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NATIONAL ASSEMBLY HANSARD 19 May 2016 42-61

PARLIAMENT OF ZIMBABWE

Thursday, 19th May, 2016

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

PRAYERS

(THE ACTING SPEAKER in the Chair)

MOTION

BUSINESS OF THE HOUSE

HON. MATUKE: I move that Orders of the Day, Numbers 1 to 3

be stood over until the rest of the Orders of the Day have been disposed of.

HON. D. SIBANDA: I second.

Motion put and agreed to.

HON. MARIDADI: On a point of order. I wish to bring to the

notice of this House a point of order that I have raised before. It is an issue of practice, process and procedure for this House. There are motions that have been sitting on the Order Paper for as long as I can remember and common practice is that when a notice to move a motion is given and the mover of that motion is not available on the day that the motion is meant to be debated, the motion should fall off the Order Paper automatically. A typical example is motion Number. 25 which was given by Honourable Shamu, to be seconded by Honourable Zindi.

This motion is now sitting at Number 25 and yet once upon a time it was sitting at Number 1. It has not been debated and as such I think it should fall off the Order Paper for two reasons. Firstly, it is becoming expensive that we continue to print paper for motions that are never debated and secondly, they are actually clogging the Order Paper. Madam Speaker, I appeal to you that some of these motions fall off if the movers are not here to debate them.

          THE ACTING SPEAKER (HON. DZIVA): Thank you

Honourable Maridadi for your clarification on the issue of your question. The issue that happens with motions is that if it has not been called out then we cannot remove it from the Order Paper but if it has been called out then it will automatically go. So, I remember the day when it was supposed to be debated, the mover of the motion came and asked for postponement on the Order Paper. As far as I am concerned, it has not been called out.

HON CHIMANIKIRE: On a point of order. I recall Honourable Shamu actually moving this motion and standing up to debate it. I stand to be corrected. I think Honourable Shamu is in the House, if he can actually clarify.

THE ACTING SPEAKER: I think we stand guided by the

Administration of Parliament. So, we have to make sure the

Administration of Parliament, do their job to research on what exactly transpired. I think on Tuesday they will be having an answer.

Honourable Maridadi having stood up on another point of order.   THE ACTING SPEAKER: Honourable Maridadi, we cannot

continue debating this issue. I have ruled on this issue and I said the Administration of Parliament will act on it and they will bring their response.

MOTION

PRESIDENTIAL SPEECH: DEBATE ON ADDRESS

Fourth Order read: Adjourned debate on motion in reply to the

Presidential Speech.

Question again proposed.

*HON. MUSUNDIRE: Thank you Madam Speaker, I would like

to add my voice to the Presidential Speech which was delivered in this House. I am not going to debate on the initial speech that he gave before this House but I will debate on the speech that he asked his deputy, Vice President Honourable E. D. Mnangagwa to deliver to this House because I am told that the first one had a mistake.

The President brought a speech before us like what is expected as he was talking about the laws…

HON. SHAMU: On a point of order. I think that the Honourable Member has no right to question the leader of this country when he appoints and delegates his Vice President to come and deliver a speech on his behalf. It is on behalf of the President and it is the President speaking. I feel that the Honourable Member should withdraw that statement.

THE ACTING SPEAKER: Order! I would like to advise the

Honourable Musundire to remain focused on the response to the debate of the Presidential Speech. The speech was read and replaced. Please debate in line with the motion that has been presented.

*HON. MUSUNDIRE: The President in his speech spoke about the Bills that were going to be brought before this House. Looking at the Bills that he said were to be brought before Parliament, these are Bills that were supposed to come from the Constitution because when we made our own Constitution, we were supposed to realign the Bills and the laws to the Constitution, just like what we had agreed as

Zimbabweans.  We voted and said that is what we wanted.

There were things that were problematic at that time we made the Constitution.  There was a complaint that provinces were not being developed equally.  We then agreed that we were going to come up with provincial councils.  When we went for elections, we came up with the provincial councillors.  It is now three years after that and some people have started campaigning for the 2018 elections, but nothing has been said or done in so far as the provincial councils are concerned, yet there are people who contested and they were elected as the provincial councillors who were supposed to be in office from then on up to 2018.

Those are things that are problematic to the country.  Even the laws and the Bills that we are supposed to make in this country, when the leaders come to tell us about the law and even to talk about our own health, we should be moving together, talking together.  He spoke about health and education.  Minister Chinamasa came and also spoke about second hand clothes that were worn by whites in some other countries and they used to come here via Mozambique.  He banned the importation of second hand clothes.  We are supposed to debate these laws.  You might be wondering why I am saying so.  When we talk about our own health, let me say the President’s daughter went to deliver in Asia and yet we have hospitals here… [HON. MEMBERS:  Inaudible

interjections.]-

THE ACTING SPEAKER: Order, order Hon. Sibanda.  Order Hon. Members!  Hon. Murai, Hon. Tshuma! Hon Dorcus Sibanda, you are a Chief Whip.  I will not allow this Parliament to turn into a circus.  I will not allow that both from the right hand side and the left.

*HON. SHAMU:  On a point of order Madam Speaker.

Yesterday, the Speaker said we should not talk about people who are not in this House and secondly…- [HON. MEMBERS:  Inaudible

interjections.]-

THE ACTING SPEAKER:  Hon. Members from the left side!  Hon. Murai, Hon. Members, can you please respect this Parliament and give Hon. Shamu time to say out his point of order.  You have got a right to speak after I recognise you, only.  So, may you please accord the Hon. Member opportunity to say what he has to say?  If you have anything to say, you will stand up and then I will recognise you.  I told you before; I do not want this Parliament to turn into a circus.  So, I will take action if you continue with such behavour.

*HON. SHAMU:  Thank you Madam Speaker.  It is not allowed and it is not proper to start talking about someone who is not in this House, who cannot answer for himself.  Secondly, a person is free to go and choose where ever they want to go for treatment.  What the last speaker has said is not proper.  He must withdraw that and he should never say that again.  I thank you - [HON. MEMBERS:  Inaudible interjections.]-

THE ACTING SPEAKER:  Order Hon. Members. Order, order!  I need to respond to the point of order raised by Hon. Shamu first before I can take another person.

Hon. Shamu, I think it is true that we cannot continue in this Parliament to talk about people who cannot come and defend themselves here.  It is not right.  From both sides, whenever you are debating, let us try by all means to talk about people that can also defend themselves because you have got the right to freedom of speech and expression, but you should also try to control that so that we also accommodate those that cannot come and defend themselves.

Secondly, the second issue that Hon. Shamu has raised.  After he has debated, if you have not yet debated the Presidential Speech, I will give you an opportunity to respond to what Hon. Musundire was debating.

*HON. THEMBANI:  On a point of order, Madam Speaker.  I wish to add on to what Hon. Shamu has said…- [HON. MEMBERS:

Inaudible interjections.]-

THE ACTING SPEAKER:  Order Hon. Members from my right.

Hon. Member, I understand you want to give a point of order, but if it is in connection with what I have ruled already, we can go with the ruling.

If it is a different point of order it is okay…- [HON. MEMBERS:

Inaudible interjections.]-

Order, order! If it is a different point of order it is okay, but if it is in line with what Hon. Shamu has already stated, then we have to continue.

*HON. THEMBANI:  No, it is different.  Madam Speaker, I

would like to make it a point that if someone is married, then it means they are under their husband and that has nothing to do with this House because these are people who have their own home.  She has her own husband and that has nothing to do with this House… - [HON.

MEMBERS:  Inaudible interjections.]-

THE ACTING SPEAKER:  Thank you very much Hon.

Thembani.  That is why I said I will give you an opportunity after the debate by Hon. Musundire so that you can get in to defend your side of the story.

          *HON. MUSUNDIRE:  Thank you Madam Speaker.  I am talking

before this House, it is not that I want to gossip behind the President’s back.  I am talking about what he said to us all because there is a time when the President’s wife was away and he said she is away.  That is what I wanted to talk about.

THE ACTING SPEAKER:  Order Hon. Musundire, I said you

can carry on debating the Presidential Speech.  Do not talk about people who are not in this House.

*HON. MUSUNDIRE:  I am saying if laws are made and if the President signs the laws and the Ministers bring up laws – I do not know what I can call it in Shona but in English it is called confidence.  As leaders, we should lead by example.  These are laws that should not only affect people in Bikita but they should affect everyone and not people from a certain area.  We were told that second-hand clothes were banned but last week we saw those second hand clothes being distributed in Gutu.  Where did those come from since we banned them?  Why is it that some people are following the law and some are not?  Laws are for everyone and we should all follow them.

Then coming to the issue of security, the President spoke about security in this House but at times you really wonder what happens with our security because we are looking for Dzamara, but we still have not found him.  We wonder what is happening with security.

THE ACTING SPEAKER:  Serjent-at-Arms can you please assist Hon. Kuruneri.  The Hon. Member needs assistance.  We are very sorry about what has happened with Hon. Kuruneri.  We all know that he is not feeling well and Parliament is right now taking the necessary action to ensure that the Hon. Member is assisted medically.

HON. MANGAMI:  Madam Speaker, can I suggest that since he has got an Aide he should be allowed to come in and sit next to him because at times, even in Committees he needs assistance and some of us Members do not have the knowledge to handle him but the Aide is a nurse.

THE ACTING SPEAKER:  Hon. Members, I would like to advise the Hon. Member and also to make you aware that it is allowed in Parliament as it has already been approved.  So the Aides are allowed to come in and assist them.  Thank you for that because most Members will not be aware of their rights in Parliament.

*HON. MUSUNDIRE:  We are very sorry about what happened to the doctor.  I was saying that when the President came to address us he spoke a lot about security.  When we talk about security, it should be there for everyone and it is supposed to protect even those who are demonstrating.  If people are going to demonstrate, we know that they should inform the police if they are four or more.  But if it is only one person, that person does not need clearance but can just demonstrate on his/her own, that is what POSA says.  What we know is that if it is just one person, that person is treated like a donkey and accused of demonstrating without having informed the Police and yet it is only one person. I am saying for one person, there is no need for clearance.  So when we talk about our own security, it should be security for everyone and not just for a few people.

When the Presidential Speech was brought before the House, there was one important thing that was not explained then but was explained later on and that was about our money, the $15 billion.  This was a very important issue.

HON. MLILO:  On a point of order Madam Speaker.  The Hon Member is supposed to debate the President’s Speech.  Probably the speech was given so long ago that he has forgotten the contents of the speech because the things that he is describing now were never part of the Presidential Speech.  [HON. MEMBERS: Inaudible interjections.]  Fifteen billion was never part of the Presidential Speech.  He has been talking about Itai Dzamara, he was never part of the Presidential Speech.  I think he needs to stand guided accordingly and if he has no facts to debate on, rather he sits down and give others a chance.  There is quite a long queue of people who want to debate here.  Thank you.

 

THE ACTING SPEAKER:  Order, Hon. Members, I advise you

to respect each other.  It is important to listen to what an Hon Member will be saying because it will help you tomorrow.  Sometimes you end up embarrassing yourselves, especially when there is national television and people do not understand what type of Members of Parliament you are.  Please respect each other, when one speaks, respect his or her views.

I have heard your point of order Hon. Member. You were actually now also debating that motion.  So, just allow him to finish his debate then I will give you an opportunity to respond to everything that he was debating in time.

HON. MAONDERA:  On a point of order Madam Speaker.  With all due respect, it has become a norm  that those new Members of Parliament who came recently, I do not think they were taken for orientation, because of the  vexatious and frivolous point of orders that they make.  We urge this House to take them for orientation …

 

Order, order, Hon. Maondera, there

is no discrimination in this House, whether you came in this House 20 years ago, five years ago and someone came last week, you are just the same, you are representing the same people.  You are not supposed to discriminate anyone on the grounds of when an Hon. Member came to Parliament.

HON. MAONDERA:  I did not mean that Hon. Speaker.  I said I came in 2013, and some of our colleagues came recently, I am not trying to belittle them…

THE ACTING SPEAKER:  Order Hon. Maondera, I have heard

your point of order and I am giving a ruling.  Hon. Members, I said there is no discrimination on whether you came when, you are all Members of Parliament and you are equal.  This issue of orientation that you are talking about will be dealt with, even those who have been here for twenty years; they still behave like they do not even know the Standing rules.  This is what I have realised.  Hon. Musundire, you may continue

– [HON. MEMBERS: Inaudible interjections.]

*HON. MUSUNDIRE: The President spoke about US$15 billion; US$15 billion is a lot of money.  This money was known by all the people in Government.  They knew about this US$15 billion that it was there.  When they spoke about 2.5 million jobs, they knew that these jobs were going to be funded by the US$15 billion.  They used to say that yes, there is money, money that we got from diamonds and they were campaigning that people should vote for them… Time limit

HON. MUDZURI:  Madam Speaker, I move that the Hon.

Member’s time be extended.

HON. J. TSHUMA:  I object -[HON. MEMBERS: Inaudible

interjections].

THE ACTING SPEAKER:  Order, order.

HON. J. TSHUMA:  On a point of order Madam Speaker.  My point of order is that Hon. Musundire actually lied to the House, he said

2.5 million….

Order, order, Hon. Tshuma. When I

recognised you Hon. Tshuma I said is there any debate and I thought you were going to debate the Presidential Speech.  If you want to speak, speak about the Presidential Speech – [AN HON. MEMBER: Akataura

kare.]

*HON. CHIPATO:  Madam Speaker, you can check I did not debate.  Firstly, I would like to thank our President Cde. R. G. Mugabe, he has people at heart.  Now, coming to the issue of ZIM-ASSET that he spoke about, looking at what he has done in the rural areas, especially in Zaka-Masvingo where I come from; many hospitals were built.  People used to walk long distances to go for delivery but now there are hospitals nearby.  Since 1990, a lot of schools have been built.  The President is knowledgeable; he knows that education is important.  That is why he made sure so many schools were built.  Especially us women, he is concerned about us.  During the Smith regime we never used to have any form of national identity cards or even birth certificates but now we can afford to obtain birth certificates, we can even afford to get

passports.  We can travel out of the country to go and buy things for resale.

I would also like to thank President Mugabe because us as women we are now here in Parliament.  There were no blacks in this House long back but now because of President Mugabe, we are free.  Today we can talk and debate even issues here in Parliament to assist our country.

Now, talking about roads, I would like to thank my President R. G. Mugabe for the work that he is doing.  He has been going from here to there.  There used to have dust roads but now those roads are tarred.  I would like to thank him for that.

I would also like to thank the President, he is our President and I applaud him.  He has people at heart.  He does not mind how much we insult him.  As it is now, there is a drought but he is going around trying to get us food. …

HON. MURAI:  On a point of order Madam President.  The Hon.

Members seems to be giving vote of thanks – [Laughter.]-

Order Hon. Members!  This is why I

ruled before that most of you, even those that have been in this Parliament 10 to 15 years, do not understand the Standing Rules and Orders.  You end up embarrassing yourselves in front of the public.  Please, may you desist from such comments and abuses against women, especially when they are debating?

*HON. CHIPATO:  Thank you Madam Speaker, for protecting

me from those who are ungrateful to what the President has done.  The Hon. Member is going out but I wanted him to listen to what the President did for him.  He is a President who has the people at heart.  To those who are laughing and despising him, the President is out there trying to source food for them.  They should be here thanking the

President.  I will thank the President and I cannot stop thanking him.

I have heard them talking about going to schools, universities and all that but during the Smith regime, they never used to go to school.  I would also want to thank those who went to war to liberate us as a country.  Long back, there were few Hon. Members in the august House but now they are booing others.

HON. MATUKE:  Madam Speaker, I move that the debate do now adjourn.

HON. CHITINDI:  I second.

Motion put and agreed to.

Debate to resume:  Tuesday, 7th June, 2016.

MOTION

RESTORATION OF THE MOTION ON HUMAN TRAFFICKING ON

THE ORDER PAPER

HON. NYAMUPINGA:  Thank you very much Madam Speaker.

I rise to move that the motion on human trafficking of persons in Zimbabwe, particularly the girls and young women, which was superseded by the lack of quorum be restored on the Order Paper in terms of Standing Order No. 152(1).

 

Motion put and agreed to.

HON. CHAMISA:  Hon. Speaker, we are beginning to see a trend of this House not being able to be constituted properly.  Most motions are falling by the wayside on account of lack of quorum.  It would appear that we need to find a permanent solution to the absenteeism of members for purposes of our business.  It may actually entail looking at the fundamental cause or the root cause of the absence of Members of Parliament.

I have bothered to check with other members why they are not in the House when they are supposed to be debating.  We are paid by the taxpayers to do this – [AN HON. MEMBER: They are attending public hearings.] – It is not about Committees.  Most Members of Parliament, because of their working conditions are either vendors or are moonlighting – [HON. MEMBERS:  Inaudible interjections.] – Some are proper and pure dealers who spend most of their time either on their farms or mines.  We want to deal with those things so that we are not going to have this kind of problem Hon. Speaker.

It is a very serious issue.  These past two weeks, we had more than four motions that were terminated on account of lack of quorum.  It is a disturbing trend.  We have to give seriousness to business of Parliament.  It is also wasting your effort and time, so I just thought it is an issue that we need to have the Speaker making the necessary intervention for purposes of the direction of the House.  Thank you very much.

THE ACTING SPEAKER:  Thank you Hon. Member.  It is a

constitutional right for the people and you as Members of Parliament that you must attend Parliament business.  I put it upon your political parties.  You are doing injustice to the people that voted for you and your political parties.  I advise the offices of the Chief Whips to continue to whip Members of Parliament to attend Parliament business.

In terms of Parliament procedures, I understand Hon. Chamisa you are a member of the Standing Rules and Orders Committee.  That is the platform where you should actually talk about these things and find ways and if necessary, amend to put more rules to make some kind of penalties to Members of Parliament who do not come to the House without any apologies or leave of the House, so this is what I advise.  Take the necessary procedures. We leave it upon Members of the Standing Rules and Orders Committee (SROC) to set penalties for absentee Members of Parliament.

HON. NYAMUPINGA:  Thank you Madam Speaker.  Yes,

privileges and Hon. Members are believed to be absenting themselves from Parliament, but I do not think that is true.

Currently at Parliament, there is an element of different committees travelling for Public Hearings during Parliamentary sittings for the reason that Parliament does not have fuel to bring parliamentarians when Parliament is on break.  I know from previous experience, even if we say experience does not count but to me, experience is never thrown away.  What used to happen, whether we were on break or on weekends, that is when Public Hearings were conducted?  If it is Public Hearings why do we have three to four committees at a given time? – [HON. MEMBERS: Hear, Hear.] – This is what also causing this.

Again, why can Parliament not find fuel to facilitate committees to attend Public Hearings during recess?  Zvanzi huyai mungobatanidza nepamunenge muchisita ipapo because Parliament haina mari.  I think that also has to be looked into before we are tarnished that we are not attending parliamentary sessions. – [HON. MEMBERS: Hear, Hear.] –

THE ACTING SPEAKER:  Hon. Nyamupinga, order Hon.

Member, I have to respond to Hon. Nyamupinga.  Hon. Nyamupinga, I appreciate your concern but when I responded, I was specific that Hon.

Members who do not attend ‘with leave of Parliament’.  So, if you are in any committees or attending Public Hearings, you are part of Parliament because you are on parliamentary business. – [HON. MEMBERS:

Inaudible interjections.] – At the same time, yes order, order Hon.

Members… – [HON. MEMBERS: Inaudible interjections.] –

Order, order Hon. Members, I think at times we also have to appreciate and accept what is happening in our country.  We have financial challenges and Parliament is also affected because it is being funded by the same Government.  We will send this concern again to the Parliament administration, through the SROC to make sure that they take the necessary steps to make sure that Members of Parliament attend Parliament sittings and fuel is available.

HON. MUDZURI:  I just want you to add something that might

be of assistance.  Yes, the SROC will sit and change rules but there is a reason why in the past parliamentarians were allowed to be absent for 21 consecutive days.  There is a good reason why that was done but of late, we have discovered that Parliament has not gone deeper into the work of a parliamentarian.

I think the SROC and we must table a motion where we discuss the work of a parliamentarian.  How he/she does it, some Members do not debate because they have no time to research.  So when a certain motion is tabled, they have nothing to contribute, hence they would rather go out because they will just be seated.  Parliamentarians need to have proper offices since Parliament is the third leg of Government.  We are supposed to oversee the Executive but unfortunately when we want to do so, people think it is protecting the Executive when they are in Parliament.  We must be overseeing them for the sake of the nation, hence the need for proper offices; an office where there is current research on what is happening in Government and we come here with facts and avoid wishy washy because we will have facts. I appeal to you Madam Speaker, that either we have a whole day of debating on what needs to be done for parliamentarians so that we hand it over to the Executive to say, this is what we need with the work of parliamentarians.

Yes, the country is experiencing financial challenges and

Parliament is most needed to work and oversee the rampant corruption.

When the President says $15 billion is missing, a lot is missing in that

Executive.  I thank you. – [HON. MEMBERS: Hear, Hear.] –

THE ACTING SPEAKER:  Hon. Members, we will forward

your concerns to the relevant authorities so that the issue of the welfare of parliamentarians is dealt with as it is one of the things that is affecting your performance.  This includes the issue of offices for Members of

Parliament and resources for their constituencies.

MOTION

BUSINESS OF THE HOUSE

HON. MATUKE:  Madam Speaker, I move that Orders of the

Day Numbers 6 to 12 be stood over until the rest of the Orders of the Day have been disposed of.

HON. CHAMISA:  I second.

Motion put and agreed to.

MOTION

FIRST REPORT OF THE PORTFOLIO COMMITTEE ON

INFORMATION COMMUNICATION TECHNOLOGY,

POSTAL AND COURIER SERVICES ON THE MOBILE

TELECOMMUNICATIONS SECTOR IN ZIMBABWE

HON. CHAMISA:  I move the motion standing in my name; that

this House takes note of the First Report of the Portfolio Committee on Information Communication Technology, Postal and Courier Services on the Mobile Telecommunications Sector in Zimbabwe.

HON. MARIDADI:  I second.

HON. CHAMISA:  I intend to rush through the motion I have already indicated is before the House on the state of the mobile sector in Zimbabwe.  This was supposed to have been tabled some time back but due to circumstances beyond our control and number of Orders that were before Parliament, we were not able to table it.  Be that as it may, I wish to thank the House and you Chair for the time to go through this report.

This report looked at the mobile networks that we have in Zimbabwe focusing on the state of the mobile sector and the impact on the economic growth, appreciating also the challenges that have been faced in the sector, the relevance of the financial services and other over- the-top transactions that are taking place on the back of our networks.  We also looked at the general recommendations that we are putting forward for purposes of improving the sector.  Infact, this is where I am going to zero-in on most importantly, though I will just go through the report to touch on the various aspects that are supposed to be debated and worked upon.

In terms of our Committee, we held field visits to Net One, Econet as well as Telecel Headquarters. The purpose of our visits, apart from being entertained by our hosts, we had a good time just to enjoy the kind of work that is being done by our service providers.  They raised a number of challenges that they are facing, particularly at Net One.  You may be aware that currently they have had challenges with their books and this has necessitated the sending on forced leave of their Managing Director, Mr. Kangai.  It is an issue that was highlighted to us.  We also got to understand and know that Net One recently got a boost in the form of a loan from China Exim Bank and to that effect, NetOne has since grown its subscriber base although it remains the laggard of the mobile sector being the last one. It was the first to be born but the last one in terms of growth. Its growth has been standard for reasons that I am going to then highlight. They have since managed to set up 652 base stations across the country and having a combination of 3G and 2G technologies. They also have been operating since 2000 and this is what has given birth to the kind of trajectory we have seen that seems to be taking course in that network.

In terms of challenges, their turnaround has been hampered by the system of tenders. You may be aware of the fact that in technology changes are so supersonic and dynamic but the change has not been met with the attendant speed particularly with Procurement Board taking all those other processes. This has made it very difficult for NetOne to be able to then compete with other network providers that are in the private sector because they have to go through this bureaucratic red tape process for them to have certain tenders approved. It has been a challenge in terms of their rate and speed of innovation, creativity and also to be able to cope with the competition from other sector players.

You may also know that most state owned entities are positioned in a very difficult position when it comes to a conducive environment for innovation. NetOne has not received any capital injection other than by way of loans - the loans that I have already indicated. It has also emerged that –[HON WADYAJENA: Inaudible interjection]- Madam Speaker I require your protection. Honourable Wadyajena was saying please say that it is funding G40 [Laughter]. It is not part of my report

Madam Speaker. Thank you for protecting me.

Honourable Wadyajena walked out of the Chamber.

THE ACTING SPEAKER: Honourable Members, I want you to

behave when you are in this House. There is a certain language that I do not accept here. Please concentrate on the work of Parliament and those who have said such things must withdraw all those things. I will not accept such things in Parliament.

HON. CHAMISA: Thank you Madam Speaker, the fortunate

thing is that he has withdrawn himself. I really appreciate and there is no need for us to then go to that one.

In terms of NetOne, they have serious constraints but particularly the short term loans that have very high interest rates and it is a very disturbing trend because their revenues are being squandered on account of roll outs of  existing network infrastructure. Clearly this has impacted negatively on the viability of NetOne’s operations and also the scope of their development and advancement. They have indeed achieved quite a lot. For the first time, they have recovered from losses and they have transformed themselves into a profitable entity.

For example, in 2013, they managed to have profit and their subscriber base as I have already indicated has also increased. They have managed to do those switch centres that I have also indicated. They are expanding into the rural areas. In fact, their reach is more prominent and their footprint is more widespread in the country side. They have also launched a payment system called ‘One Wallet’ for money transfer services and also airtime top-up and utility bill payments. This I would say is a positive development. They have added value to our GDP and they have added value to our commerce and business transactions.

As regards Econet,  the company was also set up way back. They have since grown in leaps and bounds. In terms of being a contributor, they have contributed to the Universal Services Fund (USF) to the tune of over $43m having been contributed to date since their formation. It would  appear that their gravamen or complaint has been that they are the ones that are consistently and continuously contributing to the USF. Most of the other companies, they allege are not contributing. It is a matter that we raised with the Minister and he has since indicated that it is an issue that is being sorted out.

The Econet advised us that power supplies, although they have greatly improved, they continue to have a problem with power. This is why Econet has almost become a power service provider. They are almost competing with ZESA because the number of generators they have are almost able to power in the minimum 10 suburbs because they have huge and mega generators across the whole country. Only if these generators were to be pooled together, they would really enhance the kind of output we would have when it comes to power. They were complaining but it is a challenge of power supplies, an issue that they are dealing with. They have also said that they have become again a road builder because roads are very bad particularly in rural areas like Gokwe and Mhondoro. They have had to construct road networks to access the various base stations. They have invested a lot of money into road construction, particularly working with local communities. This has also taken a lot of their revenue to be able to do work that traditionally would be done by other department within Government.

They also indicated to us that in some instances, they have had to use helicopters to erect and set up base stations. Meaning to say that the kind of resources that are required are quite expansive and extensive and this has also militated against the smooth functioning of the company. They have exceeded their roll outs in terms of achievements. They also indicated that they have invested in excess of $1.2bn over the last 6 years. They have been a star company according to them. They have done very well. They have created jobs and they have supported downstream businesses in the economy, particularly the air time sellers, vendors on the streets, Ecocash merchants and agents, kiosk operators to more sophisticated suppliers of goods and services within the country.

To date, Econet indicate that they have a network of 22 000 Ecocash agents and 20 000 merchants who are activated to sell airtime complemented by over 1 500 air time vendors. In terms of Ecocash, they boast that they have transformed the financial landscape in Zimbabwe involving the quickest and most efficient money transfer service to date.

I am sure most of the Members of Parliament have benefited from Ecocash because it is a facility that is convenient particularly where you have the unbanked or under-banked in our country where you do not have the network that would ensure that banks on account of viability are there.

They are also helping to drive the value of the money platform in

Zimbabwe’s informal sector and they value their contribution at an estimated $2bn. Clients have also received salaries, made different payments of goods without necessarily handling cash. I would say in line with Minister Chinamasa’s request that we go “e”, they have taken the lead by making sure that Ecocash becomes the lifeblood and lifeline for most communities. Instead of people being in the queue at banks they are now online and they do not need to be in the queue, a big improvement and also a positive development.  In addition to those partnerships, they have done some important synergies and networking handshakes with mobile transfer agencies across the whole world; Western Union, MoneyGram and WorldRemit to ensure that money is mobile and money is being transacted without any undue hardship.

They are also powering up Zimbabwe, making sure that they provide safe and affordable power to homes.  Econet is part of the green campaign in which the company is investing in alternative energies, raising environmental awareness by alleviating the crippling impact of worsening power cuts on the service.  They have also done things to do with improved security.

Their contribution in education - consistently helping, what they call the Basic Education Support, through what is called the Higherlife Foundation.  Over the 12 months of 2015, 23 000 children from primary schools and tertiary schools were assisted with school fees.  Since 2010, according to Econet, they have assisted more than 76 000 children through Basic Education Scholarship Programme.  By bringing ICTs to various centres in the communities.  They have also set up learning hubs through what is called Higherlife Foundation.  Their Learning Hub is a dynamic learning environment to promote communication, collaboration and creativity.

They set up 28 Learning Hubs in Zimbabwe in more than 3 000 community centres, which is quite an improvement.  They have also built synergies with suppliers, but they complain fundamentally that the over the top transaction services are reducing their revenue.  Over the top transactions - this is whatsapp, skype, those other platforms that are done on the strength of the internet.  They are able then to make calls without necessarily bringing revenue for the dialing that is supposed to be done.

So, they are complaining that those are wreaking havoc.  They would want us, as Government, to try and legislate that area.  We told them that it is not a helpful or productive arrangement.  You need also to compete on those platforms by making sure that services are indeed developed to effectively help our customers and consumers.

In terms of Telecel, you are aware that Telecel was recently acquired by Zarnet.  They have a switching capacity of about 4.5 million with subscribers connected to their platform being 4.7 million in which 2.3 million are active subscribers.  They also have been grappling with shareholder issues.  They have now since resolved the shareholder issues, hoping that this will pave way for the flying and flourishing of the company.  They have also had challenges which are the high cost of borrowing due to the need to fund capital intensive investment.  They are negotiating with vendors and other financiers to introduce more services.

Power supply – again, just like Econet it has been a big and major challenge.  Traffic refilling is a major issue for Telecel.  Traffic refilling is whereby there is termination of communication on certain networks without necessarily paying for the termination rate.  It is a big issue for Telecel as it is a big issue for TelOne and the perpetrators feel that they have no sanction against them because sentences that are currently being provided are very low, especially for those that are operating without licences.  So, it is a big issue to Telecel.  It has been affecting Telecel in a big way and I suppose it does affect all the mobile network providers that are there.

In terms of achievements, they are saying they are the cheapest of the networks.  They have also reduced all their rates by 40%.  They now have telecash like other mobile service providers, with a density of about 3 600 approved agents and integrated to all the banks on ZimSwitch, but now ZimSwitch has problems - I am not so sure how that is going to pan out.

In terms of contribution to employment creation, they have contributed significantly with their roll out of network in the various centres across the whole country.  They still have to spread it across the whole country so that they have a national footprint and a nationwide presence.  Their base stations are also powered on solar and they need to improve.

Last but not least, are the recommendations that we are giving as your Committee, Hon, Members and Hon, Chair.  The first one being the cost of ICTs in Zimbabwe, that there is need for the reduction of cost of ICTs in general, particularly the internet and the broadband services.

They are still on the high in the country compared to other countries in the region and indeed on the continent, even worldwide.

Going forward, voice call tariffs have actually been going down and this is what we hope is an issue that will be addressed through the necessary interventions by POTRAZ, the regulatory body and the referee of the ICT sector in Zimbabwe.  So, the cost of ICTs is an issue that we really would want to be dealt with, also, the aspect of the quality of services of the ICTs.  You know that our calls are terminating mid stream and our calls are not being monitored.  We have not yet come up with a mechanism.  In other countries, a mobile operator is actually deregistered on account of poor network services or poor quality of calls.

So, they attribute the problem to incessant interruptions in terms of power cuts, but POTRAZ is being urged by the Committee and indeed hopefully by Parliament, to constantly check on the quality of calls by putting in place a mechanism of checking the call quality, so that there is a percentage threshold that is permissible for quality in terms of calls from mobile operators, to ensure that customers get value for money.  Also, our Committee urged operators to come up with a mechanism of making sure that they benchmark their standards against the standards of the world.

The third recommendation is on Universal Services Fund (USF), that the administration of the USF must promote the development of networks and provision of ICT services in unserved and underserved areas in a transparent manner and fashion.  There must also be a maximum use of USF to broaden coverage, particularly in countries that are in remote areas so that we are able to then deal with situations in those centres.  All Zimbabweans need to access services, particularly areas in Binga and Matabeleland South where they are enjoying better network from South Africa and neighbouring Botswana without necessarily enjoying services from Zimbabwe.  That is a sad indictment indeed.

We have also recommended, in fact this one, we have already raised with POTRAZ, that we need USF funds to be audited.  They have not been audited and accounted for by Parliament as is required by the statutes of our country.  They indicated that they have been auditing, but we have not seen the reports as is statutorily provided for by the laws of our land.  So, this is an issue we have said needs to be resolved.

The fund must also help postal and courier operators to be developed because they are now transforming into other platforms of providing e-services, so there is need for that USF to be spread widely and in a bold fashion.  Infrastructure sharing is the fourth recommendation but there has to be a legislative framework for operators to share their sites, especially operators like ZESA, Transmedia, NRZ and local authorities.  There is no need for competition on infrastructure but competition is supposed to be on services for the consumers and the customers.  So, it is an issue, the model has not been adopted but there is need for consultation with various operators so that there is a model.  You cannot have five trenches competing in the same direction.  There has to be complementarity of effort on the part of operators so that we are able to have a sustainable and predictable model that is convenient for operators and the Government.

In terms of taxation on ICT services, the need to remove 5% duty on airtime to enable operators to invest more capital in capital investment programmes that have impact on employment creation and also revenue enhancement and contribution to the fiscus.

The Committee also recommended the removal of 25% duty on the handsets as it is not very helpful.  These are some of the tax measures we would want the Minister to consider.  In terms of mobile payment systems that are regulated by the Reserve Bank of Zimbabwe, there is need to have an integrated approach on mobile payment systems involving all operators.  The Committee recommends the reduction of tax on mobile money so that the unbanked and under-banked are also included in terms of the financial inclusion strategy of the country.  There is need to encourage adoption of mobile money by public utilities to enhance revenue collection and customer convenience.  We need to reduce payment of money in cash, including even on the commuter omnibus so that we are able to be on the e-platform.

We are also recommending consumer protection, that there is need for sufficient legislation to deal with issues of cyber security, cyber bullying, data protection and revenge pornography.  In case most of you Hon. Members do not know that the issue of revenge pornography is a big issue in Zimbabwe.  If Hon. Mudarikwa was in love with a particular partner and exchange some very nice moments during the happier times, when the situation gets out of control you then find Hon. Mudarikwa posting those pictures out of vindictiveness and revenge.  This is what is called revenge pornography.  I just wanted to use Hon. Mudarikwa as an example, not that he has done it before, but there is also no guarantee that he will not do it, especially if there is no law.

So, there is need for us to make sure that there is legislation around the issue of revenge pornography in order to protect people.  We do not post pictures of individuals invading elements of privacy because it is a very important element.  I think you know what is happening on the social platforms, the abuse that people are subjected to.  Currently we do not have laws to protect abuse of individuals in that regard.  We are not advocating any over regulation. In fact, we believe that Government is best that governs least but it is important for us to also understand that those interests of certain individuals in terms of their privacy is a very important element to be considered.

Electronic transactions are also not covered, so there is need for a Bill to come for purposes of consumer protection.  Data protection information can actually be shared widely and wildly and that can actually be a big problem.  There is need for protection of data as a way forward.  Laws need to be enacted to also deal with the importation of equipment which may be used to commit crimes.  Zimbabwe is probably one of the few countries where there is no criminalization of people who are using computers for purposes of piracy, which is an offence.  You can use it for domestic purposes but not for commercial purposes.  We need to try and look at all those areas to fine tune our laws so that we are able to also promote talent.  Macheso and Tuku do their music and when they are done, we must be able to reward that talent or intellectual property, so that ICTs are not used to shortchange intellectual property and promotion of talent.  That is an area that requires urgent attention by Government so that the lacuna is cured.

In terms of base station roll out, local authorities are encouraged to relax by-laws to allow creation of registered kiosks in the designated areas for dealers and vendors.

In conclusion, the growth of the mobile sector in Zimbabwe has faced numerous challenges, a plethora of challenges – which are a result of lack of proper and effective legislation to protect both the consumers and the mobile operators.  In fact, right now we have a grey zone in terms of legislation.  There has been a lackadaisical approach on the part of Government and we raised this with the Minister who indicated that he is trying to expedite the process, to make sure that laws are put in place to protect consumers and operators so that issues are conducted in a proper fashion.

Let me end by saying that going forward, the mobile sector in Zimbabwe is facing some very serious challenges that would require effective Government policy and also legislative measures.  We count on Members of Parliament to be able to then cure the problems that we are facing.  I wish to call upon Members of Parliament to support our recommendations on the state of the mobile sector in Zimbabwe.  I so rest my case Hon. Madam Speaker.  Thank you.

THE ACTING SPEAKER:  Order, order, Hon. Members, can

you please give Hon. Cross your ears.

HON. CROSS:  This is an incredibly important subject and we really need to listen carefully.  For example, you can imagine the impact in our community, if all 1600 primary health care clinics had access to a doctor on a 24 hour basis in terms of investigating what is wrong with the patient, what can be done, the question of referrals, the question of medication and emergency assistance.

Madam Speaker, you can imagine in the field of education, how we can provide every child in Zimbabwe with access to the world’s greatest libraries, access to every book that was ever written, access to immediate research capacity, access to academic assistance with every subject that they are studying.  We can do that for every child, irrespective of their ability to pay.

Madam Speaker, I could go on and speak mostly about the potential of this sector.  If you look for example, at the question of tourism, if you want to promote tourism, you can do so from a laptop in your bedroom and you can do it on a global basis.  When I listen to ZiFM and SFM, I understand they are streaming these two broadcast services on a global basis.  When you are sitting in the studio, here in Harare, you can communicate with the entire world.  Madam Speaker, that is an extra ordinary development and we are not using it.  We are not even touching the surface.

Madam Speaker, in Indonesia today, 3G broadband is nationwide.  It is available everywhere, provided by the Government.  We have got to have strategies which will roll out 3G broadband to every citizen, everywhere.  You can imagine the impact on people in remote rural areas, being able to interrogate the market for people, maize and cotton.  You are being paid 30 cents per kilogramme for cotton in the Zambezi Valley and you can work out, you can simply go on the internet and you can see that they should be paying double that.  This will empower ordinary people.

I can remember Madam Speaker, when I was Chief Economist of the Agricultural Marketing Authority.  We were dealing with about a quarter of a million cotton growers.  We transformed the payment system for cotton growers by simply adopting modern technology, so we were able to reach every single cotton grower at any time.  We were able to pay them within 24 hours, giving them cash.

Madam Speaker, I think, as a nation, we neglect this area at our peril.   If you want to see us walk in the future, it is going to be through the medium, through IT.  I hope that the Committee in the House will pay proper attention to the development of the sector and bring to this House if necessary, private legislation to enable the growth of the industry and the development of this sector in this country.  Thank you Madam Speaker.

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

HON. RUNGANI:  I second.

Motion put and agreed to.

Debate to resume:  Tuesday, 7th June, 2016.

MOTION

SECOND REPORT OF THE PUBLIC ACCOUNTS

COMMITTEE ON THE ANALYSIS OF THE FINDINGS OF

THE AUDITOR-GENERAL ON THE 2013 APPROPRIATION

FUNDS AND STATE ENTERPRISES AND PARASTATALS

ACCOUNTS

HON. MPARIWA:  I move the motion standing in my name that this House take note and adopts the Second Report of the Public

Accounts Committee on the Analysis of the Findings of the Auditor General on the 2013 Appropriation Funds and State Enterprises and Parastatals Accounts (S.C. 6. 2016).

HON. CHAMISA:  I second.

HON. MPARIWA:  Thank you Hon. Speaker, as I was about to pronounce my preamble due to the fact that this report may sound belated to the Hon. Members but none the less, when I go into the merits of the report, you find that the observations that were made even in 2009, 2010 and 2011 are still problems in various Ministries and parastatals, therefore the need for the Committee to actually pursue and actually intend to present this report.

1.0 INTRODUCTION

The Public Accounts Committee (PAC) plays a pivotal role in analysing audited financial statements of Government departments

(Ministries), State Enterprises and Parastatals, and Local Authorities. The PAC, with the assistance of Clive and Associates, a registered accounting firm, analysed the Auditor General’s (AG) reports for the year ended 31 December 2013 covering Government departments that is, 33 Appropriation Accounts, 89 State Enterprises and Parastatals Accounts and 40 Fund Accounts. The Committee noted with concern that there is recurring of issues observed by the Auditor General (AG) since 2009 which could be an indication that Government is not taking the Audit reports seriously.

This report is therefore, a summary of the Auditor General’s findings, and the Committee’s observations and recommendations on the findings of the 2013Auditor General’s (AG) reports. Annexed to this Report is also appendix A and B which list entities whose accounts were being audited at the time the 2013 Report was tabled and those that had not submitted accounts for audit respectively in clear violation of section 35 (6) (b) of the Public Finance Management Act. The Committee expects Treasury to put in place measures to improve the audit environment by the June, 2016. This is critical in view of the current constrained fiscal space as public funds are being lost through poor management of public resources.

2.0 THE OBJECTIVES OF THE COMMITTEE

The key objective of the Committee as mandated by Standing Order No.16 and the Constitution in Section 299 is to analyse expenditure of Government to ensure compliance with governing frameworks. In specific terms, the objectives of this Report are therefore; to perform an analysis of the 2013 Auditor General’s Report on appropriation and fund accounts as well as parastatals; to perform a trend review of the key findings from 2009 to date, and to perform an assessment of the audited entities for the implementation of AG’s recommendations to findings over the trend period and to inform the governmental departments on the necessary action required to comply with the requisite government accountability, governance and transparency principles. The Committee also seeks to review and assess the key findings from 2009 to date because of the recurrence of the issues observed by the Auditor General.

 

3.0 METHODOLOGY

The Committee analysed the Auditor General’s Reports for 2013 on Narrative Reports on Appropriation Accounts and Miscellaneous Funds and on State Enterprises and Parastatals. It then sorted the findings from each year for comparison and trend. The most prevalent findings were categorised as major findings while the less prevalent were categorised as other findings. The Committee also analysed the audit opinions issued by the Auditor General per entity.

4.0 FINDINGS AND OBSERVATIONS OF THE COMMITTEE

The Committee observed the following major findings from reading through the Narrative Reports:

↘ Lack of good corporate governance;

↘ Absence or inadequacies of  policies and procedures;

↘ Absence or weak controls relating to cash management;

↘ Inadequacies relating to management of assets;

↘ Poor inventory management;

↘ Fraud;

↘ Inadequacies relating to revenue management (and cost containment);

↘ Inadequacies relating to receivables management;

↘ Inadequate disclosure of related party transactions;

↘ Violation of procurement procedures;

↘ Non compliance with statutory requirement;

↘ Inadequate supporting documentation; and  ↘ System variances.

Other findings were identified based on the levels of prevalence.

These included the following:

→ Going concern issues;

→ Operational inefficiencies;

→ Failure to implement Results-Based Management (RBM);

→ Management override of controls;

→ Absence of Service Level Agreements (SLAs) and other agreements;

→ Inadequate project management processes;

→ Absence of strategic plans and other governing documents;

→ Suspense accounts;

→ Inadequate Information Technology general and application controls;

→ Lack of segregation of duties;

→ Inadequate management review and reconciliation;

→ Intermingling of funds; and

→ Non-submission of statutory and other returns.

4.1 An Overview of the Findings

4.1.1 A. Major findings

The charts below show the distribution of major and other findings for the year ended 31 December 2013 for the three different categories analysed.  The distribution is based on the spread of the findings across the entities in each category.  Therefore, appropriation accounts observations are expressed as a fraction of thirty-three (33), State enterprises and parastatals as a fraction of eighty-nine (89) and fund accounts as a fraction of forty (40).

 

Figure 1 - Appropriation Accounts Major Findings

From the diagram above, 61.3% of appropriation accounts had Management of Assets as a major issue and this translates 16% of the total issues. 58.1% of appropriation accounts also had revenue management as a major issue.  In proportion to total issues this translates to 16% of the findings as well. 51.6% of appropriation accounts had issues relating to Management of Receivables and Inadequate Supporting Documentation and these translates to 14% each of the total issues. 35.5% had Procurement issues, 25.8% had Inventory Management issues while 22.6% had Cash Management and System Variances issues and these accounted for 10%, 7% and 6% respectively of the total issues.

 

 

Figure 2 - Appropriation Accounts Other Findings

1Note that the symbols below have been consistently used throughout this report and should be referred to whenever encountered:

  • δ – Going concern issues.
  • µ - Operational efficiencies (organisation inadequately staffed or equipped).
  • κ – Performance management not performed (appraisals, work plans, training.
  • α – Management override of controls (unapproved allowances).
  • β – Absence of Service Level Agreements (SLAs), loan or lease agreements.
  • Ω - Inadequate project management processes in place.
  • £ - Absence of governing documents like strategic plan etc.
  • ≠ - Suspense account (straight qualification).
  • € - Inadequate IT general and application controls.
  • π – Lack of segregation of duties.
  • τ – Management review and/or reconciliation not done.
  • ϻ - Intermingling of appropriation and fund accounts.
  • η - Returns not submitted.

 

As shown in the chart on other findings above, the most prevalent issues were lack of Management Review and / reconciliations raised in 41.9% of the appropriation accounts which represents 22% of the total issues. This was followed by lack of segregation of duties raised in 25.8% of the appropriation accounts and represents 14% of the total issues.  Absence of Service Level Agreements/ loans and leases was raised in 22.6% of the appropriation accounts as well as absence of governing documents such as Strategic Plans and each represents12% of the total issues. Intermingling of funds was raised in16% of the appropriation accounts and also constitutes 9% of the total issues. Lack of Performance Management (appraisals) was raised in 16% of the appropriation accounts and this represents 8% of the total issues.

 

Figure 3 - State Enterprises and Parastatals Major Findings

The Prevalent issue among parastatals was regulatory compliance which was raised in 69.9% of the entities and represents 15% of the total issues. This was followed by Corporate Governance raised in 60.9% and constitutes 15% of the total issues. Management of Receivables was raised in 56.5% of the entities and this translates to 12% of the total issues.  Management of Assets was raised in 50.0% while Management of Revenue in 47.8% of the entities and each constitutes 10% of the total issues.  Inadequate Supporting Documentation was raised in 39.1% of the entities while Cash Management in 37.0% and each constitutes 8% of total the issues Procurement was an issue in 34.8% and Inventory Management in 32.6% of the entities and each represents 7% of the total issues.

 

Figure 4 - State Enterprises and Parastatals Other Findings

Most prevalent issues among other findings were Absence of

Service Level Agreements raised in 45.7% of the entities and represent 25% of the total issues. Going Concern was raised in 37.0% of the entities and it constitutes 20% of the total issues.  Inadequate IT General and Application controls was raised in 28.3% of the entities and this represents 16% of the total issues. Management Override of Control (unapproved allowances) and Operational efficiencies (organisations inadequately staffed or equipped) were both raised in 19.6% of the entities and each represents 11% of the total issues.

 

Figure 5 - Fund Accounts Major Findings

In relation to funds, most prevalent issues among major findings were relating to Management of Revenue raised in 51.5% of the funds and Inadequate Supporting Documentation raised in 48.5% of the funds and each represents 16% of the total issues.  Management of

Receivables was raised in 39.4% of the funds and represents 13% of the total issues. Management of Assets and Management of Cash were raised in 33.3% of the funds and each constitutes 11% of the total entities. Policies and Procedures were raised in 24.2% of the funds and this represents 8% of total issues. Inventory Management and Fraud were raised in 18.2% of the funds and each represents 8% of the total issues.

 

 

Figure 6 - Fund Accounts Other Findings

Among other findings most prevalent issues were relating to

Management Review or Reconciliations not done (22%); Intermingling of appropriation and Funds accounts (19%); Lack of Segregation of Duties (16%); and Suspense Accounts (11%).

4.1.2 Corporate governance

Corporate governance findings were mainly related to state enterprises and parastatals specifically focusing on failure to constitute a substantive board, absence of board sub-committees, inadequately capacitated audit and other board committees, failure of the internal audit function to discharge its function as well as inadequate oversight of the audit committee in the management of the State Enterprise or the Parastatal.  The Committee noted with concern that in cases where committees were constituted and a governance issue was raised, the observation was related to inadequate meeting frequency and hence failure to discharge appropriate oversight on the operations of the organisation.  A prevalent issue in the year ended 31 December 2013 was that of failure by members of Boards to disclose interests in contracts leading to conflict of interest.

With respect to Ministries (Appropriation Accounts) and Fund Accounts, corporate governance issues pertained to inadequacy of the internal audit function or failure to disclose interests in contracts. It is worth noting that Ministries are also required to have audit committees and the issue had been continuously raised by the Auditor General to no avail.

Examples of entities falling in this category included Postal

Telecommunication Regulatory Authority of Zimbabwe (POTRAZ),

National Indigenisation and Economic Empowerment Board (NIEEB),

Agricultural Marketing Authority (AMA), Net One, Health Professionals Authority and Powertel.

In the absence of a substantive Board, there is lack of effective strategy, management and supervision in the concerned entity. Where Members of the Boards or Management are acting on certain leadership positions, they hesitate to make major decisions and long term plans and where the internal audit function is inadequate, fraudulent activities may occur undetected.

4.1.3 Policies and procedures

The Committee observed that almost all internal control issues have an element of non-compliance with policies and procedures.  The Members, however, separated the issue of policies and procedures where the Auditor General highlighted total absence of documented policies and procedures in an organisation.

This observation particularly related to State Enterprises and Parastatals and Funds where 27.1% and 24.2% respectively did not have certain key policies and procedures documented.  Among the nonexistent policies and procedures were ICT policies and procedures (addressing disaster recovery issues, business continuity, security and other general and application controls), HR policies, Accounting policies and Risk Management policies. Minerals Marketing Corporation of

Zimbabwe and its subsidiaries, National Museum and Monuments of Zimbabwe(NMMZ), Agricultural Bank of Zimbabwe (AGRIBANK) and Midlands State University are some of the examples who were noncompliant with policies and procedures.

Unavailability of these policies has implications on State Enterprises and Parastatal. For instance, an entity may fail to identify and mitigate against existing and emerging risks in the absence of a risk policy.  Again in the absence of an IT policy, the IT environment may be difficult to control as there will be no formal IT documentation to spell out what is expected from the information system users.

4.1.4 Cash management

Best practice requires that cash be banked within 24 hours from receipt.  The Auditor General noted internal control violations with respect to timely banking.  This violation expounded the risks of misappropriation of cash through fraud, theft, pilferage, cash rolling and other schemes.  The risk was further amplified where the entity handled significant amounts of cash. All categories of entities reviewed had significant appearance of this observation with the highest prevalence occurring in Funds at 33.3%.Examples of entities were Harare Hospital,

Zimbabwe Parks and Wildlife Management Authority, Allied Timbers Zimbabwe Ltd and Cod Storage Commission (C.S.C).

4.1.5 Management of assets

An asset is a resource embodying economic benefits.  Assets which include items of equipment (motor vehicles, furniture, computer and other equipment) continue not to be appropriately managed.  Specific observations by the Committee related to failure by organisations to maintain up to date asset registers, periodically verify assets, perform valuations and assess the impairment and residual values of assets.  Also included under assets are investments (property, money market and equity investments).

Where assets had been damaged or disposed of, the Auditor

General noted that, in certain instances, Boards of Survey (BoS) and/or Boards of Inquiry (BoI) were not performed. These internal control violations were in contravention of section 49 of the Public Finance Management Act (Chapter 22:19) which requires public entities to keep full records of their financial affairs.

This observation was raised on several entities for example Postal

Telecommunication Regulatory Authority of Zimbabwe (POTRAZ),

Allied Timbers Zimbabwe (Private) Limited, Marange Resources (Private) Limited, Zimbabwe United Passenger Company (ZUPCO) and Harare Institute of Technology.

If assets are not properly managed, theft may occur undetected and result in prejudicing the company’s economic resources. The company may fail to recover and replace their assets in the event that a disaster occurred if they are not insured.

4.1.6 Inventory management

The Committee noted instances where inventory was inadequately managed leading to pilferage and expiration of items. Grain Marketing Board, Forestry Commission and University of Zimbabwe are some of the entities where there were inadequacies in management of inventory. Liquid fuel and fuel coupons were the most affected in the year under review, leading to gross misappropriation of inventories. In cases where there is no accounting system of inventory there will be theft and fraud which may be difficult to detect.

4.1.7 Fraud

Fraud remained prevalent in a number of entities audited (coupled with management override of control).  The Committee noted fraud cases distributed as follows:

  • Appropriation accounts – 12.9%
  • State enterprises and parastatals – 13.0%
  • Fund accounts – 18.2%

For example, funds were embezzled from Ministry of Mines and Mining Development; Ministry of Health and Child Care; Ministry of

Justice, Legal and Parliamentary Affairs- Prisons; Health Professions

Authority, Mines and Mining Development Fund, Special Gold Fund; Deeds and Companies Office Fund and Printflow (Private) Limited.  In some of the fraud cases, there was manipulation of the source documents.  Some of these cases were dealt with and the remainders of the cases are still under investigation.

The Auditor General further reported that unsupported payments were made and losses resulting from suspected fraudulent activities were incurred, involving amounts ranging from US$3,000 to US$3.5 million.

4.1.8 Revenue Management

Revenue management was also noted as a significant issue in the

Auditor General’s reports.  In our analysis, where unnecessary expenditure and/or inadequate cost management occurred in an entity, we included this under revenue management.  Cases in point are

Zimbabwe Revenue Authority, Civil Aviation Authority of Zimbabwe

(CAAZ), Central Mechanical Equipment Department (CMED), and Petrotrade. The entities experience financial losses due to wasteful expenditure and this has the effect of downstream/negative effect on government’s budgetary system and planned operations.

4.1.9 Receivables management

Where there were issues around revenue management (receipting, management of costs, banking, pricing), the Committee noted that there were challenges with managing debtors or receivables.  This led to revenue and receivables management being the largest combined contributors to the observations on internal control deficiencies for all categories of entities analysed.  Overall, entities failed to manage their collections against receivables resulting in potential impairment of receivables, cash flow challenges and ultimately the going concern issues noted further in this report. Some of the entities that had failed to manage their collection against receivables are Broadcasting Authority of Zimbabwe (BAZ), Cold Storage Commission (CSC), Netone (Private) Limited and Zimbabwe National Parks and Wildlife Management Authority. Poor management of receivables impact negatively on the operations of the entities.

4.1.10 Related party transactions

The Auditor General noted cases where related party transactions were inadequately disclosed.  This was in violation of the relevant accounting standards.  Also included here were allowances paid out to executives and senior management against which no tax was levied as some were paid outside the payroll. Postal Telecommunication Regulatory Authority of Zimbabwe is one of the entities that have a related party transaction.

4.1.11 Procurement procedures

Also prominent were weaknesses relating to procurement. There were specific violations to the provisions of Statutory Instrument 171 of

2002 (Procurement Regulations). Other violations were in relation to the tender procedures, with particular reference to sourcing of adequate quotations, splitting of invoices to elude the State Procurement Board and authorisation of transactions at inappropriate levels.  The trend with regards to the frequency of procurement violations will be analysed further in this report. Examples of such entities include Agricultural Bank of Zimbabwe (AGRIBANK), Mellofieldde Chemicals (Private) Limited and Zimbabwe Mining Development corporation (ZMDC). Procurement weaknesses have impacted on entities in a number of ways that includes financial losses due to procuring goods and services at very high prices. The environment is also conducive for corruption.

4.1.12 Regulatory compliance

Violations of regulatory and statutory requirements were noted pertaining to submission of statutory remittances to the Zimbabwe Revenue Authority (ZIMRA), National Social Security Authority (NSSA), pensions and regulatory contributions to medical aid. Other examples are Zimbabwe Investment Authority (ZIA) which failed to comply with the procurement policy, National Railways of Zimbabwe and Zimbabwe Post (Private) Limited (ZIMPOST) which failed to comply with the VAT Act. Key violations noted for funds were with respect to fund constitutions.  69.6% of State enterprises and parastatals audited failed to comply with regulatory or statutory requirements citing viability issues as major reasons for failing to fund the payments. Entities experience financial losses due to penalties and fines which may be charged by regulatory Authorities. Further in this report we discuss the going concern issues in more detail.

4.1.13 Inadequate supporting documentation

Every transaction recorded in an entity’s accounting system should be supported by the appropriate third party supporting document e.g. invoices, statements, goods received notes or acknowledgement of receipts.

In the year under review, cases were noted where supporting documents was not availed to support transactions entered into leading to a scope limitation. Examples of such entities include Zimbabwe

Revenue Authority (ZIMRA), Allied Timbers Zimbabwe (Private) Limited and Zimbabwe Mining Development Corporation (ZMDC).

Under such environment fraudulent activities cannot be ruled out.

4.1.14 System variances

System variances relate to differences between the sub-paymaster general account and the public finance management system or underlying documents.  Over the last six years the Committee has noted a material improvement in this observation which is highly commendable.

4.2Other findings

4.2.1 Going concern issues

Going concern relates to whether an entity will continue in operational existence for the foreseeable future where the foreseeable future is normally the next twelve (12) months. The Committee observed that a staggering 37% of the state enterprises and parastatals audited and analysed had going concern issues.  This was mainly due to the difficult operating conditions the entities found themselves in.  The going concern challenges were notable from some of the following indicators:

  • Negative capital position
  • Incessant losses
  • Net current liability position
  • Increasing borrowings and payables

Examples of entities with going concern issues are National

Indigenization Economic Empowerment Board, Zimbabwe Mining

Development Corporation (ZMDC), Civil Aviation Authority and

Marange Resources (Private) Limited, Infrastructural Development

Bank of Zimbabwe (IDBZ), Cold Storage Commission (CSC) and National Railways of Zimbabwe (NRZ).

4.2.2 Operational issues

Coupled with the going concern issue above was the issue of operational inefficiencies where entities were failing to deliver value to the general citizenry due to inadequate resources.  Resources in this case referred to equipment and staff among others.

4.2.3Results-based Management (RBM) implementation

The Government introduced a performance management tool for all Government departments to measure performance of staff in these entities.  However, the Auditor General noted that this method of monitoring performance was not being fully implemented in ministries (16.1%), and state enterprises and parastatals (4.3%).

4.2.4 Management override of controls

Management override of controls, though analysed separately in this report, is a subset of fraud where management deliberately circumvents internal controls in place mostly for personal benefit.  The Committee noted cases where management override of controls occurred specifically with regards to allowances granted to staff (especially management) without proper sanctioning either at board (state enterprises and parastatals) or ministry level (ministries). National Social Security Authority (NSSA) and Marange Resources (Private) Limited

are some of the examples of entities with issues of management overriding controls.

4.2.5Absence of Service Level Agreements (SLAs) and other agreements

Lease administration was not being appropriately done in a number of cases noted as exemplified by the arrangement between National Oil

Infrastructure Company of Zimbabwe (NOIC) and Verify Engineering

(Private) Limited which was not supported by a signed lease agreement.

Loan agreements were also not drawn up for loans from Ministries to State Enterprises or Parastatals as exemplified by cases in the table below:

Lender Recipient Amount

(US$)

Ministry of Transport and

Infrastructural Development

National Railways of Zimbabwe 5,500,000
Air Zimbabwe 11,499,781
Tel One 4,000,000
Civil Aviation Authority of Zimbabwe 10,500,000
New Vehicle Security Air Zimbabwe 19,875,976
Registration Number Plate

Revolving Fund

   

Figure 7 - Sample loans without agreements

 

4.2.6 Inadequate project management processes

Inadequate project management processes relate to when an entity would have received funding for a specific project or programme and yet fail to deliver on that project because resources are inappropriately allocated.  Case in point is the Ministry of Health and Child Care where Public Sector Investment Programmes (PSIP) were not implemented due to failure to prioritise fund allocations. The Committee observed that there are projects under the department of roads which were inadequately funded.

4.2.7 Absence of strategic plans and other governing documents

The Committee also noted instances where organisations were functioning without adequate strategic plans to govern operations or funds were operating without the fund constitutions.  Such entities include National Social Security Authority (NSSA) and Mellofieldde Chemicals (Private) Limited. In the absence of strategic plan, Company activities may fail to align with its goals and financial resources may not be allocated effectively and efficiently.

4.2.8 Suspense accounts

A suspense account exists where accounts are out of balance or funds cannot be allocated to specific accounts.  By nature, suspense accounts imply the inaccuracy of the accounts and in audit would lead to a qualification of the said accounts.  In the year under review, the Auditor General identified cases where suspense accounts existed even though these cases are less prevalent.

4.2.9 Inadequate IT general and application controls

IT general and application controls are measures in place to govern how an IT system operates.  The Auditor General noted instances where these controls were either non-existent or inadequate particularly in state enterprises where 28.3% of entities reviewed had that issue raised.

Netone, Cold Storage Commission and Telone are some of the examples of entities with inadequate IT general. With non-existence or inadequate IT generals systems may be vulnerable to fraudulent activities and unauthorised and intentional or unintentional changes to the application by employees may occur. There is also potential loss of data.

4.2.10 Lack of segregation of duties

A system of internal control works efficiently where there is adequate segregation of duties.  The Auditor General noted instances where there was inadequate segregation of duties between initiation, custody, and authorisation. Examples of such entities are Forest Commission, Agricultural Bank of Zimbabwe (AGRIBANK),Grain

Marketing Board (GMB) and Mineral Marketing Corporation (ZMDC). In cases where there is no segregation of duties errors and irregularities may go undetected. The environment is also conducive to fraudulent

activities.

4.2.11 Inadequate management review and reconciliation

Linked to point 4.2.10 above was the issue of inadequate management review and failure to perform reconciliations of accounts including bank reconciliations, reconciliations of the Sub-Paymaster General Accounts with the Public Finance Management System (PFMS) among other things.

4.2.12 Intermingling of funds

The Committee observed that the Appropriation funds were also intermingled with Fund resources instead of maintaining separate bank accounts and financial records for Funds managed by the respective Ministries. This was consistent with prior periods and continues to be an issue between Ministries and funds. Ministries are violating Funds Constitutions by using Funds resources to meet expenditures normally funded under the appropriation accounts. For example, Ministry of Women Affairs, Gender and Community Development took funds from the Zimbabwe Community Development Fund; Ministry of Health and Child Care took funds from the Child Welfare; Ministry of Public

Service, Labour and Social Welfare from Disabled Persons Funds and

Ministry of  Justice, Legal and Parliamentary Affairs from Prisons

Service Fund.

4.2.13 Non-submission of returns

The Committee noted with concern that returns were not submitted by 22.6% of ministries and 9.1% of fund accounts.  These include asset certificates, results based management, losses of and damage to state property among other returns required per treasury instructions.

5.0 Trend Analysis

In this section of the report, the Committee analyses how each finding has trended since 2010 (appropriation accounts) and 2011 (state enterprises and parastatals).  This is in an attempt to identify where improvements have been noted in terms of internal control findings while also identifying any items that could be deteriorating.

5.1 Appropriation accounts

The table and graphs below indicate the trends for findings pertaining to appropriation accounts.  The general trend for key observations is upwards which shows a decline in key controls.

There was one significant improvement in system variances traditionally noted between the sub-paymaster general and public finance management system (PFMS).  Of note are the following:

Figure8 -Trends for Appropriation Accounts

 

Figure 9 - Appropriation Accounts Major Findings (2010-2013)

 

Figure 10 - Appropriation Accounts Other Findings (2010-2013)

5.2 State enterprises and parastatals

The table and graphs below indicate the trends for findings pertaining to state enterprises and parastatals.  The general trend for key observation is upwards which shows a decline in key controls.  There were two significant improvements in policies and procedures and fraud.

Of note are the following:

Figure 11 - Trends for State Enterprises and Parastatals

 

 

Figure 12 - State Enterprises and Parastatals Major Findings (2010-

2013)

 

 

Figure 13 - State Enterprise and Parastatals Other Findings (2010-2013)

Please note that there is inadequate trend information for funds for us to prepare a trend analysis of the same.  Current information is only for 2012 and 2013.

6.0 Audit Opinions

The Committee analysed the performance of entities audited by assessing the audit opinions issued.  In assessing these audit opinions the Committee looked at the overall classifications for appropriation accounts, state enterprises and parastatals and fund accounts. The committee with the assistance of Clive and associates compared the audit opinions for 2013 in an attempt to interpret the quality of accounting in the public sector by category.

The Auditor General issues an audit opinion on every entity audited.  This is highly informative for the users of the audit reports.  In the past, a blanket opinion was issued for all appropriation and fund accounts while state enterprises and parastatals received different opinions per entity.  The graph below shows the audit opinion comparatives.

 

Figure 14 - 2013 Audit Opinions

From the observation of the graph above, state enterprises and parastatals have the best performance in terms of quality of audit opinions with about 87% of the audited ones receiving clean opinions. However, this does not represent a complete picture in terms of state enterprises as there are some entities which had not produced accounts for audits. This graph should, therefore, be read with Appendix A and B which show state enterprises which were not included in this audit as they had not submitted accounts for audit and could sway the spread of audit opinions.

 

 

7.0 CONCLUSION AND RECOMMENDATIONS

7.1 Conclusion

It is disheartening to note the Auditor General since 2009 has been reporting on the same findings which is a clear indication that the recommendations made from year to year are not being implemented. If anything, the findings are deteriorating from year to year. The

Committee further noted with concern that since the enactment of the Public Finance Management of Act in 2009, Treasury has been reluctant to put in place Public Finance Management Regulations which will ensure effective implementation of the provisions of the principal Act. Most of financial misconduct in the public sector cannot be dealt with precisely in the absence of these regulations. The Auditor General and the Committee may continue to make recommendations but in the absence of consequences for certain actions or inactions by public officials, the status quo is likely to continue unabated.

As the 2013 and previous Audit reports demonstrate, Funds have become objects of abuse by Ministries and the intended purpose is not being fulfilled. Government should review the performance of the various funds and see whether they are serving a purpose as most of them have become an illegal source of additional funding for activities normally funded under the Appropriation Account.

The deterioration of findings by the Auditor General from year to year shows that Ministries are not paying heed to issues raised. Going forward, the Auditor General’s Reports should inform budget allocation to various Ministries. Ministries with outstanding audit issues should have their budgets cut as a measure to enforce implementation of audit recommendations. Below are specific recommendations on the findings.

7.2 Recommendations

RECOMMENDATIONS

7.2.1Treasury should

by end of June, 2016, come up with regulations providing specifically for various acts of financial misconduct.

 

7.2.2 The Executive must urgently, where applicable, constitute Boards and appoint senior Management with the requisite skills to run the affairs of state enterprises and parastatals as provided by the Corporate Governance Framework.

7.2.3 All Board Members must declare assets before assuming office and disclosure of interest must be made whenever necessary.

7.2.4 All Accounting officers must appoint Audit Committees by the end of June, 2016 in order to comply with section 84 of the Public Finance Management Act. Failure to implement this recommendation is a violation of the provisions of the Act which is punishable in terms of section 91 of the same Act.

7.2.5 All entities must put in place key policy documents such as IT,

Investment and Risk Management policies by the end of the June 2016. Failure to implement this recommendation by due date would be in violation of section 44 of the Public Finance Management Act which compels accounting authorities to establish and maintain effective, efficient and transparent systems of financial and risk management and internal controls. Such violation is defined as financial misconduct which calls for the appointing authority to institute disciplinary proceedings.

7.2.6 Failure to properly manage cash and receivables is a clear dereliction of duty on the part of the accounting officer and as such accounting officers failing in this regard should be dismissed in terms of section 86 of the Public Finance Management Act.

7.2.7 All related party transactions should be reported at the time the transactions are concluded and failure to do so constitutes an offence which should be dealt with in terms of section 91 of the Public Finance Management Act.

7.2.8 All allowances paid to executives and senior management should be reflected on the payroll and failure to do so shall be deemed an act of fraud punishable at law.

7.2.9 The Procurement function in other jurisdictions is decentralized to procuring entities while Procurement Authorities play a regulatory function. Government should speed up efforts under way to reform the public procurement law and ensure that the new regulatory framework is in place by June 2016.

 

7.2.10   Entities should remit statutory and contractual payments to NSSA, ZIMRA and Medical Aid contributions to avoid incurring penalties. In cases where such deductions are made and remittances are not made, the accounting authorities should be held responsible for any related costs incurred by the respective entity.

7.2.11 All Ministries and Parastatals should implement Results Based Management (RBM) as a performance measurement tool. Rewards should be linked to good performance.

7.2.12 All loans should have loan agreements in place and failure to have an agreement in place should be treated as an act of nonperformance which requires the appointing authority to take the necessary action.

7.2.13 All entities should have in place strategic plans which are linked to the Results Based Management. Failure to do so is in violation of section 46 of the Public Finance Management Act which should be dealt with as provided in section 91 of the same Act.

7.2.14 There should be proper segregation of duties, as lack of it may create opportunities for concealment of errors and material irregularities.

Where there are challenges, there should be constant supervision. 7.2.15  All reconciliations must be carried out on a monthly basis/timeously. Failure to carry out reconciliations should be treated as non- performance on the part of the accounting officers which should call for necessary disciplinary action.

7.2.16 Ministries should maintain separate accounts for Appropriation and Fund resources. Failure of which constitute financial misconduct which should be dealt with in terms of Section 91 of the Public Finance Management Act.

7.2.17 Financial statements and supporting returns should be submitted on time and failure to submit should be a punishable act in terms of section 91 of the Public Finance Management Act.

7.2.18 All fraudulent activities should be investigated fully and timeously to establish responsibility and ensure appropriate legal and administrative action is taken.

7.2.19 All instances involving the abuse or loss of state properties should be properly investigated and appropriate action taken in terms of section 12 of the Public Finance Management Act.

A.         Accounts being finalised as at 31 December 2014

The table below shows entities whose audits were yet to be finalized as at 31 December 2014 as well as the periods that were being audited as at that date.

Numb

er

Public Entity[1] Year
1 Zimbabwe School Examination Council 2013
2 Agricultural Rural Development Authority 2012
3 Air Zimbabwe and its subsidiaries 2010
4 Allied and Health Practitioners Council 2013

 

5 Anti-Corruption Commission 2010
6 Bulawayo School of Hospitality and Tourism 2013
7 Civil Aviation Authority of Zimbabwe 2013
8 Environmental Management Agency 2013
9 Grain Marketing Board 2013 –

2014

10 Great Zimbabwe University 2013
11 Lotteries and Gaming 2013
12 Medical Rehabilitation Practitioners Council 2013
13 National AIDS Council 2013
14 National Arts Council of Zimbabwe 2013
15 National Biotechnology Authority 2010 –

2012

16 National Income and Pricing Commission 2013
17 Parirenyatwa Group of Hospitals 2013
18 Small and Medium Enterprise Development

Corporation and its subsidiary Liteford

2013

 

  Engineering  
19 State Lotteries 2009 –

2011

20 State Procurement Board 2009 –

2011

21 Transmedia 2012
22 Zimbabwe Academic and Research Network 2011 –

2013

23 Zimbabwe Electoral Commission 2012 –

2013

24 Zimbabwe Institute of Public Administration 2013
25 Zimbabwe Mining Development Corporation

and its subsidiaries

2013
26 Zimbabwe National Road Administration 2012 –

2013

27 Zimbabwe National Water Authority 2012
28 Zimbabwe Open University 2012
29 Zimbabwe Parks and Wildlife Management

Authority

2013

 

 

 

 

B.         Accounts not submitted for audit as at 31 December 2014

The table below shows entities whose accounts were yet to be submitted for audit as at 31 December 2014 as well as the periods that were outstanding as at that date:

Numb

er

Public Entity[2] Year
1 State Procurement Board 2013
2 Anti-Corruption 2011 –

2013

3 Forestry Commission 2013
4 National Libraries and Documentation

Services

2009 –

2013

5 National Handicraft Centre 2009 –

2013

6 Zimbabwe Open University 2013

 

I hope and trust that Members will find this report very beneficial and the Executive will also get to be busy in terms of the recommendations so that come 2015, all the entities will have submitted their accounts. I thank you.

HON. RUNGANI:  Madam Speaker, I move that the debate do now adjourn.

HON. KWARAMBA: I second.

Motion put and agreed to.

Debate to resume: Tuesday, 7th June, 2016.

On the motion of HON. RUNGANI, seconded by HON.

KWARAMBA, the House adjourned at Half Past Four o’clock p.m.

until 7th June, 2016.

 

 

 

 

 

 

 

 

 

[1] The table has been extracted from the Auditor General’s report, Report of the Auditor General for the Financial

Year Ended 31 December 2013 – Narrative Report on State Enterprises and Parastatals, p.347

[2] The table has been extracted from the Auditor General’s report, Report of the Auditor General for the Financial

Year Ended 31 December 2013 – Narrative Report on State Enterprises and Parastatals, p.348

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