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NATIONAL ASSEMBLY HANSARD 23 JULY 2019 45-71
PARLIAMENT OF ZIMBABWE
Tuesday, 23rd July, 2019
The National Assembly met at a Quarter-past Two o’clock p.m.
(THE HON. DEPUTY SPEAKER in the Chair)
HON. T. MLISWA: Good afternoon Madam Speaker. I rise on a point of privilege. I continue arming you with more information in terms of the welfare of the Members of Parliament. The first issue is, whilst some had gone to pick a $50 000 car others have been given an allowance of $55 000 and these are members of the Speaker’s Panel, Standing Rules and Orders members and Chairpersons. The question that I bring to you Madam Speaker is, if that is the correct position, I would like to know where they got the extra $5 000 from because $50 000 is what was said was the cap. Are we today not the same, are we different today?
So Madam Speaker, it is important that you also look into it. I saw a letter myself which gave others $55 000 and the majority had $50 000. – [AN HON. MEMBER: We are all Members of Parliament.] – Madam Speaker, regardless of the number of votes that you got, as long as you won you are entitled.
The second issue is - can the Administration of Parliament furnish the nation of Zimbabwe with our remuneration because people think we are getting a salary of $5 000 or $10 000. It is important that Parliament of Zimbabwe puts in the Herald what we are being given, that is $2 000 and allowances because each time we come to this House and we push for our welfare they think we are being selfish. Ministers are still being given Land Cruisers and Mercedes Benz. So, how can the austerity measures be targeted to Parliamentarians only and not the Executive yet we know for a very long time, it is the Executive that has been spending a lot of money.
Madam Speaker, I am also told there are people who had a choice to buy Isuzu vehicles from Paza Buster. I am told again that ugly head of corruption has visited our august House where people are now being told where to buy vehicles and are being told not to go to Paza Buster.
Madam Speaker, can you also look into that and find out why Paza Buster is not part of the list because other people prefer Toyota and others prefer Isuzu. It means that even those who want to marry must be given a wife at the end of the day yet you have a choice of a wife. I think it is important that we are treated like adults, we are not young children and we are constantly being treated like young children. That must stop. We have a choice of association. The Constitution itself talks about freedom of association, so whether I go and buy a vehicle from Croco Motors or Paza Buster, it is my choice. I thought Madam Speaker, I should raise these issues.
Finally, let me talk about the diplomatic passport. The President approved for every Member of Parliament to have a diplomatic passport. Who is working against the President in not taking the order from the
President? – [AN HON. MEMBER: Seva ipapo.] – The President, the Head of State has said all Members of Parliament must be given diplomatic passports. We do not have them. So, who is stopping that from happening? There are people working against the President and soon they shall be exposed.
Madam Speaker, let me move on to our welfare. We shall stop debating any other issues in Parliament until our welfare is taken care of. We are tired of passing Bills, we are tired of passing laws yet we are nothing at the end of the day. So, Madam Speaker, I thank you very much and I know Madam Speaker, as a mother you feel for us your children. I know your heart is aching, we are your children, please advance this for us. Thank you.
THE HON. DEPUTY SPEAKER: Order Hon. Mliswa, I have
noted all your concerns, I am going to look into them and will give a ruling later. I want you to give me the letter which you referred to.
HON. T. MLISWA: Madam Speaker, the Administration of
Parliament is the one that sent that letter. I managed to see it in one of the companies; unless they say they did not write the letter, I will bring the letter. They have the letter that they wrote for $55 000. Madam
Speaker, I just managed to bump into the letter when I went to one of these car sales companies. The $55 000 was for Chairpersons, SRC,
Speakers Panel and I think Hon. Mutomba’s name was not on the list, I do not know why because he is on the Speaker’s Panel. That letter did not have Parliament letterhead. So, I do not know where it came from, if they cannot give you that letter by today, tomorrow I will produce it. I will go and ask the letter from the company that I saw it from.
THE HON. DEPUTY SPEAKER: It is okay Hon. Mliswa. I am
going to look into the matters.
HON. MADZIMURE: I rise on a matter of privilege. Madam
Speaker, the issue of electricity has gone to a situation where it is no longer bearable. Madam Speaker, we have now experienced deaths being caused by the gas leakages because every house is now depending on gas. The price of gas is continuously going up. The industry is being switched off from 0700 hrs in the morning to 2200 hrs in the evening. Madam Speaker, this as a result diminishes any chances of economic revival.
Madam Speaker, the biggest tragedy is that there is no good reason being advanced, if it is because we cannot purchase more electricity then let it be known that we cannot. The issue of the water levels in Kariba – it is known that until our worst we have rains falling in Angola, DRC and Zambia there will not be any in-flows into the lake. So, with that in mind and it is a fact, can the Hon. Minister, I was actually going to ask for the Vice President to come and address this august House – [HON.
MEMBERS: Hear, hear.] – and inform the whole nation whether the
Government has completely failed to deal with the issue of electricity.
Madam Speaker, the Auditor-General’s reports are revealing
shocking corruption to the extent that $120 000.00 that is required to pay off our electricity debt can easily be paid off by the Government if the Government could look after the money that flows into Government. The situation is dire and people are being mugged when going to join shifts at 2200 hrs in the evening because no industry has electricity. So Madam Speaker, I ask for a high-powered Ministerial Statement because the Hon. Minister of Energy and Power Development has failed to give an understandable reason as to why we do not have electricity. It seems he is completely in the dark – he knows nothing about what is happening. So either he resigns or a high-powered Government representative comes here to explain to the nation. I thank you. – [HON. MEMBERS: Hear, hear.] – [HON. BITI: I also have a point of privilege Madam Speaker!] –
THE HON. DEPUTY SPEAKER: Let me give a ruling first to that one. – [HON. BITI: Thank you Madam Speaker.] – Hon.
Madzimure, I think that the Hon. Minister of Energy and Power
Development gave a Ministerial Statement less than three weeks ago – [AN HON. MEMBER: But no solution because things are now worse!] - You are now saying that you want a higher Office? – [HON.
MADZIMURE: Yes.] – Alright, on that one I will refer the issue to the Government Chief Whip, maybe he can convey the message on our behalf. – [HON. TOGAREPI: Maybe if he could put the message in writing for me to convey Madam Speaker?] – Hon. Madzimure, the Government Chief Whip is asking if you can put it in writing so that he may convey the message.
HON. MADZIMURE: Madam Speaker, I wanted clarification on whether you are saying – [HON. T. MLISWA: Inaudible interjections.] -
THE HON. DEPUTY SPEAKER: Order, order Hon. Mliswa!
HON. T. MLISWA: My question was, should I put it in writing as a question or what I am saying to the Chief Whip so that is conveyed to Government?
THE HON. DEPUTY SPEAKER: Writing what you are saying
so that the Chief Whip will convey it to higher Offices.
HON. MADZIMURE: I thank you Madam Speaker.
HON. BITI: Thank you Madam Speaker Ma’am. I rise once
again on a Matter of privilege and the Matter of privilege is being brought in terms of Standing Order 68.
Madam Speaker, a month ago, the Hon. Speaker made a ruling and determination on the availability of the NSSA Forensic Audit Report.
The esteemed and distinguished Hon. Speaker, Adv. Jacob Mudenda,
Esquire directed that the Minister of Labour and Social Welfare, Hon. Sekesai Nzenza comes to this august House within two weeks from his determination to explain to this august House when she was going to present the NSSA Forensic Audit Report.
This august House has got the duty and obligation to oversee every public institution and that obligation is defined in Sections 117 and 199 of the Constitution. More specifically on public funds, Sections 298 and 299 of the Constitution of Zimbabwe state that this august House scrutinises every cent that comes out and goes into the State. So we ask for a determination – a ruling from your esteemed self that the Hon. Minister, tomorrow should lay before this august House, in compliance with the Hon. Speaker’s determination the much heaped NSSA forensic report. I thank you very much Madam Speaker Ma’am. – [HON.
MEMBERS: Hear, hear.] -
THE HON. DEPUTY SPEAKER: Your point of privilege is noted Hon. Biti. I am going to make a follow-up. – [HON. BITI: If you could just make a ruling that Hon. Sekesai Nzenza presents the report tomorrow.] - A ruling was made by the Hon. Speaker, Adv. Mudenda and I am going to make a follow-up. – [HON. BITI: As Your Lordship pleases.] –
BUSINESS OF THE HOUSE
HON. TOGAREPI: Madam Speaker, I move that Orders of the Day, Numbers 1 to 33 be stood over until Order of the Day, Number 34 has been disposed of.
HON. MUDARIKWA: I second.
Motion put and agreed to.
SUPPORT OF THE NEW ZIMBABWE CURRENCY
HON. MUSABAYANA: Madam Speaker, I move the motion
standing in my name that this House –
COGNISANT of Statutory Instrument 142 of 2019 issued by the Minister of Finance and Economic Development abolishing the multicurrency regime in favour of the introduction of the Zimbabwe’s own local currency, the Zimbabwe dollar with effect from 24th June, 2019;
ALSO COGNISANT of the structural distortions in the economy caused by the existence of the multi-currency regime;
DEEPLY CONCERNED that the continued use of the multicurrency regime was now a root cause of the suffering of ordinary Zimbabweans who had no easy access to the United States dollar which had emerged the dominant currency in this basket of currencies;
AWARE of the Government’s noble intentions to mitigate the suffering of the general population;
NOW, THEREFORE, calls upon this august House to support in earnest the new Zimbabwean currency.
HON. MUSAKWA: I second.
HON. T. MLISWA: Excuse me Madam Speaker, I do know if these seats steal but I do not know if anybody has seen my phone – an IPhone X10. Sorry the Sergeant-at-Arms has once again done his job well by keeping it. – [HON. MEMBERS: Hear, hear.] – Thank you Sergeant-at-Arms.
HON. MUSABAYANA: Thank you Madam Speaker Ma’am. Zimbabwe adopted a multi-currency system in February 2009, thereby officially discontinuing the use of the Zimbabwean dollar. Zimbabwe abandoned its local currency after it had been ravaged by hyper-inflation which topped 231million percent. The country adopted a basket of currencies among the...
HON. BITI: On a point or order Madam Speaker.
THE HON. DEPUTY SPEAKER: What is your point of order?
HON. BITI: The Hon. Member is reading, he is allowed to refer to his notes and not read.
THE HON. DEPUTY SPEAKER: Hon. Musabayana, you are
allowed to refer to your notes not to read.
HON. MUSABAYANA: I thought it is allowed on motions. I will take that again. Zimbabwe adopted a multi-currency regime in February 2009. This was after the Zimbabwean dollar had been ravaged by inflation. Adopting a multi-currency regime meant that there was a currency substitution where the Zimbabwean dollar was now working or operating in a basket of other currencies. This basket of other currencies included the US dollar, South African Rand, Botswana Pula, British
Pound, Japanese Yen and many other currencies, more recently the RTGs dollar and the bond notes and coins.
At the point of its introduction, the multi-currency system worked because it was meant to stabilize the economy that had been battered by inflation. In terms of curreny substitution, we are looking at a situation where a nation decides to use another currency or other currencies as a medium of exchange and this is exactly what happened in the
Zimbabwean economy. At that time the economy stabilized, there was confidence in the market because with the US dollar, the investors had more confidence and there was flow of capital investments in the economy.
It was also this time that because of the dollarization, our economy stabilized and inflation also fell to levels below 10%. So at that point, it really worked. In 2015, the Zimbabwean dollar was official demonetized at a rate of US$5 to Z$175 quadrillion Zimbabwean dollars with 15 zeroes. So the journey of the dollarization started in that year. Why am I now talking of dollarization, it is because slowly the economy was now accepting more of the US dollar and the rest of the currencies were now relegated from transaction? So, the US dollar crowded out other currencies, it out competed other currencies in the basket of currencies, including the Zimbabwean dollar.
This dollarization process if you look at it, there are other countries that also took the same path, countries like Panama in 1904, Argentina in 1991, also took the dollarization route after the economy was hard hit by hyperinflation, El Salvador in 2001, Ecuador in 2000, Brazil and Mexico also did the same in the 1990s. It is important to note that this dollarization process that Zimbabwe took was more of a default, it was not by design but by default, making the US dollar a de-facto currency.
When the dollarisation process started, there were some vices associated with that but we are also looking at a silver lining to this dollarization process. With the dollarisation of the economy, it meant more stability to the economy but it also meant that our imports, goods and services were available because it was now easier for Zimbabweans to access foreign capital. The fact that there was a US dollar it meant that the economy was stable for investors because the risk of instability associated with the depreciation of domestic currency was no longer happening because we were trading with the strongest currency. A currency that is used in some jurisdictions as a reserve currency – [HON.
MEMBERS: Inaudible interjections.] –
THE HON. DEPUTY SPEAKER: Order Hon. Members.
HON. MUSABAYANA: The dollarized economy also meant a
fall in interest rates. We also saw the interest rates which were provided by our banks falling which was important for investors, which also saw the boost in the agriculture sector and the mining sector. However, as the dollarisation continued, we also saw the speculative behaviour of some sectors of the economy not being spared. This eliminated speculative tendencies that were synonymous with the Zimbabwean dollar era. So, the full dollarization created a positive investment sentiment to the Zimbabwean economy. The other positive thing that was associated with dollarization is that it reduced overall need of international reserves since the currency that was used was actually a currency that was used by some jurisdictions as a reserve currency. As a fiat currency, it become handy for Zimbabweans to use the US dollars.
Having said that the US dollars has its own disadvantages, the multi-currency or the substitution of domestic currency with foreign currencies meant that the Zimbabwean economy lost its monetary sovereignty and this is normally associated with loss of national sovereignty. This loss in sovereignty meant that it was now very difficult for Zimbabwe to control the money supply, because the money supply is controlled by the Reserve Bank. As a result of that, there was now way that the Reserve Bank was able to control the money supply
[HON. BITI: Inaudible interjections.] –
THE HON. DEPUTY SPEAKER: Order Hon. Biti.
HON. BITI: On a point of order Madam Speaker.
THE HON. DEPUTY SPEAKER: What is your point of order?
HON. BITI: I am asking Hon. Musabayane whether we eat sovereignty.
HON. MUSABAYANE: The economy was now using the US
dollars; it was now difficult for the Minister of Finance or for the economy to run. There was no fiscal space to induce productivity in the economy. The Government was then left with no option but to issue Treasury Bills, and because in terms of credit lines and other forms of investment that can be brought from abroad - it was tight because of ZIDERA. We know what ZIDERA does, it blocks any form of investments from the international community that is destined to Zimbabwe. ZIDERA also brought credit lines that we can access as an economy, because of that ZIDERA - and we know who are the architects of ZIDERA in this august House. So it was very difficult for our economy to move forward because of ZIDERA. As such, the economy stagnated and with that stagnation the Government had to try to chip in with TBs and we saw domestic debt spiking up to around $12 billion.
The lack of monetary policy flexibility also exposed Zimbabwe to real financial shocks. This is so because we did not adopt the United States Dollar (US$) by choice. It was just a straightjacket that was imposed on Zimbabwe, so it made it very difficult for Zimbabwe to maneuver in terms of investment and meeting its social obligation. The other challenge with the US$ economy was that it meant that Zimbabwe had to import the US$, which was an advantage to the United States economy. To import the US$, Zimbabwe had to fork out extra dollars, hence millions of dollars were spend in importing US$. As you know the currency is to an economy what blood is to the body of a human being. So, you cannot survive on blood that is bought on a daily basis, it is not sustainable. This is exactly what happened to our economy where we had to buy currency to be able to do transactions in this economy.
What the Government did is they were charging dollar to dollar for the importation of the US$, yet it only costs United States 6 cents to produce a US$ note, which means the United States were making at least 95 cents per one US$ that was imported to this economy. This is why…. – [HON. MEMBERS: Inaudible interjections.] –
THE HON. DEPUTY SPEAKER: Order, order! Hon. Members.
HON. MUSABAYANA: This is why you hear people supporting the continuous use of the US$ because they knew that the Zimbabwe economy was now supporting the American economy, because they were making super profit of 94 cents per US$. So we had actually became one of the cash cows of the American economy and the US Government generates about US$20 billion every year, that is from printing money that it exports to those nations that use its currency as a defacto currency.
The US$ also meant our exports were no longer competitive on the global market because the US$ is very strong and it meant that our exports were very expensive and not competitive. So we were not capable to compete fairly on the global market. Therefore, the United States economy was having an advantage in that respect. The US$ made it very difficult for this economy to issue medium to long term security papers to the productive sector, because it was also denominated in a foreign currency which we did not have a reserve for. In other words the Central Bank lost its role as the lender of last resort to the banking system. When all this is said and done, the use of foreign currency instead of a local currency damaged the nation’s sense of pride, because local currency is a symbol of a Sovereignty State. We all know that when it happened we did not have enough reserves in our coffers in terms of gold.
Now I come back to the Zimbabwe scenario, the serious challenges that obtained because we were operating in a dollarised economy.
Slowly, we saw the RTGs and the Bond note losing traction to the US$ and we saw a widening gap between the declared 1 to 1 exchange rate by the Reserve Bank of Zimbabwe and what was obtaining on the market – [HON. MEMBERS: Inaudible interjections.] –
THE HON. DEPUTY SPEAKER: Order, order! Hon. Members,
please may you lower your voices.
HON. MUSABAYANA: We ended up with a situation where we
had two economies in one nation, where we had those people who had access to the foreign currency paying less than those who did not have access to foreign currency. Also, the US$ failed as a medium exchange, why, because a medium exchange should be readily available to those people who want to use it, but this did not happen because the forex was only available to those people who were around border towns and those in cities but for the rural communities they did not get access to the US$ and they were not able to trade freely in the day-to-day running of their lives. This became a serious challenge to our citizens.
It also happened that the bigger cities were also paying a premium because there was huge competition for the US$ for those who wanted to import goods and services. So it disadvantaged certain sectors of the economy, thus creating serious underlying distortions in our economy. We saw urban centres being invaded by illegal foreign currency traders as the US$ and Bond note became commoditised, when we say a currency is now being commoditised, we mean it is no longer just a store of value or medium of exchange, but people are actually using it as merchandise. They are actually buying or sell the currency which is not good for the fundamentals of the economy.
When the saw US$ being the dominant currency - which meant economy was fast dollarising – [HON. MEMBERS: Inaudible
THE HON. DEPUTY SPEAKER: Order, order! Hon. Members,
may the Hon. Member be heard in silence?.
. When the economy started to be fast dollarised – the dollarisation process had reached alarming stages where we think as a nation we were crossing the Rubicon River, a point of no return. It was now going to be very difficult as an economy to go back to de-dollarise because every sector was becoming dollarised and because of that, we had certain sectors of the economies now demanding payments of their salaries in US$. This was going to pose a serious challenge to the Government because the Government had very limited sources of foreign currency, because our economy is 90% informal. With 90% in the informal economy, only 10% of the economy will be paying taxes into the economy and this money which was being paid was in local currency, thus making it almost difficult if not impossible for the Government to pay civil servants. The civil servants, even the private sector were justifying, saying that because all the goods and services that they could access in the market were now marked in US$.
They were not only rated in US$ but the sellers of these merchandise were actually demanding the US$ in every transaction that was taking place and because of that the Ministry of Finance and Government saw it fit to take calculated steps to de-dollarise the economy. The de-dollarisation process was not an immediate response but it was a well calculated and formulated process which is enshrined in the Transitional Stabilisation Programme. This is why we saw the Minister of Finance talking about currency reforms in October last year and in January this year. We saw all these things happening because the Government was well organised in executing a currency reform. We need to advise those people who were misinformed thinking that it was a knee jerk response – no it was not. It was a well calculated and planned process of currency reform.
The President also highlighted it in some of his speeches as he psychologically prepared the nation to accept the coming in of a new currency. This is why we saw the currency reform eventually taking shape.
What does it mean for Zimbabwe to have a Zimbabwean dollar? Having a Zimbabwean dollar is a boom for Zimbabweans because it meant that all those legacy debts which were at one to one as announced by the Minister in April meant that they will be able to clear their balances using the US dollar. The re-introduction of the Zimbabwean dollar also mean that the Zimbabweans or investors in Zimbabwe are now able to access capital easily and banks will be able to have the Zimbabwean dollar because the US dollar was very illusive and it was difficult to access – [HON. SIKHALA: Is it still available?] - The introduction of the Zimbabwean dollar –[HON. MEMBERS: Inaudible
THE HON. DEPUTY SPEAKER: Order Hon. Members order!
HON. MUSABAYANA: The re-introduction of the Zimbabwean dollar also means that the Zimbabwean exports are now competitive on the international market because the US dollar was too expensive. The US dollar is difficult to access, it is used as a store of value and it is commoditised, making it difficult to use as a currency for any nation.
Madam Speaker Ma’am, it is also important to note that other nations besides Zimbabwe have actually moved away from the US dollar. If we look at the global scenario, China, Russia, India and Turkey are moving away from the US dollar. It is no longer sustainable as a currency. It is being dethroned as a defacto currency of the world.
Why? Because all producers were cheated by Henry Kissinger to believe that they should sell all their oil in US dollars but this has since changed because the Chinese have negotiated with the Russians and they have agreed that they are now pegging the oil in the Russian currency. The Chinese have also taken bold steps to move away from the US petrol dollar to the Yuan. This shows that the US dollar has lost traction as a defacto international currency.
The US dollar is also overrated because it has no backing whatsoever. It does not have reserves to back it. It is just mere confidence. If you look at the USA as we speak, they are in huge debts that they owe China and Japan. Because of that, it means that their economy is no longer sustainable going forward – [HON. MEMBERS: Inaudible interjections.] – As Zimbabweans, we took the correct decision to move away from the US dollar. China has also taken bold steps to make sure that internationally, its currency is being accepted as a medium of exchange. This means that the US dollar is no longer a strong currency as it was. Like I said, other countries are also moving away from the US dollar. So it was wise for our Government to introduce S.I. 142 of 2019.
With the introduction of the US dollar, we have also seen our banks benefiting from the 50% interest that has been introduced because before that, what was now happening was that people were borrowing from the bank or those people bent on speculation were borrowing from the bank; take the money to the parallel market, exchange the money, burn it and go back to pay the loans. This was causing inflation and instability into the economy but this gap has been closed by the introduction of the 50% interest on loans. This has also helped to save the country from receding into recession. We are happy that the Government introduced the Zimbabwean dollar.
Introducing a Zimbabwean dollar may not be enough but we want the Government to add on a number of policy measures so that they will stabilise the economy. We propose that the Government accelerates the re-engagement process so that we promote investment into this country. When we talk of re-engagement, we are talking of re-engagement at all levels of the state. We are looking at all Government departments – they must be engaged in the re-engagement process with the rest of the world. When we say re-engagement, we mean true re-engagement where the Government rank and file is singing the same hymn from the same hymn book and if possible singing with the same tune. We do not want a situation where the President goes it alone when it comes to reengagement -[HON. MEMBERS: Inaudible interjections.] –
THE HON. DEPUTY SPEAKER: Order Hon. Members. Order!
HON. MUSABAYANA: We also propose that the Government
deals with corruption ruthlessly and perpetrators of illicit financial flows because this will create uncertainty in the economy and also discourages foreign direct investment. For us to improve our rankings on the global market, we need to deal with corruption ruthlessly. Remember, corruption is white collar crime and it is very complex and intricate. It is important that those who deal with corruption are trained and coached on how to profile corruption and how to execute the whole process.
While we applaud the Government’s austerity measures, I think at this stage our economy now requires inducement policies that will ensure that we re-energise the demand for our economy. If this does not happen, we are fearful that sooner or later, a recession cycle will set in and this will cripple our economy as we do not want that to happen.
We also realise that the reason why the economy is slowly dollarised or ended up being dollarised was because of speculative behaviour and the attempt by citizens to try and hedge their interest by keeping all their savings in foreign currency. To ensure that this does not happen again, we are also proposing that as an economy we should start creating our own reserves where we can use our diamonds, platinum and our gold as reserves so that our Zimbabwean dollar will also be regarded as strong currency and that we move away slowly from the fiat currency obtaining in the economy.
Madam Speaker Ma’am, while we applaud the Minister’s move to de-dollarise the economy, we also need to deal with the liquidity crisis that is currently happening in the economy. Workers and pensioners are spending valuable time which should be assigned to productivity to queuing at banking halls. This should come to an end and increase our productivity. The use of plastic money should be as a matter of choice or convenience not the only alternative. If there is shortage of cash in the economy, we find people trading the bank note. At the moment, people have commoditised the bond note, they are selling cash and this is also creating corruption in our economy because businesses that deal with cash are able to sell cash at a premium creating distortions in our markets. So, we implore the Hon. Minister to ensure that he closes the liquidity gap that is in the market.
We also want to encourage the Hon. Minister to pursue a strategy which brings back confidence into our domestic currency. We know confidence is anchored with consistency and confidence is also anchored on political stability and good corporate governance. We therefore urge the Minister to ensure that we have policies that inspire confidence in the eyes of domestic and foreign players.
Madam Speaker Ma’am, we also propose that we have a currency board to restore confidence in the financial sector. The currency board will make sure that there is proper allocation of currency to the needy sectors of the economy, mining, agriculture and other capital projects. We also want to ensure that the Reserve Bank of Zimbabwe (RBZ) is independent in its operations. The independence of the RBZ will also inspire confidence with our monetary sector.
If we do not have a properly constituted board that manages currency in our economy, we will also end up with issues to do with corruption where certain people are given preference or jump queues when they approach the bank. So, we want a situation where there is proper allocation of the available foreign currency to the needy sectors of the economy. To underpin why I think the Government took a correct and bold stance in going back to the Zimbabwean dollar; we have many other nations in the world which have taken the same route; Sierra
Leone’s Government in 2015 expressed the desire to de-dollarise the economy and the Central Bank Governor of that country, Dr. Kaifala Marah took bold steps to de-dollarise the economy. There was a presidential appeal where they chose to de-dollarise the economy. Mexico and Pakistan also implemented a more rapid and forced dedollarisation and it was sustainable. However, this comes at a cost because of macro-economic imbalances that happened and there was huge capital flight and less financial intermediation.
Madam Speaker Ma’am, in the 70s, Israel also de-dollarised their economy. Russia is also in the process of doing away with the US dollar, so we are not alone in this journey of de-dollarisation. Madam
Speaker, Ma’am – [HON. MEMBERS: Inaudible interjections.] –
THE HON. DEPUTY SPEAKER: Order Hon. Members.
HON. MUSABAYANA: Poland’s economic situation deteriorated in the 80s when they had a monthly inflation which was above 55%. Because of that, they also took bold steps to de-dollarise the economy which worked very well for that economy. Bolivia did the same and countries like Peru, so the process of de-dollarisation is one which is important for a developing nation.
Madam Speaker Ma’am, I want to thank the Government of Zimbabwe for coming up with a Monetary Policy Statement that is propoor – [HON. MEMBERS: Aaah, Aaah!] – because we know there are very few people in this nation who were accessing the US$. The US$ was only accessible to those people who were doing direct exports and to those who had connections to certain sectors of the economy. The decision by the Government to de-dollarise the economy came at the correct time – [HON. MLISWA: Inaudible interjection.] – THE HON. DEPUTY SPEAKER: Order Hon. Mliswa.
HON. MUSABAYANA: The decision by the Government to de-
dollarise the economy came at the correct time and will help us on reentry into the global market. The President is forever talking about Zimbabwe being open for business. Zimbabwe cannot be open for business without its own currency, when it cannot control its monetary policy or when our people have no access to currency. Madam Speaker
Ma’am, there are people who were saying the fundamentals are not right. I agree with those people because the currency issue is one of the key fundamentals that have to be dealt with once and for all because we cannot have economic fundamentals being right when we do not have a currency. When we look at economic fundamentals, we have to look at systems approach – [HON. MEMBERS: Inaudible interjections.] –
THE HON. DEPUTY SPEAKER: Order.
HON. MUSABAYANA: We look at a systems approach and a holistic approach to the economy. When we do not have a currency, there are no fundamentals that can be corrected. I want to thank the Government for correcting the first important fundamental, which is the currency issue that has been resolved. So, I thank the Government for this bold move that came at the right time and should not have come at any other time. This is the right time that the Government has made this policy move – [HON. MLISWA: Inaudible interjection] –
THE HON. DEPUTY SPEAKER: Hon. Mliswa!
HON. MUSABAYANA: Madam Speaker Ma’am, I want to
encourage all patriotic Zimbabweans to support the re-introduction of the Zimbabwean dollar because ZIDERA is an albatross. So to counter it is only easy when we have our own currency because we will have space to maneuver as a Government. I thank you Madam Speaker Ma’am.
HON. A. MPOFU: Thank you Madam Speaker. I want to add my
voice to Hon. Musabayana’s motion. Hon. Speaker, it is important right from the beginning to emphasize that the move to – [HON. MEMBERS:
Inaudible interjections.] –
THE HON. DEPUTY SPEAKER: Order, order!
HON. A. MPOFU: I would like to say from the beginning that the introduction of the mono-currency was welcomed by the wider population of Zimbabwe. The introduction of the mono-currency was good news especially to the majority of our population who had no access to the USD. It is also important to point out that as the Hon. Member who spoke before me, the mover of this motion has just indicated, there was need for stability in the economy. There was need to fight corruption because the USD had itself become a very important vehicle in the corrosive, corruptive practice that was now prevalent in the society.
Madam Speaker, the effort to fight corruption is very pivotal to His
Excellency and his Government’s effort to attract foreign direct investment into this country. The only measure therefore, that the Government takes in that direction should be welcomed by Hon. Members. I do respect that the points that have been raised by the mover of this motion have been emphatic enough to justify the introduction of Statutory Instrument 142 of 2019. I thank you.
HON. BITI: I want to thank you very much for recognizing me in this very important debate. The debate before this House is extremely an important one. It relates to the re-introduction of the Zimbabwean dollar which was officially pronounced by the Minister of Finance and Economic Development on the 24th June, 2019, in the form of Statutory Instrument 142 of 2019.
I want to make it very clear that this side of the House is firmly and vehemently opposed to the re-introduction of the Zimbabwean dollar. We are firmly and vehemently opposed to…
THE HON. DEPUTY SPEAKER: Hon. Biti, speak on your
behalf not for the side.
HON. BITI: Thank you Madam Speaker. The introduction of the Zimbabwean dollar, the attempt to de-dollarise the Zimbabwean economy is a disaster that will not work. It will not work because the fundamentals for the introduction of our own currency simply do not
A currency is not a choice that you make like you are changing your clothes. It is not a choice that you make between wearing a green, red dress or a red tie – it is not that choice. It is a choice that is a byproduct of the existence of both political, economic and legal fundamentals. We submit to the Hon. Speaker that the political economy of Zimbabwe did not support the introduction of the Zimbabwean dollar on the 24th June, 2019.
Madam Speaker, when the Zimbabwean dollar was introduced in
2009, it was not the wisdom of us who were at the Ministry of Finance.
It was not the wisdom of any Government bureaucrat, the Zimbabwean dollar was introduced by the market, it was introduced by the people of Zimbabwe who were tired and who were liberating themselves from abuse by the existing Zimbabwean dollar then known as the bearer cheque at the time.
You will recall that in 2006 to 2009, the Zimbabwean economy suffered a crisis of over accumulation, one - in respect of which there was too much money chasing too few goods. You will also recall that all of us were trillionaires and billionaires who could not even buy two bottles of soda, billionaires who could not buy two bottles of Coca-cola. The last time that the RBZ Governor printed our money, it was a hundred thousand trillion dollar note, but that hundred thousand trillion dollar note could not buy you a bicycle.
Madam Speaker, you will remember that when the bearer cheque, the hundred thousand trillion dollar cheque was introduced in September of 2008, 26 zeros had been removed from hundred thousand trillion dollars. If you add 26 zeros, the redenominated currency, to hundred thousand trillion you will have a creature that has no name in the English language. So the Zimbabwean dollar was never displaced voluntarily, it was displaced involuntarily because the market recognised that the Zimbabwean dollar had become an instrument of arbitrage.
Madam Speaker, the Zimbabwean dollar was caught in flagrante, with its pants down and once that happenes, there is nowhere in the world where a country that involuntarily dollarizes can dollarize again. Currencies are a function of confidence, currencies are a function of
In 2008, the people of Zimbabwe lost confidence and trust in the Zimbabwean Dollar and that trust will never come back again – it does not matter what you do. This is why in the history of mankind - this is fact and pure economics Madam Speaker. In the history of mankind, there is no country in the world except Panama in 1904 that dollarized and was able to de-dollarize, because it is a function of confidence. The countries that Hon. Musabayana referred to - that have managed to introduce their own currency – it is an artificial introduction because their new domestic currencies remain pegged or anchored to the United States dollar. If you go to the Rand Monetary Union, Madam Speaker
Ma’am, the Rand is the currency of use but you will find that eSwathini and Namibia also have their own currencies, but those currencies are pegged to the Rand. So under those circumstances, you cannot speak of de-dollarization when the local currency remained pegged 1:1 to the United States dollar.
So the submission that I am making is that it is not possible to dedollarize. It is not possible to adopt your own currency once economic circumstances have forced you to abandon your currency. So the fundamentals that were a prerequisite to the introduction …
HON. MUSABAYANA: Madam Speaker on a Point of Order!
Madam Speaker Ma’am, Hon. Biti is misleading this House because he is saying that the United States dollar remained pegged at 1:1 to the
Zimbabwe Dollar which is not what is happening in our markets … - [HON. MEMBERS: Inaudible interjections.] - No, that is what he said.
– [HON. MEMBERS: Inaudible interjections.] -
THE HON. DEPUTY SPEAKER: Order, order, Hon.
Musabayana, he was referring to the Rand.
HON. MUSABAYANA: No, he said the United States Dollar and the Zimbabwe Dollar remained pegged 1:1. - [HON. MEMBERS:
Inaudible interjections.] –
HON. BITI: Madam Speaker Ma’am, the fundamentals for the introduction of Zimbabwe’s own currency do not exist. For Zimbabwe to even consider the economy must be producing; there must be productivity in the economy; there must be jobs - Madam Speaker, I seek protection from Hon. Matangira. I think that he is abusive and his conduct is not becoming of a Member of Parliament. I seek protection Madam Speaker.
THE HON. DEPUTY SPEAKER: Order, order Hon. Matangira.
Hon. Biti you are protected, you may go ahead.
HON. BITI: Thank you Madam Speaker. Madam Speaker, this year alone, the Gross Domestic Product (GDP) of Zimbabwe, according to the Regional Economic Outlook issued by the IMF in April of 2019 will be minus 5.5% and that projection was made in April of 2019. Since then, we have had power shortages that have never been known in the history of this country. We have had power shortages that are lasting
18 hours and sometimes 20 hours, and when you do not have electricity Madam Speaker, you have no production.
So this means that our productivity levels, the growth rate this year will be around minus 8.5%. When you are not producing and when 95% of your people are in the informal sector selling vegetables, air time and tomatoes, you do not have an economy that can sustain the reintroduction of your currency…
HON. MUSABAYANA: On a point of order Madam Speaker,
Hon. Biti is misleading the House. He is saying that the growth rate will be minus 8%. Where is he getting those figures from, because this is not happening and it is not true – [AN HON. MEMBER: That is why he mentioned that it is a projection kani!] - But where is he getting those figures from? He must not be allowed to mislead the nation. – [HON.
MEMBERS: Inaudible interjections.] - He must tell us the source of his information so that we can verify it. You cannot just come to this august House and start throwing around figures. I thank you.
HON. BITI: Madam Speaker, the conduct of Hon. Musabayana is very unparliamentary. I said that the IMF in its Regional Economic
Outlook published in April of 2019, and put the growth rate at minus 5.5% but at that time we did not have the huge power cuts that we have; at the time we did not have the full effect of the huge drought that is affecting our country and our country is an agricultural based economy; at the time in April 2019 we did not have the huge impact of Cyclone Idai which has affected our economy. So the projection of minus 5.5% is understated – the real projection is minus 8.5%. So without productivity, you cannot have an economy and you cannot sustain your currency.
Secondly Madam Speaker, you need exports and a positive balance in your current account. A currency, at the end of the day Madam
Speaker, is a relationship between your exports and imports. At the present moment Madam Speaker Ma’am, our imports are around US$7.9 billion and our exports that which we sell outside are around US$3 billion. So the ratio of our exports to imports is a ratio of 1:4 – put simply Madam Speaker, for every dollar that we are receiving in the form of export receipts - $4.00 are going out in the form of imports. So, when you have a deficit of 4:1 – where your current account deficit is minus 15% of GDP - you do not have an economy to sustain the reintroduction of your own currency.
I move Madam Speaker to reserves. You need foreign currency reserves in the form of either money or gold and we do not have those reserves. Madam Speaker, little Botswana across the river there has got reserves of US$9 billion. It lends money to the IMF and to the World Bank. We have absolutely no reserve, the Central Bank is absolutely broke and is insolvent for all intents and purposes.
Thirdly Madam Speaker, we need balance of payment reserves. So I have spoken of reserves – national reserves and now I am talking about a balance of payment reserves. Madam Speaker, when the Government of National Unity (GNU) collapsed in 2013, we left at the IMF reserves worth US$350 million in the form of special drawing rights that were kept at the Central Bank. Those US$350 million were just two weeks import cover, considering that our imports are US$7 billion. Madam Speaker, as I am talking to you right now, Zimbabwe has wiped off US$350 million worth of reserves. The only money that is now in that account is US$2 million just for bank charges. So without balance of payments reserves Madam Speaker – you do not have the stamina to introduce your own currency.
Of all these things that I have spoken of Madam Speaker, the most important thing that you need to introduce your currency is confidence and trust. This country is suffering from kwashiorkor of confidence and kwashiorkor of trust as no one trusts the Government, the country and the Zimbabwean Dollar that ruined people. Madam Speaker, pensioners lost their money because of the Zimbabwean Dollar and the working people of Zimbabwe lost their savings because of the Zimbabwean Dollar. So no one can ever trust the Zimbabwean Dollar, including you, yourself Madam Speaker Ma’am – [HON. MEMBERS: Yes!] –
The Justice Smith Commission of Inquiry into pension funds which was published in March, 2017 reported that US$5.68 billion worth of insurance funds - both long term life insurance and short term were lost – US$5.68 billion. So it is not possible to expect the same Zimbabwean public to accept the introduction and we know Madam
Speaker Ma’am that the Zimbabwean public has rejected the RTGs Dollar since including the Government itself. Two weeks after the enactment of Statutory Instrument 142 of 2019, Cabinet set and I am glad they are esteemed Cabinet Ministers in the House. Cabinet sat and allowed companies in Victoria Falls and hotels to charge and levy in US dollars and pay their VAT in US dollars. So Cabinet itself, the author of this misfortunate Statutory Instrument has accepted that it will not work and it cannot work – [HON. MEMBERS: Hear, hear.] –
Madam Speaker, if you want proof that the RTGs is not working, you need to look at the inflation figures. In May 2019, before the introduction of Statutory Instrument 142/2019, our inflation was 96%.
In June of 2019, after the introduction of Statutory Instrument 142/2019, our inflation is now 175%. That is official Madam Speaker, but the ordinary person who shops in a supermarket will tell you that bread went from RTGs 1.20 to RTGs7.20. So if you do the mathematics just on bread and mazoe alone our inflation in real terms is 700%. Even accepting the ZIMSTATS figure, the official definition of hyper inflation is where you have month on month inflation moving by a fact of 80%. If you subtract 96 from 175, it is over 80%. So, we are already in a hyper-inflationary environment. Our inflation at the present moment Madam Speaker, is second only to Venezuela...
THE HON. DEPUTY SPEAKER: Hon. Biti, you are only left
with five minutes.
HON. BITI: Only to Venezuela as I am speaking to you but it is not acceptable for a people and a country that went through the days of hyperinflation in 2006 to 2009. When our inflation got to 500 billion percent, it is...
HON. TSUNGA: On a point of order Madam Speaker Sir.
THE HON. DEPUTY SPEAKER: What is your point of order?
HON. TSUNGA: I propose extension of time, this is important.
THE HON. DEPUTY SPEAKER: We cannot extend before it
HON. BITI: Madam Speaker, we are the first country in the history of countries to have two bouts of hyperinflation in less than 10 years. We had a hyperinflation in 2007/8, we are now in 2019 but we have had hyperinflation. This is the first country that has gone through two cataleptic catalysm breakdown implosions in a country that has not gone to war. Zimbabwe has not been to war in the last 10 years but it is reflecting features of a country that went to war. In fact, the only country in the history of mankind that went through these implosions is Germany through the two World Wars. So, Zimbabwe which has not gone to war is reflecting signs of Germany which went through two World Wars, it is unbelievable Madam Speaker. It is a sign of failure, deep failure, structural failure, unbelievable failure and unpardonable failure.
Madam Speaker, there are myths that are being peddled by Hon.
Musabayana about why the US dollar failed in Zimbabwe. When the Government of National Unity collapsed in 2013, we left physical cash amounting to US$6.5 billion. You recall Madam Speaker, that any Zimbabwean was free to go to an automated teller machine to get cash; so that money was there physically in Zimbabwe. A problem happened and that problem was the Minister of Finance in the form of Minister Hon. Patrick Chinamasa who unleashed an expansionary fiscal policy, who could not live within his means and started doing one thing which the Government of National Unity had not done, which is budget deficits and which is deficit financing. So, the budget deficit grew; right now as I am talking to you Madam Speaker, domestic debt is over US$9 billion and this is a bi-product of Chinamasa...
THE HON. DEPUTY SPEAKER: Your time is up Hon. Biti.
HON. TSUNGA: Madam Speaker, may the Hon. Member’s time
be extended by 10 minutes.
HON. MATANGIRA: I object because we also want to debate –
[HON. MEMBERS: Inaudible interjections.] – [HON. T. MLISWA: You do not have anything to debate, you are just objecting for nothing, we need to be serious when we are here.] -
THE HON. DEPUTY SPEAKER: Your time is up Hon. Biti and
there was an objection.
HON. KASHAMBE: Thank you Madam Speaker... – [HON.
MEMBERS: Inaudible interjections.] –
THE HON. DEPUTY SPEAKER: Order Hon. Members.
HON. T. MLISWA: On a point of order Madam Speaker.
THE HON. DEPUTY SPEAKER: What is your point of order?
HON. T. MLISWA: I think we need to be sober minded. I think when we come to this august House and a motion of this magnitude has been moved, I think it is quite disturbing for other members who just have the propensity to just get up and say I object. Hon. Biti is quite seasoned in this area, whether you like it or not; even a lot of us have a lot to learn. I think if at all he was being abusive or insulting anyone in his debate, one could have raised a point of order to say this is wrong. I do not think we will ever build the country if we are not united in national interests. Part of this House is to debate on issues and if we disagree with one another, then allow the person to equally debate. I think we tend to also lose it because a Parliament with just one party means nothing at the end of the day. A Parliament must be seen to be a Parliament that accommodates everyone. We see people standing from nowhere. Since Hon. Matangira came in, he has been making noise and if it were me I would have been sent out already. He came in, I do not know whether he had smoked, – [HON. MEMBERS: Inaudible
interjections.] – This is retrogressive, what he is doing is not good – [HON. MATANGIRA: On a point of order Madam Speaker. He is abusive, he is saying I smoke.] –
THE HON. DEPUTY SPEAKER: Hon. Matangira, please may
you take your seat?
HON. T. MLISWA: I stand by my word that you do take marijuana. You can go for blood testing and you will be found intact, munoputa mbanje vamwe venyu muchiuya kubasa.
THE HON. DEPUTY SPEAKER: Hon. Mliswa, please
withdraw your statement?
HON. T. MLISWA: I will not withdraw because he once offered me a smoke and I refused – [Laughter.] –
HON. MATANGIRA: On a point of order Madam Speaker
Maám. The Hon. Member is quite abusive but any way, we know one another. I do not smoke. If he does smoke, he must smoke it alone not with me – [HON. MEMBERS: Inaudible interjections.] –
HON. KASHAMBE: Thank you Madam Speaker Ma’ám. I see
myself fortunate to debate in such a crucial…
HON. KARENYI: On a point of order Madam Speaker. I think in this House we must show maturity. If I remember very well, the other side of the House always ask for extension and we do not oppose. If it is the game, in other words, if you ask for any extension; whether it is an important debate or what, we will oppose because to be very honest today it is not even fair at all. We always show a sign of maturity and unity. If you ask for an extension we always give you but today you have shown that you are in the majority and you have shown it. In future, we will also object and I want it to be minuted that if you ask for an extension we will oppose – [HON. MEMBERS: Inaudible
THE HON. SPEAKER: Order, order! Hon. Kashambe, please may you go ahead.
HON. KASHAMBE: Thank you Madam Speaker Ma’ám. I feel
myself fortunate to also present my debate on this important matter of the nation. Taking cognisant of the fact that 70% of our Zimbabwean population stays in the rural areas and 30% stay in urban areas, the abolishment of the multi-currency is a welcome development especially in the rural areas. Why am I saying so….
HON. T. MLISWA: On a point of order. We are not enough, there are about 40 people, it is not the required quorum for this
Parliament to sit. –[AN HON. MEMBER: Watoputa mbanje manje
Notice having been taken that there being present fewer than 70 members, the bells were rung for Seven Minutes and a Quorum still not being present, THE HON. DEPUTY SPEAKER adjourned the House
without question put at Four O’clock p.m. pursuant to the provisions of Standing Order Number 56.
NOTE: The following members were present when the House adjourned: Hon. Chibagu, G.; Hon. Chikuni, E.; Hon. Chipato, A.; Hon.
Dzepasi, G.; Hon. Gwanetsa, K. K.; Hon. Kabozo, S.; Hon. Kambamura,
P.; Hon. Kapuya, F.; Hon. Karumazondo, M.T.; Hon. Kashambe, M. T.;
Hon. Kashiri, C.; Hon. Maboyi, R. M; Hon. Madziva, S.; Hon.
Maronge, C.; Hon. Masango, C.P.; Hon. Masenda, N. T.; Hon.
Mashonganyika, D.; Hon. Matangira, T. R.; Hon. Matsikenyere, N.;
Hon. Mavetera, T. A.; Hon. Mawite, D.; Hon. Mayihlome, L.; Hon.
Mguni, S.K.; Hon. Mhona, F.T.; Hon. Mkandla, M.; Hon. Mliswa, T.P.; Hon. Moyo, E.; Hon. Mpofu, A.; Hon. Mpofu, R.; Hon. Muchimwe,
P.T.; Hon. Mudarikwa, S.; Hon. Mugweni, C.T.; Hon. Munetsi, J.; Hon.
Musabayana, D.; Hon. Mushonga, P. M.; Hon. Mutomba, W.; Hon.
Ncube, Ophar, Hon. Ndiweni, D.; Hon. Ndlovu, A.; Hon. Nguluvhe, A.;
Hon. Nhambo, F.; Hon. Nhari, V.; Hon. Nkani, A.; Hon. Nkomo, M.;
Hon. Nyabani, T.; Hon. Nyere, C.; Hon. Paradza, K.; Hon. Rungani, A.;
Hon. Saizi, T.; Hon. Seremwe, B.; Hon. Shava, J.; Hon. Shirichena, E.; Hon. Shongedza, E.; Hon. Singo, L.; Hon. Sithole Josiah; Hon. Sithole, S.; Hon. Svuure, D.; Hon. Taruvinga, F.; Hon. Togarepi, P.; Hon.
Tungamirai, T.; Hon. Zemura, L. and Hon. Zhou, P.