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NATIONAL ASSEMBLY HANSARD 16 MARCH 2022 VOL 48 NO 33
PARLIAMENT OF ZIMBABWE
Wednesday, 16th March, 2022
The National Assembly met at a Quarter-past Two O’clock p.m.
PRAYERS
(THE HON. DEPUTY SPEAKER in the Chair)
ANNOUNCEMENT BY THE HON. DEPUTY SPEAKER
APOLOGIES RECEIVED FROM MINISTERS
THE HON. DEPUTY SPEAKER: Hon Members, I am being advised that Cabinet meeting is on today and that is the reason why we do not have Hon. Ministers in the House except for the Leader of Government business. I have a list of Hon. Ministers and Deputy Ministers who have sought leave of absence from the House:
Hon. Dr. C. D. G. N. Chiwenga, Vice President and Minister of Health and Child Care; and
Hon. Prof. P. Mavima, Minister of Public Service, Labour and Social Welfare.
ORAL ANSWERS TO QUESTIONS WITHOUT NOTICE
HON. DR. MURIRE: Thank you Madam Speaker. My question is directed to the Minister of Information, Communication, Technology, Postal and Courier Services. What is Government policy on cellular service providers with regards to their transmission of marketing messages at the cost of recipients, for example news releases by Financial Gazette that are transmitted to subscribers without their consent and at the cost of those subscribers?
+THE DEPUTY MINISTER OF INFORMATION, COMMUNICATION, TECHNOLOGY, POSTAL AND COURIER SERVICES (HON. D. PHUTI): I would like to thank Hon. Murire for his question regarding those who send unsolicited messages to the general people who are using their data for that. Currently, there is no law to prohibit such transmission of messages. However, as a Ministry, we are going to sit down and map a way forward in order to protect the ordinary people using their own data to download such.
However, from the advice that I got, we need to take the matter seriously and craft laws that prohibit such sending of information.
*HON. MASENDA: Thank you Madam Speaker. My question is directed to the Minister of Public Service, Labour and Social Welfare. There is a very big problem of hunger because of the little rains that we received this season. The rains came late and we lost the rains earlier than expected. We are not looking at a bumper harvest- it is a very bad situation. In some areas within the country, they last received rains in January. What measures has the Government taken to avert the hunger that we are facing as a nation?
THE DEPUTY MINISTER OF PUBLIC SERVICE, LABOUR AND SOCIAL WELFARE (HON. MATUKE): Thank you very much Hon. Speaker. We all know that we received little rainfall than anticipated. Firstly, allow me to say that it is our duty as the Government to make sure that we attend to situations such as hunger. It is our duty that we intervene as Government to make sure that we attend to situations such as hunger. Government intervenes by assisting with food. The problem that we have currently is that we had people who were on the list of those receiving food aid. Government’s intention was to stop giving food aid this March, to these people. Looking at the situation now, some people will not have any meaningful harvest, so the Government will carry on assisting people until the end of this year.
Government will list all those people who have been affected by lack of rains this year. The number of people who were getting food aid from the Government will increase this year depending on the areas they are coming from and the nature or effect of hunger. I would like to assure the Hon. Member that Government is working round the clock to assist people, especially those whose names are listed and already receiving aid; Government will continue to assist those people.
Coming to schools, the programme will go on, it will continue for those who are finding it difficult to pay for their education. It could be the hunger that you are referring to in some areas but I think you are not referring to maize only. Government has started a programme where it is assisting people with money. It is up to those who receive the money to decide what to buy. The first programme is to assist with maize and the second programme is to assist with money so that they are able to buy whatever they want. Thank you very much Madam Speaker.
*HON. NYABANI: Madam Speaker, what is Government policy on assisting those who are disabled and the elderly? Deserving people are not getting anything but those undeserving are the ones who are getting the aid. What is Government position with regard to that situation?
*HON. MATUKE: I would like to thank the Hon. Member from Mashonaland Central for that question. In response to what the Hon. Member asked, it is our responsibility as legislators from the areas that we are coming from to assist in the selection of who deserves to get aid. We should work together so that we are successful in implementing the programme. Those who are undeserving should be removed from getting aid but we need to be assisted by the legislators.
(v)HON. SEWERA: Thank you Madam Speaker. This money that the Hon. Minister mentioned that is being given to assist people, is it being accessed from the banks or it is hard cash? I want to know the mode of disbursement. Are they going to work for the money or it will be food for work? Also, I want to know the amount being given to these people as a way of assisting them?
*HON. MATUKE: They are regarded as people who are in need of assistance, so they will not work for the money. If ever we need people to work for the money, they will be notified. One thousand five hundred was given to these people but it was being affected by the fluctuating rates. So we wrote to the Ministry of Finance notifying them of the change in value of the money that we are disbursing. We are waiting for a revised figure so that people can be assisted accordingly. The Government will disburse the money to those who are in need and they are not going to work for the money. If ever there is a change in the situation on how we are going to be distributing and disbursing the money, we will notify you. It is an issue which will be brought to this House so that people will know. The money that they were being given was eroded by the fluctuating exchange rate - $1 500. However, the Minister of Public Service, Labour and Social Welfare has since written to the Minister of Finance and Economic Development to notify him that the buying power of the allocated money has been eroded by inflation. Therefore, we are waiting for a response so that the money can be revised upwards.
HON. MPARIWA: Let me thank the Hon. Minister for his responses in terms of what has been asked by the Hon. Member in wanting to find out where and how it works. My humble submission Hon. Speaker; we will spend the whole day when every Hon. Member stands up to ask on whether, where and how. My submission is: can we get the Minister to table a report called Zimbabwe Vulnerability Assessment Committee (ZimVAC) Report, which reflects everywhere, whether there is drought, food deficit, how many people and their ages in every district and every ward? That will answer everyone’s question to their satisfaction. That is my humble request, thank you Hon. Speaker.
THE MINISTER OF PUBLIC SERVICE, LABOUR AND SOCIAL WELFARE (HON. PROF. MAVIMA): Thank you Madam Speaker Ma’am. Let me thank the Hon. Member for that important submission. Let me say to this august House, we have just received the first report, the Urban Vulnerability Report and we are now waiting for the Rural Vulnerability…
THE HON. DEPUTY SPEAKER: Hon. Minister, you are not connected.
HON. PROF. MAVIMA: We are now waiting for the Rural Vulnerability Report which we hope to get maybe by May. However, there are a lot of other things that are happening as well, including the fact that the Ministry of Lands, Agriculture, Fisheries, Water, Climate and Rural Resettlement is also doing crop assessments which will indicate to us areas of transitory vulnerability because of the bad season that we have had. All this information will then go into our programme to assist Zimbabweans.
As far as the urban areas are concerned, that Urban Vulnerability Report is going to be the main source of information that we are going to use. We will add to our roles but we always have those social welfare rolls; people with disabilities, with chronic diseases, child-headed households whom we always support. However, these reports are for purposes of making sure that we have a comprehensive analysis of the poverty levels as well as the vulnerability levels as they come. Thank you Hon. Speaker.
(v)HON. NDIWENI: Thank you Madam Speaker Ma’am. My supplementary –is on distribution. Sometime last year, we were promised that there was a rolling out of supplementary food distribution to urban wards, but it has not really materialised in areas like Karoi. How far have you gone in terms of supplementary distribution of food in urban wards?
HON. PROF. MAVIMA: Thank you Madam Speaker Ma’am. I beg your indulgence; I could hardly hear…
THE HON. DEPUTY SPEAKER: Supplementary food distribution to urban wards.
HON. PROF. MAVIMA: Thank you Hon. Speaker. As far as supplementary food distribution to urban wards is concerned, it is actually informed by the same Vulnerability Report that I referred to. We are now analysing that information. The mode of distribution mainly for urban areas is through cash transfers and we also work with our development partners like World Food Programme who also subcontract some of the non-profit making organisations that are operating in our urban areas.
So, that is a programme that is definitely coming. Like I said, in the rural areas, we continue now with our traditional social welfare role. However, as new information comes, we will increase our distribution. I thank you Hon. Speaker.
HON. NDEBELE: Good afternoon and thank you Madam Speaker. I have a question for the Hon. Prof. Mavima. Has Government policy changed from negotiating labour disputes with its employees through the National Joint Negotiating Council, (NJNC)? If it has not, is there consideration to reverse the illegal suspension of teachers that is making a mockery of our education sector and also painting our Second Republic as heavy handed in dealing with labour disputes?
THE MINISTER OF PUBLIC SERVICE, LABOUR AND SOCIAL WELFARE (HON. PROF. MAVIMA) Thank you Hon. Speaker. There has not been any policy change as far as the negotiating platform of the NJNC is concerned. The Hon. Member would acknowledge that we recently had negotiations leading to the signing of an agreement between the Government team and the workers team. However, there is a different matter that he has referred to which is the issue of the non-appearance at work stations by some of our teachers over a period of time, which led the appropriate Ministry, which is the Ministry of Primary and Secondary Education, working together with the Public Service Commission, to institute what is known as the no work, no pay principle but at the same time also to deal with some in the administration of our education system such as headmasters and deputy headmasters who had been promoting the non appearance of teachers at their workstations through suspension. That suspension is according to the regulations of the Public Service Commission. Anyone who has been affected by it knows the specific recourse that they can use in order to deal with that suspension. Indeed, there are people who have been suspended but I know that the majority of our teachers are back at work. As of today, we have been told that 96% of the teachers are now back at work, rendering the services that they are supposed to render. Thank you Madam Speaker.
HON. NDEBELE: Madam Speaker, I want to ask the learned Prof. if the no work, no pay principle that he is referring to is not offending against the provisions of our Constitution, specifically Section 203 as well as Statutory Instrument Number 1 of 2000? While at that, could the Minister favour this House as well as the nation as to what practical measures have been put in place to replace the suspended teachers, because we have children who will be sitting for examinations as early as June and the three months of suspension lapses in June. Thank you Madam Speaker.
HON. PROF. MAVIMA: Thank you Madam Speaker. I cannot belabour the point that 96% of our teachers are now back at work as a result of the negotiations that I referred to which resulted in major improvements in the conditions of service of not just teachers but also the civil servants. The reference to the Constitution is a reference that says there is a right to job action but there is also in the statement of the Hon. Member, an indication of the importance of education in the development of this nation and that we should never lose time as far as the education of our learners is concerned. This is the principle that has led to the institution of no work, no pay in order for us to preserve the educational standards of this nation.
You will also realise that even as late as Sunday, an additional 1600 teachers were recruited and the Ministry has compliance of the Treasury to recruit a total of about 5000 more teachers up to June. This is not just done in order to avert the adverse effects of these suspensions which are by the way being reviewed. Some of these people will be reinstated. It is also in order to just address the shortages that have already been there in the teaching field. In addition also, the fact that requirements for COVID-19 say classes should be smaller, therefore we need more teachers. In fact, initially the Ministry had asked for about 50 thousand more teachers according to the requirements of COVID-19. That is not practical, given the numbers of trained teachers that we have but also looking at the budget, everything is being done in order to make sure that our education standards remain high and we have adequate teachers for our learners. I thank you Madam Speaker.
HON. T. MLISWA: Thank you Madam Speaker. I have no problems with the suspension of the teachers if they have violated any labour regulation or their terms of reference. My concern to the Minister is the criteria used - the source of information to have these teachers suspended. These were parents, SDCs – was that a reliable source? After thought, would that be the best way to suspend teachers on the basis of parents who at times have issues with the teachers? I say so because, for example in my constituency, Vimbayi Primary School has got Mr. Shamu who is a good headmaster who has done well for the community but he was suspended. I felt the source and the credibility of the people giving information was not credible because they also had issues to do with headmasters who were tough. This was an opportunity for them to seize on that tough headmaster so that he could be exited from the system. . How credible was the source?
HON. PROF. MAVIMA: Thank you Madam Speaker. The Hon. Member raised an important question regarding the manner or the information basis for effecting the suspensions. I would not have information on the specific case that he referred to but we have a system of management of the education sector which starts from head office. The technical team is headed by the permanent secretary, the directors and the provincial education directors who are helped at that level by deputy directors as well as inspectors. It is the same at the district level, the director, DSI as well as inspectors. This becomes the supervisory system that we have in our education system and this is the main source of information. There could have been additional sources of information but like I said, anyone who has been suspended on spurious grounds has an opportunity to then present their own case and say this was not true; I was there, I did not participate and I was encouraging my teachers to be at the school. So there is recourse. Where false information was used, I think we have a system that can confirm that. I thank you Madam Speaker.
HON. NDEBELE: Thank you Madam Speaker. In the past, after asking questions you have allowed us to rise on a point of suggestion. I am going to suggest...
THE HON. DEPUTY SPEAKER: No, no.
HON. NDEBELE: Yes, precedence has been set. That is what the Speaker does. I am requesting you to put and table a suggestion for the ministers. What is wrong with that? It has been done before by some other people. Every time I rise in this House, somebody has a problem with me. I am doing my job and I insist on making a suggestion because it has been done several times here.
THE HON. DEPUTY SPEAKER: No Hon Ndebele, maybe a point of clarification.
HON. NDEBELE: A point of recommendation Madam Speaker. It has happened here and Government Chief Whip, you should also be defending me. Minister, people have risen here to raise recommendations. Every time I want to speak munondirambidza why?
THE HON DEPUTY SPEAKER: Hon Ndebele, please take your seat.
HON NDEBELE: If it makes you very happy Madam Speaker, I will take my seat.
THE HON DEPUTY SPEAKER: Thank you.
*HON. TEKESHE: Thank you Madam Speaker Ma’am. My supplementary question is - it has been long since we have been experiencing problems with teachers and they are running away to South Africa and other surrounding countries. Does the Ministry go to surrounding countries to do benchmarks and investigate why teachers are going there whilst we continue experiencing the same problems? Thank you Madam Speaker Ma’am.
HON. PROF. MAVIMA: Hon. Speaker, I would like to thank the Hon. Member for the question. We are an economy that had been in the doldrums for almost two decades and the causes of it among other things, were the illegal sanctions on Zimbabwe. We have started to see an uptake in our economy and we have started to use the proceeds from that uptake to improve the conditions of service of our civil servants and not just teachers. With time, we will see a situation where we are not going to deliberately lose our human capital to other countries but we will deliberately export like we are just about to do to Rwanda under the MOU that we signed. Indeed, there has been a problem but it is one that we are getting over right now and we have seen considerable improvement with the recent package that was sanctioned by His Excellency for the entirety of our civil service. We hope that as the economy continues to pick up, things will be better and we can match the pull factors in other countries that have caused our teachers and other professions to move to those countries. I thank you Hon. Speaker.
HON. T. MLISWA: On a point of order Madam Speaker. Moving forward, it is important that the Chief Whip remains in his position as Chief Whip not of the Chair. It is not good for him to constantly be interchanging with us thereby causing some of us to get emotional and end up behaving in a barbaric manner and we are then chucked out. He does provoke despite him being a very senior person, the Government Chief Whip. His office requires him to be calm, orderly and respectful. When he interchanges with other MPs at his level, it is kind of narky. Integrity and dignity is important for his office. Moving forward, can there be a ministerial statement from the Minister because Hon. Mpariwa asked this from a holistic point of view of the civil servants that - what is going on and a report on the brain drain and how much it will cost the country. We need to put figures to this and I think the Hon. Minister of Finance will agree that there is a lot of money that is spent in training any trained person. How do we recover such costs? The ministerial statement should have figures accompanying it so that we understand how much money we are losing as a country.
THE HON. DEPUTY SPEAKER: So Hon. Mliswa, you are asking for the ministerial statement from which Ministry?
HON. T. MLISWA: From the Minister of Public Service, Labour and Social Welfare, a comprehensive statement on the civil servants as a whole on the brain drain and the cost to this country on the brain drain. Hon. Mpariwa asked for the statement two weeks ago but the Minister did not come. Maybe he did not get the message but that would help us to assess how bad it is and how much money Government is losing.
HON. PROF. MAVIMA: Thank you Hon. Speaker. It is a possibility we could do that ministerial statement but just to indicate that it is a thing that is wider than just the civil service. It is a much wider national issue of the brain drain and would require cooperation I think from the Treasury, to help us come up with that. Let me also take this opportunity to say that to some extent, this is a result of the successes that we had in the education sector starting in the 1980s and we have become a fishing pond for big nations whom we cannot compete with as far as remuneration is concerned. So, we need to do it as a much broader statement. I thank you Hon. Speaker.
(v)HON. NDUNA: My question is directed to the Minister of Local Government. His Excellency the President has just been to Chegutu and spoke about policy relating to issuance of title deeds for home ownership, houses on hire purchase and for houses that are formerly qualified by BHBBZ plus ZMDC. How can the Ministry of Local Government’s policy help in expediting the issuance of title deeds in so far as it relates to the houses for hire purchase, home ownership and council houses that have been paid for, for the past 25 years as enunciated by His Excellency the President, Cde. E. D. Mnangagwa? How can the Ministry expedite that process in making sure that local authorities can issue the title deeds without any further ado or delay. I thank you.
HON. MLISWA: That question was well answered by Hon. Garwe. He even spoke about the geo-spatial where the Ministry of Higher and Tertiary Education is mapping. He articulated it so well that if he goes back to the Hansard, it is there. There was no better answer than what was given last week. The Cabinet Minister did a sterling job on that. Unless I am wrong, I stand to be corrected.
THE HON. DEPUTY SPEAKER: Hon. Nduna, I am being advised that that question was asked last week and it was well answered by the Minister of Housing. So you can as well check in the Hansard. I thank you.
THE DEPUTY MINISTER OF LOCAL GOVERNMENT, PUBLIC WORKS AND NATIONAL HOUSING (HON. CHOMBO): Thank you very much Hon. Speaker and Hon. Nduna for that very pertinent question. Of course, we heard the announcement that was made by the President at Chegutu but as a Ministry, we are working on the modalities of how we can put that into motion.
It was a statement but we have procedures that we have to follow whenever such statements are made by the Head of State. We took note of it and we are consulting with the relevant local authorities and all their different schemes in all the local authorities and we have to interrogate all the different schemes making sure that we also have legislation that takes care of that. I thank you.
HON. NDUNA: What are the time lines for this policy implementation?
HON. CHOMBO: I do not think I am able to give a time scale because there is a lot of consultation that needs to be done to make sure we do everything according to the law. We cannot just quicken the process; we have to make sure that we have done it legitimately because tomorrow, we will end up in trouble if we do not follow procedures.
So, be rest assured that it is an agenda within my Ministry and we are going to address that.
*HON. TOGAREPI: My question is directed to the Minister of Public Service. We are aware that there are teachers who did their teacher training more than 10 years ago but they are not yet employed, yet those who completed their training after are being recruited first. Do we have a policy or register that shows which year the teachers graduated and they should be recruited in chronological order of graduation?
Right now they are almost getting to retirement age; some of them are now 50 years of age without jobs.
THE MINISTER OF PUBLIC SERVICE, LABOUR AND SOCIAL WELFARE (HON. PROF. MAVIMA): Thank you Hon. Madam Speaker for the question raised by Hon. Togarepi that concerns teacher recruitment. Most of the processes are done by the Ministry of Primary and Secondary Education. They are the ones who have the information on vacancies available as well as the teachers required with the specific qualifications such as ECD, general primary school teachers or secondary school teachers with specific subjects. That is the recruitment criteria but they also consider the year the teacher graduated. For example, if there are two teachers required for mathematics at a Chitungwiza school, one graduated in 2016, the other one in 2020, they will recruit the one who graduated in 2016 first, that is my understanding.
So, the teachers that were on high demand of late, according to my understanding, are the ECD teachers but the majority of those who were not recruited quickly are general primary teachers. They constitute the majority yet the vacancies are limited.
For secondary school teachers, the ones who specialised in subjects like Shona, English and religious studies et cetera are also too many and their recruitment is very slow. Some of the teachers that I know who have not been recruited for a long time are physical education teachers. The ones who are recruited much faster are science and mathematics and other science subjects. It is easy for the Ministry of Primary and Secondary Education to recruit teachers who studied science and mathematics subjects. They do that at their headquarters and they use electronic system to select teachers. They follow procedures to recruit teachers at their head office.
HON. BRIG. GEN. (RTD.) MAYIHLOME: Thank you Madam Speaker Ma’am. My supplementary question follows from what the Hon. Minister just said about centralized recruitment of teachers. We are going towards devolution and everybody is talking about decentralization. Why can you not put measures to do away with corruption at local level instead of centralizing everything to Harare? The system that is there in place now does not work; it deprives the local leadership of district education officers the flexibility of getting people that are suitable for the post, personnel are just being imposed on the districts. We should put safeguards to minimize corruption instead of centralising everything to Harare. Thank you.
HON. PROF. MAVIMA: Thank you Madam Speaker, it is a very pertinent question. Indeed Madam Speaker, we have seen the unintended consequences of the centralisation programme. Let me give you an example. Binga wants a geography teacher, they recruit someone at the national level, this person goes to Binga and teaches for two semesters and then seeks transfer back to some better place yet there could be a geography person who is local who may want to work in their home area. We have seen unintended consequences and we have seen serious problems in places like Binga, Gokwe and some other remote areas. We need to look for a special dispensation where we can allow localities to recruit teachers who may then show commitment to their specific areas and then we can minimize some of the problems we are facing in those areas. Areas for example Nyaminyami District, it is also affected in the same manner.
Madam Speaker, that is a good suggestion and we need to consider that.
HON. T. MLISWA: On a point of order Madam Speaker. Hardly do you get the Minister conceding to a valid point like that unintended consequences and then he humbles himself and admits that there have been problems, then we will look into them. A Minister like that is a Minister for the country, is a Minister for the people. Most would actually be stubborn, I would like to applaud the Minister and other Ministers to also follow suit; that was a good lesson.
THE HON. PRESIDENT OF SENATE: Thank you Hon. Mliswa.
HON. T. MLISWA: Thank you Madam Speaker. My question is directed to the Leader of Government Business. It seems it was premature for us to go for elections because the environment seems not to be conducive because of many shenanigans going on, putting us in bad publicity. In your own understanding and assessment, was the environment conducive for elections?
THE MINISTER OF JUSTICE, LEGAL AND PARLIAMENTARY AFFAIRS (HON. ZIYAMBI): Madam Speaker, the Constitution does not give us a leeway to assess the environment whether it is conducive or not, but it gives us timelines. The Constitution simply says where a vacancy arises this is what you have to do. Admittedly, we were supposed to have held these by-elections a long time ago but at that particular juncture, we had COVID and we decided to prioritise life over holding elections and we had invoked our laws which allowed us to do that. However, when conditions started to be okay and we relaxed those regulations, we did not have any other choice but to go for elections. I thank you.
HON. T. MLISWA: The Minister was very fair in saying that he had referred to the Constitution and the Constitution gives him three months to announce but he then explained that, the reason why I am asking this question is, the opposition is being stopped from having rallies while the ruling party is having rallies. How can they be known as credible, free and fair elections? The credibility and fairness of the elections is then thrown away because you have this party having rallies and the other party cannot have rallies. That is why I said - is it conducive because there is no equilibrium in terms of that aspect of giving others opportunities?
HON. ZIYAMBI: Thank you Madam Speaker. When we approach elections, there are processes that need to be followed and I would defer that question. It is an operational issue where if you want to have a public gathering, according to the Maintenance of Peace and Order Act you inform the Police and you have to satisfy certain requirements. In terms of policy, we have laws and regulations that allow everyone upon application to hold the rallies. If there are issues that then arose, those are now very specific that I would request the Hon. Member to refer to the relevant Ministry so that they can explain the actions that were taken by the police. I thank you.
HON. MUSHORIWA: Thank you Madam Speaker. My supplementary question is to the Minister of Justice, Legal and Parliamentary Affairs. He alluded, in his response to Hon. Mliswa, that the application is based on the Maintenance of Peace and Order Act (MOPA). My question therefore is to say; when the political party has the requirements of MOPA and the police has given in writing and then makes a subsequent U-turn on the eleventh hour, what police directive would that be; that a law has been adhered to but all of a sudden police then makes a U-turn at the last minute?
HON. ZIYAMBI: Thank you Madam Speaker Ma’am. What Hon. Mushoriwa is asking me to comment on is not a policy issue. Once you have laws, laws have remedies and if people do not follow the laws, one of the recourse is to go to the courts. You do not make a policy statement when laws have been broken. I thank you.
(v)HON. SIKHALA: Thank you very much. Hon. Minister, my supplementary question is; if an applicant, in terms of MOPA complies with all the requirements and is still not given the go ahead to proceed with the public meeting – I have heard you talking about the remedies, the remedy in terms of MOPA is to approach a Magistrate’s court to get redress. How would an application be made to a Magistrate’s court when in most cases courts are closed during the weekend and why should those people who would have complied totally with the requirements of MOPA on how applications should be done, not be granted the right to go ahead with their public meetings? That is my question Madam Speaker. Thank you very much.
(v)*HON. CHINOTIMBA: Point of order Madam Speaker. I think we are wasting time asking the Hon. Leader of Government Business because he has already said that we must ask the relevant person, meaning that the Minister of Home Affairs is the one responsible for the police. So we are just asking him things which should be responded to by the Minister of Home Affairs. Why are we wasting time whilst the Minister of Home Affairs is there?
*THE HON. DEPUTY SPEAKER: Thank you Hon. Chinotimba. They are able to ask the Minister of Justice, Legal and Parliamentary Affairs since he is also the Leader of Government Business. He can respond on behalf of the Minister of Home Affairs.
(v)*HON. CHINOTIMBA: But he indicated earlier on that your questions should be directed to the Minister of Home Affairs, meaning that he was unable to respond.
HON. ZIYAMBI: Thank you Madam Speaker Ma’am. Hon. Members are raising issues which ordinarily are supposed, when an election is called, to be raised at the relevant forum with the Zimbabwe Electoral Commission and JSC, they set up the electoral courts and the Hon. Member is fully aware of all those processes. What I found very difficult is that he wants me to make a pronouncement on issues that are fully covered by our laws and specific issues that he wants to make reference to can be addressed at the relevant forum in terms of our laws or with the police who are the regulators where the applications are made.
(v)*HON. HAMAUSWA: On a point of order Madam Speaker. The Hon. Minister is dodging the issues at hand. The behaviour of the police is damaging the image of our country Zimbabwe and this should trigger the Minister to say something concerning this election time. The Minister should be transparent and come out to make a statement when police bar people who would have been cleared to hold their rally to say the laws of Zimbabwe do not allow that to happen. The Minister should be clear in order to portray a good image even internationally that in Zimbabwe, there is a Minister of Justice – [AN HON. MEMBER: Point of order.] – Why is he avoiding talking about this issue and to indicate that what the police are doing is tarnishing the image of Zimbabwe. It is an issue that he can rectify as the Leader of Business in this House. This issue should be taken seriously.
THE HON. DEPUTY SPEAKER: Thank you.
(v)*HON. HAMAUSWA: This issue is tarnishing the image of Zimbabwe and your Honourable Chair Madam Speaker Ma’am. It would seem as if Parliament is not working as police do their work tarnishing the image of Zimbabwe…
*THE HON. DEPUTY SPEAKER: Thank you Hon. Hamauswa. The issue that you are talking about is the one which Hon. Chinotimba has helped you with when he indicated that you should ask the Minister of Home Affairs and not the Minister of Justice, Legal and Parliamentary Affairs. So, you are forcing the Minister of Justice, Legal and Parliamentary Affairs to answer the question which is not relevant to his Ministry. I hope you understand where the issue is emanating from. Three supplementary questions that you have asked are enough and we are closing this issue and move on to the other question. You have been advised.
*HON. ZIYAMBI: Madam Speaker Ma’am, Hon. Hamauswa is implying that I know that there is a party that was given an approval document to carry out their meeting but I do not know that there is a document to begin with. Secondly, I said if election time comes, there are courts that are put in place which makes investigations on issues to do with elections. There is an organisation which is responsible for electoral issues and also investigates such issues. There is the police, which is the regulator, which also investigate to an extent that if meetings are being carried out, they give approval when in their discretion, no potential violence is bound to happen. However, they want me to agree to the things that I have no information about to say the police gave out a document which I did not see. Madam Speaker, the issue of issued documents is not a policy question, it is an operational issue. I cannot predict or guess what would have happened in Government.
A lot of things happen across ministries within Government, even to say political parties holding rallies in different communities, I might not know it. Let us follow the Constitution of this country. Let us not spread falsehoods in this country that act A was done in a certain community when nothing happened. Let us not spread falsehoods.
HON. T. MLISWA: Madam Speaker, as the originator of the question, I think Hon. Ziyambi took a fair position and the questioner has also a fair position. May we get a Ministerial Statement from the Minister of Home Affairs? I think that ends the case because he is very clear. It is an operational issue which requires the Minister of Home Affairs to issue a statement, getting details from his subordinates as to why this is happening. I think that will bring sanity to the country and the world will see that we are trying to have free, fair and credible elections. Without that ministerial statement, it does not help the Minister of Finance to raise money anywhere else. The issue of elections is important. May I seek, with your indulgence Madam Speaker, for a Ministerial Statement from the Minister of Home Affairs immediately, to talk about the state of law and order pertaining to these by-elections?
THE HON. DEPUTY SPEAKER: Thank you Hon. Mliswa. I am sure the Leader of Government Business has taken note of that and he will relay the message to the Minister of Home Affairs. Deputy Minister of Home Affairs, I am sure you have also taken note of that.
*HON. NYABANI: Thank you Madam Speaker. My question is directed to the Minister of ICT. What is Government policy with regards to rural areas where there are no more post offices or ZimPost facilities for banking or paying for car insurances. People have to travel from the borders and other distant areas to go to towns such as Bindura for banking. In the past, there were post offices that were nearer that could offer banking services. How can people get access to post offices or banks nearer to them? I thank you.
>THE DEPUTY MINISTER OF INFORMATION, COMMUNICATION TECHNOLOGY, POSTAL AND COURIER SERVICES (HON. PHUTI): Thank you Madam Speaker. May I kindly request to respond to the question in English, Ndebele or Kalanga. I would like to thank the Hon. Member, Hon. Nyabani for the question – [HON. MEMBERS: Inaudible interjections.] –
THE HON. DEPUTY SPEAKER: Order, order. Can we have order in the House please?
>THE DEPUTY MINISTER OF INFORMATION, COMMUNICATION TECHNOLOGY, POSTAL AND COURIER SERVICES (HON. PHUTI): Hon. Nyabani asked a pertinent question. He said the post office no longer operates the way it used to operate in the past. I would like to inform Hon. Nyabani that His Excellency, President E. D. Mnangagwa, when he launched NDS1, emphasised that the economy of the country should lean upon today’s knowledge, considering technology. I want the Hon. Member to know that the post office is different from what it was in the past. Fiscal issues are under the Finance and Economic Development Ministry. The post office is a responsible digital inclusion which implies that everything is covered by technological development, then the post office is at the moment establishing information centres around the country. We also have a reliable network which would assist people in accessing the post office. We also clarified that the post office of the earlier days where people were writing letters is different from what is happening now. Nowadays we are moving with technology. There are a lot of things that are happening technologically like post office money and other technological developments which are in line with what is happening. The RBZ is guiding the process. I thank you.
*HON. NYABANI: Madam Speaker, maybe the question can only be responded to by the Minister of Finance. People are suffering in the rural areas and they are failing to understand which Ministry they can approach. May the Ministry of Finance tell us what the people in rural areas that used to get assistance from these facilities can do? People are travelling long distances to go and withdraw very little salaries. I thank you Madam Speaker.
THE MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. PROF. M. NCUBE): This question is a continuation of the previous question but more broadly, it is a financial inclusion issue: which access to financial points in the rural areas to use. Certainly, it is true that the POSB is no longer fully operational in all the corners of Zimbabwe but also, it is fair to say that the banking system has evolved very rapidly. We now have mobile banking, which basically means you are able to transact from any corner of Zimbabwe where you have connectivity and transact through your mobile phone. The three network operators are able to provide those services. I am acutely aware that where there is need for cash transactions in Zimbabwe dollars, there may not be enough cash but they have the leeway to transact in hard currency since we have allowed the use of other currencies. However, the disappearance of POSB across the country has to do with the evolution of banking as banks try to reduce the cost of their operations. I must let you know that we have every intention not to leave anyone behind and we will look at other ways to support our citizens in the rural areas to access financial services. I thank you.
(v)*HON. HAMAUSWA: On a point of order. I was amazed to hear that the Minister of ICT who superintend over ZIMPOST together with the Minister of Finance are not aware that ZIMPOST has a bank that it used to transact funds similar to ecocash, which is ZIMPOST money. I thought the Ministers would elaborate that to us.
THE TEMPORY SPEAKER: Order Hon. Member. Your question may be pertinent but it is not a supplementary question to the question posed to the Minister of ICT, unless you want to ask a new question.
(v)HON. HAMAUSWA: Mr. Speaker, this is not a new question.
(v)+HON. MOKONE: Thank you Mr. Speaker Sir. My question is directed to the Minister of Information Communication Technology. The Deputy Minister of ICT talked about the digital economy but in other areas there is no network, especially in Gwanda South. How then does the Minister intend to make sure the digital service is implemented to its fullest?
+HON. PHUTI: Thank you Mr. Speaker Sir. I first want to correct Hon. Hamauswa for asking a question which shows he does not understand my submission between our Ministry and that of Ministry of Finance. We are saying we have post money. I was not going to end on post money without answering the question about the roles of the Post Office as asked by Hon. Nyabani.
May I respond to the question by Hon. Mokone on no network in Gwanda South? It is true that in other areas there are network challenges mainly because of network machines and in some cases it is because these machines cannot deliver network as far as they are supposed to. We are however looking forward to having 3G, 4G and 5G which should ensure people have network. Government is also looking forward to seeing all rural areas accessing network. This year as I alluded to the last time I was in this House, there is a programme that will bring network to more than 335 areas which will lead to most areas being network connected. There is also the programme of network service fund which will look into the areas with no network accessibility. The universal service plan will ensure that whether there is money or not, the network providers access those areas.
(v)+HON. MBONGENI: Thank you Hon. Speaker. There are some network boosters that were pledged in the previous year. I want to ask the Deputy Minister of ICT when some network boosters that were supposed to be officially commissioned will be commissioned?
++HON. PHUTI: Thank you Hon Speaker. I also want to thank Hon. Mbongeni for his question on the programmes started by the Government Ministry more than five years ago but they are still incomplete. I want to remind him that maybe he is saying where they were supposed to be put at a base station in Lupane East, the company that was assigned to do the work left it incomplete at Netone; I want to remind him of a programme that we commissioned in Chatumbama in Chipinge at Sasindwe in Binga, Matopo North. We also want to remind him of the programme we officially opened at Siyalima in Guruve and the one that we opened in Hwedza. These are some of the programmes that were incomplete so that he can appreciate what was done in his neighborhood. The machine in Modzola; they finally completed the programme.
Therefore, Netone will now have to complete the assignment as it was supposed to be done in other areas like Chiredzi.
HON. T. MLISWA: Have you not opened up other avenues for money transactions like Mukuru, electronic banking and all that to also dispose of just cash? Is the POSB important in that aspect of going electronic at the end of the day? Is it not an outdated way of transacting?
HON. PHUTI: I want to recognise Hon. Mliswa’s question, pertinent as it is because it touches on something that I think is a game changer. The Hon. Minister of Finance and Economic Development touched on such aspect but because the question has been shifted to my Ministry, I want to remind the House that when we talk about a digital economy, there is no way we cannot promote financial inclusion. As such, there are various means of making everyone involved.
I was shocked with the statistics yesterday that in the world, about 2,5 billion people do not have bank accounts but it does not mean that they are excluded financially because the antiquated methods of using bank accounts should rightfully, like Hon. Mliswa said, be replaced by methods that are commensurate with today’s environment.
As such, my mentioning of post money was amongst attempts by my Ministry to try and get involved in ensuring that there is financial inclusion in our society.
However, I may not want to delve much into financial issues lest I mutilate but truth be told, there is need to expand the scale on which we are allowing our people to access finance. The only thing that I can do is to humbly submit that he raised a pertinent question that rightfully my Ministry, jointly with the Ministry of Finance should together work on.
HON. BRIG. GEN. (RTD.) MAYIHLOME: My supplementary question relates to the earlier response by the Hon. Deputy Minister of ICT, Postal and Courier Services regarding the installation of base stations.
I want to find out from the Minister of ICT and the Minister of Finance and Economic Development, since they are both present in the House. The challenge; has it been the technology or the capacity or the availability of finance? If so, would it not be prudent for them to consider allowing devolution funds to be used for that purpose? In other words, where people think that their priorities lie in network infrastructure because we know that private sector, Telone, Econet and so forth, only go where there is likely to be profit. If there is not going to be any profit like in sparsely populated areas, they will not install these boosters.
So, can these two ministries here present be clear as to what the challenge is because private sector will not go there fast enough. I thank you.
HON. PHUTI: Thank you very much Mr. Speaker. I would like to thank Hon. Mayihlome for a pertinent follow up question. Before I answer to Hon. Mayihlome’s question, let me promise this House, all Hon. Members who are here and those following virtually, that we are going to replace construction of base stations in almost every constituency. This is a project that was launched late last year by His Excellency the President. The equipment is here and for those who may want to know, it is at the NetOne work station close to Chikurubi.
However, in response to the question, I do not think it is an issue of finance, neither is it an issue of lack of technology at this juncture. It is a project that, as I promised, is running and rolling out. I think a lot of Hon. Members here will attest to a reality that they have been visited by a team of engineers doing their scoping so that they know where they should site those base stations.
A good example that I can make mention of is a place called Bethany in Manicaland, Mutasa District where people confirmed that they had seen NetOne engineers coming to do that same work. I think in a nutshell, the mobile broadband phase 3 that I made mention of earlier is a living reality and I am only requesting for a grace period from Hon. Members to witness it unroll so that we can talk about another story a few months later.
HON. T. MLISWA: On a point of order. My point of order is to appreciate the responses by Hon. Phuti. He was very articulate and clear in what he was saying. I think it does give us hope. He said everything is in place, you can go to the NetOne workstation, everything is ready. That is quite assuring. Thank you for your responses.
*HON MPAME: My question is directed to the Leader of the House. What is Government policy with regards to contractors who win tenders to construct roads, sometimes they do not have the capacity, their equipment breaks down after a few days and they park it? People are concerned about that, what is Government policy on that?
THE MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. PROF. M. NCUBE): I want to thank the Hon. Member for that very important question. In awarding contracts, there is the normal practice which is practiced by the Ministry, which is to assess the capacity of the contractor. I think that assessment was made and found to be satisfactory. Certainly, it is surprising that then upon being awarded the tender and being told you can proceed with the job, then they are unable to do the job because of the quality of equipment. Going forward, we need to be more strict in our selection criteria for the contractors to make sure that these fly-by-night type of contractors never get contracts ever again. What we are doing is our engineers go around the country assessing the quality of the roads and making sure the contractor sticks to the stipulated standards, be they international, local or regional. Those who are not doing their job, their contracts are being cancelled. I am aware of a few that have been cancelled.
As Minister of Finance, I am not happy of the fact that contractors ask for a lot of money, then they do a shoddy job, It is unacceptable and we are taking action through the Minister of Transport. I thank you.
Questions Without Notice were interrupted by the Temporary Speaker in terms of Standing Order Number 68.
HON. T. MLISWA: I move that Questions Without Notice time be extended.
HON. MPARIWA: I second.
Motion put and agreed to.
*HON. MPAME: I want to thank the Hon. Minister for the answer but to my surprise, it takes two to three months with nothing being done, what will the responsible authority be doing? Why is it that Government is not supervising these contractors? Do we not have engineers to monitor them? After one year, that is when you will see a new contractor and that new contractor will do the same. Mr. Speaker, may I ask the Minister of Transport and Infrastructural Development to come and give a Ministerial Statement. This is a very pertinent issue. There is no progress taking place in most all of the roads in rural areas. Thank you – [HON. MEMBERS: Hear, hear.] -
HON. PROF. M. NCUBE: Mr. Speaker Sir, I concur with the request from the Hon. Member that the Minister of Transport appear before this House and give a Ministerial Statement. The Minister will give the state of issues in terms of our road construction programme to make sure that we get value for money and we get good quality contractors to develop our roads. I think that is a fair request and I think he will be able to acquit himself in this regard.
(v)HON. MUSHORIWA: The statement should include information on whether rules and regulations are being followed.
HON. PROF. M. NCUBE: I thank the Hon. Member for that follow up question. Yes, indeed the statement will contain information and clarification as to whether the recommended processes are being followed to the dot or not and also just to make sure that all procedures are being followed. That will be made clearer.
HON. MARKHAM: My question is directed to the Minister of Finance and Economic Development. I am fully aware and it has been discussed today, the effects of the season we have had agriculturally. This is going to leave the farmers in quite a sticky situation. I would like to know from the Minister of Finance and Economic Development what is Government policy for the farmers as most of them are going to be left with quite a bit of debt. What is Government policy on the debt? Farmers are going to be in a quandary with the issues going on internationally. We have had massive spike in fuel prices. With the war in Europe, we are going to have a massive increase over and above the increase we have already had in fertilizer, particularly because Belarus and Russia are manufacturers of agricultural fertilizer.
On drought relief, both grains and wheat have shot up substantially. Has Government considered a policy to help with the mitigation of these factors, particularly pertaining to the farmers? I thank you.
THE MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. PROF. M. NCUBE): I thank Hon. Markham for the very important question which pertains to agricultural sector. Yes, indeed as Government, we have noticed that the oil prices have spiked quite substantially, which has led to an increase in the domestic fuel prices through the FOB aspect of the pricing model. Also, there has been a spike in fertilizer and so forth because of the costs of certain inputs into fertilizer manufacturing which are sourced from some of the countries that are involved in conflict. This will impact our agricultural sector, it is squeezing the margins and the profitability for the farmers. This clear enough, as a Government, we have been analyzing this issue trying to understand the exact issue on farmers. I think when we are clear, we will be able to support the farmers accordingly. I think it is too early for us to make a policy pronouncement without full understanding. However, we are waiting to fully understand the quality of the crop, we are waiting for the second crop assessment from the Ministry of Lands, Agriculture, Fisheries, Water, Climate and Rural Resettlement and with that clarity, we will be able to intervene accordingly. We want our farmers to be able to go back to the land and not be discouraged by this external shock which is beyond anyone’s control, and certainly not in our control as Zimbabweans. We will make every possible effort to support them to make sure that they go back to the land and not be squeezed by these shocks in terms of their profitability and ability to pay back the loans from the banking sector. I thank you.
HON. MARKHAM: Thank you Mr. Speaker Sir. My supplementary follows on: would the Hon. Minister, as a policy, not consider pre-producer farmer prices in United States Dollars (USDs), particularly with the sliding, slowly but surely of the ZW$? The major impact on farmers is that at the end of the year when they get paid particularly for grains, it is normally delayed and it is half the value of when it was announced. If we stabilise this as the Ministry has done on numerous products including fuel, why can it not happen with something like food security? I thank you.
HON. PROF. M. NCUBE: Thank you very much Mr. Speaker Sir. I thank Hon. Markham for the follow-up question on paying farmers in USDs; we are not yet there. We are not ready for that, we have our own domestic currency and we want to set all these agriculture sector prices in domestic currency and also to promote the use of our own currency. However, there are farmers who are receiving payments in USDs because they are producing crops which are export oriented such as tobacco, cotton - even cotton is in part USDs, that is understandable because those crops earn foreign currency but not for crops which do not earn foreign currency. We are not there yet in terms of pricing these in foreign currency, but we will look at other measures to support the farmer and we will be creative. I can assure you that we will be creative to make sure that they are able to go back onto the land and not squeezed by the banks because of shocks that are beyond their control such as the oil and fuel prices and that of fertilizer. I thank you.
Questions Without Notice were interrupted by THE TEMPORARY SPEAKER in terms of Standing Order No. 68.
MINISTERIAL STATEMENT
MEASURES TO STABILISE THE ECONOMY
THE MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. PROF. M. NCUBE): Thank you Mr. Speaker Sir. Mr. Speaker Sir, I was requested by this august House last week to give a Ministerial Statement on measures to stabilise the economy. The global tensions that have developed, especially in Eastern Europe have compounded the global economic conditions at a time when economies were starting to recover from the effects of COVID-19 pandemic. Shocks are rising from higher commodity prices of energy, minerals and agricultural commodities are fueling global inflation which passes through effects on domestic prices of goods and services.
Mr. Speaker Sir, as is well known, both the countries of Russia and Ukraine are major exporters of metals, energy and agricultural commodities and disruptions in supply of these commodities have led to food prices increasing to a 14 year high. Fertilizer prices continue to increase as Russia, a major low-cost exporter of the product to the global market has curtailed exports.
Additionally, oil prices have surged to their highest level since 2008 on fears of supply constraints. Brent crude oil prices have increased to as high as USD129 per barrel from around USD77 per barrel in December, 2021. Inevitably, domestic prices of fuel have been increasing and now stand at USD1.67 per litre from USD1.41 in January, 2021.
The rise in international prices of several metals, including gold due to its position as a safe haven and nickel due to supply concerns is however, expected to positively impact on the country’s export receipts from mineral products.
On the domestic front, both the fiscal and monetary authorities continue to implement and fine-tune policy measures that are meant to stabilise the currency and lower inflation, including, among other things, fiscal consolidation and restrained reserve money growth.
Government has maintained near balanced budgets since 2019. Avoiding excessive spending and recourse to the Central Bank overdraft facility has reduced pressures on inflation, and created buffers that have been deployed to mitigate exigencies such as the COVID-19 pandemic that has adversely impacted on the economy and livelihoods whilst also allowing the private sector access resources for productive economic activity and employment generation.
On the monetary front, the Central Bank has instituted the necessary monetary reforms to curtail money supply growth, including strengthening the foreign currency auction system that has enabled access to foreign currency by the productive sectors for importation of critical raw materials and capital equipment.
The interventions have, to some extent, worked to restore stability on the exchange rate and ultimately, relative price stability. Inflation declined from a peak of 837.5% in July, 2020 to current levels of 66.1% as at February, 2022.
However, inflationary pressures still persist mainly due to benchmarking or indexation of prices of goods and services at parallel market exchange rates as well as responses to global price increases. In addition, negative perceptions among our people and business are also driving the unjustified exchange rate and price increases.
The pressures to inflation have necessitated Government to implement further policy measures to ensure stability of the local currency and prices is restored. Measures to increase demand for the local currency through taxes were announced by Treasury on 4th February 2022 as follows:
All mining royalties are now payable in Zimbabwe dollars up to a limit of 50% of royalties due.
All duties and taxes on importation of designated motor vehicles are now payable in Zimbabwe dollars, again up to a 50% of the duties and taxes payable.
All domestic taxes due from exporters on their export receipts are now payable in both foreign and local currency in direct proportion to the approved export retention levels. As an example, an exporter who receives foreign currency of say US$1 00 at a 40% surrender ratio (60% retention) will pay taxes on the 40% in Zimbabwe dollars and the 60% in foreign currency.
The Central Bank, through the Monetary Policy Statement of 7 February 2022, introduced complementary measures to bring stability. These include the following:
- Lowering reserve money growth target to 7.5% per quarter.
- Maintain lending rates to about 60% to curtail speculative lending which was driving parallel exchange rate and inflation.
The Central Bank is continuously fine-tuning the exchange rate policy to ensure exchange rate flexibility, promotion of external competitiveness as well as tackling rent-seeking behaviour. These include ensuring allotment of foreign currency on the basis of available foreign exchange, strict adherence to and enforcement of the Know Your Customer (KYC) and Customer Due Diligence (CCD) principles by banks when processing forex bids and intra-bank transfers on behalf of their customers. The bank is also exploring measures to ensure the huge foreign currency balances held by banks is transparently traded;
Increase foreign currency retention for tobacco and cotton farmers to 75% and to 100% for hotel and tour operators, exporters in the manufacturing, horticulture and cross border transport sub-sectors shall be eligible to retain 100% of the incremental portion of their export receipts; and
Increase in the limit on mobile banking transactions from ZWL$20 thousand to ZWL$25 thousand per transaction with a maximum limit of ZW$100 thousand per week for person to business, person to person from ZWL$5 thousand to ZWL$10 thousand per transaction with a limit of ZWL$70 thousand per week and increase the cash withdrawal limit for the banking public from ZWL$2 thousand to ZWL$5 thousand per week.
The liquidity Management Committee is being strengthened to coordinate and synchronise Government liquidity injections and withdrawals in order to minimise impact on the market.
In an effort to cushion the general public and businesses against increases in the price of fuel, for example Government reduced strategic reserve levy on domestic fuel price from US$12.7 cents to current levels of US$8.7 cents/litre beginning January 2022 through SI 31 of 2022. Government is looking into additional policy measures to address the situation.
Furthermore, Government is prioritising the domestication of value chains. In response to bread prices, Government, through the winter wheat programmes, is supporting wheat farmers, targeting 75 thousand hectares expected to produce 350 thousand mt. This will significantly reduce reliance on wheat imports.
With regards to fertilizer, Government is facilitating access to foreign currency by local manufacturers for importation of critical raw materials as well as providing guarantees for access to finance for working capital requirements.
As part of measures to reduce the adverse impact of these shocks to the most vulnerable members of our society, Treasury will prioritise disbursements to beneficiaries under the various social assistance programmes.
In conclusion, the theme on the 2022 Budget, which is already underway, is “Reinforcing Sustainable Economic Recovery and Resilience”. This will enable us to focus on bolstering resilience to shocks and support economic recovery. Government economic policy will therefore continue to support this objective which will result in positive economic growth for the year 2022. I thank you.
(v)HON. GANDAWA: Thank you Mr. Speaker Sir, I did not hear the Minister clearly on his intervention in terms of reviewing taxes and levies that are associated with procurement of fuel which I would want to think are quite high, currently at $1.68 and $1,67. Could the Minister please clarify the position?
HON. T. MLISWA: My point of clarity to the Minister of Finance is: thank you very much for that Ministerial Statement. I must applaud the Minister for probably being one of the few who responds to these Ministerial Statements. Some ministers do not even respond. We have been asking the Minister of Agriculture to give us a Ministerial Statement but he still has not given us. It is equally important for the Ministry of Finance in terms of the state of agriculture so that they can put their figures together. More important is the stabilisation matrix which the minister brought up and spoke about fertilizers going up because of what has happened in terms of the Russia/Ukraine impasse but more importantly, fuel as well. Already our rate and our inflation have gone haywire. What measures has the Minister put in place to stabilise things or is he going to allow things to flow and allow the markets to just dictate and hope for sanity to prevail? That is a point of clarity I would want from the Minister because what has happened right now is totally beyond his control and that being the case, I do not see any economy that can control what is going on right now, unless you are the USA who more or less hedge on the gold and the fuel that they have. Any other country, especially in Africa, finds it very difficult because fuel has gone up. It moved from $1, 41 to $1, 79. The barrel from $77 in December 2021 has also gone up to $129. Those are astronomical figures in terms of a rise. The Minister also must be able to clarify on the effect that the current agriculture season has again in terms of money. Where is he going to get the money? Does the Hon. Minister intend to come to this august House with a supplementary budget to support everything that is going on because there is no other way of sustaining the economy other than a supplementary budget? All Ministries come to your office to ask for money because it seems all the time they say there are no resources but the question is, do they ever approach you and ask for money so you can come to this Parliament for a supplementary budget? Those are my points of clarity.
(v)*HON. NYABANI: I want to find out from the Minister that, since fuel prices went up, it means everything that will be used by industries will also increase in price. Since you are anticipating to see our industries’ resuscitated, do you envisage the flourishing of industries because most of the industries were using fuel for production. Does it mean that our industries are on their way to getting broke or do you have any plans in place to ensure that despite the fuel price increase, they can still break even in their businesses?
HON. MUTAMBISI: Thank you Mr. Speaker. I would like to thank the Minister of Finance for his presentation. Hon Minister, when we visit other countries like Mozambique, Kenya, Uganda, etcetera, we note that they are very strict in terms of using their own currency. Can you please clarify why here in Zimbabwe it is very difficult to enforce the use of the Zimbabwe dollar as a local currency?
(v)HON. NDIWENI: Thank you Mr. Speaker. I would like to thank the Hon. Minister of Finance for his presentation. My question to him could be rhetorical. He has set out to try and spell out measures to stabilise the economy for a long time but as it is, things are really going bad day by day. More-so, I refer to the black market availability of finance. How is he going to stop the black market trading because I for one personally think it is the only thing that is messing up the economy? Is there going to be an end to the black market trade?
HON. TEKESHE: I also want to thank the Hon Minister for the Ministerial Statement. I heard the Minister talking about bank limits and the like but I did not hear him talking about when banks will start giving interest to depositors. History tells us people used to go with their savings books to get their interest entered into their accounts but now it is always debits after debits from the banks. You deposit money today and after six months, you find there is no money in your account,. instead of finding your balance increased with interest. When are we going to see a review in this area? We cannot have banks taking people’s money all the time. We need to build confidence in our currency and that depends on the banking system. That is why people are keeping money in their pillows and under their beds because the banks are just there to take people’s money. I thank you.
HON. MUDARIKWA: I also rise to thank the Hon Minister for the Ministerial Statement. My concern is what is happening at the auction floors. Fuel companies are getting money at the auction rates which are very cheap but the same fuel companies go out there and start selling that fuel in US dollars. What has gone wrong, why do we not have fuel being sold in Zimbabwe dollars? Let me give an example, I am producing maize and I will be paid for the maize in RTGs but for me to access fuel, I must pay USD, hence this element of failing to control people who have been allocated money. You hardly get any fuel in Zimbabwe being sold in RTGS, all of it is in USD.
The other thing that we must realise that there is something wrong happening in the fuel sector; go to Harare you find that at every corner now there is a new service station. It shows that people are making a killing. I once travelled from Harare to Zvishavane, on the way there were 32 new service stations which show there is a lot of illegality. The challenges we are facing in terms of foreign currency are being caused by the fuel dealers. I want to therefore, appeal to the Minister to make a thorough investigation on this situation.
THE MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. PROF. M. NCUBE): Thank you Mr. Speaker Sir. I thank the Hon. Members for those questions, following my Ministerial Statement. The first questions pertain to the levels on fuel.
We have responded as a Government and Ministry of Finance, working with the Ministry of Energy to reduce the levy on fuel. We have reduced it from 12.7 cents to 8.7 cents, we have already acted and it is helping us curb the rise in fuel prices. We will continue to act, and if there is need to lower it further again, we will look at it accordingly and see if that is rightful decision to make but we stand ready and flexible in terms of cushioning the public.
We recall this levy has gone a long way in assisting the Government through Treasury to service loans that were contracted in the past for the importation of fuel, well before 2018. We have owed some legacy loans that we are still servicing. However, we structured the interest charges service mechanism, so it is helping us solve a problem that in a sense we inherited as a Second Republic. So we need these resources.
I now turn on to Hon. Mliswa who referred to two areas: one is in the stabilisation of fertilizer prices and what we are doing about that. I talked about our import substitution strategies, for example where we are capacitating fertilizer companies to import critical raw materials to manufacture fertilizers locally.
If you are talking about importation of ammonium gas, those prices have gone up again. So while it will make the fertilizers more available, it may not necessarily reduce the price but the second strategy we are employing for fertilizer is to import it early for the summer programme. We have noticed that fertilizer prices are highest during the European winter because of the gas prices which are high during winter. So, if you buy fertilizer from November onwards into January, prices will be too high. Therefore, the best time to procure input for fertilizer is during the middle of the year, that is when the prices are lowest globally and this year we want to make use of that knowledge.
On the issue of fuel, I have talked about dealing with the issue of lowering the levy which we have already lowered from 12,7 cents to 8,7 cents. We have another strategy which is to work with all companies who import fuel into this country to switch to a different way of procuring fuel.
Currently, most of them tend to procure fuel on the back of sport prices, so when the price spikes for fuel then there is trouble and they have to buy those highway prices, selling it into the local market at high fuel prices where everyone is unhappy with that.
Therefore, the best way is to shift those contracts to what is called the M-1 type contract, which means that the price of fuel is based on the average price for the previous months. So literary, you take the daily prices of fuel in the previous months and then average out. The average price is what then you use as a contracting price for the month of March, for example.
This cushions us from volatility in the fuel price which volatility is problematic and then we know where we stand. These companies too will benefit because then they are clearer as to what prices they are going to face as buyers of fuel globally. We will be clear as well as ordinary Zimbabweans who consume this fuel, it helps everyone. Most countries around the world are on this type of formula that I have described and we are engaging the fuel companies to move towards this approach so that we have less volatility in the market.
I agree with Hon. Mliswa that with all these pressures, it may be necessary to bring a supplementary budget to this Parliament and why not during the Mid-Term Review, but we will assess the situation. Indeed, the pressures are mounting and I will be very happy to receive the assistance of the House in passing such a supplementary budget.
I move on to Hon. Nyabani, obviously the increase in prices generally which is affecting industries, this is true. It is affecting industry via the increased costs of logistics. Some of them are using fuel in terms of generators to run their businesses, so the oil products are inputs to various raw materials. It is squeezing the margin. So they have no choice but to maintain margins to keep the jobs profitable. They have no choice but to pass on that cost to consumers and then it shows up as increased inflation. That is what is really going on and that is how inflation gets transmitted and we are dealing with it. I am also hopeful that this is a passing phase. I have been watching the oil price, it went up as high as 132, 135 United States dollars per barrel early last week but it has come down as of yesterday. I have not checked this morning, we have been rushing around with Cabinet, but it had come down to about 109, 108 United States dollars per barrel. That was actually earlier in the week as it was last Friday and Monday. Today it is closer to a 100 United States dollars per barrel. This is pleasing, so it is turning downwards. This again should translate to reducing the costs for industry. It is going in the right direction and it is coming down because of these discussions around more peace in Eastern Europe and also increase in supply from other sources of fuel such as Saudi Arabia, perhaps Venezuela; who knows but all that would be welcome.
There is an Hon. Member who asked why we are allowing for the use of foreign currency in the economy yet other countries are not allowing that, they only use domestic currency in their countries. Zimbabwe is in a perculiar situation, perculiar in the sense that it cannot access normal credit lines. We are also in arrears with our payments. We have started paying and of course things are improving. So, we do not have what we call balance of payment support but we did notice that we do have US dollars splashing around in the economy but also our diaspora, last year they send an email record of US$1.4 billion and as Government, we sat back and said you know what we need, that is some kind of surrogate credit line or just another source of credit lines.
Part of the reason why we created the auction was as a mechanism of harnessing the foreign currency that is already here and that is also coming in and then redirecting it to those in need of that foreign currency including the industry, was to substitute for the absence of credit lines. In other words, it has become the source of the credit lines that are missing. That is a very perculiar construction that we have put in place in Zimbabwe which dictates that the US dollar should be allowed to circulate for some time until we resolve the credit lines issue. So, it is a transition but I bet a necessary one, one day mono currency in countries like South Africa, Zambia, Malawi, Mozambique, Kenya and others, it will happen but we are going through phases. We are going through a transition and a necessary one.
The other question was, Hon. Minister, will we ever kill the black market? My answer is, as long as we are going through this transition which is caused by the peculiarity of the economy, there will be some form of the black market. As you know, most currencies around the world have some kind of parallel market. If you have received a US dollar in other countries, there is a parallel market for it. Most currencies will have this and that is the reason for illicit behaviour and illicit trades and that causes different and parallel exchange rates. We never completely eliminated that because we are in this transition and we expect the parallel market to be around for sometime as we go through this transition. It is our hope that when we introduce the mono currency at the right moment where you cannot hold on to foreign currency for longer than 30 days, you would convert, then that moment the black market would fizzle out and hopefully completely die.
The other question is - when will banks start paying interest to attract depositors into the banks? Banks have begun paying interests and it is by law because I issued a Statutory Instrument back in 2020 to compel banks to pay interest. It took time figuring out how to comply, now they have just started complying but I think the real issue is on bank charges, which is on one hand, you receive an interest and on the other, you have bank charges versus the interest; it is the issue for the customers. I think the issue that we need to work with the banks is the issue of bank charges and we will continue with the policy of moral suasion to make sure the bank charges are managed by the banks and are not too excessive, otherwise depositors will not find it attractive to put their money in there. Also, that the deposits in hard currency in the nostros should also attract a healthy interest rate and that again is a subject of moral suasion that we are aware of and we have been engaging the banks on this.
The question asked by the Hon. Member on this is that the fuel companies that access foreign currency from the auction then claim that they will sell the fuel in Zimbabwe dollars but then they go on to sell it in US dollars. We are aware of this and we have changed the system. What we are doing now is, we have said that any designated companies and service stations that wish to sell fuel in Zim. dollars and we have carefully chosen these will be supported through a different system rather than the auction. You will be supported through letters of credit that are arranged through the Central Bank and through NOIC; that will allow them to access foreign currency through a special facility backed by the letters of credit at the back of which we then sell the fuel in Zim dollars. That is the new system to deal with the issue that the Hon. Member has mentioned. We have also realised there was this problem. So, we are dealing with it.
Hon. O. Sibanda, his question was disturbed by connectivity, so he did not quite complete his question.
(V)*HON. CHINOTIMBA: I would like to ask the Hon. Minister of Finance that long ago, we used to have fuel stations for Government which was later changed by Mr. Mangoma to Petro Trade. Government is responsible for selling fuel on black market because the vendors are from the Government. What if the Government builds its fuel stations for the people? People must have access to fuel with good prices. What are you doing with the issue of fuel so that the people may access fuel easily like they used to do long ago before the black market intervention, Hon. Minister of Finance, where are you in terms of filling stations that sell in local currency? We are seeing the Zimbabwe United Passenger Company (ZUPCO) doing so, this is what we want.
(v)+HON. M. MPOFU: Thank you Mr. Speaker Sir. My question to the Minister is: what causes fuel to be expensive in Zimbabwe compared to other neighbouring countries? We export fuel to Zambia but you find that fuel in Zambia is cheaper than it is in Zimbabwe? My second question is, what is being done by the law enforcement agencies pertaining to the issue of trucks that come with fuel to Zimbabwe and empty it and then ferry water? What is the Minister doing about this issue?
(v)*HON. NYAMUDEZA: Thank you Mr. Speaker Sir. My question to the Minister of Finance and Economic Development is: how long will it take to have fuel selling in RTGS? Is it not possible to publicise those who are getting foreign currency on the auction floors so that the nation would know that this month, so and so got money on the foreign currency auction floors?
(v)*HON. MASENDA: My question is the prices of agricultural products that we produce are already set using RTGS, for instance the price of maize and small grains, using the rate that was existing then, now the rate has escalated. This means that the foreign currency that farmers were expecting on a tonne of maize then is not the same currently. By the time we sell our maize, we do not know what price it will fetch. My question is, is the Minister seized with the matter of revising the prices of agricultural products so that they will be in sync with the existing rates when we finally sell our maize at the Grain Marketing Board (GMB)?
(v)HON. TOFFA: Hon. Toffa too Hon. Speaker Sir.
THE TEMPORARY SPEAKER: Hon. Toffa, I am not seeing you but I can recognise you later after this, thank you.
(v)+HON. MOKONE: Thank you very much Mr. Speaker Sir. My question to the Minister is, since the price of fuel has gone up, this means that even prices in the shops are going to escalate. What plans have you in place to assist the workers since the prices have gone up? This will ensure that they can be able to buy their basic commodities and the pensioners can also survive because the pension that they are getting has been eroded by inflation.
HON. I. NYONI: Thank you Mr. Speaker Sir. My question is on bank charges which are going up all the time. If you leave some money in the bank, say about $10 000, in one year’s time, you find the whole account wiped out. What measures are there to ensure that it becomes attractive to bank money instead of keeping it at home?
HON. TOFFA: Thank you Mr. Speaker Sir. My question to the Hon. Minister through you Mr. Speaker Sir, is the Minister considering the fact that Zimbabweans earn ZW$, what measures are in place to make sure that the citizens get access to fuel? Would it not be a good suggestion that the Hon. Minister considers at least giving each citizen an allowance of $20 litres per week so that they can go to work and take children to school? This can be controlled by way of registration books. Thank you Mr. Speaker Sir.
(v)HON. MUSHORIWA: The first question relates to the answer that the Minister gave in terms of the fuel taxes. Hon. Minister, in terms of our taxation on our fuel, we have got the duty that you said you will reduce from 11cents to 8 cents but you are aware that you also have ZINARA levy, the Carbon tax, the Strategic reserve levy and also the debt redemption levy, implying that we are out of the cost of a list of fuel cost, almost 49 cents goes to the tax. I want the Hon. Minister to advise what his Ministry is going to do in terms of ensuring that there is a reduction or review of those levies and taxes so that fuel can be affordable to the majority of Zimbabweans.
The second question relates to the pronouncement by the Minister that the banks – [Technical glitch] - My question is two-fold, the first one is, what are the conditions pertaining to the on-lending of the USDs to avoid a situation where we have got banks using the RTGS lending rates? Are there any regulations pertaining to that? Related to that, what measures or guarantee does the Minister give, that we are not going to have a situation where the Central Bank may not end up raiding the forex reserves within the bank assuming that there is a law on on-lending activities by the bank?
The third and last question, Hon. Minister, in your response pertaining to the efforts that your Ministry is doing in terms of stabilising, I did not hear you speaking when you talked about your Liquidity Management Committees and the question of the usage of the Government in terms of borrowing from RBZ used as TBs? I did not hear you speaking pertaining to the FBR in terms of how much has actually been utilised so far in terms of how much is outstanding because we do not seem to feel the impact of the inflow of the FBR. What percentage, because the last time you said you have used about 311 million and we want to find out the remainder there as the reserve currency or the money has been utilised somehow because we need to find out what measures are being put in place to make sure there is actual stability within the economy.
The last thing, why do we continue to have this huge gap between the auction rate and the parallel rate which is skyrocketing? Moreso, given the fact that in your previous pronouncement and especially when you did the budget you had said that one of the key objectives or key deliverables of the Ministry was to ensure that there was going to be stability of the foreign exchange. Why is it that the market does not seem to be following or taking a cue from the activities of Government? I thank you.
HON. R. R. NYATHI: Thank you Hon. Speaker Sir. My question to the Hon. Minister of Finance is - what measures is he employing in the short term to encourage our people to bank money in our financial banking system? We know that without our people banking money, it means our industry will not grow but once everybody is motivated to bank money, it means that the economy will increase, industries will operate and the economy will improve. That is my question to the Hon. Minister.
(v)HON. KASHIRI: Thank you Mr. Speaker Sir. My question to the Minister of Finance and Economic Development is, we seem to have foreign direct investment coming through the mining sector quite a lot, which is good. However, if you look at the manufacturing industry, it seems nothing is really happening there – what are you doing as a Ministry to make the environment conducive for companies to come and invest in Zimbabwe so that we do not become a consumptive economy? I thank you.
(v)HON. GANDAWA: I would like to know from the Minister of Finance – it would appear as if when there is a global spike in fuel prices we tend to have an instantaneous increase of fuel here in Zimbabwe. I wanted to know what our import cover in terms of our fuel is because we do not seem to see an instantaneous reduction in the price of fuel, suppose the price per barrel has gone down. Thank you.
THE MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. PROF. M. NCUBE): Thank you Mr. Speaker Sir. I thank the Hon. Members for their contributions, questions, comments and request for clarification. I will start with Hon. Chinotimba. His plea was, why Government does not have dedicated petrol/fuel stations that will sell fuel in Z$ and make it more accessible to ordinary Zimbabweans. This is exactly what we are doing and intend to do by making sure that certain resources in the form of letters of credit through NOIC and structured by the Reserve Bank are available for designated petrol stations and companies to access foreign currency and sell the subsequent fuel in Z$. That is exactly what we are doing; Petrotrade is one of those companies and we will expand the programme.
Hon. J. Mpofu asked why fuel is so expensive in Zimbabwe when the other countries are subsidizing their fuel. For us fuel has been largely unsubsidized, except in the last few months because of the current fuel spike. We have been subsidizing that through this reduction of the fuel levy. We will continue to do more and look at other ways of cushioning our citizens. We are aware that countries in the region are subsidizing their fuel but those that also cost our country, cost port tend to have lower fuel crisis because they have a lower cost of logistics. We have to truck our fuel, send it by rail or pipe it by pipeline and that adds to the fuel cost, but others do not have those costs.
You also talked about some of the shenanigans around smuggling fuel, claiming that fuel is being taken across neighbouring countries but when you open up the trucks you find that there is just water and so forth. We are catching these individuals who are involved in this kind of illicit activity. I think you have seen that ZIMRA has been very proactive and active in catching them and anyone caught in this kind of smuggling activities, their truck gets confiscated and they are fined accordingly. We are discouraging this kind of activity but we are also making sure that our GL-tracking and fuel marking technologies are working. Of course, people do get around those things and that is why they are called crooks - that is why they are called crooked people. They do that but we make sure that is minimised. There will be use of appropriate technology and also just plain good policing by both ZIMRA and the police.
There was a comment about how long it will take for fuel in Z$ to be available. We are putting these letters of credit in place. Some fuel is already available in Z$ at designated service stations. It might be a good idea to publish to the public and let them know which companies and which service stations are selling fuel in Z$. I will encourage the Minister of Energy to make this public.
There is a comment on prices of crops being charged in Z$ and the exchange rate because of the parallel market bouncing around, which means that some of these producer prices should be revised upwards. I think that was the implication of the question. From time to time Government has reviewed the price upwards in response to market conditions and we always stand ready to do this. I must say that in reviewing these prices, we are not just driven by parallel market rates, exchange rates and so forth. There is a whole pricing formula which looks into the input cost – what goes into the production of a specific commodity. There is electricity, fuel, and there is also the optimal hectarage – is the person producing at an average of four and half hectares and is it higher or lower. We usually use anywhere between four and half or five hectares and that is the average hectarage that we ought to use for maize and wheat and varied from year to year. There is also the cost of financing; for those who are borrowing, it also becomes a factor. So there is a long list of factors that impact the cost of production, that cost build up model that we use as Government for determining the prices. We are also further refining our price mechanism making sure that this cost of production driven model becomes basically what we call the minimum reserve price so that if prices then go above that, the seller ought to participate on the upside while knowing that there is a minimum and there is a flow which is due to them but we will still make sure that they break even. So, we are getting more and more creative around this issue to make sure that we maximize value and reward for the farmer.
Hon. Mokone, if I got the name right, talked about the support for workers due to increase in price of fuel and inflation. That is exactly what we have been doing in terms of this in the last few weeks. We announced an adjustment in salaries for civil servants, the 20% increase from January and also introducing an additional US dollars cash payment which started this month in March. This also applies to pensioners; this is in addition to the 75US dollars that we are already paying under the COVID-19 allowance programme. Civil servants will receive at least US$175 in hard currency and the remainder will be in domestic currency. If we walk back and say where were we beginning of 2018? The average salary for a civil servant was actually about US$275 because the exchange rate was about 1:2. I often hear an argument being made that it was something like US$500 or so but effectively, it was not that figure. It was that figure divided by two because of the exchange rate then which was not one to one.
If you take the US$175 now plus the Zimbabwe dollar component, you will find that the civil servants are actually, in terms of position, they are in a good position as they were in 2019 if not better this time around. I am very happy to show you the calculations. Specifically, how we have done it, certainly the situation is much better than before. For specific categories, we have not just extended the monetary benefit, but we have also given the non-monetary benefit which is school fees support up to 2 /3 children for a teacher at a Government school or the school where they teach. That also applies to private schools. There is a 20 000 RTGS per child in terms of support from Government if they are at private schools and for Government schools, it is basically free because the school fees are not at the level of 20 000RTGS. We are rolling out accommodation at various schools and then support in terms of transportation. This also applies to the nurses as well, the health workers; they have their own non-monetary benefits. It applies to teachers as well, which include duty free importation of cars and so forth, the risk allowances for the health workers and other allowances for night duty and so forth. There is just so much that we are providing in terms of non-monetary benefits to supplement the monetary benefits. I could go on and on but we are happy to supply any document that gives this kind of detail.
This also extends to our pensioners, our retirees who worked very hard to support us; the war veterans will also be receiving this US dollars component as part of their salary. Mr. Speaker Sir, you recall that the salaries of war veterans turned to be linked to active and serving members within the military. There is a formula where those salaries are linked to a certain level. So any increase for the military will always impact positively on the pensions for war veterans.
On the issue of bank charges which was raised by an Hon. Member, which is to discourage deposits, I agree with him and I talked about it earlier that the bank charges continue to discourage depositors even in the face of an increase in deposits rate and we appreciate that the banks have started paying interest on deposits but the bank charges work against that positive move. We really urge the banks to work hard to lower the bank charges so as to promote more deposits. This is not just in Zimbabwe dollars deposits but in hard currency deposits as well in the nostro accounts.
There was a question on access to fuel in Zim dollars that perhaps we should support every citizen by giving them a fuel allowance for taking children to school and so forth. It sounds like a very complex system. Often if a Government feels that ordinary citizens who are not employees of Government typically feel that they need to be supported, they institute what we call cash transfers as opposed to ...
(v)HON. TOFFA: On a point of order Mr. Speaker Sir.
THE TEMPORARY SPEAKER: What is your point of order?
(v)HON. TOFFA: My point of order is that the Hon. Minister did not quite understand my question. I said is it not possible for Government to allow citizens to get access to fuel by allowing them at least 20 litres a week in Zimbabwean dollars. It is not an allowance by Government but allowing them access the Zim Dollar fuel.
HON. PROF. M. NCUBE: I thank the Hon. Member for clarifying that question which has been asked many times that we should give citizens’ access to Zim dollar fuel. That is exactly what we are working on, providing letters of credit through a special window, through NOIC working with the Reserve Bank. So, certain designated fuel stations and companies can then sell the fuel in Zimbabwe dollars and I did say that perhaps I will encourage the Minister of Energy and Power Development to publicise which companies are selling fuel in Zimbabwe dollars, where their service stations are located. I think that will be very useful information to citizens. I thank the Hon. Member for that important question again.
Hon. Mushoriwa, there are many levies on fuel and so forth. What we have done is that we have now amalgamated all these various levies on fuel into the one strategic fuel level of 12.7 cents that I talked about. Most of those levies have disappeared, including levies around servicing old debts through the old NOCZIM and so forth. All that has been amalgamated into the strategic levy of 12.7 cents which I have said they have now been lowered to 8.7 cents due to our need to curb the increase in fuel price for the benefit of citizens. So we have cleaned that up and now we are able to control those taxes. We know exactly where the money is going.
The forex deposits in the banking system - do we have conditions on how the money is extended to companies in the form of loans. These are loans, so the banks know what to do. When they extend loans to customers, they lend out in US dollars and they expect repayments in US dollars and not in Zim dollars. That is what we understand them to be doing. They charge interest rates and that is a good thing, which means that now we are putting these US dollars to good use and suspect that they are lending to companies that are earning US dollars as well so that they can service the loans. This is a good thing and there is nothing untoward here. I am not sure if we need any rules as long as they lend in US dollars and receive the payments in US dollars.
The possibility of raiding foreign deposits is a no, no. We do not do that. We are not interested in those US dollar deposits, it is theirs to do what they please with those US dollars and that was very clear in the past. Then the SDRs, the SDRs are being used to support the normal budget programmes and in the budget for 2022, I presented before this House which areas the SDRs will be used in, in supporting the socio-economic sector, health, education cash transfers. How we will then support the productive sector which is agriculture in terms of irrigation export revolving fund, the mining sector in terms of support for artisanal miners especially in the gold sector and then funding some infrastructure developments and then reserving some of them to help stabilise our currency. As I speak, we have something to the order of US$700 million worth of SDRs that are in a bank account which are a part of our foreign reserves and therefore go towards the stabilisation of our currency. So they are playing both roles. There is the budgetary aspect which I described and then there is the reserve element which supports stability. There is no problem here.
He talked about why there is this gap between the parallel market and the official rate. Look, when there is a parallel market official rate, there will be a gap and we have been dealing with this gap in many ways. As I said, one of the ways has been to promote the use of the Zimbabwean dollar. That was in my statement and the other is to fine tune the auction, the way the RBZ has been announcing from time to time and third is to eliminate the backlog on payments in the auction market. So there are different ways in which we have been dealing with the efficacy of the auction market so as to deal with this gap.
I think you will notice that in the last, I would say two months, that gap has not really been widening as before. It just shows that some of the measures here are working but of course the gap was already wide, but it has not really widened very much between the auction and the parallel rate. That is why now we are saying that the real source of inflation is imported inflation through the fuel sector, but also raw materials that we require to do some manufacturing locally and through finished goods because of this sharp rise in global inflation and global fuel prices.
Hon. Nyathi on short term measures to encourage people to bank money; again, I have tried to deal with this issue. The banks, by law, have introduced interest rates for Zimbabwean dollars but then the issue has been the bank charges which I think are still high and I suspect over time, they will be sensitive enough to lower those bank charges, but also the Central Bank is now saying that an individual can access more cash from their bank account per week. All this is good that you are able to deposit your money, earn an interest and then you are able to cash out more from the bank on a weekly or monthly basis.
Hon. Kashiri, we said we have witnessed growth or increase in foreign direct investment (FDI) into the mining sector but perhaps not much into the manufacturing sector. I tell you what, in the mining sector that is where you really need FDI. Why, because mining is expensive business. Explanation - buying equipment then eventually you prove the resource, you go into the digging of a hole into the ground if you have to. It is an expensive business so it always needs foreign direct investment because really, our financial sector is too small to support these kinds of expensive ventures and that is a good thing, but when it comes to manufacturing, things are different. This is a less expensive business and what has been happening is that our manufacturing sector has actually been reinvesting. A lot of companies have retooled. The new companies have come on to the market and are manufacturing these myriad products that you see on our shelves that are locally produced. So again there is reinvestment in the manufacturing sector by the companies that are already on the ground and in the country and then new companies have also entered the market, but this does not require as much investment as the mining sector.
Finally, there is a question on the global spikes in fuel prices and other prices which is a direct translation into Zimbabwe. Why is this and how can this be ameliorated? Again, I tried to explain this even in my presentation to say, if it is fear for example, one way is to enter into contracts where the prices depend on the average price for the previous month. This will smooth over the spikes and troughs and create certainty on the prices for the following month, both for the companies themselves that procure the fuel as well as for citizens locally, domestically, who then will be clear as to what price will prevail from time to time. So that is one way, but of course there could be other ways to do this. They are hedging mechanisms and it is the companies which should be doing the hedging not the Government but we hope to see more hedging strategies being implemented going forward as the market becomes more and more sophisticated. I thank you.
(v)HON. G. DUBE: Thank you Mr. Speaker. As a follow up to our answers from the Minister, this is especially on the issue of civil servants. I am sure it is incorrect for the Minister to say civil servants are doing better than they were before. It is better for him to say we are trying to improve the bad working conditions of the civil servants. It does not make sense to give someone 10% when you do not pay it. So I think the statement on civil servants is not correct and everyone is not able to do anything including these workers you are looking at now at Parliament and everyone in the civil service…
THE TEMPORARY SPEAKER: You are breaking up Hon. Dube
(v)HON. G. DUBE: Business is actually pegging prices at a rate of 250 to 300 to the United States dollar and you are crediting salaries at a rate of 120. What are you doing to solve this problem? It affects the ordinary person?
HON. R. R. NYATHI: Mr. Speaker Sir, I have a follow up question on banking. What guarantee does our Minister give to the nation that those people who are having forex in their homes, that is the US Dollar and other currencies to be encouraged to bank their money with the guarantee that they will get their money back in the future?
(v)*HON. RAIDZA: Thank you Mr. Speaker Sir. My point of clarification to the Minister is on the increasing fuel prices and we are not getting it in some fuel stations. I suspect that they are holding it in anticipation of another price increase. What is Government policy to ensure that the fuel that is in the country is sold at the prevailing prices at the time of importing the fuel? That can affect development in the country. Also, Government should be exposing such business malpractices. I thank you – [HON. MEMBERS: Inaudible interjections.] –
THE TEMPORARY SPEAKER: It is not the Minister saying so. You know we have got other businesses that we want to attend to. I think we have given this Statement enough time for your questions. I now give the floor to the Hon. Minister to respond to clarifications.
THE MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. PROF. M. NCUBE): Thank you very much Mr. Speaker Sir. Let me start with the question from Hon. Nyathi. Basically, he wanted guarantee and as the Minister of Finance, I cannot give a guarantee that if you put your money in a specific bank, you will get it out. So many things happen with banks. They have got different charges. They have different interest rates and they may even fail, for that matter. However, for that we have got the Deposit Protection Corporation. A Minister cannot give those kind of specific guarantees but we can pronounce on policy to say we have a policy where over time, we will increase the amount that you can access as a depositor in a specific bank. We have a policy that banks should pay interest but also we cannot force individuals to bank in the first place. We have allowed you in terms of policy to keep your money under your mattress and that is okay. We have not made it illegal and I think that is the kind of flexibility that we want in our economy.
(v)+HON. S. K. MGUNI: Thank you Mr. Speaker Sir for allowing me to make a follow up question. I have not heard the Minister addressing to the communicating of the parallel rate that is being done by the illegal forex traders. How are they being controlled and how is the Government going to apprehend them? They are the people giving us trouble as a nation. It seems we do not have a signed resolution to control them.
The other question is on fuel. The citizens of Zimbabwe are now suffering. Fuel is being sold in foreign currency which is not within the reach of the citizens. I have not heard the Minister addressing a sound solution on the fuel issue. Only a few individuals are affording to buy fuel because it is sold in foreign currency. Only a few individuals are able to get the foreign currency. The civil servants earn little salaries, therefore they are not able to buy fuel. I am appealing to the Government to come up with a sound resolution that could protect illicit financial flows and also control the illegal forex trading.
THE MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. PROF. M. NCUBE): Thank you very much Mr. Speaker Sir. Let me begin by answering the question from Hon. Raidza. He asked a very important question about service stations that are holding fuel for speculative reasons, hoping that prices will go up. I know that prices are coming down rather than going up. So I do not know how they will handle that.
Secondly, we cannot force companies to sell fuel that they have bought using their own resources. They have not used Government resources, they have used their own resources and they are in business. Let us then see how they square the books - where they do not sell the fuel and then the prices start coming down. Some of these things will be sorted out by the market forces and they will start offloading when prices go down, that is if they go down. We cannot as Government force companies to sell fuel that they have accessed through their own resources.
This behaviour speaks to the volatile nature of the market which will cause this kind of behaviour and I did explain that one way to handle this going forward is to average out prices over the previous months and then use those as contracting prices for future purchase of fuel by companies which then translates to more stable prices for the domestic market.
The question from the Hon. Member that there is so much fuel in forex, actually we need more fuel in Zimbabwe dollars and deal with those who are breaking the law in this regard. I have already dealt with that to say we have special facilities, letters of credit which if you access your US Dollars that way, you can only sell in Zimbabwean dollars and there is enforcement. The ZERA, the Financial Intelligence Unit and the Central Bank are enforcing this kind of programme. The idea is to expand it so that more citizens can access the fuel in Zimbabwe dollars. He also referred to the issue of dealing with the foreign currency traders and we have been arresting them. We have been fining them and the companies. I am very pleased with the work that the financial intelligence unit is doing. We have capacitated them further and they are beginning to have teeth and also we are putting the laws to enable them to act. We had S.I. 127 whose aspects were also incorporated into the Finance Bill for this year. We are pleased with the legal framework for dealing with such errant behaviour. We will not stop. We will continue to do this kind of work to discourage illicit activities.
On the motion of THE MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. PROF. M. NCUBE), the House adjourned at Six Minutes past Six o’clock p.m.