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NATIONAL ASSEMBLY HANSARD 23 MAY 2024 VOL 50 NO 54

PARLIAMENT OF ZIMBABWE

Thursday, 23^nd May, 2024

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

PRAYERS

(THE HON. DEPUTY SPEAKER in the Chair)

HON. TSVANGIRAI:  Thank you Madam Speaker and good afternoon to you.

THE HON. DEPUTY SPEAKER: Good afternoon.

HON. TSVANGIRAI:  My point of national interest relates to the quantitative evidence increase in the number of children living on the streets of most towns and cities in this country. Madam Speaker, the majority of them, whilst being of school going age, are not going to school. Some of them are now involved in drug and substance abuse, theft in vehicles and girls are now into sex work and are being taken advantage of by paedophiles. Madam Speaker, firstly, I implore the Executive, through your leadership of the Assembly, to execute Section 19 of the Zimbabwean Constitution, which compels the State to come up with a framework to make sure children have shelter, access to education and are protected from all forms of abuse.

Secondly, Madam Speaker, the NDS1 speaks to the idea of not leaving anyone behind, henceforth calls upon the Executive through your leadership, to walk the talk, find solutions to this critical issue and make sure no child is left behind. I thank you.

THE HON. DEPUTY SPEAKER: Thank you Hon. Tsvangirai. Your concerns have been noted.

MOTION

REPORT OF THE NATIONAL PROSECUTING AUTHORITY FOR THE YEAR 2023

THE MINISTER OF JUSTICE, LEGAL AND PARLIAMENTARY AFFAIRS (HON. Z. ZIYAMBI): Thank you Madam Speaker. I rise that this House takes note of the Report of the National Prosecuting Authority for the year 2023, presented to this House of Parliament in terms of Section 262 of the Constitution of Zimbabwe. I so submit Madam Speaker.

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

Motion put and agreed to.

Debate to resume: Tuesday, 28^th May, 2024.

MOTION

BUSINESS OF THE HOUSE

THE MINISTER OF JUSTICE, LEGAL AND PARLIAMENTARY AFFAIRS (HON. Z. ZIYAMBI): Thank you, Madam Speaker Ma’am. I move that Orders of the Day Numbers 2 to 8 be stood over until Order of the Day Number 9 has been disposed of. I thank you

Motion put and agreed to.

MOTION

REPORT OF THE JOINT PORTFOLIO COMMITTEE ON BUDGET, FINANCE AND INVESTMENT PROMOTION AND INDUSTRY AND COMMERCE ON THE 2024 MONETARY POLICY

HON. CHIDUWA: I move the motion standing in my name that this House considers and adopts the Report of the Joint Portfolio Committee on Budget, Finance and Investment Promotion and Industry and Commerce on the 2024 Monetary Policy Statement.  

HON. MUDEKUNYE: I second.

HON. CHIDUWA: Thank you Madam Speaker.

1. Introduction

Section 119 (2) of the constitution obliges Parliament to ensure that the State and all institutions and agencies of Government at every level act constitutionally and in the national interest. Furthermore, Section 9 of the Constitution of Zimbabwe sanctions the State to adopt and implement policies and legislation that develop efficiency, competence, accountability, transparency and financial probity in all institutions and agencies of Government at every level and in every public institution. The Committee on Budget, Finance, Economic Development and Investment Promotion has the oversight mandate on the Ministry of Finance, Economic Development and Investment Promotion, its agencies and parastatals.

Following the presentation of the 2024 Monetary Policy by Dr.  J. Mushayavanhu, the Reserve Bank of Zimbabwe (RBZ) Governor on the 5^th of April 2024, the Joint Committees on Budget, Finance, Economic Development and Investment Promotion and Industry and Commerce conducted wide consultations to gather views of the public on the 2024 Monetary Policy Statement. The consultation was meant to involve the people in decision making in line with Section 141 of the Constitution.

2. The 2024 Monetary Policy

The 2024 Monetary Policy Statement was meant to address the following objectives:

1. A solid and stable national currency;
2. A stable and sustainable exchange rate;
3. Robust policy credibility and restoration of market confidence and
4. Macroeconomic stability.

The policy introduced the following policy measures, among others:

1. Introduction of a new structured currency.
2. Anchoring local currency on reserves backed by gold and foreign currency balances.
3. Adoption of a market-determined exchange rate system.
4. Review of the interest rate from 130% to 20%
5. Efficient and optimal money supply management.
6. Exemption from bank charges of accounts that maintain a consecutive daily minimum balance of US$100 and below or its equivalent in ZiG for 30 days.
7. Payment of 50% taxes in local currency
8. Other support measures and obligations in response to market demands.
9. Legislative compliance

The presentation of the Monetary Policy Statement complied with Section 317 (c) of the Constitution of Zimbabwe which broadly gives the RBZ the mandate to formulate and implement Monetary Policy.  However, the presentation of the Monetary Policy Statement failed to comply with Section 46 of the Reserve Bank Act in terms of time frames.

4. Methodology

Enjoined by Section 141 of the Constitution of Zimbabwe and Standing Order No. 23, the Committees resolved to conduct consultations with stakeholders to gather views on the monetary policy measures introduced through the Monetary Policy Statement. On the 22^nd of April 2024, the Committees invited several stakeholders which included Bankers Association of Zimbabwe (BAZ), Zimbabwe National Chamber of Commerce (ZNCC), Confederation of Zimbabwe Retailers (CZR), Consumer Council of Zimbabwe (CCZ), Institute of Chartered Accountants of Zimbabwe (ICAZ), Confederation of Zimbabwe Industries (CZI), Zimbabwe Builders Contractors Association (ZBCA) and Zimbabwe Chamber of SMES. Furthermore, the Committees received oral evidence from the Governor of the RBZ on the 23^rd of April 2024 and the Minister of Finance, Economic Development and Investment Promotion on the 6^th of May 2024.

5. Findings on Policy Measures

• Introduction of New Structured Currency

The 2024 Monetary Policy introduced a new structured currency called the Zimbabwe Gold (ZiG). The ZiG is backed by foreign currency and a basket of minerals - primarily gold, platinum, lithium and diamond, among others. The Committee was concerned about the convertibility of ZiG to minerals or foreign currency reserves upon demand. The Committees were informed that ZiG was not convertible to gold, since its fiat money backed by gold and other precious metals. However, economic agents who have foreign payments obligation could apply for foreign currency from their respective banks who could then avail the required foreign currency. The Central Bank would ensure that 50% of the foreign currency retention is availed to commercial banks for this purpose.

• Anchoring Local Currency on Reserves Backed by Gold and Foreign Currency Balances.

Upon its introduction, the ZiG was backed by USD100 million in cash and 2.522 tonnes of gold worth US$185 million.   The currency in circulation was estimated at ZWL2.6 trillion which was about US$80 million. Going forward, the Government through the Ministry of Finance, Economic Development and Investment Promotion will be purchasing 25% export surrender requirements from exporters, where 50% of the surrender will boost reserves. Hence, the Committees noted that there was a defined mechanism on the intrinsic value of the currency as opposed to relying solely on confidence in the monetary system. From a purely theoretic perspective, it should bring forth a sense of stability to the currency.

• Adoption of a Market-Determined Exchange Rate System.

The Monetary Policy Statement introduced a market determined exchange rate under a willing-buyer/willing-seller (WBWS) trading arrangement. The committee commended the abolition of the Auction System as it was creating arbitrages in the market, also noting that more than 80% of transactions were made in foreign currency, suggesting that business was realising foreign currency from sales. The willing-buyer/willing-seller (WBWS) model promotes an efficient price discovery mechanism for the market. Stakeholders also commended that if the policy measure is implemented consistently, it would potentially ensure price stability, as exchange rate responds to market forces. Stakeholders concurred that a stable and market-driven exchange rate system could attract foreign direct investment by providing a predictable environment to investors. The idea of transparency and a floating exchange rate has long been requested and if fully implemented could combat the currency volatility.

• Interest Rate Policy

The policy rate was reduced from 130% to 20% per annum, with overnight accommodation interest rate set at 5%. There was a general consensus that interest rates on deposits should be above the inflation level. If interest rates were kept high, they were likely to drive inflation, which would go against the National Development Strategy 1 (NDS1) objective of a single digit inflation of 3% - 7%, by 2025.   Reducing the interest rate spurs demand for credit but capacity to lend might be limited, given the other policy measures announced, which included the increase in statutory reserves. Availability of affordable funding would therefore, improve access to working capital and enhance capacity utilization of businesses, creating growth opportunities, which was in tandem with the NDS1 objectives.

• Efficient and Optimal Money Supply Management.

The Monetary Policy Statement also proposed a tight money supply which will be based on the growth in gold and foreign currency reserves. The Committees noted that the increase in inflation experienced in the recent past was a result of printing of money which was beyond the RBZ’s mandate due to quasi-fiscal activities. The policy stance has moved quasi fiscal activities to the Ministry of Finance, Economic Development and Investment Promotion. Eliminating quasi-fiscal activities has been a long-term objective of the country. Stakeholders were concerned about the history of the country where money supply was attributed to quasi-fiscal activities by the Central Bank. The stakeholder recommended that the RBZ should walk the talk, and stop the printing of money which is a vehicle for fuelling inflation. Under the new thrust, the increase in money supply would be linked to reserves and productivity. 

 

• Exemptions from Bank Charges

There was a general consensus on streamlining bank charges with the exemption of accounts that holds US100 equivalent and below. Bank charges had been a thorn in the flesh for consumers. For instance, farmers, who only receive payments once in a year, got their accounts charged monthly, thereby accumulating negative balances. This measure, therefore, encourages individuals with lower incomes or savings to keep their money in the banking system, and consequently, promoting financial inclusion.  Stakeholders concurred that reducing bank charges would improve deposit retention levels, given the low levels of disposable incomes and savings. Whilst the exemption of bank charges was introduced for balances below USD100, the Committee noted that general level of bank charges for the balances above USD100 is too high to attract depositors into the banking system, hence there is need for rationalisation

• Payment of 50% Corporate Income Tax in Local Currency

The monetary policy introduced a fiscal policy measure to pay 50% of corporate tax obligations in ZiG. In Zimbabwe, corporate income tax is paid on a quarterly basis, often referred to as quarterly payments dates. The requirement for the 50% of the tax obligation to be paid in local currency would create demand for the local currency. The Committees were assured that work was in progress on ways to make all taxes be paid in ZiG. The demand for local currency to pay taxes could impact positively on the exchange rate, especially if a significant portion of tax payments were made in local currency. This was likely to bring the needed stability in the exchange rate.  However, the Committees noted that there was a dilemma on implementing the 50% payment of taxes in local currency, given that quarterly payments were estimated at around US$300 million, where 50% (US$150m) should be in ZiG, against the US$80 million of ZiG currently in circulation.

• Currency Switching and Notice

The Committee was concerned about the immediate aborting of ZWL transactions, and the time taken to re-configure the system. The RBZ apologised for the delay in currency switching which disturbed the daily flow of activities for all Zimbabweans. The conversion needed a lot of work, alignment of all contracts and loan agreements, among other things. The RBZ advised that a gradual approach would have given room for economic agents to take positions, some of which may not be desirable to the economy. Theoretically, currency introduction needs 14 days to educate the nation to educate the people about the features of the currency, especially in rural areas. The RBZ confirmed that they were going right round the country educating the public about the new currency and its features. The RBZ also appealed to the Members of the Portfolio Committees to assist in creating awareness so that people from their respective constituencies would appreciate how the new currency was structured.

• Exchange Rate of ZiG

The Committees learnt that the exchange rate of ZiG was not solely determined by the price of gold at International Gold Market but would be determined by the willing-buyer/willing-seller (WBWS) model. The Committees were informed that the WBWS would be benchmarked with the gold price implied exchange rate from time to time. Gold price implied-exchange rate would give checks and balances to the RBZ to determine when to intervene in the market to control the exchange rate. Thus, if the WBWS exchange rate increases, RBZ would intervene by injecting more foreign currency in the market. The Committees were also informed that the movement of gold prices and other precious minerals should not directly affect the prices of goods and services as there was no direct relationship between the exchange rate and inflation.

• Trading in ZiG.

It was noted that at the introduction of the new currency, 85% of the transactions were estimated to be in foreign currency, and only 15% were in local currency. It was therefore envisaged that the low amount of ZiG in circulation could not meet the needed transactions if all goods were to be priced in ZiG. The Committees were worried about the high demand for USD as several transactions such as rentals, school fees, healthcare services, government fees and charges, fuel and transport services were being paid in USD. The exclusive demand for foreign currency in the purchase of such services was to be blamed for the existence black market foreign currency dealers and consequently the instability in currency value. On that note, stakeholders concurred that goods such as fuel could at least remain priced in USD to avoid shortages in the market, although there is a dilemma in commuting public who will need USD. Government fees and taxes were recommended to be solely paid in ZiG  so that government could build the needed public confidence to ensure stability in the currency.

The Committees were concerned that the bulk of economic activities which were conducted in the informal sector were trading purely in USD and cash-based. The big risk was that ZiG might further increase the propensity to transact in USD, thereby entrenching a USD-cash based informal economy. A situation may arise in the economy where ZiG may largely be used for smaller transactions, change purposes and compliance to tax obligations. There was therefore a risk that ZiG might not bring the currency stability being sought if these scenarios are not addressed.

7. Synchronisation of Fiscal Policy and Monetary Policy

The Committees understood that monetary policy and fiscal policy should speak to each other. The 2024 growth was projected at 3.5%, and the Ministry of Finance, Economic Development and Investment Promotion believes that the growth rate should be achievable due to the introduction of a stable currency. Several risks, including climate change risks and debt undermined the growth of 5.5% stipulated in NDS1. The 2024 monetary policy was expected to bring investor confidence, promote ease of doing business and enforce broad macroeconomic stability. A stable currency was a sine qua non for economic stability. The Minister of Finance, Economic Development advised the Committees that Government was taking a gradual approach to institute measures that would improve the demand for the ZiG. Some of the measures already in place included the requirement for payment of 50% corporate income tax in ZiG, standardisation of the Intermediated Money Transfer Tax (IMTT), review of Personal Income Tax bands among others.

1. 2024 Budget Credibility

The Committee was concerned about the cumulative increase in inflation from the rate of ZWL6000 in November 2023 to ZWL33 000 to 1 USD by April 2024, which had the impact on eroding the value of the budget.

The Committees were informed that when inflation was increasing, revenues and expenditures were also increasing in tandem with inflation rate. Thus, the erosion on the budget was minimal. Treasury was also hopeful that it would still spend within the approved ZWL59 trillion (converted to ZiG) approved by Parliament in December 2023, thus, nullifying the need for a supplementary budget. Again, noting that revenue increased together with expenditure as the exchange rate depreciated, the Committee reiterated that Treasury should not to spend outside the approved budget without authorisation of Parliament. Treasury assured the Committee that they would spend within limit, but would come back to Parliament whenever the need for a supplementary budget arises.

1. Payment for Government Contractors

As a developing country, Zimbabwe has the appetite for development with many development projects taking place across the country, particularly road construction. In the past, payment of contractors had a significant impact on the exchange rate, inducing exchange rate depreciation. The Committees were concerned that if such practice continues, it would undermine the value of the ZiG. It was however, noted that the Ministry of Finance, Economic Development and Investment Promotion together with the RBZ had put in place a Liquidity Management Committee which would oversee payments to contractors with a view to ensure exchange rate stability. The payment to contractors has an impact of increasing liquidity in the market, thereby directly affecting money supply.

1. Budget Tracking

The 2024 National Budget was presented in Zimbabwean Dollars. The Committees were concerned about their budget tracking oversight function in line with Section 32-34 of Public Finance Management Act, as the issue of currency presented some challenges in terms of analysis of budget execution reports. The Committees were informed that the first quarter budgets disbursed will be converted to USD, then to ZiG at an indicated rate of Gold price starting from January 2024. The 2024 National Budget performance will be reported in ZiG.

 

1. Bureau de Change

The Committees further inquired on the availability of bureau de changes to formally provide small amounts to citizens. The Ministry advised that bureau de changes are there, however, they needed capacitation. Government was considering to utilise the 25% realised from the export retention to capacitate the bureau de changes for the general public to have foreign currency for small transactions.

1. Capacity of the Financial Intelligence Unit (FIU)

The Committee enquired on the capacity of the Financial Intelligence Unit (FIU) in enforcing financial discipline within the country and also in other countries considering that some illegal transactions happen at border posts. The Ministry advised that the capacity of the FIU needs to be enhanced.

1. Compliance with International Public Sector Accounting Standard (IPSAS

The Committees expressed concern on the difficulty which comes with introduction of new currency on financial report in view of the need to comply with international standards.  The need to assist State owned enterprises, local authorities and MDAs to comply with the International Public Sector Accounting Standard (IPSAS 4) in the change of functional currency. The need for a roadmap to ensure that credible financial information is reported was noted.

          Financing Drought

The 2024 national budget projected agricultural sector to contract by -4.9%, but the impact was now bigger than what was projected. The Ministry of Finance, Economic Development and Investment Promotion was considering expenditure reallocation to support grain import without driving the government into an unsustainable budget deficit, hence financing is deficit neutral. After drought was declared national disaster by His Excellency, the President E. D. Mnangagwa, other measures implemented by Government included opening the borders for private sector to import grain. The Ministry indicated that Zimbabwe has insured for drought with Africa Risk Capacity, but the insurance pay-outs were believed not to be sufficient to cover the demand for maize across the country. Apart from that, there were development partners that were willing to provide drought relief interventions thus, reducing the fiscal burden. Consequently, the drought financing is not envisaged to increase money supply.

8. Committee Observations
9. There is low amount of ZiG in circulation. This implies that taxes and Government fees and levies cannot be entirely paid in local currency. This can however be done on a gradual basis.
10. Bank charges were too high in Zimbabwe, leading to a preference to bank with foreign banks and keeping of money at home;
11. Traders were using a relatively higher exchange rate than the official rate as provided for in Statutory Instrument 118 of 2022. This creates an official parallel exchange rate, hence the Statutory Instrument needed to be repealed.
12. The need for Financial Intelligent Unit to be capacitated and also collaborate with other security agencies.
13. There is need for Treasury to issue guidelines on how to comply with International Financial Accounting Standards.
14. It has been observed that in previous years, the loss of currency value was induced by monetisation of the fiscal deficit especially when Government spending exceeds the revenue capacity. This implies that there is need to enhance the taxation of the informal sector, which in most cases is avoiding taxes.
15. There was limited inter-bank lending in Zimbabwe, suggesting that the risk perception among banks is relatively high.

 

9. Committee Recommendations
10. The Ministry of Finance and Investment Promotion should repeal Statutory Instrument No. 118A of 2022 which allows 10% differential from the official rate, by 20 May 2024;
11. The RBZ should facilitate establishment of inter-agency taskforces at district level to enforce compliance given that FIU is thin on the ground, by 20 June 2024.
12. There is need for RBZ to continuously engage in aggressive awareness campaigns to educate the public on the new currency.
13. The marketing of maize and other grains should be deregulated to ensure that farmers are efficiently paid upon delivery of grain.
14. The Ministry of Finance, Economic Development and Investment Promotion should issue guidelines on how to comply with International Financial Accounting Standards by December 2024;
15. The Minister of Finance, Economic Development and Investment Promotion should consider relaxing the period for filing of corporate income tax returns from 30 June by one month to 31 July to allow ample time for corporates to make the necessary conversions, by 30 June 2024.
16. ZIMRA should devise innovative strategies for collecting revenues from the informal sector, by 31 August 2024.
17. RBZ should develop regulations for creating and promoting secondary mortgage market, by December 2024.
18. ZiG should, with immediate effect, be designated as the first currency of settlement with an option of paying in foreign currency.
19. The Ministry of Finance, Economic Development, and Investment Promotion and RBZ should maintain tight fiscal and monetary policies to create long-term exchange rate stability. (monetary rules- money supply targeting).

Conclusion

The industry indicated that the new currency is a welcome initiative, considering that it is a structured currency with value preservation features. It is, however, critical that the value preservation feature be enhanced by way of implementation of the above-mentioned recommendations.  I thank you.

HON. MADZIVANYIKA: Thank you Madam Speaker for the opportunity to debate on this very important submission by the Budget and Finance Committee, sitting together with the Committee on Industry and Commerce on the proposed recommendations with regards to the recently promulgated Monetary Policy Statement which was issued on the 5^th of April 2024. I would like to highlight the major points that have been highlighted in the report and then I give my views on that one.

Firstly, the report talks of the issues of convertibility.  It is very important that we have what we call local convertibility and foreign convertibility. What do I mean? When a currency is said to be backed by an underlying asset; in our case…

THE HON. DEPUTY SPEAKER:  Order Hon. Madzivanyika. Hon. Chiduwa, please may you switch off your microphone? You may proceed Hon. Madzivanyika. 

HON. MADZIVANYIKA:  Thank you.  The point that I was making was the issue of convertibility. What am I saying? When a currency is said to be backed by an underlying asset, what it literally means is that when you are in doubt of the currency itself, you go and redeem the underlying asset from the current financial institutions. So, in our case, the Zimbabwe Gold currency is backed by a basket of minerals which is predominantly gold and other precious minerals such as diamond, as well as the foreign currency, the Unites States Dollar. What it therefore means is that all economic participants in Zimbabwe should, at any material time, if they doubt that the ZiG currency is working, they should go and get the underlying asset - that is what is meant by convertibility. That must happen locally as well as internationally.

 It must be easy for people from other countries to appreciate our currency and if they are in doubt, they should get somewhere where they are going to get the underlying asset because the gold standard is applied by countries who are rich, who have got abundant gold reserves and that on its own will stabilise the currency, because at any material time when one will visit the bank and in doubt that he has the Zimbabwean Gold currency, he gets to a bank or a bureau de-change, that person must easily access the underlying asset. If we stay with the underlying asset for one week or so and realise that there is no change; the market fundamentals are the same, that person will go back again and inter-change and then that is how the currency gains its trust. I am sure this must be well emphasised so that the corrective action is taken. It is very important so as to create trust for this currency.

Secondly, the issue of divisibility, it is clear from the Monetary Policy Statement that the reserve Bank Governor introduced low amounts of M1 or notes and coins in low divisions like $10, $5 and so forth, but then the challenge Madam Speaker is that, if you go into the market, you do not get that money. Our people are still struggling to get change in very simple transactions such as in commuter ominibuses and market stalls for tomatoes and whatever.  So on those small transactions, we are still having challenges in terms of divisibility.

 I wish that report could just get amended to include that very important situation because right now we realise people are now using coupons. It is now money again. Coupons should not take the position of our money. Money should remain, we have got our ZiG which should be working and be supported.

Let me move on to the issue of confidence Madam Speaker. Every currency, for it to work, has to stand the test of confidence. What do I mean by confidence Madam Speaker? Confidence is the trust or the belief that is associated with the generality of the people on its monetary institutions or Government.  The issue of confidence or lack of it is a function of expectations. When a currency comes, people make expectations about the future or about that currency. Those expectations Madam Speaker, are as a result or are a function of history.  So whenever we talk about confidence, let us look at history. What does history have in place for Zimbabwe in terms of its currency?

In 1980, Madam Speaker, when our country got its independence from British colonial rule, there was what we call the Rhodesian Dollar which was operating. The Rhodesian Dollar was at par with the newly introduced Zimbabwean dollar. So, it was actually stronger than the United States dollar then. As we moved on from 1980, we got to an era of 2003-2008, we saw a variety of currency changes Madam Speaker. We saw the issue of bearer cheques, special agro cheques, traveller’s cheques and at one point Madam Speaker, we got to a point where Zimbabwe produced a 100 trillion dollar note which is notes and coins, 100 trillion not SM1; that was part of our history. These are the best of it that make expectations Madam Speaker.

Moving from 2009, we dollarised the economy of Zimbabwe in 2009 up to 2016.  In 2016, yes, we were still using a dollar but we introduced another currency which was called the bond note. Madam Speaker the bond note was said to be backed by a 200 million-dollar Afreximbank fund. I want to assure you that it is backed by this foreign currency.  So the issue of backing did not start today, it happened in 2016 when we introduced an exporter support programme through the bond note.  We said that these bond notes that we are putting into the market are backed by a USD200 million Afrexim Bank support.  So from 2016, the new bond notes went along with the basket of foreign currencies which are the USD, Pula, Rand and other currencies.  They went on together as medium of exchange in this country.

          Fast forward, in February 2019, through a monetary policy statute, the Reserve Bank of Zimbabwe (RBZ) came and said all those bond note balances that we had and the ecocash balances which were denominated in bond are now called the RTGs dollar and they are now working along with the USD.  From there, fast forwarding again, in June 2019, six months later, the Government of Zimbabwe banned the use of the newly introduced RTGs dollar, the Government of Zimbabwe put a  monetary policy statement that banned the use of a basket of currencies to say the foreign currencies have ceased to operate.  We are now using a mono-currency by the name RTGs dollar.  That happened, a few months down the line, after introducing that mono-currency, the Government introduced Statutory Instrument (SI) 133: 2019.  The S.I. came to say the RTGs dollar is now equivalent to the USD 1:1. You know what Madam Speaker, many people lost value in that time because all assets that were denominated in USD, all pensions denominated in USD were reduced to 1:1 with RTGs. 

          A few months down the line, the exchange rate started to diminish and many people lost their money.  So these are the things that create that memory lane of the issue of confidence.  On March 2020, about seven months down the line again, the Government came back and said, no, we are now re-instating the foreign currency which we had previously banned.  It meant the Zimbabwean dollar was now working along with the basket of foreign currency.  So what  policy inconsistency is this?  We cannot continuously shift policies within months.  I think as an advice going forward, whenever we want to introduce an economic policy, let us lecture that currency policy, we think deep about it before we can distribute than to continue flip-flopping in terms of business.

          Lastly, on the issue of confidence, from March 2020, we came on to the issue of the new currency, which is the Zimbabwean Gold.  This is where we are today and I would also like to add my voice on the issue of the application of the ZiG.  This ZiG, as rightly said in the report, must be used in all local services and goods.  It must not be selectively applied.  For example, to say the fuel service sector is ringfencing and this other sector is not.  No, the Government should come back, to say how best can we subsidise the area that we think has problems so that we drill confidence and trust on that currency amongst the people of Zimbabwe?  My recommendation is that Government should just say, how best can they subsidise those fuel dealers to buy fuel in USD and those who are willing to buy using the ZiG should be able to do so willingly so that everyone in this country believe and trust that this currency is there to stay.  We hope that going forward, it will work.

          So, it is important for Government to be a pacesetter in terms of these things so that everyone else can easily follow with a lot of comfort.  There is this issue that always gobbles my mind, the issue of involuntary and compulsory change of outstanding allotments.  Previously, before the introduction of the new monetary policy, the Government used to have what we call the wholesale forex market and the retail forex market, where businesses could go and approach the RBZ to get foreign currency and then give RBZ local currency.

          When you introduced this new currency on the field, the RBZ Governor then said, all the businesses that had outstanding amounts, which were yet to be paid their foreign currency – these businesses had already given RBZ local currency.  What was left was for RBZ to give these businesses their foreign currency.  That foreign currency was not paid immediately to those companies, which had outstanding allotment from the forex market.  They even announced that they wanted to start on a clean slate.  The RBZ then, instead of paying those companies their money, the RBZ then created a non-negotiable certificate of deposit, which was at an interest rate of 7.5% for two years,

          What it therefore meant was that these companies were temporarily deprived of their money, but their money is then going to be reversed in a two-year non-negotiable certificate of deposit for two years at an interest rate of 7.5% per annum.  What is the implication, it gives a false sense of hope because what we are saying is, can the Government of Zimbabwe, through its economic and muscle strength, fail to pay USD172 million in terms of foreign currency allotments?  Then they start on a real clean slate.  Imagine Madam Speaker, the effect on the liquidity position of those companies.  I am a company owner and then my company is deprived of 25% of its export requirements and I am now forced to buy security for two years, without getting my money.

          The meaning is it sends a message which is not correct in the eyes of the corporate world because they would be thinking that uri kuda kuvaka dendere rako neminhenga yedzimwe shiri, which is not very good. I thought may be the RBZ should just quickly correct this before it tarnishes its image because these are private companies.  With due respect, they do not have any subsidies.  They hustle their way to get constant income but then when they are made to be in this Catch-22 situation by a Government, I do not think it is right Madam Speaker.  I hope that this Government will correct this as a matter of urgency so that we move on as a country.

          Then the issue of the willing buyer, willing seller at banks.  Information coming from banks, as it stands right now, information on the ground, is very good to have a willing buyer, willing seller arrangement because that will help to get an optimum or an equilibrium exchange rate which represents what really happens on the market.  The idea was perfect.  The issue is if you go to banks now, after making your payment in ZiG, it takes time to get your forex allocation.  What it means now is that there is shortage of foreign currency in this country.  That is also worrying.  Since the Government has reserves, can they activate their reserves so that we get money to support?

          THE TEMPORARY SPEAKER (HON. TSISTSI ZHOU): Hon. Madzivanyika, you are left with five minutes.

          HON. MADZIVANYIKA: Okay Madam Speaker.  Thank you.  Let me highlight this important issue before I sit down.  The Government of Zimbabwe, when they introduced S.I. 81:24, in other words, it introduced a price control. In what way? An exchange rate is a price of foreign currency related to the local currency, which means whenever we say we are removing the 10% variance to the 10% premium, we are actually putting a price control on the price which is denominated by those goods we are going to sell. Assuming that the normal inter-bank exchange rate is 13.5, what is really happening is, if we allow all businesses to sell at 13.5 exchange rate, that is exchange rate cost recovery because look at what is happening now, when companies go to banks to get forex as allocation by the RBZ.  When we get to banks to get forex, the bank is not going to sell the foreign currency at 13.5, which is the bank rate.  They are going to sell at above 13.5 with a margin of about 5%.  So right now, the 5% increase is deviating from the interbank rate.  Not only that, recently the Minister of Finance increased the IMTT, which is the intermediate tax from 1% to 2% on all forex payments. So, when a company goes to the bank, they are going to have the other 2% of IMTT tax. Not only that Madam Speaker, but the RBZ also charges 1% administration charge to that amount. So, if you add 5% plus 3% plus 1 % you will get to around 8%.  That is technically not correct because you know what, those businesses cannot be forced to sell at the inter-bank rate, yet to get the resources, they are bought at an exchange rate which is not cost recovery. So, technically and to be honest Madam Speaker, something must be done as a matter of urgency to correct that situation. Otherwise our companies will end up finding their goods at the black market, which is what we do not want Madam Speaker.

Lastly Madam Speaker, I am left with four points but because of our time, I am going to give one point or two if time allows. The demand for the ZiG is very important for it to succeed. The only thing that I have seen from the Government itself to encourage the ZiG was to allow companies to pay their corporate taxes, which is predominantly known as the PPDs, half of it to pay using local currency. You know what it means Madam Speaker, it sends a very wrong signal. The ZiG is our own local currency. We should express pride in it. Was it not possible, to expand the tax issues to include also Pay As You Earn, to include also the issue of value added tax, even withholding tax so that there is demand for the currency?  

Madam Speaker, if the demand for the currency does not matter, then we are not going anywhere. Why am I saying so? Currently, the stability that we are enjoying today is not as a result of the Zimbabwean Gold. It is as a result of the foreign currency that we are using. The Governor, in his Monetary Policy Statement, indicated that Zimbabwe is dollarised up to the tune of 85%. So, it means we are actually close to being fully being dollarised. We wanted a situation whereby we should take advantage of the stability of the ZiG so that we introduce more currency to enable transactions.

Lastly Madam Speaker, the issue of policing a policy with the police is a good idea to some extent, but does not work ultimately. Why do I say so? The informal sector is a beast on its own. We do not have control over what happens there. We try by all means – imagine, do we know where they get their foreign currency to do their business to support their tuck-shops and everything? We do not know. So, the dynamics in that area needs a new approach which should assist…

THE TEMPORARY SPEAKER: Your time is up Hon. Madzivanyika.

HON. MADZIVANYIKA: Thank you Madam Speaker.

HON. MAMOMBE: I move for the extension of his time Madam Speaker Ma’am.

HON. HWENDE: I second.

HON. SAGANDIRA: I object.

Motion put and negatived.

HON. MUKOMBERI: Thank you Madam Speaker for the opportunity granted to add my voice – [HON. MEMBERS: Inaudible interjections.] –

THE TEMPORARY SPEAKER: Order. Hon. Members on my left, please can you allow Hon. Mukomberi to be heard in silence.

HON. HWENDE: On a point of order Madam Speaker. I think we do not have quorum in the House.

THE TEMPORARY SPEAKER: I had not recognised you yet Hon. Hwende. You can take your seat. Can you switch off your mic? You can proceed with your point of order. What is your point of order?

HON. HWENDE: Thank you very much Madam. There is no quorum. That is my point of order.

[Bells rung.]

          [Quorum formed]

        THE TEMPORARY SPEAKER: Order, Hon. Members, order, can we all take our seats.  After a point of order had been raised by Hon. Hwende, we have now ascertained that our numbers are now in excess of 70 Members and we can proceed. 

        HON. MUKOMBERI:  Thank you Madam Speaker Ma’am for the opportunity granted to allow me to add my voice on the debate.  The Portfolio Committee on Budget and Finance, together with the Portfolio Committee on Industry had a fact-funding interaction with the RBZ and the Ministry of Finance pertaining to the Monetary Policy Statement in relation to the introduction of ZiG, the new currency in Zimbabwe.  As the number of questions were raised by the Committees, others were received from RBZ as well as the Ministry of Finance.  First and foremost, I want to talk about ZiG as a currency.  It was clear in the interaction that ZiG as a structured currency.  It is a currency that is backed by gold and other precious minerals together with reserves of foreign currency. That alone was clearly explained by the RBZ Governor that it is that which gives value to our newly introduced currency. It implies therefore that ZiG as a currency, derives its value not only from the paper but from the minerals and forex reserves that back it.

Madam Speaker, this was an answer to the question on whether ZiG is going to maintain value over time or it is going to follow suit the route of Bond Note as well as the RTGs.  It was clearly explained that ZiG is a different currency altogether as it is backed by precious minerals that appreciate in value or maintain stability in value.  It implies therefore that the introduction of ZiG is a welcome initiative that I feel Zimbabweans should support as was said in the Monetary Policy Statement as this currency is likely to maintain value over time. Therefore, we will allow money to play its function as a strong value.  Madam Speaker, it implies that as money will play its function as a strong value, it will be acceptable in the market by traders and money therefore will play fundamental function as a medium of exchange.

Madam Speaker Ma’am, it is clear from the report that there is need for public confidence to allow acceptability of ZiG as it is money. Money should play a function as a medium of exchange but for it to play that function as a medium of change, it should be characterised by acceptability.   That acceptability was explained to say if there is need for the RBZ to undertake grassroots campaigns so as to educate the grassroots in terms of the good features of ZiG as well as making it available in the market, they are using the Police to enforce a policy. It is also a fundamental move to allow acceptability not only based on the fact that there is doubt that ZiG is a valuable currency, but there are economic saboteurs in the economy who may intend to devalue ZiG as a currency through some malicious moves that are against any progressive economic initiative. 

Madam Speaker, the involvement of the Financial Intelligence Unit to enforce traders to accept ZiG as a medium of exchange from the baskets of multicurrency system, is a fundamental move that will see ZiG being accepted in the market.  It is clear that the convertibility feature of ZiG which is characterised by the ability of ZiG to be converted into other currencies, locally and abroad is fundamental.  Local convertibility is measured in terms of the ability of people to exchange ZiG for other currencies in the basket of a multicurrency system but the international convertibility question is that recommendation that the Committee gave to say the Ministry and the RBZ should work to allow ZiG being also accepted in the international market.

Madam Speaker, it is a welcome move in the Monetary Policy Statement that the supply of ZiG is going to be maintained at low levels, currently at 15% of the total money is circulation whereas forex constitute 85%.  This implies that there will be a shortage of ZiG.  Why is it important for money to maintain its value?  There is need for scarcity of it as a characteristic of money.  So, there was an artificial move by the RBZ to maintain scarcity of ZiG initially so as to create excess demand than supply that will result in the appreciation of ZiG in value.

  Fundamentally, what it will mean is, as 50% of tax was said to be pegged in ZiG and 50% to be remitted in forex, the demand for ZiG to meet the tax obligations is going to increase.  However, there will be low supply of it in the market.  It will mean that the Reserve Bank will accept the ZiG as the traders will be in demand of it so as to meet their tax obligations.  So, in lieu of the US dollar values, the Reserve Bank will then print ZiG that will replace the US dollar that will accumulate in their Reserve.  Gradually by 2030, we will manage to eliminate multicurrency system and remain with mono currency where ZiG will dominate the market but this should be a gradual process. 

Madam Speaker, it should also be clear that as the new currency was introduced, there were also some shocks in the market that resulted in the illegal market going up to around 25 from 13 that was at the date of introduction of ZiG.  However, this is acceptable in economic analysis.  There is always and everywhere the jay cave effect, whenever a new policy is introduced, it does not yield positive effects in the short term.  It shall have short term worsening of the situation whereas adjustments in the long run will allow and stable benefits as is in the case of ZiG.  The ZiG demonstrated that it is a currency that can gain value more than what it has now.

     Madam Speaker, as it is a backed currency backed by gold, gold is a precious mineral that is subject to appreciation in value or even depreciation on the international market.  It implies therefore that the value of ZiG is derived value from the value of what backs it.  It means the appreciation in the value of gold will also result in the value of ZiG following suit. This is the reason why soon after the introduction of ZiG, it even appreciated in value to around 12.  It later went up to 13.5 thereabouts due to the changes in the values of those minerals and the forex exchange of what backs it.  Madam Speaker, the Reserve Bank of Zimbabwe Governor clearly indicated that to maintain the value of ZiG, they shall not overprint money.  Overprinting money was in the context of overprinting it to an extent exceeding the reserves that we have as a nation.  So, the Reserve Bank Governor promised not to overprint money.  Currently, he clearly stated that we have USD 285 million worth of the reserve basket backing the ZiG in circulation, whereas the ZiG in circulation is only to a tune of USD 80 million value of ZiG.  That clearly indicates that the ZiG in circulation is over cushioned by the reserves we have.  It means that though it co-circulates with foreign currency in the form of USD, which may be considered by others as good money more than the ZiG, the Gresham effect of bad money chasing away good money shall not apply in this situation. The ZiG will maintain its value over time as it is being backed by a value which is more than the total value of what is in circulation.  This implies that the Reserve Bank has room to print some more ZiG up to a tune of 285 million because now we only have USD 80 million value of the ZiG in circulation.  So, we still have an over cushion of USD 205 million value of the reserve backing the ZiG in circulation.

Madam Speaker, it was clear that as we interacted with the Reserve Bank Governor, there shall be an outreach programme to educate the grass-roots so that they will properly understand the ZiG as a currency.  It was evident last week, I saw the Reserve Bank people in Masvingo, educating the public about the features of the ZiG and how it works.  I can say the RBZ is currently walking the talk.  It is actually satisfying its promises.

Madam Speaker, the Minister of Finance, Economic Development and Investment Promotion also brought about the motion to repeal S.I 118 that used to allow traders to add a 10% over and above the interbank rate value when they were trading in the market.  That is also a welcome move that can see Zimbabwe having uniformity in the exchange rate.  This implies that decision making will be made easier for traders as one will be quite aware that with this amount of the ZiG I have, I will manage to acquire goods worth this value of forex because the exchange rate will be uniform.  It is therefore pertinent to also understand that this is the reason why we are now using the Police to enforce the policy such that compliance is going to be ensured.  Everybody is going to use an interbank rate in the conduct of business transactions. 

I want to thank you Madam Speaker for the opportunity granted and I can say at this moment that ZiG bhoo, ZiG bhoo.  I thank you. - [HON. MEMBERS: Hear, hear.] -

*HON. HUNGWE: Thank you Madam Speaker. I would like to speak a little bit with regards to the report presented by Hon. Chiduwa.  I do not have much to say, but the first thing I would want to say is that this currency, which was established on Monday the 5^th of April, has brought stability to our local currency. What was happening was that the currency was fluctuating making it difficult for businesses.  Business people could put a price in the morning and in the afternoon, the price would have changed.  I would like to applaud the Governor for the currency which he gave us.  I would like to support and applaud them for introducing the gold to anchor our currency.  Our currency does not change its value any more.  It is now a bit stable because gold is stable. 

We also want to say that when we focus on this currency which was introduced on the 5^th of April, it reminds people of the days when they did all the transactions with our local currency and there were always fluctuations in prices.  However, if somebody gets a quotation today using the ZiG and then go back a week later, they would still see the same price that was quoted.  Even if they receive their funds via their accounts, it is a bit stable now. I would like to say to the whole of Zimbabwe, let us give ample time to the recently introduced ZiG.  I foresee our future being good because if we look at it from the 5^th of April to date, most people who thought it would have devalued can see it is still stable and it is the opposite of what they thought.  It is actually appreciating value. As Zimbabweans, let us unite and support our industry, our banks and our currency.  If we support our currency, we will get far. I would also like to support the 50% obligation which was put …

          THE TEMPORARY SPEAKER: Order! Hon. Member, you are advised to use one language. I thank you.

          *HON. HUNGWE: I also want to support what the RBZ said that 50% of VAT should be effected from the 25^th of June in the ZiG. They said if 300 million is due by then, 150 million is expected to be taken into the ZiG currency. So, if we look at it closely on the percentage or the amount of the ZiG in circulation, it is around 80 million as we speak. The other one that we are expecting will be around US$150 million, so if we look at it, people will rush for the ZiG to pay for their taxes. In addition, by so doing, I discovered that it is a very noble idea because if we put a lot of money in our transactions, we will have a lot of demand. So, I would like to support that. I will also want to support those in Government departments, even those in local authorities like councils, et cetera.

As Government, they should be the ones to start having swipe machines and all those other devices which can enable people to use local currency so that our local currency continues to gain value when transacting. When we passed our budget last year, it was Z$57 trillion which was difficult to convert to US dollars, but right now, a lot of people can convert the US dollar to the ZiG currency and still be able to know the value. Right now, a lot of people are still experiencing high bank charges when transacting, and I urge Government to look into this issue with a view to rectifying the problem.

In South Africa, it is cheaper to use plastic money when buying goods and services than cash. I am urging the RBZ Governor to put measures in place to make sure that the public opt for plastic money instead of cash. So, we would like to encourage all people and our Governor to do investigations and see what is it that can be done so that people do not ask for cash every now and then when transacting. He has to try to reduce bank charges in the banks. When you go into a shop, they say we have cash discount, but when you say I want to buy using swipe machines, they will simply say it is a bit higher. I think it is simply because of the bank charges.  So, he has to look into that as well.

The other thing which I discovered is that for our currency to continue working, we have other people who are importing goods from abroad, those who have free funds or those who are into business of buying and selling. I was of the opinion that if somebody brings something through the border, that person should produce a proof of purchase to show how they paid for those goods. That will help our country to have more foreign currency in circulation. I thank you Madam Speaker Ma’am.

HON. TSVANGIRAI: Thank you very much Madam Speaker for the opportunity that you have given me to air out my views to this critical subject that has been triggered by Hon. Chiduwa, supported by Hon. Madzivanyika.

Firstly, I would like to applaud the direction that was taken, to abort the auction system which was causing huge arbitrage without a true reflection of the market system. The introduction of the willing-buyer/willing-seller was something that we have been crying for, for years. It brings sanity in the market. A market-based pricing system promotes investments and efficient pricing systems which are good for economic growth. The idea of introducing a new currency was noble to do away with galloping inflation and exchange rate instability. We need to be cognisant that the RTGS was facing confidence deficit and as a result, its velocity of circulation was high thereby weakening its value. Now, we have the ZiG that we all wish and need for it to be stable. One of the noble characteristics of the ZiG is that it is backed by gold and other baskets of minerals. One key worrying issue Madam Speaker, is its convertibility. Once you have challenges in converting the ZiG to foreign currency at micro level, it definitely implies the fundamentals are having some exclusive nature.

Any individual in Norton at Katanga or Mashlands who wants a passport which is exclusively charged in US dollars, is forced to look for foreign currency elsewhere to some extent, making a massive lifeline for the informal sector trading. This is against the objective of the monetary policy Hon. Speaker. After the new currency was established, one of the key tenets of creating a strong currency is by creation of demand for the currency and currently, the policy direction is showing selective application of the law where some services are strictly US dollars and others you are forced to have both US dollars and ZiG.  One thing to note is that once we have other services charged exclusively in US Dollars which are needed by the bottom one percent, it definitely means that as a country, we will be sponsoring black market to operate. 

Madam Speaker, as presented by the Chairperson Hon. Chiduwa taking ZiG particularly in cash is posing a challenge in the economy as individuals are failing to access cash.  Currently, consumers are being overcharged by service providers, for instance, the Combi fare which used to be US$0.50, people are now paying US$1.  This is a great anomaly Hon. Speaker that there is a challenge in accessing forex and then get overcharged to change issues. 

Let me go on the budget feasibility Madam Speaker.  The Budget of 2024, in December 2023, with expenditure of 59 trillion RTGs, it is a general theory that when inflation increases, we are likely to see a nominal increase in revenues.  At the same time, expenditure till also increases consequently.  The Hon. Minister promised the Committee that he will spend within the 59 trillion dollars approved by Parliament without any need of a supplementary budget.  I do not know how feasible it is.  We are yet to witness that and it is my view that it is a challenge on its own.  The informal sector is growing, with much of the transactions happening in cash, further driving confidence deficit in the country.  Look at Magaba, look at Mbare Musika, even countrywide.  These are the markets where mainly poor people buy and sell.  We need to have policies that directly deal with informality.  Informal sector, we can agree, is being a thorn in the flesh for the successful implementation of Government policy in Zimbabwe.

Lastly, Madam Speaker, there is a need to promote financial inclusion in terms of access to loans since the vulnerable only account to less than 10% of total share of loans.  This has been indicated by the Monetary Policy which was presented by the new Governor.  Banks are lending at 30 to 45% and this clearly is not sustainable for young people.  So, therefore, there is a need to come up with a framework that promotes financial inclusion which targets the vulnerable of this country.  I thank you.

*HON. MANGONDO:  Thank you Madam Speaker for affording me this opportunity to air my views with regards to the issue which is being debated.  I would like to thank these two Committees for the big job that they did to select and do thorough investigation on the issue to do with the new programme which was brought in by the Reserve of Zimbabwe Governor Dr. Mushayavanhu.  I have discovered that from the programme aired by the Governor focusing on the country’s currency, I think this programme will help in the development of our country while focusing on the issue to do with the new currency that we are using right now. It has to maintain its value whenever we are doing transaction in this country.  This does help a lot because if a nation does not have its own currency, it will be a disaster.  

We discover that as Zimbabwe, if we look at our currency, it is everything that people expect when evaluating the nation’s currency.  Whenever they are focusing on the wealth, the richness or the poorness of the country, it has to involve the currency and it maintains the value of our currency which is parallel to the value in the market. 

The problem that I foresee is when people start to discuss on the issue to do with US dollars.  On the issue to do with US dollars, you remember when the Reserve Bank Governor introduced this currency, people started playing around with the local currency.  The issue to do with gambling on the nation’s economy.  If we say we have our own currency but other people do not have trust in our local currency; they expect to continue using those American dollars.  By so doing, if we still maintain the American currency, those US dollars working in this country together with our local currency, we will see those people running around trying to fluctuate the value of our local currency.

When they get the local currency, they use black market to source US dollars.  That problem, we have to be very careful and we need to sensitise people.  I would like to thank the Reserve Bank of Zimbabwe when they introduced ZiG, they asked people to go on a sensitisation tour on how to use our local currency and that helped a lot of people who are based in rural areas because they do not have a large shopping centre with lots of shops.  Some of them might have limited knowledge on what has been organised or planed by the Reserve Bank. 

By sending those people to disseminate information or to sensitise people on our local currency, I think it helped a lot. I want to applaud the Reserve Bank and encourage them to continue sensitising people who are in those rural areas, even those people from Mbare, Siyaso, Magaba or even in any other area where they do transactions. People should be sensitised on the importance of using ZiG so that people must not be cheated or they must not be crooked on their hard-earned cash. 

Madam Speaker, all of us as a nation have to unite.  We have to come together so that we develop our country. We want our economy to gain value. I think by so doing, this can help us a lot for our currency to maintain its value. If I do not have trust in my own local currency, what about those people who are coming from other countries? Will they have trust in our local currency? I will give you an example, if you go to other countries surrounding Zimbabwe in SADC; if you go to Zambia, Malawi or Mozambique, these three countries once had a bigger financial problem, where their currencies were being exchanged on black market.

We discovered that people in Zambia used to carry their Kwachas using wheelbarrows to buy bread, around the 1980s and 90s. We discovered that it also happened in Malawi as well as Mozambique. However, if you look at these countries now, they now have trust in their currency. Even if we look at exchange rate, I think the exchange rate is a bit high, but they do have trust in their currency because as it is, their money can buy whatever they want. They never use the USD. We know our Government has plans, like now, the multi-currency system will stay put up until 2030. That is what we were told by RBZ. However, I think when we reach 2030, a lot will need to be done to sensitise people. People must have trust in our local currency and that is the only way for us to safeguard our local currency. That is the only way we can get credibility for our local currency. I see other people when they speak, despise our local currency. You will hear them saying when we got into independence, our currency used to have a higher value. Yes, if the USD was a bit lower than the British Pound when we got our independence, it was to an extent that it was going for the value of 1 Pound which was equivalent to $USD1.70.

However, if you look at it now, that Pound has devalued. It is far lower in value as compared to the USD. What I am trying to say is, if we look back, we used to have the Rhodesian Pound. We used to call them Pounds and it used to be one is to one. When our currency was changed from Pounds to Dollars, they used to say one mbofana was being equivalent to USD2. When we got into independence, that USD had devalued as one Pound was equivalent to $USD3. What I am trying to say is, the economy within the nation, if it is not that strong, even if people do not have trust in their local currency, it will lead them into such devaluation of the local currency on the market. I am saying this because I would like to encourage our local companies to try and assist by manufacturing more products within the country which we can then export to other countries. If we export those products, we will then earn foreign currency from other countries, which will then help in increasing the value of our local currency. I would like to thank you Madam Speaker Ma`am for the report which I heard right now. I would like to support it very much and for the job well done by the two Committees on the Ministry of Industry and Commerce and the Budget Committee. I would like to support what the Governor of the Reserve Bank of Zimbabwe and our Government did, to give new programmes thereby introducing the new local currency ZiG.

I would like to advise all people who are citizens of Zimbabwe to strongly support and have faith in our local currency. Let us use it. I urge all banks to have new ways of using the local currency. We do not only want the hard currency, we can even use plastic money. Let us transact using the money within our bank cards.  Let us have swipe machines almost everywhere, for it has to be easy for people who are selling anywhere outside towns so that they have these machines for people to swipe and do their transactions using the point of sale machines. Bank charges which are being charged when transacting have to be a bit lower so that people will be encouraged to use those cards. I see from today going onwards, the future of our ZiG currency will be very good if we all support it. Thank you.

          HON. MATINENGA: Thank you Madam Speaker. I would like to add my voice to the report that was presented, which is a joint report of the Budget Committee and the Committee on Industry. The question that was posed by the Speaker is, are you adopting this report? I am saying let us adopt this report with modifications which make the report user friendly to the citizens of Zimbabwe. I would like to buttress on four points which were raised by Hon. Chiduwa. Number one, he mentioned the issue of extending the date for the submission of returns. Yes, it is a task for accountancy in submitting returns, preparing accounts in submitting returns, so the extension is valid and needs to be implemented. Number two, I am also commenting on the standardisation of IMTT. That has been commented by other Hon. Members and in his own words, the Deputy Minister of Finance in this august House mentioned that they will constantly review so that whatever IMTT is charged, it is a charge which is user friendly and encourage the citizens to use the banking sector.

Number three, I am also quoting the Minister of Finance, in this House for where he was debating with the Budget and Industry Committee, he also said, he is not going to bring shock to the market. He is going to monitor the issue for requesting ZiG to be paid so that there is no shock in the market. Lastly, number four, I am also buttressing on the issue of improved access to this ZiG currency that has been mentioned by a number of Hon. Members. So, it is my humble prayer that what the Minister recommended, what the Governor recommended will be implemented. In order to do this, let us move that this report by the joint Committee be supported with modifications as recommended by Hon. Members. I thank you Madam Speaker.

HON. SAKUPWANYA: Thank you Madam Speaker for giving me the opportunity to debate the report that was tabled before this august House. Madam Speaker, I would want to start by reiterating the statement mentioned by His Excellency, the President E. D. Mnangagwa, that a country will be built by its own people. In this sense Madam Speaker, it is impossible for a country to be built by its own people without the necessary and relevant tours produced internally for it to succeed. Having said that, I want to appreciate and thank greatly the Reserve Bank for coming up with the initiative that Zimbabwe has its own currency, the Zimbabwe Gold (ZiG).

It is important to note that one of the principles of money is that it should be a store of value. The moment when money loses its sense of being a store of value, it is more or less meaningless. When you look at the Zimbabweans today, and when they see that with the 14 ZiG that we have in our accounts, we able to buy a loaf of bread, the thinking should be that after six months, that same 14 ZiG should still be able to buy a loaf of bread. That Madam Speaker, is store of value. The reason why there is a lot of confidence around the US dollar is because if you look at the price of bread today in US dollar term, it is USD1. Five years ago, to buy a loaf of bread was still USD1 as a result of the maintenance of the store of value. By default, you have built confidence in that currency. As such, I want to appreciate that the Reserve Bank has recognised that our previous Zimbabwean dollar had lost that aspect of store of value and henceforth, introduced the Zimbabwe Gold.

What is important is that we maintain the aspect of store of value so that the 14 ZiG today that buys a loaf of bread, five years from now, ceteris paribus, should still be able to buy a loaf of bread. Madam Speaker, I want to state that when Zimbabweans look at our own currency, it is important that we must support that which is ours. In the same sense, it is important that an ordinary Zimbabwean be able to live whatever kind of lifestyle they want to live without need for any other currency but their own. For this to be practical Madam Speaker, it means to say that the essentials within which we need to survive should be available in ZiG. That means if I want to buy electricity, I need not look for US. If I want to pay my council rates, I need not look for US dollars, even if I want to purchase fuel.

I want to take note of the part in the report where they mentioned some Government fees that are being paid in USD terms. I think it is very important that there must be a deliberate move from Government and parastatals, particularly to create the demand for the ZiG. It is better Madam Speaker, that when we go to ZESA and want to pay for  electricity that ZESA says no, we do not want US dollars but instead, we want the ZiG. In doing so, we have created the demand ourselves. If ZESA wants to then introduce some equipment that requires foreign currency, the Reserve Bank has a special amount that is reserved for special parastatals to be able to acquire their machinery and others. This Madam Speaker is important for the sake of maintaining the relevance of the ZiG.

Madam Speaker, I want to also state the willing-buyer/willing-seller approach that the Government has taken up is very much appreciated. I must state that the intention to open up the forex market to the general public is one which should have happened sometime ago. In that sense Madam Speaker, the Reserve Bank should ensure that it has reduced the regulation requirements for the bureau de changes so that we have a number of them opening up in areas where there are no banks such as Chimanimani, areas where it is difficult to access a bank like you would do in Buhera.

Madam Speaker, the opening up of the willing-buyer/willing-seller means to say that an ordinary civil servant should be able to have access to forex; but in doing so, it is important that the RBZ institutes measures that ensure we do not have that system being abused by the so-called money changers. In this sense, I want to give an example of a proposition where the ordinary citizen should be able to access or have the facility whereby they trade in forex through a Bureau de change or even the bank at most once per 90 days. If you want to do more than that, you should go for special application that is approved by the Reserve Bank.

Doing so Madam Speaker, means to say that you will not have people continuously going to the Bureau de changes for forex and becoming money changers themselves.  Let us formalise the system by introducing Bureau de Changes. Let us formalise the system by making sure the access of forex is not limited to a few. Madam Speaker, I want to lastly speak to the fact that Zimbabwean Gold is ours and for all of us. Its use, its longevity depends on how as Zimbabweans we take it and use it.

I applaud what has been put in place by the Reserve Bank, but I encourage that they take seriously the fact that we cannot run away from the banking system and sector in the use of the Zimbabwean Gold for our civil servants are paid through that system. The one big problem that has been noted even in the report is that of bank charges, the thinking that banks should earn their money through bank charges.

Our bank charges Madam Speaker, are too high. Yes, we have taken note of the fact that they have put a leeway for those who have account balances below USD100, but it is not enough Madam Speaker. We encourage as per the report recommendations that bank charges really need to be dealt with. Banks should go to that system where they encourage lending as a source of income not to burden the tax payer because otherwise we create no appetite for storing our money in the bank.

Also, to add on to that Madam Speaker, I want to touch on the aspect of cash in the society. The world-over, they have introduced ICT measures where you have economies that are running without cash. Printing cash is an expense Madam Speaker, and our Monetary Policy should be cognisant of the fact that there are technological methods and manners in which we can run as a cashless society. Zimbabwe therefore should gravitate towards those measures. In China for example, they use the social media platform of WeChat to pay for goods and services. Why can we not introduce the same?

There are a lot of youths in Zimbabwe who are able to create social media platforms from here within our own country. Why can we not encourage our RBZ to engage these young people, create the platforms so that when you are in a kombi and need to pay your 50c, you use your ICT platform without the need for cash because cash is a cost. Madam Speaker, let us move with the times. Let us gravitate and accept the technology that is there for all of us. Introduce, inculcate and assimilate the ZiG in a technical and technological way. With this Madam Speaker, I would like to thank you for the time that you have given to me. I would like to thank both Committees of Industry and Commerce and that of Finance, for coming up with a wonderful report. I say that ZiG is here and the ZiG is here to stay. I thank you.

          *HON. P. ZHOU:  Thank you Madam Speaker.  I would like to thank you for the report which was presented in this House.  I would like to thank the responsible authorities for the new currency which is being used nationally.  Now that everybody is crying to say I need to have ZiG in my hand, look at me, today was my first day to get hold of our local currency and I am happy.  I think ZiG was brought to the market whereby everybody knows.  The reason why ZiG was brought in was simply because the previous Zim Dollar had lost its value. 

          Madam Speaker, as we see, ZiG has got a good value.  I would like to give an example of ZiG being our new currency which looks like a newly-wed bride whose bridegroom has a lot of girlfriends.  By so doing, I am saying ZiG is here but we used different currencies from way back, other currencies like US dollar, Rand, Pula and other different currencies.  Now that this newly introduced ZiG has a lot of challenges because some of us are already used to US dollars, Rands,  those people try their level best to take back and to maintain the use of US dollar and Rands.  For ZiG to continue working, people should use it.  Just like somebody who has a newly wedded woman, you have to ensure good safety of the newly wedded lady.  If you do not support it, then we will have a lot of problems. 

          Madam Speaker, for ZiG to have its value, I suggest that it has to purchase things like fuel, farmers should buy fuel for farming.  Other people want fuel for travelling from point a to point b, they will have a problem whereby they will receive ZiG, thereby they will try to look around to say where can I get American dollars to buy fuel.  I think that gap has got to be bridged.   ZiG must be able to do everything, it should be able to buy all commodities in the country like other SADC countries are doing. ZiG should be used even if you want to get a new passport. You must do the transactions using ZiG, using the same exchange rate.  Even if I decide to visit a certain place, I must believe that if I have ZiG I must use it wherever I want to go, to have to transact or to exchange ZiG into American dollars. 

          Madam Speaker, we must be able to pay duty using ZiG.  If you are charged USD200, it has to be converted into ZiG and then you pay using that. What I am simply saying is to ensure that we maintain the value of our ZiG gold.  I look into this country’s situation, we have 80% or more people who are into small to medium enterprises.  They are doing those businesses but a lot of people like vendors do buying and selling, even those motor mechanics and tuck-shops.   Those are the people who have a lot of currency circulating in the system.  The problem is that the currency is not going through the banks.  Also, they want all their things to be transacted using USDs.  They do not have those point of sale machines, they do not accept Ecocash transactions, meaning that our Government is losing tax. 

          Madam Speaker, for ZiG to gain its value, we want such things like swipe machines.  They have to start opening bank accounts.  Everybody can be assisted.  Let me give an example of a market, to say a council must have the names of the vendors.  They must have a database for all the vendors which they will then use then for everybody who is into marketing, they must be sensitized to open their bank accounts so that everything goes well and currency flows through the banks.  We respect ZiG as it is. 

          Madam Speaker, there is another issue, that is when people want to travel be it along the roads, people cannot do their transactions even on a distance which is charged 50 cents, people are being forced to pay US$1.  I am kindly asking the Reserve Bank to print more ZiG so that people can do their transactions and get their change.  A lot of sensitisation should be done to those who receive school fees and even those with private colleges.  Most of them do not want to do their transactions using the local currency and even those private schools do not want to tolerate the use of ZiG.  They are only demanding US dollars.  I would like to applaud the way information on ZiG is being disseminated.  I think that will help us a lot. 

          Madam Speaker, I would like to support what is being said by His Excellency the President to say, let us build our own nation.  Our local currency should be supported by us Zimbabweans.  Let us all support our local currency.  There is no one who is going to come from somewhere and say, let us support ZiG but us as Zimbabweans, you and I can achieve more now that ZiG is here, so let us kindly support it.  Let us rally behind ZiG. If we do not abuse it just like other people who do transactions, ZiG is a good currency because it is backed up by gold.   A lot of gold will be increased into the market, meaning that focusing on Vision 2030, we will get there. We want to get to Vision 2030.  We want to reach there while using ZiG only as the transacting currency.  With these few words, I thank you Madam Speaker.  

          *HON. NYAKUEDZWA: Thank you Madam Speaker. A very good afternoon to you.  I would also want to add my voice on the motion before this august House, a report tabled by two joint committees that did a splendid job in furtherance of our country’s interest.  The RBZ saw it fit that we have a new currency which will enable our economy to develop.  I support what the previous speaker just said that for our country to have a good economy, we should place as a priority, the strengthening of the ZiG currency.  The ZiG is going to help us in a lot of things so that the economy of our country is developed.  If we have confidence in our currency just as our neighbours; Zambia, Namibia, Botswana, South Africa and Mozambique are doing – when you get to Mozambique, the first thing you have to do as you get to the border is to convert your foreign currency into the local currency.   So, when we trade with other countries, visitors to Zimbabwe should go to the Reserve Bank and leave their foreign currency in exchange for the local ZiG currency so they purchase Zimbabwean goods using that currency.  That will enhance the value of our ZiG.

          Our banks should also value our people who will be opening bank accounts or those depositors that have funds in their banks.  They should not charge exorbitant bank rates so that people become confident in saving their money with banks.  That will also enhance the strength of our ZiG.  If we can be able to use plastic money, this will also reduce the bank queues for the people as they seek to withdraw paper money.  If the paper money is going to be used in conjunction with plastic money and if our wholesalers have swipe machines, this will further strengthen our currency. 

          The leader of this country gave us the new mantra that a country is built by its own people and he further stated that Rome was not built in a day but it will be brick by brick and stone by stone as we move along.  So, as Hon. Members, it should start with us that we value our ZiG currency.  If you did observe Madam Speaker, today people came early in the morning as if they were interested in working but it was because His Excellency, the President is assisting us as Hon. Members to acquire vehicles.  But if we value these vehicles as Hon. Members in order to ensure that we discharge our duties properly and we value our vehicles like the moving around we did today, if we were also to apply the same energy in having confidence in the ZiG, our country will be going in the right direction.  All the people in all the cardinal points of the campus were united as we went about the business of acquiring motor vehicles.  So, I urge all of us to be united in the same mode as we support the ZiG.  If we do that, our country will be further developed. 

           I would want to express my profound gratitude to the Governor of the Reserve Bank of Zimbabwe (RBZ) for the awareness campaigns he is holding all over the country.  In fact, the programme is covering urban centers as well as rural areas.  He is urging people to use our own currency and also to ensure that it remains strong and in so doing, the Governor of the RBZ is doing a good job. 

          In conclusion, I would like to say that the joint committees did a splendid job, a very important job indeed, which has led us as Hon. Members, to also place priority and importance on the report.  I foresee us getting into Vision 2030 on auto-pilot.  I would want to thank the President of this country for his wisdom in leading this country.  This wisdom to use our own currency.  As Hon. Members, we should also, including you Madam Speaker, be united in thanking him.  He is honey.  I would want to fortify my words by saying that if you are in your own house, for you to be respected as a father or mother, you should give your children rules that they must follow so that they in turn respect you as their father or mother.  The President is doing very well in coming up with rules and regulations to ensure that as citizens we behave properly. 

Lastly, I support the report tabled by the joint committees.  Let us use our own currency and respect it and have confidence in it so that our country can develop.  I thank you.

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

          HON. GUMEDE: I second.

          Motion put and agreed to.

          Debate to resume: Tuesday, 28^th May, 2024.

MOTION

BUSINESS OF THE HOUSE

          HON. KAMBUZUMA: I move that Orders of the Day, Numbers 10 and 11 on today’s Order Paper be stood over until Order of the Day Number 12 has been disposed of.

          HON. GUMEDE: I second.

          Motion put and agreed to.

MOTION

REPORT OF THE DELEGATION ON THE ELECTION

OBSERVATION MISSION TO RUSSIA

          Twelfth Order read: Adjourned debate on motion on the Report of the Delegation on the Election Observation Mission to Russia.

          Hon Shamu having stood up to wind up the debate.

          HON. MADZIVANYIKA: I rise on a point of order Madam Speaker. When the debate was adjourned last time, I was having the floor and because of the technical fault that happened in this august House, I was assured that when the debate resumes, I would be given the opportunity to continue as the first debater. I so submit.

         THE TEMPORARY SPEAKER: You may proceed Hon Member.

          HON. MADZIVANYIKA: Thank you for the opportunity to continue my debate on the report of the delegation that was sent to Russia to make observations of elections taking place there. One of the important points to note from the election observation which took place in Russia was the use of electronic voting. The Central Elections Commissions of Russia introduced a system of voting using digital equipment which was called the SAS-vibro. This system is so autonomous in terms of its connectivity. It is secured from the outside internet world such that it was free from abuse in terms of the electronic voting. Voters could simply just scan their identity documents and then click on their preferred presidential candidate. So, that was the return from the digital voting that I really appreciate. I would like to say if we adopt this as Zimbabwe, that will go a long way to eliminate queues which are normally laborious and monotonous.

          In this modern world, people are always occupied with their hustles trying to make ends meet in life and given the opportunity to use electronic voting, we will go a long way in actually helping and smoothening the process of voting. The electronic voting system was supported and was used largely by the youth of that country. That is commendable Madam Speaker. We hope Zimbabwe will take a leaf from that. In our next elections, we hope that we are going to have digital voting to allow people to vote from their homes.

          By using electronic voting system, there are no complaints that anyone stood in your way to say there were people who were standing by the road stopping people from voting. There will be no such kind of intimidation because you cannot intimidate someone over his vote. Someone will just use his phone to make a determination of what he wants. That will be very good and there will be no complaints of such in future.

          If you look at this form of electronic voting system, it allows people to see results as voting takes place. There is no need for one to announce results. As voting takes place, uploading will be taking place online and everyone else will see and check whether the results which are being declared are in tandem with what was obtained at local levels. That was a brilliant way of doing elections. I would like to recommend that Zimbabwe adopts such from Russia.

          The issue of voter registration in Russia through the Elections Commission with their system of SAS-vibro, actually allows a continuous updating of voters list on the website or platform. If you are a member of that platform, you can easily see whether your name has been updated or not, and this is very important. To make things better and comfortable, you do what you call mobile voter registration. There is no need to go to the office. You just use a telephone or send someone to do voter registration on your behalf. It is allowed in the Russian Federation.  This gives the impetus to allow people to register in numbers and with ease, which is very important. I want to commend Russia for introducing such a vibrant technological position.

          On voter registration again, people were allowed to register to vote even if they do not reside in that country. Those people who are on temporary absence were allowed to vote. I am saying diaspora voting was allowed in Russia. To make the record straight, over 1.8 million Russians were allowed to vote from the diaspora. That was a commendable position. As Zimbabwe, we should learn this because it is very important for people who are citizens of Zimbabwe – if you look at our Constitution, Section 3 on Founding Values of Zimbabwe, has got an issue to do with good governance. One of such is regular elections on the principle of adult suffrage. It means that anyone who is above 18, no matter where one is living, as long as he or she is Zimbabwean, is allowed to vote….

          *HON. MUGWADI: On a point of order, I rise to remonstrate with him. For them to come and give their views here in Parliament, it is important that the Hon. Member must be well read and he should check the Constitution of Zimbabwe to see what a Zimbabwean is and appreciate the difference between a Zimbabwean and a temporary resident. Once you distinguish the difference between the two, you will be okay. Only Zimbabweans are allowed to vote. Does he want us to go for a referendum to define what a Zimbabwean is or it means that he is off topic?

HON. MADZIVANYIKA: Thank you Madam Speaker, you can also check yourself, it is there on section III for you to verify.  Besides Madam Speaker, every Hon. Member here can be given the opportunity to debate.  If he thinks that my position is not correct, he must debate and correct the position so that Zimbabwe will weigh to see which is the correct position.  The issue of voter registration in Russia was not an issue, it went on smoothly because of many apparatuses which were put in place to ensure that voting goes on smoothly. 

So, we take a very big leaf as Zimbabwe.  Under these circumstances, you will find that it is so difficult to get identity documents in Zimbabwe, even birth certificates.  I do not know the challenges that are that side, maybe there are genuine economic challenges but I am taking a leaf from Russia to say everyone above the age of 18 is allowed and has the opportunity to have identity documents.  As a country, we are learning from Russia to say let us correct them going forward.  

If you look on the digital platform that Russia has used on its elections, it allows quick production of election results; within a moment of minutes results will be all over for all and sundry to see.  Secondly, you will realise there was high resolution video surveillance on all the poling stations across the Russian Federation.  What does this mean Madam Speaker, there will be no complaints to say so and so ran away with the ballot box.  There will be no complaints to say so and so did this.  So we want to applaud the Russian Federation, the Election Management Board in Russia for holding these elections in a way that allowed all the people in the country to be satisfied.  In the case of any problem, they will use evidence on the video evidence that was present at all polling stations.  So, Zimbabwe has a lot to learn Madam Speaker.

There was this opportunity that was given to some people who were regarded as having challenges, particularly care givers.…

THE TEMPORARY SPEAKER (HON. MAUNGANIDZE): Order you are left with five minutes.

HON. MADZIVANYIKA: I just want to believe that when debate is the other side, time will be kept at both sides. 

THE TEMPORARY SPEAKER: Are you questioning my judgement Hon. Member?

HON. MUGWADI: On a point of order Madam Speaker.

THE TEMPORARY SPEAKER: What is your point of order?

HON. MUGWADI: Madam Speaker, when you are seated on that Chair, you are the substantive Chair of the House.  This side of the House feels great where a Member debating and in the discourse of his debate, seeks or attempts to undermine the Chair by alleging unfairness.  It is grossly disallowed in this House and the Hon. Member must withdraw his statement if he is supposed to proceed, otherwise if he is allowed to continue in that narrative, then you have lost the Chair Madam, which I do not think you have.  I thank you.

THE TEMPORARY SPEAKER: Hon. Madzivanyika, I am the Chair and I make decisions, you are not allowed to question me. Can you please withdraw your statement?

HON. MADZIVANYIKA: I withdraw Madam Speaker.

THE TEMPORARY SPEAKER: You may proceed.

HON. MADZIVANYIKA: Let me talk about this special group of people who were given assistance or the opportunity to vote from home, looking at their circumstances.  They are care givers, the disabled, the sick and the old.  They were given the opportunity to vote from home.  What a commendable move.  I think Zimbabwe has a lot to learn from this kind of election process.  This is because here sometimes we see old people being carried to the polling station and that is not sustainable.  So I think going forward as a country, we should also recommend to take on board this very important issue. 

My last point, if you look at the Russian election, all major outlets be it on television, radio, newspapers, they all reported the events of campaigns and political activities in a balanced and a fair manner.  That is important Madam Speaker. In her set up to enable freedom of choice for people to be informed of their choices, they really need to have this kind of thing taking centre stage in trying to ensure that there is fairness.

So, as Zimbabwe, I think we also have to learn a lot about it, to have multiple radio stations.  Also, for them to give information which is free, fair and credible for all people of Zimbabwe to make choices freely.  I thank you.  

HON. SHAMU: Thank you Madam Speaker, I rise to thank all the Hon. Members who contributed their views on this report.  May I also convey the same appreciation to all Members in this august House who listened attentively to the debate.  On that note, I now move that this report be adopted.

Motion that this House adopts the Report of the Delegation on the Election Observation Mission to Russia on Russian Presidential Elections led by Hon. Shamu from 13 to 20 March, 2024, put and agreed to.

On the motion of HON. KAMBUZUMA, seconded by HON. N. NDLOVU, the House adjourned at Three Minutes past Five o’clock p.m. until Tuesday, 28^th May, 2024.