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NATIONAL ASSEMBLY HANSARD 26 January 2017 43-28
PARLIAMENT OF ZIMBABWE
Thursday, 26th January, 2017
The National Assembly met at a Quarter-past Two O’clock p.m.
(THE HON. SPEAKER in the Chair)
ANNOUNCEMENTS BY THE HON. SPEAKER
SWEARING IN OF A NEW MEMBER
THE HON. SPEAKER: On 25th January, 2017, Parliament of
Zimbabwe received communication from the Zimbabwe Electoral
Commission (ZEC) on the election of the following member of ZANU
PF party as Member of the National Assembly with effect from 21st January, 2017 and this is Hon. Beauty Chabaya representing Bikita West Constituency.
Section 128(1) of the Constitution of Zimbabwe provides that before a Member of Parliament takes his or her seat in Parliament, the member must take the Oath of a Member of Parliament in the form set out in the 3rd Schedule. Section 128(2) states that the oath must be taken before the Clerk of Parliament.
I therefore call upon the Clerk of Parliament to administer the oath of a Member of Parliament to Hon. Beauty Chabaya. – [HON. Members:
Hear, hear.] -
NEW MEMBER SWORN
HON. BEAUTY CHABAYA subscribed to the Oath of Loyalty as required by the Law and took her seat – [HON. MEMBERS: Hear,
VISITORS IN THE SPEAKER’S GALLERY
THE HON. SPEAKER: I wish to recognise the presence in the
Speaker’s Gallery of pupils and teachers from Chiedza Primary School in Mashonaland West Province. You are most welcome – [HON.
MEMBERS: Hear, hear.] -
LEAVE TO MOVE SUSPENSION OF STANDING ORDER NO. 124
THE MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. CHINAMASA): Mr. Speaker Sir, I seek
leave of the House to move that the provisions of Standing Order No. 124 (3), regarding the period allotted to debate on the motion to bring in one or more Finance Bills be suspended for the series of sittings in respect of the debate on the 2017 National Budget.
THE HON. SPEAKER: Hon. Minister, you were expected to
give your reasons for seeking leave.
THE MINISTER OF FINANCE AND ECONOMIC
DEVELOPMENT (HON. CHINAMASA): Thank you Mr. Speaker
for reminding me that I should give reasons. Yesterday, a quorum was called and the House was unable to constitute a quorum. Therefore, in terms of the Rules, the Budget Debate was removed from the Order Paper. So, this motion is to restore it back onto the Order Paper.
Motion put and agreed to.
SUSPENSION OF STANDING ORDER NUMBER 124 (3)
THE MINISTER OF FINANCE AND ECONOMIC
DEVELOPMENT (HON. CHINAMASA): Mr. Speaker Sir, I now
move that the provisions of Standing Order Number 124 (3) regarding the period allotted to debate on the motion to bring in one or more Finance Bills be suspended for the series of sittings in respect of the debate on the 2017 National Budget.
Motion put and agreed to.
LEAVE TO MOVE RESTORATION OF THE MOTION ON THE
FINANCE BILL ON THE ORDER PAPER
THE MINISTER OF FINANCE AND ECONOMIC
DEVELOPMENT (HON. CHINAMASA): Mr. Speaker Sir, I now
seek leave of the House to move that the motion on leave to bring in a Finance Bill which was superseded by lack of quorum be restored on the
Order Paper as Order Number 2 in terms of Standing Order Number 73.
Motion put and agreed to.
RESTORATION OF THE MOTION ON THE FINANCE BILL ON
THE ORDER PAPER
THE MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. CHINAMASA): Mr. Speaker, I
accordingly move that the motion on leave to bring in a Finance Bill which was superseded by lack of quorum be restored on the Order Paper as Order Number 2 in terms of Standing Order Number 73.
Motion put and agreed to.
LAND COMMISSION BILL [H.B. 2A. 2016]
First Order read: Consideration: Land Commission Bill [H.B. 2A, 2016].
Amendments to Clauses 7, 14, 61 and 62 put and agreed to.
Bill, as amended, adopted.
Third Reading: With leave, forthwith.
LAND COMMISSION BILL [H.B. 2A. 2016]
THE MINISTER OF LANDS AND RURAL
RESETTLEMENT (HON. DR. MOMBESHORA): Mr. Speaker Sir, I
now move that the Bill be read the third time.
Motion put and agreed to.
Bill read the third time.
FINANCE BILL: BUDGET DEBATE
Second Order read: Adjourned debate on motion that leave
be granted to bring in a Finance Bill to make further provisions for the revenues and public funds of Zimbabwe and to make provisions for matters connected therewith or incidental thereto.
Question again proposed.
HON. HOLDER: 1.0 Introduction
The Parliamentary Portfolio Committee on Media, Information and
Broadcasting Services has an oversight role over the Ministry of
Information, Media and Broadcasting Services. The Ministry’s mandate is to build a good image of the country, promote public communication and information dissemination. The Ministry has six parastatals under its watch namely: Ziana, Transmedia, Zimbabwe Broadcasting Holdings,
Zimbabwe Film and Television School for Southern Africa, Broadcasting Authority of Zimbabwe and Kingstons.
1.1 The Ministry’s Key Result Areas
The Ministry’s key result areas are:
- Oversight of information, media and broadcasting services;
- Policy development for the information and communication
- Development of information and media infrastructure and Information dissemination.
1.2 Major achievements during the 2016 fiscal year
During the 2016 fiscal year, the Ministry registered the following achievements:
- Embarked on the digitalisation project which is now 35% complete;
- Upgrading the ZBC studios (WIP);
- Five new local commercial radio stations now on board as of
- Produced 125 graduates in 2016 in film making and television production; and
- Trained 33 graduate engineers for the broadcasting industry
1.3 Policy Priorities 2017-2019
The Ministry has the following Policy Priorities for 2017-2019:
- Completion of the digitalisation project to achieve universal coverage for both radio and television;
- Creation of well-equipped content production centre for content generation;
- Develop new legal and institutional framework for the information and communication sector in line with the Constitution;
- Redressing the urban –rural information divide; and
- Development of information and media infrastructure and undertaking research on emerging technologies.
2.0 The National Budget
The Ministry of Media, Information and Broadcasting Services was allocated $3 329 000 and this represents a 0.08 % of the total National Budget. The allocation has been reduced by 8.32% compared to the 2016 Vote.
2.1Vote Allocations for the Ministry
Administration and General
Table 1: Distribution of the Sub Vote
|1. Administration and General||2016||2017||%change|
|Employment costs||1 177 000||1135000||-3.57|
|Goods and Services||612 000||603000||-1.47|
|Current transfers||1 369 000||1074000||-21.54|
|Acquisition of fixed capital assets||150000||150000||0|
|Capital transfers||80 000||150 000||87.5|
|Total||3 631 000||3 329 000||-8.32|
From Table 1, allocation on employment costs will decrease by 3.57% while current transfers will decrease by 21.54%. Capital transfers will increase by 87.5%, expenditure on goods and services will also decrease marginally by 1.47%, maintenance will decrease by 18.18% while there will be no changes on programmes and acquisition of fixed assets. Employment costs expenditure will consume 34.1% of the sub vote allocation. The overall sub-vote allocation declined by 8.32% and this significantly affects the operations of the Ministry and will make it difficult to achieve the set objectives for the fiscal year. Capital transfers were allocated as follows:
Broadcasting Authority of Zimbabwe $38 000
New Ziana $30 000
Transmedia $54 000
Zimbabwe Film Training School $28 000
Table 2: Economic Classification of the Ministry Vote
|Current Expenditure||2 032 000||1 955 000||-3.79|
|Employment costs||1 177 000||1 135 000||-3.57|
|Goods and Services||612 000||603 000||-1.47|
|Maintenance||143 000||117 000||-18.18|
|Programmes||100 000||100 000||0|
|Current Transfers||1 369 000||1 074 000||-21.54|
|Capital Expenditure||230 000||300 000||23.33|
|Acquisition of fixed capital assets||150 000||150 000||0|
|Capital transfers||80 000||150 000||
|TOTAL||3 631 000||3 329 000||-8.32|
Current expenditure for the Ministry was reduced by 3.79% and capital expenditures and capital transfers were increased by 23.33% and 87.5% respectively. The allocation for the acquisition of assets remained the same as for the previous year.
Zimbabwe Media Commission
Table 3: Allocations to the Zimbabwe Media Commission
|Employment costs||231 000||200 000||-13.41|
|Goods and Services||62 700||325 000||418.34|
|Maintenance||37 300||105 000||181.50|
|Acquisition of fixed assets||20 000||40 000||100|
|Total||351 000||670 000||90.88|
From Table 3, there was a significant increase of 90.88% of the overall budget allocation where expenditure on goods and services increased by 418.34%. There was a decline of 13.41% on employment costs. The Commission had bid for about $400 000 so this is above what they had asked for.
Table 4: Economic Classification of the Vote for the Media
|331 000||630 000||90.33|
|231 000||200 000||-13.41|
|Goods and Services||62 700||325 000||418.34|
|Maintenance||37 300||105 000||181.50|
|20 000||40 000||100|
|Acquisition of fixed assets||20 000||40 000||100|
|Total||351 000||670 000||90.88|
Table 4 shows that overall current expenditure increased by 90.33% and employment costs decreased by 13.41%. Expenditure on goods and services increased by 418.34%% while that on maintenance costs increased by181.5%. About 90.33% of the Media Commission budget allocation goes to recurrent expenditure and 29.85% goes towards employment costs. Capital expenditure is only 5.97% of the budget.
3.0: Observations by the Committee
The Committee made the following observations;
- The migration from analogue to digital broadcasting is still behind schedule as the country failed to meet the 17th June, 2015
International Communications Union (ITU) digitalisation deadline. The programme is only 35% complete and there is no specific allocation or timelines for the completion of this programme.
- The Zimbabwe Broadcasting Corporation has not yet appointed a substantive Chief Executive Officer and this has implications on decision making.
- New Ziana is not moving at pace with the changing technology and is therefore lagging behind in terms of news delivery.
- The Zimbabwe Media Commission is now a standalone entity but has not yet realigned its laws such as AIPPA with the new
- The Zimbabwe Film Training School is not operationally effective to train competitive media practitioners.
- Disbursement of allocated funds is either delayed or the funds are not disbursed at all.
- That the Committee does not have an input in the appointment of Commissioners in Commissions under their Ministry.
- That the Report by the Information, Media Panel of Inquiry (IMPI) has not yet been made public.
- That the funds released for the digitalization programme was used to pay the local contractors only and nothing has been done to pay off the foreign contractors who are now holding on to the equipment that is to be used for the programme.
In view of the above observations, the Committee therefore recommends that:
- Adequate funding should be made available so that the Ministry can completely migrate from analogue to digital transmission. The implementation of this programme is behind schedule and this does not only put the Ministry on the spotlight but the entire country by the end of the first quarter of 2017.
- The Zimbabwe Broadcasting Corporation should appoint a substantive Chief Executive Officer as a matter of urgency for timeous and progressive decisions to be made by the end of February 2017.
- Transmedia Corporation should retain some percentage of the revenue that it generates for self-financing so that it can capacitate
- The Zimbabwe Film Training School can consolidate its operations by partnering institutions of higher learning like the Midlands State University that offers media studies for effective training of media practitioners.
- Laws governing the operations of the Ministry should be aligned with the dictates of the new Constitution of Zimbabwe by the second quarter of 2017.
- The Report by IMPI should be made public by the end of March 2017.
- The Curriculum Vitae for the Commissioners be availed to the Committee for scrutiny and input by the Committee and the appointment of the Zimbabwe Media Commissioners should be done as a matter of urgency, preferably by the end of the second quarter of 2017.
- Funds allocated to the Ministry should be disbursed timeously so that the Ministry can effectively execute its mandate.
The Ministry of Information, Media and Broadcasting Services plays a critical role in the dissemination of information; promotion of public communication and image building for the country. For the Ministry to achieve these objectives there is need for adequate provision of funding from Treasury. The Committee noted with concern that the funding provided by Treasury is inadequate for the Ministry to achieve its set objectives for the fiscal year.
HON. MARIDADI: On a point of order. Mr. Speaker Sir, I realise that all Committees are going to be presenting reports. Each Committee would take up to 20 or 25 minutes to present a report and there are 19 Committees in this House. It is going to take us a lot of time, yet next week on Tuesday, this Budget must go through.
I was going to suggest that all those Committees Chairpersons could just give us an executive report for five minutes, then table the report. Those who are interested in seeing the report would be given it in the pigeon holes, so that we kill time. – [HON. MEMBERS: Hear, hear.] –
THE HON. SPEAKER: Order, order! It would appear there was
some consensus by acclamation. I think the most critical part of the report should be centered on recommendations. Thank you.
Having agreed to summarise, I am appealing to Hon. Members that we should not have lack of quorum. You cannot have the cake, and then eat it. So, I am appealing to Hon. Members so that we can complete the task and we are not disturbed by lack of quorum. Please stay on until all the reports are completed.
Mr. Speaker, our Constitution is the foundation that cements the priority we place on gender equality and women’s empowerment in Zimbabwe. This is reinforced in blue prints that guide the development agenda of Zimbabwe, including the National Gender Policy (2013), the ZIM ASSET (2013), and now the Sustainable Development Goals (SDGs), amongst others. In line with the theme of the 2017 Budget of promoting productivity across all sectors of the economy it is critical that women and men play an equal and meaningful role as contributors to the economy in the various sectors aimed at driving economic growth and development. Unfortunately, as borne out by undisputed evidence, including the recent Interim Poverty Reduction Strategy Paper (IPRSP, 2016 - 2018), women still remain at the margins of the economy, and indeed are the poorest of the poor, with very limited or no means of production. The implication is that women can do little currently to contribute to economic growth and development, unless we invest in building their capacity to do so. May I remind the House, Mr. Speaker, that it is now an indisputable fact, through analysis undertaken by the United Nations and others, that there is a direct co-relationship between gender inequality and deficits in economic growth. On the other hand it has been shown that increasing the economic participation of women has a multiplier effect, on productivity, efficiency and sustained economic growth; we know that when women earn an income it is spent on their families, and communities, and they can also contribute significantly to the fiscus. In fact this is the reason the recently launched National
Financial Inclusion Strategy (2016) recognises women as a distinct category that requires specific support to become viable players in the finance sector. Mr. Speaker, for the reasons cited it is imperative that we budget for gender equality and women empowerment in a way that will have a positive impact on women’s lives and the nation at large. Mr. Speaker, as pointed out previously, gender budgeting is a policy priority and also falls within principles of public finance management in Chapter 17 of our Constitution. The Ministry of Finance and Economic Planning since 2007 has been issuing annual Budget Call Circulars that include an instruction to Government line ministries to mainstream and integrate gender issues into their budgets. The Ministry of Women Affairs, Gender and Community Development, with its cross cutting mandate to promote gender mainstreaming across all sectors is central in driving the economic recovery agenda, through coordinating strategies and actions that are core in promoting development and mobilising 52% of the population to play its role. Together with the recently established Zimbabwe Gender Commission, the Ministry is at the centre of ensuring women take the front line to push production frontiers and accelerate economic growth and development in the country.
2.0 BUDGET ALLOCATION FOR THE 2017 FISCAL YEAR
The Ministry’s key result areas focus on the achievement of women empowerment, gender mainstreaming and community development. The work of the Ministry is supported by 3 departments, and a decentralised structure including ward level officers. This is key in ensuring effective outreach work and mobilising women to be proactive in developing themselves, their communities and the nation. Unfortunately, Mr. Speaker, the work at ward level is constrained by limited staff and thus not all 1958 wards are currently being serviced.
Resources are required to address this gap. Further, Mr. Speaker, Your
Portfolio Committee on Women Affairs, Gender and Community
Development is alarmed at the trend of underfunding in the Ministry.
Allow me to elaborate with recent data. The budget of the
Ministry has remained under 1% of the total Budget for the past 5 years. In fact the allocations have fallen sharply between 2016 and 2017, with the 2017 allocation at a mere 0.19% of the total Budget, representing a decline of 37.82% from 2016. To compare this allocation with other Ministries, it is indeed one of the lowest; yet it is meant to support the implementation of a major cross cutting mandate.
Mr. Speaker, allow me to further point out that of the negligible funding that has been allocated to the Ministry, only about 50% of the allocated funding has been disbursed in any given year, further compromising the operations of the Ministry. No rationale is provided for not disbursing the funds in full, and very little is released on a monthly basis (approximately $30 000), when the Ministry requires at least $100 000 a month to function minimally. Mr. Speaker, the ratio of recurrent expenditure in relation to the development budget is 80:20 respectively in relation to the 2017 budget. It is not conceivable that the Ministry can be effective in its mandate to play the front and centre role to promote empowerment that contributes to economic growth and development; the key result areas will not be achieved with this level of funding.
Allow me, Mr. Speaker, to highlight specific empowerment
initiatives undertaken by the Ministry with the goal of promoting women’s contribution to economic growth and development. It is important to note the impact the Ministry is having even in the face of scarce resources. In 2016 the Ministry, through its capacity building and networking interventions in the key economic sectors of agriculture, mining, and trade, resulted in a cumulative total of 39 268 women being empowered. In 2017 the plan is to exponentially increase this number by at least 25%.
With regard to specific interventions let me highlight some key ones that require resourcing:-
3.0 WOMEN’S DEVELOPMENT FUND
Mr. Speaker, with the National Financial Inclusion Strategy
(2016) now in place, and its emphasis on women’s access to finance, it is more critical than ever that this unique financial vehicle established in 2010 is functional. This fund offers specially designed financial products for women and can potentially provide an excellent investment vehicle for strengthening women’s enterprise development. It is thus a concern that the $300 000 that had been allocated in 2016 was not disbursed. In 2017 the allocation has been reduced to $200 000 and remains inadequate. The Committee proposes that the funds that were not disbursed in 2016 be availed in order to promote ease of access by women to affordable finance.
It’s an important step in catalyzing women’s potential to boost productive activities and contribute to the growth of the economy.
4.0 WOMEN MICRO FINANCE BANK
Mr. Speaker, the establishment of the Women Microfinance
Bank remains a very important step towards facilitating women’s financial inclusion and a catalyst to increase productivity by women. This bank can provide leverage for the Ministry to make a meaningful contribution to the implementation of the National Financial Inclusion Strategy (2016). The uniqueness of this initiative also lies in the fact that the vision includes decentralised structures that will reach women in all corners of Zimbabwe, with women centered financial products that can boost their development. Since 2015 when the first allocation of $5 million was made to the Ministry in the budget, no disbursements, including in the last fiscal year, have been made.
Mr. Speaker, Hon Minister of Finance and Economic
Development, stated in his Budget Statement presented on 8 December,
2016 that the allocation for the Women’s Bank has been increased by
100% to $10 million. This is a commendable development. However,
this amount is not reflected in the Blue Book, and clarity is required on this matter. The funds must be released at the earliest opportunity for the
Women’s Bank to be launched and open its doors, as it is long overdue.
5.0 GENDER MAINSTREAMING
The Ministry’s work to mainstream gender in Government structures, processes and mechanisms, encompasses gender policy implementation, capacity strengthening of the public and private sector, awareness campaigns on gender issues particularly gender based violence (GBV), capacity building of the Anti Domestic Violence Council, ending child marriages, and mainstreaming gender in the realignment process. Mr.
Speaker, it is important to note that this dimension of the Ministry’s mandate is significant since it contributes to a good and effective gender management system without which gender mainstreaming is an ad hoc and ineffective process.
The Committee must also draw attention of the House to the fact that there is credible research that shows a direct relationship between GBV and costs that impact on the fiscus. In 2009 a study commissioned by Swedish Development Agency (SIDA) highlighted that the estimated aggregate cost of GBV in Zimbabwe was US$2 Billion (cost of services including legal, medical, transport and opportunity cost including absenteeism from school, productive activities). The area of gender mainstreaming must therefore be adequately financed, so that the plans that the Ministry has to contribute towards reduction of this scourge, including establishment of more one stop centres in respective districts, are realised.
Mr. Speaker, given the importance of the gender mainstreaming
dimension of the Ministry’s work, it is a serious concern that the 2017
Budget has been reduced by 85% from $100 000 in the 2016 Budget to $15 000. There is no room whatsoever to make an impact with such a negligible budget. Further, it is of paramount importance that all line ministries, in line with the Budget Call Circular requiring them to budget for gender related programmes and projects, provide concrete evidence of the resources they have allocated towards promoting gender equality and women empowerment in 2017. Line Ministries cannot shun their responsibility to mainstream gender. The gap created by failure to do so has a direct impact on the ability of the country to progress in achieving economic growth and development.
6.0 COMMUNITY DEVELOPMENT
Mr. Speaker, allow me to point out that investing in community
empowerment processes, particularly those that ensure women are skilled and have access to the means of production, should be a key national investment priority as it is “ low hanging fruit” with respect to pushing productive activities in the country. The Community development portfolio of the Ministry recorded very significant results in terms of empowering women and men in that there were 136 581 supported with value addition of agro products, bee keeping and honey production, community gardens, and internal savings and lending skills (ISAL). In 2017 the Ministry intends to increase the impact of its work by 30%.
7.0 ZIMBABWE COMMUNITY DEVELOPMENT FUND
Mr. Speaker, the Ministry administers a Community Development Fund in order to provide finance aimed at supporting economic empowerment initiatives that promote household food security, reduce poverty, and strengthen financial security including ways of sustaining this through savings skills. In 2016 the allocation to the Community Development Fund stood at a mere $200 000 and none of this amount was disbursed. In 2017 the budget has increased by 300% to $600 000, which is commendable. However, given the likely positive impact community development initiatives can have on both direct and indirect beneficiaries, the Ministry budget should increase to $3 000 000 and the full amount should be disbursed.
8.0 ZIMBABWE GENDER COMMISSION
Mr. Speaker, the Committee cannot overemphasise the importance of this statutory body for the advancement of gender equality and women empowerment in Zimbabwe. As you are aware the Commission has a far reaching mandate, which includes monitoring compliance by various bodies responsible for implementing gender equality and women empowerment commitments, investigating possible violations of human rights in relation to gender, conducting research into issues related to gender and social justice, and secure appropriate redress where human rights related to gender have been violated.
The Commission has three technical departments, namely Public
Education and Information, Research and Programming, Legal and Investigation, as well as Regional Coordinators in nine (9) provinces, with various supporting departments.
Mr. Speaker, it is worth noting that in 2016 the Commission, in
spite of its very limited resources, produced its strategic plan, a tool to guide the handling of complaints, capacity building of Commissioners, and secured the necessary space to resume operations. No funds were released from Treasury for these activities, which were supported by development partners. It is thus critical, Mr Speaker, that Treasury plays its part in ensuring the Commission becomes fully functional.
The Commission, has faced challenges in its operations, principally in relation to personnel as well as transportation to begin outreach work. The projected establishment for the Commission is 52, however, currently there are 4 officers, 3 of who are seconded from other Ministries and one funded by a development partner. The Commission requires a minimum of 20 staff, with the requisite qualifications to undertake the technical and other work in the institution. The Commission must also have the latitude to recruit from a wide range of sources, instead of being constrained to recruiting from retired civil servants. Currently the transportation for the Commission is confined to a donated vehicle and one from ZIMRA, whereas a minimum of six (6) vehicles are required for the
Commission to begin outreach activities.
Mr. Speaker, the Committee considers resourcing the
Commission a critical strategy for promoting the various development blue prints in the country, including supporting women’s contribution to economic growth. In this regard Treasury must be commended for increasing the Commission budget in 2017 by 347% from $100 000 to $1105, 000.00. However, it must be noted that the Commission had budgeted $1300 000.00 for operations as opposed to $670 000 allocated (50%). The budget is inadequate to finance the planned 2017 activities that include public education and awareness, investigating possible violations of human rights related to gender, research, monitoring compliance with gender equality commitments, and institutional strengthening.
The Minister should increase the budget allocation to the
Ministry to a minimum of 2.5% of the total budget, or retain the 2016 budget cap. In the absence of these increases, all the funds allocated in the 2017 budget to the Ministry must be disbursed by the end of the first quarter.
The Ministry of Finance should ensure that all line
Ministries reflect gender mainstreaming in their budgets, through gender specific budget lines that are adequately funded. In this regard it is imperative that the Ministry of Finance reject any line Ministry budget that does not comply with the policy requirements.
The Gender Commission must be allocated $1 300 000.00 for operations, and, at a minimum, there must be Treasury concurrence for the recruitment of the urgently required 20 members of staff with the requisite qualifications and experience, and funds to be availed for the 6 vehicles required for operations support.
The Gender Mainstreaming & Community Development
budget allocations in particular must significantly increase as they are drivers of women empowerment initiatives that can significantly impact the economic recovery agenda, and economic growth.
Funds allocated to the Women’s Bank and the Women
Development Fund must be released in the first quarter of 2017 to enable both institutions to be fully functional to promote women’s financial inclusion.
In conclusion Mr. Speaker, it is clear that there is no gender equity in the manner in which the 2017 Budget was formulated. Ministries that have the mandate to address gender equality and women empowerment issues have some of the lowest budgets. The Ministry of Women Affairs,
Gender and Community Development, and the Ministry of Small and
Medium Enterprises and Cooperative Development are a case in point. Further, disbursements of funds allocated must be released in the first quarter for smooth operations. Finally, the responsibility to budget from a gender perspective does not lie with the Gender Ministry alone; it is high time serious measures are taken to call to account Ministries that are not complying with this requirement. I thank you.
*HON. CHINOTIMBA: Mr. Speaker Sir, on a point of order. I would like to inform this House that I asked a very serious question yesterday and the question has been acted upon by the Reserve Bank
Governor, Dr. Mangudya. I am happy that the Governor of the Reserve Bank has acted promptly on the request which was put in this House yesterday. A swift reaction has been taken. That is welcome and we are very grateful for such a stance. If such action is taken, there will be no corruption and laziness in the country. I thank you.
HON. PARADZA: Mr. Speaker Sir, Hon. Members of
Parliament, it is my pleasure and privilege to present to you the post budget analysis report for the fiscal year 2017 for the Ministry of Foreign Affairs Vote 12.
Before I present our report, as a preamble, I feel compelled to narrate some incidences which help sum up the current state of the Ministry.
The first incident involved our Ambassador in Paris whose official car could not start when she had visited the Namibian Ambassador and was forced, under humiliating circumstances, to use the Namibian
Ambassador’s car. This is because the car she is using has already outlived its life span.
Another embarrassing story involves one of our top diplomats who was being driven in an official car with the national flag and was stopped by the police and asked to identify himself as the car he was driving was not fit to be a diplomatic car.
In yet another embarrassing episode, this one involves our ambassador who is currently the Dean of the Diplomatic Corps in West Africa. Courtesy requires that as Dean, when they have official meetings and gatherings, our diplomat is supposed to leave the event first but because of the dilapidated car, a Peugeot 504, which has seen better days, our diplomat, in most cases, is the last one to leave the venue as a way of avoiding embarrassment.
Mr. Speaker, these are just a few real incidences which our Ambassadors are subjected to daily during the course of their work in these foreign capitals.
The other issue, Mr. Speaker, I wish to highlight is to do with rental arrears at our Diplomatic Missions.
According to the Permanent Secretary, Ambassador Joey Bimha, the Ministry is in a quandary because all missions, without exception, have received eviction notices. As we speak, the Ministry has an outstanding rental bill of $7 million, a carry over from 2016. Besides eviction notices, some of our diplomats have also been sued for their failure to pay rentals.
These are some of the harrowing stories that as a Committee, policy makers and above all as Zimbabweans, we find profoundly dispiriting and disenchanting. We think we can do better than this as a nation. Our image is at stake and we should do all that it takes to spruce up our image by allocating resources to this strategic Ministry which is the face of the country.
Mr. Speaker, your Committee in consultation with the officials from the Ministry of Foreign Affairs has since undertaken a comprehensive analysis and assessed the provisions for the Ministry contained in Budget 2017 Vote 12. The findings are presented in this report. This analysis asks key questions about the budget that we believe should be of interest to both Parliament and the public.
Our analysis is mainly based on two documents available to the public as of the time of the analysis: Budget Estimates for the Year Ending December 31, 2017 and the 2017 National Budget Statement as presented to Parliament by the Honourable Minister of Finance, P.
The overall purpose being to analyse and provide disaggregated information on the 2017 budget allocation for the Ministry of Foreign Affairs. In addition to this, the report aims to provide the Zimbabwean public with a synthesis of the main features of the budget allocation to the Ministry making comparisons with allocations in previous years and assessing the impact of the allocation on the Ministry and ultimately on our men and women who represent our interests around the globe. We then conclude by proposing some recommendations to both Government and the Ministry.
3. THE MINISTRY OF FOREIGN AFFAIRS
Mr. Speaker, Zimbabwe cannot bend the world to its will, therefore, a paradigm shift towards international focus is both necessary and useful.
Through international focus, we can exploit the vast opportunities the changing world offers for advancing our prosperity and well-being and for meeting the challenges that we face today. It is the responsibility of our Government through the Ministry of Foreign Affairs to create global conditions that favour Zimbabwean interests, promote and safeguard the reputation and influence of the Republic in the region and within the international community and to protect nationals living and working in foreign lands. Its focus is mainly outside the state where it operates in a complex and changing international environment liable to sudden transformation by unexpected events constantly shaped by factors beyond national Government control.
3.1 Major Achievements During 2016
It is indisputable that 2016 was a difficult year for Zimbabwe. Despite these challenges, fiscal year 2016 has been a year of many notable achievements for this Ministry in its on-going work to establish a stronger and more productive presence for Zimbabwe and Zimbabweans at large.
Major results during 2016:
- Active involvement in the SADC mediation in Lesotho.
- Participated at the SADC Council of Ministers held in March 2016 in Gaborone, Botswana where the Ministry successfully lobbied for the endorsement of the candidature of Dr Walter Mzembi for the post of Secretary General of the United Nations World Tourism Organisation (UNWTO).
- Participated in several meetings of the SADC ministerial task force charged with finalisation of the Costed Action Plan for the SADC
Industrialisation Strategy and Road Map.
- Participated in the exercise to finalise the budget for the SADC Revised Regional Indicative Strategic Development Plan (RISDP)
- Played an active role in shaping the work on the review of the SADC Secretariat Organisational Structure which is being done to align the organisation to the new priorities contained in the Revised RISDP and the SADC Industrialisation Strategy and Road Map.
- Facilitated the sending of an observer team to be part of the SADC Electoral Observer Mission to the Republic of Zambia in July 2016.
- Coordinated Zimbabwe’s participation in the 19th COMESA Summit of Heads of State and Government held in October 2016 in Madagascar.
- Led a team of officials from various ministries to develop the
Regional Integration Strategy Framework for Zimbabwe (RISF).
- Successfully handed over the AU Chairmanship during the 26th session of the Assembly held on 30-31 January 2016 in Addis Ababa, Ethiopia.
- Played a part when the Government of Zimbabwe successfully launched the 2016-2017 Drought Disaster Domestic and
International Appeal for Assistance.
- Played a key role in the Government constituted grain importation and distribution task force which was responsible for the importation, transportation and distribution of drought relief.
- Hosted the Zimbabwe-Russia Inter Government Commission in
- Hosted the inaugural Zimbabwe-South Africa Bi-National
Commission in November 2016.
- Participated at key international meetings notably:
- UN signing ceremony for the Paris Climate Change
Agreement in New York in April 2016.
- Meeting of the African Caribbean and Pacific countries in
Papua New Guinea in May 2016.
- Forum on China-Africa Cooperation (FOCAC) in July 2016.
- 6th Tokyo International Conference on African Development
(TICAD) in August 2016.
- 17th Non Aligned Summit of Heads of State and Government in Venezuela in September 2016. vi. United Nations General Assembly and its associate meetings from September to December 2016.
- Took over the 72nd Presidency of the United Nations Economic and Social Council (ECOSOC).
- Coordinated the repatriation of 151 Zimbabwean Nationals trafficked to work as maids in Kuwait and Saudi Arabia.
3.2 National Polices, goals, priorities and outcomes for 2017 in the
The policy priorities for the Ministry in 2017 in many ways represent continuity of the policies in 2016. The following are the priority areas:
- Continued re-engagement with the West and other groups of countries.
- Enhancing the style and depth of diplomatic interactions with a view to promoting economic diplomacy.
- Intensifying diplomatic engagements with multilateral agencies, institutions and international organisations.
- Capacity building (through training) to enhance the quality and efficiency of the Ministry’s staff both at head office and diplomatic missions abroad, the focus now being economic diplomacy as opposed to the usual political diplomacy.
- Resourcing head office and diplomatic missions to ensure delivery of excellent services.
The crux of these priorities is to enhance and improve economic, political, technical and scientific relations with the outside world for improved cooperation and to improve the perception of Zimbabwe which will help increase FDI and trade inflows which inevitably will help in the realisation of this year’s National Budget theme whose thrust is“Pushing Production Frontiers across all Sectors of the Economy”.
3.4 Challenges facing the Ministry of Foreign Affairs.
The Ministry is facing a number of formidable challenges and the following are some of them:
- Globalisation, including technological advancement, present both opportunities and threats for Zimbabwe. As part of a global village
Zimbabwe can benefit from the global economic opportunities. However, the nation needs to be conscious that it is equally susceptible to the global dynamics like international business trends and competition. Therefore, as a country, we need to think outside the box.
- The Ministry lacks trade and investment experts in its diplomatic missions which makes it hard for the missions to be used to promote FDI and trade. The world has since moved in this direction and as a country, we are way behind. As I said earlier, we need a paradigm shift within the Ministry, complete change of the mindset, so that our diplomats focus on attracting investments to
Zimbabwe and also marketing Zimbabwe as a tourist destination.
- As exposed by the analysis below, the Ministry has been underfunded for a number of years now and this has had an incrementally detrimental effect to the operations and infrastructure of the Ministry.
- Furthermore, the Ministry operates in a global environment where:
- Many developments are beyond its direct control and can have a significant impact on its operations and budget. ii. The running of Diplomatic Missions is done on a contractual basis as the operations are in foreign lands. To this end, the Ministry has to abide by the laws of the host countries and obligations have to be met on time.
Given that the Ministry is the face of Zimbabwe and the challenges and international responsibilities, which are presumably unique to the Ministry of Foreign Affairs, it is fit and proper that the Ministry is adequately funded to avoid irreparable reputational damage on the country.
- What are the opportunities available to Zimbabwe through the
- Zimbabwe’s unique range of membership in a wide number of multilateral organisations provides the ideal opportunity to advance our interests and values across a number of issues on the international community.
- Economic Diplomacy in tandem with other reforms could help unlock FDI flows into Zimbabwe and promote trade.
- The country could use the Ministry to fully harness and exploit the potential benefits of having an effective diaspora policy.
- COMPREHENSIVE ANALYSIS OF THE 2016 BUDGET
In this section, we examine the allocations of the budget for 2017 compared with budget allocations in previous years. Except where stated, figures in this section refer to planned budget/allocations rather than actual spending.
5.1 Overview of the Ministry Budget
In the fiscal year 2017, a total of $32, 4 million has been allocated to the Ministry of Foreign Affairs under Vote 12, which represents about 0.8% of the total National Budget. Figure 1 below shows the 2017 budget allocation to the Ministry as a percentage of the total National Budget.
This provision is well below the optimistic financing scenario of $74, 4 million as outlined in the budget request by the Ministry. This represents about 43.6% of the amount requested for by the Ministry. Compared to 2016, the Ministry by and large has received the same allocation in percentage terms, i.e. 0.8% of the National Budget. However, in absolute terms, the allocation this year represents a reduction of $4,5 million as compared to the allocation of $36,9 million under the 2016 National Budget, reflecting a drop of 12.22%.
The Committee is extremely disheartened and dissatisfied by this reduction as the allocation for 2016 was by no means adequate. Given the state of affairs in the Ministry, the allocation is not enough to cover critical funding areas. This reduction will further damage the operations of the Ministry.
The Ministry is split between Head Office and Diplomatic Missions.
The 2017 allocations are as follows:
- Sub Vote I $8 405 000 has been targeted at Administration and
General representing 25.8% of the total budget (Head Office)
- Sub Vote II $24 068 000 has been targeted at Diplomatic Missions which is 74.2% of the total budget.
Of these two sub vote II, the Diplomatic Missions are facing the biggest cut backs.
Compared to the 2016’s vote allocation of $29,6 million, the diplomatic missions in 2017 received $24 million which is a reduction of $5,6 million (18.9%). This is being done at a time when our diplomatic missions are in dire need of funding. The Committee is deeply disillusioned by this reduction as it will inevitably affect further the operations of our Diplomatic Missions and also the envisaged new focus – that of promoting economic diplomacy.
Table 1 below lays bare the inadequacy of the 2017 National Budget provisions, as it highlights the major, contractual non-salary and unavoidable operational expenditure items for diplomatic missions.
|Diplomatic Missions Annual Rentals||$13 200 000|
|Diplomatic Missions Medical subscriptions||$ 1 500 000|
|Subscriptions to International
|$ 4 035 000|
|Head Office Rentals –UNDP Offices||$ 97 000|
|TOTAL||$18 832 000.00|
The total figure for the inevitable contractual items exposes the inadequacy of the budget provisions as the total operations budget allocation of $14, 9 million will be totally wiped out by the diplomatic missions annual rentals of $13, 2million leaving $5, 6 million unfunded. This situation is worsened by the fact that there are rental arrears of $7 million from 2016.
As a Committee, we are acutely aware of the fact that since 2013 the national economy has been facing headwinds and as a result, it has not grown as we would all want. As a matter of fact, it has been static and consequently the National Budget has been static as well, stuck around $4billion. That said, we note with deep concern that the allocation to the Ministry of Foreign Affairs has had a steep downward trend which started unabated in fiscal year 2015. In the light of the very significant role that the Ministry will have to play in the re-engagement efforts and helping attracting FDI into the country, the cuts and failure to award more resources to the Ministry is very discouraging as it defeats this thrust.
5.2 Trends in Foreign Affairs Allocations
Mr. Speaker Sir, your Committee also notes with regret that budget allocations for the Ministry as a percentage of the National Budget has progressively decreased in the past 4 years when Hon. Minister Chinamasa was appointed to head Treasury. In keeping with this trend, the 2017 Budget continues a longer term trend evident of allocating progressively less of public national resources to Foreign Affairs Ministry. Table 2 below clearly backs my claim.
Table 2: Foreign Affairs Budget as a Share of National Budget for financial years 2010-2016.
|Fiscal Year||Total National Budget||Ministry Budget
|Share of National
|2010||$2 250 000 000||$42 427 000||1.89%|
|2011||$2 746 000 000||$77 060 000||2.8%|
|2012||$4 000 000 000||$73 672 000||1.84%|
|2013||$5 245 000 000||$63 204 000||1.2%|
|2014||$4 120 000 000||$63 884 000||1.5%|
|2015||$5 439 348 431||$48 126 000||0.88%|
|2016||$4 645 417 000||$36 995 000||0.8%|
|2017||$4 100 000 000||$32 473 000||0.79%|
The table explicitly shows that over the past eight years (post dollarization), the best the Ministry got in budget allocation as a percentage of the National Budget was 2.8% in 2011 and the lowest being in the last 3 years was about 0.8%. The share by any standard is grossly low as the Ministry is a key department of this administration and going forward will play an important role in the economic development of the country through helping in attracting FDI and international trade facilitation for local companies.
The Committee finds this disappointing and disheartening as the
Ministry needs to be well funded to deliver on its all-important mandate. A share of between 2% and 3% of the National Budget would be reasonable.
5.3 Ministry allocation dropping faster than the National Budget
In the last 4 years, in real terms the National Budget has by and large remained unchanged yet the Ministry’s allocation as a percentage of the National Budget has gone down significantly. This suggests that the Government of Zimbabwe has not maintained the priority given to the Ministry of Foreign Affairs in the face of limited public resources and competing interests.
5.4 Employment costs
Employment costs are statutory and have to be adequately funded. The allocation for employment costs for the Head Office of $1,5 million is adequate. The Committee notes that the bulk of the Ministry’s budget goes towards employment costs and this has been the trend for a number of years now. The employment costs for Administration and General (Head Office) plus Employment costs for Diplomatic Missions consume about $17, 5 million which constitutes 53.96% of the total Ministry’s budget.
By international standards this proportion is quite high as it should be around 30%. This means that the Ministry effectively becomes hamstrung with no room to develop, grow and better its services as most of its budget is for consumption purposes.
5.5 Current Expenditure and Capital Expenditure
The Committee notes with disappointment that over the last 8 years on average, current expenditure consumes about 92% of the total budget allocation to the Ministry. In 2017, a total of $29, 9 million was allocated for current expenditure which represents 92.15% of the budget. On the other hand, capital expenditure was allocated a total of $2, 5 million which is 7.85% of the budget, with the Administration getting $100 000 and the diplomatic Mission getting $2, 4 million. Compared to last year, the increase of $420 000 is welcome but it is still below the optimum requirements of the Ministry. The Committee is extremely disappointed by the lack of provision for adequate funding for development. Ostensibly, this means there is little in the form of resources that could be used for the development of the infrastructure and other development related activities which would help improve service delivery and the image of the country.
Table 3 below expressly shows underfunding of capital expenditure over the last 8years.
Table 3: Allocation for Current Expenditure and Capital Expenditure for the Ministry Budget(2010-2016).
| Share %
|2010||$42427000||$37 467 000||$4 960 000||88.31% 11.69%|
|2011||$77 060 000||$72 710 000||$4 350 000||94.36% 5.64%|
|2012||$73 672 000||$66 282 000||$7 390 000||90% 10.00%|
|2013||$63 204 000||$58 874 000||$4 330 000||93.15% 6.85%|
|2014||$63 884 000||$59 454 000||$4 430 000||93.07% 6.93%|
|2015||$48 126 000||$46 196 000||$1 930 000||95.99% 4.01%|
|2016||$36 995 000||$34 865 000||$2 130 000||94.24% 5.76%|
|2017||$32 473 000||$29 923 000||$2 550 000||92.15% 7.85%|
Table 3 above and figure 2 below show that the bulk of the budget for the Ministry goes to recurrent expenditure. This is simply unsustainable as there is little if any allocation for development.
Figure 2. below is a graphic presentation of the share of Recurrent and Development Expenditure in the Ministry of Foreign Affairs 2010-2017.
From the table and the graph, it is clear that for the past 5 years, capital expenditure has been side-lined with profound impact on the Ministry.
5.6 Goods and Services
Given that the lion’s share of the budget of the Ministry goes towards employment costs, it is no surprise that a paltry $7, 6 million has been allocated towards Goods and Services with the bulk of it ($5
053 000) for the Diplomatic Missions and ($2 611 400) for
Administration and general. Based on the actual requirements, Diplomatic missions on their own require $24,7 million. For instance, the total annual rentals abroad stand at$13, 2 million. The allocated amount of $3 million will just cover a mere 3months of rentals. It is against this background that all the missions without exception have received eviction notices as we have outstanding arrears of $7 million. It then goes without saying that the allocation to the Ministry is patently insufficient. As I mentioned earlier Mr. Speaker, in addition to several threats of evictions, some of our embassies have been sued, thereby exposing our Ambassadors as this nullifies their diplomatic immunity status within the host country.
The Committee also finds that the Ministry was allocated $570 000 for maintenance for foreign missions while $130 000 is for the head office here in Harare. Compared to 2016 where the Ministry was allocated $999 000 this represents a decrease of $299 000. Again, the Committee is saddened and discontented with this as the provision is way below Ministry’s requirements of $510 000 for the head office and $3, 4 million for the Diplomatic missions. The Ministry’s movable and immovable assets at head office and at missions have suffered years of neglect due to inadequate funding. As noted in my preamble, the vehicle fleet at most missions is old and needs urgent replacement. The Committee notes that the allocation does not address the needs of the Ministry.
5.8 Current Transfers
This allocation is earmarked for mandatory contributions to regional and international organisations. Zimbabwe’s unique range of membership in a wide number of multilateral organisations provides the opportunity to advance Zimbabwean interest and values and it is absolutely imperative that membership subscriptions are paid up.
An allocation of $4 million towards this represents an increase of
$235 000 that is 6.1% from the 2016 allocation of $3,8 million. The Committee acknowledges and welcomes the increase as it will help cater for increased subscriptions for 2017 but this is by no means adequate. For instance, the Ministry has just received 2017 AU assessment of $2 million, which is $500 000 (32.7%) more than 2016 contributions of $1, 5 million.
6. COMMITTEE RECOMMENDATIONS
7.1 Committee Recommendations to the Executive.
- Increase the budget provisions to the Ministry as it is a strategic department. As a Committee, we explored the unenviable option of closing some of our embassies but we came to the correct realisation that it would cost the country more in the short term and long run as there is need to normalise the situation at the embassies by clearing arrears and be able to transfer or re-assign personnel, most of whom have overstayed their mandate. In addition to this, we realised that at a time when Zimbabwe needs the Diaspora more than ever, we should not give in to easy options which would
be detrimental to the needs of the country. Countries like Kenya which are of similar international profile and ambition are actually broadening their geographic footprint.
- Instead of shutting down some of these missions, Government should help them to downsize their offices around the world and ask our embassies to cut down in spending in a surgical manner rather than with a wholesale approach. Zimbabwe needs representation globally and should be able to serve its citizens wherever they are, without asking them to make a trip to another country or fly for hours for a simple service. This is a chance for the country to carry out a total reform of Zimbabwe’s Diplomatic offices around the world and we should seize it.
For example, these could be in the form of satellite offices that could serve Zimbabweans abroad.
- Give the Ministry the right to offer visa services and for passport renewal where the embassies can charge commission which they will keep. Zimbabweans in the diaspora would prefer to pay a relatively higher fee for their passport renewal, or other services than flying back home just to renew a passport.
- Do all it can to attract Foreign Direct Investment (FDI) by enacting policies that are investor friendly and improving the ease of doing business in the country. The theme for this fiscal year’s budget is“Pushing Production Frontiers across all Sectors of the Economy”. This inevitably requires international capital. Foreign investment will help Zimbabwe achieve this and realise its economic potential by providing capital to finance the industries and enhance existing industries, boosting infrastructure, productivity, and employment opportunities in the process. This will result in higher growth supported by foreign investment which will pay dividends for Zimbabweans by increasing tax revenues thereby increasing the funds available to spend on hospitals, schools, roads and other essential services.
- By extension, the Government should invest in economic diplomacy and equip our embassies and consulates for them to be able to promote Zimbabwe’s economic interests.
- Considering that we operate in a dynamic world characterised by shifting interests that often lead to both political and economic realignments, the Government should, therefore, continue to reorient our foreign policy and trade interests and inject enough resources towards this thrust.
- Allow the Ministry to employ trade and investment experts and deploy these at our foreign missions so that economic diplomacy can be fostered for the betterment of the country.
- To achieve the above, the Government should redefine its foreign policy in order to establish the country’s global trade priorities and pursue a robust, reciprocal bilateral and multilateral trade, taxation and investment relations through regional and international trade agreements.
- In light of the above, the Ministry’s mandate should be expanded to include international trade as the two are interconnected. This will allow the Ministry to better handle matters of international trade, unlike the current situation where the mandate is with another Ministry.
- Government should promote Harare as a hub for economic and multilateral diplomacy.
- Establish a semi-autonomous Government Foreign Service academy and a centre of excellence offering cutting edge training to diplomats in the country and the region.
- Create and implement the Zimbabwe diaspora policy and establish a national diaspora council of Zimbabwe to facilitate effective engagement with Zimbabweans in the diaspora.
- Last but not least, the Committee implores the Government, to do all that it takes to make sure that the economy starts to grow again. It is imperative to grow the economy by enacting pro-business policies improving the how to do business environment and dealing with the concerns of investors so that Foreign Direct Investment inflows increase.
- As the economy grows, the revenue base will grow and the National Budget will grow and Ministries will get bigger allocations, and this will translate into a virtuous circle.
6.2 Committee Recommendations to the Ministry The Ministry should:
- Move offices to smaller and less expensive locations as a costcutting measure.
- Remove or downgrade ambassadors where they are not necessary.
While high ranking diplomats such as ambassadors are vital for Zimbabwe to promote its foreign policy, in many cases having such high ranking officials in every diplomatic mission may not be necessary. A lower ranking diplomat assisted by local staff may be adequate to save on costs such as rentals which is the biggest expense at our missions.
- Keep minimal diplomatic personnel and convert some consulates into smaller offices could then report to another bigger neighbouring consulate, embassy, or directly to head office in Harare.
- Spend less on big villas for high ranking officials as these huge houses are not a necessity at this time of economic crisis.
- The Ministry should direct its limited resources specifically to countries that are of economic value or benefit to Zimbabwe.
- The Ministry should embark on a systematic restructuring and streamlining of personnel at our embassies.
- Develop and implement diaspora communication strategy with the view to enhance participation of Zimbabweans living abroad in national development by developing structures of engagement, database of Zimbabwean living broad and their skills, development of a dedicated web portal to enhance interaction and communication on the national opportunities as well as effective provision of consular services.
- The Ministry should develop a strategic plan to build bridges with the west, with a commitment to work with others to fulfil our nation’s collective aspiration of transforming Zimbabwe back to its original form.
- It should come up with a strategic plan which would define the strategic areas around which the Ministry’s objectives and strategies can be derived.
- The strategic plan will be a performance management tool to enable the Ministry to focus its work strategically and to enhance efficiency and accountability in the use of public resources. Like in other countries, this could be in the form of a score-card to assess the performance of our ambassadors either on a weekly or monthly
A comprehensive network of missions abroad is a central instrument in the implementation of foreign policy and development of a nation, and the budget proposal should always aim to secure
Zimbabwe’s external representation. A flexible and appropriate presence abroad functions as a source of information and power of influence which increases Zimbabwe’s security and welfare. The budget allocation for 2017 is deeply unhelpful to achieving this.
In the words of Elon Musk, “If something is important enough, even if the odds are against you, you should just do it”. To this end, we implore, entreat and importune the Honourable Minister of Finance to grant more funding to this strategic Ministry which carries the face of Zimbabwe. We are conscious of the challenges that we are facing as a nation, but this department cannot continue in its present form.
Mr. Speaker, we need to do something about this deteriorating situation in order to save our diplomats as well as our nation from further embarrassing situations and to enable the Ministry to meet its inevitable operational requirements abroad which have not been catered for in the current budget. I thank you.
HON. MANGAMI: Thank you Mr. Speaker Sir. I am going to a Report on the Ministry of SMEs and Co-operative Development. Mr. Speaker Sir, the amount allocated by Treasury to the Ministry of Small and Medium Enterprises and Co-operative Development...
THE TEMPORARY SPEAKER: Sorry Hon Member, go
straight to your recommendations. The House has agreed that you must go to the recommendations only.
HON. MANGAMI: It is okay, Hon. Speaker Sir. I am reading the recommendations, only that we combined them and they come immediately after the observations but anyway, I am going to do that.
THE TEMPORARY SPEAKER: Please!
HON. MANGAMI: The National Budget statement correctly identified that the economy is suffering mostly from production challenges hence the theme of the budget “Pushing Production Frontiers across All Sectors of the Economy” was ideal and relevant to the current economic quagmire. The production challenges have resulted in the fiscal space challenge as the economy continues to lose potential sources of revenue (workers retrenched and corporate taxes as companies close). Given the changing economic structure where big corporates are closing down and SMEs are driving production frontiers, there is need for the realisation that the Ministry of Small and Medium Enterprises and Cooperative Development has become the pillar of economic development in as much as it is contributing immensely to employment creation, revenue generation and supporting the big formal corporates.
In 2016, the Ministry of Small and Medium Enterprises and Cooperative Development managed to achieve the following using little budgetary allocations and the support from the Development Partners who assisted to the tune of US$ 12.6 million:
- Establishment of the observatory unit and acquisition of computer hardware.
- Production of the second formalization strategy draft document.
- Training of 23 825 micro, small and medium enterprises (MSMES) comprising 13508 females and 10317 males.
- Relocation to decent infrastructure of 1771 MSMEs countrywide.
- Registration of 868 co-operatives in all various sectors.
- Refurbishment of the SME Incubation Centre in Waterfalls under the India/Africa Incubation Centre partnership.
In light of such achievements, there is scope for increasing the budget allocation so that more can be done. This is buttressed by the fact that Development Partner support is not predictable hence the
Government should shoulder the greater part of the financing.
The above successes were also achieved against the background of a number of challenges, among them liquidity challenges, erratic funds, lack of mobility, inadequate computers and the lack of financial resources for onward lending to SMEs players. The liquidity challenges that affected the Ministry also impacted on the SMEs players. Most MSMEs operate on a cash basis, hence the shortage of cash which prevailed during the greater part of the year affected MSME operations and slowed down critical job creation in the sector. The introduction of Bond Notes by the Reserve Bank should be applauded as it has eased liquidity and cash shortage challenges for the players.
Table 1: Comparative Vote allocation and analysis for the Ministry of Small and Medium Enterprises and Cooperative
Development between 2016 and 2017.
|Budget Item||2016 Vote (US$)||2017 Vote (US$)||Change from Previous Year|
Table 1 above shows the following:-
- The total Vote allocation to the Ministry for the fiscal year 2017 is US$ 6, 131, 000, which is US$ 180 000 less than the $6,363,000 which the Ministry of SMEs and Cooperative Development was allocated in the previous budgetary year.
- The amount that was allocated to the Ministry is only 19 percent of the initial bid to Treasury, which was US$ 32,428,564.
- Most importantly, the amount that has been allocated to the Ministry of SMEs is only 0.15 percent of the total National Budget allocation of US$ 4.1 billion. This small share of the National Budget is not consistent with the fact that this Ministry now looks after a very important and large economic sector in the economy.
- Across all budget line items, there has not been any budget item that was equal or above the initial bid by the Ministry of Small and Medium Enterprises and Cooperative Development.
- A number of programmes that the Ministry of SMEs has planned to undertake in the forthcoming year did not receive any funding and have therefore been put on hold.
- The Small and Medium Enterprises Development Corporation (SMEDCO) loan revolving fund remains underfunded having received only US$ 2, 000, 000 against the initial bid of US$ 5,000, 000. This is going to make it difficult for the majority of MSMEs
to access funding in 2017.The allocation is not reflective of the importance of the SMEs in the economy which has become largely informalised.
Table 2: Analysis of the Vote for the Ministry of SMEs and Cooperative Development in relation to the Total National Budget.
|Vote Allocation to
Ministry of SMEs
|Total National Budget||$2,506,289,000.00||
|Proportion of Min of
SMEs Vote to total
Table 2 above shows that the total Vote allocation for the Ministry of Small and Medium Enterprises ($6,131,000) as a share of the total Government Budget excluding statutory and Constitutional Votes ($3,426,389,000) is only 0.18%.
Breaking it down shows that the Ministry of SMEs operations will consume 0.43 percent of the total amount earmarked for operations by the Government in 2017. Capital expenditure will take 0.41 percent of the total Government capital expenditure.
Implications of the Vote Allocation
- The amount allocated by Treasury to the Ministry of SMEs and Cooperative Development falls significantly short of the programming requirements of the Ministry. The budget seriously handicaps the Ministry of SMEs, which has set out to achieve a number goals as enunciated in their strategic plan.
- The Budget fails to reflect the importance of the MSMEs in the current economic set up where the sector is a pillar of production in the country generating employment, contributing to production processes and tax revenue.
- The Ministry’s vehicle fleet is now very old and they have few vehicles to enable mobility but the allocation to the Ministry is not adequate to purchase the required motor vehicles and motor cycles for provinces to reach out to all the potential sector players.
- No financial resources were allocated for the formalization of SMEs when current discourse in and outside Government is centering on how to formalise the informal sector to enable increased participation of the SMEs in the economy which will enhance their contribution to fiscal revenues.
- The Ministry has accrued rental arrears to the tune of $400,000 and is on the verge of being thrown out of the rented premises. The Ministry is currently being charged rentals of $43,000 per month for its offices across the country. In the long term, the Government will be better off incurring a once off capital expenditure either buying or building offices so that it ceases paying rentals.
- With the MSMEs facing challenges accessing bank loans, the amount that was allocated to SMEDCO of $2 million is insufficient to cover the ever increasing players who require funding. There is need for this allocation to be disbursed earlier in the year.
- Whilst the release of the US$ 10 Million to SMEDCO in the form of Treasury Bills by the Government is appreciated, the move did not achieve the intended objective of availing liquidity to SMEDCO. It should be understood that the market is currently not very liquid hence attempting to liquidate the Treasury Bills at the moment calls for a huge discount. This implies that the resources will remain locked in TBs making it difficult for SMEDCO to onlend the resources to the SME Sector.
- SMEDCO was also not allocated any funds for infrastructure, hence all ongoing infrastructural projects will be put on hold. The implication is that the cost of those projects will continue to increase, which would further increase their risk of the projects not being completed.
- The Government has proposed that the presumptive tax be ringfenced for the capitalisation of SMEDCO which is a positive development. However, it is imperative for Treasury to give clarity as to what percentage of this tax income is going to be ring-fenced and how the disbursement is going to be done.
- At the heart of every programming process is the need for monitoring and evaluation of programs, however, the budget failed to live with this reality. Not a single cent was allocated for this important cause. It will be difficult for the Ministry of SMEs and Cooperative Development to measure the impact of the ongoing programmes hence difficult to understand if there is success or not.
The following recommendations flow from the analysis of the 2017 Budget Vote for the Ministry of Small and Medium Enterprises and Cooperative Development:-
- Government should give greater priority to the Ministry of
Small and Medium Enterprises and Cooperative Development considering the increased importance of the SME and Informal sectors to the overall well-being of the economy.
- Government should immediately release the $2,000,000 allocated for the capitalization of SMEDCO in the first quarter of the year to enable the entity to provide loans to the SME sector.
- Treasury should restore the $180,000 shortfall on the 2017 Budget Vote so that the 2017 Vote is at least equal to the Vote for last year.
- Government should consider acquiring or constructing its own buildings so that it stops leasing properties because in the long run this is a very expensive option.
- Treasury should ensure timely disbursement of allocated funds and the funds should be disbursed in full to avoid jeopardizing programmes underway.
- The Ministry of Finance should conduct wider stakeholder consultation when they review presumptive tax.
The budget allocation is very small in relation to the programme requirements of the Ministry of SMEs and Cooperative Development. It is important that the Ministry’s allocation be increased by US$180, 000 so that it at least tallies with the 2016 allocation which was not also adequate. The formalisation of the informal sector is the new narrative, hence there is need for an allocation towards this important cause to allow the Ministry to engage SME players and train them with the support of other line Ministries. There is need to 'walk the talk' in as far as disbursements of the resources is concerned given the allocations are already less than the required appropriations. Any further reductions and any failure to actually disburse allocated amounts will worsen the situation for the Ministry of SMEs which has a number of important goals to achieve. I thank you.
HON. MUNOCHINZWA: Thank you Mr. Speaker Sir. I rise to
present a Report of the Portfolio Committee on Higher and Tertiary
Education Science and Technology Development.
1. Mandate and Priorities of the Ministry in 2017
The Ministry is responsible for the oversight, formulation and implementation of policies related to planning, training and development of human capital and the promotion of science, technology and innovation. The operations of the Ministry are governed by the provisions of the Manpower Planning and Development Act, the 2nd Science, Technology and Innovation Policy and Statutory Instrument 1 of 2000 as amended. The Ministry also facilitates cooperation in research and development, higher and tertiary education as well as science and technology at local, regional and international levels. The
Ministry falls under the Social Services and Poverty Eradication and Value Addition and Beneficiation clusters of the ZIM ASSET policy.
The Ministry will prioritize the following areas in 2017.
Human capital development: The Ministry continues to prioritise the improved supply of skilled and competent human capital through universities, polytechnics, teacher’s colleges and industrial training colleges. The Ministry will also prioritise lobbying the international community for financial, material and other support in addition to ensuring quality of all programmes and services in all tertiary institutions as well as providing scholarships to the needy and deserving scholars.
Science and technology development: The Ministry will advance the science and technology development agenda through research, development and innovation; technology transfer for science, socioeconomic development, promotion and advocacy on science activities countrywide. The Ministry will continue to promote the teaching and learning of STEM subjects.
2. Key achievements for 2016
The achievements for 2016 can be viewed from the ZIM ASSET perspective under two clusters namely;
- i) Social Services and Poverty Eradication and ii) ii)Value Addition and Beneficiation.
2.1 Social Services and Poverty Eradication
Establishment of new universities: Three more universities were established in the remaining three provinces, which did not have universities, making higher education more accessible to deserving students throughout the country.
Increased number of graduates (as at 30 September 2016): 8526 students graduated from 8 polytechnics and 3 industrial training colleges; 7471 students graduated from 14 Teachers colleges; 4682 students graduated from 2 universities.
Bilateral scholarships: 156 bilateral scholarships processed in the engineering field.
STEM programme: 5132 students were enrolled to study A ‘level
Mathematics and any 2 science subjects on full scholarship.
HPC computer centre: The connection of the HPC to universities and private organization is 80% complete.
Construction and refurbishment works: The female hostel and 2 warden houses completed at Lupane State University. Phase 1 relocation of students and staff from Bulawayo city to the campus effected with 145 students and 95 staff members accommodated. Thirty blocks at Madziwa Teachers College were refurbished while student hostels were also refurbished at Great Zimbabwe University and Gwanda State University.
2.2 Value addition and Beneficiation
Centre of excellence in mineral processing and beneficiation (CEMPB): The National task force team for the development of a document on draft modalities and statutes for CEMPB is already in place.
Coal to fuel production: Verify Engineering has commenced the production of liquid gas from coal and the expected production per day is 65 000 liters of liquid gases (oxygen and nitrogen).
Water purification and bottling: The Harare polytechnic and Harare Institute of Technology have completed the development of water purification and bottling plants.
Pharmaceutical and herbal medicine production: The construction of infrastructure, manufacture and production of pharmaceutical and herbal medicine is at 30% completion stage at HIT.
Tobacco Grader production: The design, production and commercialization of mechatronic tobacco grading system are at 10% completion stage at HIT.
Biodiesel production: The production of biodiesel from jatropha by Finealt Engineering is ongoing.
3. Overview of the Ministry’s Budget
The Ministry’s budget constitutes 4.9% of the total National Budget allocations for 2017 down from 9.1% in 2016. This indicates a decrease in priority accorded to the Ministry in 2017. The overall allocation of the Ministry will decrease by 35% in 2017 having decreased by 2.9% in 2016 and decreased by 10.7% in 2015. The major decrease is witnessed in the Current Transfers budget which will decrease by 43.5% in 2017.
This situation will cripple service delivery in grant aided institutions.
The situation also reflects a scenario of expenditure switching given an almost stagnant national budget at $4 billion. Figure 1 shows the Ministry’s budget allocations since 2012. Figure1: Ministry allocations from 2012 to 2017
Source: Budget Estimates (2012-2017)
3.1 Economic classification of the Vote allocation
The Higher Education budget is highly recurrent with 88.4% of the total budget going towards current expenditures in 2017 leaving 11.6% for capital expenses. This reflects a highly consumptive budget. Current transfers take the bulk of the Ministry’s current expenditure budget absorbing 62.3% in 2017 compared to 72% in 2016 and 66.7% in 2015. This remains the key expenditure priority area of the Ministry. Current
Transfers supports grant aided State enterprises and agencies under the Ministry. As of end of October 2016, 74.4% of the total budget resources had been disbursed to the Ministry with significant disbursements going towards current expenditure (80.7%), with current transfers getting 77.8%. However, the resources were not always available on time. On the other extreme, only paltry resources were disbursed towards capital expenditure (5.2%), goods and services (18.6%) and maintenance (44.1%). This will impact negatively on the day to day running of the ministry. Table 1 shows the economic classification of the ministry’s expenditure in 2017 compared to 2016.
Table 1: Economic classification of the Ministry’s Vote for 2017 compared to 2016
classification of the vote
| Exp to
|% expt to
|Proportion of 2017 budget||%
|Goods and services||1165000.0||217081.0||1858000.0||18.6||0.9||59.5|
|Acquisition of fixed assets||65000.0||119500.0||4617000.0||183.8||2.3||7003.1|
Total 307720620.0 229066940.0 200886000.0 74.4 100.0 -34.7
3.2 Programmes of the Ministry
Three main programmes of the Ministry have been identified as
Policy and Management, Human Capital Development and Science and Technology Development. The bulk of resources of the Ministry go towards human capital development (96.2%). This is in line with the core mandate of the Ministry of improving the supply of skilled and competent human capital. The resources to the areas for 2017 have been apportioned as in figure 2.
Figure 2: Resources to the Ministry by main Programme
3.3 Analysis of the Sub Votes of The Ministry
The Ministry has 3 sub votes namely, Administration and general,
Teachers’ Education and Technical and Vocational Education and
Training (TVET). The Teacher Education budget covers ten Teacher’s colleges while TVET covers 8 polytechnics, 385 independent TVET institutions and 2 industrial training centres. The budget for TVET is supplemented by the Zimbabwe Manpower Development Fund (ZIMDEF). The Administration and general supports 15 grant-aided State enterprises and agencies which are10 State universities in each province, the National Biotechnology Authority, the Zimbabwe Council for Higher Education (ZIMCHE), Verify Engineering (Coal to Fuel), Finealt Engineering (Bio-Diesel) and the National Nano-technology.
As a proportion of the total Ministry budget, the Administration and General budget takes 74.7% in 2017 compared to 82% of the budget in 2016 and 77% in 2015. The Teacher Education budget takes 18.8% of the Ministry’s budget in 2017 and the remainder (6.6%) goes to Technical and Training Education. Figure 3 shows the distribution of the
Ministry’s Vote in 2017.
- Figure 3: Distribution of the Ministry’s Vote in 2017.
Administration and general budget
The Administration and General budget will decrease by 40.3% in 2017 against an increase of 3.3% in 2016. The major sub component of the Admin and General budget are Current Transfers which support grant aided institutions under the Ministry. The Current Transfers Vote will decrease by 43.5% in 2017. As a proportion of the total Admin budget, Current Transfers take away 83.4% in 2017 compared to 88.1% in 2016 and 86.9% in 2015. A decrease in the Current Transfers’ budget of this magnitude will cripple institutions of higher learning in delivering their core mandates. The budget will not sustain the institutions for more than 6 months going forward. Table 2 shows the distribution of the Administration and General Budget.
Table 2: Distribution of the Administration and General
|Administration and general||2016||Exp to
|Acquisition of fixed assets||65000||20000||0.0||-69.2||0.01|
Total 251449000 178100968 150014000 70.8 -40.3 100.00
3.3.1 Analysis of the Teacher Education Budget
The Teacher Education Budget will decrease by 15% in 2017 having decreased by 27.3% in 2016. Employment costs which chews 98% of the Teacher Education Budget, will decrease by 16% in 2017 and is not clear which policy will be instituted to support this new development. The operations budget remains constant while the poor levels of disbursement of 11.9% by October, further cripples the department’s operations. The situation in teacher’s colleges will get into a sorry state if the Treasury fails to improve resource allocations.
By October 2016, 98% of resources had been disbursed towards the Teacher Education Vote with the major disbursement going towards employment costs (99.5%). Only 11.9% was disbursed for operational expenses while nothing was disbursed for current transfers. Also no allocation was made for acquisition of fixed assets in 2016.
This situation obviously will affect the Ministry’s achievement of its key result areas which includes quality human capital development, science and technology development, research and development, quality assurance and standards, technology transfer and knowledge generation and application. Table 3 shows the Teacher Education budget status.
Table 3: Teacher Education budget status
|Teacher education||2016||Exp to Oct||2017||% disbursed||%change||prop 2017|
|Total 44443000 43761066 37763000 98.5 -15.0 100.0|
3.3.2 Analysis of the Technical and Vocational Education and
Training (TVET) Budget
The budget towards TVET will increase by 11.5% in 2017 having decreased by 4.4% in 2016 and decreased by 7.2% in 2015. The increase probably reflects the inclusion of vocational training centres who previously were housed under the Ministry of Youth, Indigenisation and Economic Empowerment. Employment costs will decrease by 14.1% in 2017. Although there is a significant increase in the acquisitions of fixed assets budget by 187.2%, the major question is on disbursements since this item has not received anything since 2014. The operational expenses budget will also decrease by 9.1% in 2017.This scenario as in the previous budget, depicts a retrogressive approach towards entrepreneurship considering the fact that the department impact skills necessary for students to start own projects against background of high unemployment and a growing informal sector. As a proportion of the total TVET budget, employment costs constitute 63.7% in 2017 compared to 76.7% in 2016. Acquisition of fixed assets will consume 32.5% in 2017 from 12.6% in 2016. Although the budget is supplemented by ZIMDEF, the situation is becoming worse given the financial management problems of ZIMDEF funds as unearthed by the
Zimbabwe Anti Corruption Commission (ZACC) in the last quarter of 2016.
By October 2016, 61.3% compared to 62.1% in2015 of the Vote appropriation has been disbursed towards TVET. The major disbursement goes towards employment costs (73.5%) while 10.9% is for operational expenses. No funds were disbursed towards acquisition of fixed assets as in the 2015 and 2014 budgets. This is despite the rise in funds allocated in the 2017 Budget which increased by 187.2%. Table
4 shows the TVET Budget status.
Table 4: TVET Budget status
|Technical education and training||2016||exp to Oct||2017||% disbursed||% change||prop 2017|
|Acquisition of fixed assets||1482000||4257000||0.0||187.2||32.5|
Total 11753000 7204907 13109000 61.3 11.5 100.0
3.4 Analysis of the Current Transfers budget
Current transfers consume 62.3% of the total budget of the
Ministry. This Vote decreased by 43.5% in the 2017 Budget. This is mainly driven by an average reduction of 45% of resources going to universities. This is a major blow to universities who solely depend on Government funding. The budget for universities mainly caters for employment costs of staff members. The reduction of this line item’s budget allocation by almost 50% will inevitably impact negatively on service delivery and ultimately result in brain drain and potential student demonstrations and industrial actions.
The levels of disbursements at an average of 77.8% are also worrisome. Some key and critical staff members have already resigned from universities due to unpredictable salary disbursements on a monthly basis. This was further compounded by work overload given the current recruitments freeze on all vacant posts.
The continued reduction in budget allocations towards the ministry’s specialised projects, with potential to raise revenue, shows lack of commitment on the part of Treasury. These projects include those initiated by the National Biotechnology Authority, Finealt and
Verify Engineering, which have remained underfunded for many years with erratic disbursements making the institutions literally dysfunctional.
The Treasury has also failed to disburse funds towards capacitating the HPC and Innovation and Commercialisation Fund despite having made some provisions in the previous budget. While these are potential revenue generators, they remain infant institutions that depend on
Government resources year in year out.
The scholarship fund remains largely inadequate given outstanding obligations to host countries. While the disbursement rate towards this budget item is commendable, there is need to grow the fund so that we owner our part with regards to bilateral agreements with host countries.
Table 5 shows the breakdown of the Current Transfers budget.
Table 5: Breakdown of the Current Transfers budget
|Current transfers||2016||exp to oct||2017||%
|Bindura Univesity of Science
Chinhoyi University of 19057000 14679142 10349000 77.0 -45.7 8.3
|Great Zimbabwe University||22023000||17377834||12649000||78.9||-42.6||10.1|
|Gwanda state university||35000||45000||0.0||28.6||0.0|
|Harare Institute of Technology||10535000||8223864||5869000||78.1||-44.3||4.7|
|Lupane State University||7868000||5907433||4320000||75.1||-45.1||3.5|
|Midlands State University||30315000||24181946||17322000||79.8||-42.9||13.8|
|Manicaland state university||40000||35000||0.0||-12.5||0.0|
|Mashonaland State university||40000||35000||0.0||-12.5||0.0|
|National Education and
|National University of Science and Technology||28364000||22173468||15876000||78.2||-44.0||12.7|
|University of Zimbabwe||60494000||46868596||33161000||77.5||-45.2||26.5|
|Zimbabwe Council of Higher
|Zimbabwe Open University||20527000||15771242||11153000||76.8||-45.7||8.9|
| Zimbabwe Manpower
|High performance computor||40000||10000||0.0||-75.0||0.0|
| ZIMDEF Science and
|Subscription to various 38000||27495 38000 72.4 0.0 0.0|
Total 221601000 17247681 125178000 77.8 -43.5 100.0
4. Implications of the budget
- The overall budget allocated to the Ministry constitutes 4.5% of the total budget and will decrease by 34.7%. This will negatively impact on service delivery particularly towards employment costs for tertiary institutions. The largest percentage of the budget 62.3% goes towards current transfers (mainly state universities) which is a reduction from the previous year’s allocation towards current transfers of 72%.
- Disbursement to October 2016 accounted for 74.4% of the resources allocated. Although this is an improvement from 62% disbursed in 2016, it is still low given that the funds will be needed monthly for operational expenses and meeting employment costs.
- The budget remains highly recurrent as it leaves only 11.6% for capital expenses. This budget is very consumptive and lacks developmental drive.
- The cadetship funds under the National Education training fund are insufficient to restore the cadetship programme. The funds are also going towards meeting an insignificant part of previous obligations standing at $37 000 000.
- The budget of $1 000 000 towards scholarships to foreign students will imply reduced stipends to foreign students who are already on stream against an arrear of $340 000. This will make students vulnerable and creates a bad image for the country. There is also an outstanding arrear for 2016 of $500 000 for the Equatorial
Guinea Programme of which the same amount was allocated in 2017. This implies that the country will fail to fulfil the requirements of foreign students in the two countries.
- The operational budget for Teachers’ colleges and Technical and Vocational Training colleges are never released year in year out.
This adversely affects operations at the institutions.
- Despites the funds allocated to programmes being insufficient, the
Treasury always fails to disburse the funds making it difficult to derive benefits from such programmes. Important to note is that these are STEM programmes with a potential to turn around the economy.
- A small budget for STEM disciplines ($200 000) will result in reduced enrolment for STEM based courses.
- The outgoing education attaché in Paris has outstanding salary arrears and the new attaché is not able to depart for France due to resource constraints.
- The reduction in the Current Transfers budget which largely meets employment costs for grant aided institutions coupled with delayed releases of salaries, kill staff morale and eventually results in destructive demonstrations, industrial actions and massive brain drain.
- The fees generated by institutions under the Ministry have been proved beyond doubt to be insufficient to run the institutions and thus have been used for operational expenses and supplementing research and development. This is mainly because the fees are pegged low and in line with affordability and also that payments are intermittent. Thus, shifting the burden to institutions to be selfreliant and sufficiency, which is counterproductive.
- The budget towards the HPC of $10 000, which is far short of the basic requirement of $1 307 600 covering areas such as internet, operational and software licences, forensic HPC live demonstrations, HPC marketing and publicity, electricity, human capital development and HPC user training. It is important to note that once fully operational, the HPC has potential to recover costs through billing users.
- The overall implication of the budget allocated to the ministry is to reduce the volume and extent of its activities to fit the budgetary resources.
- The timeous disbursement of funds allocated to all budget items remains critical. This is in light of low levels of disbursements towards operational expenses, maintenance, programmes and
fixed assets acquisition as well as unpredictable disbursements towards grant aided institutions’ salaries.
- The resources towards current transfers should be increased by 44% to at least restore grant aided institutions, in particular universities.to the situation obtaining in 2016. Otherwise, resources will be depleted within the first 6 months of the year.
- There is also urgent need to clear outstanding arrears to the Ministry such as $48 080 591 liabilities on goods and services, the August 2015, 50% salary arrears ($7 963 320) and the $7 658 779 on outstanding certificates for work done but not paid for in grant aided institutions. While the Ministry’s activities are ongoing concerns, such arrears will continue to militate against service delivery since the current budget does not reflect these.
- The Government should rationalise tertiary institutions establishment in line with SADC standards, lecturer/student ratios and STEM thrust. This is in light of the freeze on recruitments which has resulted in an overall Ministry’s staff deficit of 2 498. The Government should seriously consider lifting the ban on recruitment, in light of brain drain affecting some universities’ programmes that are STEM related.
- The Treasury should increase funding towards scholarships in order to enable the country to meet its bilateral agreements with host countries as well as avert the potential of putting the country’s image at stake when Zimbabwean students abroad demonstrate against poor conditions. The Government should also avail resources towards the Equatorial Guinea students studying in Zimbabwe in fulfillment of the fuel agreement signed between the two countries.
- In light of dwindling fiscal support towards the Ministry’s specialised projects with potential to generate revenue such as National Biotechnology Authority, Verify Engineering and
NanoTechnology, the Government should consider the option of privatising the entities to make them operational and viable. The Government should also avail resources for patenting products produced by such companies so as to enjoy long term benefits.
- The Treasury should review upwards the budgets to new state universities which have become a burden to other universities with a supervision role on them.
- The Government through the Treasury and RBZ, should accelerate the infrastructure bond funding option so that it becomes operational. While some universities have PSIP work in progress, the progress is very slow due to lack of funding while other new universities are still to commence on infrastructure development work.
- In light of massive unemployment in the country, the Government should consider providing refresher courses to graduates before they finally get absorbed. In addition, the Government can also consider exporting graduates to countries in need of them and benefit through remittances which feeds into the fiscus.
- In order to sustain new programmes in tertiary institutions that have an impact on the economy(in light of the current freeze on recruitment of staff) such as the training of
Optometrists and Aircraft Engineers, the Treasury can virement resources from directly related entities.
HON. KWARAMBA: This 2017 Budget Analysis Report pertains
to the Vote Allocations made to the Ministry of Public Service, Labour and Social Welfare; the Ministry of Welfare Services for War Veterans,
War Collaborators, Ex-Political Detainees, Restrictees and; and the Public Service Commission.
- ANALYSIS OF THE 2017 BUDGET VOTE FOR THE
MINISTRY OF PUBLIC SERVICE, LABOUR AND
The Ministry of Public Service, Labour and Social Welfare’s core mandate involves promoting a conducive labour market environment, fair labour standards, labour productivity and efficient employment placement services and includes; capacity building to ensure efficiency
|in the delivery of public goods and services; enhancing self-reliance through the provision of social protection services to vulnerable and disadvantaged groups in society; providing an interface with the International Labour Organisation and ensuring the maintenance of labour standards. The Ministry is also tasked with initiating reforms aimed at strengthening public service management and administration and mobilising resources for the Ministry, the National Social Security Authority (NSSA), Premier Service Medical Aid Society (PSMAS) and the Zimbabwe Institute of Public Administration And Management
In order for the Ministry to play its central role in the achievement of ZIM ASSET goals and to deliver on the key ZIM ASSET pillar of Social Service and Poverty Alleviation through the attainment of important social and economic objectives, as well as the attainment of the Sustainable Development Goals, it is critical for the Ministry of
Public Service, Labour and Social Welfare to be adequately resourced.
Because of this central role, the MPSLSW is one of the four
Government Ministries that have been piloted on the Programme Based
Budgeting framework. Under this framework, the Ministry has four programmes and the budget vote of $193,789,000 for 2017 has been appropriated in full cognisance of these programmes, namely:
- Policy and Management; ii. Public Sector Human Capital Development; iii. Labour and Social Services Administration; iv. Social Welfare.
The total allocated vote of $193, 789,000 for the Ministry of Public
Service, Labour and Social Welfare is significantly lower than the its bid
($291,000,000) and this will significantly affect the performance of the Ministry and derail attainment of its set objectives for 2017.
Table 1: ANALYSIS OF THE 2017 BUDGET VOTE FOR THE
MINISTRY OF PUBLIC SERVICE, LABOUR AND SOCIAL
|National Budget Total||$2,506,289,000.00||$400,000,000.0 0||$520,000,000.00||$3,426,289,000.00|
|Proportion of the MPSLSW vote to
total budget line
|Prop of vote to the total Ministry
- The total vote for the Ministry of Public Service, Labour and Social Welfare constitutes 5.66 percent of the total vote allocations for 2017 ( excluding statutory and constitutional allocations)
- The major component of the vote allocation is employment costs which will consume 85 percent of the total amount allocated to the Ministry. This high level of expenditure going to employment costs (85%) is not a healthy scenario and points to the need for
Government to continue with efforts to rationalise the Civil Service.
- Though operational costs will consume 14 percent of the
Ministry’s budget, this is a higher proportion relative to the total operations costs of the Government at 6.94% of total Government operations costs.
- The vote allocation signifies that the budget is a recurrent expenditure budget with very little set aside for capital expenditure.
- This implies that if the proposed revenue inflows dwindle during the year, the capital allocations will suffer the most.
- It should be understood that international best practice requires that capital expenditure should be at least 25 percent of the budget allocations.
Challenges of the allocations and their implication
National Social Security Authority Contributions
Government has been unable to remit NSSA Employer
Contributions with arrears now approaching $180 million. The situation spells doom for NSSA since it is paying Government Pensioners, whilst contributions are not coming in. In view of the fact that the NSSA minimum pensions are being reviewed to $100 per month with a further upward review to $150 per month planned for 2017, it is critical for Government to avail sufficient resources to NSSA to avert its possible collapse in the very near future. Only $34,800,000 has been set aside for NSSA in the 2017 Budget. This amount falls significantly short of what would be required to resolve the arrears problem.
Premier Medical Aid Society (PSMAS)
The Government has been failing to remit its contributions to the PSMAS hence has fallen into arrears. These arrears are affecting the smooth provision of health services to members who are frequently turned away from health institutions or are required to pay cash upfront for services.
Goods and Service Providers
The Ministry of Public Service has incurred significant arrears for goods and services across all its programs. The arrears are for Rentals, Utilities, Allowances, Communication expenses (Fixed and Mobile
Telephone expenses, Internet, advertising, newspapers and transportMotor Vehicle Hire and Vehicle maintenance). The Ministry currently faces a real risk of being taken to court and possible cancellation of leases and eviction if arrears for these services and rentals are not cleared.
The Ministry has accumulated unpaid subscriptions to
International bodies where the country is a member. These are: - Eastern and Southern African Management Institute (ESAMI), African
Regional Labour Administration Centre (ARLAC), African Training and
Research Centre In Administration for Development (CAFRAD), International Labour Organisation (ILO) and International Organisation for Migration (IOM). Zimbabwe is current chair of some of these bodies and plays host to the ARLAC in 2017. Arrears are proving to be embarrassing for the image of the country.
Basic Education Assistance Module (BEAM)
Cumulative arrears for the Basic Education Assistance Module for 2014, 2015 and 2016 now stand at $72 million The Ministry has been allocated only $10million (10%) from a requirement of $105 million
This amount will result in only 161,102 children being assisted in 2017, from an estimated need of over 500,000 children. As many as 338,000 children risk dropping out of school in 2017. Major donors DFID and
USAID have stopped supporting BEAM hence the need for the Government to support the programme.
In addition to this constraint, Children in difficult circumstances have been availed only $200,000 compared to the ideal requirement of $1,500,000.00 and this will adversely affect that social programme.
Health Assistance Fund
Cumulative arrears stand at $5,800,000 and of the $6,800,000 the budget requirement for 2017; only $1,000,000 has been set aside for the Health Assistance of vulnerable households.
Food Mitigation Strategy
Only $500,000.00(9%) out of a requirement of $5,400,000.00 has been provided. This will be sufficient to provide food to vulnerable people for only one month.
Harmonized Social Cash Transfers (HSCT)
Donors have effectively pulled out of the HSCT programme owing to Government’s inability to fund their share of the $1 for $1 contribution. Poverty and vulnerability is therefore likely to increase in
- The $2,000,000 provided for in the budget represents 18% of the $13,600,000 required to sustain the programme.
Zimbabwe Institute of Public Administration (ZIPAM) and the Zimbabwe National League for the Blind require Capital Grants for improving infrastructure but have been provided only $100,000 and $84,000, out of a requirement each of $1,000,000 and $200,000 respectively implying that capital projects will not be completed this coming year.
Other Critical Services
Critical Boards and councils under the Ministry continuously fail to meet and discharge their duties due to resource constraints as the Ministry is unable to pay arrears of outstanding allowances and current expenses. These boards are the Retrenchments Board, the Older Persons Board, the Disability Board, The National Productivity Centre and
National Productivity Institute Board, National Joint Negotiating Council. In addition, critical functions in the Ministry such as the registration and Monitoring of NGOs (PVOs) and conducting Social Dialogue are not being sustained. One of the major effects of this has been the inability by the Ministry to conclude implementation of the
Kadoma Declaration agreed to by labour, government and business in 2001, with an objective to foster understanding amongst the social partners and reduce the country's risk factor.
Shortage of Equipment and Vehicles
Shortage of Motor vehicles, furniture and office equipment has impacted service delivery. Such important activities as labour Inspections and investigations and in office services are woefully inadequate as some offices have no chairs, desks and essential basic office equipment. Vehicle hire is proving to be very expensive and unsustainable and Government may need to allow the Ministry some room to purchase its own vehicles.
- ANALYSIS OF THE 2017 BUDGET VOTE FOR THE
MINISTRY OF WELFARE SERVICES FOR WAR
VETERANS, WAR COLLABORATORS, EX-DETAINEES
This is a new Government Ministry and is still under-resourced in terms of human resources. Most of the staff in this Ministry has been seconded from the Armed Forces and this is creating issues of accountability and inefficiency in the Ministry.
The Ministry of Welfare Services for War Veterans is looking after the interests of 34,000 War veterans and their dependents, 9,000 War
Victims (Disabled), 5,400 Ex Political Prisoners, Detainees and Restrictees.
A massive exercise to vet War Collaborators still needs to be carried out and this has not been provided for in the budget. The Ministry is also tasked with looking after the burial of National Heroes and the upkeep of dependants and widows of National Heroes.
Table 2: Allocations to the Ministry of Welfare Services for War
Veterans, Former Detainees, Restrictees and war Collaborators
|Allocation to the
|National Budget Total||$2,506,289,000.00||$400,000,000.00||$520,000,000.00||
|Ministry allocation as a proportion to total line allocation||0.03%||5.25%||0.05%||0.64%|
|Proportion to Ministry allocation||3.76%||95.11%||0.01%||100.00%|
The total Ministry allocation remains meager given it is less than 1 percent of the total vote allocations.
The major component of the vote allocation is operations (reflecting the nature of the Ministry which is solely responsible for catering for health, fees of war veterans and their dependents).
The total allocation for operations constitutes 95 percent of the total vote allocation to the Ministry. The Ministry budget allocation is basically dominated by operational expenses as compared to employment costs.
The allocations to employment costs and capital expenditure remain very low at 0.03 and 0.05 percent of the total employment and capital expenditure votes respectively. This translates to 3.76 percent and 0.01 of total government expenditure for those votes respectively.
Of concern in the Budget is the very low capital expenditure, which should be progressively increased to 25 percent of the total vote allocation in the future, once fiscal space increases.
Challenges and Implications of the Budget Vote
- The budget vote of $22,080,000 against a requirement of $83,000,000 is grossly inadequate.
- In view of all the above the vote allocation by the Honorable Minister of Finance did not take into cognisance the expanded mandate of the Ministry of Welfare for War Veterans and as such this Ministry is currently faced with a dilemma.
- The budget fails to adequately cater for the school fees of war veterans dependants , medical bills and funeral grants. Medical bills are now soaring as War Veterans now need increased medical care due to their advanced age.
iii. ANALYSIS OF THE 2017 BUDGET VOTE FOR THE
PUBLIC SERVICE COMMISSION
The Public Service Commission’s (PSC) core mandate in terms of the
Constitution of Zimbabwe is to define operational structures for line Ministries, appoint relevant and qualified personnel and to fix and regulate conditions of service in the Civil Service. In addition, the Commission is tasked to implement all necessary measures to ensure efficient performance and the general well being of Civil Service employees. The Key Result areas of the Public Service Commission are: Social Service Delivery; Policy Formulation Advocacy and
Coordination, Implementation and Evaluation; Capacity Building and
HR Development and Management; Public Service and Civil service
Reforms and ensuring public sector accountability and Transparency.
Priority Ares of the Public Service Commission for 2017, which the budget is supposed to support are:
- Rationalization of the Public Service;
- Alignment of the Public Services Act and statutes to the new Constitution;
- Implementation of the Results Based Personnel Performance
System and Computerized Human Resources Management
Information System and payroll systems; and
- Upgrading PSC member’s skills and strengthening PSC structures.
TABLE 3: ANALYSIS OF THE BUDGET VOTE FOR THE PUBLIC SERVICE COMMISSION
|Allocation to the Commission||$12,854,000.00||$4,500,000.00||$1,390,000.00||$18,744,000.00|
|Prop to Total Budget allocation||0.51%||1.13%||0.27%||0.55%|
|Prop to Ministry
The total allocation to the commission as a proportion of the total budget allocation was 0.55 percent (which is less than 1 percent).
The major share of the budget was allocated to operations, which will consume 1.13 percent of the total Government operations costs. Relatively this was higher than employment costs which are going to consume 0.51 percent of the total national budget.
Capital expenditure remains the smallest beneficiary from the budget at 0.27 percent and has the highest risk of not being honored in case of revenue slippages.
In terms of the allocation to the Public Service Commission, the major component is to employment costs (68.58 percent), followed by operations (24 percent) and lastly capital expenditure (7.42 percent).
The major challenge with the budget allocation remains the huge employment allocation at the expense of operations and capital expenditure
Challenges with the budget allocation to the Public Service
- The ideal budget appropriation for the PSC for 2017 was proposed at $33,359,122.00.
- This amount would have been adequate to cover the operational mandate of the Commission for 2017.
- However, a vote of $6,290,000 has been proposed by the Hon Minister of Finance and this is inadequate. The Commission has accumulated arrears of approximately $3,000,000 representing 50% of the 2017 Vote.
- Under this scenario it will be a challenge for the Commission to meet its commitments and sustain its programmes for the 2017 fiscal year.
The Committee strongly recommends that:-
- Rationalisation of the Civil Service be expedited in order to reduce the wage bill which currently takes up 97 percent of the National
- Allocated financial resources must be disbursed timeously and in full to avoid situations of Government Departments going into arrears for critical goods and services.
- Government should urgently provide resources to clear all outstanding Employer contributions to NSSA currently at $180 million.
- Government should urgently provide resources to clear all outstanding medical aid contributions to PSMAS to enable civil servants to access medical services.
- The Ministry of Public Service, Labour and Social Welfare and other Government departments should embrace e-technology and stop buying items like newspapers.
- Government must allocate resources for the purchase of motor vehicles. Hiring vehicles is not cost efficient and it is strongly recommended that the resources being channeled for vehicle hire be instead used to finance Hire Purchase of vehicles. For the
Ministry of Public Service, Labour and Social Welfare.
- Resources must be availed to the Ministry of Public Service, Labour and Social Welfare to clear outstanding arrears with international bodies where the country is a member to avoid the current embarrassing situation.
- Adequate financial resources should be allocated towards the Basic Education Assistance Module (BEAM), to enable vulnerable children, who are our future to access basic education. In addition, Government should speedily identify other funding partners for the programme.
- Given the weaknesses of the Health Assistance Fund, Government must speedily conclude the establishment of the National Health Insurance Fund.
- The Vote for the Food Mitigation Strategy must be increased so that it covers the up to the end of March 2017 when the harvest season begins.
- The Ministry of Public Service, Labour and Social Welfare should enact a statutory instrument compelling Government departments and Ministries to use ZIPAM conference facilities.
- Boards should be self financing and some Boards under the Ministry of Public Service, Labour and Social Welfare should be merged to avoid duplication and save on financial resources.
- Government is urged to immediately move some of the beneficiaries of the Harmonised Social Cash Transfers to other
Social Protection Programmes.
- The Ministry of Welfare Services for War Veterans, Collaborators, Ex-Detainees and Restrictees should immediately recruit competent key staff and reduce reliance on seconded employees from the army as this compromises accountability and transparency.
- An audit should be conducted to establish the number of genuine War Veterans and their dependents to avert and eradicate leakages to non bona-fide beneficiaries.
- Adequate oversight must be exercised by Treasury and Parliament on the operations of the commercial businesses that have been set up by the Ministry of Welfare of War Veterans and Ministry of Public Service, Labour and Social Welfare to avoid leakage of funds.
The Budget Votes allocated to the Ministry of Public Service, Labour and Social Welfare and the Public Service Commission are inadequate for their needs given the high levels of accumulated arrears for past services. This points to the lack of fiscal headroom and the fact that annual vote allocations are not translating into actual release of funds due to resource constraints. The Ministry of Welfare of War Veterans, Ex-Political Detainees, Restrictees and War Collaborators is hamstrung as a new ministry, but has taken initiatives to assist central government by engaging in revenue generating projects that are expected to provide additional resources. This should be highly commended.
The Ministry is responsible for promoting sound environment practices and sustainable development, utilisation of natural and water resources. Zimbabwe’s economy is largely dependent on environment and natural resources which makes the country highly vulnerable to the adverse impacts of climate change. Since negative climate change is threatening livelihoods of most citizens in the country, the Ministry remained one of the most strategic ministries. The Ministry is implementing mitigation interventions such as climate smart agriculture practices like rainwater harvesting and supplementary irrigation.
2. The major achievements in 2016
In 2016, the Ministry managed to achieve the following among others, with limited budget allocation of $34,242,000;
- The construction of Tokwe-MukoRsi 98% complete and to start impounding water during the 2016-2017 rain season;
- Upgrading of Harare, Chitungwiza , Kwekwe and Chegutu water supply and wastewater treatment plants under the ZIMFUND project;
- With financial support from development partners including DfiD and SDC, the Ministry drilled 240 boreholes to complete the project target of 1500 boreholes;
- An additional 145 boreholes were drilled under China Aid against a target of 300;
- 41 boreholes were drilled under the Water Fund programme.
- The water treatment plant for Lupane is now complete and supplying water to all parts of Lupane including the Lupane State
- Upgrading of Beitbridge water supply and waste water is at 99% completion;
- Following the drying of the dam supplying Kotwa an emergency pipeline was constructed from Dendera farm, 7.5 km to the North
East of the Growth Point;
- Ministry received and installed meteorological equipment worth US$1.5 billion under China Aid to Africa Programmes.
- Anti-poaching system upgraded to include sniffer dogs, GPS radio tracking and drones;
- Successfully defended Zimbabwe’s sustainable utilisation principle at CITIES CoP 17;
- Establishment of green villages to scale up adaptation in Buhera,
Chiredzi and Chimanimani.
3. The major challenges faced in 2016;
In 2016 the Ministry faced the following challenges among others;
- Increased poaching targeting high value species such as elephants and rhinos throughout the country using sophisticated methods.
- Non-compliance to environment policy and legislation by institutions such as local authorities, small scale miners, mining companies etc;
- Inability to unlock resources due to CITIES restrictions on ivory trade;
- Poor solid waste management in urban centres, growth points and service centres in Zimbabwe;
- Uncontrolled veld fires resulted in the loss of 7 lives in 2016 (16 lives lost in 2015).The 2016 fire season recorded a total of 1652 incidences resulting in 1 197 335 .52 ha of land being burnt by fire while 1881 incidences and 1 336 746 .77 ha was burnt in the 2015 fire season. This translates to 10.4% reduction in the area burnt by veld fire and a 12% reduction in fire incidences;
- Foreign policies by western countries have led to a decline in proceeds from hunting in Zimbabwe;
- Tight fiscal space affected implementation of major Public
Service Investment Programme (PSIP) projects;
- Non releases of PSIP Funds resulting in delay of completion of projects identified as priority under the ZIMASSET;
- Non-payment of water levies by beneficiaries;
- Low uptake of water from some dams by farmers resulted in decline in revenue.
4. 2017 policy priorities for 2017-2019
The priorities include the following:
- Climate financing (adaptation and mitigation)
- Cloud seeding;
- Dam safety and desiltation of dams;
- Completion of on-going projects Marovanyati and Mutange dams;
- Completion of rural and urban water supply projects (Beitbridge,
Victoria falls and Binga);
- Procurement of Meteorological equipment;
- Aviation equipment – automatic weather observing systems for
Kariba, Buffalo Range, Masvingo and Hwange airports.
5. 2017 Budget Analysis
In 2017, the Ministry was allocated $ 40,100,000 against a bid of
$66,480,000. The allocation constitute only 60.32% of total requirements. However in comparison to 2016, the allocation increased by 17.3%. The implication is that the fiscal problems faced in 2016 will persist in 2017. The economic classification of the allocation is broken down as follows;
Table 1: Economic classification of the budget allocation
|Budget Area||Budget Allocation||% Allocation|
From Table 2, 91.7% of the budget allocation is capital expenditure and 8.3% is current expenditure. 78% of the funds is allocated to capital transfers which shows that the budget is developmental in nature. The amount is for water development projects.
The budget allocation is divided into three sub-votes as follows:
2017 Vote analysis for sub-vote I: Administration and General
The total proposed funding level for 2017 is $855,700 which represent a significant decreased of 74.4% over prior years. Table 2 present the breakdown of the allocations.
Table 2: Percentage Change in Budgetary Allocations from
2016 to 2017 for administration
|Goods and services||287,000||80,866||198,700||-30.8|
Acquisition of fixed capital assets
|Sub head not repeated(Capital
From Table 2, budget proposed expenditure decrease mostly on current and capital transfers. For 2017 fiscal year, parastatals (EMA, Zimbabwe Parks and Wildlife Management Authority and Forestry Commission) have been weaned off in line with Government’s policy of expenditure streaming and promotion of income generation among ministries. The operations and maintenance budget (current expenditures less employment costs) decreased from $317,000 in 2016 to $309,700 in 2017 by proposing a decrease of 30.8% in goods and services and a 103.3% increase in maintenance. The implication is that the department will end up accumulating arrears and selective payment to specific service providers. In 2016, the Ministry had an outstanding debt of $442,271.41. The general operations is grossly underfunded.
Capital expenditure was allocated $10,000 in 2017 for furniture and equipment but there is no provision for vehicles as the Ministry had an aged fleet that needs urgent replacement.
5.1 Vote analysis for sub-vote ii: Meteorological Services
The department was allocated $465,500 which represent a decrease of 80% compared to 2016. Table 3 summarises the budgetary allocations.
Table 3: percentage change in budgetary allocations from 2016 to 2017 for meteorological services
|REVISED ESTIMATE||EXPENDITURE TO OCTOBER||APROPRIATION||% change|
|Goods and services||223,000||54,055||143,800||-35.5|
Acquisition of fixed capital assets
|2,330,000 1,563,349 465,500 -80.0|
From table 3, there is a proposed expenditure decrease on current expenditures, 35.5% on goods and services, 37.2% on maintenance and 10% on programmes (cloud seeding). The proposed expenditure decrease will negatively affect the general operations of the department.
The marginal decrease in allocation to cloud seeding will ensure continued implementation of the programme in 2017.
Capital expenditure was allocated $5,500,000 which is significant increase from $197,000. The amount will fund construction works at MET office ($100,000) and procurement of weather radars for Harare and Bulawayo ($5,000,000) and hydrogen generator for Vic Falls Airport ($400,000). The proposed allocation will equip MET department with modern real-time weather casting tools necessary for disaster mitigation and preparedness.
5.2 Vote analysis for sub-vote iii: water resource management and development
The total proposed funding level for 2017 is $31,776,000 to spearhead water development projects which represent an increase of 11.2% from 2016. Table 4 present the economic classification of the allocation.
Table 4: percentage change in budgetary allocations 2016-
2017 for water resources
|REVISED ESTIMATE||EXPENDITURE TO OCTOBER||APROPRIATION||%
|Goods and services||105,000||1,817,878||164,000||56.2|
From table 4, the budget proposed a decrease in expenditure on maintenance (16%) and current transfer (37.7%). The operations and maintenance budget increased by 42.3% from $130,000 in 2016 to $185,000 in 2017. The implication is that general operations of the department is set to improve in 2017 compared to previous year. No allocations for current transfer to parastatal (ZINWA).
Capital transfer proposed to increase by 11.4% from $28,075,000 in 2016 to 31,776,000. The implication is that water infrastructure development will persist in 2017. The Ministry’s priorities on water infrastructure development are as follows;
For Dams Construction
Dam safety – desiltation and repair of critical dams and rivers-
$2,000,000; Marovanyati Dam– $8,550,000, Mutange-
$2,000,000.Causeway Dam $5,000,000, Gwayi-Tshangani -$3,700,000.
Tokwe Mukorsi Dam-$4,500,000 for upgrading 12KM road access.
Water infrastructure projects development will persist as the country continue to respond to climate change needs.
Water supply and Sanitation projects:
The Budget has proposed to continue funding projects started in 2016 as follows; Binga rural water supply – $700,000 and Beitbridge water supply – $1,000,000, Victoria Falls water supply- $250,000.
These funds are expected to bring these projects to completion in 2017. The Budget also proposed to fund Borehole drilling, $3,500,000 was allocated for drilling equipment in 2017.
The committee observed the following in the 2017 Budget;
- The Budget prioritised capital expenditure as in the previous years.
$31,280,000 is allocated for water infrastructure projects and the
Committee noted that new projects will resume (Mutange, Causeway and Gwayi-Tshangani). Therefore the budget is developmental though the funds remain inadequate;
The Budget proposed to persist funding dam construction and water supply and sanitation programmes started in 2016 to completion. Resumption of funding for Gwayi-Tshangani ($3,700,000) was noted and the Committee view this as underfunding as an urgent maintenance is required to avoid high future costs. Moreover the Gwayi-Tshangani project has been outstanding for vear 10 years.
- The Committee observed that Kunzvi dam has neither been mentioned in the Budget Statement nor in the presentation made by the Ministry but it’s a critical dam that supplies water to Harare.
- Budget prioritised key water projects however other capital projects were not funded such as Connemara/Tuli-Moswa, Dande Dam and Tunnel. Works at Dande Dam should resume to avoid high future costs. The Committee observed that the tunnel mentioned by ZINWA as a new project is work in progress. Dande dam is also a critical dam that services Guruve and Mbire districts.
The Committee observed that the Ministry had outstanding certificates for work already done of $58,274,000 and 1,138,000 euros which need to be cleared.
- The Committee noted that $3,500,000 was allocated to borehole drilling. Although this is appreciated, the fund is insufficient as the amount can only drill 1000 boreholes. the country require more boreholes and should implement one borehole per ward policy as opposed to the current situation of 43 boreholes per district
- Automatic weather observing systems were not funded for Kariba, Buffalo Range, Masvingo and Hwange Airports; Seismic stations in Gokwe, Mt Darwin, Zaka and Nyanga.
- Increased role of development partners in financing water and sanitation infrastructure. 45% appropriation and 55% development partners. This diversity in financing mix is greatly appreciated as work on existing projects will persist. It will also help Government to redirect funds to other projects.
The Committee is deeply concerned on persistent reduction in operation and maintenance budget for most departments, while they are accumulating arrears ($442,271.41 as at 31 December).
- Continued financing of cloud seeding programme ($450,000) was noted.
- No current transfers to the Ministry’s agencies (EMA, Forest
Commission, Zimbabwe Parks and Wildlife Management
Authority) as the Ministry of Finance has started implementing self-sufficiency policies on parastatals and release pressure on Central Government funds in line with expenditure streaming and revenue mobilisation programme.
- The Committee noted the emphasis on parastatals to generate their own revenue, however Forest Commission might face challenges in generating revenue given the nature and scope of its revenue generation projects. Most of the projects are long term.
The late disbursement of funds is resulting in accumulation of arrears
- In view of the fact that Treasury disbursements are made timeously, the Committee observed that the budget allocation for the Ministry could be adequate to cover all priority projects under the Ministry.
7. Conclusion and Recommendations
In conclusion, the Budget proposed a decrease in operational budget in 2017 in line with the Government’s expenditure streaming programme. Given this revenue challenges, ministries must be innovative and create revenue generation projects. However, this has resulted in gross underfunding leading to arrears accumulation. The Committee resolve to ask for additional funding for operational budget and also encourage the Ministry to look for more development partners in key projects.
The Committee also strongly recommends that Forest commission be awarded a grant in order to keep key personnel as its activities are largely regulatory in nature. The Committee strongly advocates for the Government to fund the research and also the release of 5% tobacco levy that the Forest Commission is entitled to.
The Committee further recommends that a critical dam like Kunzvi dam should be prioritised for funding as it provides water to the generality of Harare residents.
2017 POST BUDGET ANALYSIS FOR THE MINISTRY OF
TOURISM AND HOSPITALITY INDUSTRY - VOTE 24
The Ministry of Tourism and Hospitality Industry is responsible for development and implementation of tourism policies, tourism development and promotion among others. The Ministry has one parastatal Zimbabwe Tourism Authority (ZTA) which spearhead tourism promotion and development. Destination marketing is the key functional role of ZTA. The Zimbabwe Agenda for Sustainable SocioEconomic Transformation (ZIM-ASSET) has identified tourism as the quick enabler to the speed recovery of the economy. If more tourists are attracted multiple benefits are realised not only in foreign currency inflows but employment creation.
2. Key achievements for 2016
In 2016, the Ministry achieved the following;
- Completed the national tourism master plan;
- Completed visitor exit survey report;
- Hosted the inaugural joint tourism technical committee (JTTC) meeting with South Africa in Bulawayo;
- Implemented the UNWTO legacy project in Victoria Falls where the Chinotimba community swimming pool was rehabilitated;
- Developed a community based tourism enterprises (CBTEs) strategy which seek to empower communities and 4 pilot CBTE
Committee members underwent training;
Key Priority areas based on 2017 Budget allocations
- Tourism marketing and promotion;
- Domestic tourism development;
- Tourism product development and diversification;
- Tourism satellite account development;
- Community based tourism enterprises development;
- Implementation of tourism special economic zone;
- Promotion of international year of sustainable tourism for development
2017 Budget Analysis
The Ministry was allocated $2 674 000 for 2017 compared to $2 892 000 allocation of 2016. The budget allocation decreased by 7.5% and the Ministry’s funding challenges will be worsened. The Ministry remain least in budget priority ranking. The economic classification of the budget allocation is presented in table 1.
Table 1: Percentage Change in Budgetary Allocations from 2016 to 2017
|REVISED ESTIMATE||EXPEND TO OCT||APROPRIATIO
|Goods and services||1,483,000||1,263,423||269,000||-81.9|
|Current transfers (ZTA and subscript)||754,776||1,046,047||460,000||-39.1|
Acquisition of fixed capital assets
|capital transfers (ZTA) TOTAL||70,000||90,000||28.6|
From table 1, operation and maintenance budget decreased by 53.6% from $2,671,000 in 2016 to $1,240,000 for 2017 due to proposed significant decrease in goods and services by 81.9% and tourism programme by 19.3%. The implication is that the Ministry’s daily operations will be severely compromised given that the Ministry had accumulated $684,453.61 as arrears to various creditors since 2013.
Whilst the decrease in tourism programmes is due to proposed decrease in tourism promotion from $827,000 to $600,000 for 2017. Tourism marketing and promotion activities will be minimum, for instance;
- International tourism department was allocated $118,370 which would partially fund bilateral tourism relations and participation at regional and international tourism programmes. Other programmes are not funded that include promotion of women in tourism; SADC trade in Services; UNWTO regional training workshop and language training. The Ministry will not implement community based enterprise projects and not attend regional workshops in 2017 despite being a priority.
- Policy, research, planning and development was allocated $133,481 which would partially fund domestic tourism survey and strategic plan 2017-2021.
- Domestic tourism was allocated $88,000 meant for UNWTO STEP programme and JICA programmes. However, community based tourism roll out and activities to commemorate 2017 as the year of sustainable tourism for development programmes were not funded.
- Nation branding was allocated $50,000 to fund nation branding research for 3 provinces only, benchmarking exercise in one country and a nation brand website.
- These programmes are important for trade promotion.
Analysis of Current and Capital transfer to ZTA 2017
ZTA was allocated $490,000 of which $400,000 is for recurrent expenditure and $90,000 for capital expenditure. The amount allocated to recurrent expenditure is 44.7% of the amount released as at October 2016. This clearly shows that destination marketing is severely underfunded as ZTA would only fund three travel shows (2 in January and 1 in March). The Minister is expected to lauch a campaign later this year in Spain. These three shows would exhaust the 2017 budget allocation. 33 travel shows are required in order to fully market the country. Major tourist promotion programmes will be negatively affected, that is, Sanganai Hlanganani World Tourism Expo and Harare internatiomnal carnival. These two events require a minimum of $1 million. Therefore several tourism marketing and promotion activities are at risk. The consequential effect on tourist attraction will be worse compared to last year where the Government funded five travel shows. Zimbabwe recorded 1,538,905 international tourists’ arrivals during the first nine months of 2016. This figure is a 4% up from 1,483,626 during the same period in 2015. However, ZTA is facing stiff regional competition in market penetration, for instance from European markets, South Africa recorded a 16% increase in tourist arrivals from 794,073 in 2015 to 920,706 in
2016, while arrivals for Zimbabwe from the same market fell by 9% from 107,108 in 2015 to 97,383 in 2016. This disparity in market growth is unwarranted if ever tourism is to propel economic growth. ZTA has arrears to clear amounting to
$147,000 owed to suppliers in Bulawayo. Capital transfer increased from $70,000 to $90,000 in 2017, the fund is not enough to re-equip and retool as well as keep up with technology.
The Committee observed the following from the 2017 budget; for the Ministry;
- Severely reduced operational and maintenance budget by 53.6%
- The Ministry has accumulated $684,453.61 as arrears to various creditors since 2013.
- No funding for women tourism, UNWTO regional training workshops, programmes and activities to commemorate 2017 as the year of sustainable tourism for development; community based tourism projects roll out.
- Gross underfunding of the Tourism destination promotion programmes only $400,000 was allocated.
- Tourism Masterplan will not be implemented , however the Ministry will be able to fund –
- Nation brand website for easy navigation of tourist sites.
- The Ministry is exploring other sources of revenue by engaging Development partners.
- for ZTA
- Proposed reduced Government funding to ZTA;
- 3 international travel shows will be funded by Government in 2017 against a target of 33 shows. Travel shows are important for attracting tourist for instance tourist arrival from Nordic Countries increased from 9000 to 20000 after the Netherland travel show with estimated foreign currency inflow of $42
- ZTA still owes service providers in Bulawayo for the
Sanganai/Hlanganani World travel Expo which was held in
Bulawayo June 2016 an amount of $147,000 which the Ministry of Finance and Economic Development had promised to pay;
- Major tourism marketing and promotion programmes are at
- Sanganai/Hlanganani World Tourism Expo and Harare International Carnival would not be held this year. The previous carnival had attracted over 50,000 visitors;
- Total tourist arrivals for 2016 up by 4% from 1,483,626 in 2015 to 1,538,905 in 2016. The marginal increment recorded against a actual release budget of $1,046,047 as at 31 October 2016;
- Africa is the major source market of tourist arrivals for 2016 which constitute 86.9% of total tourist arrivals;
- Declining of tourist arrivals from key European markets by 9% while arrivals from Africa fell by 3%. Therefore the source market is dwindling instead of growing;
- ZTA is being outcompeted in destination market penetration by regional competitors especially South Africa which attracted 794,073 European arrivals against a figure of 107,108 for
Zimbabwe in 2015. The gap widened for 2016 where South
Africa recorded 920,706 arrivals against 97,383 for Zimbabwe.
4. Conclusion and Recommendation
In conclusion, there is gross underfunding of core activities especially tourism promotion. The growth target of 0.8% of the sector remain uncertain. Tourism has been identified as the most strategic in economic development, however, the Ministry received the least allocation for 2017. The growth forecast of 1.7% for 2017 is attributed to the success of agriculture (that has already been fully funded), and tourism (which is grossly underfunded) among others service sectors. There is need for paradigm shift in funding development programmes, the Government must allocate more resources to sectors that are driving economic growth. Funding of tourism must rise in line with other Sub
Sahara African countries as it is not a capital intensive sector and therefore require less funds relative to capital intensive sectors. Funding tourism should be increasing rather than decreasing if ever tourism is considered as one of the key contributors to economic development. The benefits of tourism are quick compared to heavy manufacturing industries. In SADC, tourism contributes an average of 4 percent to GDP and average growth rate of the sector is 2 percent. By 2025 these figures will be 8 and 5 respectively. The country must be seen moving towards these regional targets.
Therefore, the committee strongly recommends the following;
For the Ministry
- Additional funds should be allocated for operation and maintenance budget as the allocation of $1,240,000 is inadequate as the Ministry has to clear an outstanding arrear of $684,453.61. Key priority programmes for the Ministry should be funded that include promotion of Women in Tourism, community based tourism projects roll out, regional workshops, programmes and activities to commemorate 2017 as the year of sustainable tourism
for development. The Committee requests an additional fund of $2,000,000 for the Ministry.
- Conducting an awareness campaign to all line ministries so that everyone is involved in nation branding.
- The allocation of $400, 000 for tourism promotion is inadequate as ZTA has to clear an outstanding arrear of $147,000 for UNWTO service providers at Victoria Falls in 2013. Travel shows and other tourism marketing and promotion programmes should be funded. If there is no aggressive marketing, less tourists will be expected and tourism contribution to growth will be low. The ZTA had approved a target budget of $11,906,000 which has a deficit of $5,000,000 as opposed to the shortfall of $10,268,000 on the ideal budget. The committee resolve to request an additional $5,000,000 for ZTA in order to reverse the decrease in growth of destination markets and outcompete regional competitors.
- The Ministry of Finance must fully resource all the must attend travel shows and fairs
- The Ministry of Finance must ensure that resources are availed for the establishment of a fully furnished Zimbabwe stand at crucial shows to increase the country’s image branding, destination marketing and promotion. The country has been outcompeted in the past years by countries like Swaziland, Lesotho, Zambia and Kenya both in China and Berlin travel shows.
I thank you Mr. Speaker.
THE HON. SPEAKER: Can the owner of the following Ford
Ranger ADI 8920 go and remove your car, it is blocking other vehicles.
HON. CHAMISA. Thank you Mr. Speaker, I am going to present
a very brief version of the report on the allocation made to the Ministry of ICT, Postal and Courier Services. In line with the traditional I was actually going to do a Power Point presentation but I realise that I might not be necessary particularly considering the fact that we are just going to focus on recommendations and observations.
POST-BUDGET ANALYSIS FOR THE MINISTRY OF
INFORMATION COMMUNICATION TECHNOLOGY, POSTAL
AND COURIER SERVICES (VOTE 25)
There is global consensus that Information Communication Technology (ICT) is a powerful mechanism for social and economic development. Studies have shown that internet access and penetration have positive impacts on companies’ productivity across world regions and across different stages of development. As a huge positive, Zimbabwe will be the regional internet exchange hub which in itself is a major boost for provision of affordable internet services and socioeconomic development. The Ministry of Information Communication Technology, Postal and Courier Services has a mandate to develop a knowledge based society with ubiquitous connectivity by exploiting the potential of ICTs for sustainable socio-economic development. It has oversight over NetOne, POTRAZ, TelOne, ZARNet and Zimpost. Some of the ministerial objectives for the period 2017 include:
- Formulation of ICT sector policies.
- Maintenance of National Systems.
- E-government and setting up of Community Information Centres.
- Setting up ICT laboratories in schools.
- Establishment of Data Centre and International Internet Gateway.
- ICT literacy and capacity building for civil servants and citizens.
In the 2016 fiscal year, some of the major achievements of the Ministry include:
- Approval of National ICT policy by Cabinet.
- I. 11 of 2001 amended – Contribution by telecommunications operators to USF increased from 0.5 percent to 1.5 percent with effect from 1 January 2016.
- Completion of Community Information Centres in Gokwe,
Muzarabani, Rushinga, Glendale and Chikato.
- Infrastructure sharing regulations gazetted.
- Connected 55 District Hospitals (PFMS – Last Mile Connectivity).
- Maintained up time of PFMS system at 98%.
- Ease of doing business – connected One Stop Investment shop on fibre optic.
- Training 533 civil servants in ICTs (185 males and 348 females).
2.0 INFORMATION COMMUNICATION TECHNOLOGY,
POSTAL AND COURIER SERVICES VOTE ANALYSIS
2.1 Overall Ministry Analysis
The Ministry had drawn up an initial bid of $19,211,032. This bid was not at all considered as Treasury imposed an expenditure target of $6,355,000 on the Ministry. In the 2016 Budget, net of employment costs, the Ministry was allocated $5,192,205 of which only $3,663,751 (70.56%) was disbursed. Table 1 shows the disbursement rate by subvote.
Table 1: Disbursement to Ministry as at 31 December 2016
From Table 1, the Capital Expenditure (11.70%) component was hardest hit by delayed disbursement with Capital Transfers suffering the fate on zero disbursement. The $244,000 released was used for only one project, the National Data Centre. Other projects could not be undertaken due to minimal disbursement of funds. Acquisition of Fixed Capital Assets had a disbursement rate of 12.05 percent. On the other hand, the Current Expenditure component had an impressive rate of disbursement averaging 110.06 percent. This was hugely influenced by Maintenance (378.56%) as a result of a Treasury directive to virement
$930,000 from unreleased Capital Expenditure for the settlement of a
Dexel debt for maintenance of the Public Finance Management System (PFMS). Goods and Services had a disbursement rate of 33.93 percent which had an adverse effect on operations as minimal sporadic disbursements made planning difficult. Goods and Services and Current Transfers had disbursement rates of 33.93 and 95.13 percent, respectively. Table 2 and Table 3 show the Top 10 and Bottom 17 rankings, respectively, for the vote appropriations in 2016 and 2017.
Table 2: Bottom 17 Vote Appropriations for 2016 and 2017
Table 3: Bottom 17 Vote Appropriations for 2016 and 2017
From Table 2, we can infer that Government priority is towards Primary and Secondary Education, Home Affairs and Defence in that order. Going to Table 3, the ranking of the Ministry rose from 26th in 2016 to 25th in 2017. However, in terms of vote allocation as a percentage of vote appropriations, the figure remains unchanged at 0.19%. Analysis of the percentage change in the major components of the budget allocation to the Ministry is shown in Table 4.
Table 4: Percentage Change in Budgetary Allocations from
2016 to 2017
From Table 4, there is a negligible decline in the overall vote appropriation of 1.51 percent from $6,452,205 in 2016 to $6,355,000 in
- Current Expenditure recorded a decline of 2.80 percent from the
2016 allocation. The biggest increase recorded, under Current Expenditure sub-items, is 17.04 percent for Maintenance. This perhaps shows an appreciation of the importance of maintaining key systems such as the PFMS. Appropriation of funds to Employment Costs declined by 14.52 percent and this has been attributed to the downscaling of staff establishment from 193 to 132. The Ministry highlighted a huge financial obligation of $5,496,526 for services rendered. Of this debt, $3,369,290 is owed to TelOne for phone bills and systems connectivity; $904,893 owed to Dexel and Africom for PFMS Maintenance and $713,836 for outstanding office rentals. Non-payment of rentals limits the ability of the landlord to service the premises thus seriously affecting the day to day operations of the Ministry. The allocation of funds under Current Transfers (solely attributed to ZARNet) decreased by 46.61 percent, perhaps as a progressive move to eventually wean off this state-owned enterprise once it becomes commercially viable.
Capital Expenditure registered a marginal increase of 1.20 percent from $2.085 million in 2016 to $2.110 million in 2017. There slight increase is a welcome development which could see meaningful work being undertaken provided the allocation is released in full, as opposed to the 2016 situation where a mere 11.70 percent of the CAPEX allocation was released. Table 5 shows the breakdown of bids and corresponding allocations for Programmes sub-components.
Table 5: Bids and Allocation for Capital Expenditure Subcomponents
From Table 5, a bid of $2,500,000 was placed for the National Systems Maintenance and Treasury only allocated $700,000, an underallocation of 72 percent. This allocation, while below expectation, will facilitate the continuous upgrading and modernisation of the system.
For E-Government, $300,000 (60%) is allocated against a bid of $500,000. The Ministry will not be able to achieve much given this allocation. This is against a background of non-disbursement of funds to this line item in the 2016 Budget. It is ironic to note an allocation of
$2,250,000 for E-Government under the Office of the President and Cabinet. This shows lack of harmonisation in Government projects.
From a bid of $1,300,000 Treasury was only able to allocate
$300,000 (23.08%) towards Community Information Centres. With this allocation, the Ministry cannot meet its targets. However, through the
Universal Services Fund, the setting up of 70 Community Information Centres in rural areas can be made possible through accessing part of an $11.7 million fund for ICT development.
$1,700,000 was bid for the National Data Centre and only $650,000 (38.24%) was allocated. While inadequate, the allocation is commendable as the Ministry will make some progress towards the completion of the National Data Centre project. However, there is an allocation of $6,250,000 towards establishment of a National Data Centre, but appropriation is via Office of the President and Cabinet. This may mean that significant progress can be made towards completion of this very important national project.
A bid of $150,000 was placed for ICT training but Treasury was only able to allocate $50,000 (33.33%). This allocation is deemed to be too low to make meaningful progress. The problem is compounded by the fact that no funds were released towards this line item in the 2016
Only $50,000 (2%) was allocated from a bid of $2,500,000 towards ICT Labs in Schools. As such, no progress can be made given this under-allocation of resources. However, computerisation and Elearning facilities to 1,300 schools will be made possible via the USF $11.7 million ICT development fund. In addition, there will be introduction of tele-medicine facilities in 20 rural health centres financed from same.
TelOne is making significant progress in upgrading and updating their infrastructure. This has been made possible by a $98 million loan facility from China, where Phase 13 of the project ($25 million) has been completed as at end of December 2016. With respect to debtors and creditors, TelOne owes Government entities $37 million (ZIMRA, POTRAZ) while it is owed $88.9 million by same (Central Government, Parastatals, Local Authorities).
NetOne appears to be on a growth trajectory as seen by the ever improving subscriber base. This growth will favour the State-Owned Enterprise as there is a related decrease in interconnection fees against its competitors. Investment in infrastructural projects seems to be paying dividends. NetOne has outstanding debtors of $12.1 million (GoZ $9.1 million, NRZ $3 million) while having creditors of about $7 million (Econet $6.7 million4, Telecel $13,0005).
Zimpost is still grappling with a property dispute between itself and GoZ on the status of ownership. This has had adverse implications on Zimpost’s potential revenue that could have otherwise been earned if the dispute is resolved in Zimpost’s favour. As such, Zimpost has no claim on GoZ for unpaid rentals.
ZARNet is a potentially profitable entity that is still being sustained by an over-burdened Treasury. The state of affairs at this entity, are not pleasing to the eye. ZARNet is owed $212,000 (GoZ and Parastatals) whilst it owes $552,000 in unpaid obligations (ZIMRA, Powertel and Telone.
POTRAZ: There are currently no outstanding licence fees by mobile service providers save for minute amount owing from small private ICT companies.
3. CHALLENGES AND OBSERVATIONS
- The Ministry raised three key challenges to their operations namely; o Duplication6 of roles and absence of consolidation. o Inadequate financial resources.
- Limited skills depth due to lack of appropriate targeted training.
- Lack of cooperation and collaboration from some stakeholders.
- The Committee noted the serious potential in ICTs and raised concern with respect to duplicity in terms a project being administered from two different ministries (ICT & OPC, ICT &
- The Committee noted with concern absence of a legislative financing framework in the budget for the tabling of important ICT Bills to Parliament. The Computer Crime and Cyber Crime Bill and the Data Protection Bill are set to be tabled in Parliament before end of the first quarter of 2017.
- The Committee noted that the Ministry was not the focal point for
ICT expertise as suggested by their core mandate.
- There is reason to believe that the annual licence fees being charged by service providers such as Africom and Dexel are inflated.
- Some ministries are not paying for ICT services rendered by stateowned entities yet they settle bills from private service providers.
- There was no information in the Budget Statement relating to the acquisition of Telecel through SOE ZARNet.
4. RECOMMENDATIONS AND WAY FORWARD
After careful consideration of submissions by the Ministry of Information Communication Technology, Postal and Courier Services, the Committee strongly recommends the following;
- Functional harmonisation and consolidation of ICT infrastructure projects and service provision ought to be done to eliminate duplication of effort and expenditure.
- Clarification must be made on Ministry of ICT, Postal and Courier Services and OPC Data Centre.
- In light of possible over-charging, the Committee should be favoured with agreements between the Ministry and service providers in-order to devise best approach towards domestic resource mobilisation.
- Treasury must revisit bidding-allocation-disbursement framework. In addition, carryover of unutilised financial resources into the next fiscal year should be permitted.
- Government must utilise ICT services that are rendered by SOEs rather than seeking same from private companies.
- Government ministries must pay for services rendered by SOEs, in full and on time, as they do with private service providers. In light of TelOne having two underutilized data centres, the Committee recommended that a feasibility study be undertaken to see whether these facilities can be converted into the much sought National Data Centre.
- The Ministry must procure all ICT equipment on behalf of
Government agencies. I thank you.
The 2017 Budget comes at a time when Government fiscal space continues to shrink as evidenced by the failure of Treasury to disburse the ever declining budget allocations to Ministries. This is against a background of Government’s heavy, if not total, reliance on tax revenues to finance expenditure. Be that as it may, the tax collector is also missing revenue targets due to a diminishing tax base as the economic slowdown; which has seen many companies closing and the ‘non-taxable’ informal sector increasing its dominance in the economy continues unabated.
Mr. Speaker Sir, it is with this realisation that your Committee, in line with the domestic resource mobilisation theme of this budget, is proposing a raft of measures that can see the departments and parastatals under the Ministry of Transport and Infrastructural Development increasing their revenue base and reducing dependency on the fiscus if adopted and implemented with expediency. However, it is the hope of your Committee that the Ministry will be allowed to retain a large portion of these expected revenues in order for it to be able to discharge on its mandate of providing and managing transport infrastructure networks, logistics and services.
2016 Budget Performance Review for the Ministry
In the previous financial year, the Ministry was initially allocated
US$39.9 million of which only 27% had been disbursed by October. These resources, augmented by other funds administered by the Ministry led to the following achievements:
- Completion and commissioning of the Victoria Falls
International Airport; ii. Procurement of 31 new wagons for the National Railways of
Zimbabwe; iii. Completion of
- 1km of the Bindura-Matepatepa road;
- 5km of the Chivhu-Nyazura road widening; iv. Completion of the construction of the Mabvuku road-overrail bridge;
- Completion of the rehabilitation of 1.5km of the Bulawayo-
Victoria Falls road; vi. Completion and commissioning of the VID Bindura office block.
Overview of the 2017 Budget
The Ministry was allocated US$55.838 comprising US$45 million (81%) for capital expenditures; US$8.9 million (16%) for employment costs and operations and maintenance accounting for US$1.9 million (3%). Of the US$45 million, US$28.45 (51%) goes to road construction; other projects US$2.7 million (5%); capital transfer to CMED US$5 million (9%) and lending and equity to parastatals US$8.9 million
(16%). It is the Ministry’s hope that the allocated funds will be disbursed as outlined above though precedence does not foster much hope in that regard.
Other funds administered by the Ministry will be utilized as follows:
- Traffic and Legislation Fund – VID office block construction for Rusape, Chivhu, Norton, Gokwe and Chegutu; and procurement of boats for inland waters.
- Roads fund, road and bridge construction, and routine and periodic maintenance.
- New Limpopo Bridge Fund–Bulawayo Turn Off-Beitbridge Border Dualisation, Beitbridge-Bulawayo-Vic Falls reseal and the VID Depot Project.
- Road Access Fund–Sangano Drift, feasibility studies, purchase of vehicles and furniture and equipment.
- Number Plate Fund – works at the Transport Management Centre – security fence, leveling of ground and designs for office block.
Post Budget Analysis Meeting Output
Your Committee duly held a post budget analysis meeting with
Ministry officials and departmental heads led by the Permanent Secretary on Tuesday 17th January 2017 with a view to assessing the adequacy and relevance of submissions for the 2017 National Budget. The following issues were observed:
Your Committee noted with concern the lack of integration of the transport management systems of the Ministry’s departments and parastatals resulting in variations, inefficiencies and incessant revenue leakages.
Your Committee also observed that bulk goods continue to be wholly transported by road side-lining the NRZ despite existence of some capacity. This implies loss of potential revenue by NRZ as well as reduced shelf life of the rehabilitated roads. The NRZ can tremendously benefit from the transportation of the 30 million metric tonnes of chrome and the 700 000 metric tonnes of maize. If the NRZ was to transport these quantities in whole, it would get potential revenue of US$2.1 billion from chrome and US$210 million from maize, respectively.
However, given its existing capacity, if the NRZ is guaranteed at least
10% of local bulk contracts, its revenues would significantly improve.
In 2014, Treasury introduced 40% duty on bus imports with a view to protect local assemblers. However, this policy resulted in local operators of luxury buses not assembled in Zimbabwe resorting to registering their buses in neighbouring countries. While Treasury has proposed to ring fence the import of 30 luxury buses at the reduced import duty of 5% for 2017, the Zimbabwe Passenger Transport Organisation (ZPTO) hinted that the country needs an estimated 3,000 coaches with only 1,500 coaches available at present. In light of this, they are seeking an upward adjustment from 30 to 100 buses for 2017. However, local bus manufacturers would like the 40% duty to remain in force as it allows them to remain competitive against relatively cheap imports. After deliberations, an understanding was reached that local manufacturers can grow their capacity if government, schools and ZUPCO buy from them.
Furthermore, local bus assemblers indicated that they feel shortchanged by their suppliers who are financing local operators and allowing them to bypass local agents and buses buy direct thus prejudicing them of potential revenue and rendering their distributorship ineffective and unnecessary. Your Committee advised the local manufacturers of the need to put in place watertight contracts with their suppliers.
The Zimbabwe Building Contractors Association (ZBCA) raised concern over the limited participation by local professional contractors in PPPs and BOTs, a case in point being the Plumtree-Mutare highway widening. Furthermore, even local institutions such as universities are using building brigades instead of qualified personnel resulting in substandard work of questionable quality. This is negatively affecting capacity utilisationin the construction sector which currently stands at a paltry 2%. The ZBCA is calling upon Government to award them contracts to complete specific outstanding Public Sector Investment Programme (PSIP) projects whose progress has been stalled by lack of finance. They advised your Committee that the association has engaged a consultant, Dr. Nigel Chanakira, a finance expert, who is facilitating the structuring of joint venture deals worth US$1 billion meant for the financing those projects. The contractors will then recover their money through tolling before handing over the projects to Government.
Your Committee observed that despite other parastatals charging Government for services such as car hire (CMED), water (ZINWA), electricity (ZESA) and telecommunication (Telone and Netone); the Ministry is not collecting road user fees from Government vehicles. The officials advised the Committee that statutory provisions to that effect are already in place. However, they have a clause which gives the Government respite until it has sufficient resources. Nevertheless, it is the strong feeling of your Committee that Ministries provide for road user fees in their budget submissions like any other expenditures such as water and power.
It was also brought to the attention of your Committee that despite the Government directive that Government officials use Air Zimbabwe for external travel; the measure would not derive the intended benefit since the airline is not registered with IATA due to an outstanding US$3.5 million in fees. Consequently, the national airline is hamstrung in the number of routes that it plies. Furthermore, the non-registration with IATA also works against the open skies policy being pursued by the airline. Opening the airline to competition whilst it is hamstrung will only drive it to extinction.
Your Committee also enquired on the status of the rehabilitation of the airport radar systems. The officials informed your Committee that progress had been delayed by legal processes that nullified the previous tender award. The Committee was assured that a call for tenders for both financing and rehabilitation of the radar systems will be made this year.
Your Committee raised concern over the fact that all the 8 provincial road engineers (PREs) are in acting capacities despite the multi-billion dollar projects and tender processes that they preside over. The Ministry clarified that the incumbents do not have the required number of years of service in order to be made substantive and it had also failed to attract qualified candidates, locally and from abroad, owing to uncompetitive remuneration packages. The committee responded by imploring the Ministry to approach the Public Service Commission (PSC) with a view to making them substantive under a special dispensation as they cannot continue administering huge projects of national importance while in acting capacities. The situation is unacceptable.
Concern was also raised on the potholes along the BulawayoVictoria Falls road. Your Committee was advised that Treasury had allowed the Ministry to use US$2 million from the New Limpopo
Bridge Fund to reseal the Beitbridge–Bulawayo–Victoria Falls road.
Nevertheless, it is the general observation of your committee that the country’s national roads are in a deplorable state as they are riddled with potholes, the situation being exacerbated by the incessant rains. Urgent rehabilitation works are needed to prevent unnecessary loss of
Summary of Recommendations
Your Committee recommends that the Ministry should ensure the full computerisation and integration of its transport management systems linking driving schools, VID, ZINARA, RMT, TSCZ, CVR, ZIMRA and the ZRP to root out variations, plug revenue leakages and increase efficiency. This alone can improve the revenue collection of these departments more than threefold as was the case with ZINARA on toll gates and TSCZ on the 12.5% of third party vehicle insurance.
Furthermore, your Committee also recommends that ZINARA and the Insurance Council of Zimbabwe (ICZ) take over the collection and administration of Third Party Vehicle Insurance. This will greatly improve revenue collection and plug leakages in this multimillion-dollar sector.
Your Committee proposes the commercialisation of the VID in the future through introducing the inspection of private motor vehicles. This is in line with regional best practices (Zambia, Namibia, and South Africa).
Currently, inspection is limited to public service vehicles (PSVs) only with US$18 million is being realised from fees charged at US$25 and US$20 per heavy and light vehicles, respectively, in line with SI 134 of 1998. If introduced, inspection of at least 1 million private vehicles at the 2014 approved rates of $40 per light and $50 per heavy vehicles, which had not been effected yet, will raise an estimated US$90 million.
This figure combined with US$5 million from Learners Licence Tests, US$6 million Drivers Licence Tests and US$25 million from PSV inspections will raise the revenue by 600% to US$126 million.
Furthermore, your Committee proposes the merger of ZINARA and VID, as the two organisations can leverage on synergies with quick wins in activities such as enforcement of laws regarding overloading, unlicenced vehicles, road-user-pay principle, transit coupons, fuel levy, unroadworthy vehicles, unlicenced drivers, garage inspections etc. It is important to note that the two entities are already collaborating on some of these activities.
However, such linkages need to be harnessed to remove duplication thus enhancing operational efficiency and creating a robust organisation capable of generating more revenue to support infrastructure and road network preservation and rehabilitation. The strategy does not require a bill but political will and a Statutory Instrument, if need be, for ZINARA to absorb the Inspectorate staff of VID.
Your Committee also recommends that road access fees be increased from the current US$10 to the SADC standard rate of US$20 for all foreign vehicles and vehicles entering the country.
In light of the failure to access the US$147 million from
Development Bank of Southern Africa (DBSA) meant for the NortonKadoma dualisation project (which was to be repaid through a fuel levy on petrol and diesel, charged at US1 cent and US2 cents, respectively); Your Committee proposes that we unlock value in money held in the Maintenance Reserve Account for the Plumtree-Mutare highway by using it as collateral in sourcing finance for the aforementioned dualisation project. Currently, the fund has accumulated to the tune of
US$32 million and keeps growing as its use will only begin after 2027.
The Committee recommends the promulgation of a Statutory Instrument directing mine houses and other companies to move at least 10% of their goods by rail.
Your Committee recommends that ZUPCO, Government Ministries and schools buy buses from local manufacturers. Local manufacturers are advised to negotiate better deals with their partners so that there are no direct sales to Zimbabwean operators like is the case with local agents for Scania South Africa. The local bus manufacturers should also be included in the special economic zones (SEZ) to enhance their business which should take advantage of the tax incentives offered in those geographical areas.
Furthermore, given the gap between required and available coaches, the Committee proposes that the 30 bus cap on import of luxury coaches be removed and an import duty of 5% be extended to all other buses not assembled in Zimbabwe. This ensures that the practice of registering buses in South Africa, resulting in loss of potential revenue to Zimbabwe, will come to a halt. Your Committee also recommends that the 5% export incentive be extended to cross border buses where documented records of banked money derived from the business of imported passengers exist.
Your Committee recommends Government quantifies outstanding PSIP projects to the tune of US$1 billion and award them to local contractors under the Zimbabwe Building Contractors Association (ZBCA). The Association, through joint ventures with foreign partners, will finance and complete the project then recover their money through tolling before handover to Government.
The Zimbabwe Institution of Engineers (ZIE) and the Engineering Council of Zimbabwe (ECZ) must be involved in all national projects for quality assurance and the 5% due to the ECZ should be remitted so that they carry out proper monitoring and evaluation of national projects beginning with the Beitbridge–Chirundu highway project.
In line with Government’s thrust towards indigenisation and empowerment of local entrepreneurs, it is imperative for the Ministry to ensure that locals participate fully in any infrastructure development projects, beginning with the dualisation of the Beitbridge- Chirundu highway. Failure to do so, as prevailed during the rehabilitation of the Plumtree-Mutare highway, will not only disempower indigenous business people and result in capital flight through foreign-owned companies, but will ultimately impoverish the country. Furthermore, your committee recommends that in the Beitbridge–Harare highway project, 40% be reserved for local contractors as 80% of all raw materials used in road construction are locally available. For all projects with national status, the Committee also proposes that there be tax/duty exemption for local contractors and suppliers. This was seen as the reason for local suppliers being more expensive than the main contractor for the Victoria Falls Airport rehabilitation.
Government vehicles should be made to pay road user fees, with immediate effect, in the same manner that Ministries pay for all other
Your Committee recommends that a 15% tax be levied on the value of gross extracted resources for the rehabilitation of roads leading to mines and around mining communities. Furthermore, 15% of the land tax should be reserved for road rehabilitation. This is against the background of roads being destroyed by bulk transportation of mining and agricultural products with no compensation at all. A few cases in point are:
- The depletion of the US$206 million DBSA loan-financed
821 km Plumtree-Mutare Highway at the 134 km peg, by
RioZim, before it has even been commissioned;
- An estimated 100 km of the Lupane-Nkayi road destroyed by
Hwange Colliery; iii. An estimated 100 km of the Tanganda-Chiredzi highway destroyed by Green Fuel resulting in a 30-minute journey taking 4 hours; iv. Open cast mining by Break Ridge (formerly ACR) at the 40km peg of the Kadoma-Mamina road has completely cut off the road and people have to find alternative roads.
- Zimplats inherited 85km of road from BHP but further than that, they have depleted all the roads which culminated in a family of 7 perishing in a low-lying bridge in the Zimplats mining area. The mining company could have raised that bridge.
Proceeds from parking fees and roadside billboard advertising should also be used for road rehabilitation.
While the filling of potholes is applauded, there is need for quality control to ensure that resources are not lost in constant refilling and rehabilitation.
Given the unnecessary loss of lives due to road carnage at a rate of 5 deaths and 38 injuries per day, Your Committee is also proposing the establishment of Accident Victims Stabilisation Centres (AVSCs) at toll gates. This is necessitated by the fact that road traffic accidents (RTAs) are having an estimated 70% mortality due to lack of proper pre-hospital emergency care, and almost 30% of those being transported from the accident scene die before reaching a place of definitive care. In most cases, it takes more than 2 hours in general yet the first hour after the accident is the most critical for stabilising victims.
Furthermore, the central hospitals are overwhelmed emergency cases. For example, Mpilo Hospital attends to an average of 150 road traffic accident (RTA) victims per month in addition to nearly 3000 other emergency cases. In light of this, pre-hospital care at the proposed
Accident Victims Stabilisation Centres will go a long way in saving lives. Standardized Emergency Care reduces the severity and length of required rehabilitation from 18 months to 3 months, thereby being very cost effective. Your Committee proposes that the initiative be financed by the Traffic Safety Council of Zimbabwe by allocating 4.5% of the
12.5% collected from third party insurance.
Road Traffic Accidents Statistics (Zimbabwe)
14336 15305 14965 14131 14010 12822 11392 INJURED
Your Committee recommends that Air Zimbabwe and the National Railways of Zimbabwe also benefit from the 5% export incentive on external revenues repatriated and banked in Zimbabwe.
Your Committee recommends that PPPs be adopted for toll gate and weigh bridge construction since they do not entail any government financial outlay.
The Committee proposes that the money allocated towards the liquidation of outstanding certificates for work done by local contractors be disbursed in full.
Above all these, your Committee strongly feels that since all these recommendations are for the 2017 financial year, it is critical that they be implemented expeditiously and not encroach too much into the year. In light of this, your Committee recommends that implementation should be in effect by end February 2017.
Furthermore, if all the measures proposed by your Committee are adopted, it is estimated that the parastatals and departments under the Ministry can raise an estimated US500 million. In this regard, your Committee requests that a large portion of these funds be ploughed back for the recapitalisation of these departments.
From the aforementioned submissions, it is clear and irrevocable that the transport and infrastructure sector provides a latent source of domestic revenue, employment creation and sustainable development for the Government and people of Zimbabwe. However, this low hanging fruit can only be plucked and harvested for the greater good of the Zimbabwean citizenry, if the gaping holes through which the muchneeded revenue continues to leak like a sieve are well and truly plugged.
The huge strides made in the development of information and communication technologies have provided a unique opportunity for the parent Ministry to harness ICTs, automate all transport management systems and ensure that all revenue is properly accounted for. The dark, laborious days of manual processes and dependence on the integrity of an individual, have given way to the beaming light of incorruptible computer-aided revenue collection. The onus is on us, therefore, to take advantage of the opportunities that technology provides to spur the economic revival of this great country. We owe to it to the electorate, we owe it to posterity and we owe it to ourselves.
Integration Diagram 1
Integration Diagram 2
HON. MANDIPAKA: Thank you Hon. Speaker. I am going to be dealing with four Ministries that are: - Ministry of Defence and Home
Affairs; Ministry of Sports and Recreations, Ministry of Primary and
THE TEMPORARY SPEAKER: Order, Order! ADI9064 is
blocking the bus of those students who in here. Could you please go and remove the vehicle.
HON. MANDIPAKA: Thank you Mr. Speaker.
- 1.1 The Committee on Defence and Home Affairs has an oversight role over the Ministries of Defence and Home Affairs. During the 2016 post-budget review, your Committee analysed the budget allocations for the Ministries of Defence and Home Affairs and also received oral submissions from the Ministries’ officials.
Several observations were made from the budget allocations about the
Ministries’ funding needs and gaps, and the subsequent performance implications of the budget allocations. These observations culminated into some recommendations to improve the operational efficiency of the Ministries so that they meet their Constitutional and Statutory obligations. Below is the economic analysis of the allocations to each
MINISTRY OF HOME AFFAIRS VOTE 18 ($364,308,000)
1.0 Mandate of the Ministry
1.1 The Ministry of Home Affairs is responsible for a number of core duties which are:
- Promoting a secure and conducive environment through maintenance of law and order,
- Combating corruption,
- Managing migration,
- Ensuring timely registration and issuance of secure registration documents,
- Regulation of gaming and entertainment activities and Ø Provision of forensic science services.
1.2 The Ministry is made up of one support department (Administration and General) and technical departments namely:
- Zimbabwe Republic Police (ZRP).
- Registrar General,
- Immigration Control and
- Forensic Science.
2.0 The Ministry’s achievements during 2016
Major achievements during the 2016 financial year were as follows: Commissioning of self sufficient passport production centre.
- Cascaded e-visa platform to 14 stations on wide area network.
- Reducing short term permit processing and issuance time from 2 weeks to within five days.
- Installation of Queue Management System at 3 provincial offices.
- Installation of bio-environment capturing booths at 10 registration offices.
- Successful coordination of National Heroes Commemoration.
- Successful hosting of Joint Permanent Commission.
- Maintenance of law and order.
3.0 Policy Priorities for 2017-2019
The Ministry’s major policy priorities for the period are:
- Debt clearance for the Ministry,
- Fully equip and operationalise the new offices for the Registrar
General and Immigration Control departments,
- Acquire CDMA communication service for ZRP,
- Computerise and link all border posts,
- Operationalising the Automated Fingerprint Identification System
- Fully utilise and maximise production on ZRP farms in each province,
- Equipping the Forensic Science laboratory.
- Completing the following prioritised projects namely:
- Central Registry Office sand
- CID Headquarters.
4.0 Global Overview and Analysis of the Ministry’s 2017
4.1 The Ministry was allocated $364,308,000 and is ranked second in the order of national priority allocation. However, this allocation is $39,417,619 lower than the 2016 budget allocation. Thus, outstanding expenditure items from 2016 financial year may not be covered in 2017 thereby paralysing the Ministry’s operations.
The reductions in allocation are represented in a table as follows:
|Expenditure item|| 2016
|Recurrent||0. $19,020,000||1. $16,400,000||- 14%|
|3. $6,400,000||4. $4,000,000||- 37.5%|
|Operations||6. $900,000||7. $600,000||- 33%|
This clearly shows that the 2017 Budget is grossly inadequate to at least sustain the basic requirements and inescapable expenditure items for the Ministry.
4.2 From the global allocation of $364,308,000 a huge sum amounting to $339,118,000 (translating to 93.1% of the total allocation) caters for employment costs in the whole Ministry leaving a paltry balance of $25,190,000 for operations (this is only 6.9% of the
Ministry’s total allocation for 2017). The balance left for operations and programmes is thus by far inadequate to fund the Ministry’s priority expenditure items, implying that more operational challenges will be faced in 2017 than the 2016 financial year.
4.3 Also important to note is that the Ministry has outstanding payments for both recurrent and capital expenditure and these are waiting for cash releases from Treasury amounting to $1,213,289.53. From this total amount ZRP has outstanding payments amounting to
$429,968 required to settle bills for Zimbabwe International Trade Fair ($60,000), Heroes Commemoration ($20,000) and procurement of uniform material ($349,968).
Moreover, the ZRP alone has another outstanding debt amounting to $63,000,000 owed to service providers like ZESA, ZINWA and TELONE and it dates back to the year 2009. The debt has since tarnished the image of the Ministry and working relations between the Ministry and service providers. This has negatively affected the capacity of the Ministry to acquire other goods and services on credit and will grossly paralyse the Ministry’s operations in 2017 hence requires
4.4 The Ministry has two high priority projects which were not completed during the first half of 2016 due to non-release of funds and unavailability of the right materials for their completion. These projects include the CID headquarters and Central Registry building. Central Registry building is yet to be occupied because there are some outstanding works yet to be done such as network cabling for the Public Finance Management System (PFMS). The 2017 allocation has no provision for these important expenditure items.
4.5 In addition ZRP has targeted to purchase and install a search engine for an Automated Fingerprint Identification System (AFIS) so that the force can move away from the less inefficient manual system. A total of $9,600,000 is needed for that but Treasury allocated a paltry $4,200,000 which is inadequate hence the search engine will not be purchased, and the AFIS cannot be operationalised.
4.6 Following violent protests and abuse of social media networks ZRP initiated CDMA Trunked radio project in 2014 to avoid interrupted communication and to lower the cost of communication service rendered by private sector players. This needs to be completed before 2018 General Elections. However, your Committee noted that this project was not prioritised in the 2017 budget allocation despite the long lag time required to implement it.
4.7 The Forensic Science laboratory which is housed in the CID headquarters needs to be fully equipped with modest technical equipment and chemicals, all of which are very expensive. Out of a bid of $3,200,000 needed to cover initial capital equipment Treasury allocated only $400,000 which is grossly inadequate. The capitalization of the Forensic Science laboratory is important since it helps to bring tangible evidence in cases which require forensic science investigations. This is also important to clear the backlog of such cases like murder and rape filed in ZRP and the courts of law. The costs of outsourcing services for DNA tests will also be reduced.
4.8 Similarly, the Immigration Department needs to install iris scanner at all major ports and fully computerise the ports to reduce revenue leakages. However, such expenditure items cannot be financed given that immigration is still under the $100,000 retention fund allocation which is inadequate.
4.9 It was disturbing to note that Treasury proposed to exclude expenditure items such as purchase of motor vehicles as well as travel and subsistence from items financed by retained revenue. However, these expenditure items are very important to the Ministry especially in ZRP and Immigration Departments which are very mobile but were grossly underfunded for several years. Furthermore, given the dilapidated state of the fleet of vehicles in the Ministry, their mobility still remains a challenge given that the country will prepare for the 2018
4.10 In order to finance other welfare items, the Ministry prioritised to fully utilise all its farms but requires adequate farm implements. ZRP had bidded for these farm implements but were not allocated anything despite being promised to get them from the
Ministry of Agriculture, Mechanisation and Irrigation Development.
4.11 Your Committee was disturbed to learn that 527 new ZRP graduates went without pay since June 2016 despite the fact that they were recruited within the approved establishment. This situation has resulted in the Ministry looking for funds from amenities to pay the ZRP graduates – a situation which is not sustainable.
4.12 Your Committee noted that travelling and subsistence are very critical expenditure items to the Ministry but were not included in the Vote and no allocation was made to that effect.This is despite the importance of this expenditure item especially given that Zimbabwe is a signatory to international conventions that have to do with money laundering and suppression of terrorism (like the Eastern and Southern
Africa Anti-Money Laundering Group (ESAMLAG), Electronic Funds Transfer (EFT)meetings and Joint permanent meetings which the country has to attend. To this end, travel and subsistence become inescapable especially with the ever-increasing security threats internally and externally.
4.13 The ZRP had proposed a proactive crime prevention programme which had a total bid amounting to $72,900,000 but Treasury allocated only $12,000,000 to cater for that programme. Thus the Police Services are likely to be reactive to matters instead of being proactive.
4.14 It was learnt that the Ministry is expected to raise a total of $87,591,300 as retention fund to finance part of its operations. Although the idea is rational, this target can be missed resulting in further operational challenges. The limited financial envelope is exacerbated by the non-release of allocated funds by Treasury which has been the norm for years.
In view of the above observations, your Committee made the following recommendations:
- All funds allocated should be timeously released to facilitate timely planning and smooth operations of the Ministry. ii. Treasury should take over the debt and arrears owed to service providers like NETONE, ZINWA, TELONE and ZESA.
Furthermore all outstanding payments should be prioritised and processed.
iii. Special attention should be given to Forensic Science laboratory which require specialist equipment. The laboratory should be fully equipped since it will help to cut costs of outsourcing its services. iv. High impact PSIP projects which are earmarked for 2017 should be prioritised and fully funded. These projects and programmes are:
- Installing network cables for PFMS system at Central
- Secure and installation of the search engine for the Automated Fingerprint Identification System so that it can be operationalised,
- Implement the CDMA Trunk radio to ensure uninterrupted communication by the security forces,
- Fully automate and computerize all the ports of entry and exit with computers and iris scanners for accurate identification and to reduce criminal activities such as illegal migration, money laundering and revenue leakages.
- Treasury should reconsider its decision to exclude the purchase of vehicles as well as travel and subsistence from being financed by retained funds. Instead, these expenditure items should be prioritised and should be adequately funded since they are inescapable.
- Treasury should consult the Ministry and find a strategy to operationalise the proposed proactive crime prevention programme since it is an important security measure.
- Treasury should not expect the Ministry to cover its inescapable items using retained funds since these funds may not be fully raised as expected.
- Farm implements and other required inputs should be availed to the Ministry so that production is maximised and the income and output generated from the farm would cater for other welfare issues in the Ministry.
- New Police graduates in the Ministry who went without salaries should be included on the payroll and get paid all their outstanding salaries.
MINISTRY OF DEFENCE – VOTE 4 ($340,522,000)
2.1 The Mandate of the Ministry of Defence
The Ministry is mandated to:
- Ensure the country's territorial integrity and sovereignty over the land and air space against both internal and external aggression.
- Provide rescue assistance to civilians in times of disasters.
- Promotes international peace and security through participation in peace-keeping missions.
2.2 Major achievements during 2016 The Ministry managed to:
- Utilise the resources disbursed effectively and within time thereby improving on internal capacities and efficiencies.
- Achieve its constitutional mandate and statutory obligations.
2.3 Policy Priorities 2017-2019
The Ministry’s major policy priorities are:
- Meeting the constitutional and statutory obligations which cover rations, uniforms, medical care and accommodation,
- Maintaining existing Defence Forces equipment and facilities,
- Re-equipping, refurbishing and upgrading Defence Forces’ equipment and facilities,
- Training of military personnel,
- Research and development,
- Transforming the National Defence College into a University, and Ø Implementing the risk management policy.
3.0 Global Overview of the Ministry’s Budget
3.1 The Ministry is made up of Civil Service personnel and the Defence Forces Headquarters. The Defence Forces Headquarters consists of the Army (ZNA) and Air Force services (AFZ).
3.2 The Ministry was allocated a total amount of $340,522,000 of which $292,492,000 cover employment costs leaving only
$48,030,000 for other programmes. This allocation of
$48,030,000is only 15% of the ideal requirement of $320,000,000 which was bided for to cater for the critical prioritised expenditure items of the Ministry. This is gross underfunding considering that 85% of these critical expenditure items were not allocated any funds during the 2017 financial year.
3.3 The Ministry’s total requirements and allocation are broken down as follows:
|Administration and General||$25,000,000||$9,800,000||$15,200,000|
|Zimbabwe National Army (ZNA)||$115,000,000||$27,400,000||$87,600,000|
|Air Force of Zimbabwe (AFZ)||$180,000,000||$10,800,000||$169,000,000|
This allocation is giving the Ministry a serious challenge since its priorities cannot be half-funded because of the complementary nature of the activities.
3.4 Your Committee noted with concern that the Ministry accessed only $38,450,000 out of the total allocation of $48,830,000 in 2016. This resulted in the Ministry incurring carryovers amounting to $51,650,000.
3.5 The Ministry has constitutional and statutory obligations to cover rations, uniforms, medical care and institutional accommodation. Under this expenditure item, Administration and General
Department was allocated only $3,000,000 which is just 50% of its total requirement. ZNA was allocated only $6,200,000 from its actual bid of $95,000,000 to cover rations only. With this $6,200,000 it means that each soldier has to use $0.40 per day which is far below the ideal ration scale stipulated in the Quarter Master General Standing Order (QMGSO) of $17.00 per soldier per day. The Ministry incurred a domestic debt of $1,840,000 on rations in 2016 in order to avoid starving the Forces, but it is clear that the 2017 allocation cannot service the debt.
3.6 The Air Force of Zimbabwe failed to fully meet some of its statutory and constitutional obligations due to underfunding and non-release of funds and hence accumulated a total debt amounting to $61,524,902.97 in previous years. This debt includes the carryovers amounting to $143,251.61 incurred by Air Force of Zimbabwe to provide uniforms which were and are in a deplorable state thereby tarnishing the image of the organisation. In addition
the AFZ failed to pay for medical services for its members – a situation which reduces the productivity, motivation and efficiency of the Forces. Your Committee was disturbed to learn that the $10,788,000 allocated for operations cannot fully cover the debt, thus compromising the planning and execution of duties by the Ministry.
3.7 Military procurement is one expenditure item which forms the backbone of the Ministry. There is an urgent need for serviceable military equipment, combat vehicles, self-propelled artillery weapons, arms and ammunition to improve internal capacity and efficiency of the Forces. However, your Committee noted with concern that the total capital expenditure funds released have never exceeded 10% of the allocated funds for the past three years. The $1,570,000 allocated for military procurement is just 5.4% of the total requirement of $29,000,000.
3.8 The Ministry is relying on its old stock of assets and equipment (both movable and immovable) to carry out its operations. Given that these assets are very old, their maintenance costs are very high. In case of vehicles the fuels, oils and lubricants form an essential component of maintenance. However, it was disturbing to note that the allocation to this expenditure item has continued to decline in the past three years. The ideal requirement is at least $800,000 per month but it was allocated $1,700,000 for the entire
- The Ministry has been relying on few selected service providers who agreed to supply services on credit but this cannot be guaranteed in 2017.
3.9 AFZ has not been supported on maintenance and capital acquisition for the past three years- a situation which has seen most assets and equipment depreciating beyond repair. Currently, AFZ is operating with aircraft which has limited life span due to infrequent service and this affects duties such as fly pasts, search and rescue operations and training. Most of the aircraft require total engine overhaul and this is very costly. Ideally the AFZ requires $16,000,000 for aircraft maintenance and $23,700,000 for the overhaul of AFZ platform but only $2,020,578 was allocated. This allocation cannot adequately fund the technical maintenance and engine overhaul of aircraft.
3.10 ZNA has high impact projects which have remained incomplete for the past three years, and some of them are at risk of collapse before completion. These projects are:
- The Zimbabwe Military Academy Cadet accommodation,
- Dzivarasekwa Housing Units,
- 52 Infantry Battalion houses, iv. 42 Infantry Battalion sewer system.
A total of $3,530,000 was allocated for selected ten projects against a requirement of $13,450,000 for fifteen PSIP projects which were prioritised for 2017. Similarly, AFZ has eleven activities on Manyame Air Base, Field Air Force Base and Thornhill Airbase which have to be executed in 2017. Despite the insufficient funds amounting to $1,172,000 allocated for these projects, it will be appreciated if the allocated funds to various projects are fully released in time.
- Training and human capital development is one of the critical components and a priority item for the Ministry especially during time of peace. Thus it is important to adequately fund teaching, training material, upkeep of training facilities and maintenance of ranges. AFZ was allocated $715,000 against the requirement of $7,300,000 and ZNA was allocated $155,000 against the required amount of $317,264. This inadequate funding poses a risk to the organization.
- The Ministry has operations which form part of its constitutional mandate. These include search and rescue operations in times of floods, fly pasts for Zimbabwe International Trade Fair, Independence celebrations, Heroes and Defence Forces Day celebrations, Harare Agricultural Show, VVIP and VIP tasks. The allocation of $10,788,000 is far below the department’s carryovers of $61,524,902.29 giving a negative variance of $50, 735,902.27.
- The Ministry has outstanding programmes that include completing the demining exercise which has missed several deadlines and extensions prescribed in the Ottawa Convention. Your Committee noted that the Ministry has been relying on donor funds to undertake this exercise.
After an analysis of the Ministry of Defence’s budget by your Committee, the following recommendations were made:
5.1 Treasury should prioritize adequately funding major expenditure items such as institutional provisions which include uniforms, rations, medical services, accommodation, training and development expenses.
5.2 Expenditure items that result in increased internal capacities and efficiency of the Ministry must be fully funded. These are:
- Servicing the Defence Force’s vehicles and other mobile equipment,
- Maintenance and servicing of the Force’s aircraft,
- Engine overhaul for the aircraft.
- Having failed to meet the January 2015 Ottawa Convention Third Extension Deadline, Treasury should fully and urgently support the completion of the demining programme. These land mines are
causing serious injuries and deaths to people, livestock and wild animals in the affected areas. The land could be used for other economic and social activities like agriculture and mining had it that there are no land mines. Other programmes that require adequate funding include search and rescue operations in times of floods, fly pasts for Zimbabwe International Trade Fair, independence celebrations, Heroes and Defence Forces Day celebrations, Harare Agricultural Show, VVIP and VIP tasks
- Treasury should target fully funding the completion of housing and other PSIP projects which have high impact for the Ministry in the long run. These projects are: Ø Dzivarasekwa Housing Project,
- Zimbabwe Military Academy Cadet Accommodation in Gweru, and
- Procurement of new state of the art security equipment.
In that same vain other high impact projects must be targeted for 2017 and a special Fund should be created so that there is accelerated progress towards their completion. These are:
- 52 Infantry Battalion Housing project,
- Rehabilitation of Sewer Systems at 42 Infantry Battalion,
- Construction of R31 Flats at Field Air Force Base,
- Repair of hangers, hard stand and taxiway,
- The Manyame Air Base.
- There is need to urgently and fully avail targets to facilitate smooth operations of the Ministry. This should also involve consulting with the Ministry’s officials about the targeting of expenditure and timing of releases to cover such prioritised expenditure items to avoid carryovers.
- Treasury should take over the Ministry’s outstanding debt so that operations earmarked for 2017 are better funded.
- A Projects Fund must be created so that the Ministry becomes selfsustained and reduce continued dependence on the fiscus for expenditure items such as rations and other projects where low cost and high impact alternatives are available. In this regard, Treasury should fully support the Defence Force’s agricultural activities and other income generating projects.
The Committee implores the need for the Ministry of Finance and Economic Development to identify inescapable and high impact expenditure targets so that these can be fully funded. This calls for the need for close cooperation and consultation between Treasury and the respective Ministries to identify the funding needs, gaps and special priority areas. It is imperative that when Treasury adopts such innovative measures to cut costs, respective Ministries should also implement cost efficient strategies and find revenue generating activities with the support of Government.
Primary and Secondary Education, here are the recommendations:-
- The Ministry must present monthly and quarterly budget reports to the Portfolio Committee as is required by the Constitution.
- Budget allocations to Ministries must exclude employment costs as this clouds judgment in terms of allocation towards the operational budget
- All employment costs to be channeled through the employer that is the Ministry of Public Service, Labour and Social Welfare.
- Meaningful funding is required for primary and secondary education as it is the foundation stage of human capital development and social molding.
- Progressive building of offices will in future eliminate the rental expense given the large amount budgeted for rentals which is US$1 774 000
- Exploration of joint ventures and partnerships in school construction to ease pressure on the treasury
- The BEAM facility should be administered in our view through the Ministry of Primary and Secondary Education to ensure resources are channeled where they are needed most.
Recommendations on the Ministry of the Sports and recreation are as follows Mr. Speaker Sir:-
- Treasury must finance all national teams and not leave the responsibility to well-wishers.
- Ministry of Sports and Recreation must liaise with Ministry of Home Affairs on the issue of lottery fees as these funds are more suited to sport and recreation.
- The Ministry of Sport and Recreation should liaise with the local authorities on possible collaboration on use and maintenance seemingly idle community facilities for advancement of the Sport and Recreation agenda.
- There is need to preserve open spaces in light of land uptake for construction purposes to allow for sport and recreation activities to take place in various communities in the country
- The Ministry of Gender and Women’s Affairs can be approached by the Ministry of Sports and Recreation so that some ward based sport and recreation coordinators can be done through gender offices.
Hon. Speaker, those were the recommendations for the Ministries, I thank you.
THE TEMPORARY SPEAKER: Thank you very much Hon.
Mandipaka, you have done very well on time management.
HON. MUKUPE: Thank you Mr. Speaker for giving me the opportunity of showing the less learned how to make recommendations.
So my report is on the Portfolio Committee on Industry and Commerce Vote 7 of the 2017 Post budget analysis.
The Ministry of Industry and Commerce's major mandate is to provide a conducive environment for economic growth and development through sustainable industrialisation and trade. The State Enterprises under the Ministry’s purview are: Industrial Development Corporation,
Zimbabwe Iron and Steel Company, Zimbabwe International Trade Fair
Company, as well as, grant aided institutions which include: Consumer Council of Zimbabwe, Competition and Tariff Commission, National Incomes and Pricing Commission, Standards Association of Zimbabwe and ZimTrade.
In the Zimbabwe Agenda for Sustainable Social and Economic Transformation (ZIM ASSET), the Ministry has the task of making industry and commerce the engine for national economic growth and development. The Ministry therefore, focuses on implementing the Industrial Development and National Trade Policies which are aimed at reviving the manufacturing sector and accelerated industrialisation through value addition and beneficiation which are fundamental to Zimbabwe’s economic transformation.
2.0 Overview of the Ministry’s Budget
The Ministry of Industry and Commerce was allocated US$18,547,000, against a total bid of US$21 563 622 which translates to 86% of the total bid. The overall allocation to the Ministry increased from US$17 465 000 to US$18 547 000. Out of the US$17 465 00 Treasury had disbursed by October 2016, only US$7 433 876. Given the huge investment needed to revamp our industries, the allocation to the Ministry is not adequate to fund the important reforms, which are critical for reviving our industries which are the engine for growth and development.
3.0 Analysis of the economic classification of the Ministry’s Budget
Table 1: Economic classification of the vote
|Budget Item||2016 revised||2017||%change||proportion
|Change in proportion|
|Goods and services||999000||945000||-0.05||5.72||5.10||-0.11|
|Acquisition of fixed capital assets||255000||355000||0.39||1.46||1.91||0.31|
|Lending and equity participation||11269000||12800000||0.14||64.52||69.01||0.069|
According to the 2017 National Budget allocation the Ministry of Industry and Commerce budget for recurrent expenditure marginally decreased by 0.09% and capital expenditures marginally increased by
0.14%. The total budget to the Ministry also marginally increased by
0.06%. Recurrent expenditures constitute 29.07% of the total budget. Within the recurrent expenditures employment costs constitute the bigger proportion of total budget registering a proportion of 11.6% to total budget. Capital expenditure constitutes the bigger proportion of the total budget to the Ministry as it takes 70.1% of the total budget, leaving the remainder for recurrent expenditure. This shows that the budget is inclined to developmental issues. Capital expenditure allocation and disbursements are critical for the revival of the industries.
Lending and equity participation takes up 69.01% of the total budget allocated the Ministry and it constitutes 97% of the capital expenditures. This allocation, although inadequate will enhance the operations of the Industrial Development Corporation assuming the funds are released on time. No allocations were made for capital transfers in 2017 and this is not a welcome development to the Ministry because it is going to negatively affect its infrastructural development and capacity building. The following budget lines witnessed marginal increases in allocation
Employment costs 0.004%, Maintenance (0.17%), and Programmes
(0.21%). All the other budget items witnessed a decrease in allocation as follows; Goods and services (0.05%), current transfers declined by -
4.0 An Analysis of the Sub Budget Items
4.1 Goods and Services
The Ministry received US$ 945 000 for goods and services which include communication, foreign and domestic travel, institutional provisions, office supplies and other operational expenses against a total bid of US$ 2 425 565. The amount allocated for goods and services represent 39% of what the Ministry had proposed to Treasury. This entails that there is a shortfall of about 61% at allocation level before looking at disbursements. The financing gap will thus affect foreign travel requirement as the Ministry is involved in extensive international travel to participate in various core, unavoidable and non-optional meetings such as the SADC Trade Ministers’ meeting, SADC Council of
Ministers, ACP Trade Ministers, ACP-EU Joint Council of Ministers,
WTO Ministerial meetings, ESA Council of Ministers, SADCCOMESA-EAC Tripartite FTA meetings etc. Thus, the amount allocated to the Ministry for foreign travel will affect the effective participation of the Ministry at various meetings which are important for the growth of trade and creating a conducive environment for the private sector to do trade and investment initiatives.
The Ministry got 42% of the total bid which was made to the Treasury, and this translates to a variance of 58% allocation. Given the state of machinery and vehicles it means that the Ministry will find it difficult to maintain and repair vehicles, equipment and physical; infrastructure. However, the funds allocated are more than the ones allocated last year as the budget line registered a 0.17% increase for the
2016-2017 budget allocations.
4.3 Current Transfers
The Ministry of Industry and Commerce’s budget requirement for subscriptions including arrears to international organisations in 2017 is US$5 111 270 and Treasury allocated only US$ 1 354 000 which leaves a financing gap of US$ 3 757 270. The amount allocated is just 26% of the Ministry’s requirement for subscriptions to international organisations. In addition, the Ministry requested US$982 319 for the NIPC and NCC but was allocated US$ 161 000 for NIPC and for NCC there was no allocation made. The bid for subscription to organisations such as WTO, COMESA and SADC was US$3 863 251 and the
Ministry got a 23% allocation of the total amount bided for. As a result of the underfunding, the country will continue to accumulate arrears in respect of its obligations to international organisations.
4.4 Support to Grant Aided Institutions
There are some institutions under the Ministry purview for instance the Standard Association of Zimbabwe who were not allocated anything by the 2017 National Budget. Lack of funding to the State
Enterprises will greatly affect their operations.
The Ministry received funding for programs in line with the budget which they had submitted. However, the resources are not enough to cover the budget requirements for the programs given that there was no room for the Ministry to determine the budget which they wanted to be supported for the programs. Treasury had given them the ceiling for programs cost which was not informed by the demands of the Ministry.
18. 4.6 Challenges
Generally the economy is going through phases which are negatively impacting on the ability of the economy to generate revenue to support the critical drivers of the economy such as industry and commerce. Some of the issues affecting the economy include: liquidity constraints, continued company closure, constrained fiscal space, mounting job losses amongst others.
Treasury is not timeously disbursing the allocated funds to the
Ministry and this has the effect of affecting the operations of the
Ministry in fulfilling its mandate;
The level of disbursements to the Ministry is not sufficient to meet the annual obligations for the Ministry to achieve its planned targets and goals;
There is need to ensure that the promises which was made of availing US$50 million by the Minister of Finance and Economic
Development is fulfilled in order to revive ZISCO;
Reviving ZISCO is a key priority for the country as it has lateral linkages with other industries and also it’s potential to create more employment to address the development challenges facing the country; The allocations to IDC which is in line with the call circular ceiling provided by the Ministry of Finance and Economic Development limits the Ministry in proposing developmental budgets which are ideal to support the revival and operations of these institutions;
The Ministry is accruing arrears of subscriptions to international organisations and this will limit the country's benefits from services provided by various trade organisations as some benefits are linked to subscriptions;
By allocating inadequate funds to IDC for lending to ailing industries, Treasury is indirectly allowing industries to collapse. If industry falls, revenue base falls and there is loss of employment. It is also important to note that shut down companies are difficulty to resuscitate. The Ministry is focusing more on value addition and beneficiation yet the industries are struggling with capacity utilisation;
- There is need to create an enabling environment for sustainable enterprises through addressing bottlenecks around investment, energy and power supply, and access to international markets and lines of credit;
- There is need to raise the US$50 million resources which are important for the revival of ZISCO;
- There is need to expedite the resuscitation of operations at ZISCO
Steel, a strategic entity for the country's economic recovery;
- There is need to ensure that Treasury should disburse resources in accordance with the budget which has been cut considerably against the budget bid which was presented by the Ministry;
- There is need for Government to come up with policies that promote foreign direct investment which is what the country requires at the moment to help resuscitate our ailing industry in light of liquidity challenges in the country;
- The industry needs to be restructured following years of economic decline and companies are using out-dated infrastructure. Even if more money is injected for capitalisation without the
infrastructure, domestic industry will not be competitive due to technical inefficiency;
- There is need for mobilisation of finance for industrial development in the country through tapping of new sources of funding such as pension funds;
- There is need to address the bottlenecks which are causing companies to close in Zimbabwe and even engage experts to document these reasons in view to proffer evidence based policy reforms to address the current challenges industries are facing for instance some of the issues are:
- High cost of doing business;
- Inefficiencies of key enablers;
- lack of affordable long term financing;
- labour reforms
HON. CHITINDI: Thank you Mr. Speaker Sir.
The 2017 National Budget is anchored on the theme “Pushing
Production Frontiers Across all Sectors of the Economy.” The economy is expected to grow by 1.7% driven by agriculture which is also expected to grow by 12%. The Parliamentary Portfolio Committee on Lands, Agriculture Mechanisation and Irrigation Development has an oversight role over the Ministry of Lands and Rural Resettlement and the Ministry of Agriculture, Mechanisation and Irrigation Development.
The Ministry of Agriculture has ten key Sub Votes. The Ministry’s Vote is thus subdivided into these ten Sub Votes. The Ministry of Lands and Rural Resettlement has three Sub Votes. The Ministry of Agriculture has a mandate to facilitate a sustainable and viable agricultural sector by creating an enabling environment for food production to ensure food security in the country and provide raw materials for industry and the manufacturing sector. The Ministry plays a key role in the economic development of the country because of its backward and forward linkages with industry.
MINISTRY OF AGRICULTURE, MECHANISATION AND
1.1 Key Result Areas of the Ministry
The Ministry of Agriculture, Mechanisation and Irrigation Development has laid down its priority objectives for the 2017 Financial Year and these are:
- Crop and livestock production and diversification;
- Human Resource Developmen;t
- Agricultural mechanisation and irrigation development;
- Market access;
- Institutional Capacity Development;
- Coordination of the agricultural sector and;
- Policy, legal and regulatory framework;
- Crop and Livestock research and development;
1.2 Major achievements during 2016
During the 2016 Fiscal Year, The Ministry made the following achievements among others:
- Produced 400 Diploma and 500 Certificate holders from 8
- Trained 50 young commercial farmers at Kushinga Phikelela and National Farmer Training College and 1000 in short courses at various colleges;
- Constructed 50 metal silos in Masvingo, Matabeleland North
Mashonaland East and West;
- 50 artisans, 120 technicians and 5600 extension workers were trained;
- Introduced four new maize varieties;
- Established 8 cotton varieties.
1.3 Ministry’s Policy Priorities for 2017-2019 The major policy priorities for the Ministry are;
- To increase crop and livestock productivity, production and development;
- To develop, rehabilitate and modernize irrigation research and development infrastructure;
- Market access;
- Coordination of the agricultural sector;
- Institutional capacity development.
2.0 The National Budget
The overall Budget Estimate for 2017 is projected at US$4 100 000
000, which has not shown any change from the 2016 National Budget. The Ministry of Agriculture, Mechanisation and Irrigation Development received an allocation of US$ 292 696 000, an increase of 101.73% from the previous allocation.. The top ten ranked beneficiaries of the National
Budget are shown in Table 1 below: Table 1: Ranking of the National
Budget according to Ministries
|15||PRIMARY AND SECONDARY EDUCATION||803 771 000||1|
|19||HOME AFFAIRS||364 308 000||2|
|4||DEFENCE||340 522 00||3|
|8||AGRICULTURE, MECHANIZATION AND
|292 696 000||4|
|14||HEALTH AND CHILD CARE||281 976 000||5|
|5||FINANCE AND ECONOMIC DEVELOPMENT||281 191 000||6|
From Table 1 above, the Ministry of Agriculture, Mechanisation and Irrigation Development is ranked fourth in the overall budget allocations. This is comparable to the previous fiscal year where it was ranked the same. The Ministry’s overall allocation is 7.1% of the
National Budget which is a decline from the previous allocation of 8.3%. This is below the internationally accepted allocation levels for agriculture. This therefore means that in terms of real allocations the Ministry was given less preference in allocations. It will be difficult for the Ministry to achieve its set objectives for the fiscal year because of the inadequate funding allocated. The fact that the Ministry is ranked among the highest ten recipients in the budget shows its economic and social importance but due to the paltry allocation, the ranking will do little to impact positively on the role of the Ministry on food security and economic development. The Ministry has 6 key programmes whose allocations are shown in the Table 2 below.
Table 2. Programme Allocations for the Ministry
|1.Policy and Administration||83 081
|2.Agricultural Education||2 038 550||1 550||431||-29.78|
|3.Crop and Livestock Research and
|8 683||000|| 8
|4.Crop Production, Extension and
|5.Agricultural Engineering and farm
|6.Animal Production, Health,
Extension and Advisory Services
2.1 Vote allocations for the Ministry
The Ministry has ten major Sub-Votes and these are summarised in
Table 2 below and shows the changes of the Ministry’s allocations within its sub votes.
Table 3: Changes of allocations according to sub-votes.
|Administration and General||85 117 000||234 944
|Division of crop research||2 985 000||2 976 000||-0.3|
|Division of Livestock Research||2 208 000||2 209 000||0.05|
|AGRITEX||19 599 000||21 142 000||7.87|
|Veterinary Services||12 850 000||12 618 000||-1.81|
|Tsetse Control Services||2 603 000||2 538 000||-2.49|
|Research services division||3 490 000||3 397 000||-2.66|
|Agricultural Engineering & Mechanization||3 531 0000||3 200 000|| -
|Irrigation development||7 147 000||6 409 000||-10.33|
|Livestock production and development||
5 558 000
5 134 000
There was generally a decrease in the allocations for all the Subvotes. The Sub Vote on Administration and General increased by 176%, by AGRITEX by 7.87% while the Research Services Division’s allocation decreased by 2.66%.It is noteworthy that irrigation development had its allocation decreased by 10.33% and this is worrying since more irrigation schemes should actually be introduced and rehabilitate those that are already in existence to mitigate incidences of adverse weather conditions such as droughts. Tsetse control,
Agricultural Engineering and the Division on Livestock Research and Crop Research also had their share of the allocations decreased. The biggest mover on the sub-vote allocations was Administration and
General Farmers’ world was allocated US$ 10.7 and Command Agriculture was allocated US$67.5 million. This will go a long way in improving agricultural output and hence food security.
Table 4: Economic Classification of the Vote
|99 021 000||89 783 000||-9.32|
|Employment costs||74 832 000||80 723 000||7.89|
|Goods and Services||11 728 000||5 156 000||-56|
|Agricultural colleges||2 525 000||881 000||-65.1|
|Maintenance||3 486 000||508 000||-85.4|
|Programs||6 450 000||2 515 000||-19.1|
|Current transfers||1 317 000||782 000||-40.6|
|291 553 000||83 580 000||-71.3|
|Acquisition of fixed assets||14 387 000||10 885 000||-24.3|
|Capital transfers||265 609 000||61 095 000||-76.99|
|Lending and equity participation||11 566 000||11 600 000||0.002|
|Total||391 891 000||174 145 900||-55.4|
Table 4 shows that overall current expenditure decreased by 9.32 percentage points and employment costs will also increase by 7.89 percentage points. Expenditure on Agricultural Colleges will decrease by 65.1 percentage points while that on maintenance costs and programmes will also decrease by 85.4 and 19.1 percentage points respectively. Expenditure on goods and services current transfers and capital will decrease. 51.6% of the Ministry budget allocation goes to recurrent expenditure and of this 89.9% goes towards employment costs.
Capital expenditure is only 47.99% of the Ministry budget. That’s
89.9% of the budget goes towards recurrent expenditure and only 47.99% is allocated for capital expenditure shows that the budget allocation is more consumptive than developmental.
The importance of the Ministry of Agriculture, Mechanisation and Irrigation Development cannot be over emphasised. Agriculture plays a central role in the Zimbabwean economy and has the potential to alleviate extreme poverty, enhance economic growth and entrench economic stability. The sector provides employment and income to over 70% of the population and supplies about 60% of raw materials to industry. The sector also contributes about 40% of total exports.
Agriculture contributes about 20% of the Gross Domestic Product
(GDP). The success of the country’s economic blueprint, the Zimbabwe Agenda for Sustainable Socio-Economic Transformation (ZimAsset) hinges on the success of agriculture since food security and nutrition is one of the pillars of the blueprint. It should be emphasised that most of the industries are reliant on agriculture for their raw materials so the success of agriculture is the success of the whole economy since there is a linkage between agriculture and other sectors of the economy.
The Ministry is parent to such parastatals as Agribank, GMB, AMA, ARDA and CSC which can be productive and self-sustaining if given sufficient initial funding. The CSC used to be the biggest foreign currency earner in the country due to its strategic role as exporter of beef to European countries and the region. The parastatal needs to be recapitalised for it to start operations. Arda has the potential to alleviate food shortages in the country if it is adequately recapitalised. Its farms are located in regions which received normal to above normal rainfall.
From the budget allocations, nothing was allocated to Agribank, the
Agricultural Commodity Exchange, Farmers’ Development Trust and the Agricultural Marketing Authority. It will therefore be difficult for farmers to access loans for the farming season if Agribank is not capacitated.
The Grain Marketing Board (GMB) has to perform its core functions and for the parastatal to do so it has to be adequately funded.
2.2 Conclusion and Recommendations
The Ministry of Agriculture, Mechanisation and Irrigation Development was allocated $292 696 000 which is a significant improvement from the previous allocation. The allocation translates to 7.14% of the total budget. Although this allocation falls below the 10% allocation agreed at the 2003 Maputo Declaration, this is offset by some agriculture related allocations incurred in 2016. The Committee noted that the National Budget prioritizes agriculture as evidenced by allocations related to the following:
- Strategic grain reserve;
- Input schemes;
- Supportive personnel/employment costs;
- Irrigation development; Extension services; and
- Veterinary services.
The Committee commends the support to agriculture by Government in the following activities:
- Prioritisation of maize production through the Special Maize Production Programme;
- Supporting cotton producers as evidenced by $42 million worth of cotton inputs through the Vulnerable Households Input Scheme to
400 000 communal cotton farmers;
- Rebuilding the National Cattle Herd;
- Efforts to revive the Horticulture sector through engaging players in the sector;
- Investing in irrigation infrastructure where a number of irrigation schemes are targeted; and
- Promoting agricultural mechanisation;
- The Committee also notes with concern that funds that are allocated to the Ministry for these activities are inadequate and are either not timeously disbursed or are not disbursed at all and this affects the operations of the Ministry;
- The Committee also observed that there was little allocation for Research, Irrigation Development and Veterinary Services. These activities by the Ministry play a critical role to the success of agriculture and therefore need to be adequately funded. ;
- The expectations are high that, the country may experience a bumper harvest for the current season, however, the GMB storage capacity has been reduced due to poor maintenance of silos;
- Research and training institutions are an indefensible elements in the agricultural sector, contributing to agricultural body of knowledge, however agricultural colleges’ allocation was inadequate;
- There is also the outbreak of the army worm which needs to be controlled if harvests are no to be negatively affected.
- Current summer cropping season has received above normal rainfall throughout the country, this has resulted in shortages of fertilizers especially the Ammonium Nitrate (AN).
- Employment costs are high but activities are not adequately funded
- Irrigation and mechanization, received insignificant funding to realize any meaningful development.
The Committee therefore recommends that:
- In an effort to attract investment in agriculture, the Ministry of Agriculture, Mechanisation and irrigation Development should finalize and launch its agricultural comprehensive policy, contract farming frameworks, ensure operationalisation of the stop order system to other agricultural products as well as the warehouse receipt system;
- The allocated funds to the Ministry have to be timeously disbursed for the smooth operation of the Ministry;
- Agritex needs to be fully capacitated so as be very visible in assisting farmers;
- Entities like Agribank must be capacitated through budgetary allocation whilst ARDA and CSC should be encouraged to identify and enter into joint ventures;
- Adequate funding should be allocated to agricultural colleges for training of more agricultural experts;
- There should be adequate allocation for the Department of
Veterinary Services to enable it to combat animal diseases;
- As a matter of urgent, Treasury should release enough funding to enable local companies to produce AN fertilizer in case of incapacity, allow them to import;
- Treasury should assist the Ministry with decent accommodation for
- Treasury should release adequate funding for the rehabilitation of grain silos before the harvesting period commences;
- In light of insufficient funding to irrigation and mechanisation, the Government should provide sovereign guarantees for the irrigation equipment from willing partners like Belarus and India.
Ministry of Lands and Rural Resettlement
The Ministry of Lands and Rural Resettlement has two Sub Votes,
Administration and General and the Surveyor General. There is also the
Zimbabwe Land Commission within the Ministry. The Ministry of Lands and Rural Resettlement has a mandate to promote equitable distribution of land and provide security of tenure.
1.1 Key Result Areas of the Ministry
The Ministry of Lands and Rural Resettlement has laid down its priority objectives for the 2015 Financial Year and these are the:
Land acquisition and rural resettlement Land administration and management.
1.2 Major achievements during 2016
During the 2016 Fiscal Year, The Ministry has the following as some (among others) of its achievements:
- 51 205.33 hectares of land were acquired;
- Twelve farmers were fully compensated;
- Five 99 year leases were registered;
- One hundred and thirty five (135) farm survey diagrams produced;
- 138 A1 settlement permits were produced and issued;
- Reaffirmation of the140 km Zimbabwe/Botswana boundary;
- Ninety eight (98) user specific maps were produced.
1.3 Ministry’s Policy Priorities for 2017
The major policy priorities for the Ministry are;
- To provide security of tenure;
- Management of land information;
- Valuation and compensation of all acquired farms;
- Commissioning and maintaining of Zimbabwe’s international boundaries;
- Policy reviews, formulation and pronouncements;
- Land acquisition and distribution;
- Reorganizing, training, performance monitoring and welfare;
- Management, maintenance, acquisition and audit of assets.
2.0 The National Budget
The Ministry of Lands and Rural Resettlement is ranked very lowly in the overall budget allocations. This is comparable to the previous fiscal year where it was also lowly ranked and his is consistent with its overall staff establishment as employment costs get the biggest share in most ministries. The Ministry’s overall allocation is 0.19% of the National Budget and was reduced by 20.08% from the previous year’s allocation. It will be difficult for the Ministry to achieve its set objectives for the fiscal year because of the inadequate funding allocated. The fact that the Ministry is ranked among the lowest ten recipients in the budget betrays its economic and social importance.
2.1 Vote allocations for the Ministry
|Administration and General||7 794 000||6 095 000||-21.8|
|Surveyor General||1 768 000||1 547 000||-12.5|
From Table 1 above, it can be seen that there was a general decline in the Sub Votes allocation as reflected by the overall decline for the whole Ministry.
Table 2: Administration and General
|Current Expenditure||7 794 000||6 095 000||-21.8|
|Goods and Services||1070000||867000||-18.97|
|Acquisition of fixed assets||1507000||60000||-96.02|
|Total||9 562 000||7 642 000||-20.08|
The table shows that employment costs marginally increased by about 6.5% while all the other expenditures are decreasing.
Table 3: Surveyor General
|Employment costs||699 000||926 000||38.41|
|Goods and Services||697 000||551 000||-20.95|
|Acquisition of fixed assets||88 000||40 000||-54.55|
|Total||1 768 000||1 547 000||-12.5|
Table 3 shows an increase in employments costs by 38.41% while all other expenditures are declining. This means that the office of the Surveyor General will not be able to execute its mandate fully with such a budget allocation which is way below what was expected. The budget is in fact less than the allocation that was done in the previous fiscal year.
3.0 Zimbabwe Land Commission
The transfer on the Zimbabwe Land Commission was $200 000.
The Commission is still to be established.
Table 4: Economic Classification of the Vote
|Current Expenditure||8 265 000||7912000||-0.4|
|Goods and Services||2290000||1899000||-17.1|
|Acquisition of fixed assets||5350000||2370000||-55.7|
|Total||14 115 000||10 642 000||-24.6|
Table 4 above shows that the overall allocation to the Ministry of Lands and Rural resettlement declined by 24.6%. This decline affected all the other allocations which are in the negative. Only employment costs show a positive increase of about 7.4%.
The first key priority of the Ministry is to provide security of tenure to A2 beneficiaries in the form of 99-year leases, provide settlement permits to A1 farm beneficiaries, provide title deeds to small scale farmers and commercial farmers holding leases with option to purchase before the land reform programme and provide short term leases to homesteads and trading sites.
The other priorities for the Ministry are: to manage land information, which involves e-governance training, networking and connectivity, master data collection from provinces routine farm inspections and production of base maps and resuscitation of photogrammetric operations. The other priority of the Ministry is to commission and maintain Zimbabwe’s international boundaries.to redress historical land imbalances; the Ministry is re-gazetting land for agricultural purposes. The Ministry also evaluates and compensates for immovable farm improvements. The Ministry also intends to establish the Zimbabwe Land Commission.
The Committee notes that the Ministry faces the following challenges in trying to meet these objectives:
- Inadequate manpower;
- Inadequate or non- release of the allocated funds for operations;
- Obsolete equipment;
- Staff immobility because of inadequate motor vehicles;
- Lack of modern survey equipment;
- Legal and Technical challenges in registering 99 year leases;
- Resistance from the Rural District Councils over the collection of Rural Development Levy; Observations: Ministry of Lands and Rural Settlement and
Zimbabwe Land Commission
- The Committee noted that there is duplication of related work between the Zimbabwe Land Commission and the Ministry of
- There is slow process in the issuance of 99 years leases to farmers
- The Land Commission Bill is still under parliament consideration, however the Commission has submitted its budget and the Ministry of Finance has allocated them. The Committee raised concerns that the Land Commission should only receive funding from Treasury after the enactment of the law.
- There is no clear mechanism regarding how the Land Development
Levy, should be shared between the Ministry and the Commission.
- The Committee recommends that the Ministry of Lands should be disbanded and placed as a department under Ministry of
Agriculture and the rural component under the Ministry of Local Government, this should be effected ones the Land Commission is legally constituted;
- Treasury should release adequate funding to modernize Surveyor
- In the meantime, land redistribution should be halt, until the Land
Commission is well established and conducts land audits;
- There be clarity between the RDC and the Ministry on who should collect the Rural Development Levy. I thank you.
HON. MAJOME: I thank you Hon. Speaker for allowing me this
opportunity to table the report of the Portfolio Committee on Justice, Legal and Parliamentary Affairs as my swan song as it will be the last act that I perform as the Chairperson of this Parliamentary Portfolio Committee as the Committee is moving to ZANU PF. I want to just take this opportunity to thank this august House for giving me this privilege and honour of leading in this particular way in this august House and serving my nation in this particular way. I treasure it.
I will now proceed to present the report. Thank you Hon. Members and through you Mr. Speaker Sir, I understand that I have only five minutes to present the report of the Portfolio Committee. So, I am going to just give highlights and indicate that…
The Portfolio is concerned with the Ministry and five independent constitutional Commissions, namely the Zimbabwe Anti-Corruption Commission (ZACC), the Judicial Service Commission (JSC), the
Zimbabwe Human Rights Commission (ZHRC), the Zimbabwe
Electoral Commission (ZEC), and National Peace and Reconciliation
Commission (NPRC), as well as the National Prosecuting Authority and Parliament. The National Prosecuting Authority did not avail itself of the opportunity the Committee is compelled by Section 325 (2) of the Constitution to avail to it as a constitutional commission or institution, to make ‘representations as to the funds to be allocated to it in each financial year’.
The Committee’s analysis was also informed by anomalies identified by the Public Accounts Committee’s report on Auditor general’s report of the Ministry’s 2013 accounts.
MINISTRY OF JUSTICE, LEGAL AND PARLIAMENTARY
The Ministry also has oversight over the Zimbabwe Prisons and
Correctional Services and the Attorney General’s Office. Its key result areas are:
- Justice delivery.
- Incarceration and rehabilitation of offenders.
- Public Sector accountability and transparency laws.
2.1. MAJOR ACHIEVEMENTS IN 2016
The following are some of the Ministry’s major achievements in 2016:
Decentralisation of Legal Aid Directorate Offices to Matabeleland South, North and Mashonaland West provinces.
- Actively spearheaded the Ease of Doing Business Reform Agenda.
- Submitted to Cabinet
- The Zimbabwe National Intellectual Property Policy and Strategy.
- Key communications regarding o The International Covenant on Civil and Political Rights.
o International |Covenant on Economic, Social and Cultural Rights. o African Charter on the Human and People’s Rights and its Protocol.
Represented Government and completed 323 civil cases.
- Gave legal assistance to 2 099 indigents.
- Drafted 30 Bills and statutory instruments.
- Summarised 995 High Court judgments as well as 242 Supreme Court judgments.
- Produced 2015 Zimbabwe Law reports.
- Prepared an electronic version of updated 2016 statutes and judgments.
- Prepared the Cyber Crime and Computer Draft Bill, Data Protection Draft Bill, Electronic and Commerce Transactions Bill.
2.2. MAJOR CHALLENGES IN 2016
Notwithstanding the above achievements, the Ministry also faced the following challenges in 2014:
Erratic and non-release of funds coupled with inadequate funding for service delivery, projects and programmes.
- Freezing of vacant posts.
- Lack of vehicles to do work outside stations.
- Debt carry over from 2013 accumulated to more than $13, 300,000.
- Delays in obtaining approval for State Party reports.
- Non cooperating stakeholders.
2.3. POLICY PRIORITIES FOR 2017
- Alignment of outstanding legislation to the Constitution.
- Decentralisation of the Legal Aid Directorate and Civil Division to facilitate equal access to justice for all Zimbabweans.
- Resourcing prison farms with inputs, implements and machinery to improve production.
Channelling resources towards rehabilitation programmes.
- Renovation of prison infrastructure.
- Capacitating the Community Service Programme.
- Decentralisation of the Pre-Trial Diversion Programme for juvenile offenders.
- Capacitating the Civil Division Bulawayo offices.
- Finalising the DNA Evidence, Copyright Law and Electronic Evidence Act.
- Drafting and presentation of State Party reports on human rights treaties.
- Launching the Zimbabwe National Intellectual Property Policy and Strategy.
220.127.116.11. MINISTRY’S BUDGET TRENDS 2010-2017
An analysis of the Ministry’s Budget trend shows that on average
70% of allocated amounts are disbursed as of 30 September of the
financial year. The capital budget allocation, relative to the total budget, has generally been low over the period 2010-2017. The share of capital expenditure was at its highest (14.7%) in 2012 after which it sharply declined to 8% in 2013 and to 3.8% in 2014. In 2017, only 2.6% of the Ministry’s budget was allocated towards capital expenditure. Most of the allocated funds are therefore going towards recurrent expenditure in the form of employment costs, goods and services, and maintenance. This trend is worrisome given the dilapidated state of infrastructure in prisons and its dire security implications. Figure 1 shows allocated amounts vs disbursements, and the ratio of capital allocation for the period 2010-2017.
Figure 1: Trends in Ministry’s Budget
2.4. 2017 BUDGET ALLOCATION FOR THE MINISTRY
About 2.2% of the 2017 National Budget of $4 100 000 000 was allocated to the Ministry of Justice, Legal and Parliamentary Affair. This allocation places the Ministry’s Vote on position 10 of the
Government’s priority list (see Figure 2).
Figure 2: Top 10, 2017 Allocations
There was a 15.98% reduction in the Ministry’s budget from $108 762 000 in 2016 to $91 379 000 in 2017. The Ministry’s allocation reduces to only $24 555 000. This figure is against the Ministry’s bid of $100 742 160, and thus creates a deficit of $76 187 160 constituting a variance of -310.3%. Table 1 shows the Ministry’s bids versus allocated amounts for 2017.
Table 1: Ministry’s bids versus Allocations for 2017
|10 323 000||14 500 000||-4 177 000||-40.5|
|Zimbabwe Prisons and
|13 911 000||84 700 000||-70 789 000||-508.9|
|321 000||1 542 160||-1 221 160||-380.4|
|TOTAL||24 555 000||100 742 160||-76 187 160||-310.3|
Zimbabwe Prisons and Correctional Services had the worst variance of -508.9% followed by the Attorney General’s Office 380.4%.
Ministry’s Budget Analysis by Programme
The Ministry has four major programmes namely (1) Policy and
Administration, (2) Access to Legal Services, (3) Incarceration and
Rehabilitation of Offenders, and (4) Registration of Proprietary Rights.
The Ministry’s Vote allocation of $91 379 000 was distributed across the four programmes as shown in Figure 3 below.
Figure 3: Expenditure Allocation by Programme (US$)
Incarceration and Rehabilitation of offenders received the bulk of the allocation ($80.5m) followed by Policy and Administration
($8.05m). $716 097 was allocated towards the registration of proprietary rights and $2 055 963 towards access to legal services.
By economic classification, 76.2% of the Ministry’s budget allocation is consumed in employment costs, while the remainder goes towards goods and services (11.8%), maintenance (2.5%), current transfers (7%) and acquisition of fixed assets (2.6%). (see Figure 4)
Figure 4: Economic classification of the Vote
2.6. DEEDS, COMPANIES AND INTELLECTUAL
Deeds, Companies and Intellectual Property collected $15 138 869 as at 30 September 2016, of which only $756 943 (5%) was retained. There is scope for greater revenue collection if the department is adequately resourced with the necessary infrastructure and equipment. In 2017, a meager $1 191 000 was allocated and this amount is grossly inadequate to fund critical projects that would enhance further revenue collection and curb corrupt activities. The Ministry had placed a bid of $
6 036 460.90 to undertake the following projects:
- Computerisation and scanning of the current manual processing system.
- File audit to examine the extent to which lodged and registered documents have been paid for.
- Renovations of
2.7. OUTSTANDING DEBTS
2.7.1. Administration and General
Administration and General have outstanding payments to service providers that date back to 2013 inclusive of COPAC debts handed over to the Ministry. Table 2 shows these outstanding debts. Of concern is that no allocation was provided to repay these debts in the 2016 and 2017 budgets.
Table 2: Debts owed to Service Providers
|AMOUNT PAID IN
|ZBH||250 473.69||0.00||250 473.69|
|CMED||284 102.74||0.00||284 102.74|
|VICKSTROM||117 000.00||3 000.00||114 000.00|
|TOTAL||651 576.43||3 000.00||648576.43|
The Ministry also owes services providers for maintenance of vehicles and subscriptions as shown in Table 3. Only $354 966 in respect of subscriptions has been budgeted for to cover subscription arrears and nothing for service providers.
Table 3: Debts with respect to motor vehicles
|SERVICE PROVIDER||AMOUNT OWED ($)|
|Puzey and Payne||15 317|
|Nissan Clover Leaf||9 263|
|Subscriptions to International
2.7.2. Zimbabwe Prisons and Correctional Services
The Zimbabwe Prisons and Correctional Services owes various service providers for provisions, rates, water, electricity and vehicle hire to the tune of $11 741 880. The Commissioner of Prisons has been served with law suits from the City of Harare in respect of unpaid rates. The debts have ballooned way beyond the budget provision and are approaching $12 million as shown in Table 4.
Table 4: Money owed to service providers
|Rates and Water||2 328 000||4 250 518|
|Electricity||900 000||800 000|
|Telephones -Fixed and mobile||517 200||580 000|
|Vehicle hire||879 000||6 111 362|
|TOTAL||4 624 200||11 741 880|
2.7.3. Attorney General’s Office
The following are amounts of money owed to service providers by the Attorney General’s office. The office was allocated only $410 000 in 2017 and yet it owes service providers more than $1 000 000.
Figure 5 demonstrates the distribution and levels of indebtedness.
Figure 5: Distribution and level of indebtedness
Puzey and Payne
3. INDEPENDENT COMMISSIONS
Section 323 obligates Parliament to ‘ensure sufficient funds are appropriated to Commissions to enable them to exercise their functions effectively’ All the Commissions are gravely concerned about underfunding in the 2017 budget allocations. This is adversely compromising effective service delivery across the board and is unconstitutional.
3.1. ZIMBABWE ANTI-CORRUPTION COMMISSION
1.1 The Zimbabwe Anti-Corruption Commission’s (ZACC) mandate is to combat corruption, theft, abuse of power and other improprieties in Zimbabwe through investigation, public education, prevention and cause prosecution after thorough investigation. This obligation requires that the Commission be adequately funded if it is to achieve its constitutional mandate. Underfunding in the previous and current year has resulted in cases of corruption rising to unprecedented levels, a situation which has become worrisome
1.2 The 2016 Budget support was marred by insufficient budget releases and inadequate cash releases from Treasury. As a result, the base line survey, which is one of the Commission’s objectives, was not satisfactorily achieved. Additionally, litigation against the Commission resulted from failure to service debts. Underfunding continues to be a perennial challenge facing the Commission. Policy priorities for the Commission in 2017 include:
- Decentralization to provinces.
- Public outreach, education & integrity assessment.
- Constitution -Review legislation : Anti – corruption Act, new Whistle Blower & Witness Protection Acts.
- National baseline survey.
- UN Convention Against Corruption (UNCAC) compliance.
- Evaluating corporate governance systems.
- Start retention fund.
1.3 In terms of the 2017 Budget allocation, the Commission submitted an overall operations bid of $8 640 085 but only received $1 100 000. This represents a shortfall of $7 540 085 or -87% variance. Items under goods and services include communication and information supplies, rental and hire expenses, travel expenses, and utilities. These expenditure items are the “lifeblood” of the Commission as they make possible the day to day operations of the Commission. However, goods and services have been severely underfunded in 2017, having been allocated $394 000 against a bid of $1 664 940. Maintenance and
Programmes were also underfunded with funding variances of -27% and
-85% respectively. Figure 6 highlights the Commission’s bids versus allocated amounts for 2017.
Figure 6: ZACC 2017 Bids vs Allocations
3.2. JUDICIAL SERVICE COMMISSION (JSC)
3.2.1 The 2017 top priorities for the JSC include the following:
- Resourcing the Commission.
- Institutional capacity growing.
- Infrastructural development.
- High Court decentralisation, and
- Improving the justice delivery system & access to justice.
3.2.2 In 2017, the JSC placed a bid of $40.6 million but was allocated only $3 million, leaving a variance of $37.6 million. In 2016, only $1.2 million was disbursed against an allocation of $3.3 million. This reflects the serious funding challenges that the Commission is facing. Table 5 below shows these statistics.
Table 5: JSC 2017 BUDGET
Critical funding needs for 2017 include capital expenditure for the conditions of service of the new Chief Justice and the completion and renovation of court buildings as well as judicial officers which are all in jeopardy as the major funder of the Commission DANIDA pulled out in 2016. Treasury was so spoilt that its meager allocation to the JSC amounted to in the words of the Commission itself virtually ‘back pocket change’. The almost total foreign funding of an arm of Government that should be independent is disconcerting regarding sovereignty.
3.3. ZIMBABWE HUMAN RIGHTS COMMISSION
3.3.1 The ZHRC has a Constitutional mandate to support and entrench human rights and democracy in the country as well as examining cases of maladministration by state institutions and their agents. It administers the Zimbabwe Human Rights Commission Act (Chapter 10:30) and the Administrative Justice Act (Chapter 10:28).
3.3.2 The Commission is facing several challenges ranging from a shortage of staff, poor working conditions, lack of office equipment, inaccessibility in most parts of the country, and inadequate budgetary allocations. The Commission is also burdened by a debt in excess of $147 000 which it owes to various service providers and suppliers including security companies, utilities and the former Executive
Secretary’s dues. Some of these creditors have started litigation to recover their money.
3.3.3 With regards to the 2017 Budget, the Commission submitted a bid of $969 154 for effective service delivery, but only received $597
- The 2017 allocated amount is 38% short of the Commission’s financial requirement. A capital budget allocation of $200 000 is inadequate for a Commission that is setting up operations. The Commission is also concerned by the meager resource allocation towards direct programme activities which are its core mandate areas.
Functions like Complaints Handling and Investigations, monitoring and inspections, as well as education, promotion and research are not adequately resourced for 2017. The same applies to Thematic Working Groups that provide specialised attention to particular human rights themes. This will seriously compromise the responsiveness and effectiveness of the Commission whose service delivery is demand driven. The transfer of the public Protector’s functions remains underfunded thereby depriving the nation of protection from graft as in neighbouring states.
3.4. ZIMBABWE ELECTORAL COMMISSION (ZEC)
3.4.1 The ZEC ‘s mandate includes the conduct and supervision of elections; delimitation of constituencies, wards and other electoral boundaries; conduct and supervision of voter education; development of expertise in the use of technology that regard electoral processes; promotion of cooperation between the Government, political parties and civil society during election periods; and accreditation of observers of elections and referendums.
3.4.2 The Commission’s key result areas are:
- voter registration
- voter education
- conduct of elections and referendums
- stakeholder engagements
- delimitation of electoral boundaries
3.4.4. The Commission is facing several challenges including the late release of resources for by-elections, lack of appropriate office accommodation, poor conditions of service, debts amounting to $3.093 million July 2013 harmonised elections, among others.
3.4.5. Policy priorities for 2017 include:
- capacitating ZEC with vehicles for the conduct of electoral activities.
- Procure Biometric Voter Registration kits.
- Upgrade ICT connectivity and data storage and processing.
- Finalise the mapping and demarcation of polling station boundaries in preparation for polling station specific voter registration.
- Conduct nationwide voter registration.
- Procure election materials for 2018 harmonised elections.
3.4.6. With respect to the 2017 Budget, the following are the
Commission’s bids vs allocations (Figure 7)
Figure 7: ZEC’s 2017 Bids versus Allocation
3.4.7. The allocation for employment costs is inadequate in meeting the proposed expansion of the ZEC establishment. The allocation for goods and services does not cater for the necessary preparations for the 2018 harmonised general elections. In addition, the allocation of $335 000 for maintenance is not adequate for the maintenance of the old fleet of vehicles and election materials and equipment whose book value is more than $25 million.
3.4.7. The Committee commends Treasury’s heeding the
Committee’s pre-budget recommendation that it separates programmes from administration. However under Programmes, only about $1.5 was allocated for by-elections against a bid of $8.5 million. The bid of $29 million was for biometric voter registration and the supporting voter education in preparation for the 2018 elections. No allocation was provided for this. This is alarming given the Committee’s reports of previous years to the effect that if this gross underfunding is not stopped ZEC will not be ready conduct free, fair and credible general elections for 2018. The national security and sovereignty consequences are too ghastly to contemplate.
3.5. NATIONAL PEACE AND RECONCILIATION
3.5.1 The NPRC is an independent full time body corporate established according to Chapter 12 Part VI, Section 251-253 of the Constitution of Zimbabwe as amended in 2013. The Commission was established to promote sustainable peace, equality, reconciliation, national healing, cohesion, unity and the peaceful resolution of disputes and conflicts in Zimbabwe. The NPRC has a life span of ten years.
3.5.2 The Commission is made up of nine Commissioners with one of them being the Chairperson. Its main key result area is sustainable positive peace, stability and development in Zimbabwe.
3.5.3 The Commission has faced challenges particularly with regards to the operationalisation of the NPRC Act.
3.5.4 Key priorities for the NPRC for 2017 are as follows:
- Setting up of the NPRC. The Commission needs to establish itself so that it can operate.
- Organisational development. With 2017 being the first year that the NPRC is in office, it is important that staff undergo capacity development.
- Stakeholder mapping and engagement.
- Conflict mapping.
- Designing and implementing Conflict Prevention, Management and Resolution and Transformation (CPMRT) programmes.
- Communication through exhibitions and commemorations.
3.5.5 With regards to the 2017 Budget allocation, Figure 8 shows the
Commission’s bids versus allocated amount. The first column shows the capital bid and the second column indicates operations and maintenance bid.
Figure 8: NPRC Bids versus Allocation
3.5.6 Employment costs were allocated $699 000, and this amount is only adequate to cover the salaries of Commissioners. This means the Commission will not be able to recruit staff that will assist it to implement its programmes.
3.5.7 The Commission made a request of $467 000 for office rental, furniture and equipment and vehicle purchase but was allocated $220 000. The allocated amount falls short of the Commission’s requirement by 53%, a situation that will adversely affect the setting up of the
3.5.8 From a bid of $314 000, the Commission was allocated $230 000. This represents a variance of -27% ($84 000), which will directly affect the Commission’s 2017 operations. It is important to note that the NPRC will be in existence for only ten years in which it has to implement its functions as lain out in the Constitution. There is therefore need to prioritise resource allocation towards the Commission well on time so that work commences.
The Committee rejected outright the excuse that the Commission can only be funded if a statute is enacted as the provisions of Part 6
Chapter 12 of the Constitution do not provide that.
4. OBSERVATIONS AND RECOMMENDATIONS
4.1. THE MINISTRY
- The Administration and General expenditure target is grossly inadequate given that the Ministry should pay outstanding COPAC debts that have remained outstanding for the past three years. In addition, more than $5 000 000 is owed to ZINWA, Local Authorities and ZESA due to inadequate funding for the past four years. Some stations had their water supplies disconnected by ZINWA for non-payment, thereby posing a very serious health hazard. Travel and Subsistence is also consuming a lot of resources and some of the money extended as advance payments has not being recovered as reported by the Public Accounts Committee from the Auditor
General’s Report. We therefore recommend that expenditure allocation be increased under Administration and General and that a stringent debt recovery strategy be put in place so as to resolve the matter.
- The Zimbabwe Prisons and Correctional Services is grossly underfunded to feed and clothe about 18000 prisoners. The
Services requires $1 600 000 per month for a dietary scale of $3 per prisoner per day. It has been allocated only $3 042 000 for inmates rations for the whole year against a target of $28 631 658 thereby threatening inhuman and degrading conditions that in turn threaten security.
- Medical expenses for inmates have been allocated $501 000 against a target of $3 592 156. This hinders the procurement of drugs yet prisons are prone to communicable diseases. The Services is failing to pay major hospitals for health services accorded to inmates.
- The current prison infrastructure was established in the colonial era, therefore there is need to complete rehabilitation so that security is enhanced. The target for maintenance is $8
399 640 against an allocation of $1 996 000.
- The Zimbabwe Prisons and Correctional Services has 27 farms with 3 482 hectares of arable land most of which lies idle due to inadequate or late funding for inputs and equipment. The Services has the capacity to produce and feed all inmates if 637 hectares are provided with irrigation infrastructure. An amount of $784 000 was allocated in 2017 against a bid of $2 871 576.
- The Zimbabwe Prisons and Correctional Services has a transport system that is totally dysfunctional though it has a statutory obligation to service the High Court and all Magistrates Courts throughout the country. The department owes CMED and several private garages huge sums of money. These service providers are now refusing to provide service thereby leaving the department with no choice other than to extend hiring services which have also accumulated debts in excess of $6 000 000. We therefore recommend officials to travel in the economy class and to freeze the purchase of luxury vehicles up and until the operations fleet is acquired.
- The Legal Aid Directorate requires at least $200 000 for its decentralisation programme as outlined in ZIM ASSET. It is prioritising the acquisition of office accommodation in one remaining provincial town (Marondera-Mashonaland East) and in at least three selected district offices as well as procurement of office furniture for the said offices. The Legal Aid Directorate head office at corner Samora Machel needs refurbishment and a quote from Local Government amounts to $58 890.73 but only $23 000 has been allocated for maintenance of physical infrastructure.
- The Community Service Department rehabilitates probationers outside prison thereby saving Government from an increasing prison population. The department requires funding to supervise probationers as well as sensitise stakeholders to reduce the rate of default and therefore require a budget of $200 000, which has not been availed.
- Increase the retention rate to 100% to the Deeds office until, the goose that lays the golden egg, is fully capitalised. This will enable further revenue collection.
- The Government is signatory to the United Nations African Institute for the Prevention of Crime and the Treatment of Offenders. This is an inter-governmental organisation which aims at promoting an active cooperation of governments, academic institutions, non-governmental organisations and experts in the area of crime prevention and criminal justice. The Ministry, in its submission, indicated a need to weigh the costs and benefits of membership especially in light of the ballooning dues in membership subscriptions. In light of the fact that the Government has not been participating in the organisation, we recommend that we disengage from the organization, are remove the costs
associated with such membership and avoid the staggering $300 000 arrears.
4.2. INDEPENDENT COMMISSIONS
- Fund the AG’s department sufficiently for the alignment of laws to the Constitution.
- Fund prison farms & workshops enough to wean them off the fiscus, including systems to end theft. Also act on the Auditor
- Adequately fund independent Commissions to safeguard independence & avoid unconstitutional budget. Comply with section 325 of the Constitution.
- Fund vehicle purchases progressively to save on car hire costs for the Ministry, ZHRC, ZACC, NPRC, JSC.
- Allocate to Constituency Development Fund.
- Fund adequately ZHRC’s and NPA’s staff costs.
- Fund ZEC’s voter registration and by elections.
- Fund NPA,’s and JSC’s furniture and equipment, Deeds registries computerisation.
- Provide prisoner’s dietary, health and court transport & prison security needs. Augment clothing and bedding with secure personal supplies.
- Fund community service programme to decongest prisons
- Fund pre-trial diversion.
- Fund witness expenses, pro deo counsel fees from retention.
- Fund damages against the State and improve legal advice.
Mr. Speaker Sir, I want to end by emphasising on the Budget of
Parliament and urging Hon. Members to resolve to have the Budget of Parliament referred to the Portfolio Committee so that it can be debated in this House. As we sit here, I was laughing with the Hon. Minister that even the seat that the Minister of Finance himself is sitting is sunk. It is sinking and it is broken. Even as we were listening to submissions from Committees, Hon. Members did not even have notepads to write on, no pen, no water that this Parliament is just too poor to meet the basic needs and basic administrative costs of Members of Parliament. Mr. Speaker Sir, I do urge the Hon. Minister that he does fund Parliament but if the Standing Rules and Orders Committee does not also bring the Budget to the Portfolio Committee, that will continue. It is not an exercise in territory and it is not making the Standing Rules and Orders Committee answerable to the Committee. It is in fact, to allow the voice of all these Hon. Members of Parliament to rise in chorus to put pressure on the Hon. Minister of Finance to hear for himself that Parliament must be funded for all the work that we do in the House and in our constituencies. I thank you Mr. Speaker Sir.
THE MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. CHINAMASA): I move that the debate do now adjourn.
Motion put and agreed to.
Debate to resume: Tuesday, 31st January, 2017.
On the motion of THE MINISTER OF FINANCE AND
ECONOMIC DEVELOPMENT (HON. CHINAMASA), the House
adjourned at a Half-past Four O’clock p.m. until Tuesday, 31st January, 2017.
 The ministry’s staff establishment is 6 793 and currently 4 295 are in post.
 Released funds were utilised for fence erection and infrastructure modifications