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NATIONAL ASSEMBLY HANSARD 24 September 2015 42-05
PARLIAMENT OF ZIMBABWE
Thursday, 24th September, 2015
The National Assembly met at a Quarter-past Two O’clock p.m.
(MR. SPEAKER in the Chair)
ANNOUNCEMENTS BY MR. SPEAKER
NON-ADVERSE REPORT RECEIVED FROM THE
PARLIAMENTARY LEGAL COMMITTEE
- SPEAKER: I have to inform the House that I have received a Non-Adverse Report from the Parliamentary Legal Committee on all Statutory Instruments published in the Government Gazette during the month of July 2015, save for Statutory Instrument Number 77 of 2015 on Presidential Powers application of Chapter 8:14 to Premier Medical Aid Society Regulations, 2015.
APPOINTMENT TO COMMITTEES
- SPEAKER: I wish to inform the House that the Committee on Standing Rules and Orders met today, Thursday 24th September,
2015 and appointed Committees for the Third Session of the Eighth Parliament. The Committees remain largely the same as constituted in the Second Session, save for the following changes:
- Senator M. Mavhunga has replaced Hon. Senator A. T.
Mathuthu on the Committee of Standing Rules and Orders.
- J. Samukange has been appointed Chairperson of the Parliamentary Legal Committee while Hon. Z. Ziyambi has joined the same Committee.
- G. Kwaramba replaces Hon. B. Chikwama as Chairperson of the Portfolio Committee on Public Service, Labour and Social Welfare.
- W. Mashange replaces Hon. Anastancia Ndhlovu as Chairperson of the Portfolio Committee on Environment, Water,
Tourism and Hospitality Industry.
- K. Paradza replaces Hon. E. Mbwembwe as
Chairperson of the Portfolio Committee on Foreign Affairs.
- R. Muderedzwa replaces Hon. C. C. Sibanda as Chairperson of the Portfolio Committee on Defence, Home Affairs and Security Services.
- N. Khanye replaces Hon. T. Matangaidze as Chairperson of the Portfolio Committee on Education, Sport, Arts and Culture.
CHANGES TO MEMBERSHIP OF VARIOUS STATUTORY
- SPEAKER: Furthermore, I also wish to advise of the changes of membership to the various Statutory Parliamentary bodies as follows:
- Pan African Parliament – Article 4(2) and 4(3) of the Protocol to the treaty establishing the African Economic Community provides as follows:
Member States shall be represented in the Pan African Parliament by an equal number of Parliamentarians and the representation of each member state must reflect the diversity of political opinions in each national Parliament or other deliberative organ thereof. In observing these provisions, Hon. A. Mnangagwa has replaced Hon. Dr. J. M. Gumbo and Hon. I. Ndoro has replaced Hon. T. A. Mathuthu as members of the Pan African Parliament.
- African Caribbean Pacific and European Union (ACPEU). Dr. D. Shumba has replaced Hon. M. Hlongwane, Hon. I. Zindi has replaced Hon. N. Chikwinya as members of the ACP EU.
- Inter Parliamentary Union (IPU)
Hon. N.J. Mhlanga has replaced Hon. M. Chimene as member of the IPU.
- Deputy Chief Whip
APPOINTMENT AS ZANU PF DEPUTY CHIEF WHIP
- SPEAKER: Furthermore, I wish to inform the House that Zimbabwe African National Union Patriotic Front (ZANU PF) party has appointed Hon. Rungani as Deputy Chief Whip.
BUSINESS OF THE HOUSE
THE MINISTER OF FINANCE AND ECONOMIC
DEVELOPMENT (MR. CHINAMASA): I move that Orders of the
Day, Numbers 1 and 2 be stood over until the rest of the Orders of the Day have been disposed of.
Motion put and agreed to.
PRESIDENTIAL SPEECH: DEBATE ON ADDRESS
Third Order read: Adjourned debate on motion in reply to the Presidential Speech.
Question again proposed.
- CROSS: Mr. Speaker Sir, I rise to respond to the Presidential Speech and I want to start by making a number of comments with regards to extremely positive developments which would be prospects for improvement in our national affairs.
The first item in the speech that I appreciated very much was the proposal to reorganize the One Stop Investment Centre which is currently responsible for dealing with investment into the country. I happen to know what the proposals are and I must say I found them very comprehensive and extremely positive. I think that once this new revised One Stop Investment Centre is in place, foreign investors will discover that in fact Zimbabwe is relatively easy to deal with. The necessary procedures requiring the pre-investment needs of the individual enterprises will be satisfied in short order.
I was also very pleased to see the President’s proposal to reorganize the State Procurement Board and to give the board regulatory authority and to devolve responsibility for procurement to the individual agencies that are responsible for procurement. Mr. Speaker, I regard this as being an extremely positive development …
- SPEAKER: Order, order. Members on the left, your own is on the floor and you are making noise. What does that mean? It is amazing.
- CROSS: Thank you Mr. Speaker. I have criticized the Procurement Board for a number of reasons in the past. Firstly, I think that centralizing this complex function of Government is really not technically a sensible thing to do. To be able to deal with all the different requirements of our country through a single central authority is virtually impossible. This has resulted in extensive delays to procurement and unnecessary delays in investment decisions. I also think devolving responsibility done to the actual operating agencies is the way to go. I hope this will result in improvement in the speed with which decisions are made regarding procurement.
The other criticism I have is that putting all the power in the hands of one central agency was an invitation to corruption. I think all of us have experienced corruption with the National Procurement Board in one way or another and we hope that those days are gone. I do hope that what the Minister will do in future is not to allow these key agencies of Government to be staffed by individuals, particularly chaired by individuals for many years without seeking significant changes. I do not believe it is possible to remain fresh and innovative in a job for more than five years. I think we should make it a policy that whenever possible, people in key managerial positions on agencies like this should be regularly revolved.
In respect to Special Economic Zones Mr. Speaker, I have not had sight of what is the intention but I do understand the spirit. I think that Special Economic Zones have the prospect for creating areas or zones within Zimbabwe where we can encourage Foreign Direct Investment on a significant scale and I think for example of the Redcliff area and all the potential that exists in that area for heavy industry. If we had Special Economic Zones, we may apply to that sort of an area, that we could in fact encourage the development of significant new industry there. I look at the Victoria Falls, I have long held and I have spoken to the Minister of Tourism and Hospitality Industry that the Victoria Falls, which is one of the principal tourist attractions in the world, could become a major centre growth for Zimbabwe. Instead, we find all our neighbouring states using the Victoria Falls as if it was their own. If you have visited South African Tourist Board stand in California, you discover that at the front of their stand is the picture of the Victoria Falls. If you have visited Zambia, you would think that the Victoria Falls was their personal enclave.
I think Mr. Speaker Sir, that the Victoria Falls could be the subject of massive investment under today’s circumstances because it has a special character. As soon as we get the Special Economic Zones legislated, I think we should set up with vigour, to start encouraging inward investment into these specific areas. One of the great crisis centres of this economy at this moment in time is agriculture. I was pleased to see the President make clear that the formation of the Land
Commission was a priority for this Government.
I was happy that the land audit would be conducted in parallel with the formation of the commission, so the audit can lead into the Commission and the Commission can then start tackling the problem of sorting out land in Zimbabwe. We have to acknowledge Mr. Speaker Sir, that the land issue is far from being settled and we need to tackle the problem with vigour.
I was delighted to see that he is proposing to convert the Incomes and Pricing Commission into a National Competitiveness Commission. I was a businessman when the Pricing Commission was active. On three occasions we were instructed to cut our prices by half and I watched the destruction of my own business which employed two and a half thousand people during that time. I watched famous names like Jaggers simply destroyed. I had experienced Mr. Speaker Sir, when they announced this, crowds crushing up against the doors of our businesses demanding entry and demanding that we cut our prices by fifty percent no matter what the consequences were. It was a moment of madness. I am glad to see the end of this particular institution. I cannot believe that we are still funding it, but to convert it into a National Competitive Commission is exactly the right thing to do. I think we have to welcome
The fundamental problem in this country is not on how much we are paying our people but it is the low productivity. I was a director of the largest shoe factory in Bulawayo where we employed three and a half thousand people in Bulawayo. We manufactured four and a half million pairs of shoes a year. Our productivity was 20 percent of the Chinese and unless we get on top of that, we simply cannot be competitive as a nation. The issue of competitiveness is the centre of our struggle to re-industrialise as a country.
The next point I would want to make Mr. Speaker, is the question of the National Border Post Authority Bill. Everybody in this House who has had to use one of our border posts, particularly Beitbridge, will understand the situation that confronts visitors to Zimbabwe. I personally, have witnessed foreign tourists arriving at Beitbridge, turning back, going back into South Africa because they simply could not face the chaos. Everyday at Beitbridge, some over 700 heavy duty vehicles cross the bridge with 14 million tonnes of cargo a year. It is by far in the way the busiest border post in Africa. About five to six million people a year traverse the border post. Up to three and a half days, I had a business colleague in Mutare who runs a manufacturing business there and he has had a truck coming through Beitbridge. The truck, without any problems whatsoever regarding the cargo or the documentation, was held up at the bridge for 16 days.
Mr. Speaker Sir, anybody in the world will tell you that that is simply a recipe for disaster. It cost them R2000 a day to keep a heavy duty truck at the border post. Obviously, if the average delays is three and a half days, that represents a loss to Zimbabwe of $250 million a year. It is effectively another tax. When we realise that the total revenue that we receive from customs duties and excise taxes at the border is only $380 million a year and we are talking about transport that is losing 250 which is a quarter of a billion dollars simply on delays of a border post, we have got to understand that the border post problem simply has to be tackled.
The other principal problem – I am pleased to see the Minister of Finance and Economic Development in the House again. One of the principal problem, businessmen in Zimbabwe today is the fact that our borders are so porous. You ask a question, the Minister has imposed duty on products coming into the country but you can find the very same products in our stores today evidently duty free. How on earth is that happening? We import $1.5 billion worth of motor vehicles a year and yet the total revenue received at the border last year was only $385 million which is five percent. The average duty on a motor vehicle is 60 percent, Mr. Speaker, that means we should be earning 600 to 700 million dollars a year just from motor vehicles. Why is it not coming into the exchequer? That is one of the principal reasons why in fact we are so short of money. It is because our border posts are so porous.
We are importing $7 billion and everybody complaints about that but do we realise what that means? It means that we are the largest market in the world for South African industrial goods. We are South
Africa’s biggest trading partner. The reason for that and why that it is not influencing our young Zimbabweans, what is happening – the deleterious effect on our economy is because we simply cannot control the movement of goods and services into Zimbabwe because of the chaos at our border posts.
I do not believe the chaos at our border posts is casual. Anybody who has witnessed firsthand as I have, the collusion between touts who work at the border posts and the people on duty behind the desks, working for their different agencies of Government, you will know that if I pay a tout R200 or R300 to get myself through the border post quickly, he gives 50 percent of that to the people behind the counters.
That is the reason why they tolerate them.
Therefore, the formation of a National Border Post Authority is a great step forward because at least there will be somebody in charge. At the moment, you get 10 to 12 agencies of the Government at the border posts - CIO, police, ZIMRA, Immigration, Tourism, Health, Agriculture - they are all there, nobody is in charge. Therefore, nobody takes responsibility for this chaotic situation.
I hope Mr. Speaker Sir, that this port authority will be effective and it will be properly managed and will not be one of the agencies drawing money from the poor public and not doing its job.
Finally Mr. Speaker, I would want to welcome the regulation of the medical aid societies. I point to the chaos in the Premier Medical Aid Society. We saw the story in The Sunday Mail this week of the top five people in the PSMAS drawing $22 million of unauthorised benefits for themselves. Mr. Speaker Sir, the budget of this Parliament for twelve months is less than that and these are five individuals. Why have they not been imprisoned? Why have they not been prosecuted? Where is the Prosecuting Authority? We have heard what their salaries were. This guy Dube, why was he getting $600 000 a month? Where does he think that kind of salary comes from? It was approved by the board of the PSMAS. At the time they drew that, nearly $40 million in salaries and benefits, the medical aid society was in $119 million in arrears to its creditors.
Mr. Speaker, this is State money and not a private organisation. The Minister of Finance spends $140 million a year with the PSMAS. If civil servants cannot get medical treatment on time, it is because of this kind of behaviour. As far as I am concerned, I will not be satisfied until
Mr. Dube is in jail. – [HON. MEMBERS: Hear, hear.]-
On the negative side Mr. Speaker Sir, I was very sad to note that the President did not deal with the issue of labour relations in an adequate fashion. One of our principal problems is that the tripartite negotiating forum which was set up many years ago on a consensual basis between labour, business and Government is not effective and it is not functioning properly. It needs legislative backing. I would have thought in the present situation it is something that desperately needs to be done.
We have to sort out the distorted salaries which are being applied in some sectors of the country. If I just to mention one, the City of Harare. In the City of Harare, Town Clerk has been earning US$23 000 a month and on top of that has been getting US$7 000 a month at the least in terms of benefits, that is US$30 000 a month. The minimum wage in Harare is US$480, in South Africa it is US$176 and US$84 in Zambia. Mr. Speaker Sir, as a country we cannot possibly hope to be competitive until we stop paying these kinds of ridiculous salaries. There is no reason why they cannot be adjusted downwards. We have the example of Econet which has just reduced salaries substantially. NetOne apparently is doing the same thing right now on the face of tough trading conditions. We need to do the same thing but we must not do it in isolation.
We cannot impose these kinds of reductions on the people, it must be negotiated. That is where the tripartite negotiating forum comes in. We need to give the forum teeth. When they make a decision it should be mandatory and applied to all three social partners. I was very sad to see that the President did not tackle this issue because for me this is one of the primary priorities of the country.
The other thing that concerns me Mr. Speaker Sir, is the fact that we have four new universities on the table on top of - I do not know how many we have at the moment, 12? I am not sure. We cannot afford this multiplication of institutions of higher learning. If we are going to establish universities like this, we need to be in a position to fund them. It costs at least US$4 000 to US$5 000 a year to put a student through university. We are unable to generate those kinds of resources in our economy today. Therefore, establishing all these new universities is not only weakening existing establishments because we cannot expand the budget. It is also providing the very wrong thing here, that we are down grading the standards of our universities.
When I went to the University of Zimbabwe and attained my degree, it was acceptable throughout the world. My colleagues in medicine who took their degrees in Harare, found that they could go anywhere in the world and find acceptance. We earned degrees which were international in standard and were recognised throughout the globe.
If we are going to maintain universities of high standard, we need to recognise our limitations and concentrate our resources on a few institutions of fine repute. NUST for example, in Bulawayo, is probably our best university. The university in Harare is still an exceptional institution, I can remember the day when institutions like the main University in Uganda - were regarded as global players, but now are no longer world class institutions or even polytechnic standard. The degrees are not recognised anywhere in the world. We do not want to get to that. If we are going to compete in the 21st and 22nd century, our young people must get an education which is world class. You cannot afford to have universities which are third world standard. We need first world standard universities and therefore we need to concentrate on establishing universities and maintaining them at very high levels. I know we can do it. We have done it in the past and so we can do it again.
The other thing I want to say Mr. Speaker Sir, is let us recognise that universities are a businesses. If you go to a place like South Africa, for example, Rhodes or Fort Hare, you will find that one third of the enrolment comes from Zimbabwe. I spoke to the Vice Chancellor the other day at a dinner in Harare. He was here recruiting students for his university. He told me that the Zimbabwean students were the best payers, they pay full fees and they were the best students in the university. Mr. Speaker Sir, if we had universities which could compete with Rhodes and that is not difficult, why should those students that go to Rhodes – 2 000 students last year should come here and go to our own institutions and pay full fees? That should be our objective. I hope that the Minister of Higher Education will tackle that kind of issue.
Finally, just one last point….
*MR. CHINOTIMBA: On a point of order Mr. Speaker Sir. The hon. member’s time for debate has elapsed.
*MR. SPEAKER: Order, order. Hon. Chinotimba, do you want to take over from the Chair? His time has not yet elapsed.
- CROSS: Thank you. The last point, I have spent my whole life in agriculture. I was chief economist of the Agriculture Marketing
Authority when we ran a pretty dynamic industry in Zimbabwe. I
looked at what happened last year in the agricultural sector, frankly I was appalled. I was appalled by the fact that our farmers grew crops and did not get paid for them. If I look at the situation regarding maize for example, although the GMB price was fixed at US$395 a tonne, which is a very high price and totally unrealistic, both in regional and international terms the US price is about $176, Zambia $220 and South Africa $200. The GMB does not have any money and was unable to pay for the product given to them. The farmers were left at the mercy of the traders. What the traders did, led by the millers, they fixed a price of $150 per tonne. That is half the cost of production of maize in Zimbabwe. They have been paying for maize at this very low price since our farmers started marketing their maize. I do not know how many tonnes have been sold. The crop is now finished and we are about to go into that period where we have to start importing 100% tonnes of our requirements from South Africa and Zambia. We will be paying $300 and $350 a tonne for that product when it arrives here. In the mean time we have denied our farmers a decent return on the crop that they grew. We are going to pay for it in the coming season because those people do not have the money to pay for the next crop.
If you look at cotton we have the same situation. We have 12 ginnery companies here. The 12 companies got together and fixed one price for cotton, 30 cents a kilogram across the board irrespective of the grade. They bought the entire crop, 136 000 tonnes at 30 cents a kilogram. Mr. Speaker Sir, the present price of cotton lint on the international market is 150 cents a kilogram. The present price of raw cotton seed on the local market is 38 cents a kilogram. The cost of ginning a kilogram of cotton is about 23 cents. It means that our ginners could have paid a price of 60 to 70 cents on the crop and made a profit. What concerns me is that both of these prices were determined by cartels. These are top businessmen phoning each other and fixing prices, and that in my view is illegal. These people should be sent to jail for this kind of activity. I calculated that this sort of activity has cost our farmers this year over $300 million and the problem with that, is that US$300 million is going into the pockets of individual firms and individuals who are already wealthy and powerful and they are denying income to mostly our rural population. We are the poorest people in the country and those people now do not have the money to pay for the next crop or to buy food for themselves this season, which is creating a rural income crisis. When looking at the tobacco crop - I was one of the people who criticised the tobacco auctions. Mr. Speaker Sir, I want you to know that with the majority of the crop contracted to major international tobacco companies, they are paying nothing for some of our crop – 20 cents a kilogramme. Do you know what tobacco is worth when it is made into a cigarette, over a US$100 a kilogramme? This simply means that the margins of these intermediaries are being inflated and again the person who is suffering is the guy at the bottom of the pile.
The last thing that I want to comment on is the fact that I was the CEO of the Cold Storage Commission for 5 years. We guaranteed the price of cattle throughout the country. If you were producing cattle in Binga, you got the same price as someone who is selling cattle at an auction in Harare but today that is gone. I was in Binga 2 weeks ago and I talked to cattle producers who said they are getting US$350 for a mature ox. Mr. Speaker, what are we doing as a nation if we cannot look after the welfare of the absolute poor, the majority of them who are peasant farmers? I thank you.
- KEREKE: Thank you for according me the opportunity to also debate the important motion where we look at the presentation by His Excellency, the President, to this august House. Firstly, I want to urge the House to contextualise the role of agenda setting as it relates to the functionality of Parliament in the discourse of our mandate. When you look at the First Session, we were given a legislative mandate that had intentions for 24 Bills to come before the House but a mere fraction of those Bills came. We went on to close the First Session and opened the Second Session and out of the expected 19 Bills, yet again a fraction of the Bills came. This time around we have been mandated by His
Excellency to look at 21 Bills that need to come through Parliament. If history was to be allowed to repeat itself, then out of the 21 Bills, a fraction would pass through.
So, the call is for a closer working relationship between Parliament and the Executive branch of Government, particularly the individual ministries. Perhaps, as an idea, the administrative side of Parliament could summarize the 21 Bills and then communicate formally with the appropriate offices for the individual hon. Ministers to then start their systems working on the various Bills. It is sad that from the First Session, we have not been able to articulate and look at a lot of Bills because they simply did not come to Parliament. Unfortunately, quite a significant number of those Bills were meant to correct porous areas in our laws. If we look at the current mandate as given by His Excellency, there are at least 5 to 7 Bills that are meant to adjust existing legislation, to look at closing leakages that are in our statutes and to close inefficiencies that are inherent in our legislation. So, to the extent that we do not deliberate and go through the mandate as would have been set by His Excellency, it must mean that we are allowing the existing leakages to continue pillaging our institutions and to continue pillaging the economy. I therefore urge that through Committees, particularly the Legal Committee and the Administrative side of Parliament that close synergy be established with the Executive branch of Government.
My next point is that unless we realise that there are urgent policy decisions that are needed to realign our economy and the performance of our institutions, then the intended goals of the legislative agenda may be missed and this would be to the detriment of the population. The first area which His Excellency pointed out is that of adjusting our laws to close the hemorrhage that exists in our institutions through ineffective opaque procurement systems. If you look at the budgets that we approve year in, year out and then analyse what we set as resource targets to individual ministries for certain functions, you would find that we miss a lot of our budgetary plans and we allow that to happen year after year. Parliament, for instance as an institution created by the Constitution, our capacity to exercise our mandate is severely constrained because of budgetary under-provisions, even within the context of budgets we would have approved in this Parliament. In other words, if in a particular fiscal year, hypothetically Parliament is allocated say US$25 million, looking at the reality on the ground is that money coming to Parliament? We want to say that based on experience the answer is no, not entirely. The result is that we are a representative democracy where Members of Parliament are elected to come and represent the majority of the people. We come here and deliberate but the financial provisions that should come to Parliament are not coming through. You then see an agitated and apprehensive populace who do not see the expected feedback, rapport and community developments they would have expected from the Legislature as we play our role. It creates negative expectations and opportunities for strife in our community, which is avoidable.
The next thing is on how we can build positive expectations in the economy? There are two schools of thought; one school of thought, which in my view is myopic and a bit retrogressive is one which says; misinform for as long as possible and for as long as you can do that, policies can then be credible. I want to advocate Mr. Speaker Sir, a case where we look at the performance of the economy in earnest. We look at the hard policies that need to be taken particularly in the financial and fiscal sectors of our economy and we do take those promises for good order and for the welfare of our society. Just to give as an example, this morning we were greeted with a very glamorous headline in The Herald which said,’US$1 billion set aside for farmers’.
I want it recorded Mr. Speaker Sir, that it is a false statement for the following reason, when we look at the banking sector in Zimbabwe, for the past year, the total loans in the economy grew from US$3.8 billion in the year, twelve months to US$4 billion from June 2014 to June 2015. In other words, because of the under-performance of our exports and the depressed investment inflows, the capacity of our banks to accommodate new loans is very limited. Someone along the chain misinterpreted it to take the outstanding debt in the economy to mean new money and our people are being misled into thinking we have made preparations for the season.
Mr. Speaker, we would be shooting ourselves in the foot if we were to allow this to pass without correction. The current loans to banks dating as far back as 2009 are at around US$700 million. In other words, farmers who borrowed in 2008/09 and 2010 cumulative to date owe banks and they are struggling – some of us included to pay that past debt. That outstanding debt stock is around US$750 million. Someone and we urge the media, please ask where you do not understand. You are publicly announcing that banks have set aside fresh money, US$1 billion, to go to farmers. It is incorrect and risks lulling the Treasury into complacency thinking the required gap has been sorted.
The presentation that was done a few weeks back was that for the 2015/16 agricultural season, we need US$1.7 billion to fund both animal husbandry and cropping activities. Government due to limited revenue of only US$28 million has been set to do the input scheme for rural communities. I want it recorded that the gap of about US$1.6 billion, perhaps if the money is there, then the banks need to articulate through the various portfolio committees so that the august House can be assured that the money exists.
His Excellency, the President touched on the need to enhance mining sector productivity and I want to say it is an area which as a country we have long lacked in terms of increasing productivity. We had a good story emerging in the diamond sector but to date diamond is slowly fizzling out of sight in terms of performance. We urge that the realignments that Government is undertaking in the sector are done and concluded so that the sector can once again play a meaningful role in the economy.
Export of chrome has been reopened and is a welcome development but again, we need to take stock on the capacity of the economy to have the logistical muscle to actualize expected value.
Chrome in its raw form by nature has a very low weight to value ratio. In other words, it is bulky. You need to move so many tonnes across the borders to get a certain monetary value.
When you look at the situation at the National Railways of Zimbabwe (NRZ) and the road haulage capacity of the country, you can only anticipate a binding constraint which is likely to frustrate our efforts to export chrome. So through the relevant ministries and the oversight role of Parliament, we would urge that urgent attention be placed to restoring some modicum of viability on NRZ to be able to support the intended projects in mining. NRZ at the moment, we were briefed yesterday, does not have adequate wagons, locomotive heads to pull the rolling stock and the mere signaling equipment where now the train drivers have to use cellphones to say, where are you now, do I slow down -so that they avoid collision. We cannot allow our institutions to be run the way they are being run at the moment if we are to recover as an economy.
The subject of corruption has almost become more like an anthem which everybody sings about but without analyzing the nitty-gritties of what needs to be done. His Excellency, the President has spoken ample a time that let us fight and uproot corruption.
Mr. Speaker Sir, we have very robust legislative frameworks that ought to deal with corruption. We have institutions that are there, created by our laws that we enacted through the august House and are supported by the Constitution to deal with the vice of corruption. Why is it that the institutions are not functioning as they should to eradicate or at least fight corruption? It is a question that through this august House we need to ask and call for accountability from the relevant institutions.
When we look at the effect of corruption in relation to institutions, we estimate that between 30-40% of the cost overhead in what we call, costs in ministries/companies is accounted for by corruption. When you look at someone who wants a passport paying someone to get the passport form and then to short-circuit the queues; if you work backwards and say, so effectively what is the cost of that service? You will find that the cost has gone up.
Procurement, a machine that costs US$100 000.00 for instance, through sidekicks, you will find someone accepting an invoice of a million dollars for a piece of equipment which costs US$200 000.00 for the country. So the issue of corruption is an area which we really want to urge the august House through the various portfolio committees that we speak with one voice and firmly in calling for accountability.
Mr. Speaker sir, it is also a reality that if we are to recover and revive our economy as a country, we need to have political maturity as a nation. To some, the political equation has become superior even to the welfare of society from whom we expect votes. We emerged from harmonious elections in 2013 and 2018 is still far off the horizon. It is time that we engage in productive activities.
It is a sad reality that there is growing institutional sterility due to political infighting across the board where institutions delay to implement certain decisions that are productive in nature depending on which faction the Chief Executive or the Board Chairman belongs to. As a country, we need to separate, agree and groom ourselves to align the political electoral calendar in its perspective arising from the Constitution and not to be in a constant state of trance of political infighting. So we urge that across the board, all political players, as hon. members we are creatures of political processes. Let us urge our constituents that let us focus on production and stop political infighting.
In terms of investment promotion, we welcome His Excellency’s
emphasis that we need flexibility in our investment laws. Flexibility allows us to tailor make certain peculiarities that would come by way of inward investments, depending on what sector that investment is going. If someone wants to invest in bread making, the planning horizon could range from weeks to months. If it is mining, the planning horizon spans from five to ten years. So there is need for that flexibility to say as we attract investment, let us listen to the peculiarities and special circumstance requirements of our prospecting investors.
Mr. Speaker Sir, His Excellency, talked about the need to enhance our corporate governance systems as well as overhauling the Companies Act. That is a welcome agenda item which we want to urge the Executive who are responsible for bringing up these Bills to quickly get on with the job. As the august House, we need to agree as a House for certain Bills where there is general convergence. When such Bills come, we synthesise and expedite their passage without compromising on the need for due diligence and maintenance of the high quality that this august House is renowned for. We need to look at the policy framework that we adopt as a country.
I strongly do not agree that at this stage, continued austerity is the right policy mindset; cutting of jobs, cutting of expenditure even on critical areas in the hope that we will create fiscal space. Fiscal austerity is only beneficial to the extent that it save resources to be directed towards productive areas of the economy. Where fiscal austerity degrades the productive capacity such as laying off of nurses, teachers or cutting expenditure in capital projects like road construction and so forth, that fiscal austerity creates what in economics are called the negative hysteresis factor. It creates a shadow upon future potential of the economy.
In ending, I want to say delayed action can only create victims and the victims of our delayed action in policy realignments will be the majority of Zimbabweans, whose suffering and toil can only go on up to a certain point in time. We want to avoid avoidable tipping points in our community where out of desperation; our people will lose trust in us as the elected officials and Government of the people. Thank you.
- MASHAKADA: Thank you Mr. Speaker Sir. I rise to make
contributions to the President’s Speech and the agenda that he set for us as the august House of Parliament. Firstly, I want to thank Hon. Mutomba for his motion and for ably articulating it. I want to zero in on investment because in his speech, the President touched on amending the Zimbabwe Investment Authority Act, so as to create an enabling environment for investment and to create an enabling environment for doing business in Zimbabwe. So I will not delve into many other things but tackle investment.
Mr. Speaker Sir, we must appreciate and understand the role of investment in the economy, especially at this historical juncture that we are into. We know that investment can drive economic growth, lead to economic development and lead to more capital inflows coming into the country. Where we are, Zimbabwe is in short of new capital or new money. In fact, in economics we talk about an uneasy triangle. When it comes to the availability of money or capital in an economy, we talk about an uneasy triangle. This is because if you look at the domestic revenues, we are struggling to generate enough revenue to move the budget or to sustain the fiscus. So already we have got a problem in terms of resources and capital domestically. That is one pillar of the uneasy triangle.
The second pillar is Official Development Assistance (ODA).
Where we stand, we have got limited flows of ODA for obvious reasons.
We owe the multilateral and bilateral institutions a lot of money. Therefore, we are not receiving grants and loans. The third aspect of the uneasy triangle is trade and investment. Of these three items, you find that trade and investment contribute a lot of revenue or capital inflow into the country. Therefore, I cannot over emphasise the role of investment in the development paradigm of the country. It is a king pin when it comes to development.
In fact, the level investment stands at 12% of GDP. Best practice is that FDI should grow to 25% of GDP and 30% of GDP. That is when it can become instrumental in promoting growth and economic development and creating jobs and reducing poverty. So, investment is very important as an economic variable in Zimbabwe. Let us examine where we stand in terms of our investment climate. What are the elephants in the living room and the bottlenecks which prevent the flow of new capital by way of FDI into the country? We know that Zimbabwe has been ranked poorly year- in- year out by various bodies. If you take the World Bank doing business report, Zimbabwe has been ranked successively very poor. The last ranking of 2014 put Zimbabwe at number 171 out 183 countries, which is really very bad.
In terms of doing business, Mauritius is ranked one of the best African countries because it is easy to set up business, shop and getting licences and permits. So, we are ranked number 171. In terms of the competitiveness index of the World Economic Forum, we also do not fare very well. We have got a lot of homework to do to make sure that we improve the ease of doing business. We improve our chances of developing Zimbabwe as a viable investment destination. Let us try to tackle some of the challenges that are a hindrance to the inflow of investment.
One of the greatest challenges with due respect is our regulatory environment or our legal environment. We have to amend various laws that are bureaucratic and that limit the smooth flow of investments. Some of the laws which need urgent amendment include the following; the Mines and Minerals Act, the Companies Act, the Immigration Act, the Incomes Tax Act and the Environmental Management Act, among other pieces of legislation which make it very difficult to do business in Zimbabwe. So what we need to do is for the Minister of Justice, Legal and Parliamentary Affairs to introduce a General Laws Amendment Bill which is an omnibus Bill to reform these pieces of legislation so that we have an investor friendly environment.
After the General Laws Amendment Bill is enacted, we need to look at the Indigenisation and Economic Empowerment Act with a clear mind. Let us remove ideological underpinnings and any dogmatic feelings about it and look at it vis a vis the object of attracting investment.
Mr. Speaker Sir, the world over when investors come with capital, at times it is not their own monies, they will be investors on behalf of the principal owners of that money and capital is very expensive to raise in capital markets. You raise a lot of capital and there is a lot of interest that has to be paid. Imagine an investor bringing in five billion to Zimbabwe and we say 51% should be localised. There is a problem already because that money has been borrowed. Secondly, if the investor seeds 51%, in business terms you are losing controlling interest of your own enterprise.
So before we have even started, we have put our own stumbling blocks for the investor and remember that capital is timid, it flies away. The next option is that the investor will go to Mozambique, Zambia, Namibia or South Africa. This is what has been happening for the last years as we have not been able to be flexible with our Indigenisation Act. That is why the levels of investment in Mozambique are now over a billion, investments in Zambia are over two billion, South Africa at US$5 billion, Angola US$10 billion per annum and for Zimbabwe we only registered US$500 million in 2014. So we need to up our game and talk investment and business.
I am happy that there appears to be a new paradigm shift in Government, a new understanding of the dynamics of money and capital investment and business. That is a trajectory that we need in order to grow this economy because we need new money. Since we dollarised our economy, Zimbabwe no longer has the power of the printing press to generate or create new money supply. Therefore, in order to get the US$, you have to depend on either exports which are currently depressed or new capital in the form of Foreign Direct Investment (FDI). We cannot leave any stone unturned to try to motivate investment to come into the country.
The Indigenisation and Economic Empowerment Act has now become the greatest stumbling block to the flow of investment into this country. I hope we can soberly reflect on how we can design this law to make sure that it is investor friendly sector by sector. We do not have to insist on 51% on all sectors of the economy, certain sectors and even investors can even get 100% depending on what the investor brings on
In fact, in other countries they do not have an Economic Empowerment Act or Indigenous Act. What they have is what you call the Investment Charter. You get into an understanding or agreement with an investor before they invest. An agreement on transfer of skills and technology into Zimbabwe, you sign and agree. An agreement on corporate social responsibility, what would the company do when they come to your country. An agreement on environmental protection, an agreement on job creation and an agreement on local supply chain, how local indigenous people will benefit from the foreign investor in terms of the raw materials and input supply chain. Therefore, you will have an ab initio understanding with the investor before they set up shop through an investment charter, which is a business-friendly dialogue you engage with the investor.
One of the things that must be included in the Investment Charter is a question of banking locally. Most investors that come into Zimbabwe do not bank locally; they just exploit the resources and repatriate the money to their countries. They do not have financial or banking records and they therefore, do not contribute anything to the economy, they just plunder the economy. So there is need for an investor charter that will regulate the conduct of foreign investors in a friendly and amicable manner rather than a hard and fast piece of legislation which scares them.
The second thing that we need to do to promote investment is to look at the security of investment. Investors want to be sure that their property and interest are safe and secure and that there are no connotations of expropriation or rationalisation. One best way to do that is to make it very clear that we have got straight forward arbitration rules. If a dispute arises between an investor and a local partner or Government, there will be clear cut arbitration rules where the investor can go and get fairness. If the local arbitration system is not adequate, let us have provisions for the investor to approach the international centre for the settlement of investment disputes. That is the modern practice.
The other thing that is very important if we want to attract investment is that – the President talked about amending the Zimbabwe Investment Authority Act (ZIA). However, I want to suggest that in the days in which we are living in, gone are the days of those authorities, the world no longer operates on the basis of authorities. What we need is to substitute ZIA with what we call a board of investment, which is a commercial entity, a business minded entity which looks beyond investment regulation. What we need is a board that understands the terrain of capital market, the terrain of doing business and investment facilitation. Let us emphasise more on investment facilitation rather than investment regulation because that is the order of things.
Talking about the One Stop Shop, hon. Speaker, my heart grieves because we established the One Stop Shop Investment Centre on 12th December 2010 and it was opened by His Excellency, President Mugabe at ZIA offices. However, what killed the One Stop Shop Investment
Centre was lack of political will and a lot of ‘takeism’ among ministries because you know as Cabinet you must have collective responsibility. But, there is a tendency in Government for turfism. If it is the Ministry of Investment which has initiated the One-Stop-Shop, the Minister of Mines, the Minister of Transport and the Minister of Home Affairs will resist and at the end of the day these other Ministries and Government departments failed to second people to go into the One-Stop-Shop investment centre.
So, I would suggest that these reforms of investment facilitation be done by the highest office, the President’s Office. That is the only way to make sure that everyone can be commanded to play ball, because if it is left to one Ministry other ministers will not co-operate. I know I have been a Cabinet minister, they will not co-operate, it will be about turfism, but if it is driven in the President’s Office I think it might see day light. Otherwise, the institution is there and what we require is goodwill and a new business culture.
So, that we generate investment and we develop our country.
Thank you Mr. Speaker Sir. –[HON. MEMBERS: Hear, hear.]-
THE DEPUTY MINISTER OF INDUSTRY AND
COMMERCE (MS. MABUWA): Thank you Mr. Speaker Sir. I move
that the debate do now adjourn. Motion put and agreed to.
Debate to resume: Tuesday, 29th September, 2015.
On the motion of THE DEPUTY MINISTER OF INDUSTRY
AND COMMERCE (MS. MABUWA), the House adjourned at
Twenty Two Minutes to Four O’clock p.m. up until Tuesday, 29th September, 2015.