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NATIONAL ASSEMBLY HANSARD 09 DECEMBER 2020 VOL 47 NO 15

PARLIAMENT OF ZIMBABWE

Wednesday, 9^th December, 2020

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

PRAYERS

(THE HON. DEPUTY SPEAKER in the Chair)

ANNOUNCEMENTS BY THE HON. DEPUTY SPEAKER

APOLOGIES RECEIVED FROM MINISTERS

THE HON. DEPUTY SPEAKER:  I have got a list of apologies from Hon. Ministers;  Hon. D. Garwe, Hon. M. Mutsvangwa, Hon. K. Kazembe, Hon. J. Moyo, Hon, D, Marapira, Hon. S. Nzenza, Hon. Prof, P. Mavima, Hon. M. Ndlovu and Hon. K. Coventry.

MOTION

BUSINESS OF THE HOUSE

THE MINISTER OF HIGHER AND TERTIARY EDUCATION, INNOVATION, SCIENCE AND TECHNOLOGY (HON. PROF. MURWIRA): I move that Orders of the Day, Number 1 to 9 be stood over until Order of the Day Number 10 has been disposed of.

Motion put and negatived.

MOTION

BUSINESS OF THE HOUSE

HON. TOGAREPI:  Madam Speaker, I seek leave of the House to defer Question Time to next Wednesday to allow debate on the National Budget.

          HON. CHIKWINYA: Thank you Madam Speaker.  I seek objection primarily for two reasons.  Procedurally, the motion was put before us yesterday to suspend Government business and have the budget principles take precedence.  In that notice, which we did not object, the Leader of Government Business said and I quote …

          THE HON. DEPUTY SPEAKER: I hear you Hon. Chikwinya, we are proceeding to Questions.

          HON. CHIKWINYA: Thank you because tanga tave kuuya nemitemo chaiyo chaiyo. 

ORAL ANSWERS TO QUESTIONS WITHOUT NOTICE

          HON. T. MLISWA: Madam Speaker, the question I have to the Minister of Primary and Secondary Education is a very disturbing one.  I have just been informed in my constituency that the ‘O’ level Geography examination that was written yesterday had no map in the entire country and they proceeded to write examinations without a map and it is Geography.  May the responsible Minister respond as to why they went ahead with examinations for Geography ‘O’ level without a map?  What Geography is it when you have no map?  I thank you. – [HON. NDEBELE: And why the Minister has not been fired?] –

          THE HON. DEPUTY SPEAKER: Thank you Hon. Mliswa but that one is a specific question and I think the Minister will need time to go and investigate then come with the answer. – [HON. MEMBERS: Inaudible interjections.] -  Yes, it is a specific question.

          HON. T. MLISWA: Madam Speaker, this is a question that is very clear.  The Minister is aware that examinations are being written and this is urgent.  It actually requires you the Chair to demand for that answer now because how many more examinations are going to be written without the necessary requirements?  So it actually requires an urgent intervention, if that is happening, it will continue.

          It is a very simple question because the Minister is incharge of education and the question is – why did the examinations continue without a Geography map yet it is an ‘O’ level examination?  It is not specific but actually an urgent issue because students are writing examinations right now.  How many more examinations will be written that are incomplete and what does that do to the education system?

          THE HON. DEPUTY SPEAKER: Order, order!  I have heard you Hon. Mliswa… - [HON. T. MLISWA: It requires urgent intervention!] – Hon. Mliswa, there is no reason for you to do what you are doing! – [HON. T. MLISWA: Madam Speaker, you know I speak passionately because I have a stutter, so at times I have to…] – You speak with emotions Hon. Mliswa which is very wrong, I heard what you said.  Please may you take your seat? Please take your seat Hon. Mliswa!  It is a specific question but I will request the Minister to respond. – [HON. NDEBELE: When?] -  Hon. Ndebele order! Hon. Minister!

          HON. T. MLISWA: Madam Speaker, in line with what you said, can we actually get a Ministerial Statement first thing tomorrow? – [HON. MEMBERS: Inaudible interjections.] – No, no, he will not answer it.

          THE HON. DEPUTY SPEAKER: Hon. Mliswa, please may you take your seat, the Minister is going to respond to your question.

          HON. T. MLISWA: He is not the Minister of Primary and Secondary Education.  He is not aware of this because he is the Leader of Government Business.  This Parliament is of procedure, haisi yekungo nhonga nhonga kunge matamba adonha!  They have portfolios that they were appointed to superintend – that is the reason why I have the right to withdraw.

          I need a statement from the Minister of Primary and Secondary Education tomorrow on the matter.  It is me who has the right to withdraw and I have realised that there is no Minister with the capacity here to respond to that except the Minister of Primary and Secondary Education, so I withdraw.  Madam Speaker, may we have a Ministerial Statement pertaining to the ‘O’ level Geography examinations of yesterday that were written without a map.  At least I stand guided by you with your advice, it needs time so that at least the message gets through to him and he can prepare one for tomorrow.

          THE HON. DEPUTY SPEAKER: I said that earlier on and you disputed it.

          HON. T. MLISWA: You are right Madam Speaker, that is why I have restructured it.

          THE HON. DEPUTY SPEAKER: Please may you take your seat Hon. Mliswa.

          HON. T. MLISWA: Madam Speaker, I am accepting what you are saying but I am further giving the idea that may we have a Ministerial Statement tomorrow instead?  I do concur with what you are saying.  I withdraw the question and there is no point for anybody to go ahead with a question that I have withdrawn.  That is why I am imploring your good office to allow for a Ministerial Statement on that matter tomorrow.  I seek your indulgence Madam Speaker.

          THE MINISTER OF JUSTICE, LEGAL AND PARLIAMENTARY AFFAIRS (HON. ZIYAMBI): On a point of order Madam Speaker – [HON. NDEBELE: But Madam Speaker, you must make a ruling before the Minister speaks!] – Do you want to respond or I proceed?  I stand guided, can I proceed? – [HON. MEMBERS: Inaudible interjections.] –

          THE HON. DEPUTY SPEAKER: Hon. Members, why are you disrupting the smooth running of business? – [HON. T. MLISWA: But we need closure on the issue Madam Speaker.  The whole country is listening to hear about these examinations.  We push for students to write examinations without enough paper work.  How can you people support education?] – Hon. Mliswa, you have a tendency of disrupting the smooth running of business in this House.  You speak with emotions every time, I do not know why.

          I had already made a ruling that the Minister will go and investigate and bring the answer – that is what I said.  – [AN HON. MEMBER: When?] – Next week, that is my ruling and it is final.

          THE MINISTER OF JUSTICE, LEGAL AND PARLIAMENTARY AFFAIRS (HON. ZIYAMBI): Thank you Madam Speaker.  Yesterday when I gave notice of suspension of other business, there was an error that one of the Standing Orders was omitted and when I came here, I had already advised Cabinet Ministers that there is no Question Time because we are suspending so that we deal with the outstanding business of the day, that is the Budget and other Bills. There are no Ministers to take questions, I implore you Madam Speaker that the best thing to do is that I apologise for the error but the Ministers did not abscond because they did not respect the House.  They knew that we are proceeding with the business of budget.  I request you that we do that otherwise we will end up having one Minister answering questions which is not beneficial to all of us.  So, I seek your indulgence.

          I also would want to say that even the request by Hon. Mliswa that it happens next week; we suspend the Standing Orders and any other business would not be held unless if leave of the House is sought to deviate from that.  So, I humbly request that we proceed with the Business of the budget and suspend Question Time.  I thank you – [HON. MEMBERS: Inaudible interjections.]-

          THE HON. DEPUTY SPEAKER: Order Hon. Members!  Hon. Chikwinya may you approach the Chair.

MOTION

BUSINESS OF THE HOUSE

          THE MINISTER OF HIGEHR AND TERTIARY EDUCATION, INOVATION SCIENCE AND TECHNOLOGY DEVELOPMENT (HON. MURWIRWA): I move that Orders of the Day Nos. 1 to Order of the Day No. 9 be stood over until Order of the Day No. 10 is disposed of. I thank you.

          HON. T. MLISWA: On a point of order madam Speaker. You are aware that the budget of the country is important and we have totally taken everything out to pave way for it but the Ministers who control the Ministries are not here.  So, how serious are we?  The Ministry of Finance is here but the line Ministers are not.   This budget is about Ministers understanding, No wonder why they never comply with giving monthly reports and quarterly reports.

Why are we continuing with the budget when Ministers are not here? This is the most important document in the country and we have Ministers who are not here who must be listening to how they should spend the money but they are not here. This is an absolute circus, it is a circus all the time and with my emotions I repeat that it is a circus all the time. We are wasting time. Where are the Ministers?  May the Leader of Government business ask Ministers to come and sit in this budget. Tomorrow we will be sitting again up to 12 mid-night. MPs are tired because they cannot get to their places on time but they are sacrificing. Where are the Ministers who are responsible for those budgets and not only that, their own Chief Accounting Officers who are the Permanent Secretaries should be sitting up there.

Members have been passing budgets and there are not reports coming through. You are now known as a Parliament that rubber stamps, that is all. In the history of this country you are a Parliament which rubber stamps your own budget of Parliament you rubber stamp and you do not get anything. When are you going to work up and represent this country with a clear conscience? You cannot be whipped all the time and rubber stamps all the things. The Minister of Finance is here, we appreciate. Minister, where are your Ministers who come to you wanting money and they are not here but who do not run the money. The manager who gets the money is not here.

          THE HON. DEPUTY SPEAKER: Hon. Mliswa, I hear you. Please may you take your seat.  I hear what you said and I think the Ministers will follow the debates through reading in the Hansard and the Minister of Finance is the one who is responsible for this Bill. So, Hon. Members, we can continue with the business of the House.

MOTION

FINANCE BILL: BUDGET DEBATE

          Tenth Order read: Adjourned debate on motion for leave to brin in a Finance Bill.

          Question again proposed.

HON. MUSAKWA: Thank you Madam Speaker Ma’am. Adding to the debate on the Portfolio Committee of Energy and Power Development.

Introduction: The Portfolio Committee has an oversight responsibility over the Ministry of Energy and Power Development. The Ministry of Energy and Power Development is mandated to provide adequate and sustainable energy supply through formulating and implementing effective policies and regulatory frameworks. Post budget consultations conducted with the Ministry and its stakeholders showed that there was an increase in 2021 budget allocations to the Ministry of Energy and Power Development from the 2020 budget allocation.

1.1.  Key Policy Priorities for the Ministry of Energy and Power Development in 2021:

          The Ministry of Energy and Power Development has managed to identify some key developmental areas to pursue. Some of the Ministry’s priorities for the period 2021-2023 include:

• Complete and build new energy infrastructure
• Upgrading, rehabilitation and maintenance of existing infrastructure
• Promote the development of renewable energy projects
• Expand net metering for distributed electricity generation
• Complete and implement energy efficiency policy and regulations and implement
• Increase pipeline capacity from 2.9 billion litres to 4.9 billion litres

          The above stated key priority areas for the 2021 budget outlay a clear picture of a determined Ministry that has the intention to achieve its goals in line with national priorities.

1.2.        Ministry’s key achievements in 2020:

          Despite the economic challenges that characterised the greater part of 2020 and COVID-19 that affected most economic activities, Ministry of Energy and Power Development managed to post some achievements in 2020.  Some of these achievements include:

• 200, 10km of high voltage lines were constructed under the grid extension programme
• Manufactured electro-mechanical equipment and constructed a cooling tower and a coal plant under Hwange 7 and 8 main power house civil works
• Rehabilitated Kariba dam
• Rehabilitation of power network through transformer replacements and distribution line reinforcements

2. Ministry of Energy and Power Development 2020 Budget Performance:

          Despite being allocated a revised total budget of ZWL$525.8 million in the 2020 budget, Ministry of Energy and Power Development’s disbursements from Treasury in 2020 amounted to ZWL$80.65 million. The amount disbursed in 2020 represents 15% of the Ministry’s 2020 budget allocations. The worst affected by the non-disbursement include goods and services and acquisition of non-financial assets. Policy and Administration Programme had an average budget outturn of 36% whilst that of the Energy Supply and Security Programme was at 12%.  As a result of the failure by Treasury to release funding to the Ministry, the following budget performance impacts were noted:

• Failed to carry out monitoring and supervision of projects under the Ministry’s purview;
• Failed to subscribe to international and regional organisations such as the International Atomic Energy Agency where the country has lost its voting rights.
• Failed to achieve 2020 targets as the non-disbursement of funds resulted in the stagnation of most projects

3. Overview and Analysis of the Ministry's 2021 Budget Allocation

3.1.        Ministry of Energy and Power Development 2021 Budget Allocations

The Ministry of Energy and Power Development was allocated a total of ZWL$1.641 billion (equivalent to US$20.04 million[1]) in the 2021 budget. The amount allocated represents a 68% increase from the 2020 budget allocation of ZWL$525.8 million (equivalent to US$31.4 million). While in nominal terms the amount allocated increased, the share of the Ministry’s budget the total budget decreased from a share of 0.75% in 2020 to 0.38% in 2021. Figure 1 shows the Ministry of Energy and Power Development’s budget shares in the total national budget.

Figure 1: Ministry of Energy and Power Development’s budget share in the total national budget (2019-2021)

Source Budget Estimates (2019, 2020 and 2021)

3.2.        Economic classification of the budget:

          Of the Ministry’s total allocation of ZWL$1.641 billion, ZWL$214 million was allocated towards the Ministry’s operations which include employment costs and other operational expenditures. The share allocated towards the Ministry’s operations in the 2021 budget is an improvement from the 5% allocated towards the same expenditure item in the 2020 budget. In the 2020 budget, the Ministry’s allocation for operations were inadequate and resulted in the Ministry virementing about ZWL$42 million from the Rural Electrification Agency and ZESA. In the Ministry’s 2021 budget, the largest share (55%) was allocated for capital transfers to ZESA for the expansion and rehabilitation of Hwange Thermal Power Station which is expected to add an additional 300MW to the national grid when completed. 32% of the Ministry’s budget was allocated towards funding capital expenditures. Figure 2 shows the economic classification of the Ministry’s 2021 budget.

Figure 2: Economic Classification of the Ministry’s 2021 Budget.

Source Budget Estimates (2021)

3.3.        Ministry’s 2021 Budget Allocations vs Bids:

          Although the amount allocated to the Ministry in the 2021 budget increased from the 2020 budget allocation, a number of programmes were underfunded. The Ministry had submitted bids amounting to ZWL$3.43 billion but Treasury allocated ZWL$1.641 billion. The amount allocated represents 48% of the Ministry’s funding requirements. The Policy and Administration Programme was allocated ZWL$169 million against a funding requirement of ZWL$237 million. This means that this Programme got 71% of its 2021 funding requirements. The Energy Supply and Security Programme was allocated ZWL$1.463 billion against a funding requirement of ZWL$3.184 billion. Budget allocation for this programme is 46% of the Programme’s funding requirements. The underfunding for this programme will negatively affect implementation of Ministry’s projects in 2021.

Figure 3: Ministry of Energy’s Allocation vs its funding requirements

Source Budget Estimates (2021)

4. COMMITTEE OBSERVATIONS, ISSUES AND CONCERNS

The Committee noted that although the Ministry got an overall budget higher than what was allocated in the 2020 budget, all the Ministry’s sub-programmes were underfunded. The following are some of the Committee’s observations and concerns with respect to the Ministry of Energy and Power Development’s budget and the possible implications of the 2021 budget allocation to the Ministry’s operations and the energy sector.

4.1            Underfunding for all the Ministry’s programmes

4.1.1   Goods and Services- Treasury allocated ZWL$69.84 million against a bid of ZWL$146.5 million for goods and services. This means that there is a funding gap of ZWL$76.66 million. The inadequate budget allocation for this expenditure item will greatly affect the Ministry’s operations such as supervision, monitoring and evaluation of projects under the Ministry’s purview.

4.1.2   Capital Transfers: Treasury allocated ZWL$900 million for a loan facility to ZESA to cover local taxes for the expansion and rehabilitation works at Hwange Units 7 and 8. The Committee notes with concern that the amount allocated is lower by ZWL$550 million from the ZWL$1.45 billion that the Ministry had requested. The underfunding will delay the completion of work that is already behind schedule.

Treasury also allocated ZWL$64 million to Finealt Engineering for the renewable energy projects against a bid of ZWL$135.541 million. The underfunding will negatively affect the supply of renewable energy in the country. Finealt Engineering has a target of  10 000ha under jatropha trees over five years if supported with adequate funding. The Committee also notes with concern that in 2020, Treasury did not disburse any funds to Finealt Engineering for its projects.

4.2           Revenue from Retention Funds: The Ministry had projected to collect ZWL$87.7 million from various levies in 2021 and had planned to use the funds to procure strategic fuel stocks. However, in terms of the Public Finance Management Act, revenue from levies will now be remitted to the Consolidated Revenue Fund (CRF). In light of this development, the Ministry will not be able to procure strategic fuel reserves. The 2021 budget did not provide any funding for the procurement of strategic fuel reserves.

4.3           The Committee noted with concern that the amount owed to ZESA by various customers has been increasing and currently stands at ZWL$3.2 billion for customers paying in local currency and US$30 million for those billed in foreign currency. The Committee noted that the largest debtors include local authorities (ZWL$1 billion), parastatals (ZWL$189 million) and Government (ZWL$400 million). The failure to pay by Government and local authorities have negative effects on the electricity generation by the company. The situation is worsened by the fact that ZESA owes various suppliers about US$90 million and this debt needs to be serviced every month but the current tariffs have no provision for debt servicing. The debt accrued due to delays in effecting tariff changes in line with macroeconomic developments in the country. ZESA indicated to the Committee that an average tariff of US10 cents would enable the company to provide electricity whilst at the same time servicing its debt. The current tariff stands at US7.73 cents.

4.4           The Committee noted that the 2021 budget did not provide any funding for the production and procurement of transformers by ZENT. However, the Committee is pleased to inform that ZENT is in the process of procuring materials for the production of 830 transformers. This will go a long way in filling the backlog in the requirements for new connections and replacement of vandalised or old transformers.

4.5           The Committee also noted with concern the increase in cases of vandalism of electricity infrastructure. To date, 787 cases have been reported in 2020 with most of the cases reported during the last 2 months.

5. Recommendations

In light of the analysis of the Ministry of Energy and Power Development’s budget and issue raised, the Committee recommends the following measures that it feels will raise revenue in the sector and contribute to economic growth.

5.1           It is of concern to note that Treasury has, for the past years, have failed to disburse the total budgets allocated to the Ministry. This trend implies that Ministry’s activities also suffer from the failure by Treasury to timeously release funds allocated in the budgets. For example, in the 2020 budget, Finealt Engineering was allocated ZWL$20 million but as at 30 September, Treasury had not released anything to support the parastatal’s projects. It is therefore recommended that in 2021, Treasury should meet its side of the bargain by timeously releasing allocated funds to the Ministry.

5.2           The Committee noted that ZESA is owed a large amount of money by its customers. This situation undermines the parastatal’s capacity to pay for emergency power supplies, undertake critical maintenance and develop new capacity for both generation and transmission infrastructure. It is saddening to note that Government has also contributed to the problems facing ZESA by failing to pay its bills. The Committee therefore recommends that in 2021, Government should take a leadership role by paying up its electricity bills arrears.

5.3           In order to reduce further accumulation of debt by its customers, the Committee recommends that Government should allow ZESA to install prepaid meters to all electricity users. This will improve revenue collection by ZESA and instill discipline in the use of electricity.

5.4           Ministry of Energy and ZESA informed the Committee that cases of vandalism have increased in most areas around the country with about 200 cases of vandalism of electricity infrastructure having been reported during the months of October and November 2020 only. This has affected the provision of transformers for new connections, as the newly acquired transformers will be allocated to areas that would have lost transformers due to vandalism. It is therefore recommended that the budget should provide funding for enhancing security of electricity infrastructure. In addition, there is also need for ZESA, with the assistance of Parliament, to carry out awareness campaigns to educate people on how they can police their areas and to have a sense of ownership for infrastructure in their areas.

5.5           The Committee noted that the supply of electricity in the country is under threat due to a number of challenges facing the power utility company. Some of the noted challenges include foreign currency shortages for the importation of electricity and other equipment required for maintenance of the power stations. During the greater part of 2020, the exchange rate was not stable.  Most of the electricity users are paying using local currency. The Committee also took note of the fact that ZESA has not provided an incentive mechanism to encourage the purchase of electricity in foreign currency. The Committee recommends that ZESA should come up with an incentive tariff structure for customers paying in foreign currency.

6.  Conclusion

The Portfolio Committee on Energy and Power Development is of the view that the energy sector is key to ensuring the attainment of the upper middle-income status by 2030. It is against this background that Treasury prioritises the sector in the allocation of funds because of its linkages with various facets of the economy. Zimbabwe is endowed with renewable energy resources, including solar, hydropower and biomass energy.  Tapping into these resources would help the country meet the energy supply challenges that are key in achieving the 7.4% economic growth target in 2021 as well as meeting the set targets in the National Development Strategy 1.

          HON. MAJAYA: Thank you Madam Speaker.  The 2021 National budget is developed under unique circumstances where the country has experienced unprecedented social and economic impacts of the COVID-19 pandemic. Hard hit by the covid19 pandemic are SMEs and women. Further, in 2019-2020 the Ministry of Finance and Economic Development in partnership with Ministry of Women Affairs Community Small and Medium Enterprise Development (MWACSMED) made great strides to establish the gender needs of Government ministries and improve the practice of gender responsive budgeting. Gender mainstreaming guidelines for government ministries were developed. A gender audit of gender responsive budgeting was conducted that highlighted the need to institutionalise the practice of GRB. The institutionalisation process can only be spearheaded by the gender machinery in the country that is MWACSMED and the Zimbabwe Gender Commission (ZGC). GRB demands that there be equitable allocation of resources to respond to the needs and interests of men and women.

          The traditional practice of allocating at least 1% of the national budget to MWACSMED falls short of GRB practice. The Ministry within its internal responsibilities is expected to provide technical and coordination of gender focal persons in all government ministries to achieve gender mainstreaming. However, this was further made difficult by the removal of the Gender component on the Ministry departments. It left a vacuum in gender programming and has contributed to the diminished performance of the Ministry in terms of gender though demand is high that the gender component be resuscitated as it is key to the Ministry achieving its mandate under SDG 5 Gender Equality and the empowerment of women and girls. The budget allocations should consider that the component of MSMES is a Ministry and should be allocated a budget that resonates with the magnitude of the mandate for the Ministry, Further, consider the fact that SMEs are the drivers of the economy, their effective participation in the economy is critical to achieving a middle-income economy by 2030.

Zimbabwe has the second largest informal economy as a percentage of its total economy in the world at 60.6% (IMF,2018).Women constitute 54.4% of the informal sector and the majority of MSMEs are owned by women. The COVID-19 pandemic affected the MSMES sector to the extent that it needs more support than before. The high demand for digital methods of doing business became more imperative in COVID-19. Going forward, the sector needs to rise to the occasion of digital economy. Some MSMEs have been eroded and need resuscitation, working space to adjust to the new normal way of life, social distancing is important for MSMES and advancing access to markets.

COVID-19 pandemic revealed that the social safety nets in the country are weak. The increase of GBV from 1 in 3 women to 2 in 3 women (UNWOMEN, 2020) demanded more support services on a system that was already lacking support. The lockdown revealed that the government was over-reliant on CSOs to shoulder the burden of GBV. In the absence of travel and release of funds most support services were not functional. Women’s burden to care for the family increased from double to a triple burden of care work. There is increased food insecurity, loss of business, lack of access to water and pressure continues on access to social amenities, women are placed in a precarious position to subsidise the government. It is imperative that the gender machinery receives adequate budget allocations, in the highlighted critical areas above so that the economic potential of women is realised as we seek to build resilience and sustainable growth in 2021.

1. Positives Gender allocations on the 2021 National Budget

The following gender responsive provisions in the 2021 National Budget were noted:

1.             The 2021 National Budget Statement commits to provide social safety nets to women, children and persons with disability. Addressing gender inequalities, income inequalities, improving access to finance, social services like health, sanitation and education.
2.             The National Budget statement also states that resources will be allocated to take actions to assist persons with disability and ill health against natural disasters and Gender Based Violence.

             iii.            Allocation of zw$500 million towards the National venture capital fund which will capitalise existing finance institutions for women.

1.             Capitalisation of institutions which support various MSMEs projects: ZW$ 90 million for Women Development Fund; ZW$65 million for Community Development Fund; ZW$250million for Zimbabwe Women Microfinance Bank and ZW$500 million for SMEDCO. However, if inflationary pressures are not curbed, these figures will be meaningless.
2. Analysis of 2021 National Budget allocations to the Women's Affairs, Community, Small and Medium Enterprise Development (MWACSMED) and the Gender Commission

3.1    Overall allocation analysis from the total budget: What are the challenges?

Table 1 shows an analysis of the budget allocation to MWACSMED and the Gender Commission. It indicates that the Ministry was allocated only 0.5% out of the overall 2021 national budget. The Gender Commission was allocated only 0.036% of the total national budget. This analysis shows clearly that both institutions are on the lower end of national resources allocation and yet they have insurmountable challenges to deal with. It also shows that the Ministry of Finance has not considered the enhanced plight of women in Covid19 that has an adverse effect on economic growth of the country if not adequately resourced. The budget allocation does not adequately reflect the magnitude of work that the Ministry has to undertake to deliver its mandate which includes resuscitating the MSMES, the nation’s source to economic recovery. The other challenge is that programme outcomes may be limited if inflationary pressures are not reigned in.

Table 1: Overall allocation analysis from the total budget

	2021 Budget allocation	% allocation from overall national budget
MWACSMED	ZW$2,15700,000	0.5%
Gender Commission	ZW$153,000,000	0.036%

 

Source: 2021 Budget Bluebook

3.2    Budget variances: What are the challenges?

Table 2 indicates that MWACSMED received only 39,8% of what it bid for. The Gender Commission was allocated 64.8% of what it bid for. Whilst the Ministry and the Gender Commission welcome the budget allocation, the fear from MWACSMED is that it falls short of expectations, especially that the allocation is only half of what it bid for.

Table 2: Budget variance

	2021 Budget allocation	Ideal Budget	% allocated from the bid	Variance (shortfall) Bid vs budget allocation
MWACSMED	2,157,000,000	5,410,810,000	39,8%	60.2%
Gender Commission	153,000,000.00	236,000,000	64,8%	35.2%

Source: 2021 Budget Bluebook

1. Comparison of budget allocation between 2020 and 2021

Figure 1 shows a comparison of budget allocations between 2020 and 2021 for MWACSMED.

Table 2: Comparison between 2019 and 2020 budget allocations (%)

Programme	2020 %allocation	2021 % allocation	% variance
1.policy and administration	10.6%	19%	8.4%
2.Women Empowerment, Gender Mainstreaming and Community Development	30.8%	70%	39,2%
3.Small and Medium Enterprise and Cooperative Development	58,6%	47%	-11,6%
Total budget allocation	0.8	0.5	-0.3

Source: 2021 Budget Bluebook

The table above shows that there was an increase in allocation of resources for programme 1 and programme 2.For program 1 the allocation increased by 8.4% and program 2 39,2%.Considering the magnitude of the work that needs to be done, it remains not consummates for the Ministry. Programme 3 saw a decline in allocation from 2020 to 2021.This is disturbing as MSMEs are a critical component to drive economic recovery. MSMEs host the largest portion of the Ministry as it also hinges with community development. This does not reflect lessons learnt from the COVID-19 pandemic which remains a threat.

4. What does the budget allocation mean in real terms?

To have a full appreciation of what the Ministerial allocation means in real terms, it is critical to analyse the sub-programme allocation and the implications. Section 4A focuses on the MWACSMED and Section 4B focuses on the Gender Commission.

PART 4A

4.1    Women's Affairs, Community, Small and Medium Enterprise Development (MWACSMED)

Table 3 indicates the shortfall for each programme area.

Table 3: Budget allocation to MWACSMED by programme

Programme	2020 Budget allocation	Budget Bid	%allocated	Variance (%)
Policy and Administration	505 900 000	2 656 000 000	19%	81%
Women Empowerment, Gender and Community Development	810 700 000	1 15 7 800 000	70%	30%
SMEs and Cooperative Development	840 400 000	1 760 000 000	47%	53%
Grant Total	503,976,000	1,176,836,000	(672,864,000)	57.2%

Source: MWACSMED Budget Notes

4.1.1 Programme 1 - Policy and Administration: What are the budget challenges?

Programme 1 received only 19% of what it bid for, giving a variance of 81%. One of the main functions of the Ministry is to formulate, recommend, implement, coordinate and evaluate policies, strategies and programmes that promote women empowerment, gender equality, community, cooperative, and SME development.

Decentralisation of the Strategic Policy Planning, Monitoring and Evaluation Department:

The Ministry structure operates from national level to provincial, district and ward levels. Staff at all these levels drive the Ministry programmes and projects. However, the staff compliment is often limited to one person per district and per ward. With the wake of the national Results Based Management System there is demand for evidence gathered from monitoring and evaluation to inform future interventions and government progress towards attaining the SDGs. The Ministry received approval from the Public Service Commission on 24 November 2020 to create the provincial planning, monitoring and evaluation departments. These departments will require staff and equipment in the form of digital monitoring and evaluation appliances. Under the current budget variance of 81% for policy and administration, decentralisation cannot be realised. The Ministry requires a revision of this programme budget to accommodate this department.

Gender Mainstreaming, Inclusivity and Wellness Department:

          Since the formation of the Ministry the component of Women Affairs and Gender have been key departments. Gender has been critical as it allows the Ministry to represent both men and women in addressing gender inequalities. The changes in 2018 that eroded the Gender component of the Ministry have made it difficult for them to fulfill their mandate. The Ministry acknowledges the 105% allocation toward their bided cost for gender mainstreaming. However, there is no designated department to drive the agenda. The Ministry received approval from the Public Service Commission on 24 November 2020 to recruit a Director and a Senior Executive Assistant who will be housed in the Permanent Secretary’s office to lead the Gender Mainstreaming Department. The recruitment is subject to Treasury allocation of resources. The drive to create this post is also in support of the Devolution Agenda, the National Development Strategy and Vision 2030.

Staffing, office space and equipment:

Human resource complement of the Ministry is at 2 290. The area’s most in need of staff are Matabeleland North and Matabeleland South. The Ministry commends the Treasury for supporting the upcoming appointments in the two regions of 10 staff members per province. However, the Ministry is still experiencing human resource challenges at district and ward level were grassroots activities take place. There is a deficit of community development officers and ward coordinators. At a time were national policies are demanding decentralisation the Ministry requires a boost in its staff to meet the demands of rolling out the NDS 1, Devolution Agenda, Community Development Policy and  SMEs.

 The aspect of work space environment for Ministry staff nationwide is deplorable. The existing office spaces have limited office equipment from furniture to stationery supplies. Treasury allocated ZW$100,000.00 for printing equipment against a request for ZW$200,000,00 ,yet access to information especially at district and ward level is largely distributed by print media. The office space situation is dire at districts and ward levels .In some instances officers have no office space at all, they operate from other Ministry offices. The impact of this is poor performance of Ministry work. The Ministry also acts as the first port of call for women facing violation of their rights and it has been difficult to engage on confidential matters in the absence of private space. This subjects survivors of GBV, widows and women in distress to secondary trauma.

4.1.2 Programme 2 - Women Empowerment, Gender and Community Development:

• The Ministry would like to acknowledge the support towards the gender mainstreaming programme in which more than what was bided for was allocated resulting in a 105% allocation.
• The Ministry would like to thank Treasury for the additional $ 500 000 towards the linking women to business markets.
• The Ministry would like to acknowledge the recognition of GBV and allocating resources as requested.
• The Ministry would like to thank Treasury for supporting infrastructure development for women to do business at a rate of 74,8% against the requested allocation. This will enhance sustainability for women markets.

The impact of budget variances

Inadequate resources for women empowerment projects:

 The women empowerment programme is funded through the Women Development Fund and the Women’s Bank. The table below shows the budget variances.

Table 4: Budget variances for women economic empowerment

LOAN FUND	BUDGET BID	ALLOCATION	% VARIANCE
Women Development Fund	100,000,000	90,000,000	10%
Women’s bank	450,000,000	250,000,000	55.6%

Source 2021 Treasury versus Ministry Budget Allocations

The Women Development Fund (WDF) was allocated ZW$90 000 000 against the Ministry bid of ZW$100 000 000 giving a ZW$10 000,000 shortfall. The Ministry target is to support 200 women businesses and target 5000 project funded groups respectively. With a shortfall of 10% only 120 women can be supported. Under the WDF, the Women Development Fund has been the backbone of women economic empowerment at community level in the Ministry. With the increase in extreme poverty measured based on food poverty line of US28,30 per person per month (Zimstats &World Bank, 2019) which is anticipated to have worsened with COVID-19 in 2020,women need the support most to survive in 2021. Extreme poverty remains higher in rural areas than urban poverty. It is imperative that the WDF be administered as initially budgeted for.

From 2017-2020 the Women’s bank was allocated almost half of what the Ministry bided for giving a 55,6% variance. The Ministry bid for ZW$450,000,000 was informed by RBZ pronouncement regarding minimum capital requirement for deposit into microfinance institutions like the Women’s Bank. The budget allocation indicates a shortfall of ZW$200 million which has serious going concern implications for the Bank. The Women’s Bank which is the first such initiative in the SADC region is a model for women economic empowerment that SADC countries are anticipating a good practice that can be replicated in the region. It is important that the Bank can continue to provide capital for women businesses in agriculture, tourism, mining and manufacturing.

Limited funding for GBV institutional support services:

Treasury has supported most of the requested budget for GBV program. However, the unallocated ZW$15million component is also key to the sustainability of GBV response by the government. The government has had to rely on statistics from partners about GBV due to lack of own support services in the form of One Stop Centres. In the 2020 Budget there was a request to build a One Stop Centre in Matabeleland, in 2021 the request is back focusing specifically on Matabeleland North and Chipinge. The selection of sites is based on assessing the lack of One Stop Centres in these areas and shelter. For instance, Chipinge suffered the Cyclone Idai and there were no shelters and One Stop Centres to cater for survivors. The nearest shelter was in Murambinda run by Musasa Project. As at November 2020, Musasa Project recorded 37 152 GBV cases broken down as follows;

Table 5: GBV cases as at 21 November 2020

GBV service	Totals 2020 as at 21 November
District Offices	2857
Shelters	4752
One Stop Centres	7754
Mobile OSCs	153364
Call centres/phone in	6425
Total	37152

Source: Musasa Project GBV Database

The cost of gender inequalities affects directly and indirectly National development agendas. The gender gap of providing institutional costs to one stop centres and building one stop centres is a gender inequality cost. As more women fail to access GBV services, more women need direct support from government. Adequate budgeting for GBV is reducing costs for the Government.

Community Development:

The community development fund is one of the unique funds that meet the needs of the poorest in local communities, especially in rural areas. The fund is also easy for communities to access. With the increase in extreme poverty in the rural communities and the rise of urban poverty, the Zimbabwe Community Development Fund is critical to support women and men to engage in entrepreneurship activities .The allocation of 65million against 80million will limit the geographical coverage of this fund. The Ministry target is to fund 200 projects. A further budget shortfall of 91,7%  toward developing skills in entrepreneurship, agriculture, marketing and manufacturing for communities undermines the efforts of the Ministry. We commend the progressive allocation of resources towards infrastructure in the form of craft centres for marketing products in the community. However, the allocation left out Chapota -Mbire which is under the National Priority areas and has been pending for the past 2 years. Treasury also left out Golden Ville and Biriri craft centres which are on high demand in the provinces. The overall budget allocation towards community development does not resonate with the LEAVE NO ONE BEHIND Agenda.

4.1.3 MSMEs and Cooperative Development: What are the budget challenges?

The Budget for SMEs has drastically reduced from 62% in 2020 to 47% in 2021 allocation of what the Ministry bided for. The reduction is not in conjunction with the increased demand for MSMEs as a major source of income for the general population of Zimbabwe.31% of all respondents in urban areas operated a family business in 2020, 88% of those with a non-farm household business saw their revenue decline. The main reasons are; no or fewer customers, the usual business closed due to COVID-19 and could not get inputs or trade outputs (Zimstats PIECs survey 2020). In 2021 those who lost sources of income hope to recover through support from the Ministry.

The impact of the variance

Financial support to MSMES: The Ministry operates the SMEDCO .The Ministry bid was zw$947,200,000 and was allocated ZW$500,000,000 which is at most half of what they requested (52.8%).

The SMEDCO bid for $947 200 000 is to facilitate access to finance for MSME who are involved in value addition. MSMEs in the productive sector require high capital outlay to enable them to buy equipment and machinery. This is in line with the NDS1 that speaks to industrialisation for import substitution to create sustainable and decent jobs in the economy. The budgetary allocation will affect SMEDCO given that in addition to providing resources for on lending MSMEs, the corporation planned to upgrade its Information Technology Systems and undertake workspace development projects in line with its mandate, will be affected.

The SMEs cluster:

There is a drastic budget cut for the activity on cluster development. The Ministry bided for 136million and was allocated 40 million.The variance of 96million reduces the intended outcomes.As the nation marches towards Vision 2030, improving the productive capacity and productivity of MSMES is critical. The project is aimed at supporting MSMEs in key economic clusters such as clothing, leather and green energy with modern machinery and equipment. Targeted areas are Chiredzi, Gweru, Harare and Bulawayo. The programme is being used as a strategy to provide business development support to MSMEs with ease especially those doing manufacturing in line with MSME Policy on promoting productivity and competitiveness to MSMEs. The budget allocation caters for one cluster. Funding for the planned clusters positively affects development not only of the cluster members but also MSMEs and other service providers along the value chain.

Workspace for SMEs:

The need for MSMEs and informal sector workspace has been on the agenda for years with the Ministry pending adequate resource allocation by Treasury. It is also a priority issue for local authorities now than ever due to COVID-19 requirements for safe and healthy workspaces. Ministry intends to construct 3 factory shells in Bindura Chinhoyi and Lupane. The allocation of only 27% of what the Ministry bided for will not see construction of at least one factory take off to completion.

Business Management and Technical Skills Training:

The MSMEs sector lacks business and technical skills that are required for it to grow from hand to mouth to profit and income that contributes to GDP. The Training program covers technical areas such as quality control and standards, packaging and digital technologies. Providing business management and technical skills training for partners in the MSME sector is key to ensure the sector continues to grow in line with the thrust to graduate enterprises from micro small, and small to medium and medium to large. The limited allocation of resources to this programme of 15% of the Ministry bid will inhibit the Ministry’s capacity to adequately cover all the ten provinces in the country. We need to break the vicious cycle of skills gaps amongst MSMEs to underperformance and underproduction.

MSMEs Market and Trade Promotion:

Gaining markets including export for products manufactured by MSMEs is very key to achieve growth for the sector. The Ministry program seeks to increase access to markets for MSMEs by creating opportunities for MSMEs at national, regional and international market platforms for MSMEs to showcase their products. The 14% budget allocation against the Ministry bid will result in the Ministry struggling to fulfil its mandate. MSMEs have expanded their production capacity and Government needs to do more to ensure that they access markets using various channels including digital technologies.

Cooperatives bid:

          Cooperatives in Zimbabwe are characterised by conflicts, fragmentation, unregulated, and appear bogus to the public in Zimbabwe. Regularisation of cooperatives according to the Cooperatives Act and providing the requisite knowledge and skills to undergo the governance processes of managing a cooperative is important. The business of cooperatives can only thrive if trust is restored through proper transparency and accountability mechanisms put in place. The Ministry desires to strengthen the governance system of cooperatives as they play a critical role in all sectors of the economy and the social strata. The non-allocation of resources towards the Cooperative fund will cripple the efforts to support initiatives in fisheries as a viable business venture. The Fund needs to at least take off. However, the limited budget allocation will only serve to maintain the status quo of cooperatives in Zimbabwe.

4.1.4   Recommendations from the MWACSMED

The 2021 budget will operate under the new normal which means the socio-economic impacts of the Covid19 pandemic remain a threat. In that context, it remains critical for the Ministry to receive a budget allocation that will allow provision of social safety nets, boost economic recovery and create sustainable mechanisms for marginalised women, men, boys and girls in Zimbabwe. Towards Building Resilience and Sustainable Growth, the following recommendations are provided:

1.             Overall Ministry budget: On the overall, the Ministry’s budget should be increased from the current 39,8% of what it bid for to at least 75%. This will allow the Ministry to undertake meaningful initiatives and reduce the thinly spreading of resources which obviously undermine greater impact. Failure to provide additional budget tantamount to failure of the Ministry to effectively deliver 2021 outcomes.
2.             Addressing office space, office equipment, staff compliment and staff capacity development: The Ministry needs to resuscitate GENDER development in the Ministry. The support towards a Gender Director and Assistant is a cost-effective starting point as opposed to a whole department and decentralisation. The decentralisation of the M and E department is critical to deliver expected results under national programs like NDS1, Devolution and Ministry mandate. Addressing the dire need for office furniture and equipment of all Ministry offices nationwide is also critical. Therefore, filling the resource gap of 81% towards policy and administration budget is important.

 iii.            Inadequate funds for women economic empowerment projects:

 Treasury should reconsider reallocation of the 10 million back to the Women Develop Fund. This will allow the Ministry to fund the targeted 5000 projects in 2021. Similar, for the Women’s Bank to continue to exist a reallocation of the 200million back for the bank will raise enough funds to capitalise the bank at 450million as advised by RBZ.

1.  GBV support services: The need for institutional support services for GBV can never be over stated. Treasury needs to consider a budget towards the construction of one stop centres starting with Chipinge and Matabeleland North. An allocation of 15 million will close the existing resource gap for one stop centres.
2.             Community develop program: This program experienced huge budget cuts in critical areas for community development like funding projects , provision of skills and establishment of markets. Treasury should consider reallocation of the 15million back to the Community Development Fund for the Ministry to support the 200 projects as targeted for 2021. Further, consider allocating at least 60% of the Ministry bid which will amount to 12million thus will close the existing resource gap for skills development. An additional 32 million is needed to reconsider the development of Chapota-Mbire, Gold Ville and Biriri craft centres at Provincial level.
3.  MSMEs financial support: SMEDCO is a critical fund managed by the Ministry for community development. Allocation of 500million is inadequate. The Ministry requests Treasury to reconsider the initial bid of ZW$ 947 200 000.

vii.            MSMEs work space: The demand of workspace is growing every day as the economy grows more and more informal. All this is in line with the International Labour Organisation (ILO)’s Recommendation 204 of 2015 on “Transition from the Informal to the Formal Economy”. COVID-19 WHO guidelines require safe and healthy work spaces. The Ministry is currently seized with prioritisation of 3 factory shells in Bindura, Chinhoyi and Lupane. Construction for 1 factory requires ZW$182 712 093 million dollars. The current budget allocation of 500 000 000 million will not construct 1 factory. There is need for more funds amounting to ZW$398 136 280 million.

viii.            Business Management and Skills training: To break the vicious cycle of poverty women and men in communities need capacity development towards entrepreneurship. The current budget support needs to be upgraded from 15% of the initial bid to at least 60% for effectiveness. Capacity development is a sustainable tool that resonates with the NDS1 agenda.

1.  MSMEs market and trade promotion: MSMEs continue to be creative and develop local products that require markets to realise their full potential .Export markets are key to the growth of the sector. The current budget needs to upgrade from 14% of the Ministry initial bid to at least 70%  given the much-needed export earnings in the country.
2.             Enhancing the potential of Cooperatives: For any business venture to realise its full potential, it requires governance systems in place and financial resources. The non-allocation of resources to the Cooperative fund needs to be reconsidered. The limited resource allocation to improving governance for cooperatives also needs to be reconsidered by Treasury. The Ministry welcomes more budget support in this area.

PART 4B - The Gender Commission

4.2    The Commission priority areas for 2021 include:

The Zimbabwe Gender Commission would like Treasury to acknowledge that its 2021 budget is more focused on programming rather than administration as portrayed in the 2020 nudget. However, the budget concerns that were reflective of the 2020 budget needs still remain a priority concern for the ZGC. The budget allocation remains at 64% of what they initially bided for. The concerns of office space , equipment and vehicles remains unaddressed. The demand for ZGC services are high yet the Commission remains invisible to the general populace in the rural areas. These key aspects require some considerations and attention for the Commission to be able to fulfill its mandate. The following is noted:

Program 1: Governance and Administration: Office space: there was a budget bid of ZW$24,000,000 to allow the Commission to purchase an office building which is rather cost-effective than renting offices to the tune of ZW$300,000.00 per month. Already, the rentals are expected to increase by 200% in January 2021.The Commission will require $ZW7,200,000,000 on rentals for 2021. Therefore,require an additional resource of 7,176 000 000 for 2021 rentals from the initial bid amount. This means procurement of the office building is cost effective and sustainable for Treasury and ZGC. Thus, Treasury should consider allocating the ZW$24million for procurement as initially requested.

Table 6: ZGC breakdown of office costs

	PAX House (current premises)
Current rentals / month	ZW$300,000.00
Rentals as at Jan 2021	ZW$600,000.00
Rentals per year	ZW$7,200,000,000
Variance	ZW$ 7,176,000,00

Source: ZGC

Office equipment and vehicles: The ZGC is now close to reaching its staff compliment for the Secretariat, implying that there will be increased need for office furniture like computers, laptops, desks and chairs. Further transport for the ZGC remains a challenge and has an impact on ZGC visibility as they do their work. The Commission expressed that for the past 5 years they have been hiring vehicles for programming which amount is more expensive than buying vehicles. The work of commissioning inquiries and investigation requires nationwide travel in fulfillment of the Commissions Constitutional mandate. With a variance of 56% on finance, administration and human resources, Treasury could consider rising to an 85% allocation to allow the ZGC to operate at its full capacity.

Considering the rate of inflation, it still remains imperative that Treasury considers purchasing an office building for the ZGC as opposed to paying rentals.

 Programme 2: Gender Equality and Promotions:

Sub-program: Monitoring and Research the Commission received 71% of its bid. The focus under this programme include activities in of the following:

1.                     Periodic gender audits
2.                     M and E compliance with gender equality provisions

                                         iii.                    Facilitating engendering of Constitutional and electoral reforms

1.                     Develop Women Mentorship Programme
2.                     Develop Sexual Harassment Strategy
3.                     Baseline surveys in identified sectors

                                      vii.                    Conduct Annual  National Gender Forum

To enhance this ZGC visibility activities will be decentralised to ensure that from grassroots levels to national levels there is effective participation of women and men. Activities like the annual gender forum are proposed to be decentralised at provincial level. Each province conducts an annual gender forum which then feeds into the main annual gender forum that will provide platforms for all 10 provinces to participate. The decentralised approach of activities will require more resources to engage at the different levels. Treasury to consider additional resources for this programme.

4.2.1   Sub-program 2: public education and awareness, the Commission received 97%% of its bid. The bid was going to achieve the following  deliverables;

1.             Develop public education gender training manual
2.             Conduct provincial and district community dialogues

                                                 iii.            Conduct public awareness programmes and commemorations

1.             Produce information, education and commemorations IEC materials
2.             Procurement of one double cab vehicle

The resource gap will negatively affect the Commission in printing a limited number of IEC materials for distribution at Provincial and District Level. The Commission intends to produce and distribute 100,000 pamphlets in 2021 and the variance of zw$890,000,000 will not be able to meet the target of 30 000 pamphlets.In addition, this activity is also intended to address the visibility gap of the Commission as pamphlets will be distributed in all the 10 provinces down to districts and ward levels. To close the resource gap treasury may allocate the outstanding ZW$890 000.00 to meet the initial bid by ZGC .

Sub-program 3: Legal and Investigative Services on violation of rights related to gender, the Commission intended to undertake the following:

1.             National Inquiry on sexual harassment in Tertiary Institutions in all 10 provinces;
2.             Conduct hearings and field investigations

                         iii.            Carry out community legal consultations

1.             Provide legal advice and referral pathways
2.             Conduct mediation, conciliation and arbitration
3.             Procurement of one double cab vehicle

However, with the variance of ZW$13 530 000.00 the Commission will not be able to resource a fully operative survivor friendly complaints handling section. In addition, the variance will also affect the Commission in outsourcing legal services for any legal work required.

Furthermore, the Commission can now only conduct the national inquiry on sexual harassment in 10 institutions instead of all tertiary institutions.

The core mandate of the ZGC is to conduct national inquiry’s and investigate systematic barriers that hinder gender equality and women rights to be realised. Such investigations need to be of a quality that prevails in a court of law and can progressively influence law reform towards gender equality. It is imperative that adequate resources be allocated to this program .Treasury may consider additional resources to reach 85% of the initial bid which translates to ZW$32 300 000 thus an additional ZW$18 770 000 is required.

4.2.5      Recommendations from the Gender Commission

From the above it is clear that whilst the Commission received the bulk of its bid, the Commission will however experience challenges in the implementation and delivery on its mandate. Given the rise of gender inequalities, GBV cases in Commission focus on sexual harassment in both the formal and social sectors, it is critical that the momentum gained in 2020 by the Commission’s work be sustained in 2021 going forward. Evidence shows that lack of redress of gender inequalities and GBV undermines productivity and growth at all levels. Therefore, in fulfillment of the 2021 budget thrust on resilience and sustainable growth, the following is recommended:

100.             Office space: Treasury could consider rising to an 85% allocation against the initial bid to allow the ZGC to procure offices, office equipment and vehicles. This translates to ZW$56 100.00. An additional ZW$19 100 000 is requested.
101.             An increase in the budget support to cover the following shortfalls in programming:
102. ZW$12 300 000.00 under research and monitoring; and,
103. ZW$890 000.00 under public education and awareness; and,
104. ZW$18 870 000.00 under complaints handling and investigations related to gender.

Overall recommendation: Given that the budget is in Zimbabwean Dollars in an inflationary economy, it may be economically prudent for the Ministry of Finance to undertake a mid-term review of the 2021 Budget earlier, so that the Budget remains apt.  Additionally, resources should be disbursed to Ministries as soon as it comes into Government’s coffers. Thank you Madam Speaker.

          HON. T. MLISWA: On a point of order.

          THE HON. DEPUTY SPEAKER: What is your point of order Hon. Mliswa?

          HON. T. MLISWA: My point of order Madam Speaker is, I see that through the Administration of Parliament, we see all these reports being prepared and when they come here, they are told to summarise. I think it is important so that we do not waste people’s time; we come up with a way of just doing a single paper.  Really, we are supposed to talk about the whole report Madam Speaker while we are here but now I see it has become a tactic and a strategy in this Parliament that let us summarise, which really takes away all the effort and the time people would have been put.  So, to me we cannot continue like this.  These are Chairpersons.  When the Chairpersons ….

          THE HON. DEPUTY SPEAKER: So are you suggesting that they should read the whole report?

          HON. T. MLISWA: Whether they like it or not, every report must be written in full because the Chairpersons sit down; they waste taxpayers’ money, not to come here and be reading reports for five minutes.  What for?  Let us change the matrix.  Full reports must be read – [HON. MEMBERS:  Hear, hear.] – We cannot have short cuts.

          THE HON. DEPUTY SPEAKER: Thank you Hon. Mliswa. I think other Hon. Members are in agreement with you.  So, the reports must be read in full.   

          HON. P. MOYO: Thank you Madam Speaker.  I stand to present this report from the ICT Portfolio Committee. I will go straight to what is important.

          Overview of the Ministry of Information, Communication, Technology and Courier Services

The Ministry of Information, Communication, Technology and Courier Services, is responsible for developing appropriate policies and strategies that seek to enhance the provision of ICT, telecommunications, cyber security and courier services in Zimbabwe. The Ministry aims to develop an enabling environment for the creation of a knowledge society that transgresses across all levels of the society through exploiting the potential of Information, Communication, Technology and Courier Services for sustainable socio economic development.

The programme areas are as follows:

• Policy and Administration responsible for developing an enabling environment for the creation of a knowledge based society , spearhead the development of appropriate regulatory frameworks that facilitate the promotion of information, communication technology, championing and promote ICT literacy and utilisation;
• Information, communication, technology development and promotion responsible for implementing government ICT programmes.

The Ministry’s key result areas are to promote the development and use of Information Communication Technology and this is accompanied by the following goals:

• Improve access to ICTs
• Improve use of ICTs
• Increase ICT awareness, knowledge and skills

The Ministry’s intervention strategies for 2021-2023 include the following;

• Development and imparting of appropriate ICT skills within the public sector
• Implementation of the National Data centre
• Enhancement of PFMS coverage
• Facilitation of the deployment of passive infrastructure
• Implementation of Last mile connectivity
• Promotion of infrastructure sharing among telecommunication companies
• Establishment of information access centres
• Establishment and maintenance of National systems

This report is being prepared by the Portfolio Committee on Information Communication and Technology within the context of the Ministry of Information, Communication, Technology and Courier Services programme areas. The Committee will analyse the 2021 National Budget Statement in terms of adequacy of resource allocation and interventions in the Information, Communication and Technology sector.

2.                State of the ICT sector in Zimbabwe

The current COVID-19 pandemic has shown that information, communication and technology is the new frontier in facilitating economic transactions under the “new normal”. In view of lockdown restrictions the sector has provided critical connectivity and resilience, facilitating work-from-home arrangements, e-commerce, as well as keeping individuals and societies connected and informed, with access to essential services during mandated social isolation. Thus digital technologies and services have proven that they are enablers of sustainable development and inclusive growth. As a result, many telecom players providing broadband benefitted from the surge in the traffic of data.

In the second quarter of 2020 mobile data and internet traffic grew by a record 56.2% to record 10,407 Terabytes (TB) from 6,661 Terabytes (TB) recorded in the first quarter of 2020.The growth in mobile internet and data usage was largely attributable to increased telecommuting due to the Covid-19 restrictions ( POTRAZ Q2 report). The 2021 national budget estimates that whilst the economy is expected to contract by 4.1% by year end, Transport and Communication sector is set to increase  by 12.9% in 2020 on the back of  marked increase in internet traffic, on the other hand the sector is also expected to grow by 3.2% in 2021(pp 27, National Budget Statement).

3.                2020 ICT budget performance

In order to improve access of ICT services, the Budget highlighted that Government will facilitate the deployment of broadband infrastructure and investments in Last Mile Connectivity by industry players that will ensure affordable, accessible, ubiquitous and reliable ICT services that support an inclusive digital economy (pp 141;National Budget Statement).  The Ministry of Information, Communication, Technology and Courier Services highlighted that its major achievement in 2020 has been the maintenance of an up time of the PFMS and other national system at 98%, provided technical assistance and related ICT equipment for the paperless Cabinet, developed the document management system, configured secondary Government email application under the PFMS system to enable Government officials to use the Government domain, established virtual communication platform as a COVID-19 containment system, setting up of COVID-19 command centres, established Mobile Private Network for the work from home programme, established 7 community Information Centres against a target of 20 and established 11 ICT school labs against a target of 100.

a.    Administrative unit

The Ministry of Information, Communication, Technology and Courier Services has only two main departments namely, Policy & administration and the information, communication, technology development and promotion and these programme areas received disbursements of less than 50% for the nine months to September, 2020 with overall budget disbursement at 46.9% of the  targeted budgetary allocation for the year. The Information, communication, technology development and promotion department which is responsible for implementing Government ICT programmes accounted for 71% of the total disbursed amount towards the Ministry of Information, Communication, Technology and Courier Services. The low level of disbursements is contrary to Government’s commitment towards modernisation of Government services and embracing the digital economy. Whilst Government is encouraging embracing ICT to improve efficiency in the economy it’s not walking the talk as evidenced by low disbursements towards the Ministry responsible for implementing ICT projects.

Table 1: 2020 Budgetary Outturns for Ministry of ICT by administrative unit

	Target	Actual (As at Sep)	% Disbursed	% Share of Total Disbursed
Policy and administration	34,832,000	16,393,139	47.1%	29.0%
Information, communication, technology development and promotion	85,828,000	40,213,762	46.9%	71.0%
Total	120,660,000	56,606,901	46.9%

b.    Economic classification

With regards to budget performance by economic classification, disbursements towards compensation of employees has been relatively high and above target compared to other expenditure line items necessitated by high inflation and cost of living. Whilst expenditure towards operational costs accounted for 41.2% of disbursed amounts, disbursements towards the line expenditure have been relatively low with only 51% allocated amount having been disbursed in the nine months to September 2020.  This has resulted in the Ministry accumulating arrears to various service providers to the tune of ZWL$49.26 million.

Table 2: 2020 Budgetary Outturns for Ministry of ICT by economic Classification

	Revised Estimates	Actual (As at Sep-2020	% Disbursed	% Share of Total Disbursed
Compensation of employees	6,665,000	8,572,853	129%	15.1%
Use of goods and services	45,635,000	23,333,808	51%	41.2%
Current Grants	1,300,000	760,941	59%	1.3%
Transport Equipment	9,600,000	-	0%	0.0%
Other Machinery and equipment	49,760,000	16,239,299	33%	28.7%
Capital Grants	7,700,000	7,700,000	100%	13.6%
Total	120,660,000	56,606,901	46.9%

4.    2021 Budget analysis

To systematically exploit the potential of Information, Communication and Technology for national development and transformation, the Government of Zimbabwe through the National Development Strategy (NDS1) set to facilitate achievement of an e-enabled economy where all sectors embrace ICT to improve efficiency through exploiting opportunities that ensure a conducive business environment that enables access to ICT services through putting  in place measures to develop smart programmes such as smart Government systems, smart agriculture, smart health and smart transport and safe cities (pp130; NDS1).  Under the National Development Strategy the expected sector outcomes includes; improved access to ICTs, increased ICT usage, improved ICT skills, increased consumer satisfaction and protection on use of ICTs and increased investment in ICTs.

The Budget highlighted that priority will be on implementation of measures that create a conducive environment for private sector investment, full implementation of ICT infrastructure sharing, as well as full roll out of the e-Government programmes(pp 141; National Budget Statement).Whilst an amount of ZWL$1.97 billion is being allocated towards the Ministry of Information, Communication, Technology and Courier services, total funding resources towards government ICT interventions during 2021is estimated at ZWL$ 8,004,291,000 with an estimated ZWL$ 4.14billion from vote appropriations and ZWL$3.86 billion through various government departments (pp142; National Budget Statement).

As part of the 2021 priority infrastructure projects the government has earmarked ZWL$7.959 billion towards building physical and technological infrastructure, as well as requisite institutions and capacities; the amount accounts for 5.7% of the proposed overall support under the 2021 Infrastructure Investment Programme. 51.4% of the proposed funding for priority projects in the ICT sector will be coming from government whilst 30.3% will be financed through loans and the rest from own resources and statutory obligations(pp 124; National Budget Statement). Targeted interventions for the ICT sector in 2021 include , broadcasting digitalisation migration projects, E-government flagship projects, upgrading and maintenance of national systems, Impilo Electronic Health Management System, smart policing, Community Information Centres(CICs) and Computerisation of Schools.

Figure 1: Funding mix for 2021 ICT priority infrastructure projects

2021 Budget allocation

In analysing allocations towards any particular vote, The Committee takes note of the following:

• Budget allocations are made largely from the Consolidated Revenue Fund. This is the Fund funded predominantly by the revenue measures which more predictable and within the control of the Ministry of Finance and Economic Development. The total available budget from the Consolidated Revenue Fund for 2021is estimated at about ZWL$411 937 300,000
• In addition to the Consolidated Revenue Fund, there are also some resources that come through Retention Funds. Retention Funds are mainly fees, fines, levies and rentals which Government Departments collect from economic agents. In 2021, the total retention funds are estimated at about ZWL$70,591,523,000.

In the 2021 National Budget, the Ministry of Information, Communication, Technology and Courier services was allocated ZWL$ 1.972 billion from the Consolidated Fund and a further ZL$4, 607, 663from the Retention Fund.  The 2021 budgetary allocation from the Consolidated Revenue Fund is an increase by 1,534%from the 2020 revised budgetary allocation. The increase in budgetary allocation is compounded by inflationary pressures and increase in available resource envelope towards the Ministry.  Just like in the 2020 National Budget, the Ministry of Information, communication, Technology and Courier Services continue to be ranked among the bottom 5 in terms of priority ranking of budgetary allocation towards Government Ministries in the 2021 National budget. The ranking is not consistent with Government’s pronouncement of modernisation Government services and facilitation of an affordable, accessible, ubiquitous and reliable ICT services that support an inclusive digital economy.

Table 3: 2021 Top 5 and Bottom 5 Budgetary allocations for Ministries

	Consolidated Revenue Fund (ZWL$)
Top 5
Primary and Secondary Education	55,221,000,000
Health and Child Care	54,705,000,000
Lands, Agriculture, Water, Climate and Rural Resettlement	46,259,000,000
Transport and Infrastructural Development	30,064,400,000
Defense and War Veteran	23,754,000,000
Bottom 5
Information Communication Technology and Courier Services	1,972,000,000
Environment, Tourism and Hospitality Industry	1,786,600,000
Energy and Power Development	1,641,000,000
Information, Publicity and Broadcasting services	1,479,000,000
Mines and Mining Development	1,399,000,000

Trend in Budgetary allocation

Trend in the share of allocation towards the Ministry of Information, Communication, Technology and Courier Service over the past 10 years shows that, the amount of resources in relation to the total national available resources has averaged 0.19% between 2010 and 2020.  The budget allocation for 2021 towards the Ministry accounted for only 0.46% of the total appropriation for 2021, the figure is comparable to other regional countries such as South Africa and Zambia.  In South Africa the Department of Telecommunication and Postal services was allocated 0.09% of the National Budget for the 2019/20 fiscal year whilst in Zambia allocation towards the Ministry of Transport and communication accounted for 0.64% of the 2019 National Budget and these figures are expected to increase in view of the Covid-19 induced use of ICT products and services.  However because the country is trying to catch up with other regional countries in terms of ICT development, the budgetary allocation is too little as this has over the years been consistently been less than 1% of the National Budget, this shows Government’s lack of commitment to embrace the new digital age in socio and economic transformation.

Analysis of budget allocation by administrative unit

Relative to 2020, all the programme areas received substantially high increases in allocations with the Information, Communication, Technology Development and Promotion programme area increasing by 1,905% and accounting for 87.25% of the total resources allocated to the Ministry an increase by 16.12 percentage points from its share in the 2020 Budget (Table 4).  The increases seem to have been necessitated by both projected changes in inflation and Government desire to increase funding towards ICT infrastructure projects as envisaged by the NDS1.

Table 4: 2021budgetary allocations for programme areas compared to 2020

	2020 Revised Estimates	Share of total 2020	2021 Consolidated Fund	% increase	Share of total 2021
Policy and Administration	34,832,000	28.87%	251,400,000	622%	12.75%
Information, Communication, Technology Development and Promotion	85,828,000	71.13%	1,720,600,000	1,905%	87.25%
Total	120,660,000	100.00%	1,972,000,000	1,534%

Analysis of budget allocation by economic classification

All expenditure line items have more than doubled in the 2021 budget allocation taking into account the effects of inflation. Allocation towards Other Machinery and equipment increased by more than 3,000% accounting for 79.26% of the Ministry’s budget whilst employment costs for 2021 are expected to rise by 485.15% compared to 2020 and account for 1.98% of the ministry’s budget.

Table 5: 2021 Budgetary Allocations by economic classification

	2020 Revised Estimates	Share  of total 2020	2021 Consolidated Fund	% increase	Share of total 2020
Compensation of employees	6,665,000	5.52%	39,000,000	485.15%	1.98%
Use of goods and services	45,635,000	37.82%	153,000,000	235.27%	7.76%
Current Grants	1,300,000	1.08%	4,000,000	207.69%	0.20%
Transport and equipment	9,600,000	7.96%	183,000,000	1,806.25%	9.28%
Other Machinery and equipment	49,760,000	41.24%	1,563,000,000	3,041.08%	79.26%
Capital Grant	7,700,000	6.38%	30,000,000	289.61%	1.52%
Total	120,660,000		1,972,000,000	1,534.34%

Assessment of adequacy of Programme Budget

The committee also assessed the adequacy of the Treasury allocation in the 2021 National Budget relative to the Ministry’s aspirations. The Ministry sought to be allocated ZWL$4.385 billion, (excluding employment costs) to finance its programmes but was only allocated ZWL$1.972 billion which covers only 45% of its budgetary requirements. For operational expenses, the Ministry had sought an allocation of ZWL$190 million but allocated 76% of the amount and this has implications to the Ministry as it is continuously accumulating arrears to its service providers as the amount allocated do not allow for the Ministry to clear its arrears and fully implement its projects. On the other hand, the Ministry sought ZWL$4.195 billion for Capital expenditure (CAPEX) but was allocated ZWL$1.776 billion, which is only 42% of its CAPEX requirements. The ministry requested ZWL$2.8 billion for E-Government/Smart Government programmes which constituted 67.5% of the CAPEX bid but was only allocated ZWL$111 million (3.9% of the requested amount).  Given the urgency of cyber security threats the Ministry was also allocated ZWL$82 million for the establishment of an ICT Security Centre, which the Ministry felt was inadequate.

The table below compares the total amount allocated to the ministry and the ministry aspirations. The result shows that for its priority areas the ministry received far much less than what they have hoped for and thus they are heavily underfunded and mostly likely affect programme implementation.

 

Table 5: Allocations Compared to bid

	2021 Bid	2021Vote	% of bid obtained
	ZWL$	ZWL$
Recurrent Expenditure	-	196,000,000
Employment Costs	-	39,000,000
Good and services	190,000,000	153,000,000	76%
Current Transfers (ZARNet)	-	4,000,000
Capital Expenditure (CAPEX)	4,195,600,000	1,776,000,000	42%
o/wMaintenance of National Systems	20,000 000	703,800,000	3,519%
E-Government/Smart Government	2,810,900,000	111,000,000	3.9%
Computer Lab per School	451,000,000	410,000,000	90.9%
Establishment of Community Information Centres	82,000,000	82,000,000	100%
Total	4,385,600,000	1,972,000,000	45%

Recommendations

• The committee notes that the ministry’s programming areas are thin and their focus is limited to a few priority areas, with most ICT services and projects being done outside the ministry’s budget. The committee states that there is no reasonable justification for funding towards government ICT projects to be channelled through other line Ministries.  There is also need to allocate ICT budgets for the whole Government through the Ministry so as to maximise on the utilisation of resources.
• The Ministry of ICT and Courier Services requested ZWL$2.8 billion for E-Government/Smart Government programmes but was only allocated ZWL$111 million in the 2021 National Budget.  The Committee recommends that the Minister of Finance and Economic Development revise upwards the allocated amounts towards E-Government/Smart Government programmes to at least 50% from 3.9% of the requested amount bringing the total CAPEX budget for the Ministry to at least ZWL$3.070 billion and total budget for the Ministry to at least ZWL$3.377 billion. This will allow the Ministry to fully implement Government ambitious Smart Zimbabwe 2030 Master Plan.
• They should ensure timely and full disbursement of allocated funds to avoid delays in implementation of projects and accumulation of arrears.  The Committee recommends that budgeted allocations be timeously disbursed so that ICT programmes and projects are quickly concluded rather than remaining in the pipeline for some time.
• The Committee also recommends that the Ministry of Finance and Economic Development should avail resources to enable the Ministry of ICT and Courier Services to acquire new vehicles since the current vehicle fleet is quite old .This will be a cost saving measure as the ministry is currently being charged exorbitant prices for hiring vehicles, the costs of hiring vehicles each year is enough to acquire at least four vehicles.
• The Committee recommends that funds should be availed so that the Ministry will be able to provide necessary platform and infrastructure needed during this ‘New Normal’ as some people are working from home. Further, there is need to support schools especially those in rural areas with adequate resources so that students will continue accessing enough learning material even when learning from home.
• Budget allocations should allow for settlement of arrears by the Ministry as continuous accumulation of arrears affecting Service Level Agreements (SLAs) and maintenance services.
• The committee recommends that further funding should be provided for recruitment of more technical personnel as these are critical for the ministry to be able to deliver on its mandate. The ministry vacancy rate currently stands at 26.75 % of the establishment meaning that the ministry is not fully capacitated to monitor and implement Government ICT projects.
• There is need for all stakeholders to work together as a team and to have a work plan with clear projections and timelines to enable the ministry to meet its goals and objectives for different projects.  The Committee also recommends that there should be consideration for access to foreign currency in the procurement and maintenance of ICT equipment.
• The Committee also recommends that there is need for an ICT security centre to address the issues to do with cyber-crimes which are likely to rise as almost every sector has now gone digital. I thank you.

                HON. TONGOFA: I rise to present this report on behalf of the Portfolio Committee on Youth, Sport, Arts and Recreation.

1.           Introduction

The Parliamentary Portfolio Committee on Youth, Sport, Arts and Recreation plays an oversight role over the Ministry of Youth, Sport, Arts and Recreation.  The Ministry is mandated to transform the Youth, Sport and Culture into a vibrant sector that ensures equitable participation, social integration, economic empowerment and nation building for all Zimbabwean citizens.

The youth constitutes about 67% of Zimbabwe’s total population but they remain largely vulnerable due to various challenges; including high levels of unemployment, lack of access to low-cost funding for projects, market distortions as well as limited opportunities to participate in economic decision making. As such, The Ministry is seized with issues to do with youth empowerment in order to capacitate them to contribute towards economic growth and development. Once progress is made in this regard, the country will be on its way to achieve the aspirations of Vision 2030 of attaining an upper middle-income society.

1.1.        Functions of the Ministry

In order to deliver on its mandate, the Ministry of Youth, Sport, Arts and Recreation is charged with the following functions: -

1.             Formulate and establish policy frameworks to promote the development of Youth, Sport, Arts and Recreation;
2.             Institutionalize and enforce good corporate governance in Youth, Sport, Arts and Recreation programmes to attract investment and full participation of individuals and corporates;

 iii.            Formulate and implement strategies that ensure development and growth of Sport, Cultural, Creative and Recreation;

1.  Create an environment that supports and enhances the development of Youth, Sport, Recreation and the diversity of cultural expressions;
2.             Establish and administer a revolving youth, sport, arts and recreation fund to stimulate the growth of youth, sports arts and recreation industries;
3.  Capacitate youth, sport, arts and recreation clients/stakeholders through skills training to enhance high performance product and high quality goods and services;

vii.            Strengthen Youth, Sport, Arts and Recreation associations so as to achieve employment creation and poverty reduction; and

viii.            Promoting entrepreneurial skills development for Youth, Sport, Arts and Recreation.

1.2.        Parastatals and Corporate Bodies under the Ministry

The Ministry of Youth, Sport, Arts and Recreation is responsible for the following parastatals and corporate bodies: -

1.             Zimbabwe Youth Council (ZYC)
2.             Empower Bank

 iii.            National Arts Council of Zimbabwe (NAZ)

1.  National Gallery of Zimbabwe (NGZ)
2.             Sports and Recreation Commission (SRC)
3.  Zimbabwe National Boxing and Wrestling Control Board (ZNBWCB)

1.3.        Ministry Policy Intervention 2021 - 2023

Over the three-year budget cycle (2021-2023), the Ministry will purse the following strategies/ interventions in carrying out its function and delivering in its mandate: -

1.             Establishment of institutional mechanisms with the capacity to identify and nurture youth innovations;
2.             Creation of empowerment opportunities for the youth;

 iii.            Capitalisation of Empower Bank

1.  Decentralisation of the Zimbabwe Youth Council
2.             Development of effective enabling legal and policy framework for youth, sport, arts and recreation;
3.  Promote youth, sport and arts in economic development;

vii.            Provide communication, monitoring and evaluation of Ministry Projects and Programmes;

viii.            Implementing skills outreach programmes to ensure the marginalised are taken on board;

1.  Standardization of training institutions – Development and modernization of training institutional infrastructure, machinery and equipment;
2.             Establishment and equipping new cultural and creative centres and rehabilitation of existing ones;
3.  Promotion of social cohesion, sense of national identity and pride; and

xii.            Build research and documentation capabilities and capacities for arts, culture and heritage.

2. The 2021 National Budget

The 2021National Budget was presented to the National Assembly by the Minister of Finance and Economic Development Hon. Prof. Mthuli Ncube on the 26^th of November 2020 in accordance with section 28 of the Public Finance Management Act [Chapter 22:19] and Statutory Instrument (SI) 135 of 2019 on Public Finance Management (General) Regulations, 2019.

The budget was presented in the context of the National Development Strategy 1 (NDSI – 2021 -2025) and the broader Zimbabwe 2030 Agenda “Towards an Upper Middle-Income Economy by 2030” which are hinged on recognising the need for empowerment of women and youths. The NDS1 recognises the need to achieve sustainable economic development which is inclusive and equitable, ensuring that no one and no place is left behind. The Ministry of Youth, Sport, Arts and Recreation is a key institution responsible for inclusivity.

The 2021 National Budget targets a real GDP growth 7.4% in 2021, following the anticipated 4.1% decline in 2020. The average exchange rate for 2021 is projected at uS$1 to ZWL$80, while annual average inflation is projected at 134.8% in 2021, down from 654.9% in 2020.

The 2021 National Budget is to the tune of ZWL$421.6 billion, of which ZWL$131.6 billion is capital expenditures, representing 31.2% of the budget and 5.5% of GDP. Current expenditures are expected to consume ZWL$290 billion which is 68.8% of the budget and 12.1% of GDP. Government revenues are projected to be ZWL$390.8 billion, resulting in a budget deficit of ZWL$30.8 billion (1.3% of GDP) in 2021.

The key assumption for the 2021 National Budget include: -

1.             Recovery from COVID-19 pandemicand resumption of global economic activity;
2.             Firming international mineral prices, good agricultural season and resumption of tourism and trade;

 iii.            Macro stability reflected by stable currency and prices and recovery in domestic aggregate demand;

1.  Enhanced revenue collection and control of wasteful expenditures; and
2.             Domestication of value chains;
3. Analysis of the 2021 National Budget

Out of the total budget of ZWL$426.6 billion, the Ministry of Youth, Sport, Arts and Recreation received a total allocation of ZWL$3.49 billion, accounting for 0.81% of the total budget compared to 0.5% in the 2020 Budget.

In real terms using the current exchange rate of US$1 to ZWL$81.67, the Ministry’s 2021 budget allocation is effectively around US$42.82 million compared to US$20.31 million allocated in 2020 using the exchange rate of US$1 to ZWL$16.26 that was prevailing at the end of November 2019 when the allocation was made. The table below shows a comparison of the Ministry’s budget allocation for 2020 and 2021.

Table 1: Comparison of Budget Allocation for 2020 and 2021 in ZW$

Year	2020	2021
Ministry of Youth, Sport, Arts and Culture allocation	ZWL$330,187,000	ZWL$3,497,000,000
Percentage of Total Budget	0.5%	0.81%
Exchange rate (at time of budget announcement	16.26	81.67
Allocation converted to US$	US$ 20,309,826.23	US$42,818,660.46

The Ministry’s 2021 Budget allocation is directed towards 4 Programmes through which the Ministry will deliver on its mandate. The programmes are: Policy and Administration; Youth Development and Empowerment; Sports and Recreation Promotion and Development; and Arts and Culture Promotion and Development.

The total Budget Bid submitted by the ministry amounted to ZWL$22.028 billion against the allocated budget of ZWL$3.497 billion. As such, the Ministry was only allocated 17.46% of its total bid. This severely undermines the Ministry’s capacity to deliver of its strategic priorities. The table below shows the budget allocation by programme compared to bids submitted.

Table 2: Ministry Bids against Budget allocation

PROGRAMME	ALLOCATION	SALARY ALLOCATION	TREASURY ALLOCATION (EXCL SALARIES)	BUDGET BID (EXCL SALARIES)	SHORTFALL
Policy and Administration	806,500,000	365,750,000	440,750,000	1,376,688,329	935,938,329
Youth development	1,839,700,000	171,050,000	1,668,650,000	13,201,194,600	11,532,544,600
Sport and Recreation	528,600,000	14,100,000	514,500,000	4,096,873,460	3,582,373,460
Arts and Culture Promotion	322,200,000	13,100,000	309,100,000	2,689,137,400	2,380,037,400
Total	3,497,000,000	564,000,000	2,933,000,000	21,363,893,789	18,430,893,789

Table 2 above shows the amount of shortfalls per programme after deducting employment costs which are a fixed cost. The total shortfall of ZWL$18.4 billion is huge and this will incapacitate the Ministry to fully implement its projects.

The quality of funds allocated to the Ministry can be analysed in terms of type of expenditure supported. In the 2021 Budget, 32% of the Ministry’s Budget has been allocated towards capital expenditure. This is commendable will enable the Ministry to invest in capital items which by their nature facilitate business. Salaries account for 15% of the Budget. Again this is commendable as it is well below the recommended 30% employment costs to total income for Government institutions. Goods and services at 30% of the budget will support the smooth running of the Ministry’s day to day activities.

Current transfers and capital transfers account for a total of 24% of the Ministry’s Budget. These are amounts that are channeled to the Ministry’s Parastatals for their operations and capital expenditure. Figure 1 shows the breakdown of the Ministry’s budget by type of expenditure.

Figure 1: Allocation of the Budget by Type of Expenditure

The Youth Development and Empowerment programme was allocated the most resources, accounting for 53% of the Ministry total allocation. This is in line with the NDS1 thrust of empowering the youth to be productive in the economy. Policy and administration accounts for 23% of the Ministry’s Budget and this includes employment costs. Sport and Recreation Promotion and Development was allocated 15% of the budget, while the Arts and Culture Promotion and Development Programme received 9% of the Ministry’s budget. This shows that Treasury may not fully appreciate the importance of Arts and Culture and the Ministry needs to do more to promote Arts and Culture and ensure that its impact is understood. Figure 2 below shows the distribution of the Ministry’s budget by programme.

Figure 2: Distribution of the Ministry Budget by programme

 

The table below shows the budget allocations for the parastatals under the Ministry of Youth, Sport, Arts and Recreations.

       Table 3: Vote Allocations for the Ministry’s Parastatals

 

Parastatals/Corporate Bodies Allocation	2021	2020	% Change
Zimbabwe Youth Council (ZYC)	110,400,000.00	12,670,000.00	871.35%
EmpowerBank	250,000,000.00	50,000,000.00	500.00%
National Arts Council of Zimbabwe (NAZ)	72,000,000.00	4,351,000.00	1654.79%
National Gallery of Zimbabwe (NGZ)	78,000,000.00	8,277,000.00	942.37%
Sports and Recreation Commission (SRC)	88,400,000.00	9,149,000.00	966.23%
Zimbabwe National Boxing and Wrestling Control Board (ZNBWCB)	30,200,000.00	2,406,000.00	1255.20%

4. Committee Observations and Recommendations

4.1.        Engagement with Treasury

The Committee recommends that the Ministry of Youth, Sport, Arts and Recreation actively engages officials from the ministry of Finance and Economic Development. The engagement must be aimed at showcasing the Ministry’s programmes on the ground and highlighting their impact on National socio-economic development and contribution towards the attainment of vision 2030. Once Treasury appreciates the impact of the Ministry’s programmes, more funding will be channeled towards implementation of these programmes.

4.2.        Arts and Culture

In the 2021 Budget, Government recognises the importance of building necessary environment, infrastructure and relationships for developing youths, sport, arts, recreation and diversity of culture. To that end, Government launched the Cultural and Creative Industries Strategy 2020-30 (CCIS) which is a roadmap that guides the development and growth of the cultural and creative industries sector.

However, the Committee observes that in the Ministry allocation, Arts and Culture activities were not adequately funded. As an example, the Ministry’s bid for the creation of CCIS National Database was ZWL$40 million against an allocation of only ZWL$1.5 million.  No meaningful progress can be made in the development of this database and this will compromise the development of the cultural and creative industries sector.

The committee recommends that the Budget allocations should be in line with the budget statement and should prioritise issues that have been identified as important in the statement. This mismatch of budget allocations sets out the Ministry for failure in implementation from the onset due to inadequacy of resources.

4.3.        EmpowerBank

Empower Bank has the potential to contribute significantly towards youth empowerment in Zimbabwe. The bank was allocated is ZWL$250 million towards capitalization in 2021. Added to the current capitalization of ZWL$140 million, the Budget allocation brings the total capitalization of the bank to ZWL$390 million. Assuming an exchange rate of US$1 to ZWL$100 by end of 2021, the Bank’s capitalization will be ZWL$110 million short of the minimum capital requirement of ZWL$500 million (US$ 5 million).

The Bank also received ZWL$200 million in the 2021 Budget for provision of loans to youths against a bid of ZWL$800 million. This is inadequate and will not be enough to support youth projects.

The Bank is currently in its formative stages and is still recording losses due to embedded fixed costs. To this end, the Committee recommends that Treasury capitalises the Bank to reach at least the minimum US$5 million equivalent as well as provide more funds to channel towards youth development. This will enable the bank to start making profits as during the first half of 2021.

4.4.        Prioritisation of Budget allocations

The committee observed that the Budget has attempted to allocate some resources towards all the Ministry’s requirements. However, the funds are mostly insufficient to cover the budget items and will result in incomplete projects.

As such the committee recommends that the projects should be prioritised and ensure that some are taken to completion within the budget year. However, the is need to balance this with ensuring equitable distribution of resources across the entire country, taking into consideration the fact that other areas may have more need than others.

4.5.           Youth Empowerment

Youths are currently facing challenges in accessing low cost funding from financial institutions. The conditions linked to borrowing are restrictive for the youth as they do not have collateral required to secure funds. As such they often resort to unofficial sources of finance (chimbadzwa) which charge them exorbitant interest rates.

The Committee recommends that empowerment programmes should be designed in the form of grants rather than loans. Grants provide the youth the room to be creative and productive without the burden of repayment of loans and interest. Successful grant holders can then in turn empower other youths by contributing and investing in other startups. The process will need to be properly managed to ensure that the grants benefit youths across all provinces and sectors of the economy.

Creation and resourcing of a Youth Development fund, similar to the Women Development Fund becomes imperative. This fund should be adequately resourced.

Unlike the current scenario where youth funds are scatter in all the government departments and agencies, the Committee recommends that these funds be moved and be administered by the Ministry of Youth, Sport, Arts and Recreation. This would assist in ensuring for efficient and effective utilization of these funds specifically for the Youth.

The committee further recommends that a Youth desk be set up in all the Ministries for purposes of championing of all the youth activities and programmes as youth activities are cross cutting.

Further, the Committee recommends that Zimbabwe adopts a policy which require that Youths be represented in all boards of State Enterprises and Parastatals.

4.6.        Training Programmes

The Ministry of Youth, Sport, Arts and Culture is charged with operating Vocational Training Centers (VTCs) across the country to capacitate youths with skills required for specific practical work requirements, for example, welding and carpentry. Most of these VTCs are not in good shape and require rehabilitation and renovations. There is also need to establish VTCs in areas that currently do not have any.

The Ministry is also engaged in Skills Outreach Programmes across the country. These have been very high impact as the involve intensive training over a period of less than three months. This is a highly effective low cost training method which has the potential to impart critical skills to enable the youth to engage in business and specialised trades. The committee recommends the escalation of these trainings to cover more youths in more areas across the country.

4.7.        Nation Building

Sport, Arts and Recreation have a very important role of facilitating nation building. Once people gather together to play sport or enjoy arts and recreation, there is an opportunity to inculcate nation building. As such, the Committee recommends that the country takes advantage of sport, arts and recreation events to further nation building efforts.

There is need to engage Treasury to increase support to these events. Provision of funding for the complete rehabilitation of the National Sports Stadium will not only provide a venue for nation building events, but will also unclick revenue generation potential through gate takings.

4.8.        Disbursement of Allocated Funds

Over the years, the Ministry’s programmes have been compromised by the untimely disbursement of allocated fund. The Ministry has had to write several times to Treasury to request disbursement of funds that have been allocated in the budget.

The Committee, therefore, requires the Ministry to submit monthly and quarterly reports on amounts disbursed by Treasury, outlining how these have been used. This will not only support the committee’s oversight role over the Ministry, but also enable the committee to assist the Ministry to lobby for timely disbursement of funds.

4.9.        Monitoring and Evaluation

Monitoring and Evaluation provides important feedback on the efficiency of implementation of programmes and projects. The Audit function of the Ministry helps in monitoring and evaluation by ensuring that everyone adheres to agreed budgets and processes.

The committee recommends that the Budget should support all activities of the audit function in full to allow the department to undertake all planned audits in the Ministry and its parastatals. The auditor general’s office should also be capacitated to improve management of the country’s resources.

Parliament also needs to develop a robust monitoring and evaluation framework that’s can be adopted by all Government Ministries and Parastatals.

5. Conclusion

With the Youth population representing about 67% of the total population, it is critical that our national budgeting is also cognisant of the importance of adequately resourcing programmes for the Youth. Youth programmes has been either neglected or underfunded, thus, perpetuating the vulnerability of this special group of the population. As Government, addressing aspects negatively impacting on the youth alone, would imply dealing with 67% of the challenges affecting our population. Therefore, as the Committee responsible for Youth, Sport, Arts, Culture and Recreation, we implore the Executive to ensure the National Budget is youth sensitive, including other aspects like sport, culture, arts and recreation.

HON. E. NCUBE: Introduction

This report analyses Vote allocations made to the Ministry of Public Service, Labour and Social Welfare (MPSLSW); and the Public Service Commission (PSC). The mandate of the Ministry of Public Service, Labour and Social Welfare is to: promote fair labour practices, enhance labour productivity and access to decent jobs, enhance access to social protection system that promotes a decent standard of living and promote efficient, effective and accountable operations for the public service.

Whereas the Public Service Commission is mandated to collectively provide for the establishment and operation of the Public Service with institutions, systems, operations and personnel whose function is to execute the mandate of Central Government at National, Provincial and District levels and across different Sectors to achieve planned human rights based national development goals anchored in peace, security and safety of persons and property.

Methodology

The Portfolio Committee on Public Service, Labour and Social Welfare, after the 2021 Budget presentation by the Minister of Finance, engaged officials from the Ministry of Public Service, Labour and Social Welfare; Public Service Commission and representatives of other groups to hear their views on the 2021 National Budget Vote allocations.  The Committee sat to deliberate on the views received and came up with its own analysis of the 2021 Budget after an intensive cross-examination of Votes 3 and 26.

Analysis of the 2021 Vote allocation for the Ministry of Public Service, Labour and Social Welfare

The Treasury allocated the MPSLSW a total of ZWL$6,929,000,000 against an ideal budget of ZWL$22,851,915,655. This is only 30% of what the Ministry requires. However, there was a significant increase in the 2021 allocation from the 2020 allocation. The 192% increase from the 2020 allocation of ZWL$2,370,969,000 was informed by high levels of inflation, exchange rate and increased demand for social welfare services due to critical food deficit caused by the COVID-19 pandemic.

Table 1: 2021 vs 2020 Budget Allocations for the MPSLSW programmes

	2020 (ZWL$)	2021 (ZWL$)	Change  (ZWL$)	Change (%)
Policy and Administration	67,827,000	299,048,000	231,221,000	341
Labour Administration	108,402,000	549,505,000	441,103,000	407
Social Welfare	2,194,740,000	6,080,447,000	3,885,707,000	177
Total	2,370,969,000	6,929,000,000	4,558,031,000	192

Notes: 2020 figures are based on revised estimates

o   The increased allocation catered across all core areas that is Policy and Administration, Labour Administration and Social Welfare with 341 percent, 407 percent and 177 percent increases, respectively.

o   Given the increased demand for food support and other social welfare services emanating from the COVID-19 pandemic in an inflationary environment, the Vote allocation for the MPSLSW is a distant away from the ideal.

o   The whole of social welfare core area of the Ministry received an allocation of ZWL$6,039,516,000 excluding employment costs which is enough to mitigate food deficit but still falling short of the ideal budget.

o   Generally, there are significant variances between what was proposed as ideal by stakeholders during the pre-Budget consultations and what the Treasury finally allocated to the MPSLSW.

o   For instance, an important social welfare Programme, food deficit mitigation programme with arrears of ZWL$1,700,000,000, was allocated ZWL$1,700,000,000 while the ideal is ZWL$3,700,000,000. The variance of ZWL$2 billion is too large.

o   The major worry for the Ministry is lack of mobility. The treasury only allocated less than half of the Ministry’s submission (ZWL$267,000,000) for purchasing vehicles.

o   Other seriously under-funded areas include: acquisition of fixed capital assets, use of goods and services, Zimbabwe Decent Work Country Programme, labour migration, Tripartite Negotiating Forum (TNF), retrenchment Board, computerisation, labour market Bulletins, labour laws harmonisation, children in difficult circumstances, Disability support and social protection among others.

Box 1: MPSLSW priorities for 2021 - 2023

ü  Strengthening of the National Case Management System for the care and protection of vulnerable children including promotion of adoption and foster care

ü  Scaling up, review and strengthen inclusive social assistance across life cycle of vulnerable groups including comprehensive education support through BEAM

ü  Scaling up cash transfers to vulnerable households under Harmonised Social Cash Transfer

ü  Developing and implementing integrated information management system

ü  Developing retrenches database

ü  Operationalisation of the TNF Act and consolidation of social dialogue

ü  Develop labour market information system and register labour market institutions

ü  Crafting legal frameworks for Zimbabwe National Productivity Institute (ZNPI)

ü  Extending social security coverage to the informal sector and establishing unemployment benefit schemes

Identified gaps by stakeholders

The major concerns highlighted by stakeholders point to the inadequacy of the Budget allocations to provide adequate mobility of social workers, enough social safety nets, in particular, to adequately mitigate food deficit among the vulnerable groups (people with disabilities, the elderly and children among others). The Committee therefore noted that the Budget must do much more to address the plight of the vulnerable groups. Some of the identified gaps in the allocations to the Ministry include but not limited to:

The 2021 National Budget significantly underfunds acquisition of assets by the MPSLSW thereby negatively affecting mobility of social welfare workers leading to inefficient service provision. The treasury allocated too little for the purchase of vehicles, an allocation only enough to buy 39 vehicles out of the ideal 139. Additional funding to buy at least 60 vehicles may significantly improve social welfare services;

The budget allocated for assets in particular furniture is far short of what the Ministry requires in order to effectively implement devolution. More workers and offices are required in provinces for the successful implementation of devolution; the number of people requiring food aid and the market prices of food is a testimony that the current allocation is not enough;

The total amount earmarked for Children in Difficult Circumstances was far less than what was requested. Only ZWL$50 million was allocated from the ideal budget of ZWL$100 million;

The MPSLSW is negatively affected by continued use of a manual system and manual database. There is a problem of improper targeting and duplication of services due to lack of computerised database. The 2021 National Budget does not provide adequate resources for the computerisation process. For instance, the Ministry was allocated ZWL$20,000,000 for the social protection management information system against an ideal budget of ZWL$25,000,000;

While labour issues have become critical in the country, the National Budget continues to underfund areas dealing with labour administration. For instance, there is at least a 60 percent funding gap in the following: development of dispute resolution (ideal budget ZWL$15,000,000 and only got ZWL$6,235,000), National Joint Negotiating Council (ideal budget ZWL$5,000,000 but got only ZWL$2,049,000), Retrenchment Board (ideal budget ZWL$5,000,000 but only got ZWL$830,000), harmonisation of labour laws (ideal budget ZWL$5,000,000 but got ZWL$830,000), computerisation of labour cases (ideal budget ZWL$85,250,000  but only got ZWL$830,000), publications and publications and gazetting (ideal budget ZWL$5,000,000 but only got ZWL$830,000), and productivity promotion programme (ideal budget ZWL$26,000,000 but got ZWL$11,348,000); and food deficit mitigation is in arrears and this implies a non-avoidance of an upward review of this allocation.

The Parliamentary Committee on Public Service, Labour and Social Welfare however, applauded the Treasury for agreeing to increase the allocation to ZWL$6,929,000,000 from the initial figure of about ZWL$4 billion. In addition, the continued provision of public buses continues to lessen workers’ burden. Another welcome development is that the Treasury has also allocated ZWL$500,000,000 for the continued support of primary and secondary school girls with free sanitary wear.

The 2021 Vote allocation for the Public Service Commission

The Public Service Commission was allocated a total of ZWL$9,004,000,000 in the 2021 National Budget. This is a significant increase (496%) from the ZWL$1,509,660,000 revised estimate for 2020. About a maximum of 89.7% of the Public Service Commission vote was allocated to compensation of employees, a maximum of 3.8% to use of goods and services and a maximum of 6.4% to capital expenditure. The expenditure estimates are distributed as in Table 2:

Table 2: Expenditure ceiling

Expenditure head	Expenditure ceiling (ZWL$)
Compensation of employees	8,080,000,000
Use of goods and services	344,200,000
Other expenses	800,000
Acquisition of non-financial assets	579,000,000
Total	9,004,000,000

Of major concern is the smaller allocation relative to the ideal budget. The Commission was allocated about 2% of the proposed ideal budget of over ZWL$413 billion. However, by removing the ZWL$390.5 billion pension liability for the Public Service Pension Management Fund, the 2021 budget allocation for the Commission is about 39% of the ideal budget. The programmes allocations as a percentage of the ideal budget are presented in Table 3.

Table 3: Allocation against ideal budget

Programme	Ideal budget (ZWL$)	2021 allocation (ZWL$)	2021 allocation as percentage of ideal budget (%)
Corporate services	5,465,519,145	570,663,000	10
Human capital management and development	781,924,908	263,886,000	34
Pay and benefits	407,525,541,405	8,169,451,000	2
Total	413,772,985,457	9,004,000,000	2

Box 2: PSC 2021-2023 Priorities

ü  Institutionalise strategic planning and client service charters across the public sector;

ü  Develop and implement a culture change blue print;

ü  Set up monitoring and evaluation units in Ministries;

ü  Develop and implement monitoring and evaluation instruments;

ü  Devolve Ministry structures and engage citizenry;

ü  Operationalise the Corporate Governance Act in Ministries;

ü  Develop and implement a results performance management system;

ü  Develop and implement staff development programmes;

ü  Modernise Public service Academy Training;

ü  Strengthen Public Private Partnerships for infrastructural development;

ü  Promote research and development, build capacity in ICTs and expand ICT infrastructure; and

ü  Facilitate foreign exchange programmes.

The stakeholders noticed that the allocation for the Public Service Commission falls far short of the ideal requirements which points to the need to prioritise programmes and projects. Of major concert to stakeholders was the winding-off of retention funds. The recalling of retention funds may cause inefficiencies within the Public Service Commission and other Government departments as these retentions were used to close gaps in treasury delays in the release of budget resources and also used to anchor PSC decentralised structure.

The PSC Programmes that are likely to suffer from an inadequate budget were identified as follows:

o   Ensuring implementation of the National Development Strategy 1 programmes through inspection, monitoring and evaluation across

Districts; ICT modernisation of work place and entrenchment; Biometric authentication programme and upgrading of pensions and payroll systems;

o   Human capital training through the establishment of the Public Service

Academy; Capacitating accounting personnel for the International Public Sector Accounting Standards (IPSAS) compliant projects; and Strengthening non-monetary incentives and skills attraction, retention, development and management initiatives.

Another area with a major worry is the under-funding of the PSC programme on strengthening non-monetary incentives and skills attraction, retention, development and management initiatives despite very low remuneration for public servants.

The stakeholders also noticed the importance of paying special attention to people with disabilities and prioritising them in employment in the public sector as enshrined in the Constitution.

Committee’s Observations and Recommendations

The Portfolio Committee on Public Service, Labour and Social Welfare considered deliberated on the 2021 National Budget allocations for votes 3 and 26:

1. The Committee noted that the Treasury has moved to prioritise release of resources for social welfare and hence the MPSLSW should prioritise expenditures against releases. The MPSLSW must take more proactive measures to ensure that beneficiaries of social welfare programmes access grants on time. Programmes such as BEAM must be expanded. In addition, new entrants deserving to receive social welfare assistance must easily join the other recipients without a long waiting period;
2. The Committee recommends that Social Workers be capacitated to reach all vulnerable households in all provinces. Food aid must be expanded to cover wider areas. Social workers must therefore be mobile and the Ministry must be capacitated to easily reach all corners of the country and transport food to the final destinations. In this regard, there is need for more resources for the acquisition of vehicles (enough to purchase at least 60 more vehicles) and other fixed assets. In addition, decentralisation in the realm of devolution must be prioritised by the

MPSLSW;

iii.           The MPSLSW must prioritise computerisation of its systems such as the Social Protection Registry of all assisted vulnerable households. The Ministry must move away from using manual systems. This will not only help in reducing corruption and duplication of services but will also improve efficiency and facilitate Harmonised Social Cash Transfers and timeous payment. Corruption in the selection of the needy, in food, education and health can be monitored and controlled through computerisation. In this regard, additional resources (at least ZWL$5,000,000) once available may be directed towards a speed implementation of computerised systems of the Ministry;

1. Priority must be given to programmes that create a computerised database of the vulnerable households including a comprehensive database of the persons with disabilities.
2. As enshrined in the Constitution, the PSC must effectively prioritise people with disabilities in employment in the public service. People with disabilities must not be on the waiting list like others. The Government must domesticate the Convention on the Rights of Persons with Disabilities to give impetus to the country’s constitutional provisions (Section 22);
3. The Committee recognises that budget allocation towards social welfare is still like a drop in the ocean. The token provided to the very few people does not provide people a decent livelihood. Hence, it is important to expand coverage and increase the amount. Orphans and vulnerable children living in care homes must be supported adequately to achieve a decent livelihood. The ZWL$4,382,000 allocation for rehabilitation institutions is below the ideal budget of ZWL$6,520,000.

vii.          The Committee recommends the PSC to prioritise strengthening nonmonetary incentives and skills attraction, retention, development and management initiatives in this environment of very low salaries. Additional financial resources must be directed towards improving nonmonetary incentives in order to improve welfare of civil servants. The Government should reintroduce low-cost housing, improved transport allowances and vehicle loan schemes and provide cheap loans for all civil servants.

viii.        The Committee is worried about the increasing number of trained teachers and nurses who remain unemployed for more than two years after training. The Committee therefore recommends that the MPSLSW must prioritise establishing bilateral agreements (starting regionally) to export trained teachers and nurses to other countries. This will not only improve welfare within their households but will also improve export revenue of the country thereby improving the balance of payments;

1. Given the rising labour disputes in the country, the Committee recommends a speed establishment of a social contract. More Budgetary resources must be committed to the establishment of a social contract. The Tripartite negotiating Forum (TNF) must be capacitated and the Committee recommends the MPSLSW to consider these labour negotiation forums seriously; and
2. In terms of the paltry current pension schemes, the Committee recommends the PSC to speedily facilitate the movement towards a Defined Benefit Pension Management Fund. An increase of pension payment to ZWL$600 is not adequate for pensioners. The pension office must be resourced to ensure timeous payment of pensions. Government must clear the liabilities of the Public Service Management Fund.

Conclusion

The Budget must allocate more resources towards social welfare services. More funds must be availed to the MPSLSW including the food distribution costs in order to make sure that vulnerable households receive the required assistance. Although the 2021 National Budget recognises that the challenging environment facing the country has resulted in increases in the number of vulnerable households while the capacity of the existing social safety nets has equally deteriorated, the MPSLSW was only allocated about ZWL$6 billion against the ideal budget of over ZWL$20 billion.

The allocation is not adequate given the numbers of needy households. In addition, when distributing food, the Government must include all children’s homes, all homes of people with disabilities and all old peoples’ homes.

On the broader macroeconomic front, the Government should work towards maintaining a stable inflation and exchange rate in the economy so as to preserve the values that were allocated to the MPSLSW and PSC. If inflation is not checked it will affect all programmes and funds will become inadequate, which will leave the poor and other vulnerable groups the worst affected.

          HON. K. PARADZA: Thank you Mr. Speaker Sir.

The Ministry is mandated to promote, safeguard the national interests, image and influence of the Republic of Zimbabwe in the regional, continental and international arena and to protect the interests of Zimbabwean nationals abroad. In addition, the Ministry has a specific mandate to champion the re-engagement and promote exports which are key in stabilising the new currency and foster economic growth. Central, the Ministry is expected to support the country in the thrust towards rejoining the family of nations through:

 Engagement with the diaspora;

1. a)Intensification of re-engagements efforts with the E.U, US and normalizing relations with UK;
2. b)Implementation of treaties, e.g., African Continental Free Trade Area (AfCTA) and COMESA-

EAC-SADC Tripartite FTA;

1. c)Ratification and domestication of  all outstanding international treaties, protocols and agreements;
2. d)Rejoining the Commonwealth
3. e)Strengthening regional economic ties
4. f)Focusing on South to South cooperation
5. g)Promoting economic diplomacy, promotion of FDI International Trade (Zimbabwe is Open for Business)

          However, the following were noted as challenges which are impeding the Ministry in achieving its mandate:

• Some embassies abroad are dilapidated, while some  residences have been abandoned

e.g., Ambassador’s residence in New York, South Africa, Zambia and Mozambique.

• Non-payment of rentals is still a major threat; in some cases, staff have been evicted or locked out.
• Perennial salary arrears amounting to USD$ 20, 329, 168 (between September 2010 – October 2020) for both home-based diplomats and host nationals working in our embassies. Consequently this means Zimbabwe has been breaching international labour laws by not paying workers accordingly.
• Late payment of salaries as well as inaccessibility of these salaries. This has affected even the payment of school fees and medical bills for the staff and their families. Consequently these difficulties have  affected the morale of the staff within our diplomatic missions.
• Inadequate embassy vehicles. No representational vehicles, e.g., in Sweden and Cuba where they have resorted to the use of vans.

          In responding to the above challenges and repositionising the Ministry to achieve its mandate, through the budget, the Committee supported the Ministry to submit a budget totalling ZWL$55,153,030,910 (US$672, 597, 938). However, the Ministry received ZWL$9,352,196,000 (US$114,051,171) which reflect a shortfall of 83%. The following table showcase budget submissions from the Ministry and budget ceilings and ultimate variances.

 Table 1: Budget Submission and Allocated Funds

Descriptions	Submitted Budget (ZWL$)	Budget ceiling (ZWL$)	Variance (ZWL$)	Variance (%)
Compensation             of employees	1,800,000,000	2,631,000,000	831,000,000	43%
Goods & Services	10,906,273,200	4,525,000,000	-6,381,273,200	-59%
Subscriptions	2,874,756,860	712,196,000	-2,162,574,860	-75%
Acquisitions     of Physical Assets	38,929,218,790	1,484,000,000	-37,445,218,790	-96%
Foreign   Services Institute	642,782,060	0	-642,782,060	-100%
ZimTrade***	400,000,000	41,011,000	-358,989,000	-90%
Total	55,153,030,910	9,352,196,000	45,800,834,910	-83%
Total (USD)@82	US$672,597,938	US$114,051,171	US$558,546,767	-83%

 

ZimTrade figures were excluded in the final figure when adding because they are included in subscriptions.

2. RISKS AND IMPLICATIONS OF SHORTFALLS IN BUDGETS

 Specifically, the following risks are expected from the following omissions:

 (a) Limited Funding on ZimTrade Portfolio

          The President, H.E. Mnangagwa launched National Export Strategy and the National Development Strategy 1 which, combined, places emphasis of ZimTrade role in promoting exports and nation branding. The country is expected to grow exports from the current US$4.5 billion to US$7.3 billion by 2023. To meet the desired target, ZimTrade is expected to grow exports by a minimum of 10% per year. In addition, in line with devolution, ZimTrade is expected to assist all the ten provinces to contribute to national exports. This is a new thrust which requires funding.

          In addition, in recent months, ZimTrade has assisted the country in rebranding and in a number of cases, ZimTrade has accompanied the President to all the international forums and has exhibited on behalf of the country.

The fact that only 10% of the requested funds were allocated by Treasury, ZimTrade is constrained to achieve the set targets which will undermine the achievement of the goals set in the NDS1 and National Export Strategy.

 (b) Compensation of Employees

          The approved budget shows a variance of 43%. In view of limited funding in other cost centres, this positive variance will give the Ministry scope to virement resources.

 (c) Use of Goods and Services

          This heading has a shortfall of 59% (see table 1). A significant share of this budget line item are diplomatic missions which amounts to ZWL$2,400,000,000 (i.e., US$29,268,293). By virtue of the fact that there is an overall shortfall of 59% of the total budget requested, the risks which emerges from here are as follows:

• Continuous expulsion of officials in diplomatic missions;
• Legal suits since the diplomatic missions have contractual agreements with the landlords;  Bad country image;
• Restrictions to number of foreign missions/travels thereby slowing international reengagement;
• etc

 (d) Subscriptions

          This budget item has a negative budget variance of 75% (see table 1). This variance is worsened by the fact that the Ministry is in arrears for the 2020 COMESA and UN subscriptions which if not addressed the country risks being expelled from these groupings. More importantly this situation is negatively affecting the country’s image.

 (e) Acquisition of Non- Financial Assets

          This budget line only received 4% of the requested budget (see table 1). This budget item was aimed at renovating the diplomatic missions abroad, procurement of new fleet of motor vehicles, machinery and equipment and new buildings. In view of the above, the following are the implications:

• The diplomatic missions and motor vehicles will continue to reflect deplorable state which reflects badly on the country;
• The Ministry will find it difficult to establish new  embassies in Abu Dabhi, Ankara and Kigali.
• The Ministry will risk losing its land in Zambia, Tanzania, Addis Ababa and Abuja.

 (f) Exchange Rate Volatility

          The Committee noted that the budget is in ZWL which poses the risks exchange rate losses when the local currency depreciate. In view of the above, the Committee recommend that at the time of the approval of the budget the prevailing exchange rate be used as base and an upward movement will be accommodated by Treasury.

          CONCLUSION & RECOMMENDATIONS

          In view of the shortfalls of the overall budget by 83% and the fact that the Ministry of Foreign Affairs and International Trade utilises foreign currency in most of its activities as it drives the re-engagement agenda enunciated by the President, there is evidence that the Ministry will not achieve its targets.

          In addition, the Committee unanimously agreed that there is need to reaffirm on the following recommendations which were previously submitted during the pre-budget consultations:

(a)Government must provide budget support which will enable the Ministry to meet financial needs by diplomatic missions;

(b)            Treasury must provide budget, that is, ZWL$400 million, with a view of helping the organisation to deliver its mandate of promoting exports and nation branding;

(c)Additional resources are required with a view to equip the Ministry as it take a leading role in engaging the diaspora with a view to promote their participation in the economy which is key in mobilising resources for the NDS1.

(d)            More resources are required in order to capacitate the Ministry to deploy trade, tourism and information attachees to strategic areas and cities such as UAE, Ankara, Geneva, London, Brussels, Beijing, etc to;

(e)Government must peg the budget of Ministry of Foreign Affairs and International Trade in USD since the Ministry consumes a lot of foreign exchange in its re-engagement drive, trade negotiations and support to the diplomatic missions. This move will also help in locking in the value of money in the face of volatile exchange rates;

(f)  There is need for provision of sufficient budgetary support towards diplomatic mission with a view to clears salary arrears and also avoid a situation where current salaries are paid late;

(g)            Additional resources must be provided targeted at the procurement of new embassy buildings and renovating dilapidating ones;

(h)            There is need for additional resources for the procurement of motor vehicles and office equipment as well as furniture for the diplomatic missions.

(i)  The Committee placed significant emphasis on the need to consider building our own structures/buildings in countries where we have been offered land for example in Abuja, Lusaka, Cairo, Dodoma and Addis Ababa. This is expected to result in the reduction of rentals and create avenues for revenue generation in the medium to long term period;

(j)  In order to improve accountability and efficiency in the operations of embassies in foreign missions, the Committee highly recommend that the Ministry of Foreign Affairs should be given the authority to oversee the operations of their buildings/embassies in foreign land rather than having the buildings under the jurisdiction of the Ministry of Local Government;

(k)            Since over 60% of the expenditure of the Ministry of Foreign Affairs and International Trade is in the USD, coupled with the challenges of foreign currency faced over the years, the Committee highly recommends that the Ministry of Foreign Affairs and International Trade must be allowed to participate at the foreign currency auction floors with a view to ease access of foreign currency. In addition, the Committee highly recommend that the Ministry must be availed with foreign currency whenever it is required.

(l)  In order to raise resources for the Ministry, the Committee highly recommend for the promulgation of a Statutory Instrument which gives authority to the Ministry of Foreign Affairs and International Trade to make use of funds collected by Embassies for services rendered for example visa fees, emergency travel documents etc.

(m)         In view of tight fiscal space and subsequent financial constraints faced by the embassies, the Committee highly recommends to shut down/downsize or rationalise some of the embassies so as to free up resources which will be used to sustainably manage the country’s foreign missions;

(n)            Likewise, in view of tight fiscal space, the Committee highly recommend that the Ministry of Foreign Affairs and International Trade must consider and expedite the implementation of Public Private Partnerships aimed at construction of chanceries and other projects that embassies may deem necessary.

(o)            The Committee highly recommends that Treasury must expeditiously release allocated resources with a view to help the Ministry of Foreign Affairs and International Trade ease operational challenges.

          Based on the foregoing recommendations and the fact that the Ministry of Foreign Affairs and International Trade does not have parastatals under its purview which gives it additional funds, the Committee is humbly requesting the Minister of Finance and Economic Development award the Ministry its budget request of ZWL$55,153,030,910 instead of the budget ceiling of ZWL$9,352,196,000.

This request if fulfilled, will help the Ministry and the Committee to effectively deliver its mandate and mitigate against the following risks:

(1)            Poor country image over continuous expulsion of our staff abroad and poor infrastructures of embassies and motor vehicles;

(2)            Slow - down of the re-engagement drive on the back of shortage of funds;

(3)            Loss of land in Zambia, Tanzania, Addis Ababa and Abuja;

(4)            Possible expulsion from regional and international groupings such as UN, COMESA,  WTO and ACP due to an outstanding debt;

(5)            Missing the target of US$7.3 billions exports as a result of incapacitation of ZimTrade; and

(6)            Failure to meet the NDS1 targets considering the fact that ZimTrade and MOFAIT are key in the resource mobilisation trust.  I thank you.

                   HON. MOLEKELE: Thank you Madam Speaker.  I rise to give a post budget analysis on the Portfolio Committee on Health and Child Care.

Background

The Ministry of Health and Child Care’s mandate is to provide the highest standards of health care services to all Zimbabweans. Currently, the health sector is facing a number of challenges which have negatively affected the provision of efficient health care in the country. Some of these challenges include shortages of essential medicines, essential hospital equipment, medical consumables and drugs; inadequate ambulances and services vehicles; poor diet and overcrowding of patients; industrial action by doctors and nurses as well as infrastructure gap to provide basic health care interventions.

Methodology

         Following the presentation of the 2021 National Budget by the Minister of Finance, the Portfolio Committee on Health and Child Care engaged the Ministry of Health and Child Care and stakeholders to gather their views.  The Committee consolidated the views and came up with its own analysis of the budget.

HEALTH AND CHILD CARE BUDGET ANALYSIS

Overview of the 2021 budget

         The Ministry of Health and Child Care was allocated a total of ZWL$54.7 billion in the 2021 National Budget up from ZWL$6.459 billion allocated in 2020. This allocation represents a 746.96% nominal increase to what was allocated in the previous budget. It further represents a 12.74% share of the National Budget up from 10.15% achieved in 2020 and translates to 2.3% of Gross Domestic Product up from 1.9% achieved in the 2020 budget. To contextualise the budget allocation to the health sector, an analysis of the top ten vote allocations was made (see Figure 1). Allocation to the Ministry of Health was ranked second after Ministry of Primary & Secondary Education among all the vote allocations (see Figure 1). This implies a high level of government priority to the health sector.

 

Figure 1: Top ten vote allocations for 2021

 

Figure 2 shows the trends in the Ministry of Health and Child Care budget allocations and its share to National Budgets from 2010 to 2021. It illustrates a general decline in the share of the health sector to total national budget from a high of 8.6% in 2012 to 5.84% in 2018 before slightly recovering to 7.05% in 2019 and 12.74% in 2021.

Figure 2: Trends in Health and Child Care Budget Allocations (US$): 2010-2021

It is important to further note that the share of the health budget to total expenditure for 2021 slightly exceeds the Southern African Development Community (SADC) average of 11.3% but remains below the 15% stipulated under the Abuja Declaration for the delivery of quality health services.

Trends in per capita health spending

 

The 2021 Health Budget allocation of ZW $54.7 billion translates to US$ 42.34 in per capita terms, up from US$27 in 2020 (see Figure 3). Whilst this allocation slightly improved, it significantly falls short of the World Health Organisation recommended threshold of US$86. Further, allocation to the health sector is only 28.9% of the SADC average per capita health spending of US$146.29.

 Figure 3: Trends in per capita spending on health in Zimbabwe (2010-2021)

Low levels of per capita spending in health care indicate that health financing in the country is insufficient to guarantee adequate access and quality health care. It implies that the health sector will continue to significantly rely on out-of -pocket expenditures and donor assistance, which is not sustainable given the low disposable income amongst the public and the unpredictability of donor support.

The 2020 Budget performance

         The original 2020 health sector budget was ZWL$6.459 billion but was reviewed upwards by a further ZWL$2.996 billion, bringing it to a total of ZWL9.455 billion. The reviews went towards salaries (ZWL$1.796 billion) and COVID -19 emergency response (ZWL1.2billion).  

 

Table 1: Summary of the 2020 Expenditure performance

	Original Budget	Additional 2020	2020 Total Budget to date	Actual Expenditure	Burn Rate %
Employment Costs	1,978,500,000	1,796,171,524	3,774,671,524	3,774, 671,524	100%
Operations	2 ,403,500,000	1,200,000,000	2,354,250,000	2,354, 250,000	65%
Capital	2,077,100,000	NIL	202,500,000	202,500, 000	10%
TOTAL	6,459,100 000	2,996,171,524	6,331,421,524	6,331,421,524

 

As shown in Table 1, the salaries budget was fully utilised. As much as 65% of the budget allocated to operations had been exhausted as at 30 September 2020. Only 10% of the budget allocated to capital expenditure had been utilised as at 30 September 2020. This is explained by the position the government took to halt all capital expenditure and focus on fighting COVID-19.  Burn rate for central hospitals and services ranged from 93% to 100% whilst that of provincial hospitals ranged between 56% and 92%. For district hospitals, ZWL$43.3million out of ZWL$61.8 million was expended and this represented a 70% burn rate.  

Economic Classification of Health and Child Care 2021 Budget

 About 17% of the Health Ministry’s Budget was allocated towards capital expenditure which includes buildings and structures, machinery and equipment as well as capital grants (Table 2). This is against the 36% that was allocated to the capital expenditure in 2020.

Table 2: Economic Classification of MOHCC 2021 Budget (%)

	2021	2020
Capital expenditure	17	36
Employment Costs	62	25
Use of Goods and Services	21	39

As much as 21% of the Ministry’s Budget will be spent on recurrent expenditure compared to 39% allocated in 2020. Recurrent expenditure includes purchase of goods and services and current grants. Employment costs will take 62% of the Ministry’s total budget compared to 25% allocated in 2020.

Budget Allocations vs Bids for 2021

         In developing the 2021 budget requirements for the Ministry, the following evidence was used to inform key issues to be stressed in budgeting.

v  National Development Strategy 1 which gave the Ministry the focus areas to concentrate on as well as contributions from various stakeholders.

v  Resource mapping exercise (2020 Report) that helps to improve coordination of both finances and activities and reduces fragmentation.

v  2021 to 2023 Ministry of Heath Strategic Plan.

v  Inputs from the various programme managers and sub - programme managers 2020 budget performance

         The Ministry’s submitted a bid of ZWL$88.8 billion to Treasury for its programmes but received an allocation of ZWL$54.7 billion leaving a funding gap of ZWL$34.1 billion (62.3%) (see Table 3). Table 3 further shows that Public Health programme has a resource gap of ZWL$63.15 billion (92.3%) whilst Bio-Medical Engineering, Bio-Medical Science, Pharmaceutical Production has a deficit   of ZWL$7.16 (85%). With such inadequacies in public health funding, the country remains at high risk in terms of its preparedness in dealing with the disease burden engulfing the nation such as typhoid and maternal related health complications putting children at high health risks. Worse still is the increasing incidences of non-communicable diseases which require high level interventions. Budget surplus in curative services programme is commendable.

Table 3: 2021 MOHCC BID vs Allocation 

	Bids	Allocation	GAP
Programme
Policy and Administration	5,582,660,214	10,136,159,990	(4,553,499,776)
Public Health	68,414,623,714	5,268,426,980	63,146,196,734
Curative Services	6,396,192,000	38,062,269,030	(31,666,077,030)
Bio-Medical Engineering, Bio- Medical Science, Pharmaceuticals	8,403,111,429	1,238,144,000	7,164,967,429
TOTAL	88,796,587,357	54,705,000,000	34,091,587,357
Economic Class
Employment Cost	57,141,956,150	33,641,000,000	23,500,956,150
Use of Goods and services	60,671,170,371	11,609,000,000	49,062,170,371
Capital	54,533,682,710	9,455,000,000	45,078,682,710
TOTAL	172,346,809,231	54,705,000,000	117,641,809,231

Zimbabwe Health Financing: Domestic vs Partner funding (2014-2021)

         In 2021, the Ministry of Health is expecting to receive a total partner support of US$496 million translating to 42.6% of the total funding of US$1.165billion to the health sector.  This health financing mix as illustrated in Figure 4 is not sustainable given the unpredictable nature of donor funding. This necessitates the need for the government to find more innovative financing methods for health and decrease donor dependency.

Figure 4: Zimbabwe Health Financing Trend: (2014-2021) (US$)

 

The Government is looking forward to the extension of the Global Fund into another funding cycle (2021-2023) with total resources amounting to US$523million.  These resources will be channeled towards complementing Government efforts in fighting HIV/AIDS, Tuberculosis and Malaria. The Ministry of Health is also expecting around US$60 million from the Health Development Fund although this is still unconfirmed. This fund will support interventions which capacitate the health systems to prevent, detect and control health emergencies as well as focus on COVID-19 response pillars namely coordination, infection, prevention and control, risk communication & community engagement, case management, procurement & logistics and points of entry.

         The health sector is also expecting a disbursement of US$10.7 million from the Global Financing Facility towards supporting increased coverage and quality of maternal and child health services.

The Government of Zimbabwe is also receiving support from the People’s Republic of China through the construction of a pharmaceutical warehouse to the tune of US$20 million with the project now at 60% completion and expected to be completed in 2021. Additionally, the Government of Japan is also supporting the procurement of medical equipment equivalent to US$2.8million for Sally Mugabe Children’s Hospital and deliveries are expected in 2021.

Health Budget Allocation by Programme

Of the ZWL$54.7 billion allocated to the health sector, the Curative Programme received the largest share where it was allocated ZWL$38.06 billion (70%) followed by Policy and Administration that received ZWL$10.14 billion (18%). Public Health was allocated ZWL$5.27 billion (10%) whilst Biomedical Engineering, Bio-Medical Science, Pharmaceuticals and BioPharmaceutical Production received the least share of the budget which amounted to ZWL$1.24 billion (2%) (see Table 4) despite the latter’s critical importance in Zimbabwe’s health care system in terms of research and development to facilitate local production of drugs. The National Development Strategy 1 acknowledges that the availability of locally produced medicines is critical in ensuring sustainability of health care. With this allocation, its aspirations of:

• increasing the number of locally produced medicines from 30% to 60% of the essential medicines list by 2025;
• reducing the medicines import bill from US$ 220.4 million in 2020 to US$ 100.4 by 2025; may remain elusive if funding to this programme is not reviewed upwards.

 

 Table 4: Composition of Health Budget Allocation by Programme

	Allocation for 2021	Share of Programme allocation(%) in 2021	Allocation for 2020	Share of Programme allocation(%) in 2020
Policy and Administration
Ministers' and Permanent Secretary's Office	381 735 000	4	18 094 000.00	6
Policy Planning and Coordination	1 083 548 300	11	63 191 000.00	21
Human Resources	1 206 079 500	12	48 541 000.00	16
Finance and Administration	1 145 139 300	11	114 359 000.00	39
Monitoring and Evaluation	332 677 100	3	35 847 000.00	12
Internal Audit	221 861 790	2	9 277 000.00	3
Logistics and Asset Management	5 638 684 000	56	5 000 000.00	2
Legal Services	126 435 000	1	-	0
Sub Total	10 136 159 990	100	294 309 000.00	100
Public Health
Communicable Diseases	1 782 181 000	34	172 501 000	42
Family Health	1 862 128 420	35	85 656 000	21
Non-Communicable Diseases	145 677 720	3	128 644 000	32
Environmental Health	1 478 439 840	28	21 373 000	5
Sub Total	5 268 426 980	100	408 174 000	100
Curative Services
Quinary (Research Hospital)	164 672 000	0.4
Quaternary Care(Central Hospitals)	12 359 328 820	32.5	3 095 273 000	52.97
Tertiary Care(Provincial Hospitals)	4 529 576 300	11.9	928 107 000	15.88
District/ General Hospitals Services	11 966 295 420	31.4	1 231 428 000	21.07
Rural Health Centre and Community Care	8 928 616 490	23.5	588 385 000	10.07
Traditional Medicines	113 780 000	0.3	400 000	0.01
Sub Total	38 062 269 030	100	5 843 593 000	100
Bio-Medical Engineering, Bio- Medical Science, Pharmaceuticals
Bio- Medical Engineering	229 383 000	19
Bio- Pharmaceutical Engineering and Production	193 831 500	16
Bio-Medical Science Research	297 593 500	24
Bio-Analytics	168 568 000	14	15 248 000	15.5
Health Research	348 768 000	28	82 993 000	84.5
Sub Total	1 238 144 000	100	98 241 000
GRAND TOTAL	54 705 000 000		6 644 317 000

 

2.7.1 Composition of the Public Health Allocation

Family health; environmental health and communicable diseases sub-programmes received the bulk of the budget allocated to Public Health when combined as evidenced by the respective shares of 35%, 34% and 28%. Non-communicable diseases (NCDs) received the smallest share or only 3% of the ZWL$5.27 billion allocated to Public Health in 2021 (see Table 4).

2.7.2 Composition of Curative Services Budget

Of the ZWL$38.06 billion allocated to Curative Services, 33% went to Central Hospitals; 31% to District/General Hospitals; 24% to Rural Health Centre and Community Care and 12% to Provincial Hospitals (see Table 4).

2.7.3 Composition of the Bio-Medical Engineering, Bio-Medical Science Pharmaceutical Production Budget 

The Bio-Medical Engineering, Biomedical Science, Pharmaceutical and Pharmaceutical Production medical budget amounted to ZWL$1.24 billion. This was allocated to health and research (28%); Bio-Medical Science Research (24%); Bio-Medical Engineering (18%); Bio- Pharmaceutical Engineering and Production (16%) and Bio-Analytics (14%) (Table 4).

3.      COMMITTEE OBSERVATIONS, ISSUES AND CONCERNS

 3.1 The 746.96% nominal increase in the budget allocation to the health sector reflects the Government’s increased level of priority that it assigns to the health sector in 2021 compared to 2020. This increase however, needs to be looked at with caution in light of the prevailing macro-economic environment that is characterised by high level of inflation as well as health threats from climate change and COVID-19 pandemic. These challenges actually threaten to reverse the significant improvements that have been achieved in the health sector over the last two decades (such as reduced maternal mortality; decreased Tuberculosis incidence; decreased Malaria incidence and declined mortality). Therefore, the Committee is of the view that the overall size of the health budget seems to be low relative to need. The deplorable situation in the health sector certainly requires more resources. With a funding gap of ZWL$34.09 billion for its programmes, the Ministry is faced with huge challenges of ensuring a healthy human capital that will take the country into an upper middle-income class by 2030.

3.2 Whilst the country has reached 12.74% and is moving towards the Abuja Declaration minimum threshold of 15%, more is going towards salaries. Thus, even if all of it is disbursed, provision of adequate health care services still remains a challenge if health financing is not reviewed upwards.

3.3 The Committee is concerned about the huge decline of the budget allocation to capital projects (17% in 2021 down from 36% in 2020) as this does not match the demand for sound health infrastructure required in most hospitals around the country. This seems to be misaligned to one of the macroeconomic objectives of the 2021-2025 National Development Strategy 1 which is to improve infrastructure development and investment in health.

3.4 Treasury allocated ZWL$175.84 million towards storage and distribution of anti-retroviral drugs by NATPHARM against a bid of ZWL$259.3 million. This left a funding gap of ZWL$83.41 million. The Committee is concerned that the Ministry of Health already owes ZWL$200 million to NATPHARM, adding this to the funding gap will leave NATPHARM inadequately capacitated to execute its mandate.   

3.5 Inadequate manpower and unstable workforce remain a key challenge.  Health workers play a critical role in the provision of health services but recurring industrial action threatens to derail all the efforts that have been made to improve the health care system of the country. In order to foster stability of the workforce, the Ministry has proposed a number of initiatives (eg staff accommodation; improved work environment and tools of trade) but funding is the issue.

3.6 Resource leakages and inefficiencies in the area of procurement will continue to weigh down Government efforts in improving the health system if not urgently addressed.

3.7 The Committee is concerned about the low burn rate in the country’s public hospitals. Unutilised resources are returned to the donors despite the deplorable state of the health care system.

3.8 The Committee is concerned about the decision taken by Treasury to centralise the Health Service Fund. This fund plays a critical role in ensuring the smooth flow of hospital operations and these institutions cannot operate without it. It is meant to cushion the unpredictable flow of funds from Treasury in cases of drug shortages and well as repairs and maintenance. If it is centralised in Treasury, the cumbersome procedures and delays encountered by hospitals in accessing the funds will only worsen the health service provision by these institutions.

3.9 Donor funding to the health sector is still significant (42.6% of total health funding). The high dependency on external sources compromises sustainability of health care should external funding be withdrawn. Moreso, donor funding is selective and disease specific (TB, Malaria and HIV/AIDS). Whilst the Committee appreciates the progressive procurement of contraceptives, its concern is on the fact that Treasury is not funding vaccines, leaving a lot of children exposed in the event that donor funds dry up or if donors shift priorities.

3.10 It is of concern to the Committee that nutrition health is not included as a separate budget line item under the Public Health programme. If included, this could attract donor funding using $1:$1 funding model.

3.11 The prolonged harsh macroeconomic environment characterised by high inflation and low foreign currency reserves, coupled with the impacts of COVID-19 have seen some industries closing resulting in massive job losses, salary cuts, slowed business activity and fall in disposable income. This implies that the poor cannot afford basic health care services. Further, this has negatively affected employees/employers contributions to health funds such as the AIDS levy. Moreso, at least 60% of Zimbabwe’s economy is informal, making payments of AIDS levy by employees and employers difficult.

3.12 Public health institutions have run out of drugs and medicines supplies, thereby forcing patients to resort to private pharmacies for their prescribed supplies. It is disturbing to note that pharmacies are charging exorbitant prices thereby denying the majority of Zimbabweans access to health care.  This situation has seen chronic-diseased patients like those on hypertension medication suffering more.

RECOMMENDATIONS

4.1 Treasury to ensure timely disbursements of the allocated resources in full to facilitate provision of the health care services.

4.2 Government to prioritise the strengthening of the health sector’s human capacity and conditions of service. This requires increased funding to enable the health sector to adequately respond to the health challenges the country is faced with. Funding the Ministry of Health’s initiatives such as staff accommodation; improved work environment and tools of trade will go a long way in fostering stability of the workforce.   

4.3 Treasury to prioritise recapitalisation of NATPHARM in order to ensure the availability of drugs in all health centres around the country.

4.4 There is need for innovative health financing given that the country’s public health spending is limited and substantially relies on donor funding. This could include:

4.4.1 Devising cost recovery measures given that most of the services in public health institutions are free of charge. One of this is to make patients pay for health services, especially those that can afford or are on medical aid

4.4.2 Privatisation of some wards and allow access to those that can pay

4.4.3 Reversing the high dependency of unpredictable donor funding for public health sector whilst exploring more practical options for domestic resource mobilisation for health financing including the participation of the business community.

4.4.4 Treasury to allocate $1 out of the $30 charged on presumptive tax towards AIDS levy. This will also trigger flow of resources to the National Aids Council.

4.4.5 Channel the full health levy charged from 10% of airtime to the Ministry of Health instead of the current 5%.

4.4.6 Treasury to include nutrition health as a separate budget line item under Public Health budget as this stands a greater chance of receiving partner funding.

4.4.7 Government to introduce National health insurance in the long term as a solution to guaranteeing sustainable health care services. The Government can pick lessons from Rwanda National Health Insurance that has every citizen logged onto its database. Any change to their incomes is automatically captured in the National Health Insurance system thereby guaranteeing its funding.

4.4.8 Treasury to consider allocating 100% of the unallocated reserves to fill in the health sector funding gap. More so, Treasury to consider procurement of 20 mobile vehicles from these unallocated reserves in preparation for the second wave of COVID-19. These vehicles will be used to distribute drugs to the 10 provinces thereby guaranteeing drug availability to patients in need of them.

4.4.9 NATPHARM to sell drugs to public hospital patients at affordable prices in order to harness resources that are being used by public to buy drugs from private pharmacies.

4.5 Prioritise funding of Biomedical Engineering, Bio-Medical Science, Pharmaceuticals and Bio-Pharmaceutical Production in order to promote local production of drugs.

4.6 Reduce wastage and improve efficiencies in procurement. This could be achieved by putting in place tight systems. Further, the new procurement staff that has been employed is expected to foster this.

4.7 Treasury to leave the Health Service Fund with the public hospitals but increase monitoring of how the funds are utilised. Strengthening monitoring of utilisation of funds in general will also increase burn rate of public hospitals. Thank you.

HON. CHIKUKWA: Introduction

1.1           The newly formed Ministry of National Housing and Social Amenities is responsible for the promotion and facilitation of urban and rural development through the provision of modern and affordable housing and social amenities, and the regularisation/sanitisation of informal settlements in consultation with relevant ministries.

1.2           With a housing backlog of 1.25 million units, the Ministry is targeting to deliver 220,000 housing units over five years under the National Housing Delivery Programme (2020-2025). The Ministry shall adopt a multi-pronged approach involving the public and private sectors, and broad-based citizenry participation to achieve this goal.

1. Budget Allocations for 2020 and Ministry Achievements

2.1         Having been formed out of the Ministry of Local

Government and Public Works after the 2020 budget allocations, the

new Ministry did not get a new budget but received administrative

allocations under the former parent Ministry.  This severely compromised its operationalisation, especially the setting up of offices and mobility. From a revised estimated allocation of ZWL$346.4 million, only 60% was disbursed for operations. Given these resources, the Ministry achieved the following:

1.              Commissioning of 228 stands at Nemwama Housing Scheme, a joint venture with Masvingo Rural District Council;
2.              Dzivarasekwa 737 high density stands, and Makonde Rural District Council 197 mixed density stands 90% complete;

                           iii.            Construction of 2 blocks x 3 bed roomed flats in Marimba 80% complete;

1.             Completion of 29 F14 houses in Beit Bridge;
2.             Establishment of Shelter Afrique regional office;
3.             Crafting of the Zimbabwe National Human Settlement Policy (2020);

                        vii.            Hosting of the 2020 World Habitat Day; and

                     viii.            Unlocking of a US$55 million line of credit of which US$30 million has already been approved for disbursement.

3.0           2021 Budget Allocation

3.1.1        For the 2021 Budget, out of a bid of ZWL9.4 billion, Treasury allocated the Ministry only ZWL$2.8 billion, which is 30% of its requirements. The massive variance between the allocation and bids implies that the Ministry will not be able to deliver on its mandate effectively.

4.0           Post Budget Analysis Meeting Output

Your Committee held a post-budget analysis meeting with Ministry officials and departmental heads led by the Permanent Secretary on Tuesday 1 December 2020. The following was observed:

4.1.1        Given that the Ministry is new, there is a need for office equipment, furniture and fittings, and vehicles at the head office, and both provincial and district levels. Unfortunately, the allocations made towards these expenditure lines are glaringly way below the bids. A case in point pertains to vehicles. The permanent secretary and five directors have no cars, and dependence on hiring is proving too costly. Out of a requirement of 70 vehicles, the Ministry only has 13 old vehicles, of which 5 are non-runners. The Ministry submitted a bid of ZWL$ 547.7 million, and only ZWL$80.2 million, that is, 15%, was allocated. Such a scenario severely undermines effective administration and discharge of the Ministry’s mandate at all levels.

4.2         The Ministry has found it prudent to first complete stalled projects around the country before considering new ones. They comprise residential houses, civil service staff accommodation and student accommodation at state universities which at various stages of completion. The projects need a minimum of US$239.1million, that is, ZWL$20.3 billion for completion using a phased approach over 4 to 9 years. However, for the 2021 budget, Treasury allocated only 39.6% of the ZWL$3.5 billion Ministry bid. At this pace, most of these projects will remain unfinished.

4.3        Your Committee also observed that Treasury allocated a mere 6% of the required ZWL$106.3 million for the phased construction of 500 housing units for the distressed Chimanimani Cyclone Idai victims. This is a worrying situation given the deplorable torn tents and temporary structures in which the victims are living.

4.4        No allocations were made towards the recapitalisation of the National Housing Fund (NHF) and the National Guarantee Fund (NGF) which are critical in the financing of housing construction, especially for the civil servants.

4.5        The allocated funds will not be sufficient for the Ministry to provide the requisite off-site infrastructure (sewer and water reticulation systems) which are critical for the regularisation/sanitisation of various informal settlements which have cropped up in major cities over the years.

5.0           Recommendations

Your Committee recommends that:

5.1           Treasury increases its allocation to the Ministry towards the acquisition of office equipment and vehicles to enable the setting up of administrative structures at all levels for effective discharge of its mandate.

5.2        The allocation towards stalled projects be increased to match the bid. The completion of stalled projects will significantly improve the conditions of service for the civil servants, especially those working in rural areas while reducing the housing backlog.

5.3           The phased construction of houses for the Cyclone Idai victims be fully funded and treated with the urgency it deserves given the dehumanising conditions under which the people are living.

5.4         Treasury makes allocations towards the recapitalisation of the National Housing Fund and the National Guarantee Fund. These two funds play a critical role in the Ministry’s endeavour to ensure decent accommodation for the civil service.

6.0    Conclusion

Decent shelter is a critical human need and an essential feature of an upper-middle-income society. In this light, adequate resources need to be channeled towards achieving this human right. However, your Committee is very concerned with the underfunding of the Ministry of National Housing and Social Amenities and implores Treasury to consider the Committee recommendations. While the reduction of the 1.25 million housing backlog takes the participation of Government, the private sector, and citizens at large; the Government has to take the lead and pave the way by setting up the critical off-site sewer and water reticulation infrastructure. As such, the Ministry’s Policy and Administration, and Human Settlement Development programmes need adequate resources.

HON. MAYIHLOME: 1.0 Introduction

Your Committee on Defence, Home Affairs and Security Services noted several observations regarding the funding needs and gaps, and their implications to the performance of the Ministry of Defence and War Veterans and the Ministry of Home Affairs and Cultural Heritage. Key recommendations were suggested to improve the operational efficiency of these Ministries.

2.0 Ministry of Defence and War Veterans Affairs - Vote 4: $23, 75 billion

2.1 Global Overview and Analysis of the Ministry's 2021 Budget Allocation

The budget allocations to the Ministry’s departments/programmes were as follows:

Programmes	2021 Allocation	Ideal Allocation	Budget Shortfall
Policy and Administration	$679 million	$54, 8 billion	$54, 1 billion
Defence and Security	$22, 3 billion	$98, 8 billion	$76, 5 billion
War Veterans	$814, 9 million	$4, 9 billion	$4, 0 billion
Grand Total	$23, 8 billion	$158, 4 billion	$134, 6 billion

2.2 The most seriously distressed expenditure items in the Ministry were:

1. Employment costs that currently do not reflect the approved Military Salary Concept.
2. Funeral benefits for the ZDF:-no funds were allocated for funerals yet it is part of their conditions of service.
3. Travel and subsistence allowances (T&S) which are paid when soldiers are deployed. The ZDF has accumulated a backlog on T&S.
4. Medical supplies and services where the War Veterans, the ZDF members and their dependents are failing to access free health services,
5. An army marches on its stomach. Rations are an institutional requirement, but the allocations are so paltry one would get the impression that someone thinks he is doing the military a favour.
6. Institutional provisions that include uniforms and ceremonial dress; fuel, oils and lubricants,
7. BRE was last procured over 30 -40 ago.
8. Research, training and development for the military to keep abreast with modern security techniques. The military need to have the appropriate tools of the trade, when there is peace so that they practice with those tools for there no room for trial and error in actual combat.
9. Maintenance of vehicles, mobile equipment and physical infrastructure,
10. Acquisition of vehicles and other  military equipment,
11. Public Sector Investment Programmes (PSIPs) especially;

Ø  The Manyame Hospital VVIP section, Imbizo Barracks,

Ø  Dzivarasekwa housing units, and Jason Ziyaphapha Moyo Barracks

Clearance of legacy debt owed to creditors, which amounts to $1.8 billion. It should be noted that a significant portion of this legacy debt relates premiums charged or factored into prices by suppliers for anticipated late payments.           Why should treasury have special arrangements to pay these premiums instead of simply allocating and releasing the amounts on time to avoid punitive prices?

Furthermore, the Military must not exist to be paid monthly salaries; they must be equipped and trained for war. It follows also that Military commanders should not spend most of their time thinking about how to feed and accommodate soldiers, those are givens, that’s why it is institutional, rather commanders ought to spend most of their time thinking about the immediate and long term threats, making strategy and operational plans, and training their men to meet those plans.

In Summary, the ZNA was grossly or not funded at all for the following: funeral expenses, medical expenses for the military and their dependents. Currently using PSMAS but the claims are not being honoured. Thinking of PSMAS, can someone tell me how soldiers on operations or on important training exercises are expected to access or benefit from the use of PAMAS! Mobile equipment like water bowzers, trailers, field kitchens, TFA, Sewage and refuse collection.

  Likewise, the AFZ was grossly underfunded especially for R&D and upgrade programmes.  Tools of the trade are aged and need replacement.  New technologies,   Maintenance of Buildings

The War Veterans Affairs programmes such as the registration of War Collaborators and Non Combatants, vetting of War Veterans and the operationalisation of War Veterans’ district offices. The War Veterans dept bided for $88m for initial registration of some 160 000 cadres of the liberation struggle and a lot more for the actual vetting. However, only $50m was allocated, which is not sufficient to conduct registration. There are high expectations regarding this forthcoming exercise and we urge that it be funded in full.

Revamping the War Veterans Fund and operationalizing the Veterans’ Bank.

Recommendations

In light of the above observations, your Committee recommended the following:

3.0           Treasury should prioritize clearance of the Ministry’s legacy debt amounting to $1.9 billion to enable establishment of good relations with suppliers.

3.1           Allocated funds should be released fully and in time to enhance proper planning,

3.2           The Military Salary Concept should be fully implemented to fulfill all the conditions of service for the ZDF members, and hence retain and boost their morale.

3.3           Treasury should adequately finance all institutional provisions and inescapable expenditure items to guarantee an efficient discharge of statutory obligations. These relate to:

1. Medical supplies and services,
2. payment of travel and subsistence allowances, 
3. rations, uniforms and ceremonial dress,
4. research, training and development to enhance self-sustenance,
5. fuels, oils and lubricants,
6. acquisition and maintenance of vehicles and other military equipment

3.5           Treasury should also consider a phased approach to replacement of the ZDF capital equipment,

3.6           Support joint ventures and national collaborations  between the ZDF and other stakeholders, e.g. on digitalisation and provision of  institutional accommodation.

3.7           PSIP projects such as institutional accommodation and health services centres require full funding to expedite their completion.

3.8           Treasury should consider capacitating the ZDF projects by capitalizing the Zimbabwe Defence

Industry and the ZDF farms and mines,

3.9           The War Veterans department requires an upward review of its budget allocation to programmes such as:

Ø  Completion of the registration and vetting of War Collaborators and Non-Combatants, and

Ø  The establishment and operationalization of the Veterans’ Bank and the Department’s 66 District Field offices.

Ø  Treasury should have another one on one meeting with the Ministry of Defence to discuss their barest minimum expectations for the 2021 budget.

3.10 Going forward, Treasury should consider applying a modern funding approach where a certain percentage of the country’s GDP is set aside for funding the Ministry of Defence and War Veterans as is the norm in UN and other developed countries.

MINISTRY OF HOME AFFAIRS AND CULTURAL HERITAGE - VOTE 18 ($23, 6 BILLION)

 Global Overview and Analysis of the Ministry’s 2021 Budget Allocation:-

The thrust of the Ministry of Home Affairs and Cultural Heritage is mainly about service delivery, that is to say building institutions governance which address whether the resources allocated would make any difference in service delivery and crime reduction. This issue came up even during the public hearings that the Ministry especially the ZRP should be adequately funded.

         In the 2021 National Budget of Zimbabwe, the Ministry was allocated $23, 6 billion.

Your Committee commended Treasury for allocating adequate funds that are enough to purchase basic needs of the Ministry. Thus, the Ministry of Home Affairs and Cultural Heritage is well positioned to complete the following projects/ programmes if timely releases are made.  The Central Registry building was well funded especially to complete the Insiza Registry offices and the Central Registry Office, save for the following areas: _ Rentals asked for $100m but $8m given;

Domestic travel, which includes all mobile registration was given only $5m. Utilities (water, ZESA, Refuse, security) were allocated $7m yet this is inadequate for 1 month. Fuels were allocated $30 against a bid of $150m Institutional provisions were allocated $10m out of a bid of $88m.

Consumables for the Registry department not funded, let alone the forex consideration. By the way, for since all prices are pegged using the USD$, it is the parallel market rate and not the auction rate, that government departments eventually pay for local products.

The Mkushi Police camp and Chimoio Camp got commendable financial support from Treasury, as well as materials and equipment for the garment factory. The Museum of African Liberation in Zimbabwe has adequate support from the Government; An Auditorium under the National Archives of Zimbabwe was well prioritized.

          However, 65% of the Ministry’s budget allocation will cater for employment costs. Ideally, the Ministry requires $312, 6 billion to cater for its recurrent expenditure for the 2021 financial year. The budget shortfall affected some expenditure items, particularly in Civil Registry, Police Services and Migration Management.

The following inescapable expenditure items in the Ministry were grossly underfunded: Supplies and consumables for the Civil Registry, the ZRP and Migration Management.

1. Institutional provisions that include:

Ø  Uniforms and ceremonial dress for the ZRP;

Ø  rations, travel and subsistence allowances for the entire Ministry;

Ø  fuel, oils and lubricants, travel and subsistence allowances for the entire Ministry’

Ø Research, training and development for the officers to keep abreast with modern policing technology.

Ø T$S was last paid in 2008 or thereabouts. Individual policemen and women are therefore subsidizing the Government programmes, they use their own money to travel and feed themselves while carrying out official work, e.g. to complete investigations, hence the tendency to feed from the community.

Ø It is small wonder therefore that cases of illegal mining, traffic offenses illegal border crossing continue to increase because of poor equipment and poor conditions of service. Police must be immaculate, efficient, effective, swift and courteous. This can only happen if they are well equipped, looked after, and well trained.

 In a nutshell, ZRP need the following tools of their trade:

• Traffic management equipment,
• Mobility in terms of vehicles for land water and air in all terrains,
• Speed traps and breathalyzers,
• CCTV and Drones  Digital technology,
• PPEs in light of COVID-19 pandemic. Even schools are requesting police to enforce. How does one deploy officers to enforce COVID-19 rules when the same police officers are not compliant?

Maintenance of vehicles, mobile equipment and physical infrastructure to improve their operational efficiency and lengthen their lifespan; Acquisition of vehicles and military equipment to the preparedness and capability of the ZRP and  the digitalization programme that enables the Ministry to work together with other security departments like the ZRP, Civil Registry and Migration Management. The Ministry of Home Affairs has such an initiative where it is implementing an integrated border management system.

The Operationalisation of an integrated border management system at all ports of entry and exit. This can be done in collaboration with other security departments/ Ministries and Equipping the Forensic Department laboratories in all the five centres.

 Recommendations 

Ø Expenditure targets should be released in time to enable proper planning,

Ø The Civil Registry Department should be capacitated and review upwards the budget allocation to the following key areas:

Ø  Tools and implements, institutional provisions and utilities and service charges;

Ø  Identification documents and passport consumables,

Ø  Fuels, oils and lubricants,

Similarly, Treasury should increase funding earmarked for all critical goods and services for Civil Registry, Migration Management and the ZRP.

Adequate funds should be availed towards capital expenditure for ZRP so that it can be fully equipped with up-to-date, digital technology facilities and equipment.

Treasury should also prioritize the digitalization of the Migration Management department and capitalization of the Forensic Department. A phased approach to funding the replacement and acquisition of capital assets for the Ministry should be applied. Retention funds should be reintroduced especially in line departments like Migration Management and Civil Registry. The Ministry has farms and mines that require financial support so that the Ministry can be self-sustained.

Treasury should support joint ventures and national collaborations between the Ministry of Home Affairs and Cultural Heritage and other stakeholders, e.g. on digitalisation and provision of institutional accommodation, construction, joint operations etc.

Police Commanders should not be seeking Treasury interventions on a day to day basis, but must be given room to plan and execute their operational plans, for theirs is a Constitutional requirement. Therefore, like the Military, Treasury should meet the commanders for a further review before the budget is finalized.

          Overall Conclusion

The operations of these Ministries aim at fulfilling their constitutional mandate. Therefore, to achieve this, all inescapable expenditure items require adequate funding. In the same vein, capital expenditures also need to be prioritized and funded so that future operations are smoothened. This strategy acts as an expenditure succession planning whereby both the Ministries’ current and future needs are well catered. These will feed into the short term, medium and long-term development strategies of Zimbabwe. Overall, partnerships and collaborations remain as a key success factor. I thank you and submit Mr. Speaker Sir.

          HON. S. K. MGUNI: Thank you Hon. Speaker Sir for giving me this opportunity to present the report from the Portfolio Committee on Industry and Commerce on the 2021 Budget allocations.

                   1. Introduction

On 26^th November 2020, the Minister of Finance and Economic Development, Hon. Professor Mthuli Ncube presented the 2021 National Budget. The 2021 National Budget was presented a few days after the government launched the National Development Strategy 1 (NDS1, 2021-2025), which is an economic blueprint outlining the policies, institutional reforms and national priorities as the country aims to attain the middle-income status by 2030.  Hence, the 2021 National Budget is aligned to the provisions of the NDS1 as it is centred on building resilience and sustainable economic recovery.

The 2021 National Budget comes against the background of the Covid-19 pandemic which has hampered implementation of planned programmes and projects and led to the closure of borders which has an implication on importation of raw materials and price increases due to high costs of production.

The other challenges include inadequate ICT infrastructure, shortages of fuel and water supplies, high costs of utilities, inadequate foreign currency and reduced working hours amongst other challenges.

While the economy has been exposed to varying shocks coupled with macroeconomic risks, there is still need and space to firmly set focus on strategic priorities for economic recovery and growth anchored on building resilience against such shocks, hence the need to accelerate the industrialisation drive if we are to turn around the economy and steer it towards the achievement of Vision 2030.

2.    The Ministry’s 2020 Budget Performance Review 

The mission of the Ministry is aligned to the Second Republic’s vision of transforming the economy to the middle-income status by 2030.  Thus, the Ministry of Industry and Commerce’s vision is to attain a highly industrialised, technologically advanced and diversified Zimbabwean economy by 2030.  This will be attained through its main service delivery areas of policy and administration, industrialisation and consumer protection and quality assurance.

The Ministry was allocated a total budget of $60, 760, 000 during the year 2020, which represented a 25,6 percent increment from the 2019 National Budget allocation.  However, during the year 2020, the Budget was increased to $476, 840, 802 as a result of funding for the roller meal subsidy programme and on-lending.

The Ministry’s major achievements under the three key result areas during the 2020 Budget year include:

v Successful implementation of Local Content Strategy.

v The registration of 4000 companies in the reserved sectors.

v Launch of the Consumer Protection Act.

v Increased list for products requiring conformity to standards.

v Implementation of the Zimbabwe National Industrial Development Policy (2019-2023).

v Successful implementation of the value chain concept across most key sectors of the economy.

v Successfully funded the IDCZ to the tune of $124 million.

v Fruitfully participated in two international investment conferences.

          3. Overview of the 2021 National Budget

The Ministry was allocated ZWL$2, 345, 000, 000 against their bid of ZWL$9, 772, 998, 870. The allocated figure exceeds the ceiling of $742, 000, 000 according to the Treasury Budget Call Circular Number 3 of 2020 by more than 200 percent. This is a welcome development as the Ministry is geared to meet its mandate of providing a conducive environment for sustainable industrial and commercial growth and development.

While the Ministry is happy with overall allocations to its three main operating areas, Policy and Administration, Industrialisation, Consumer Protection and Quality Assurance though the committee is concerned with the variance between the proposed Ministry bids and the ceilings of 79 percent, 95 percent and 94 percent respectively. This has fully manifested in the shortfalls of the National Budget allocations to the proposed bids for each Ministry’s key areas as shown below:

Key Ministry Areas	Ministry’s Proposed Bid ($)	2021 Budget Allocation ($)
Policy and Administration	983, 081, 826	235, 922, 000
Industrialisation	7, 615, 556, 230	2, 029, 226, 000
Consumer Protection and Quality Assurance	831, 776, 314	79, 852, 000
Total	9, 430, 414, 370	2, 345, 000, 000

The Committee noted that the industrial sector is continuously facing challenges pertaining to access to affordable and long-term financing for retooling and working capital. The Industrial Development Corporation of Zimbabwe (IDCZ) needs to be capacitated financially to provide funding to the industrial sector. IDCZ was allocated $1, 960, 000, 000 which is far less than the proposed bid of $5,5 billion.

4. POST BUDGET PRESENTATION ANALYSIS MEETING OUTPUT

Your Committee duly held a post budget presentation analysis meeting with Ministry officials led by the Director of Finance and the industry representatives, CZI and ZNCC on Thursday, 3^rd December, 2020.  The following issues were observed:

19.             In its meeting with Ministry officials on the 3^rd December 2020, the Ministry appreciated the 2021 National Budget allocation to the Ministry. However, there were concerns on the variance (76 percent) between the Ministry bid of $9, 772, 998, 870 and the budget allocation of $2, 345, 000, 000 which is likely to have an impact on the efforts of the Ministry to revamp the industry which is significantly affected by Covid-19. Your Committee was in consensus with the Ministry officials in regards to the need to capacitate the industry towards aiding the 2030 Vision.
20.             Your Committee questioned the role of IDCZ on financing of start-up businesses. The IDCZ representative responded by reiterating the role of IDCZ in complementing the government efforts through implementation of the industrialisation strategy of Zimbabwe in tandem with policies, national priorities and strategies of the NDS1. Also, IDCZ is open to fund manufacturing oriented and value addition firms across all sectors of the economy. IDCZ raised concerns with regards to budget allocations which are persistently and consistently falling short of its proposed bids, which makes it difficult for the institution to finance start-up businesses.

 iii.            The submission from CZI, one of the key stakeholders reiterated the need for more government effort towards crafting policies which enhance productivity in the manufacturing sector so as to reduce taxes and increase companies’ performance. They also called for policies which promote import substitution, local procurement and value chain support. Your Committee fully supports the proposals.

1.  The ZNCC in their submission, noted the positives in the 2021 Budget such as the support towards infrastructure development, the Tripartite Negotiation Forum and value chains strengthening. However, they raised their concerns on issues of public debt transparency, taxation, subsidies, global compensation agreement, venture capital and start-ups financing, parliamentary role on public debt, corruption and de-dollarisation framework amongst others. In this regard, your committee took note of the submissions and urges the executive to attend to the issues raised above.
2.             Your Committee queried the effectiveness of the role being played by the industry in the fight against economic sanctions. The industry representatives acknowledged the existence of economic sanctions and also highlighted their effort in the fight for the removal of economic sanctions in Zimbabwe.
3.  Your Committee noted with concern the provisions of the new Companies and other Business Entities Act [Chapter 24:31] of 2020 which requires companies registered before February 2020 to re-register by December 2023. As such, the Committee strongly feels that a lot needs to be done on effective and efficient operationalisation of e-registration systems by the Registrar of Companies.

          5. Summary of Recommendations

Your Committee recommends that:

1.             There be complementarity between the Ministry, other ministries, the Parliament of Zimbabwe and the industry in order to embrace the demands posed by the Vision 2030 policies and strategies.
2.             The Ministry to do frequent tours of the industry in order to establish the status of the industry as well as challenges thereof. This will help the Ministry to tailor solutions which foster industrial growth and development.

   iii.            The Ministry, industry and all relevant stakeholders must speak with one voice on issues such as sanctions and corruption for the growth and development of the industry and the nation at large.

1.             There is need to improve the ease of doing business environment so as to improve competitiveness of the country in order to attract both domestic and foreign investments. In this regard, there is need for cooperation between the Ministry of Industry and Commerce, Ministry of Finance and Economic Development and the Zimbabwe Investment and Development Agency.
2.             The Registrar of Companies office should be digitalised so as to effectively and efficiently carry out the re-registration exercise as required by the provisions of the new Companies and other Business Entities Act [Chapter 24:31].
3.             There is need for timely disbursement of funds by the Treasury to the Ministry of Industry and Commerce for it to carry out its mandate in a more efficient and effective manner.

vii.            Noting the existence of monopolies and oligopolies resulting in collusion and threat to price stabilities, the Committee recommends for improved funding to the National Competitiveness Commission.

viii.            There is need for adequate capacitation of the IDCZ so as to enhance financing of start-ups and improve performance of businesses.

6. Conclusion

Industrialisation is at the epicenter of the national vision of becoming an upper middle-income economy by 2030. It has the capacity to absorb shocks and macroeconomic risks. Hence, with industrialisation, we can effectively exploit the backward and forward linkages that primarily exist among the agricultural, mining and manufacturing sectors thus bringing to reality the structural transformation that this economy desperately needs.

          HON. S. S. KHUMALO: Thank you Mr. Speaker.

1. OVERVIEW

The Ministry of Lands, Agriculture, Water and Rural Resettlement’s responsibilities include ensuring food security in the country. It is also responsible for ensuring that agriculture input is produced to serve as raw materials for downstream value adding sectors, especially the manufacturing sector. The ‘Land’ responsibilities have also seen the Ministry being responsible for promoting equitable distribution of land and provision of security of tenure. The “Water” functions of the Ministry also bestow the roles of ensuring that there is adequate water provision for various purposes, including irrigation and recreation purposes. The “Rural Resettlement” functions focus on the issues related to land resettlement programmes and estate management. The Ministry also provides administrative, technical, advisory, research and regulatory services in line with these functions. This implies that budgetary provisions to the Ministry have to be shared among several other alternative and critical uses besides agriculture, making it critical that such funding is adequate.

The Ministry operates through nine programme areas as follows:

1. i)Policy and Administration which creates an enabling environment for sustainable and viable agriculture sector;
2. ii)Agriculture education which focuses on producing competent agriculture graduates with analytical and entrepreneurial skills;

iii)                        Crops and Livestock Research and Technology which focuses on developing, adapting and disseminating innovative research technologies to improve crop and livestock productivity;

1. iv)Crops Production, Extension and Advisory Services which promotes sustainable, competitive and viable agricultural production through provision of technical, extension, advisory and coordination services;
2. v)Agricultural Engineering and Farm Infrastructure Advisory Development which promotes agriculture mechanisation, farm structures and irrigation technologies;

vi)Animal production, health, extension and advisory services which prevents entry, establishment and spread of transboundary animal diseases within Zimbabwe and controls specifies animal diseases and pests; and

vii)                     Lands, Resettlement and Security of Tenure, which is responsible for provision of security of tenure, management of land information, valuation and compensation of all acquired farms and land acquisition and distribution in general;

viii)Land Survey and Mapping, which is responsible for commissioning and maintenance of international boundaries;

ix)Integrated Water resources management, which is responsible for construction of dams, completion of rural and urban water supply projects.

This is a report by the Portfolio Committee on Lands, Agriculture, Water and Rural Resettlement which is designed to assess the implications of the 2021 National Budget, taking into accountthese programme areas as well as interventions that have been proposed under the budget.

2. BUDGETARY ALLOCATION AND TRENDS

The total budget for appropriation to the various Government ministries and departments for the 2021 National Budget is ZWL$429,341,300,000 (about ZWL$429.3 billion), for which about ZWL$60.8 billion is from constitutional and statutory provisions. In the 2021 National Budget, the Ministry of Lands, Agriculture, Water and Rural Resettlement got an allocation of ZWL$46,259,000,000 (ZWL46.3 billion) and a further ZWL$1,869,315,000 is expected from Statutory Funds, which brings the total available resources appropriated to the Ministry at ZWL$48,128,315,000 (ZWL$48.1 billion).  These resources are expected to result in a significant recovery in the agriculture sector, which is expected to increase by 11% in 2021, from a decline of 0.2% envisaged in 2020.

In order to establish the implication, the Committee notes the following:

• The 2021 budgetary allocation from the Vote Appropriation is an increase of about 307.3% compared to the revised estimates from the same source for 2020.Given that the National Budget also project annual inflation to end the year 2021 at less than 135%, the increase in budgetary allocation to the Ministry is still higher in real terms. The Committee therefore commends Treasury for increasing resources to the Ministry in 2021 compared to 2020.
• The total allocation to the Ministry from the Consolidated Fund constitutes about 10.77% of the total budget. However, if the allocation to the Ministry from the statutory funds are taken into account, the total resources available to the Ministry would constitute about 10.96% of the total resource envelope.

An assessment of resources allocated to the Ministry cannot be assessed in isolation. It is also important to assess the importance that is attached to agriculture compared to other productive sectors. Generally, Zimbabwe is considered agro-based, as agriculture is critical for livelihoods as well as for feedstock to downstream industries. At 10.77% of the total available budget, the Lands, Agriculture, Water and Rural Resettlement has the third highest share after Ministry of Primary and Secondary Education as well as the Ministry of Health and Child Care (Figure 1). Given that there were a lot of disruptions to the education sector due to the COVID-19 pandemic, the decline in the rank of the Lands, Agriculture, Water and Rural Resettlement Ministry from being first in 2020 to 3^rdin 2021 is understandable. The Committee appreciates this prioritisation, and consider it consistent with the Government’s desire to have agriculture as the main economic driver.

Figure 1: 2021 Top 15 Budgetary allocations for Ministries

3. ASSESSMENT OF RESOURCE ADEQUACY

Given that the Ministry received very significant resources, it is generally difficult to argue for reallocation from other Ministries and State Entities that received a lower share of the Budget. An objective template that can be used to assess whether agriculture has been adequately funded is the “Maputo Declaration on Agriculture and Food Security in Africa”. African Heads of State and Government came up with the Declaration at the Second Ordinary Assembly of the African Union in July 2003 in Maputo. The Heads of State agreed that 10% of public expenditure should be spent on agriculture in an effort to increase agricultural productivity. The 10% benchmark is also stipulated in the Comprehensive Africa Development Programme (CAADP). The Committee is therefore happy that the allocation of about 10.77% to agriculture is above the Maputo and Malabo Declarations. However, the Committee is also cautious in its celebration, given the fact that the Ministry is very broad, with its mandate including other areas which might not be under the functions of the ‘agriculture’ ministries in other countries, for example, the ‘water’ functions could be separate. However, it is commendable that the benchmark is reached.

While giving a high budget on paper can be regarded as indicative of priority, the main determinant factor is the extent to which such resources would be quickly put to use, especially given that we are now in a high inflation environment. The Committee is happy to notice a change in absorption capacity in the Ministry for some programme areas, as traditionally there were some challenges in spending budgeted resources. In 2019, all programme areas had poor absorption capacities, with only 42% absorption capacity by September 2019. By September 2020, the Ministry had overshot its budget by 42% (Figure 2), mainly due to three programme areas; Integrated Water Resources Management; Policy and Administration; and Agriculture Education, which had already spent more than originally allocated. However, the Committee is concerned that only 7% of resources that had been earmarked for Lands, Resettlement and Security of Tenure had been utilised by September 2020, while only 28% of the resources earmarked for Land Survey and Mapping had also been utilised. There is scope, however, for the remaining four programme areas (Crops and Livestock Research and Technology, Crops Production, Extension and Advisory Services, Agricultural Engineering and Farm Infrastructure Advisory Development, and the Animal production, health, extension and advisory services) to be at least able to utilise their resources over the three months from September given that they are not far off from 75% utilisation level. The Committee is therefore happy that the bulk of the resources earmarked for use during this current year are on course to be spent across all but two programme areas.

Figure 2: Utilisation of budgeted resources

 

 

3.1 Quality of the Budget

In 2020, about 67% of the Ministry’s budget was earmarked for the Policy and Administration programme and the Committee raised a concern that the budget had been largely constructed to fund one programme area at the expense of other critical functional areas of the Ministry. The Committee is happy that there is a notable shift, as the Policy and Administration programme is taking only about a third of the resources, leaving more resources towards projects (Figure 3). The Committee is particularly impressed that the Integrated Water Resources Management programme’s share is now second, giving an expectation that a number of projects on dams and irrigation development can now be accommodated. The Committee is also happy that Agriculture Education, which had a paltry 0.51% share of the Ministry’s Budget in 2020 has improved to about 3%. Generally, the quality of the budget is an improvement, as key programmes such as Animal production, health, extension and advisory services, are also getting significant amount of resources

Figure 2: Distribution of Ministry’s Budget across the programme areas

The quality of the budget is also reflected by the extent to which the budget is development oriented. A budget which is biased towards capital than recurrent expenditure is generally considered developmental. About 69% of the Ministry’s Budget is for the acquisition of non-financial assets, which include buildings and structures, machinery and equipment and other fixed assets (Figure 3). Only 29% of the Ministry’s Budget is designed to cater for recurrent expenditure, which includes employee costs, purchase of goods and services and current grants. Thus, the Committee also commends government for prioritisation of developmental spending.

Figure 3: Quality of the Ministry’s Budget

3.2 ASSESSMENT OF ADEQUACY OF PROGRAMME BUDGETS

The Committee also assesses the adequacy of the programme funding relative to the variance between what the Ministry had bid for the programmes and what they actually received. Table 1 compares the total amount that the Ministry received (a combined total from consolidated revenue fund and statutory funds) as a percentage of what it had put in their bid. The results show that generally, the allocations were below what the Ministry expected, as the total allocation is only 45% of the Ministry’s requirements. However, of particular concern to the Committee are five Programme Areas, namely Agricultural Education (48%); Crop and Livestock Production, Extension and Advisory services (36%), Lands, Resettlement and Security of Tenure (22%), Land Survey and Mapping (20%), and Integrated Water Resources Management (34%) where the allocated amounts were below 50% of what the Ministry had bid.

Table 1: 2021Budgetary allocations for programme areas compared to what Ministry required

	Allocation	Bid	Share of allocation to bid (%)
Programme 1: Policy and Administration	16,542,997,000	25,500,000,000	65
Programme 2: Agricultural Education	1,312,209,000	2,754,759,000	48
Programme 3: Crop & Livestock Research & Technology Development	2,264,810,000	3,613,570,000	63
Programme 4: Crop & Livestock Production, Extension & Advisory services	2,015,998,000	5,536,000,000	36
Programme 5: Agricultural Engineering & Farm Infrastructure   Advisory Development	5,339,895,000	9,991,150,000	53
Programme 6: Animal Production, Health, Extension &  Services	5,259,972,000	8,860,000,000	59
Programme 7: Lands, Resettlement and Security of Tenure	2,678,847,000	11,929,000,000	22
Programme 8: Land Survey and Mapping	602,860,000	2,947,520,000	20
Programme 9: Integrated Water Resources Management	12,110,727,000	35,484,000,000	34
Total	48,128,315,000	106,615,999,000	45

The Committee hopes that this variance does not result in serious adjustment requirements which can compromise the effectiveness of the interventions.

4. OTHER OBSERVATIONS BY THE COMMITTEE

Agribank transformation

The Committee also appreciates the measures being introduced to transform Agribank into the Land and Agriculture Development Bank of Zimbabwe (LADBZ) as part of measures to strengthen and diversify agriculture and rural financial services across the entire agriculture value chain. However, the level of support provided under the budget of ZWL$700 million is not sufficient to meet the 31 March 2021 deadline for achieving this transformation. In addition, the bulk of the resources would generally go towards ensuring that as a commercial bank, Agribank meets the US$30 million minimum capital requirement. Currently, Agribank falls short of this minimum capital requirement by almost US$15 million. However, the resources provided, which are equivalent to about US$8 million, are not sufficient to meet the capital requirements, which could also compromise the funding operations for agriculture, which constitute about 60% of the loan book. The funding gap of US$7 million is a concern to the Committee.

Support for cotton farmers

The Committee is worried that cotton farmers are owed more than ZWL$1 billion, at a time when they are supposed to go back to the farm. The Committee calls for resolution of this issue, while also calling for better management of prices and subsidies to ensure that the farmers are not disadvantaged in future.

Support for the Pig Industry Board

The Committee appreciates the support that has been extended to the Pig Industry Board (PIB), where ZWL$15 million has been allocated for capital costs while an additional ZWL$10 million is earmarked for operations. The PIB had actually bid for ZWL$93 million based on the need to grow the herd and breeding stock. Thus, the amount allocated which is far below expectations would result in a scale down of operations, at a time when improved availability of pork would be instrumental in facilitating economic growth.

5. COMMITTEE’S CONCLUSION AND RECOMMENDATIONS

In conclusion, the Committee greatly appreciating the efforts that treasury has made to increase the capacity of the agriculture sector to perform roles expected under the 2021 Budget. However, the Committee would have the following recommendations:

• We urge Government to timely release the allocated resources in this inflationary environment, while also putting extra efforts to ensure that the key enablers, including utility provision, is in place to facilitate agriculture productivity;
• The Committee would also urges Government to consider facilitating more resources towards some parastatals which are struggling so that they do not have to scale down their operations. This includes the Pig Industry Board and Agribank, which need more resources than what was allocated;
• The Committee recommends that a lasting solution be found on cotton farmer payments and cotton pricing, so that they do not have to spend such a long time while owed by Government;
• The Committee also recommends that capacitating extension officers should be a priority to ensure that the Pfumvunza programme is done effectively, given the capacity gaps among the farmers. I thank you.

          HON GORERINO:

Introduction

The Portfolio Committee on Transport and Infrastructural Development (hereafter referred to as the Committee) plays an oversight role over the Ministry of Transport and Infrastructural Development (hereafter referred to as the Ministry). The Ministry’s mandate is to provide and manage transport and transport related infrastructure and services through the development of policies band regulations for the transport sector.

Following the presentation of the 2021 National Budget by the Minister of Finance and Economic Development, the Committee conducted post budget consultations with the Ministry of Transport and Infrastructural Development and representatives from the State-Owned Enterprises (SOEs) under the Ministry. SOEs includes, Zimbabwe National Roads Administration (ZINARA), Air Zimbabwe, National Railways of Zimbabwe (NRZ), Civil Aviation Authority of Zimbabwe (CAAZ), Central Mechanical and Equipment Department (CMED), Traffic Safety Council of Zimbabwe.  The post budget consultations and the Committee’s in-depth analysis of all the 2021 budget documents and the National Development Strategy 1 (NDS1) informs this report.

Ministry’s strategies and contribution to NDS1 sector outcomes.

The Ministry’s interventions for 2021 are in line with the NDS1 sectoral outcomes.

NDS1 Sector Outcomes and Strategies the Ministry is contributing to Sector Outcomes

• Improved roads and bridge infrastructure
• Improved road transport services
• Improved rail transport infrastructure and services
• Improved air transport infrastructure and services
• Improved marine infrastructure and services

Ministry Strategies / Interventions for 2021 -2023

• Capacity building
• Upgrading of communication technology systems
• Public private partnerships
• Recapitalisation of State Enterprises and Parastatals

Analysis of the Ministry of Transport and Infrastructure Budget

3.1    REVIEW OF THE MINISTRY OF TRANSPORT AND INFRASTRUCTURE DEVELOPMENT 2020 BUDGET PERFORMANCE

3.1.1 BUDGET PERFORMANCE

The Ministry has a revised budget estimate of ZWL$3.2 billion in 2020 (4.6% of the total budget) compared to the original budget of ZWL$3.1 billion (5.4% of total budget). However, as at September 2020 the Ministry’s expenditure is at ZWL$8.1 billion which is more than twice the revised estimates for 2020. The Ministry expenditure represents 9.3% of total government expenditure as at September 2020 and that is second after Lands, Agriculture, Water, Climate and Rural Resettlement in terms of expenditure to September 2020. This is huge improvement from 2019 when the Ministry’s expenditure was at ZWL$455.7 million (35% of the 2019 revised budget). The Committee commends the Ministry of Finance and Economic Development for the improvement in disbursements especially given the escalation of costs that threatened most projects.

The key driver of the expenditure for 2020 is the Road Infrastructure and Transportation programme with ZWL$6.9 billion expenditure as at September 2020 which is 177% more than the revised estimate of ZWL$2.5 billion. Policy and Administration programme expenditure as at September 2020, was at ZWL$1 billion which is 153% more than the 2020 revised estimate of ZWL$401 million. However, Rail and Aviation Infrastructure Development utilised ZWL$209.4 million which is equivalent to 67% of the 2020 revised estimate of ZWL$312.6 million. Inland Waters Infrastructure and Transportation used only ZWL$4.9 million which is equivalent to 23.6% of the 2020 revised budget of ZWL$20.9 million. Although, this is an improvement from the 2019 budget performance where the Inland Waters Infrastructure and Transportation programme had utilised 2% at the same stage, the underperforming is a cause for concern given the increase in the number of inland facilities.

3.1.2 KEY ACHIEVEMENTS

The Ministry’s achievements included

• Constructed and upgraded 100 km on Beitbridge Masvingo Harare Road
• Upgrading of R.G. Mugabe International Airport
• Dualised 10km  of Harare-Gweru Road
• Constructed Norton Road over Rail Bridge
• Rehabilitated Cyclone Idai damaged roads and bridges
• Rehabilitated 80km Tanganda-Chiredzi Road
• Computerised learners license testing at 5 depots

3.2         MINISTRY OF TRANSPORT AND INFRASTRUCTURE DEVELOPMENT 2021 BUDGET

The Ministry has an allocation of ZWL$30,064,400,000 (7%) for 2021 compared to the revised estimate of ZWL$3,224,178,000 2020 (4.6% of the total budget). This is an increase of 832.5% above the overall budget increase of 508.6% (total budget increase from 2020 revised estimate of ZWL$70,548,144,000 to ZLW$429, 341,300,000 in 2021). The increased Ministry’s share of the budget and above average percentage increase shows a positive shift of priority towards the Ministry that is commendable. However, there is still a huge funding gap as the Ministry presented a total budget proposal of ZWL$73,939,436,436 leaving funding gaps of (ZWL$43,875,036,436).

Over and above the ZWL$30.1 billion from the Consolidated Revenue Fund, the Ministry has Statutory and Other Resources worth ZWL$11,621,843,000 with the bulk of that going towards Road Infrastructure Development (ZWL$7,786,899,000) and ZWL$3,835,043,000 towards Rail, Infrastructure Development and Services.

3.3    ECONOMIC CLASSIFICATION OF THE MINISTRY BUDGET

Acquisition of non-financial assets (capital budget) takes the bulk of the Ministry’s budget with ZWL$28.1 billion (93.3%) while the acquisition of financial assets takes ZWL$2 billion (6.7%) of the budget. There is a slight decrease of the capital budget from the 95% in 2020 to 93.3% in 2021 and slight increase of the acquisition of non-financial assets budget from 5% in 2020 to 6.7% in 2021.

The acquisition of financial assets covers use of goods and services with an allocation of ZWL$116 million (5.6% of Ministry’s total budget), Compensation of employees, ZWL$313 million (1% of Ministry’s budget) and other expenses with ZWL$7.6 million (0.03%) as shown in Figure 1.

Acquisition of non-financial assets is dominated by expenditure on buildings and structures with an allocation of ZWL$22.8 billion (75% of the Ministry’s total budget). Capital grants is second with ZWL$3.2 billion (10.8% of total Ministry budget) followed by Transport equipment with ZWL$1.5 billion (5.1%).  Other fixed assets have ZWL$449.3 million (1.5% of total Ministry budget) and other machinery and equipment with an allocation of ZWL$82.9 million (0.3% of total Ministry budget).

In terms of shifting priorities, the buildings and structure budget gained the most from 71% of the Ministry allocation in 2020 to 76% in 2021 followed by use of goods and services that increased from 4% in 2020 to 6% in 2021. Capital grants had the biggest loss from 21% in 2020 to 11% in 2021 followed by other machinery and equipment from 1% in 2020 to 0.3% in 2021.

Figure 1: Economic Classification of Ministry of Transport and Infrastructure Budget

 

Source: 2021 National Budget Estimates of Expenditure

3.4    PROGRAMME CLASSIFICATION OF THE MINISTRY BUDGET

The Ministry has four programmes namely, Policy and Administration, Road Infrastructure and Transportation, Rail and Aviation Infrastructure Development and Services and Inland Waters Infrastructure and Transportation. The main priority for the Ministry is the Road Infrastructure and Transportation programme as shown in Figure 2, with a budget allocation of ZWL$26.4 billion or 88% of the Ministry’s budget compared to 78% in 2020. This is followed by Policy and Administration with a budget of ZWL$2.3 billion or 8% of the Ministry’s budget compared to 12% in 2020. Rail and Aviation Infrastructure Development and Services with ZWL$1.2 billion which is 4% of the budget declining from 10% in 2020. Inland Waters Infrastructure and Transportation has ZWL$202.4 million or 0.7% of the Ministry’s budget which is an improvement from 0.4% allocated in 2020.

3.5    FINANCING GAPS AND IMPLICATIONS FOR TRANSPORT AND INFRASTRUCTURE DEVELOPMENT

As outlined before the Ministry presented a bid of ZWL$73,939,436,436 but was allocated ZWL$30,064,400,000 that is 41% of the Ministry’s requirement leaving funding gaps of (ZWL$43,875,036,436). Capital budget received an allocation of ZWL$28.1 billion (42% of capital requirements) leaving a shortfall of ZWL$38 billion as shown in Annexure 1. Operations and Maintenance received ZWL$1.7 billion (only 21% of operations and maintenance requirements) leaving a shortfall of ZWL$6.2 billion. The Committee is concerned with the huge funding gap that compromises transport and infrastructure development in the country. There is therefore need for an upward review of the allocations to allow for adequate implementation of the required projects and maintenance works.

3.5.1 POLICY AND ADMINISTRATION

Policy and Administration programme received budget allocation for operations and maintenance of ZWL$90.6 million (54% of requested budget) leaving a funding gap of ZW$76.9 million. In terms of the capital budget the programme was allocated half the required budget with ZWL$2.2 billion. The programme cater for the administrative issues in support of the various activities the Ministry including providing support to the Minister’s and the Permanent Secretary’s Offices. Therefore, this programme requires adequate funding for their operations, taking into consideration the need for extensive monitoring of projects and various other issues that are handled by these offices.

3.5.2 ROADS INFRASTRUCTURE AND TRANSPORTATION

Roads Infrastructure and Transportation programme received an operations and maintenance budget of ZWL$1.6 billion (21% of requested budget). Under this programme, road maintenance received a paltry ZWL$710 million, which is 11% of ZWL$6.4 billion requested.  The programme requested a capital budget of ZWL$53 billion but received an allocation of ZWL$24.5 billion (46% of requested budget). That leaves a funding gap of ZWL$28.5 billion.

Although the major chunk of the Ministry’s budget is for Roads construction and rehabilitation, the Committee is concerned with the huge overall funding gap of ZWL$34.5 billion for the sector.  The Committee notes that that the roads infrastructure subsector requires major funding, taking into consideration the backlog in maintenance and rehabilitation of the major roads. Continued side-lining of these roads results further deterioration of the infrastructure.  This eventually leads to increased funding requirements towards roads infrastructure. The increase in climate change challenges is a cause of concern. To date, there are a number of bridges and roads damaged due to heavy rains, some which the department - because of funding, failed to work on. The Committee notes that there is need for funding for the upgrading and rehabilitation of infrastructure and services towards efficient systems for business and the public, particularly roads that do not attract investment.

The Committee also notes that the functioning of Transport Management requires officers to be mobile during inspections and patrols. There is therefore need for funding provision for the roads Department to replenish its vehicle fleet to allow for smooth operations.

3.5.3 RAIL AND AVIATION INFRASTRUCTURE DEVELOPMENT AND SERVICES

The Committee notes that the Aviation Infrastructure Development and Services received an operations and maintenance budget of ZWL$4.1 million (55% of requested budget) leaving funding gap of ZW$3.4 million. Rail Infrastructure Development and Services received an operations and maintenance budget of ZWL$6.6 million (53% of the required budget).  The two sectors were allocated a capital budget of ZWL$1.2 billion (14% of requested budget) giving a shortfall of (ZWL$7,307,857,400.00). The Committee observes that there is an overreliance on the road transport system as reflected by the gross underfunding of the rail and aviation sector.

The Committee notes that the underinvestment in the rail sectors will make it difficult to achieve the 2021 budget targets and the NDS1 target. The 2021 budget targets the reduction of cost of transportation to 4.5c per tonne km rate for freight from 5c in 2020 which will eases the burden on the road networks as well as reducing the costs of transportation of goods and services. On the other hand, the target under the NDS1 is to increase the proportion of track meeting set standards (Track Quality Index) from 57% in 2020 to 68% by 2025, as well as increasing freight cargo moved from 2.6 million tonnes per annum in 2020 to 6.7 million tonnes per annum by 2025. The revival of the national rail system is vital, as it is the cheapest way to transport agricultural produce, minerals and other heavy cargo.

The Committee therefore urges the Ministry of Finance in the interim to put adequate resources for maintenance works to allow the existing infrastructure to realise business. There is also need for the completion of the search for partnerships for institutions such as National Railways of Zimbabwe and Air Zimbabwe (Pvt) Ltd for the recapitalisation of the entities.

3.5.4 INLAND WATERS INFRASTRUCTURE AND TRANSPORTATION

The department requested ZWL$178.7 million for its capital budget and got an allocation of ZWL$165.4 million for 2021 representing 92% of the budget requested, which is commendable. However, the operations and maintenance budget received ZWL$27.8 million (46% of requested budget) leaving a funding gap of ZWL$34.5 million. The Committee’s observation is that this will negatively affect the operations of the department making it difficult to fulfil its objective of providing efficient, affordable and safe marine infrastructure and services.

Recommendations

4.1    Prioritisation of Operations and Maintenance

The Committee notes the gross underfunding for operations and maintenance where the Ministry received ZWL$1.7 billion equivalent to 21% of the requested budget. The Committee recommends increasing the operations and maintenance budget particularly road maintenance that received only 11% of the requested budget.

4.2    Recapitalisation of State Owned Enterprises (Air Zimbabwe and National Railways of Zimbabwe)

The Committee takes note of Government’s effort towards recapitalisation of both the Air Zimbabwe and the National Railways of Zimbabwe. The Committee is concerned with the long time it is taking to complete the debt assumption for Air Zimbabwe that is critical for attracting potential investors. The Committee recommends the speedy resolution of the proposed reforms of these institutions given the importance of rail and air transport. While plans for restructuring are taking place, the Committee recommends increased funding to ensure a reasonable level of operations that will make the entities attractive for investors.

4.3    Public Private Partnership        

The Committee recommends the enactment of a Public Private Partnership Act that can allow for private sector investment in infrastructure development. As with the previous budget, the Committee recommends fiscal incentives for key transport infrastructure projects.

4.4    Tollgates

The Committee notes that the relocation of the Skyline tollgate to a new site covering six lanes, upgrading of the Dema tollgate to a standard toll plaza with four lanes and the upgrading of Esigodini to a standard toll plaza with six lanes are included among other projects in the 2021. The Committee recommends the completion of the above tollgates first before embarking on the new tollgates (Mushagashe, Mupfurudzi and Coleen Bawn) proposed in the 2021 budget. The Committee also recommends that adequate resources are put in place before the beginning of construction of the tollgates to ensure that once a project starts it is completed in the shortest possible time, hence reducing delays and congestion during construction of the tollgates. For the tollgates where ZINARA is renting toilets, the Committee recommends the construction of proper ablution facilities instead of renting. The Committee recommends having clear timelines for the construction of the tollgates.

4.5    Vehicle Number Plates

The Committee is concerned with the current shortage of vehicle number plates at the Central Vehicle Registry (CVR) and the inconvenience caused to the public. Bearing in mind the fact that the number plates are paid in foreign currency, the Committee recommends that the Ministry of Finance provide adequate foreign currency and timely funding for the procurement of number plates. Therefore, the Committee recommends an upward review of the number plates budget allocation from ZWL$757 million to the requested ZWL$993 million. This will remove the inconvenience to the public while at the same time increasing the revenue generated by CVR. The 2021 budget should also consider financing the local production of the number plates to reduce the import bill related to the number plates.

4.6    Bulawayo – Victoria Falls Road

The Committee notes that there is no funding for the Bulawayo to Victoria Falls road. The Committee recommends funding for the continuous rehabilitation of the Bulawayo to Victoria Falls considering its importance as the country’s main tourist destination place.

4.7    Disbursements of Funds

The Committee recommends timely disbursement of funds to ensure projects are completed on time.

5.0    Conclusion

The Committee commends the Ministry of Finance for the support provided to the Ministry of Transport and Infrastructure Development in 2020. However, the Committee notes that the development of the transport sector is capital intensive and therefore urges the Ministry of Finance and Economic Development to consider an upward review of the Ministry’s allocation. This will ensure continuous and sustained rehabilitation and maintenance of transport infrastructure envisaged by NDS1 and contribute towards the achievement of Vision 2030. The Committee notes that lack of periodic maintenance works increases the future cost of maintaining infrastructure and as the famous saying goes “a stitch in time saves nine”.

Annexure 1: Summary of Ministry Budget Allocation and Bid

 

		MINISTRY PROPOSAL	SHORTFALL
	2021 Approved Budget	ZWL$	ZWL$
Compensation of Employees	313,000,000.00	-	-
Policy and Administration	27,628,000.00	-	-
Roads Infrastructure and Transportation	270,629,000.00	-	-
Rail and Aviation Infrastructure Development and Services	5,534,000.00	-	-
Inland Waters Infrastructure and Transportation	9,209,000.00	-	-
Operations and Maintenance	1,696,000,000.00	7,890,650,000.00	(6,194,650,000.00)
P.1 : Policy and Administration	90,600,000.00	167,500,000.00	(76,900,000.00)
Ministers' and Permanent Secretary's Office	32,200,000.00	62,500,000.00	(30,300,000.00)
Human Resource Management & Development	10,100,000.00	17,500,000.00	(7,400,000.00)
Financial Management & Administration	25,000,000.00	42,500,000.00	(17,500,000.00)
Internal Audit	8,900,000.00	17,000,000.00	(8,100,000.00)
Legal Services	6,200,000.00	11,500,000.00	(5,300,000.00)
Information Technology	8,200,000.00	16,500,000.00	(8,300,000.00)
P.2: Roads Infrastructure and Transportation	1,566,900,000.00	7,642,900,000.00	(6,076,000,000.00)
Road Infrastructure Development	799,900,000.00	6,649,900,000.00	(5,850,000,000.00)
o/w road maintenance	710,000,000.00	6,400,000,000.00
Road Transport safety and Standards	767,000,000.00	993,000,000.00	(226,000,000.00)
P.3: Rail and Aviation Infrastructure Development and Services	10,700,000.00	20,000,000.00	(9,300,000.00)
Aviation Infrastructure Development & Services	4,100,000.00	7,500,000.00	(3,400,000.00)
Rail Infrastructure Development & Services	6,600,000.00	12,500,000.00	(5,900,000.00)
P.4: Inland Waters Infrastructure and Transportation	27,800,000.00	60,250,000.00	(32,450,000.00)
Inland Waters Infrastructure Development	16,000,000.00	35,500,000.00	(19,500,000.00)
Inland Waters Safety and Standards	6,100,000.00	13,250,000.00	(7,150,000.00)
Marine Navigation	5,700,000.00	11,500,000.00	(5,800,000.00)
Capital	28,055,400,000.00	66,048,786,436.00	(37,993,386,436.00)
Policy and Administration	2,196,200,000.00	4,416,919,000.00	(2,220,719,000.00)
Roads Infrastructure and Transportation	24,541,800,000.00	52,993,344,236.00	(28,451,544,236.00)
Rail and Aviation Infrastructure Development and Services	1,152,000,000.00	8,459,857,400.00	(7,307,857,400.00)
Inland Waters Infrastructure and Transportation	165,400,000.00	178,665,800.00	(13,265,800.00)
Appropriation Total	30,064,400,000.00	73,939,436,436.00	(43,875,036,436.00)

 

Source: Ministry of Transport and Infrastructure 2021 Budget Analysis

 

I thank you.

          THE TEMPORARY SPEAKER (HON. MUTOMBA): May I thank you Chairman Hon. Gorerino.  I noted that the moment you highlighted your recommendations, the Hon. Minister did not stop writing – meaning that this is the area that he is so much interested in.  Although I must say that I was listening very attentively and did not hear you talking about the feeder roads in rural areas.

          This time, it is the rainy season and the areas are impassable.  I mean, it is just an omission but I must thank you very much for what you have done.  You did a great job.  Thank you.

          HON. TOGAREPI: Mr. Speaker, I move that the debate do now adjourn

          HON. MPARIWA: I second.

          Motion put and agreed to.

          Debate to resume: Thursday, 10 December, 2020

MOTION

BUSINESS OF THE HOUSE

          HON. TOGAREPI: Mr. Speaker, I move that Orders of the Day, Numbers 1 to 9 be stood over until Order of the Day Number 10 has been disposed of.

          HON. MPARIWA: I second.

          THE HIGHER AND TERTIARY EDUCATION, INNOVATION, SCIENCE AND TECHNOLOGY DEVELOPMENT (HON. PROF. MURWIRA):  Mr. Speaker, I move that the debate do now adjourn

Motion put and agreed to.

          Debate to resume: Thursday, 10 December, 2020

          On the motion of THE HIGHER AND TERTIARY EDUCATION, INNOVATION, SCIENCE AND TECHNOLOGY DEVELOPMENT (HON. PROF. MURWIRA), the House adjourned at Twenty Five Minutes to Seven o’clock p.m.