be able to deal with the issues that are to do with whether local people get preference.  I am going to be bringing a motion in the next week or two.  I have had problems trying to get information around it but to explain to you what this is all about; we have a major problem around issues of procurement.  When people decide on whom to give a tender or to give a job, there is no local preference at all.

Let me give you one example, the Gwanda solar thing that happened was given to Wicknell Chivhayo.  What was even worse around that particular tender is that he did not pay any particular deposit.  There was nothing, he did not come with anything from the bank.  So, any group in Gwanda could have gone to the Ministry of Energy and Power Development and said we want to be part of this solar programme because if it did not have to come up with specific funds, it did not matter who had money or not.  However, my first problem is that when you are going to do something in a community, common sense says you want to find out whether the people in that community are able to provide that service or not.  It makes absolutely no sense and I speak as somebody who represents the other side of the country.  Most of the big tenders we have in this country, you are unable to find one tender which you can point at that has been given to someone from the Southern region.  I do not understand whether that is because somebody is saying, all the people that are coming from Matabeleland are so daft that they are unable to get into the economic business of this country.  There is something that is fundamentally wrong.  It is so bad Mr. Speaker that you can even find local authorities in Matabeleland coming to give business to people who are in Harare.  In most of those instances, they are cheated because no one knows where this person is coming from and they can lie that they have an office in here …

HON. MUPFUMI: On a point of order Mr. Speaker.  She is trying to bring division between the people from Matabeleland and the Shona people.  Let her discuss issues which are pertinent to what we are discussing.

HON. MISIHAIRABWI-MUSHONGA:  I will just breathe and

decide that I do not engage in mediocrity, so I will leave it as it is.

THE HON. SPEAKER:  Order, I have not ruled on the point of order.  I want to draw the attention of the Hon. Member who talked about division between Shonas and Ndebeles.  Your attention is drawn to Article 13 of the Constitution which is very clear.  It says “bring about balanced development of different areas of Zimbabwe, in particular” –

[HON. MEMBERS: Hear, hear.]- “a proper balance in the development of rural and urban areas.”  There is no mention of tribes here.  In any case, you find Shonas in Matabeleland in as much as you find Ndebele speaking people in Matabeleland.  So, there is no issue of division here.

It is a constitutional right.

                HON. MISIHAIRABWI-MUSHONGA:  Thank you Mr.

Speaker, I feel like jumping on top of the table but I will not do that.  What I am coming back to, is that whole issue.  First and foremost, I am glad that the report of the Committee did speak to the issues around domestic preference.  So, I know I am buttressing the point that they raised.  So, probably we may need within the Act, to create a proper and clear provision that there will be a particular preference.  I am sure it would not be new to the way we do things.  The whole basis of indigenous and gender preference is that you are acknowledging that you want to empower a particular group.  So, if you say you will do a local preference to allow that if there are particular tenders that are in a particular area, you will call upon those that are in that community to do so.  I am sure we can find a proviso that can clearly define that.  Usually, if something is not put down clearly, people usually avoid doing these things because there is no legal framework for them to enforce implementation.  So, I would be calling upon the Minister to look at how best that issue around local domestic preference can be dealt with, in particular around issues of tenders.

          In the same light, I want to bring in the issue of gender preference.  Again, in the same light, given the state of our economy right now, most of the resources and business that people are engaged are centred within Government and Government tenders.  However, what we are finding is that you do not necessarily see women being given preference.  I will give you an example of Kenya, which came up with a statutory instrument that gave gender preference to women.  For every tender, 30% should be given to women.  This has increased the level of economic empowerment for women in a manner that they tried to do in so many things.  Let me give you an example; you want to create materials for hospital bed sheets in Bulawayo.  What Mpilo is called upon to do is, if they are going to be buying bed sheets that cost $100,000, 30% of those bed sheets should be given to women coming from that particular community.  The amount of resources that would come from Government and fall on women within those communities is amazing.

          In conclusion Mr. Speaker, the one area I hope procurement will be able to look at is where people are making a lot of money, which is in the area of debt collection.  You will notice that particularly with those that run legal firms.  A person will be given the right to be the debt collector of a whole Ministry.  I have one such person and I will bring it to the House when I bring my motion.  This particular law firm covers the entire Zimbabwe.  So, they got a tender to be the debt collector for the entire Ministry of Health.  This particular lawyer does not have to do any work anymore.  He does not have to go to court but can literally live on debt collection.  They have a small office at Harare hospital, Parirenyatwa and Mpilo hospital.  For every amount that they collect, they are given a particular percentage ranging between 5%-10%.  All they are doing is simply to write letters to the debtors.  What really upsets me – and this is true of ZESA which also has one particular lawyer who is doing that.  I am still trying to find out what is happening with Wellcash in Harare because they are unable to give me the specific person whom they have given to do Harare City Council.  However, what disappoints me Mr. Speaker is, why do you think that there are no lawyers in Bulawayo to do debt collection for Mpilo Hospital.  Why do you have to get a lawyer who is coming from Harare to go and do debt collection at Mpilo? – [HON. MEMBERS:  Hear, hear.] – Why do you think there are no lawyers in Masvingo who can be given the job to do debt collection for the hospitals in Masvingo?  Why does that person have to be coming from Harare?

          I think the whole issue around procurement Mr. Speaker, forces us to look at the whole issue around devolution; the whole issue of making sure that communities participate.  We do not want to lie to each other.  The issue around procurement is where money is made.  Anything else can fall apart but Government will always need something.  So, those that had found themselves in a Government space are the ones that are now making money.  If you are not in that area which becomes a cabal controlled by a few, you will remain poor when everybody is paying tax. This is because procurement that we are doing is out of the tax that everyone of us are paying but benefits a small cabal who have buses in every other area.  I thank you Mr. Speaker Sir.

          HON. CHAKONA:  Thank you very much Mr. Speaker.  I also

want to add my voice to the subject matter of discussion.  First of all, I want to highlight that the current status quo was very good at delaying projects.  I would like to say that the process of just procurement would take no less than a year in State enterprises.  Also, it was subject to legal challenges and so on.  I hope and trust that the current Bill is going to address the issue of challenges around the person who would have been awarded the tender.

          Mr. Speaker, there is need to also protect State enterprises that were incorporated for specific and special mandates.  Let me give you an example.  There is a company called ZESA Enterprises, which was incorporated by ZESA Holdings.  That organisation was incorporated specifically to manufacture transformers, switch gears and other consumables that ZETDC uses.  It is disturbing that whilst this organisation is there and manufacturing these components on behalf of these State enterprises, still the State Procurement Board would require ZESA and its sister companies to go to tender.  Ninety five percent of the cases, they would actually buy from other private companies, suffocating ZESA Enterprises.

          This is synonymous with even the ICT industry, where we have got PowerTel and Zarnet.  These organisations were incorporated to offer specific and specialized services to Government and its State enterprises but that is not happening.  Government and these other State enterprises are buying their services from non-State enterprises and I think this again is suffocating Government.  We want to see money circulating within Government coffers.

          Mr. Speaker, there are technological changes worldwide and I think the new Bill is going to look at issues to do with timelines by which procurement has to be done.  I want to give you an example.  NetOne went to tender in 2011 for the upgrade of their network.  That tender was only concluded in 2014.  In 2011, in the ICT or telecommunications industry, there was 3G.  By 2014, technology had already evolved to LTE.  What it means is, by the time the tender is concluded, the organisation is buying old equipment and technology and it does not make sense.  So, there is need to have a timeline or a turnaround for buying, especially technology related equipment and services.

          Mr. Speaker, there are issues to do with requirements for organisations that tender.  There is this new requirement of tax clearance certificate and I am glad the Minister of Finance and Economic Development is here.  Any organisation would obtain a tax clearance certificate, irrespective of the fact that it complies or it does not.  There are very minimal requirements for an organisation to qualify for a tax clearance certificate.  This tax clearance has become meaningless.  All the organisations that are participating, especially in State procurement tenders do not pay any tax to the Government.  If they do, they just pay minimum for them to comply with tax requirements.  I think it is imperative that tax audits be done on these organisations that are actually getting large tenders because Government is losing money.  It is being charged tax and that tax is not coming back to Government.

          Mr. Speaker, I want to emphasise the issue of e-Government as my colleague has debated. We have become a nation that is technologically averse.  We do not want to embrace technology.  I do not know why we are not computerizing Government departments and procurement systems in this nation.  I want to give you an example.  The Department of Immigration right now has got a computerized visa system.  However, if you go to the department, each time they receive a computerized application, they go on to open a manual file, over and above a computerized system.  They are duplicating efforts, so it is rather they revert to the manual system.  This is synonymous with everywhere.  Even if you go to the Ministry of Lands and Rural Resettlement, there are files almost everywhere.  Why cannot we computerize?  Why are we not doing that?  It expedites application and whatever work that we are doing.  It simplifies and shortens the time that we do work in this nation.

          Mr. Speaker, I will not overemphasise the point that my colleague also made that we need to empower locals whenever there is a tender.  Right now, there is the Beitbridge – Harare road and we need to empower the people of Matabeleland South, Masvingo and

Mashonaland East to participate in these tenders.  Mr. Speaker, I want to thank you for this opportunity.

            HON. SANSOLE:  Thank you Mr. Speaker.  I would just want to

add my voice to the debate in support of this Bill.  I think a lot of emphasis has been placed on procurement.  There is another aspect of the Bill which relates to disposal.  The pitfalls associated with procurement, the delays associated with central procurement and the corruption that has been associated with the State Procurement Board have been adequately dealt with.

However, if we look at the disposal side of it, there are also benefits that accrue to local communities as far as disposal of assets is concerned. I know the previous speakers have spoken about empowerment as far as tenders are concerned but there is also empowerment that accrues to locals in the form of having access to assets that are disposed of by State enterprises, Government departments and local authorities. For instance, sometimes you have motor vehicles sold by local authorities and Government departments – even small things like tyres sold by CMED, these were sold through some central department in Harare. If disposal is done at local level, the locals also have an opportunity to be able to bid and purchase those assets. So, I would like to support the Bill in that respect. I thank you.

          HON. MUDARIKWA: I need approach this debate from a

different dimension. Our procurement must be categorised in such a way that for example, we have manufacturing procurement. If we want say for example, trucks, that tender must indicate that it is only people who are registered with the Ministry of Industry and Trade who are known manufacturers of trucks who can then tender. We have a situation where vehicles are being procured outside Zimbabwe and yet we have the facilities in Zimbabwe for assembling the vehicles. We have some companies that have got employees who are waiting to do the work.

Most of the work pertaining to vehicles comes completed from outside Zimbabwe. On manufacturing procurement, there is no one who will sell coca cola less than Coca Cola itself. Why then do you want to get a third person to say there is a tender for doing this when we know that it is Schweppes that manufactures Mazoe? Those things must not be tendered for. It is known we want to support our local industry; we must just go and buy there.

          We have a situation where people are calling themselves businessmen because they just go and facilitate, get a tender and then bring vehicles outside Zimbabwe. Some of the vehicles are not even suitable for Zimbabwean terrain. That creates a situation where we have massive unemployment in Zimbabwe because there are no spare parts for those vehicles. There are no garages with equipment to give a back up arrangement.

          Turning to e-procurement, that is only possible when you have people who are willing to use the system because these days when banks do not want to give you money, they just say our systems are down. The same thing will happen when you introduce e-procurement, the Tender Board will say our systems our down, let us go manual. It is the element of people who want to steal, they always look for ways to move away from things that are transparent.

          There is this issue of sealed envelopes. I remember tendering to a certain organisation and then they said bring in your documents in sealed envelopes. Under the cover of darkness someone can simply put your envelope over hot steam, opens it to see your amount and put the lowest figure and gets the tender. It is so simple and this is how Government departments are buying very expensive goods. Even if we are to ask

now, what is the cost of a shoe or jacket? Suits here in town cost $15 but suits for Government messengers go for $180. You can just see how things are and all this at the end of the day does not benefit out economy because those suits are even imported from other countries.

          Another issue is community procurement, like what has been mentioned, how do you get people digging trenches from Harare to

Gweru. There are some local youth there who can dig. They are there. Digging to us is nothing new because we have got the hoes and shovels, so what is so special about getting one company coming all the way from Harare to dig trenches of data cables?  In other situations cutting of grass…

          Interruption of microphones due to systems failure.

          THE TEMPORARY SPEAKER: What is happening? What is your problem Hon. Member?

          HON. MUDARIKWA: Even as I am debating Mr. Speaker Sir,

the tender for this equipment was not designed for tall people like us.

This was meant for someone with a Chinese height. It was approved and now we struggle. I saw Hon. Dr. Made, when he was negotiating the other day, he was talking as if he was trying to fly. These microphones are not built for the needs of our people.

          We must have tenders that are clear and meant for indigenous Zimbabweans. Local banks must support that tender. We can have a nation of economic spectators where people from other countries come in to make money whilst we are looking. That is unheard of. We are economic spectators day-in and day-out. With all the level of intelligence in this country, the education we have got, the STEM that has been initiated by Hon. Prof Moyo, we cannot fail to have people to manage these projects. It is important that certain tenders must indicate that this tender is for an indigenous Zimbabwean.

          On economic empowerment, we must just say this tender is for women. There is no need to say 30%. It is a tender for women who constitute 52% of the population. They have a right to be looked after. They have a right to be given preference because they are 52% of the population. We also have the youth; they must be given the same facility. How do you have a tender for supplying vegetables given to me, a man when there are women who have tendered? Any tender for supplying vegetables should be given to women because they are good at that. Our economic development will be nothing when we only have rich men and poor women. It is unacceptable in this day and age. We must have women who are masters of their own destiny, who can say I have won this tender, it is my responsibility and I am able to support it and then we can support them.

          Lastly, if you check the amount of money that is spent on tenders per year and the amount of money that is coming to local Zimbabweans, it is less than 10%. 90% is going to foreigners. Even in other situations where our people have the capacity to do it, that thing is not being possible. It is also important that one way or the other, our people must be protected. For example, when Zimbabwe was supplying beef to the EU, we were given a quota for EU and not a quota for Britain. There are certain things that we must say these things are for Zimbabweans. It is us here who make these laws and it is the same of our officers who implement these laws.

          I want to thank you Mr. Speaker Sir for allowing me to contribute. As for the oversight role, the Committee chaired by Hon Chapfika must continuously interface with the Tender Board on how they doing, not to just wait for them; and after they have awarded a tender, we come here and start complaining when somebody is already dead and when all our youths are gone as most of them are now drug addicts because they have nothing to do. We have to do things that benefit our people.  I want to thank you.

          HON. D. SIBANDA: Thank you very much Hon. Speaker for

affording me this opportunity to also air my views on this interesting debate.  Hon. Speaker, I expect that the Procurement Board should be independent – work independently from the three arms of the State.  Also, when the board is being put in place, it should be approved by Parliament and there is need that on that board, if there are 10 members there should be 50/50 representation that is, five women and five men because that is what gender balance means.  That is what we expect.  When appointing the board, there is need for professionalism.  Let us have people who are professionals, those who have the know-how of procurement so that there is less corruption on that board.

          Mr. Speaker, on the issue of corruption, the Government should also put systems in place to try and cover up the loopholes in order to avoid corruption completely.  Back home there, people expect that whatever is being sold at local level, 30% should be given to Government and 70% should go back to the locals – that is decentralisation of the resources.  There is also a tendency of the Committee members of the Tender Board to be also bidding.  When vehicles are being sold, they are also there bidding for those vehicles.

Mr. Speaker; we do not expect any one of them to be part of the bidding because that is corruption.  Then, there is also need for adverts; they should be put well on time and people back home were also concerned and said sometimes we would not even be aware of what is happening – we just hear when the tender of the vehicles or whatever have been already sold.  So when adverts are being done, there is need for them to also be done in vernacular so that everyone understands.

If the procurement is being done in Victoria Falls, it should also be advertised in Chitonga, Nambya or whatever language that is spoken there.  If it is done in Bulawayo, we expect it to be done in Ndebele so that everybody, including the ordinary man on the street can understand that such a thing is happening.  Thank you very much Mr. Speaker.

          *HON. MAPIKI:  Thank you Mr. Speaker.  I thought I would just add my voice to the debate.  I would want to believe that the manner in which the Bills crafted should benefit even the small to medium enterprises because the informal sector is now the backbone of the Zimbabwean economy.  Glen View for instance, is now manufacturing chairs and so sofas.  People even go to buy these products at a lower cost.  They will have secured these tenders and then they come and put a mark-up which is four times.  They would have passed the Standards Association test. We do not encourage the people that are in the small to medium enterprises who were supposed to receive 25% of

Government’s business.  When you observe the people that are in that particular sector and what is in circulation, the study conducted by

FISCO says that $8 billion is in circulation in that sector of the industry.  So, in light of that, Government whenever it thinks of floating tenders, it should encourage Zimbabwean companies to supply.

We even have parking meter attendants from South Africa – they are the ones that won the tender and when we do not give them such tenders, we mourn that they are not paying taxes.  How will they be able to pay taxes when they are not receiving such lucrative tenders?  I urge Hon. Chinamasa to look into the small to medium enterprises sector – they sell their door frames or doors at a low price and when they supply to someone who has won a tender, they are making a killing out of that.  We should be working towards ensuring that our own companies get these tenders so that we benefit from the low costs.

 I was looking at Mtshabezi Hospital in Matabeleland South; they came to procure a tender in Harare for the sale of wood for their ceiling but, there are expects in Matabeleland who can put up very good ceilings.  They came here to look for Harare briefcase cases and the money that was paid for such tenders is misused when trying to track them.  They fail to understand them because they do not even have phones.

          The other culprits are local authorities – in the manner in which they win their tender.  Why would someone want a tender for the supply of vegetables which normally cost 25 cents but, they give tenders to one who buys at $1.  Why not simply benefit from this because a lot of corruption would then be involved.  We should look at our upcoming business that are in the small to medium enterprises in conjunction with the Indian Government, there is a company called Indo-Zimbabwe and it shows that a lot of businesses do not have the same competence and they cannot supply the same goods as those that are being supplied by this particular company.  More often than not, their good work is looked down upon or frowned upon.  We should be encouraging it and not only the large corporates.  We should at a paradigm shift like other countries are doing so that we should not have tar macadamised roads but have concrete roads.  In this country we have engineers.  We should have engineers who are doing their work and not those that are merely introduced in title only at rallies.  Let us promote the local engineers in Zimbabwe rather than have expatriates.

I was looking at another job where tenders were being flighted for riverbed mining and a lot of foreigners landed these contracts whereas, it would have been easier for us to employ our own local indigenous people to do riverbed mining.  We have experts in that particular field and they should be benefiting.  Those that we give that come from outside the country come here and loot our mineral resource and run away.  It is easy to remonstrate with a local person than would be the case with a foreigner.

          I will come to motor vehicles that need to be supplied for instance, to Parliament.  You will see that the tender would be awarded to someone who manufactures motor vehicles, but, why is my motor vehicle now being imported from Durban?  Why should Zimbabwean people not be given a tender to supply motor vehicles from knocked down kits.  If that were to be looked, it would assist us as a country and it will develop our economy.  I thank you Mr. Speaker Sir.

          *HON. MATAMBANADZO:  Thank you Mr. Speaker Sir for

affording me this opportunity to add my views on to this debate. That is in line with the Bill on the Procurement Board.  My opinion is that as we look into this legislation, we must put in place measures that ensure that Government does not suffer any losses.  Once the Government suffers losses, all of us will be blamed for having failed.  I want to believe that whenever there will be a tender, there will be a budget.  Once the budget is done on what needs to be procured, for example, ZESA, a certain amount will be put aside for the purchase of transformers.  For instance, if it is US$200 million, there should be a law in place to say that the supplier of the tender should not exceed US$200 million mark.

Secondly, the company that is awarded the tender should complete its work and paid a stipulated amount.  We should not have a situation where a company with the lowest bid is awarded the tender and then they undercharge.  For example, for a job worth US$200 million, the tender will be at US$100 million and then ways are crafted to defraud the Government.  Upon using up the US$100, they will then request for US$50 million, subsequently followed by US80 million.  By so doing, it will exceed the limit of the tender pegged at US$200 million.

Hon. Minister, it is your job because it is you who will be blamed and we are also indirectly blamed.  I am saying that contractors should give a timeframe and they should not undercharge.  Once there is undercharging and failure to complete the project at the stipulated time, the two parties to this contract, the contractor and the one who won the tender, should both be fired or measures should be taken to ensure that they are brought to book.  We should come up with stringent measures and we should not continually mourn that a lot of money is being defrauded.  We need to come up with stringent measures in the form of legislation.

If the tender is from Kwekwe, local people should be given first preference to the tender in question because they are not going to enjoy the benefits alone.  If I am given a tender to repair roads in Kwekwe – if a local person is given that contract, they may have a bulldozer and a tipper and they may get other equipment from Harare.  We are saying that there should be coordination in terms of equipment between a local person and an outsider so that they collaborate on the work given such tenders.  This should be the law.  I believe that is all I intend to contribute on that Bill.  I thank you.

HON. J. TSHUMA: Thank you very much Mr. Speaker Sir.  May I also add my voice on this very important matter.  I will start by giving you a narration of what I saw happening in front of my eyes.  In my

Constituency, Pelandaba Mpopoma, there is a big stadium called White City.  That stadium was renovated, I think sometime in 2014.  When it was being renovated, guess what happened, a contractor from Harare was given that job.  When they came to Harare, what saddened me most was that, simple jobs were taken up by people from Harare at the expense of the youths who are in my Constituency, in Pelandaba, Minyela and Mpopoma.  They could not find employment there.  When the contractor came and did everything, which was substandard, he fled after our intervention and the few people who were contracted to go and work there, were not paid their money.

The problem is that for us to start following up on that person became difficult because he did not come from Bulawayo, he came from Harare.  That was a very painful and saddening issue which is still pending to this day.  I have got youths in Bulawayo who were not paid but worked for a contractor from Harare for a project in Bulawayo.  That is where the problem is.

So, Mr. Speaker Sir, the reason why I am saying this Bill is very important is to make sure that we lock down these things, sonke sifuna ukukapula.  Let the people in Bulawayo also kapula because they are also as human as anybody else.  Once we go into this thing, let it be made clear that we shall not compromise on that because we end up looking like we do not – that is where even the question of marginalisation, this and that comes in.  We will not be able to handle it in a proper manner because of simple things like this.

Mr. Speaker Sir, I want to say that, definitely, let us support this Bill and make sure that from now onwards, let the person who stay there enjoy the benefits of staying there by being given the opportunity from there.  I will give you another typical example.  I was also saddened when a tender came out at Mpilo Central Hospital and someone from Harare was given that tender.  I was saying to myself, really, do they think that we are so abnormal or useless that we do not deserve to eat or partake this national cake?  I hope that all these issues – [HON.

MEMBERS: Inaudible interjections] –

THE TEMPORARY SPEAKER (HON. MARUMAHOKO):

Order, order.  Hon. Members lower your whispers please, you are making a lot of noise.  We cannot hear what the Hon. Member is trying to put across.

HON. J. TSHUMA: I think there are some people with that mentality, who think that if you start speaking about Matebeleland, you are being tribal, which is not the case.  We are not being tribal, we are being factual.  It is a fact that things have not been going well and need to be corrected.  I am glad that this Bill speaks to all these truths and facts.  Mr. Speaker Sir, all I am advocating for is that whilst we are here in this House, let us get things clear and straightened.  This is not politics, it is business and when we talk of business, we are talking about survival.  Talking of survival means the generation down the line stream.  I hope that we will take this seriously, knowing that we are above politics.  We are in an august House representing people.  My people in Pelandaba Mpopoma Constituency suffered because of negligence of giving a tender to somebody from Harare which could have been done by someone in Bulawayo.  I must say it, we will not take it lightly.  I am glad that there is a Bill that seeks to address that kind of anomaly so that we all operate at the same level and sharing the national cake and everything is alright.

Mr. Speaker Sir, allow me to also bring your attention to the issue of the public asset disposal. I speak of this because I am aware that Government has properties like houses which were built a long time ago, even in the Rhodesian era, which are being used by teachers and others.

I hope that this Bill will also address that so that the people who have been living in those houses become the beneficiaries of these houses.  Let us not have other people like Ministry Officials coming in to try and take away these houses from these people.  I speak of this because I have an example of one teachers’ cottage in Pelandaba which has been there time immemorial.  Now, because disposals are about to happen, other people are now eying to disperse the people who have been dwelling in those houses from time immemorial – that should not happen.  Let us have the people that are in those houses being the first people offered to get those houses and when they get them, please I hope that the Bill will address the issue of how much they should be paying rentals.  They have already been paying rentals for these houses for over 30 years now, so I hope that this Bill is going to also look into that issue so that we play fair with everybody feeling that they are part of this system because we are a Government of everyone.  I hope that this Bill will address that.

With these few words Mr. Speaker Sir, I want to thank you for giving me this opportunity to air my view especially about Matabeleland but not in a tribal manner.  We are not being tribal – in Matabeleland, we have got our fellow brothers who are from Mashonaland but now they are part of us.  I can tell you about people like the Vurombos, vana Vera, vana Madzimbadondo, they are now part of us.  When I say

Matabeleland, I am not saying Ndebeles but everybody who has interest in Matabeleland whether they are Shona, Kalanga, Tonga or Venda but we are from Matabeleland.  I thank you.

          HON. GABUZZA: I just want to raise a few points.  Firstly, traditionally procurement has been always under the Office of the President and Cabinet. I think Mr. Speaker; let me hasten to warn that I think it is not a good idea if the Bill still wants the procurement to be still under OPC.  Procurement itself has a lot of problems, abnormalities, a lot of favoritism, a lot of complaints. If we keep on continuously putting it under the Office of the President, in my respective view, I think it reduces the credibility of the office of the President, when we continuously see a lot of court cases, challenges, overhaul, what could have transpired and a lot of corruption.  So, it is my respective view that in the next Bill we must consider finding a different home for this Procurement Board.

          Secondly, Mr. Speaker, in Botswana you cannot employ anybody who is not a Mutswana. If you do that, you have to prove beyond reasonable doubt that you advertised three times for that particular job and you could not find a Mustwana.  I think if we look at what is being proposed in the Bill, there is the issue of domestic.  Domestic must mean domestic and not mean Zimbabwe, it think it must mean domestic.  Charity begins at home as they say.  When we do our procurement advertisement and processes, we must be able to categorise that whatever company is tendering or is about to procure some services, they must prove beyond  reasonable doubt that within the district there was no company or companies that were able to tender and capable to supply a service.  If there is that proof that they could not get, then we must move to a regional level within that province; then we open it up to the nation.  By so doing, I think that question of equitable distribution can be fairly realised.  If we just leave it to say domestic means Zimbabwean, it will be the same people and usually same criminals getting jobs and benefiting the same people and usually those who are highly connected and those who are able to pay a better bribe than the other smaller guys and those who have access to information.

          I think the Bill must have stages or categories to say we start at district level, if we cannot get anyone, then we move on.  Failure of which, maybe I would suggest our system categorises procurement in such a way that we say beyond a certain amount these are open to national tenders.  Below a certain value, we do not open it to everyone but it is restricted to local areas.  If we do that, I think there will be a mechanism of trying to benefit everyone especially at local level.

          The other issue Mr. Speaker is the issue of the Procurement Board.  I think from experience, if you put a static board, it normally faces challenges because tenders come in various forms, technicalities, one time you are tendering for the services of cricket carpets, the other time you are tendering for a motorized grader, the other time you are tendering for an aeroplane.  I think within the board, there must be a leeway.  That board must be flexible enough to say we have certain permanent members but once in a while they must be able to bring in certain skills which are not available when they are dealing with a particular matter.  It is very important because in most cases you get people presiding over an issue that they do not have any knowledge or understanding about and eventually give the wrong person because the specifications were beyond their imaginations.

          The issue about E-procurement, I think it is something that we must proud ourselves given that we are one of the most educated nations.  Why should we still be using paper work?  A good example is that we have a very brand new airport at Victoria Falls. I went there over the weekend, two aeroplanes came in, B.A and South African Airways at about 1200 hours but tourists started coming out after about 3 hours at 1500 hours because all the system was manual.  To get a visa, the immigration had to write it physically, put an amount, no receipt given and clearly you could see it was meant for abusing the funds.  Why would it take, when we need tourists so much and we need to do business so well, we have to take three hours to clear tourists? This is because we do things manually and everyone I think from those developed countries, really got shocked and asked why we have to struggle to write a visa by hand.  It is the same thing with procurement. Let us go e-procurement – that is the modern and fast way of doing things. I think this cannot be over-emphasised. If it is possible, the Bill must clearly reflect that we must be moving towards achieving that.  Having said that Mr. Speaker, I think I would wish to support the Bill and possibly propose amendments at the appropriate time.

          HON. ZINDI: Thank you Hon. Speaker.  I am just going to highlight a few areas because most of the things have already been said.  I just want to mention that this is a State purse or State resources and everybody is looking at the State purse.  When we are looking at the State purse, State is the highest spender and everybody is looking at that and internationally.

Therefore, when it is like that, I would like to emphasise the point that we need to make sure that the local people benefit as a result that most of this money have been raised within the state as well through taxes. It is our own money but it is money now being taken, which would end up benefiting foreigners.  If we do not revisit the issue of having to support local people; for example, I always want to point this road, the Plumtree- Mutare resurfacing that is a South African company.  Of course, I understand local people were part to that deal but it was not that easy for the local people to be part of that deal, Group Five.  There was quite a fight in order for them to be recognised, though of course they also did a mediocre job but at least there were local people who got part of that deal.

          Now what it means is, if we focus on foreigners, without also bringing the component of the local people, the money is then taken out of Zimbabwe, hence the situation we are facing to say that we no longer have enough money in circulation, in particular US$.  United States dollar is a sought after currency world over.  This is what we are using to transact business.  Therefore, we are an attractive market internationally and everybody would like to come to Zimbabwe because they know they get the US$.  Therefore, I am proposing Mr. Speaker and it may sound like repetition but I think it is important.  Sometimes repetition is emphasis of an idea, that we go e-procurement, we categorise what should be local tenders for local people and that should not go international.

          I am saying as well, when we get to the point of saying this is a tender to be flighted  nationally or internationally, we have to look at the aspect of saying you do not have the local expertise in order to execute that kind of a job or a deal.  That way, I think that will encourage circulation of money.  It will also motivate our local people even to pay tax.  As the Minister of Finance and Economic Development, last week he was complaining that Blacks have a culture of not wanting to pay tax.  If they know that they have access to State procurement, State purse, they will be encouraged to be part and parcel of having to remit their taxes but if it is money that is taken by foreigners, sometimes they end up asking, why then should I contribute to the State purse?

          I also want to give an example Mr. Speaker.  The Black Economic Empowerment Policy in South Africa, was created particularly to support the local people.  Therefore, pachivanhu tinoti gugara nhaka huona dzevamwe.  If the South Africans are doing it and it has brought positive results, of course there is no system which does not have merits and demerits.  It has its own merits and demerits but we need to look more on the issue of saying how many and how effective has that system been in South Africa.  To a larger extent, it has been effective.

Therefore, there is nothing that can stop us as we amend this

Procurement Bill, to look into the aspect of considering the aspect of the

Black Economic Empowerment Policy that had been adopted in South

Africa; looking at the past, how we have been performing through the State Procurement Board.

          Hon. Mudarikwa gave us an example of saying, tall people like us have to bend in order to reach this microphone because the tender perhaps was given to the Chinese and Chinese being short people, this is their good height.  So, we have to adjust ourselves and sometimes end up with back pain because we need to adjust to the height of the Chinese which does not fit us.  Really Mr. Speaker, I think when we have the Bill amended, it has to look into that aspect.

          The other aspect I also want to raise is the fee that is demanded in order for a company or for one to participate in a flighted tender when you are to bid.  Sometimes they raise it so high to the extent that the local people will not be able to participate.  I think last time it was US$100.  You pay that US$100, you access the papers, you are given that vendor number but no job will ever come through to you simply because you are not well connected but this is already US$100 that has gone.  So, I think a revisit as well when we categorise international and local tenders, is to come up with a fee structure that suits the local people.

          Finally, decentralisation, I think we need to emphasise on that.  When this Bill is amended, it has to look on the aspect of saying whatever tender, let us look at that district, in that province and let us also look at the aspect of women and youths.  It is important – yes Hon.

Mudarikwa said it but I think we need to emphasise it as well from the women’s point of view, me speaking here, that women we need to actually have a say.  We need to have a participation in the State procurement because as I said earlier on, these are all monies that have been contributed to through taxes, levies et cetera in order for us to come up with that State purse and let the women also have a say in that because most of them you find they are companies dominated nevarume so we are saying madzimai nemayouth let them be part of it.  With those few observations, I thank you Mr. Speaker.

          HON. MUSANHU: Thank you Mr. Speaker Sir.  I rise to point out some few remarks on this debate.  Mr. Speaker, if all Zimbabweans were patriotic, I do not think the Minister of Finance and Economic Development was going to have any problem with having deficit on the budget.  What it means is, every Zimbabwean who was going to benefit would actually employ and the  people who are employed would pay tax so that the Government can have some funds.

          On this issue, if you look at my Hon. there, the Vice President of MDC, if you look at the label of his suit, it is not a local suit.  It is an import and if you look at all the other Hon. Members around, the clothes that we are putting on are actually imported.  That shows that the mind of people has a mentality or we also have an inferior complex that if you buy the local material, you are degrading yourself. Given that even the Minister of Agriculture, Mechanisation and Irrigation Development here has actually said that genetic cotton is not permissible, most clothes that are worn in this Parliament are made out of genetic cotton which shows that we sometimes refuse to do some things but at the same time we are doing the opposite thing on the other side.

          I just stood up to point out those few sentiments. I do not want to repeat what has been said already. With these few remarks I have made, it would go a long way and it would help our Minister of Finance and

Economic Development if we become patriotic and help our

Government to collect as much revenue as they require. I thank you.

          HON. ENG. MUDZURI: I just want to add my voice to the

Procurement Bill. I would want tomorrow to bring written comments to the Minister from the Zimbabwe Association of Consulting Engineers which they have presented asking you to look clause by clause in terms of their concerns. It is just unfortunate that I did not bring them. I will try to bring a copy to you.

          On procurement, it is important to recognise that it is best practice to have the best procurement standards. It is unfortunate that sometimes our institutions are not very much prepared to do best practice. I think the Minister’s effort, if it is complimented by the appointment of a board of people who are truthful and nationalistic who really want to see this nation moving forward, we are likely to have decent results on the decentralised form of procurement.

          What I want to put across is that procurement must be complimented by people who are competent.  If you look at the bridges which are not properly constructed, once rain comes they are washed away because there is no complimentary work in terms of a design to DDF. While we say the work is good, the community has done its work we are also not looking at the quality of work we are doing.

I remember the other day we were also speaking to the quality of engineers we are recruiting in Government. I was looking at a pothole which was filled the other day along Masvingo road. We were sitting inside it and this pothole was filled while I was watching. We insisted on quality of work. There are certain standards that are kept in terms of just doing pothole patching. We have spent a lot of money patching but within no days the whole pothole will be gone. So, we will have put money but it will not last. There is always a need to have a balance between the quality and the quantity of work done. We are always so expedient on the quantity and probably over indigenising.

Indigenisation is very important but we must create our international markets. We must create economic destinations for our products. When the Minister comes and says let us try to have areas where we have value addition, we must be prepared to build industries that are competitive internationally. When you value add and something is not going to be marketed externally, we are still not doing much to our economy. While we want to be very local and want to use our people, we must always balance our Standards Association of Zimbabwe with what happens internationally. If we think that our standards are superior we can always use the standards of Zimbabwe outside the standards of external agencies but we must ensure that the standards are competitive when we try to export the product.

I must hasten to say we have talked about buying local suits according to Hon Musanhi but what we should do is to ensure that the standards of the clothing we make is competitive for the market we are destining it for. We are such a small population of 14 million people and when we are 14 million, we must be exporting our goods to larger markets. If we can make things cheaper than in China, the population of China will be able to buy from us. If we can make our product cheaper for the market in South Africa, then we will be able to do our marketing in South Africa. A combination of those factors will bring our industry to the fore. If we do not work towards a common good, we are going nowhere because we end up with a product that is not marketable and we end up trying to sell it locally by force and still will not get a market.

With these few contributions and the document which I will bring to the Minister tomorrow, I want to thank you.

THE MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. CHINAMASA): Thank you Mr. Speaker

Sir and I want to acknowledge the contributions made by all the Hon.

Members. I will just mention them by name; the Portfolio Committee

Chairman, Hon. Chapfika, Hon. Nduna, Hon. Misihairabwi-Mushonga,

Hon. Chakona, Hon. Mudarikwa, Hon. Sibanda, Hon. Mapiki, Hon.

Matambanadzo, Hon. Tshuma, Hon. Gabbuza, Hon. Zindi, Hon. Musanhi and lastly Hon. Eng. Mudzuri. I thank all of you for your contribituions and more importantly, for the support that you are giving to the Bill.

I just want to underscore that this Bill is about decentralisation to procurement authorities. Currently, the State Procurement Board is procuring for all procurement entities and these include local authorities of whatever size, parastatals and line Ministries. With the enactment of this Bill procurement is going to devolve to these procurement authorities which means that, each line Ministry will have a procurement unit.  Bulawayo City Council will have a procurement unit so is Harare Municipality and so are parastatals.  But, they will not be given that responsibility until they have been trained on standards and norms of procurement and procedures.  Obviously, municipalities like Bulawayo and Harare could get that function quickly, compared to other municipalities and town boards.  That is what this Bill is about to do – to devolve that procurement function from the Central Government so to speak, to the procurement authorities.  The State Procurement Board is going to remain but with a different function; that of regulatory.  It will regulate and monitor all the activities of the procurement entities.  So when you are talking about who should be on the board and so on, it is no longer quite relevant because each procurement authority will set up its procurement unit at a local level, and then discharge its function.

So I want to say that, the contributions which were made, I want to go and reflect on some of the proposed amendments that were suggested.  In particular I want to reflect more deeply on what Hon. Eddy Cross said about procurement of professional services - for architects and engineers.  I think that there is merit in his argument, that when you are procuring engineering services, clearly the fee structure is as determined by their institute and it is applicable to every engineer.  What is an issue is the quality of the service.  So, we want to look deeply into that to see what can be excluded from the tendering and what can be included.  I will need more time to reflect on that.

Hon. Misihairabwi-Mushonga, just for the record, I think we need to understand that yes, when we are procuring from Gweru, Kwekwe and Gwanda, we need to look at what expertise is available.  But if that expertise is not available, we should look nationally.  I also want to say this Hon. Misihairabwi-Mushonga, you need to know that while the road from Mutare to Plumtree was given to Group Five, the actual contractor was a Bulawayo company.  I am just talking about the issue raised about discrimination and so on.  The company that did the Mutare to Bulawayo was a Bulawayo company.  So, you need to know that.  But, I think it was also because it had capacity.  I know the company has the capacity and I do not think that we should shy away from employing a company which has capacity because we think that it does not come from the area where the contract is to be performed.

We have contracts here which some of them are of a sophisticated nature.  Bulawayo Power Station; of course you do not expect that the expertise would be resident in Bulawayo.  Anyway, in the case of the Bulawayo Power Station, because of the nature of loans conditionalities, the contractor is an Indian company because we got the loan from IndiEximbank but, we do negotiate with them to see that they also incorporate procurement of local materials where that is possible.  But clearly, the machinery would have come from India in this case.

So, again you raised the issue of procurement of lawyer services and so on.  Again but to think about it, I should not be forced to hire a

lawyer whom I do not like - [HON. MISIHAIRABWI-MUSHONGA:

Inaudible interjections.]- no, I should get a lawyer whom I am comfortable with, who can advance and defend my interests.  So, it should not be a surprise and generally clients Mr. Speaker Sir, follow their clients.  If a Bulawayo lawyer located to Harare, you will find that clients from Bulawayo will follow him even to Harare because they are used to expecting a certain quality of service from him.  The Hon.

Member (Hon. Gonese) who has just sat near you, he gets clients from

Harare, yet he is located in Mutare –[HON. MISIHAIRABWI-

MUSHONGA: Inaudible innterjections]-

I do not know about that but clearly I know that there are lawyers in Mutare who get clients from Harare.  There are lawyers in Harare who get clients from Kwekwe; lawyers in Kwekwe who get clients from Harare and I do not think that it is an issue that we should worry much about, where you procure your lawyers.

Hon. Chakona, thank you very much – I am also going to look into the issue about what these vendor numbers are about and whether in the past there has been an abuse of vendor numbers.  I am also going to look into the issue of tax clearance certificates – in what circumstances they are issued in order for entities to qualify to participate in public tenders.  Another issue that I am also going to look into is the procurement of technological and engineering solutions.  We also need to look at and see whether this can be incorporated as a requirement in most of what we do if there is local capacity for supplying these services.

Hon. Mudarikwa, I got you and Hon. Sansole thank you for your support.  The point that I got from Hon. Mudarikwa is basically that which is not quite to do with procurement – where you have five or so telecommunications companies digging parallel trenches and each trench containing a fibre optic which has capacity for all the five.  That is a different problem which in the area of telecommunications, is being handled through the Ministry of ICT.

Hon. Gabbuza, I thank you and I think I have also understood the contribution by Hon. Matambanadzo for localisation and also Hon.

Tshuma for localisation.  Hon. Mudzuri, I am waiting for the submission of the proposals from the Zimbabwe Association of Engineers so that we can see whether we can take any of their suggestions on board.

With those remarks Mr. Speaker Sir, I now move that the Public Procurement and Disposal of Public Assets Bill (H.B. 5, 2016), be now read a second time.

Motion put and agreed to.

Bill read a second time.

Committee Stage: Wednesday, 8^th February, 2017.

ANNOUNCEMENT BY THE TEMPORARY SPEAKER

REPORT RECEIVED FROM THE PARLIAMENTARY LEGAL

COMMITTEE

THE TEMPORARY SPEAKER:  I have received a non-adverse report from the Parliamentary Legal Committee on the Appropriation Bill, (2017) (H.B. 14, 2016).

Second Reading: With leave, forthwith.

SECOND READING

APPROPRIATION BILL, (2017) (H.B. 14, 2016)

          THE MINISTER OF FINANCE AND ECONOMIC

DEVELOPMENT (HON. CHINAMASA): Mr. Speaker Sir, the

purpose of the Appropriation Bill is to give effect to the main Estimates of Expenditure for the year ending 31 December, 2017, which I tabled in this august House on 8^th December, 2016.

Section 3 of the Appropriation Bill, charges the Consolidated Revenue Fund with a sum of US$3,426,289,000, which relates to the 2017 Vote Appropriations.

The Vote appropriations seek to ensure realization of the overall objectives of the Zimbabwe Agenda for Sustainable Socio-Economic Transformation (ZIM ASSET), 2013 – 2018 programs and projects under implementation by the Government.

The 2017 Budget policy measures include, among others;

• Enhancing production across all sectors of the economy through giving greater and more urgent attention towards the supply side interventions;
• Strengthening of social safety nets in support of vulnerable groups in line with the objectives of our Interim Poverty Reduction

Strategy Paper (IPRSP) for 2016 – 2018;

• Containment of expenditures, particularly employment costs in order to re-orient the thrust of fiscal expenditures towards service delivery and infrastructure development, particularly in the Energy, Water, Transport and ICTs subsectors.

Mr. Speaker Sir, Section 5(1) of the Bill empowers the Minister of Finance and Economic Development to transfer funds already approved by Parliament between Votes in respect of a function or responsibility transferred between Ministries and Departments during the course of the

Fiscal Year.

Section 5(2) of the Bill allows discretion by the Minister of Finance and Economic Development to transfer funds from the Unallocated Reserve, which appears on the Ministry of Finance and Economic Development Vote to any other Vote as and when the need arises in order to meet inescapable expenditures.

          In addition, and if necessary, the Minister of Finance and Economic Development can vary the amounts transferred by taking back any surplus for reallocation to other Ministries to meet demands that may arise.  Mr. Speaker Sir, I accordingly move that the Appropriation Bill, (2017) [H.B. 14, 2016] be now read a second time.

          Motion put and agreed to.

          Bill read a second time.

          Committee Stage: With leave, forthwith.

COMMITTEE STAGE

APPROPRIATION (2017) BILL, [H.B. 14, 2016]

House in Committee.

          THE MINISTER OF FINANCE AND ECONOMIC

DEVELOPMENT: Madam Chair, I put the amendments to the schedule standing in my name.  These are the amendments that I have already explained during the debate last week that;

          On page 2 of the Bill, in Section 4 (schedule), paragraph 2 (Parliament of Zimbabwe), under Sub-Vote II replace “26, 245, 000” with “35, 245, 000” and adjust the Vote Total appropriately to reflect “39, 713, 000”.

On page 3 of the Bill, in Section 4 (schedule), paragraph 5 (Finance and Economic Development), replace “281, 191, 000” with “206, 374,000”.

On page 4 of the Bill, in Section 4 (Schedule), paragraph 16 (Higher and Tertiary Education, Science and Technology Development),

1. Under “Programme 1”: delete the words “Administration and

General” and replace them with “Policy and Management”.

2. Under “Programme II”: delete the words “Teacher Education” and replace them with “Human Capital Development”.
3. Under the renamed “Human Capital Development” programme, replace “193, 272, 270” with “259, 089, 270”.
4. Under “Programme III”: delete the words “Technical Education and Training”, and replace them with “Science and Technology

Development”.

5. Under “Vote Total” replace “200, 886, 000” with “266, 703, 000”.

On page 5 of the Bill, in Section 4 (schedule), paragraph 17

(Youth, Indigenization and Economic Empowerment), under

Programme V: Human Capital Development, replace “4, 901, 279” with

“4, 271, 279”, and adjust the Vote Total appropriately to reflect “17, 192, 000”.

On page 5 of the Bill, in Section 4 (schedule), paragraph 23

(Women’s Affairs, Gender and Community Development), under Programme I: Policy and Administration, replace “637, 890” with “747,

890” and adjust the Vote Total appropriately to reflect “8, 434, 000”.  

Amendments to the schedule put and agreed to.

          Bill reported with amendments.

          Bill referred to the Parliamentary Legal Committee.

MINISTERIAL STATEMENT

CURRENT STATUS OF VAT ON BASIC GOODS

          THE MINISTER OF FINANCE AND ECONOMIC

DEVELOPMENT (HON. CHINAMASA): Mr. Speaker Sir I crave the

indulgence of the House to issue a Ministerial Statement. The Ministerial Statement is concerning the current status of the VAT on basic goods.

          Mr. Speaker Sir, you will recall that in the 2017 National Budget, I propose to introduce VAT at a standard rate of 15% on products which include rice, margarine, cereals, maheu, potatoes, meat (pork, beef, fish and chicken).  The basis for standard rating the products is mainly due to the need to rationalise the schedule of zero rated and exempt goods in order to broaden the tax base and minimise the cost of tax administration.

          Mr. Speaker Sir, Zimbabwe, together with other SADC Member States, has ratified the SADC Protocol on Finance and Investment.  Under the Protocol, Member States are mandated to harmonise taxation matters and coordinate tax regimes.

          In an endeavor to harmonise taxation matters, the SADC region has developed VAT guidelines which enable Member States to sustain and enhance tax revenues on an equitable and efficient basis.

          Member States have, thus, agreed that the list of zero rated and exempt products should be streamlined in order to achieve the following objectives:

• Broaden the tax base;
• Enhance revenue generation;
• Promote administrative efficiency;
• Minimise corruption
• Ensure similarity among Member States; and  Enhance equity and fairness among others.

Mr. Speaker Sir, in the SADC region, Zimbabwe has one of the longest list of zero rated and exempt products.  The list of zero rated and exempt products include, but not limited to the following:

• Grains such as maize and wheat;
• Mealie meal;
• Bread;
• Cooking oil;
• Salt;
• Milk;
• Fruits;
• Vegetables;
• Eggs;
• Inputs for manufacture of cooking oil;
• Soya beans;
• Protective clothing;
• Animal feeds and remedies;
• Pesticides;
• Fertilizers;
• Medical services;
• Selected pharmaceutical products;
• Domestic supply of electricity;
• Domestic supply of water; and
• Supply of goods such as books, typewriters and maps for use by physically challenged persons, among others.

Countries such as Namibia, Lesotho, Malawi, and Zambia have a minimum list of zero rated and exempt products.  Such countries charge VAT on products such as rice, fresh milk, fruits, eggs and meat products among others.

However, in our circumstances, following the debate that took place here and stakeholder representations, wherein concerns have been raised regarding potential informalisation due to perceived price increase, I propose to shelve the implementation of Statutory Instrument 20 of 2017 –[HON. MEMBERS: Hear, hear.]- Which levies VAT on potatoes, rice, margarine, maheu and meat products.  This will allow for further consultation with relevant stakeholders and those consultations, I will start them with this august House.  I need the august House to give me guidance.  I must tax something to raise money to pay for service delivery, allowances, and wages.  So, we need to have guidance so that we understand and agree on which items to tax.  So, the consultations will start with this august House.  I thank you – [HON. MEMBERS:

Hear, hear.]

HON. P.D. SIBANDA: Thank you so much Hon. Speaker.  I think I was talking to a colleague of mine saying this Hon. Minister is so good that he is the only ZANU PF Minister who does not have a ZANU PF DNA –[HON. MEMBERS: Inaudible interjections.]- The importance of the step that has been taken by Hon. Minister is that these goods that we are talking about are basic necessities for Zimbabweans.  The impact of taxing them is huge in terms of the cost of living of this nation.  The impact that this would have especially on the small scale to medium enterprises would be huge which are the backbone of our economy currently.

However, I just want to seek clarification from the Hon. Minister, whether on meat and meat products, he includes also such products as kapenta fish.  I come from Binga where our major source of income is fishing of kapenta so we want him to clarify whether kapenta is also within the bracket of those goods whose VAT has been set aside.  Thank you.

HON. ENG. MUDZURI: Thank you Mr. Speaker Sir.  I just want

to thank the Minister for his attitude. Honestly, if you listen to the people’s voices, then you are in a national leadership.  Sometimes we do not listen and I just pray that the Minister keeps that spirit of listening to the concerns of the people.

Unfortunately for him, the economy is not improving.  He wants to increase his tax base but the economy is not improving.  Actually, if you look around Hon. Speaker, you will discover that there is a trend of people failing to pay rentals, even everything, they are failing to pay.  So, I am not sure how we are going to jump start the economy and probably have some other sources of income.  What we should try to do is to close anything that encourages corruption…

          THE TEMPORARY SPEAKER (HON. MARUMAHOKO):

Order, order, Hon. Vice President of the MDC, what I have said here was clarification not the debate but seeking clarification to what the Minister had said.

          HON. ENG. MUDZURI: The Minister said if he can get other means of getting revenue and I am just saying the best means…..

          THE TEMPORARY SPEAKER: He said he was going to

consult everyone, including this House.  He did not mean now.

          HON. ENG. MUDZURI: My final clarification is on meat and beef which type of beef or meat are we going to have concessions because there is tinned beef, raw beef and game meat.

          HON. NDUNA: Thank you Mr. Speaker.  I believe on the day he proposed that there be 15% to be added onto meat products, in particular because I am an owner of an abattoir, it happened immediately.  Today,  he has given this Ministerial Statement, it is my clarion call that this also happens immediately in terms of repealing that 15% VAT by retailers.  Over and above that Hon. Minister, you have mentioned on issues to do with clutches and wheelchairs for people living with disabilities, it is also my clarion call that you also add on the zero rating those that were not there before, in particular Braille, equipment and some other model of clutches for people living with disabilities aware and cognisant of the fact that the budget increase did not occur for these people who are marginalised because of disabilities.

          *HON. A. MNANGAGWA: Thank you Mr. Speaker.  I thank the Minister of Finance and Economic Development for removing such taxes.  We were failing to provide for our children and some children were now under nourished because we could not afford to buy nutritional foods.  I thank you.

          THE MINISTER OF FINANCE AND ECONOMIC

DEVELOPMENT (HON. CHINAMASA) Thank you very much for

the contributions and for the clarifications sought.  Hon. Sibanda, if the Statutory Instrument imposed VAT on fish and carpenter is fish, I am shelving it as per my statement.  Hon. Mudzuri, thank you very much, this covers all types of beef.  I cannot say off hand whether tinned beef is part of that.  I doubt it, I think tinned beef should be different but all we are looking at is what did the instrument cover.  Anything that was covered which was to take effect from 1^st February, 2017 will now be shelved.

          Hon. Nduna, I think I have to explain this VAT.  As you know,

VAT is a transactional tax.  It is charged at every level of value addition.  In other words, if we take the example of a manufacturer, when the manufacturer sells to the wholesaler, he charges VAT.  When the wholesaler sells to the retailer, the wholesaler charges VAT and when the retailer sells to the consumer, he charges VAT.  This is why VAT is now the largest source of our revenue in terms of support to the budget revenues.  It accounts for a very huge contribution to our revenue collection.  Seconded, I think by Pay As you Earn.  So, when we are looking for how to raise money, we are basically identifying those areas where there is a lot of economic activity.

          A supermarket will fix its price, in the prices they do not include tax.  You only know the tax when you get to the till.  So, this issue about prices being increased, it is not seen in the shops but when you get to the till because of the VAT.  If a retailer includes a VAT tax in the price, you can be sure that money is not coming to ZIMRA.  It is getting into the coffers of the supermarket and that is not desirable.

          I want to thank all of you who have contributed.  Hon.

Mnangagwa, kwashiorkor had not come yet.  It was only introduced on 1^st February, 2017 and I think if you have not been buying meat, you cannot blame the tax.  Mr. Speaker Sir, I thank Hon. Members and I hope that I have done justice to the clarification sought.

ANNOUNCEMENT BY THE TEMPORARY SPEAKER

NON-ADVERSE REPORT RECEIVED FROM THE PARLIAMENTARY LEGAL COMMITTEE.

          THE TEMPORARY SPEAKER: I have to inform the House that

I have received a Non-Adverse Report from the Parliamentary Legal Committee on the Appropriation, (2017) Bill [H.B. 14,2016].

CONSIDERATION STAGE

APPROPRIATION BILL [H.B.14, 2016]

          Schedule as amended, put and agreed to.

          Bill, as amended, adopted.

          Third Reading: With leave, forthwith.

          Motion put and agreed to.

THIRD READING

APPROPRIATION BILL [H.B.14, 2016]

          THE MINISTER OF FINANCE AND ECONOMIC

DEVELOPMENT (HON. CHINAMASA): Mr. Speaker, I now move

that the Bill be now read a third time.

          Motion put and agreed to.

          Bill read the third time.

SECOND READING

ZEP – RE (MEMBERSHIP OF ZIMBABWE AND BRANCH OFFICE

AGREEMENT) BILL [H.B. 9, 2016]

          Third Order read: Second Reading: ZEP – RE (Membership of Zimbabwe and Branch Office Agreement) Bill [H.B. 9, 2016].

          THE MINISTER OF FINANCE AND ECONOMIC

DEVELOPMENT (HON. CHINAMASA): Mr. Speaker Sir, it is my singular honour to move that the ZEP-RE (Membership of Zimbabwe and Branch Office Agreement) [H.B. 9. 2016] be read for a second time.

          Mr. Speaker Sir, Honourable Members will recall that Zimbabwe is a shareholder of the PTA Reinsurance Company (ZEP-RE), an intergovernmental reinsurance company with a local branch office in Harare.

          The Government, through my Ministry signed a Host Agreement with the PTA Reinsurance Company in June 2013 and that Host Agreement provides, among other things, that the Government of Zimbabwe shall grant certain privileges and immunities to the company, which privileges and immunities is a standard feature of such Host Agreements. Conferment of these privileges and immunities are consistent with the provisions of Article 40 of the Agreement establishing the Common Market for Eastern and Southern Africa.

          It is upon that basis and in terms of Section 327 of the Constitution of Zimbabwe that the ZEP-RE Bill before you seeks to confer legal status to the PTA Reinsurance Company.

          Benefits of ZEP-RE operations in Zimbabwe

          The operations of ZEP-RE bring economic benefits that include, writing insurance business from the insurance market, improving the capacity of the local reinsurance business by bringing on the board strong shareholders as well as downstream economic benefits associated with insurance business.

          A robust insurance sector for Zimbabwe will contribute to sustained economic growth and improved financial sector performance.

Growth and development of the insurance industry will in turn create more business for the ancillary service providers.

          The operations of the reinsurance company in the country benefit the Government of Zimbabwe through a wider capital base for the subscription of prescribed assets.

          Provisions of the Bill

          Clause 4 of the Bill provides for the Minister’s powers in relation to the conferment of privileges and immunities upon the company, with Clause 4 (2) of the Bill allowing the Minister responsible for Finance to temporarily suspend the immunities and privileges conferred upon the employees of the company where it is in the public interest that such suspension be effected. Under the same provision, it is recognised that certain of the privileges and immunities cannot be conferred upon the company on a permanent basis and may therefore be granted for only a specified time period.

          Article 2 of the First Schedule provides for the definition of the terms used in the Bill. Under this Article, “Host Agreement” means the Agreement between the Government of Zimbabwe and ZEP-RE (PTA)

Reinsurance ompany, and “Treaty” means the Treaty establishing the Common Market for Eastern and Southern Africa (COMESA).

          Article 4 of the First Schedule provides for the treatment which will be extended to the offices and accommodation of members of the company. The Government has a duty to ensure that there are no unnecessary interruptions or intrusions which could have an adverse effect on the operations of the company nor the dignity of its employees.

          Article 6 of the First Schedule provides that the company shall be entitled to operate foreign bank accounts pursuant to their business activities, provided that they acquire the required authorisations under the Exchange Control Regulations.

          Article 8 of the First Schedule provides for the status to be accorded to the directors of the company as that of non-resident members of diplomatic missions and Article 9 further expounds on the privileges and immunities extended to other members of the company and the family members of those employees.

          In terms of Article 10 (5) of the First Schedule, the interpretation of the privileges and immunities conferred upon members of the company are not to be construed to allow its employees to derive any personal benefit of any nature upon them. The privileges and immunities must be read within the broader context of achieving the objectives of the company.

          Further, Article 10 (6) also provides that the Managing Director of the company may suspend the privileges and immunities entitled to an employee where it is in the interests of justice that this be done.

          Finally Mr. Speaker Sir, in terms of Article 14, the Agreement, along with any entitlements arising there - from, shall terminate where the company relocates outside of Zimbabwe, or where both parties agree to terminate the Agreement. Mr. Speaker Sir, I now move that the debate do now adjourn.

          Motion put and agreed to.

          Debate to resume: Wednesday, 8^th February, 2017.

          On the motion of the MNISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. CHINAMASA), the House

adjourned at Seventeen Minutes to Six o’clock p.m.