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NATIONAL ASSEMBLY HANSARD 16 JUNE 2022 VOL 48 NO 54

PARLIAMENT OF ZIMBABWE

Thursday 16^th June, 2022

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

PRAYERS

(THE HON. SPEAKER in the Chair)

ANNOUNCEMENTS BY THE HON. SPEAKER

PETITION RECEIVED FROM MR. W. TARANHIKE

          THE HON. SPEAKER:  I wish to inform the House that on Wednesday, 8^th June, 2022, Parliament received a petition from Mr. W. Taranhike requesting Parliament, through the Portfolio Committee on Public Service, Labour and Social Welfare, to intervene in the Commercial Union of Zimbabwe’s disputes.

NON-ADVERSE REPORTS RECEIVED FROM PARLIAMENTARY LEGAL COMMITTEE

          THE HON. SPEAKER:  I also wish to inform the House that I have received Non-Adverse Reports from the Parliamentary Legal Committee on Statutory Instrument Nos. 85, 86, 87, 88, 89, 90, 91, 92, 93, 94, 95, 96, 97, 98, 100, 103 and 104 published in the Gazette during the month of May, 2022. 

          HON. CHIKWINYA: Thank you Mr. Speaker Sir.  Today is 16^th June and it is a day recognised as the Day of the African Child.  I join the nation and fellow citizens of Zimbabwe in celebrating this day.  As I do so, I take cognisance of the fact that the Constitutional Court recently passed a landmark judgement in which it moves the age of sexual consent from 16 to 18 years.

          I therefore call upon the Minister of Justice, Legal and Parliamentary Affairs to come to Parliament with a Bill that actualises the  provisions but criminalise the involvement of sexual activities for children under the age of 18 years so that at least we make it a reality for us to protect these children who are below the age of 18.

          THE HON. SPEAKER: Hon. Chief Whip, if you can take that message to the Leader of Government Business for the amendment of the relevant pieces of legislation on that Constitutional Judgement. 

          HON. BITI:Thank you for observing that I was the advocate.  It is that the Minister of Justice and Government was obliged to come up with a comprehensive Bill protecting children, not just vis-à-vis sex or child marriage but also things like pornography and cyber bullying.  So the Minister must come up with a comprehensive Bill - protecting children, giving life to the children’s rights set out in Section 81 of the Constitution of Zimbabwe.  I thank you.

          THE HON. SPEAKER: While you are up standing there, would that also impinge on the Child’s Bill.  Do we need to have a re-look of that Bill?

          HON. BITI: The implicit ruling by the Constitutional Court is that the Child Protection Adoption Act must also be revisited.  It still sets the age of a child at 16 and does not offer sufficient protection, particularly for those children between 16 and 18.  Also children still face discrimination from the inheritance point of view.  So I have a daughter called Zoey, she cannot inherit from my own estate, which is why the Constitutional Court says the Government must come up with a comprehensive Bill protecting children in their entirety, including child labour.  Children are working in farms, tobacco, cotton in Gokwe and so forth.  This Bill must protect children.  Thank you.

THE HON. SPEAKER: Understood for the elaboration.  I would like to thank Hon. Chikwinya for making that statement, supported by Hon. Biti.  I thought you were going to go further than what you have stated.  You see that commemorating day was in recognition of the role played by the youngsters in South Africa.  That was a turning point on the role of the youths in fighting for independence and freedom and the 1976 massacre of those youngsters touched the entire world to the extent that this day is highly recognised.  In fact in South Africa, they declared the whole of June as Youth Month. .  I am sure we will celebrate with our own here in Zimbabwe and share their aspirations and struggles to self actualise as they grow up – [HON. MEMBERS: Hear, hear.] –

MOTION

BUSINESS OF THE HOUSE

          HON. TOGAREPI: I move that Orders of the Day, Numbers 1 to 17 be stood over until Order of the Day, Number 18 has been disposed of.

          HON. TEKESHE: I second.

          Motion put and agreed to.

          THE HON. SPEAKER:I was waiting for you Hon. Markham.  I have a guillotine to place on your neck.  Are you ready for it?

          HON. MARKHAM: I am quite ready for it.

          THE HON. SPEAKER: I take this opportunity to inform you that one of the assignments that you challenged the Chair to follow up; the issue of the Global Settlement Deed, which is worth $3.5 billion and I had instructed it be sent online to you.  Have you received it?

          HON. MARKHAM: Thank you Mr. Speaker.  I have received it, plus one for the Dutch farmers.  However, it appears to be a summary, I still have to go through it.

          THE HON. SPEAKER: There are seven other issues outstanding.  I am hoping that by next week we shall have collected all of them for your attention.

          HON. MARKHAM: Thank you Mr. Speaker.

MOTION

SECOND REPORT OF THE PORTFOLIO COMMITTEE ON ENERGY AND POWER DEVELOPMENT ON THE RURAL ELECTRIFICATION PROGRAMME

          HON. GABBUZA: Thank you Mr. Speaker.  I move the motion standing in my name that this House takes note of the Second Report of the Portfolio Committee on Energy and Power Development on the Rural Electrification Programme in Zimbabwe.

          HON. TSUURA: I second.

          HON. GABBUZA: Thank you Mr. Speaker. I wish to move a motion on the report by the Portfolio Committee on Energy and Power Development.  This report basically is about the energy projects that the Rural Electrification Fund has embarked on since the inception of REA. 

  1.0    INTRODUCTION

1.1      The Rural Electrification Fund was established in 2002 through the Rural Electrification Fund Act, Chapter 13:20 to facilitate rapid and equitable electrification of rural areas in Zimbabwe. The fund has electrified more than 10 000 rural institutions through grid extension, solar mini grid systems, mobile solar systems and biogas digesters. Consequently, the Portfolio Committee on Energy and Power Development resolved to conduct an inquiry into the rural electrification programme.

• OBJECTIVES

1. To understand the sustainability of biogas technology as a potential source of alternative energy in Zimbabwe;
2. To assess the progress made on grid extension, solar and biogas projects that were completed during the period of 2015 to 2020;
3. To appreciate challenges faced in the implementation of the projects; and
4. To make recommendations for improved implementation of the projects.

• METHODOLOGY

3.1      This report is informed by oral and written submissions from the Permanent Secretary of the Ministry of Energy and Power Development, Chief Executive Officer and officials from Rural Electrification Agency (REA). The oral evidence meeting was held on 22^ndApril, 2021.

3.2      In order to get official and technical insight into the progress made on projects that were completed between 2015 and 2020 and challenges being faced in the implementation of the projects, the Committee conducted verification visits to selected solar, biogas and grid extension projects from 26^th May to 29^th May, 2021.The Committee visited the following projects;

District	Institution	Project
Harare	Petrotrade Mabvuku	Solar project
Goromonzi	Pig Industry Board	Biogas project
Mutasa	St Davids Bonda Mission	Biogas project
Nyanga	St Mary’s Magdalene High School	Biogas project
Chimanimani	St Patricks High School	Biogas project
	Makina business centre	Grid extension
Buhera	Mudanda Primary school	Grid extension
	Mudanda Secondary School	Grid extension
	Mudanda Clinic	Grid extension

 

THE HON. SPEAKER:  Order. Hon. Member, you are the Chairperson?

HON. GABBUZA:  Yes.

THE HON. SPEAKER:  In future, make sure that your reports come through my office so that we scrutinise them, approve or disapprove and suggest any amendments or corrections. I do not recall flipping over the small papers you are holding currently.  In future, make sure that the report follows the due process.  You may proceed.

HON. GABBUZA:  Thank you Mr. Speaker.  The report actually went through all those processes.  My small paper is simply a summary of the report.  I did not want to go through all the details.

THE HON. SPEAKER:  No, no.  We need the whole report for purposes of Hansard and that report is very critical and it must go as it is in full on our website, not summaries.  No.

HON. GABBUZA:  Hon. Speaker, I have submitted it.

THE HON. SPEAKER:  You have to table the presentation. You do not have to summarise. 

HON. GABBUZA:My apologies Hon. Speaker.  Thank you Mr. Speaker for the guidance. 

4.0      COMMITTEE FINDINGS

4.1      Overview of the Rural Electrification Programme in Zimbabwe

4.1.1   Rural Electrification Fund (REF) is managed by a Board of Directors which report to the Ministry of Energy and Power Development. REF undertakes two major sub programmes namely; electricity grid extension and alternative energy technologies. Up until 2021, REF focused more on electricity grid extension with minimum effort towards development and dissemination of renewable energy technologies. However, the launch of the National Energy Policy in 2012 and National Renewable Energy Policy in 2020 widened the mandate of REF to cover renewable energy technologies such as solar and biogas.

4.1.2   REA is the implementing arm of the fund that runs day to day operations. The fund also established a special purpose vehicle named Hotspeck Enterprises which is responsible for producing adequate transmission wood poles for the Rural Electrification Programme. Hotspeck Enterprises operates under three divisions; namely Pole Plant, Renewable Energy and Contracting and Consulting Services. The pole plant has a capacity to produce 100 000 poles per annum against REF’s annual requirement of 50 000. The Renewable Energy and Contracting and Consulting Services divisions provide services on commercial basis.

4.1.3   The Committee was informed that all rural public institutions such as schools, health centres, government extension offices, chiefs homesteads and business centres were electrified on 100% capital subsidy from the fund. Up until 2019, these customers paid for internal wiring and service connection fees to Zimbabwe Electricity Transmission and Distribution Company (ZETDC). However, REF Board resolved to include these costs as part of the project funded on 100% capital subsidy for the institutions except for business centres. It was reported that rural villages and households that constitute a group of 10 households can be electrified on 50% capital subsidy from REF. In addition, individual homesteads that cannot form group schemes can apply for electrification on 40% capital subsidy. However, these customers were expected to do internal wiring and pay service connection fees to Zimbabwe Electricity Supply Authority to be connected to the grid.

4.2      Funding of the Rural Electrification Programme in Zimbabwe

4.2.1   The electrification programme is funded from several sources such as the 6% levy from ZETDC electricity sales, contributions from rural customers, loans, grants, the fiscus and other statutory appropriations. It was highlighted that the electrification programme also receives financial support from income generated from local and regional sales of excess transmission wood poles produced by Hotspeck Enterprises pole plant.        

4.3      Performance of the Fund from 2002 to date

4.3.1   As at 30 March 2021, a total of 9 577 rural institutions were electrified since the establishment of the fund in 2002. The rate of electrification of rural public institutions was estimated at 60% for primary schools, 72% for secondary schools and 88% for rural health centres. It was indicated that about 419 solar mini grid systems were installed at rural school and health centres between 2007 and 2021. Additionally, 82 biogas digesters were constructed at public institutions such as boarding schools, hospitals and prisons between 2012 and 2021 whilst 433 mobile solar systems were installed at remote rural centres.

4.3.2   According to the submissions from REA, the performance of the fund was affected by a steady decline in revenue from the levy and the fiscus. The situation was exacerbated by high inflation rate from 2018 to date and as a result, the fund failed to procure materials and equipment for project implementation.

4.4      Rural Energy Master Plan

4.4.1   Rural Electrification Fund (REF) crafted a 20 year Rural Energy Master Plan (REMP) (2016-2035) which provides a systematic and prioritized approach to rural electrification through grid and off grid technologies. According to the plan, about 68% of rural communities would be electrified through grid electricity while 32% through off grid technologies. About US$2.13 billion was required for the rural electrification programme in the REMP.

4.4.2   It was indicated that REF would continue to electrify all outstanding rural public institutions using the REMP. Around 1894 primary schools, 575 secondary schools and 217 government extensions constituted the rural public institutions earmarked for the grid electrification programme. Furthermore, REF would accelerate the upgrade of solar mini grids on rural public institutions installed under the 2006 to 2015 programme and institutions in the REMP would be covered under this initiative. It was reported that 347 primary schools, 56 secondary schools and 10 government institutions would be electrified through solar mini grids.

4.5      ELECTRIFICATION PROGRAMMES UNDER REF

4.5.1   Grid extension projects

4.5.1.1         Despite receiving more funding than it required, the fund managed to do less projects than it had targeted for in 2019 and 2020. In 2019, REF targeted to electrify 519 institutions but electrified 142 institutions and they had received ZWL$28 million against a requirement of ZWL$21 million. In 2020, the fund targeted 364 institutions but electrified 155 institutions and had received ZWL$196 million against a requirement of ZWL$147.5 million. The failure to achieve the targeted number of grid extension projects for 2019 and 2020 was attributed to high inflation that caused a steep increase in prices of project materials.

4.5.1.2         During the visit to Makina Business centre in Chimanimani, it was indicated that REF invested around US$80 411 in 2020 to construct a 0.7kilo metres (km) of 11kilo volt (kV) line to connect the Hlambiso micro-hydro network to the grid. However, there was no electricity at the centre due to wiring and connectivity challenges. It was highlighted that REF was responsible for the design and construction of backbone infrastructure whilst ZETDC was responsible for connecting the beneficiaries of the project, operation and maintenance of the grid network. The Manicaland Provincial Manager of REA, Mr. Magadze reported that beneficiaries of grid extension projects took long to wire premises and this delayed connection to the grid.

4.5.1.3         He also explained that the institution faced setbacks such as shortages of transformers during implementation of grid extension projects. As a result, it affected the mandate of REF to facilitate rapid electrification of rural areas in the country as experienced in Madzivire, Mudanda and Vhiriri in Buhera, whose grid extension project estimated at US$ 230 181 was completed in 2020 after commencing in June 2017. The Committee was informed that there were also challenges associated with vandalism and this derailed the work of the fund. Nevertheless, the institution disseminated information against vandalism and the importance of protecting electricity infrastructure within rural communities.

4.5.2   Solar projects

4.5.2.1         The Italian Government donated solar mini grids equipment to the Government of Zimbabwe in 1997 and these were installed at over 400 institutions. The installation of the equipment commenced in 2007 but performed poorly from the onset. According to the submissions from REA, the systems with a 0.84 kilowatts (kW) solar generators were designed for a maximum of four teachers’ houses per institution. However on the ground, the maximum number of teachers’ houses was eight. As a result, the number of users outweighed the capacity of the system which affected its efficiency.

4.5.2.2         It was also reported that solar batteries spent over seven years in the warehouse before being utilised and this affected their durability. The charge controller for the solar mini grid had obsolete technology that affected its capacity to fully charge batteries. Nevertheless, the fund resolved to install new appropriately designed solar systems in areas recommended for solar technology in the Rural Energy Master Plan by 2022.

4.5.2.3         The Permanent Secretary, Dr. Magombo informed the Committee that REF targeted to install solar micro grid systems at 40 public institutions in 2019 and 20 public institutions in 2020. In 2019, the project was expected to be pre-financed by the bidder but the successful bidder failed to secure foreign currency. In 2020, the funding required was ZWL$74 million. However, REA failed to raise the amount due to cash flow constraints and the tender was cancelled.

4.5.2.4         The fund targeted to install community solar mini grids in Gutu (Masvingo), Tsholotsho (Matabeleland North) and Gokwe North (Midlands) in 2019 and 2020. The targeted projects were affected by incomplete tender processes for material procurement, termination of tender due to high budgetary costs, cash flow constraints and late disbursement of funding (ZWL$44 million) by Treasury in 2020.

4.5.2.5         During the visit by the Committee at Petrotrade in Mabvuku, it was reported that REF installed the solar project estimated at US$26 164 with a capacity to power one fuel pump at a time. The project reduced the burden on the grid, costs for generator, carbon emission penalties from Environment Management Agency and improved the service delivery by the fuel station. The Committee was also informed that Petrotrade was benefitting from the solar project and had installed a similar system at its fuel outlet in Bindura.

4.5.3   Biogas Projects

4.5.3.1         From 2009, a number of institutions benefitted from the initiated programme on biogas which was 100% capital subsidized and REF constructed a total of 82 biogas digesters to date. Of the 82 biogas digesters, three were constructed on commercial terms at Kotwa, Mimosa Mine and Harare Institute of Technology. The biogas digesters were installed by REF but the beneficiaries were responsible for the operation and maintenance of the projects. REF would assist the beneficiaries in the maintenance of the systems at a cost.

4.5.3.2         During the meeting held on 22 April 2021, the Committee was informed that REF constructed five bio-digesters in both 2019 and 2020. It utilized about ZWL$3 million from the levy. It had targeted to construct 12 bio-digesters in 2020 but Treasury did not disburse ZWL$3.4 million of the allocated funding of ZWL$6.4 million. At the time of the visit, some of the biogas digesters that were constructed during the period of 2015 to 2018 were reported to be facing challenges. The following is a summary of the state of biogas projects visited by the Committee;

 

District	Institution	Project		Year		Project Cost		Status	Reason
Goromonzi	Pig Industry Board		Biogas 50m3		2015		US$35 000	Partially working	-Clogging on burner nozzles   -High replacement costs
Mutasa	St Davids Bonda Mission		Biogas 50m3		2015		US$26 768	Working
Nyanga	St Mary’s Magdalene High School		Biogas 50m3		2017		US$31 282	Not working	-Suspected blockage   -Insufficient feed
Chimanimani	St Patricks High School		Biogas 50m3		2018		US$22 103	Not working	-Insufficient feed

 

4.6      Sustainability of biogas technology as a potential source of alternative energy in Zimbabwe

4.6.1   Biogas technology is one of the commendable alternatives to cooking energy especially in the rural areas of Zimbabwe. Studies that were conducted before 2012 that led to the creation of the Zimbabwe Domestic Biogas Programme (ZDBP), showed that there was a great potential to introduce biogas as a clean, affordable and sustainable form of energy to replace traditional firewood and paraffin. REF launched the Rural Institutions Biogas Programme in 2013. The aim of the project was to provide rural public institutions with alternative energy for cooking and lighting as well as waste management system.

• Magombo, the Permanent Secretary for Energy and Power Development, highlighted challenges being faced in sustaining biogas technology in Zimbabwe and these included non-availability of appropriate biogas appliances on the local market and qualified biogas digester builders. She added that users failed to feed digesters with adequate and appropriate feed stock and there was low acceptance of the technology by some institutions and individuals. It was also reported that the implementation of the technology was affected by lack of affordable initial capital investment by some rural institutions and individuals.
• During the visit by the Committee, some of the beneficiaries of the biogas projects highlighted that the technology was unsustainable due to clogging, wear and tear of the equipment and unfavourable import duty on biogas heaters. The Committee was also informed that limited availability of well trained and skilled biogas technicians was another barrier that also delayed its adoption in communities. It was indicated that beneficiaries felt disengaged from the onset of implementing the project hence could not familiarize with the technical and management of the project to ensure sustainability.
• It was again highlighted that the type and availability of bio digester feedstock was a challenge in sustaining the operations of biogas digesters. Of the four biogas digesters projects visited, those with success stories were relying on pig manure while those that relied on human waste were non-functional. As a result, the sustainability of the digesters was dependent on the performance of animal husbandry activities at institutions. The beneficiaries also highlighted that the awareness of a new technology was dependent on the promotion activities by REF. Many districts across Zimbabwe were not aware of the biogas technology despite having biogas digesters that have been operating for more than five years within provinces.
• During the meeting held on 22 April 2021, Dr. Magombo explained that the biogas programme would be sustainable when the challenges are addressed. She highlighted some of the strategies that would be employed to ensure sustainability and these included promoting local production and availability of appropriate biogas appliances, training biogas digester builders countrywide and users on proper usage and operation of biogas digesters. She again indicated the need to carry out awareness campaigns on the benefits of biogas technology.
• Additionally, there was need to assist beneficiaries through subsidy to lower investment cost of biogas digesters. There was also need to conduct research and development in order to come up with affordable biogas technologies. It was reported that the sustainability of biogas technology would be achieved through the availability of feedstock (cow dung, pig waste, human waste and organic agricultural waste), water and labour. 

5. CHALLENGES FACED IN THE IMPLEMENTATION OF REF PROJECTS

5.1      High Inflation

The year 2019 was characterized by high inflation and this resulted in a steep increase in prices of project materials. Hence, REF only managed to buy 586 509 metres of conductor against a target of 2 856 840 metres. The fund also managed to buy 32 transformers against a target of 497 in 2019 and procured 163 transformers against a target of 335 in 2020. The steep increase in prices was experienced on project materials. As a result of high inflation and general shortage of foreign currency, suppliers of project materials failed to procure the project materials in adequate quantities while on the other hand, REF could not mobilize adequate financial resources from the levy and Treasury sources.

5.2      Shortage of Foreign Currency

The Committee was informed that the bulk of project materials used on REF projects were imported. In 2019 and the first half of 2020, suppliers of project materials and equipment such as conductor and transformers failed to deliver equipment and materials due to lack of foreign currency for imports.  In 2019, the tender for solar mini grid systems for rural institutions was terminated because the bidder failed to secure foreign currency to purchase the solar equipment. Similarly, suppliers of conductor as well as transformers failed to meet REF’s requirements due to shortage of foreign currency as well as steep increases in prices. In 2020 when the auction floor system was introduced in the country, REF applied for foreign currency but did not receive much because priority was given to other sectors of the economy.

5.3      COVID-19 Pandemic

Covid-19 had a devastating impact on REF operations, particularly in 2020 because most of the materials used for projects are imported from China. During the first half of 2020, the majority of orders for materials could not be delivered because of restrictions. The materials that were sold by local suppliers were costly because there were no alternative options. Moreover, REF could not operate consistently in 2020 due to COVID-19 lockdown. 

5.4      Cashflow Constrains

About ZWL$2.5 million which was expected from Treasury was not released in 2019 and the allocation of ZWL$44 million for 2020 was only released in November 2020. As a result, these cash flow constraints impacted negatively on REA’s ability to implement projects. It was also indicated that the 6% rural electrification levy was inadequate for the Rural Electrification Programme and REA had not received the expected levy in full over the years. The following is the schedule of the 6% rural electrification levy received from ZETDC against what was expected for the period of 2015 to 2020;

YEAR	CURRENCY	6% LEVY EXPECTED	6% LEVY RECEIVED	VARIANCE	% RECEIVED
2015	US$	43 714 767	32 290 291	11 424 476	74%
2016	US$	43 958 903	32 993 250	10 965 652	75%
2017	US$	45 721 688	33 079 096	12 642 592	72%
2018	US$	49 151 962	41 300 211	7 851 751	84%
2019	ZWL	194 148 535	95 789 342	98 359 193	49%
2020	ZWL	1 452 736 386	430 705 280	1 022 031 106	30%

 

6. COMMITTEE OBSERVATIONS

The Committee made the following observations;

1. There is no coordination between REA and ZETDC on the hand-over and take-over of grid extensions projects completed by REA. As a result, it takes long for rural institutions to get connected to the grid.
2. There is no consistency in prioritizing outstanding targeted projects on yearly basis.
3. There was gross under performance by REA on achieving set targets due to high inflation and inaccessibility of foreign currency. On the other hand, REF continued to set unrealistic targets amidst a myriad of challenges.
4. Ministry of Finance and Economic Development is not timeously availing funding allocated to REF in the budget and this is affecting the implementation of projects.
5. Most of the rural areas are not informed about biogas technology and its benefits.
6. There are no monitoring mechanisms put in place by REA to assess the performance of implemented projects.
7. There is no standardization of the cost structure of biogas digesters with the same capacity. The same sized digesters constructed in the same year have a massive variance in terms of construction costs.
8. The solar and biogas projects constructed by REA were too expensive and this contradicts with the vision to promote the use of affordable clean energy.
9. There was no due diligence done on the feasibility studies of biogas projects. Therefore, most of the projects had poor designs, poor quality and inaccurate location which affected the efficient use of biogas technology.
10. There was inadequate training of users and lack of technical support from REA on the management and operation of biogas projects to be sustainable. As a result, some of the users were not interested in taking up the responsibility to sustain the project.
11. Most of the beneficiaries of biogas pilot projects with success stories were relying on pig manure while those that relied on human waste were non-functional.
12. COMMMITEEE RECOMMENDATIONS

In light of the above observations, the Committee recommended the following;

1. There is need for coordination between REA and ZETDC on the hand-over and take-over of completed grid extensions projects, to ensure timely connection of rural institutions to the grid when projects are completed by REA. As such, REA and ZETDC should come up with a memorandum of understanding by December 2021, to establish formal linkages.
2. REA should carry forward the outstanding targeted projects of the previous year into the following year before coming up with new projects by January 2022.
3. Ministry of Finance and Economic Development should avail funding allocated to REF in the budget to ensure projects are implemented in time.
4. There is need for vibrant awareness campaigns in rural areas and information dissemination on biogas projects and its benefits to the rural communities by January 2022.
5. REA should put in place monitoring mechanisms by January 2022 and timely assess the performance of implemented projects.
6. REA should come up with a standard affordable cost structure for constructing biogas digesters with the same capacity by January 2022.
7. REA should do due diligence on the feasibility of biogas projects and come up with designs, quality and location that promote the efficient use of biogas technology whenever they plan to construct biogas digesters.
8. REA and the Ministry of Energy and Power Development should adequately train biogas users by February 2022 and constantly give technical support on the management and operation of biogas projects to promote sustainability of the projects.
9. Ministry of Energy and Power Development should partner with financial institutions and development partners by February 2022, to provide affordable loans to individuals or institutions that want to construct biogas digesters.
10. Ministry of Energy and Power Development should engage the Ministry of Industry and Commerce and Ministry of Finance and Economic Development in order to come up with a policy by January 2022, that reduces the import duty on biogas equipment to promote adoption of the technology in the country.
11. REA should ensure that it constructs biogas digesters for institutions that have variety sources of feed, apart from human waste, to ensure sustainability of the biogas projects by March 2022.
12. REA should enforce stringent measures against vandalism of electricity infrastructure installed in rural communities and sensitise the communities on efficient methods to protect the infrastructure against theft by January 2022.
13. CONCLUSION

The Rural Electrification Programme has a great responsibility to achieve universal access to sustainable modern energy services by rural communities in Zimbabwe by 2030 in line with Sustainable Development Goal 7. Therefore, the Committee is expectant that the relevant authorities will consider and implement the above recommendations to improve the quality of projects being implemented in rural areas and promote positive response from the beneficiaries of the project. I thank you.

          *HON TSUURA: Thank you Madam Speaker Ma’am for giving me the opportunity to second the report by the Portfolio Committee on Energy. This Committee moved around Zimbabwe inspecting the works of REA and we discovered that they have embraced solar technology in their operations. We found out that there are some service stations like PetroTrade which use solar energy. PetroTrade functions so well with solar energy. Hospitals, schools and other places where people access facilities also use solar energy. We also discovered that a lot of schools and hospitals have electricity infrastructure but REA takes time to complete those projects, which then results in vandalism of electricity poles and a lot of people forget how the project would have started.

          Some people who undertake these projects do not have the necessary knowledge on what steps to take with ZESA so that electricity is installed in their households. We discovered that this is a major challenge as a lot of people do not have knowledge on what steps to take.

We also discovered that there are some people who use biogas but the biogas electricity is not functioning because people do not have knowledge.  At some schools, students are shunning bio digester toilets meant for biogas production instead opting for blair toilets because they are ashamed of being seen using those toilets which generate biogas electricity. Others allege that witchcraft may happen if their waste is used while others fear satanism. We discovered that funds from Government are not used in such projects. In some places, biogas functions properly and when those facilities have a blockage, they do not want to repair them as they do not want to touch human waste and this causes destruction of such facilities.

          As we went around, we discovered people do not have foreign currency to buy the supplies for biogas. Funds are not disbursed as soon as possible. In conclusion, let me say we are looking forward to educating people about the biogas project and the disbursement of funds to them so that they can do their projects well.  I thank you.

          *HON. DUTIRO: I would like to thank Hon. Gabbuza for the motion concerning Rural Electrification Programme. I would like to add a few words concerning biogas and bio digesters which were constructed in rural areas. The bio digesters which were built by REA in conjunction with other NGOs are new in rural areas. It was not clear who was supposed to benefit from these. If you take a closer look at those bio digesters, they were built in places where there are old aged people and the youth were not involved in the setup of these bio digesters and this led to the destruction because the old people did not have enough knowledge in operating the bio digesters so that they function properly. REA must work in conjunction with extension officers, agricultural officers in order to share knowledge so that the project will be a success.  Electricity is a challenge in this country.  We have 1 200 megawatts, our capacity is 2 000 plus and our demand is almost at 3 000.  Therefore, we have a shortfall and the Rural Electriciation Programme must proceed so that we have enough electricity that is solar and coal powered.  We have easy access to coal power because we have coal in Hwange.  We have a problem of climate change, we have no one to process coal so that we generate electricity.  We must look for other alternatives so that we electrify our country.  There is resistance in the rural areas for rural electrification using biogas sources.  Therefore, solar power is not proper to use for cooking and other sources. We need engineers to take a close look at that so that we use Zambezi River to have electricity.  We cannot depend on Zambezi River because if we have no rain, we do not have electricity in the country.  We are a signatory on an agreement that developed countries must give developing countries money so that they use for this issue.  We have no access to the funds to build hydroelectric power, solar power and other sources of power so that people will have enough electricity in the country and that is why we do not have anything from Paris Agreement.  Other Committees attend the Cooperation of Parties and other officials from the Ministry of Energy attend as well but the Committee does not attend and we wonder if we are moving forward as a country.

Madam Speaker, we are causing degradation by cutting down trees.  The Committee of Energy must take part in COP so that they present their problems and find out new things that are there.  For example, to change people’s lives, they should know the type of funding available so that we are successful.  Thank you Madam Speaker. 

HON. MUDARIKWA:  Thank you Madam Speaker.  Let me add my voice on the report submitted by the Committee on Energy.  The critical situation in Zimbabwe is that the use of renewable energy has not been accepted by the people mainly for example for biogas the costs are out of this world.   It is because biogas equipment is coming and people are paying duty.  The moment you pay duty on biogas equipment then the element of renewable energy as clean and cheap energy falls off.  The first thing that must be done is, the national energy policy of Zimbabwe must be brought to the august House for debating and then Hon. Members make contributions on what are we looking at when we say national energy policy.  Are we saying those people who use electricity must only be in urban areas and those in rural areas must continue to use firewood, so there will be wahuni and the wamagetsi in Swahili?  That element has to change; wherever there is somebody, he or she needs electricity and electricity should be there either from ZESA or from solar which is very easy and cheap.  When it was introduced in Zimbabwe, there was no standardisation.   Our electricians did not know how to connect solar gadgets, so they continue to say it does not work.  Also, again it was overpriced.  The propensity of our businessmen to make profit in Zimbabwe has killed the solar business just like what is happening now in rural areas, the cost of bread has gone up.  I do not understand why our business people have resorted to exorbitant profits hence people have resorted to mbambaira/ sweet potatoes and mufarinya/cassava.  So the same thing will happen to the use of solar energy. When things are expensive people will say it is for the whites and the rich people and they do not use them yet we are creating a big disadvantage to our people.

On the use of coal for energy, the situation of this world is that those who have things do not want others to have.  We have a huge deposit in this country; we must continue to build power stations that use coal until we reach the level of those developed countries on how they did it and if they do not want to do that they must provide the money to the Government of Zimbabwe.  We must use coal until the developed countries come and say here is the alternative for you.

We must have hydro stations along every river in Zimbabwe and we forget about coal other than that we need to continue using coal.  I was happy Madam Speaker to here that Hwange 7 and 9 is almost completed.  Let me explain to other Hon. Members, the electricity that is being generated and say Zimbabwe requires 3 000 megawatts, it constitutes about 10% of the total energy requirement.  When we talk of energy requirement, we talk of those using firewood, those using rambi reparaffin, it is part of the energy requirement of everybody but that is not happening.  As it does not happen, it creates a very difficult situation for the people of Zimbabwe.

          I am rounding off by saying, we need to be participating in international organisations that deal with energy, like what Hon. Dutiro has mentioned the element of COP.  There is also the element of IRENA, International Renewable Energy Agency; Zimbabwe is a member.  There are finances available but the challenge we face in Zimbabwe -the money from IRENA, they wanted to divert it and put it in Jatropha production, where out there in Mutoko they produce bio-diesel. 

          When you look at that project for bio-diesel, it is nothing but it is standing there to create employment for one or two people.  We go there, sometimes they have got 40 bars of soap, that is all.  At times five drums of diesel – when we are planning things for the nation, we must be serious.  So, we must take the money from IRENA and use it may be to establish a plant that makes solar panels.  United Arab Emirates, yes they have got oil; they have everything but most of their energy is now fired from solar panels.  They have got big solar farms, not our situation here where we have – it takes years and years to put up a solar farm.  According to IRENA, it takes exactly 60 days, that must be fired but in Zimbabwe, solar farm takes seven years.  There is consultancy for this.  There is a consultant for the use of the line.  There is assessment to see whether the line has the capacity; many other things.  We want to be doing many things that are not necessary and yet the nation is suffering.

          In most of the rural areas, pass rate is zero percent.  People have no access to lighting to use for studies.  So, if light was available, then we would not get these zero percent pass rates.  I had a school in my area where it went on social media.  They had three percent pass rate.  So, three percent of 1000 students; what is that?  It is really a mockery to the education system.  So energy must be made available to every Zimbabwean so that students can study; pupils can read.  Everybody can participate and we can also watch television and see what is happening in other areas.  You cannot try to blame - who do we blame now if there are five schools in one area who get zero percent?  Can you say that they are cursed that the mothers of that particular area are giving birth to children who are dull?

          Energy is critical for the development of any society.  Now we are on IT and gadgets require energy to charge them.  I have electricity at home and every day there are not less than 20/30 people wanting to charge their cellphones.  Cellphones are there but there is no point in charging them.  So, as Parliament of Zimbabwe, as Government of Zimbabwe, we need to focus on making energy available to our people.  This will make us be able to achieve Vision 2030.  We do not achieve Vision 2030 using marambi.  We cannot achieve it carrying water on our heads.  Vision 2030 is an Upper Middle Income, where in the morning you eat egg and bacon.  Even what you drink is not musombodhia, you are drinking something that is meeting the standards of life.  I thank you.

          *HON. DZUMA: Thank you Madam Speaker Ma’am.  May I speak in Shona so that my constituents can also understand.  I stand here to support the motion raised by Hon. Gabbuza, supported by Hon. Tsuura.  As a member of the Committee on Energy and Power Development, I was among the Hon. Members who went to those various areas in our country.  As you heard from the Chairman of this Committee, Hon. Gabbuza, we realised that REA indeed has reached to several places that had no electricity; be it schools, clinics and other areas and villages where they are a bit organised and there are connections of rural electricity.

          What I think should be rectified is, we should remove the use of wooden poles in the system because these days we see a lot of those poles being destroyed by termites.  We should use concrete poles or else use other poles which are not treated gum poles.  I saw that the project was very much accepted in one area in Manicaland at Madzivire High School as well as the business people there, especially Madzivire Primary and Secondary School.  They really showed appreciation of that. 

          If possible, Committees like the one on Energy should regularly go around for visits because the workers of REA project worked very hard when they heard that the Committee was going there.  If we do not do that, sometimes they spend years to complete one project.  So when they know that the Parliamentary Committee will visit regularly, they will work hard to meet the deadline.

          With regards to solar systems, we went to Mabvuku as well as Seke.  We realised that the use of generators is no longer viable.  Even a child cannot pass because they are very noisy.  They are expensive to use because they need fuel and also the fumes that they release are very bad. I realised the same when I was using the older car than the Prado that I have now, when I used to suck petrol.  It is very bad for health.  Solar is clean energy, it does not have problems.  You would not pay any rent to anyone.  It comes straight from the sun.  Our country has a lot of solar energy available, especially in Hwange, Binga, Buhera et cetera.  If you go to several places in this country, the sun is in abundance. In some countries, this solar energy is dedicated to specific areas like strategic institutions of national importance.  The use of solar energy is very impressive.  It is accepted and it is now being used, especially in residential areas.  Sometimes boreholes that give water to many people, we use solar energy for that.  It can pump water as far as 10 km to 20 km.  This country must channel a lot of resources towards that so that we move from the other conventional electricity generated from hydro or thermal.  Let us move to solar energy. 

          The Ministry of Energy and Power Development are the ones that give recommendations.  That is the source of all wisdom.  Even a newly born baby sees a light, so I hereby request that the Ministry of Finance should channel a lot of resources to the Ministry of Energy because indeed this is showing that we are moving from darkness to light.  I have decided to take this opportunity to support the report presented by the Chairperson of the Portfolio Committee, Hon. Gabbuza, supported by Hon. Tsuura.  Thank you. 

          *HON. CHIKUNI:  Thank you Madam Speaker Ma’am.  I also want to add my voice to this debate presented by Hon. Gabbuza, seconded by Hon. Tsuura.  The coming of REA helped very much the rural areas.  There was a lot of darkness but those who are organised managed to form groups and they have been receiving electricity from 2013 up to 2018.  They have organised themselves as groups and are getting access to electricity. 

          However, the challenge is, if the transformer is stolen, the people are not able to replace that transformer.  When they go back to REA, they are told that the transformers are not there.  People also do not have requisite resources to employ security guards.  I hereby request that Government should channel a lot of resources to procure transformers so that they may be able to assist groups who are supposed to contribute to the procurement of these transformers and subsidise them.  Once you get used to electricity, when you fail to get it, it becomes difficult.  There is now electricity in schools and clinics. 

          Moving to biogas, many people use cow dung.  People need to be taught on how to construct that, as well as, tubing process.  Homes that we saw using it are very good.  However, it requires young women who still have energy and a lot of cattle because the dung is required from time to time.  It needs attention from time to time but if you are able to install it and have access to it, it works very well.  The manure can also be taken to the fields and gardens.  There is need to impart knowledge on its use.  People need to be taught about biogas energy.  They also need to be taught on how to form those groups that they use to apply for electricity. 

          On REA, another speaker alluded to the fact that most of our rural areas are lagging behind because of lack of access to electricity.  Some of the schools have their transformers stolen and they have not been replaced.  The children are finding it difficult to learn without electricity.  Some of the things  require televisions or cell phones for  learning purposes, they then fail to learn through that method.  I also propose that these committees should be given a lot of resources to travel because it shows that the Government workers work hard when they hear that a Parliamentary Committee is going there.  I thank you. 

          *HON. RAIDZA:  Thank you Mr. Speaker Sir, for giving me this opportunity to add my voice on this report presented by Hon. Gabbuza, seconded by Hon. Tsuura.  It was indeed a good report that outlines challenges that REA is facing in supplying electricity, as well as, the monies that are being paid by the customers who use them.  They also talk about the use of some of the funds.  It is also mandated to give electricity to rural communities.  According to the findings of this Committee, we heard that there are some things that they are doing very well but they are also some things they are failing to do due to several challenges.  Some of the challenges include money.  They are not getting the funding on time to do their work.  The other thing is that they are not providing service to people, like adequate supply of electricity.  His Excellency the President, Cde. Mnangagwa said that Vision 2030 is supposed to give people a better livelihood. Looking at electricity, if the relevant authority is given the required support and resources, I think we will be able to fulfil the vision outlined by His Excellency the President of this country. 

          The mandate of REA must be to focus much on giving electricity to rural communities so that the rural communities will not be left behind in terms of development.  When people get access to electricity, they will be able to use that electricity not only for domestic use but also for other entrepreneurs that will give them revenue.  So we are saying electricity is very important and it contributes to the development of people’s livelihood.

          So the REA Department must work harder in everything they are doing so that people’s livelihoods can be improved.  The other thing that I would like to say is that since they realise that conventional electricity is difficult they should increase output from solar energy because that will ensure that people will get electricity faster and it should be cheaper.  They should research through their engineers at REA on how best they can do this so that they can supply solar generated electricity.

          Mr. Speaker Sir, in schools, we are saying children must not be left behind in learning especially in this COVID-19 era.   If children do not have access to electricity they are left behind in school.  Children in rural areas must be able to access e-learning so that they catch up with children from the urban areas.  Duty that is being charged on all solar products must be decreased from 60% to even 10% that can help us to ensure that people access electricity and solar power. 

          The budget allocation for REA must be increased so that the rural electrification programme can be a success.  We have heard about biogas generated electricity, it is only known by the employee of REA but some of the people in the rural areas, especially from the constituencies that we represent like Mberengwa do not know anything about it.  They are supposed to ensure that they spread the information to the majority of people so that REA is on the same page with the people.  Training must be extended to many people and REA must put a lot of money in teaching people about various forms of electricity and biogas.

          Even in the Bible, it is written that my people perish because of lack of knowledge.  REA should take their message to the people and teach people and all existing infrastructure must be safeguarded and maintained properly; they must teach people on how to maintain the infrastructure.  They must have a maintenance department.  I am saying this from experience. In my constituency at Svitsa clinic, REA put up electricity some 10 years ago and now it is not working, it only worked for a year.  There could be a very small problem that needs fixing yet people are going for years without electricity.

          The chiefs benefited from the electricity programme.  At Chief Mataruse they installed solar powered energy; that system only worked for a year and up to now it is down.  There is no support service as well as maintenance and follow ups on people they would have supplied with electricity to see that they are not facing any challenges. With these few words, I would like to say I thank you very much Hon. Speaker.  I am in support of this report.

          *HON. TEKESHE: Thank you Mr. Speaker Sir for giving me this opportunity to support the report brought by Hon. Gabbuza and seconded by Hon. Tsuura.  I would like to talk about REA especially with regards to my constituency.  People are failing to get electricity through the REA project; it is very expensive, and people are now thinking that the Hon. Member of Parliament will have money to give to people.

I met a lot of people who said they bought poles or have done partly some of the process.         Sometimes they hire contractors who do not do the full job or sometimes they bring untreated poles.  Only those who benefited from REA when it started are the ones who benefited properly. The rest where I come from in Makoni Central, there is nothing. All the funding that we hear is being given, where is it going? We have asked for an explanation on this funding, where is the money going to after people are being taxed on the rural electrification programme yet the rural areas are not even benefiting? 

          People are poor out there, they do not have enough money, and one of the Hon. Members said the tax should be increased.  Let us first of all see how the current money is being spent before we can increase it.  I thank you.

          +HON. CHASI: Thank you Hon. Speaker.  I want to add my voice to this report that has been tabled by Hon. Gabbuza, seconded by Hon. Tsuura.  The issue of electricity is an important one.  I would like to thank the Government for the initiative of REA.

  I also want to add that this is a task that needs patience because in the rural areas country-wide, people are suffering because they do not have electricity.  In some areas, they do not even have firewood.  People are chasing one another and fighting so that they can collect cow dung to use as fuel for cooking.

          What the previous Hon. Member said is very important. In other areas, electricity cables will be passing through the school yet that particular school is not connected to the electricity.  With the introduction of online learning due to COVID-19 pandemic, it then becomes impossible to apply it.  Other schools in the rural areas were given computers and laptops but without electricity, everything is impossible. 

          At the clinics, the issue is the same; there are a lot of areas where there are electric cables that were just left idle.  I think that the mandate of REA cannot be fulfilled if we say people in the rural areas should pay for their electricity to be connected because they do not have the money.  It would be much easier if people in rural areas are connected to the electricity grid and they pay over a period of five years.  This will allow them to use electricity to create income generating projects so that they repay the electricity connection fees.

          Most people who are in the rural areas are old and for them to pay for electricity to be connected may be impossible because they do not have the money. I am appealing to the Government that it takes the burden for connection of electricity in the rural areas. After the electricity has been connected in the rural areas, people can now be billed to pay for electricity.  If it can be implemented in this way, everything will be fine.

On the issue of solar energy, it is another pertinent issue. There are areas like Beitbridge, Matabeleland South, Matabeleland North and other areas which are always sunny and favourable to use solar energy.  Therefore, I suggest that REA should also shift its focus of using electricity that is generated from Kariba and concentrate on using solar energy so that we can connect schools and boreholes through solar energy.  There are some areas where there are boreholes but they can no longer pay for their electricity bills, meaning that they will be cut off from the water supplies. Therefore, if we use solar energy, they will have their water continually. If this was enabled, it would assist us a lot.

 The issue of electricity will assist the nation in creating employment.  The young men in the rural areas can begin to do welding as a source of income and others can engage themselves into agriculture and irrigating their crops using this solar energy.

          I do not see it as justified that we do not have electricity in rural areas yet there are a lot of ways to create electricity.  There are ways of generating electricity in rural areas.  In my view, I think REA should make awareness campaigns in the rural areas so that people are aware that they can create electricity if you have bio-harvester.  I thank you.

          HON. NDUNA: Thank you Mr. Speaker Sir.  I want to add my voice and ventilate on a few issues in the report by Hon. Gabbuza, seconded by Hon. Tsuura. 

          Firstly, I want to commend them for a report which is flawless bringing out very pertinent issues in terms of power generation, usage, plundering of the resources, how to avert, avoid and completely eradicate the scourge of plundering.

          There are just a few issues that I want to touch on; the capacitation of REA, the modus operandi and how I propose that it be capacitated.  The previous speaker who stood on this pedestal and platform spoke to the issues of the incapacity of the rural folk in terms of paying for electricity.  The establishment and the laying of cables, especially for loads of kilometers are quite usurious.  It is not for the faint hearted; if you do so, nine times out of 10, the material used is prone to vandalism.

          We debated in this august House about the issues of copper that is being plundered or that is being pilfered.  The thieves are actually vandalising and we suggested as a House that all copper dealership licences should be revoked because Mhangura Copper Mine which used to produce copper is closed until such time when we have production lines or when we can produce from our mines. That material, we are using the copper cables from REA and ZESA as the mine. What it means is that we are shooting ourselves in the foot.

          We have the Minister of Energy crying foul in terms of vandalism and here we are with impunity continuously producing or issuing out licences. So we stood right here and requested that Government revokes those licences for the very reason that we do not have an operating mine that produces copious amounts of copper for cabling for ZESA and electricity production.

          Having said that, I was on the point of the various amounts needed for laying those cables, so I agree and go further to say there is need for those that are going to come into bed with REA on a PPP basis, where there is no Government capital outlay; they should be given tax havens and tax concessions and holidays, pretty much along the same lines as the Special Economic Zones scenario where the investor comes in and takes holiday for five years or three years and they are situated in a geographical location whose tax incentives and modus operandi are actually tailored in a way that is going to encourage investment and copious amounts of the same.

          So I encourage REA to go into partnership with producers of energy because this has become a global village. We can no longer operate in silo systems in a way that is not coordinated with the global community. We have a lot of people, a lot of banks and a lot of institutions that have a lot of money that they can utilise in energy generation at very low interest rates if we have to say that. All they want is to have a safe haven for their money and also get a little bit of income in terms of returns through robust resilient, effective and efficient business initiatives. I encourage that REA goes into bed with these institutions.

          Secondly, if it has not been done, the issue of revoking the licences of copper dealership in Zimbabwe should be revoked immediately. Isaiah 6: 1 says, “In the year that King Uzziah died, I saw the Lord”. Let us use this report that has come here. It is not too late to make sure that we stop in the tracks the plundering of the resources that REA seeks to establish in the Rural Electrification Programme. Otherwise, what we are doing is that we are going three steps forward and four steps backwards.

          I speak like this because we have got a derelict Dabuka marshalling yard which had about 300 kilometers of copper wire which was plundered from Gweru to Harare. That was a lot of cabling and if they had not been any plundering of the copper resources in ZESA and in the REA’s spheres of operation, we could have added into the clients of ZESA more than 600 000 more clients, but you will find that we still have about nearly half a million or 600 000 clients and what did ZESA use or REA use to replace the plundered resources? They used enough cabling for 600 000 more clients.

          So, we could be having more than 1.2 million clients from the resources that were used to duplicate what was stolen from ZESA. The issue of the theft of copper cables is real. You find that there are no deterrent enough sentences that are going to make sure that the theft is stopped in its stray. To complement, augment the issues of curtailing the theft, I propose that we remove the licences and revoke those that are in place because we cannot for sure monitor and police the current scourge of plundering of those resources and theft which is gigantic and humongous in proportions.

          The Third and last issue that I want to touch on is the issue of renewable sources of energy and other sources of energy that the report spoke to and about. It is that of bio-digesting. There is natural flow of human waste that is currently occurring in urban local authorities and there are bio-digesters that have been established. I talk about Harare Metropolitan Council that has defunct bio-digesters which have not been in use because they have not been repaired.

          More so, it could be the reason why the workers are shying away from human waste in terms of capacitating, maintaining and rejuvenating those bio-digesters whose contract and agreement is in place and is currently subsisting. For the past 7 to 9 years, those bio-digesters are lying derelict and defunct.

          May I make a clarion call therefore to resuscitate these bio-digesters - they could add a few megawatts into the system especially for Harare Metropolitan to alleviate the plight of the innocent, unsuspecting citizens of Harare in order that they do not pay these usurious amounts may be for 13 cents, 12 cents kilowatt hour or otherwise.

          It is my hope and view that we will first deal with those bio-digesters before we establish more. I want to thank you for giving me this opportunity to vociferously, effectively and efficiently represent the people of Chegutu West Constituency who in name include; Lameck Nyamarango, Sarah Chikukwa, Marjory Ruzha, Patricia Nyamadzawo, Mr. Makoni and Mr. Green, who would have made me debate in the manner that I have to actually bring in their issues into this august House through Section 119 of the Constitution of Zimbabwe that speaks to and about the representative role that I am endowed with. Thank you for the opportunity Mr. Speaker Sir and good afternoon.

          HON. SVUURE: I move that the debate do now adjourn.

          HON. NDUNA: I second.

          Motion put and agreed to.

          Debate to resume: Tuesday, 5^th July 2022.

MOTION

REPORT OF THE PORTFOLIO COMMITTEE ON INDUSTRY AND COMMERCE ON THE FACT FINDING VISITS TO PROJECTS IMPLEMENTED UNDER THE INDUSTRIALISATION PROGRAMME

          HON. SVUURE: I move the motion standing in my name that this House takes note of the Report of the Portfolio Committee on Industry and Commerce on the fact finding visits to projects implemented under the Industrialisation Programme from 2019 to October 2021.

          HON. S.K. MGUNI: I second.

          HON. SVUURE:

1.0 Introduction

The Portfolio Committee on Industry and Commerce undertook fact finding visits to companies that received funds from the 2019 National Budget to date under the Industrialization Programme from the 18^th to the 21^st of October 2021. The visited companies are Chemplex Corporation, Olivine Industries, Sable Chemicals and Radar Investments. The funds were disbursed through the Industrial Development Corporation’s lending facility. The activity was funded by the African Development Bank (AFDB) under the Tax and Accountability Enhancement Project (TAEP) in collaboration with the Government of Zimbabwe. 

2.0 Objectives

1. To ascertain how the ZWL20 million loan received by Sable Chemicals, ZWL 170 million by Chemplex Corporation, ZWL 5 million by Olivine Industries and ZWL 20 million by Radar Investments were utilized; ii. To get a detailed breakdown of the projects that were implemented by loans extended to these companies by IDC in 2019, 2020 and 2021, including but not limited to projects that were completed, projects that are still in progress, the envisaged benefits of the projects in resuscitating industry and contributing to the attainment of Vision 2030;

iii. To appreciate the challenges faced in implementing the projects; and 

1. To appreciate challenges being faced by Willovale Motor Industries, if any, and proffer palatable recommendations.

3.0 Methodology

The Committee held oral evidence sessions with the Industrial Development Corporation of Zimbabwe and undertook fact finding visits to Chemplex Corporation, Olivine Industries, Sable Chemicals and Radar Investments. It held meetings with management of all the aforementioned companies and toured the projects that were implemented as a result of the loans granted to them by the IDCZ. The Committee took the opportunity of the said visits and visited Willowvale Motor Industries where it met with management and briefly toured the company’s premises.

4.0 Committee Findings

4.1      Brief Anatomy of the Industrial Development Corporation of Zimbabwe.

4.1.1 Shareholding Structures

The investment shareholding structures for the IDCZ range from 100% like Chemplex to 17% at Modzone, with Foreign Direct Investment partners like Italians in dimension stone mining and processing, Indians and Singaporeans in Surface Wilmar Investments and Olivine Holdings, Chinese in cement as at SINO Zimbabwe Cement Company and, Iranians at Modzone and Motira, and local conglomerates TA Holdings at Sable chemicals and ZFC. 

4.1.2 Group Investments and Sector Clusters

The group investments comprise, large, medium and small, created, acquired or rescued, subsidiary and associate. The acquired or rescued are mostly capital-intensive industries with old and obsolete plant and equipment (Chemplex, Olivine, Willowvale Motor Industries, Deven Engineering, Modzone Enterprises, Ginhole Investments), being mainly subsidiaries except for Modzone Enterprises which is an associate. The relatively newly created regional and export oriented and automated strategic industries are Surface-Wilmar Investments, Sunway City, Sino Zimbabwe Cement Company, Motira (Private Limited) being mostly associates.

Sector coverage-The group covers a wide cross section of sectors, in Argo Industries, Motor and Transport, Glass, Textiles, Packaging, Metal extrusion, Industrial minerals, Animal and health, furniture, chemical and fertiliser, dimension stone, insurance and real estate.

4.1.3 Statutory Objectives of IDCZ:

1. With the approval of the Minister, to establish and conduct new industries and industrial undertakings.
2. To facilitate, promote, guide and assist in the financing of: (i) new industries and industrial undertakings (ii) schemes for the expansion, better organisation and modernisation of and the more efficient carrying out of operations in existing industries and industrial undertakings.

• Without prejudice to the function and powers conferred upon other relevant agencies or institutions of the Government and so far, as maybe practicable, to assist and support the development of small scale or medium scale industries and industrial undertakings.

1. Within the scope of its functions and powers, to implement policies of the Government in regard to decentralisation of industry, choice of technology and such other matters connected with industrial development as the Minister may specify for that purpose.
2. To undertake the development of management and technical expertise in the carrying out of operations in industries and industrial undertakings, including the development of expertise in project analysis, evaluation of investment opportunities and the provision of consultancy services.
3. To take such measures as maybe necessary or expedient to enable the Corporation to exercise direct and effective control over enterprises in which it has made an investment; to the end that the economic requirements of Zimbabwe maybe met and industrial development within maybe planned, expedited and conducted on sound business principles.

4.1.4 Mandate, Vision and Mission

The IDCZ is mandated to establish and conduct new industries and industrial undertakings. Its vision is to contribute to the transformation of Zimbabwe to a value adding and beneficiating middle income economy. Lastly, the IDCZ’s mission is to identify, develop, mobilise resources and finance industrial project opportunities into commercially viable ventures in partnership with local, regional and international investors, and technology and market access partners.

4.1.5 The Industrial Development Fund

The Corporation is allocated funds through the National Budget under Programme 2 of the Ministry of Industry and Commerce’s Budget known as the Industrialization programme. The corporation commenced lending activities in 2019, after receiving seed capital from the government as its sole shareholder. It opened a special bank account where all the lending fund movements are being tracked for easier control and transparency. The fund is in local currency (RTGS) and is managed as a revolving facility, meaning that as other beneficiaries repay, the reserve being built becomes available to others. Total funds received from government by IDCZ from 2019 up to 31 October 2021 are as follows, July and December 2019, ZWL$64 000 000, 2020 April to end of year, ZWL$ 60 000 000 and in 2021 from July to end of October ZWL$ 100 000 000. This gives a sum of ZWL $ 224 000 000 as at 31 October 2021.

The fund targets corporates who are either existing or new who are into manufacturing and value adding activities across the country and priority is given to those who are able to exploit our local currency to export or have the potential to do so or to import substitute.

4.1.6 Disbursement summary -The total amount disbursed by IDCZ as at 19 September 2021 was ZWL$289 522 580 to fifteen companies and out of these, six managed to pay off their loan obligations while the remainder were still running. 

4.1.7 Interest Rates & Charges- At inception, the corporation started at 15% per annum, then reviewed to 25% per annum up to the time of the visit where it was charging 35% per annum. The interest rates are guided by the RBZ rates for the productive sector. The corporation also charges an administration fee of 2% of the total amount disbursed to cater for visits related to monitoring to ensure that funds are being used for the approved purpose.   

4.2 Disbursements Summary for the Visited Companies

4.2.1 The Acting General Manager for the Industrial Development Corporation of Zimbabwe, Mr. Tranos Mutingwende presented before the Committee the funds that were disbursed by the Corporation to the four visited companies from 2019 to end of October 2021 as illustrated in the table below.  

Name of Company	Capital Expenditure (ZW$)	Working Capital (ZW$)	Total (ZW$)
Chemplex Corporation	68 000 000	102 000 000	170 000 000
Olivine Industries	-	5 000 000	5 000 000
Sable Chemicals	-	20 000 000	20 000 000
Radar Investments	10 000 000	10 000 000	20 000 000
Total	78 000 000	77 000 000	215 000 000

 

The corporation submitted a document before the Committee that summarises the general purpose of the funds disbursed to the above companies as well as the utilization of the same funds which was in line with their business proposals. Having been equipped with this information, the Committee conducted field visits to Chemplex Corporation, Olivine Industries, Sable Chemicals and Radar investments to verify the above, assess the progress made in the implementation of the projects and appreciate the challenges faced if any, as illustrated in the subsequent paragraphs.

4.3 Chemplex Corporation

4.3.1 The committee visited Chemplex Corporation on the 18^th of October 2021. It was briefed by the Acting CEO, Mr J. Chigwende that the group received ZWL$60 million in 2020 and ZWL$110 million in 2021 from IDCZ. This sums up to ZWL$170 million received as at 31 October 2021, a confirmation of the submissions from the IDCZ. The ZWL$110 million was for capital projects and working capital to enhance capacities and efficiencies in the fertilizer value chain and traded chemicals. The funds were split as follows ZWL$68m (US$0.8m) for fertilizer plants capital projects and ZW$32m (US$0.4m) for working capital for traded chemicals and veterinary remedies. The division was categorised as essential services under COVID-19 as its products which range from sanitizers, water chemicals, cattle dips and fertilizers were key in surviving the scourge as well as curing the January disease that ravaged livestock at the beginning of 2021. It is important to note that the loan was repaid fully and that it was part bailout for defaulted account by City of Harare then of ZWL $370 million for the supplied water treatment chemicals. The subsequent paragraphs give a detailed breakdown of the utilization of the ZWL$170 million that was granted to Chemplex and its impact.

4.4 Zimphos

4.4.1 The company was granted ZWL$ 34 million from the ZWL $ 60 million that was received by Chemplex Corporation in 2020. ZWL$ 23.4 million was used to procure raw materials for water chemicals production namely bauxite, sulphuric acid and coal whilst the balance of ZWL $10.6million was used to service the water treatment production plant, (boilers, compressors and other spares) to enhance increased production.

4.4.2 In 2021, Chemplex Corporation allocated ZWL$60 million to ZIMPHOS for the purchase of a new Granulation Plant and a new Blending plant. ZWL $42.5million was utilized for purchasing the former and ZWL $25.5million the later. At the time of the visit, the two plants were not yet delivered at ZIMPHOS, however the procurement process was in motion and delivery and commissioning was expected to take place in January 2022 which was 12-15 weeks from the time of the visit. The selection process of a Civil Works supplier was in motion, running parallel with the equipment manufacture and delivery. 

4.4.3 The loan improved the supply of water chemicals by almost double especially to City of Harare where an average of four truckloads were done daily from the previous two resulting in improved provision of clean water supply to the City of Harare. It contributed to the improvement of capacity utilization from 45% to 75%. Plant efficiencies also increased which resulted in price reduction of over 30% in 2021 supplies to the customers. However, the City of Harare debt skyrocketed to ZWL$400 million and as at 31 October 2021, it was at ZWL $90 million as required deliveries were being met but with default payments.

4.5 G & W Industrial Minerals

4.5.1 Mr. Chigwende briefed the Committee that, there was growing demand of agricultural lime for both commercial customers and Government input schemes and stock feeds for various customers.  These products were in short supply but G & W has vast limestone resources to be exploited for these products. The company operations had been suspended over the years. Recently, an amount of US$500 000 was injected from own resources to resume operations for the production of affordable agricultural lime and the ZWL$ 10 million from the government. The latter was spent on spares and repairs on the equipment that was at the time of the visit close to 90% available for full production of 3500 tonnes per month to 5000 tonnes per month. The plant was producing 1000 tonnes per month.

4.5.2 Production has already started at one of the mines in Concession area and refurbishment work being completed at a mine in Rushinga. At the time of the visit, production of 3500 tonnes per month of agricultural lime was projected to be mined in the fourth quarter of 2021 and it was projected to increase to 5000tpm from 2022 onwards. The plant was also to produce stock feeds. It was highlighted that an additional amount to the tune of ZWL$7million working capital was needed for purchasing of spares and packaging material to ensure production and supply of at least 3000t pm.

4.6 Chemplex Animal and Public Health (CAPH)

4.6.1 Chemplex Corporation commands a market share of around 55% on animal and public health chemicals through its division, Chemplex Animal and Public Health (CAPH) and has a potential to grow the market share to more than 70%. The division manufactures cattle dips, tick grease, worm remedies, antibiotics and wound remedies. It also manufactures Malaria vector control chemicals, tsetse fly control chemicals, grain protectants, poultry flea dust, rodenticide and sanitizers. Strategic raw materials for cattle dips and public health chemicals are imported from China, India, and South Africa. Adequately financed, CAPH has the potential to supply dipping chemicals and tick grease requirements for the department of Veterinary Services. The Division also has a potential to manufacture and supply grain protectants to protect the bumper harvest from the Pfumvudza initiative, thus enhancing the country’s food security.  

4.6.2 CAPH got ZWL$17million from the ZWL$110 million disbursed to Chemplex Corporation by the government through the IDCZ. At the time of the visit, ZWL$7 million worth of raw materials had an allocation at the RBZ auction system queuing for foreign currency release. The balance of ZWL $ 10 million was yet to get foreign currency allocation. In 2020, the division was given ZWL$10 million from the ZWL$ 60 million that was received by Chemplex Corporation from IDCZ. The money was used to procure raw materials for the production of an equivalent of 4 000 litres of sanitisers, raw materials for the production of cattle dips and packaging materials. Part of the money was also used to modify the existing dips plant for the production of sanitisers. At the time of the visit, production and supply of sanitizers was still ongoing. The division also produced cattle dips and these were supplied to the department of Veterinary Services and other customers. The dips helped to mitigate the impact of the January disease and the programme was still ongoing. As a result of the loan, capacity utilization increased by 5% from 25%.

4.7 Chemplex Marketing

4.7.1 The Committee was briefed by the Acting CEO, Mr. Chigwende that Chemplex Corporation has a market share in traded chemicals of around 15% through its operating division Chemplex Marketing.  It has the potential to increase to 60% from its strong brand and a huge order book which it fails to fulfill due to working capital funding challenges. Cognisant that the ballooning of the import bill is precipitated by the importation of industrial chemicals for mining, food industries, water treatment chemicals for local authorities which can be produced locally, it gives a huge potential for Chemplex Marketing to exploit the market opportunity through production of water treatment chemicals. 

4.7.2 The division got ZWL$ 16 million from the ZWL$ 60 million that was granted to Chemplex in 2020. The money was used for importation of raw materials for the manufacture of water treatment chemicals. These are sulphuric acid, hydrated lime and aluminum sulphate for portable water and Power Station water purification chemicals. The loan resulted in improved supply of clean water through provision of adequate water treatment chemicals to the City of Harare and other customers. There is also the uninterrupted supply of power station water chemicals at ZPC Hwange for national power generation.

4.7.3 The division got ZWL$15 million from the ZWL$110 million that was granted to Chemplex Corporation in 2021. At the time of the visit, ZWL$7 million worth of raw materials had allocation at the Auction Market waiting for foreign currency release. The balance of ZWL $ 8 million was yet to get foreign currency allocation.

4.8 Challenges at Chemplex Corporation

4.8.1 The Acting CEO outlined to the Committee, the challenges bedeviling the group. He said that although the Reserve Bank of Zimbabwe promised to support on forex allocation, not enough forex has been allocated to the corporation as at 31 October 2021. Compounding the financial challenges was that, the Government through its fertilizer programmes owes Chemplex group (ZFC, ZimPhos, Dorowa) US$11.6m (approximately ZW$1billion) for winter fertilizer supply, thereby holding back funding for summer preparedness. The financial situation was worsened further by the City of Harare’s debt of over ZWL $90 million and the slow payment of the debt was choking the supply chain. The non-payment of the VAT debt by the City of Harare has been a burden on the group.

4.8.2 Electricity charges at Dorowa Mine are at 60% in United States dollars and 40% in local currency (RTGS$) whilst 70% of the group’s products are supplied to local markets in Zimbabwean dollars. Hence, he appealed for the electricity charges to either be wholly levied in local currency or for the 60% to be in local currency and the 40% to be in foreign currency.

4.9 Assistance Required by Chemplex Corporation

4.9.1 Mr. Chigwende briefed the Committee on a number of projects that needs funding assistance from the IDCZ. These are Dorowa magnetite project for US$2.5m, Dorowa Phosphates project for US$13m in tranches, ZimPhos sulphuric acid plant for US$9m, CAPH projects for US$1m and GMP plant for US$3m-US$6m, Bauxite Mine purchase for approximate US$2.5m and Phosphoric acid plant refurbishment for US$30m (medium term). He also highlighted the need and importance of government support for the projects to get some momentum. Also that Government fertilizer orders should be released early in the year for ample time to prepare and collections to happen early and avoid congestion.  Ideally, the ZW$ funding for fertilizer should be put in place as working capital and cash covers for forex.

4.9.2 Further to the above, he appealed to the government through the Committee for the enactment and operationalisation of a Statutory Instrument that awards all government tenders to Chemplex Corporation for water treatment chemicals, cattle dipping chemicals, grain pesticides, fertilizers and agricultural lime. Also, a Statutory Instrument that increases procurement threshold for buying locally from US$300 000 to US$1 million to be operationalised and raw materials for the production of cattle dips and water chemicals to be duty exempted in support of the restocking programme and clean water supply.

4.9.3 Lastly, he appealed for the Reserve Bank of Zimbabwe to continue prioritising allocation of forex to capital projects and project funding. At the time of the visit, this has started happening and should just be followed through.

4.10 Olivine Industries

4.10.1 Olivine Industries manufacture a wide range of fast-moving consumer goods (FMCG) like margarine, baked beans, bathing and washing soaps, cooking oil among others. The company accessed ZW$ 5 million from IDCZ for working capital to procure raw materials for soap and margarine production lines. The raw materials procured are palm steering for soaps, I.E fats for margarine, caustic soda, butter flavour and fragrances for making Jade soap.

  Challenges and Impact of the Loan

4.10.2 The CEO, Mr. S. Mangani briefed the Committee that Olivine industries require around US$ 5million to US$ 6million per month to operate optimally on its various product lines. At the time of the visit, the company was operating at 30% capacity due to limitations precipitated by the lack of access to adequate foreign currency from the Auction System. Hence the ZW$5m which at that time translated to around US$ 60 000 was utilised to purchase ancillary items which had no significant impact on the overall company performance with reference to job creation, import substitution, and exports.

4.11 Radar Investments (Pvt) Ltd T/A Macdonald Bricks

4.11.1 The company operates two brick making plants in Bulawayo under a brand name Macdonald Bricks at Willsgrove and Montgomery plants. The two plants operate within clay mining claims with a combined resource that is expected to last for another 80 years.  Their clay deposits produce high quality Standards Association of Zimbabwe certified bricks that meet both local and export standards. The two plants complement each other as Montgomery focuses on face bricks while Willsgrove focuses on the high volume non face bricks.  All Macdonald brick products are clay based and range as, Face Bricks mainly used for aesthetic reasons, Industrial Bricks commonly used for load bearing structures and Common Bricks used for building walls.

4.11.2 Radar Investments (Pvt) Ltd was granted ZWL $20million loan funding for the purchase of raw materials and for working capital to enhance capacity and efficiencies in the construction value chain. The company split the funding as follows, ZWL $10million for plant and equipment for its Willsgrove Brick Factory, ZWL$5 million for the purchase of raw materials and ZW$5 million for working capital. 

4.11.3 The Committee toured the Willsgrove plant and witnessed the factory sheds/structures that were built with some of the loan funds to house the new brick making equipment that was imported by the company from China. The sheds were made of new steel beams and roofed with Inverted Box Rib (IBR) Zinc roofing sheets. 

Impact of Loan

4.11.4 As a result of the upgrading of the plant and equipment at Willsgrove, the company has a combined annual output of 100 million bricks per annum. Prior to accessing the loan, the company was operating at 40% capacity due to financial constraints however, at the time of the visit it was operating at +/- 80% capacity due to the positive impact of the loan received from IDCZ. The introduction of new technology at the new Willsgrove plant resulted in low production cost which was being cascaded down to the customers through reduced prices by 3% per pallet of bricks. The company, directly and indirectly created employment for +/-300 people. This is through direct and downstream employment in transport, packaging and other plant spares cluster industries.

 4.12 Sable Chemicals

4.12.1 Sable Chemicals manufactures Ammonium Nitrate fertilizers from ammonia gas imported from South Africa using railway tankers. The importation follows the impairment of its electrolysis plant which sucked ammonia gas from the air using the electrolysis process which was using a disproportionate amount of electricity. For every tonne of imported ammonia gas, the company produces 2.1 tonnes of fertilizer. It commenced its operations in 1960 and is the sole producer of nitrogenous fertilizer in Zimbabwe with a capacity to produce 240,000 tonnes of ammonium nitrate (AN) fertilizers per year which can supply the entire market.

4.12.2  The General Manager, Mr. B. Nyajeka briefed the Committee that the company was granted ZWL$ 20million loan for the purchase of ammonia gas, a key raw material in the manufacture of Ammonium Nitrate fertilizers.  The company initially applied for ZW$40 million on 25 February 2020 when the exchange was at US$1:18 ZWL$ which at that time was equivalent to US$2.2m which was enough to purchase 4000 tons of Ammonia gas for the manufacture of 8 000 tonnes of AN. However, on 28 July 2020 an amount of ZWL$ 19.45 million net of charges was disbursed to Sable Chemicals. On 7 August 2020 the company went to the RBZ auction and got the foreign currency at a rate of 1:85, equivalent to US$229 000. The company paid for ammonia equivalent of 407 tonnes and produced 814 tonnes of AN. The fertilizer was sold to ZFC, Omnia & National Tested Seeds. The company paid back the loan on the 30^th of June 2021. Hence, when the Committee toured the plant there were traces of manufacturing of fertilizer taking place at Sables Chemicals but the fertilizer that was produced as a result of the loan was long sold.

Impact of Loan and appeals by the company

4.12.3 Mr. Nyajeka, reiterated the importance of the loan received from the IDCZ as it improved the capacity utilization of Sable Chemicals from 15% in 2020 to 80% in 2021. It also contributed to downstream employment in the agricultural sector, import substitution as well as foreign currency savings 

The General Manager requested for the timely release of ZWL$ funding by the Treasury to local fertilizer manufacturers to allow for perennial production of Ammonium Nitrate fertilizers as this increases the availability of ammonia gas. He also reiterated the need for capacitation of the Land Bank (AFC) and continuation of the IDCZ’s finance facility to fully implement the Import Substitution Program.

4.13 Willowvale Motor Industries

4.13.1 The Committee visited WMI and it was briefed by the Acting General Manager Mr. Matanhire that the company was established in 1961 and IDCZ bought the company in 1967 and opened it for contractual assembly. The company was restructured into an automotive group called Motec Holdings under a joint venture partnership between Industrial Development Corporation of Zimbabwe (IDCZ), Mazda Corporation of Japan and Itochu Corporation (C Itoh & Co then) of Japan. This agreement was signed in 1989 and expired in 2014. WMI, a subsidiary of Motec Holdings (as it was then), started to concentrate on assembling the Mazda brand, achieving significant gains in productivity. Over the years, the partnership contributed to the enhancement of production capacity, quality and skills development to enable the company to produce world class vehicles for Zimbabwe and the region. The assembly line is one of the most flexible in the world as it is capable of producing any automotive products that include passenger vehicles, light and heavy commercial vehicles, bus chassis and tractors. The company was operating on contract assembly basis and from 2017 to 2020 has assembled

BAIC picks-ups from SKD kits. Below are vehicle brands (Baic and Mazda) assembled at WMI.

 Challenges and Assistance needed at the company

4.13.2 The committee was informed by Mr. Matanhire that WMI was bedeviled by a plethora challenges and chief among them was a debt of US$ 2.1 million owed to suppliers of vehicle kits in China. The debt antagonized the relationship between the company and the suppliers resulting in the later not sending the kits to WMI. Further to the above, some of the equipment was obsolete. It was backdated to 1920, 1961 and 1999. This is exemplified by the secondhand painting facilities that were purchased in 1961.  Having said this, the Acting General Manager appealed for an overhaul retooling of WMI.

4.13.3 Further to the above, the Acting General Manager said that the company needs an injection of approximately US$ 15 million to produce 150 cars per month and US$5-8milllion for the overall retooling exercise. He proposed that there was need for the government to buy a minimum of 4000 units/cars per annum to keep the company viable as was before. 

Committee Observations

1. The loans were used for the intended purposes.
2. The loans contributed to increased capacity utilisation and employment creation.
3. There is need to adequately fund the Industrial Development Fund so as to contribute substantially to the re-industrialization of the country.
4. Erratic disbursement of the Industrial Fund by the Treasury affects the planned projects of beneficiaries as the money loses value through inflation due to prolonged periods between the date of approval of the loan and the date of disbursement.
5. Most equipment at Willowvale Motor Industries was obsolete and the entire factory roof needs to be refurbished.
6. Electricity charges in foreign currency at Dorowa Mine are too high.

Committee Recommendations

1. The Ministry of Finance and Economic Development should timeous disburse the budgeted Industrial Fund to the IDCZ for forward lending so as to circumvent waning of the value of the fund through inflation in particular and for it to contribute substantially to the re-industrialisation of the Zimbabwean economy in general. Hence, Treasury should make sure that by August 2022, all the budgeted funds for Industrialization are released to the IDCZ.
2. The Government, through the Ministry of Finance and Economic Development should proactively support the local Motor Manufacturing Industry by providing a facility which guarantee loans to civil servants for the purchase of locally produced cars a situation prevailing in South Africa and Botswana by the end of 2023.
3. The Ministry of Energy and Power Development should engage the Zimbabwe Electricity Transmission and Distribution Company (ZETDC) by the end of July 2022, to lower electricity rates in foreign currency (USD) at Dorowa Mine from 60% to at least 40% so as to improve the viability of the Chemplex group, as 70% of products produced by the group are consumed locally where payments are made in local currency.
4. The Reserve Bank of Zimbabwe through its Auction System should immediately prioritise allocating foreign currency to project funding, particularly the beneficiaries/companies that receive loans from the Industrial Fund for capital projects or import substitution.
5. The Government, through the Ministry of Mines and Mining Development, by 31 November 2022, should enact a Statutory Instrument that bans the importation of phosphate which is produced in abundance at Dorowa Mine.
6. The Committee is in support of the enactment and operationalisation of the enactment and operationalisation of a Statutory Instrument that awards all Government tenders to Chemplex Corporation for water treatment chemicals, cattle dipping chemicals, grain pesticides, fertilizers and agricultural lime. In this regard, the Government should come up with this Statutory Instrument by the end of December 2023.

 Conclusion

In reiteration, the Committee commends the above beneficiaries of the Industrialization programme for positively utilising the loans extended to them by the IDCZ. However, the Committee appeals to the Government of Zimbabwe to continue support the reindustrialisation program by allocating more funds to the Industrialisation programme.  I thank you.

          HON. NGUNI:  Thank You Hon. Speaker for affording me the opportunity to support this motion.  I would like to add my voice to the monitoring and evaluation as well as the injection of capital, especially in relation to the budget and reviving of our economy in relation to our industries in Zimbabwe, as well as the purchasing of equipment and machinery that is necessary in this country.  Hon. Speaker, Sir, Zimbabwe is a country that can develop quickly if we follow up on all the monies that are disbursed to various ministries.  When you look closely at people in industries who wish to uplift their companies, what is dragging them behind is the money that they are being given.  I will say this in relation to Olivine Industries which is one of the companies with potential to grow.  The management that we met expressed their concerns and wished they could increase their manpower and grow the company so as to be able to employ more people.  They even showed us the machinery that they had imported using their own funds but has been sitting idle for more than two years because of lack of resources needed to mount and connect the machines to electricity and water.  What was now dragging them back was the capital which was supposed to be deposited to them from the budget.  The Ministry of Industry and Commerce is supposed to be above other ministries in terms of budget allocation but if you look at the budget given to this Ministry it falls far short to capitalise the companies needing assistance.  I urge us as a nation to look at these companies which can assist us create foreign currency but they are not being funded sufficiently.  If we manufacture more of our local products, this could also result in price decreases.  If you look at the goods that we import, they need to be transported and the transport costs a lot, which effectively results in price increases and failure to pay our workers.  Most of the companies have shut down and the only way to revive these companies is to create a meaningful budget for the indigenisation programme.  These companies can assist in creating employment for our youths who are hard hit by unemployment.  Many people are leaving the country to seek greener pastures because of lack of employment.  If our industries are revived, the number of people leaving the country would decrease and most of them would prefer to work in their country.  Most of the people that leave to go and work outside the country are subjected to brutal working conditions and they do not enjoy working out there.  Opening new companies in this country would create a conducive environment for them to work at home.  Another company that I want to cite is Willowvale Motor industry.  I would want to mention that we saw top of the range executive vehicles, durable, very strong and suitable for the Zimbabwean terrain.  These vehicles can compete with vehicles from the foreign market but what I noticed is that they lack funding.  So the Ministry of Industry and Commerce needs to be funded. 

          Another issue is that of giving civil servants loans.  If you do not give money to civil servants, how are they going to purchase these vehicles and who will purchase the vehicles?  We need to grow this company so it can manufacture more cars. We met with our Minister for Industry and Commerce who reiterated that we should buy local products.  This could also help grow our industries like Olivine and Willowvale Motors to have the capacity to supply enough goods for its consumers.  Then there is the Buy Zimbabwe initiative – in other countries they restrict the importation of goods that are locally manufactured.  We also have to do the same in order to protect our local products such as cement, margarine and even cooking oil which is produced at Olivine industries.  If you look at products produced locally you do not even see them on the shelves.  The money that they target on a daily basis is US$6000 but they do not have the money.  Government should inject capital in such companies as Sable Chemicals in Kwekwe.  They were telling us that they pay a lot of money to import chemicals used in the production of fertiliser.  If they are however given enough capital they can manufacture a lot of fertiliser and even export some of the fertiliser.  They mentioned that the money raised from exports was a lot and they could bring in foreign currency and probably stabilise inflation.  There are a lot of good things that can happen to our economy if we produce our products locally.  We should not import more than we export in this country.  This could assist us in managing the inflation that is ruining our economy. Currently we are dependent on importation and this is fuelling inflation.  When you look at the amount disbursed to assist the companies, it was $240 mil dollars. If you convert this amount to foreign currency, you will also see that I am not criticising what is not there, it is something that we are not taking note of.  I encourage that if we are preparing such a report, we need to analyse and scrutinise because in the long term, this could assist.  Most of the countries in industrial revolution like India, China, Malaysia have injected more funds into industry and it produced fruits.  Their fruits seem like they are better than us but if we put our heads together, we will see the importance of funding the Ministry of Industry and Commerce. 

          The other thing which was mentioned on the issue of funding, we noted from the industry that we visited, they delay releasing funds and by the time these funds are released, the currency would have lost its value.  I want to encourage that there should be no delay in the disbursements of monies.  Companies would also have made quotations of the items that they want to import but by the time the funds are released, the money would not be enough for the goods that they would want to import, hence they end up in debt with their suppliers and they fail to acquire enough machinery. 

          We were fortunate enough that all the industries that we visited had managed to pay up the debt they had incurred out of the shortfalls that they had made.  That was caused by the delay of funds to be released.  They would want the money to be released in three months but it would take six to eight months to get to them.  I urge that after funds have been allocated, disbursements should be done as soon as possible and not to delay the process because inflation is one of the challenges. 

          I want to thank you Hon. Speaker and the good job that was done by the whole Committee and the sacrifice that they made going around the country following up on all the monies that Government would have released to various organisations.  I pray that this would be done regularly, they should monitor regularly all the funds released by the Government.  The Ministry of State for Presidential Affairs in Charge of Implementation and Monitoring headed by Hon. Minister Dr. Gumbo, should be visible and make follow-ups to see that there is no company that misuses the funds that have been allocated to it.  Monies have been allocated to ministries but there are no boreholes, roads and clinics that are being constructed.  I urge ministries to be visible and to be on the ground.

          HON. SVUURE:  I move that the debate do now adjourn.

          HON. TEKESHE:  I second.

          Motion put and agreed to.

          Debate to resume: Tuesday, 21^st June, 2022.

          On the motion of HON. SVUURE, seconded by HON. TEKESHE, the House adjourned at Thirteen Minutes past Five o’clock p.m. until Tuesday, 21^st June, 2022.