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NATIONAL ASSEMBLY HANSARD 28 July 2016 42-80

PARLIAMENT OF ZIMBABWE

Thursday, 28^th July, 2016

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

PRAYERS

(THE HON. DEPUTY SPEAKER in the Chair)

ANNOUNCEMENT BY THE HON. DEPUTY SPEAKER

VISITIORS IN THE SPEAKER’S GALLERY THE HON. DEPUTY SPEAKER:  I have to acknowledge the

presence in the Speaker’s Gallery of students and teachers from Matilika, Primary School from Manicaland Province, you are most welcome – [HON. MEMBERS: Hear, hear.] –

FIRST READING

LAND COMMISSION BILL [H.B. 2, 2016]

          THE MINISTER OF LANDS AND RURAL

RESETTLEMENT (HON. MOMBESHORA) presented the Land

Commission Bill [H.B. 2, 2016].

Bill read the first time.

Bill referred to the Parliamentary Legal Committee.

MOTION

BUSINESS OF THE HOUSE

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

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

HON. MANGAMI: I second.

Motion put and agreed to.

MOTION

PRESIDENTIAL SPEECH: DEBATE ON ADDRESS

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

Presidential Speech.

Question again proposed.

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

HON. D. SIBANDA:  I second.

Motion put and agreed.

Debate to resume:  Tuesday, 16^th August, 2016.

MOTION

FIRST REPORT OF THE PORTFOLIO COMMITTEE ON SMALL

AND MEDIUM ENTERPRISES AND COOPERATIVE

DEVELOPMENT ON THE OPERATIONAL ENVIRONMENT

AND ECONOMIC CONTRIBUTIONS OF SMALL AND MEDIUM

ENTERPRISES AND THE INFORMAL SECTOR IN ZIMBABWE

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

This House takes note of the First Report of the Portfolio

Committee on Small and Medium Enterprises and Cooperative Development on the Operational Environment and Economic

Contributions of Small and Medium Enterprises and the Informal Sector in Zimbabwe.

HON. S. CHIDHAKWA: I second.

HON. MANGAMI: I am going to present the First Report of the

Portfolio Committee on Small and Medium Enterprises and Cooperative

Development on the Operational Environment and Economic Contributions of Small and Medium Enterprises and Cooperative Development (SMEs).

1.0      INTRODUCTION

Madam Speaker, a new economic order has emerged in Zimbabwe where small and medium enterprises (SMEs) are now major players.

The 2016 National Budget Statement highlights that SMEs  account for 60% of the country's labour force and contribute 50% towards the gross domestic product (GDP).  In the same vein, the Zimbabwe Agenda for Sustainable Socio-Economic Transformation (ZIMASSET) underscores the important role played by SMEs towards employment creation and poverty reduction.  Although this sector has the potential to contribute more towards the GDP, it is saddled with a number of perennial challenges associated with; financing, infrastructure, technology, management, entrepreneurial skills and marketing. The Portfolio Committee on Small and Medium Enterprises and Cooperative Development resolved to conduct an inquiry pertaining to the operational environment and economic contributions from the SMEs and the informal sector.

2.0     METHODOLOGY

Madam Speaker, your Committee used the following methods to gather information:

1. Capacity building workshop with various stakeholders on the theme; Taxation and Accessibility to Financial Resources by the

SMEs and Informal Sector in Zimbabwe ii. Oral evidence from: the Minister and Officials of Small and Medium Enterprises and Co-operative Development; the

Zimbabwe Revenue Authority (ZIMRA) and the Zimbabwe

Chamber of SMEs.

3.0   BACKGROUND ON THE EMERGENCE OF SMEs AND

THE INFORMAL SECTOR

Your Committee was given a historical background on the emergence of SMEs in Zimbabwe by officials from the Ministry of SMEs and Cooperative Development. The sector emerged in the mid-1990s following the liberalisation of the economy and the introduction of the Economic Structural Adjustment Programme (ESAP), which in turn led to a rise in unemployment  due to company closures.

More company closures were experienced between 1997 and 2008, after the country went through severe economic pressures, characterised by hyper-inflation, leading to further job losses on the formal market.   Furthermore, in the last 3 years, 55 000 people have been retrenched following the closure of about 4 000 companies due to a number of factors, which include the lack of financial resources for Re-tooling or recapitalisation.  In addition, universities and tertiary institutions are churning out more than 10 000 graduates each year onto the job market.

The scarcity of jobs on the formal market has led the retrenched and unemployed to start their own enterprises as a safety net. This sector has experienced phenomenal growth, where in 1991, there were approximately 845 000 SMEs and informal traders  employing about 1.5 million people and by 2012, there were over 2.8 million SMEs and informal traders employing  approximately 5.7 million people, representing around 43% of the national population. (See graph below)

Graph 1: No of SMEs and Employment Levels 

cope Survey 2012

 

SME Surveys 1998 and Finscope Survey 2012

4.0      COMMITTEE FINDINGS

4.1    Legal and Policy Framework

Madam Speaker, an SME is defined in the Small and Medium Enterprises Act [Chapter 24:12], as a legal entity and is categorised based on its annual turnover and  gross value in assets. Your Committee was informed that SMEs are found in various sectors of the economy with agriculture accounting for the majority. (as shown on  Table 1 below).

Table 1: Sectoral Distribution of SMEs

Sector	Percentage (%)
Agriculture	43
Wholesale and Retail	33
Manufacturing	9
Other Services	7
Energy and Construction	3
Art and Entertainment	2
Transport	1
Mining and Quarrying	1
Tourism	1

          

Source: 2012 Finscope Survey

More women own businesses accounting for 53% of the total SMEs. In addition, 71% of SMEs are owned by individual entrepreneurs which at times creates challenges in terms of continuity of the businesses.  However, the Committee noted with concern that 85% of the SMEs are informal, hence are operating outside the laws and regulations of the country. There is no doubt that the Treasury and other revenue collecting agencies are being prejudiced by the non-remittances of taxes, levies and other charges from the sector.

Your Committee was briefed by the SME Associations on the reasons for this informality.  These factors include: multiplicity of regulatory requirements for starting a business, lack of understanding of the laws governing SMEs, lack of information from Government departments and fear by SMEs that formalisation will lead to higher operational costs.   Resistance to formalisation is further worsened by the relentless and forceful manner of revenue collection by the different agencies, such as; ZIMRA and local authorities. Furthermore, the

Committee was informed by the Minister of SMEs and Cooperative

Development that the country does not have a national database on  SMEs that are in existence, thus making it difficult for policy makers to develop targeted sectoral policies to encourage formalisation.  However, the Minister highlighted that the process of creating a national database on SMEs that are in the country is underway.

Your Committee also noted with concern that the policy and legal framework as it relates to the operations of SMEs is complex, particularly taxation laws. The majority of SMEs cannot afford to hire tax consultants.   Most of the laws and policies are written in English, in terms that are not easily understood by an ordinary person. Although the Ministry of SMEs and Cooperative Development has the responsibility to train SMEs on these policies and laws, it is heavily incapacitated due to limited financial support from the Treasury. In the 2016 National Budget allocations, the Ministry features in the bottom ten.

Madam Speaker, despite these challenges, the Committee was informed by the Ministry of SMEs and Cooperative Development, that with the support from the World Bank, it was conducting consultative meetings with SMEs on formalising their operations. It is anticipated that this process will lead to the crafting of a Formalisation Strategy.

The Committee would encourage the Ministry of SMEs and

Cooperative Development to expedite this process for the benefit of the economy.

          4.2    Infrastructural Facilities

Madam Speaker, infrastructural services are largely provided and maintained by local authorities. The Committee was informed by the Urban Councils Association of Zimbabwe (UCAZ) that SMEs and the informal sector are like nomads, as they are always shifting and reconfiguring.  In the process, it makes it difficult for town planners to design appropriate infrastructure and certain shelters and structures designed for SMEs have been abandoned.  On the other hand, UCAZ, together with the Ministry of SMEs and Cooperative Development acknowledged that  some SME structures had been abandoned because of inappropriate location and design of the infrastructure due to lack of adequate consultations or that the structures had inadequate facilities.  For instance, some SME structures in the manufacturing sector  only provide working space without facilities for storage or marketing of the finished product.

To address some of these challenges, your Committee was informed that the City of Harare had entered into   public-privatepartnership agreements (PPPs) where  decommissioned containers and sheds will be erected to create decent workspaces for SMEs. In the same vein, Old Mutual Private Limited, plans to build state of the art infrastructure in Harare to accommodate 500 SMEs.  The Committee would like to encourage all local authorities to venture into similar PPPs to facilitate the growth and development of SMEs.  Regional countries, such as South Africa and Mozambique have state of the art SME structures built through PPPs. These structures attract both  local and international customers.

The SME Associations informed your Committee that they were being marginalised from acquiring appropriate workspaces with a niche market in major towns in the country. The associations indicated that they would like to be accommodated in the central business district

(CBD) of major cities, in places occupied by businesses, such as OK and Pick and Pay.  The Committee believes this issue can be resolved through consultations between the sector and town planners.

4.3    Tax Compliance by SMEs and Informal Traders 

Madam Speaker, major tax contributions by the SMEs and informal traders are in the form of value added tax (VAT) and presumptive tax. The Committee was informed by experts from Ernst and Young that tax compliance by SMEs is made difficult by the onerous requirements from ZIMRA.  For instance, a bank account is a necessity for an SME to be on the tax register, yet most SMEs do not have confidence in the banking sector. In addition, SME associations highlighted that their members are not aware of any tangible benefits of  tax compliance, if anything, it is viewed as a cost burden to  be avoided.

The Committee was informed by the Ministry of SMEs and Cooperative Development that it had to intervene in some disputes where ZIMRA was charging exorbitant amounts on SMEs that were seeking to formalise their operations during the tax amnesty period. An illustrative example is an SME operator from Gweru who voluntarily approached

ZIMRA to regularise his position but was levied penalties amounting to US$87 000. This meant that the owner would not have been able to get tax clearance to continue with the business, if the Ministry had not intervened for a reduction. The Committee believes such kind of incidents discourage SMEs from formalising their operations.

Your Committee received a complaint from the Zimbabwe Chamber of SMEs  that presumptive taxes were too high and the association questioned the rationale behind the tax thresholds.  For instance, a hair saloon is required to pay US$1500  per quarter as presumptive tax, which according to the SME Association, was  unreasonably high given the low profit margins in that particular business. In response, the ZIMRA Commissioner General, Mr. G. Pasi highlighted to the Committee that the levels of presumptive tax appear unreasonably high but had to be understood in the context of the transition from the Zimbabwean dollar to the multi-currency system which was received with mixed reactions by different sectors of the economy. Furthermore, SME associations informed the Committee that since the pronouncement  that US$7.6 billion was circulating in the informal sector, ZIMRA had become ruthless in its revenue collection endeavors, creating more animosity between the sector and the agency.

Your Committee was informed by the Ministry of SMEs and Cooperative Development that revenue collection is more difficult because of the physical location of most SMEs and informal traders. About 39% operate from residential premises, 22% on farms, 11% operate from door to door, 9% work in the street or pavement and only 6% operate from a traditional market.  The Committee was also informed by ZIMRA that the Government was losing a lot of revenue through smuggling of cheap imports, particularly, fruits and vegetables and bales of secondhand clothing.  Most of these commodities find their way onto the local markets, dominated by SMEs and informal traders, such as Mbare Musika.

4.4    Access to Financial Resources by SMEs

4.4.1 Private Sector Initiatives

Madam Speaker, your Committee had an opportunity to interact with the Bankers Association of Zimbabwe (BAZ) and SME Associations on the challenges faced and available opportunities for SMEs in accessing financial resources from the  banking sector.  Indications were that there are very few opportunities for SMEs and informal traders to access resources from banks.  The Ministry of SMEs and Cooperative Development highlighted that, in 2014  loans advanced to SMEs stood at 6% of the total banking loan advances.  SMEs fail to access loans from banks due to a myriad of factors that include:

1. Negative perceptions on the operations of the sector, with views that some of the enterprises are involved in illegal activities;
2. SMEs usually require small loans which incur high transaction costs through processing, making it unsustainable for banks; iii. Banks require recognisable collateral which most SMEs fail to  produce;  A lot of documentation is required such as proof of residence,  business address, updated books of accounts, information which is not always at the disposal of most SMEs;
3. Some SMEs are unwilling to give full disclosure of their business  operations in fear  that the information will be sold to competitors. Consequently, banks are unwilling to provide loans to the businesses that appear hazy; vi. The maturity period for  most loans is too short and the interest  rates are too high. This does not give SMEs adequate time to make adequate profits to repay the loan; and vii.    Banks are not readily available in the rural areas.

Your Committee noted with concern, that SMEs are excluded from the banking sector and this forces the majority of them  to borrow from  micro-finance institutions which charge higher interest rates than banks.

4.4.2 Funding from Government 

Madam Speaker, the Small and Medium Enterprises Development

Corporation (SMEDCO) is the financial arm that provides loans to SMEs on behalf of Government.  However, the parastatal is heavily incapacitated. In 2015, SMEDCO received US$150 000 out of its total allocation of US$1.9 million  and in  2016, the parastatal has been allocated  US$2.4 million but as at March 2016, it had not received any disbursement.  In 2012, Parliament ratified a US$3 million loan agreement from the Arab Bank for Economic Development in Africa (BADEA) towards re-capitalisation of SMEDCO's operations. Your Committee was informed that efforts made by the Ministry of Finance and Economic Development to secure the loan on three occasions had not been successful. One of the challenges encountered in securing the loan was associated with the economic sanctions imposed on the country.

5.0   COMMITTEE OBSERVATIONS

5.1 The country does not have a formalisation strategy or clear incentives to motivate SMEs to formalise their operations.

5.2   There is no national database of SMEs that are currently in existence.

5.3   Most SMEs lack information on the policies, regulations and laws that govern and affect their operations.

5.4   The majority of SME structures are located on the periphery of major cities and towns.

5.5   Payment of taxes is not being linked to a realisable benefit, hence the resistance to pay taxes by SMEs.

5.6   There is a perception that tax compliance will lead to further  cost burdens on SMEs.

5.7   There is inadequate training for SMEs on key issues that affect their businesses, such as record keeping, management, among others.

5.8 There is inadequate and sometimes poor infrastructure for

SMEs to produce or market their commodities.

5.9   Poor relations exist between SMEs and revenue collecting agencies, such as ZIMRA and local authorities.

5.10 SMEs are not fully recognised by the banking sector.

5.11 The closure of companies, as well as, the low capacity utilisation levels by large companies presents an opportunity for SMEs to fill the supply gap.

5.12 Lack of access to affordable capital is one of the major challenges faced by SMEs in Zimbabwe.

6.0    RECOMMENDATIONS

6.1    The Ministry of SMEs and Cooperative Development should draft a National Formalisation Strategy with clear incentives to motivate SMEs to formalise their operations by December 2016.

6.2    The Ministry of SMEs and Cooperative Development should develop a national database of SMEs that are in existence by December

2016.

6.3 The Ministry of Finance and Economic Development should unlock the BADEA loan facility of US$ 3 million which was approved by Parliament to re-capitalise SMEDCO for the provision of adequate financial resources to foster the growth and development of the SMEs sector by December 2016.

6.4    Local authorities should plough back three percent (3%) of revenue collected from the SMEs towards the development of decent workspaces and for the provision of better services to the sector.

6.5    The Ministry of SMEs and Cooperative Development, in collaboration with ZIMRA and local authorities should hold countrywide awareness programmes on tax policies, by-laws and relevant regulations at least on a yearly basis.

6.6    ZIMRA and Local Authorities should establish an SME desk in their respective institutions as a strategy of improving relations with the SME sector by October 2016.

6.7    ZIMRA should establish offices in all the districts of the country by December 2017 and should not only be visible in the districts when collecting revenue.

6.8    The Ministry of SMEs and Cooperative Development must engage the Bankers Association for it to be flexible on the types of collateral, maturity periods and interest rates on loans to suit the business models of SMEs by September 2016.

6.9    The Ministry of SMEs and Cooperative Development should liaise with banks so that they are more visible in rural areas by October 2016, for instance, in the form of mobile banks operating at given intervals or coinciding with  key events in rural communities, such as the agricultural marketing seasons.

7.0    CONCLUSION

7.1    The growth and development of the SMEs sector in Zimbabwe is a dynamic process which calls for continuous review of policies and institutional frameworks to ensure optimum benefit for our economy. SMEs are here to stay and Government should find adequate space for them in all new settlements given that about 43% of the country's population is employed in the SMEs sector in the face of the ever shrinking formal sector, fueled by company closures. Other countries, such as Malaysia and India which have fully embraced this new dispensation are thriving economically, so should Zimbabwe.

ANNOUNCEMENT BY THE HON. DEPUTY SPEAKER

VISITORS IN THE SPEAKER’S GALLERY

THE HON. DEPUTY SPEAKER: I have to acknowledge the

presence in the Speaker’s Gallery of students and teachers from Ndondo

High School from Masvingo Province. You are most welcome. – [HON.

MEMBERS: Hear, hear.] –

HON. S. CHIDHAKWA: I rise also to add my voice to this very important sector of our economy of the small to medium enterprises. It is common knowledge that our industries have closed due to several reasons, chief among them bad policies by the Government hence the creation of the SMEs which now constitute 75% of the working population in the country.

The SMEs are contributing immensely to the unemployment rate in the country because there is no industry to talk of. It must be noted that it is not everybody who is now an informal trader by design. Some are forced to be informal traders because of the harsh economic conditions in the country. There are no jobs. There are some graduates who could be employed in formal employment but they have no choice and end up being informal traders.

Inasmuch as they are contributing to the unemployment rate in the country, they are not contributing any meaningful contribution to the fiscus because of the reasons such as the conditions which are put forward by ZIMRA which are so complex that it is very difficult for most of our SMEs to understand how ZIMRA system is operating. There is need for ZIMRA to simplify their method of collecting taxes.

The other reason is that the SMEs are very nomadic and are not stationed in one place. Today, they are operating at this corner and tomorrow they are operating on the other corner which is very difficult for  the revenue collection officers to track them. One other reason why these informal traders are so nomadic is that they do not have enough infrastructures. The local authorities are not putting adequate infrastructure for all the SMEs to operate from. If there are, some are built in very unfavourable areas where they cannot access the market and as a result, they are shunning to operate from those areas. Those are some of the challenges that these SMEs are facing hence they are failing to contribute meaningfully to the fiscus.

However, if these people are properly organized, the country can benefit much by way of taxes from these SMEs since there is no industry to talk of. These people are facing so many challenges. Some of the challenges have been mentioned in the report and it is very difficult for the SMEs to access any funding from the financial institutions because the conditions are that they have to provide title deeds which they do not have and like I said, most of them are operating from leasing structures from the council.  They do not have their own properties which they will have title deeds to surrender to the banks.  Also, there is a need for a paradigm shift from the local authorities to allocate those who are capable to put on their own structures to operate from so that at the end of the day, they will be able to get some title deeds which they will intend to use to access funds from the banks.

Madam Speaker, other challenge which these people are facing is security.  From where they are operating, at any given time, they are raided by the police.  It is either the municipal police or the ZRP and their wares are confiscated.  The mystery there is once these wares are taken, they are not accounted for.  Sometimes we hear that they are donated at rallies and so on.  Hence, this is hindering the SMES to grow.    We must also understand that these people are operating with very little or very small capital.  So, once they lose that capital, it is very difficult for them to rebuild so that they can continue.  Again, it is our suggestion that once these wares are confiscated, they must be returned to the owners.  Who is benefitting from these things?

The other challenge which the SMEs are facing is corruption.   If we are really serious and want to grow the SMEs as our only option left in the country since the industries are closed, we have to deal with the issues of corruption.  Most of these Government institutions are actually favouring big established companies in awarding them tenders because they are getting some kick backs from those companies, in the process, they are depriving the SMEs.

You would find that those big companies are being supplied by people who are operating from the SMEs those products which they will be using on those tenders which they will have secured from the Government.  So, it is a matter of saying the Government has not put in place some methods which will enable the SMEs to be able to also win some of the tenders if we want to grow these people.  There is no way the SMEs are going to grow when we are denying them the opportunities to participate in bigger contracts.

The infrastructure, Madam Speaker – most of the infrastructure which these people are operating from are substandard.  In some instances there is no water, there are not enough toilets.  How would we expect people to be serious business people when they are operating from such conditions?  During the rainy season, some of the infrastructure does not have enough shelter to protect their wares.  We had an opportunity of visiting some of the places.  It is deplorable.

There are no roads to access where they are operating from.

Also in some of these places, there are people who are called touts.  I do not know, probably some other Hon. Members who are operating some taxis here might know this word.  These are the people who were told they are running - like the fronts of the people who are operating business. In actual fact, these people are working for other people who are in authority, who are in power.  They are collecting money and remitting that money to some other people.

To our surprise, the council authorities seem not to have the power to evict these people.  They are not operating at night, they are operating during the day time and it is known they are operating illegally, but no one is making an effort to try and remove them.  So instead, these are the people who are benefiting from where they did not sow because they are actually charging more money than the operator and they are getting much more profit.  They are not paying any rent, they do not pay any wages, but the person who is making these products is the one who is suffering.  He is not making a meaningful margin in terms of profit.  So, it is another concern that we are appealing to the powers that be, to look into this issue seriously if we would want to protect the SMEs.

I talked, Madam Speaker, earlier on on infrastructure.  Although the municipality has entered into some PPs with the private sector, you also find the people who will benefit from those structures at the end of the day, are not exactly SMEs.  They are what they are calling space barons.  There are other big people who are in authority, who are in power, who run in front and grab those shelters and then in turn, they lease to the SMEs.  This is the corruption that I have been referring to.

So, it is another concern that if this is not corrected, even if the local authorities are saying that the SMEs are given those shelters on temporary basis, in other words, it is a place where they must operate maybe for a period of three or so years.  From there, they must graduate to be able to go into the formal sector, but it will not be possible because they will be paying very difficult rates.  They will be paying to the space barons and they will be paying to the local authorities and the profit that they will remain with will be very little.  So, that has to be corrected.

In conclusion, Madam Speaker, the Government has got to move in to protect the SMEs in terms of where they must be operating from, in terms of the corruption, the hurdles that they are facing in accessing the products, the hurdles that they are facing maybe in accessing the tenders which are offered by the Government institutions for them to be able to grow.  This is my recommendation.  Thank you Madam Speaker.  I rest my case.

*HON. MANGWENDE:  Thank you Madam Speaker.  I am

grateful to Hon. Mangami and Hon. Chidhakwa for raising this motion on SMEs.  As some of the people who reside in the city of Harare, we are benefiting a lot from the SMEs.  We have been indigenised through them.  We have SMEs complexes at Mupedzanhamo, Siyaso other market places in Harare. These market places have led to the economic growth of Harare.  We are appealing to the City of Harare to fully shoulder its responsibility because in some of these areas where SMEs are operating from there are no toilets.  The SMEs are an essential part of our economic development and therefore, the local authorities, not only in Harare but in other areas give priority to these SMEs.

If you move around in different areas, the furniture which you see is manufactured here in Harare.  The President, His Excellency, Cde R. G. Mugabe is also aware of the existence of the Glen View Furniture

Complex which has a lot of expertise and well manufactured products.  We wish that the City Councils or local authorities would take care of these places and keep them clean and maintain the standards of hygiene.   SMEs are taking care of the people who were retrenched.  We have 53% of women who are getting a lot of assistance from participating in these SMEs and they are able to take care of their families, sending children to school and feeding them.  A lot of people are benefiting from these SMEs because of unemployment in the country.   I thank you.

HON. NDUNA:   Thank you Madam Speaker.  I want to add my voice to the report from our Committee on SMEs that was presented here by Hon. Mangami and seconded by Hon. Chidhakwa.  I want to say that report was pregnant with a lot of information that if the Executive, Government and quasi Government departments followed and if the society of Zimbabwe followed, we would be able to make sure that our economy gets boosted using the informal sector as a springboard for our economic emancipation.

Madam Speaker, I need to hasten to say the SME where the artisanal miners are embedded is very key and the policies that were requested for establishment in this House by this Committee should be followed to the letter and they should also involve policies that make sure that our gold sector, headed in the informal sector by artisanal miners is purely and completely emancipated and optimally resourced so that we can as a nation be emancipated in our economic operations.  Gold is the only tradable commodity as we speak.  We have no currency of our own in Zimbabwe.  If we utilize that gold which is coming out to the tune of US$684m per annum as alluded to in this monetary statement by the RBZ Governor Mr. Mangudya.

If we make sure that we support that SME, that sector which is informal, in order to make sure we formalize it for the good of the economy, we are doing ourselves a good service in Zimbabwe.  I will move away from the issue to do with the only tradable commodity which is gold.

Madam Speaker, if we are to resuscitate the industry in Zimbabwe; we must utilise the SMEs, the informal sector as the springboard for the resuscitation of this industry.  Our industry currently is operating below 40%.  I should hasten to say this is the formal way of doing things that was ingrained in our minds and hearts by those that had the power before the black majority came to rule in this country; before total emancipation of the black formerly marginalized majority.  The issue to do with the big industries is what we know, is what we were taught to know, is what we grew up knowing but now the industry is skewed towards that informal sector which is under the Small to Medium

Enterprises.  It is now time to capacitate those SMEs, to capacitate them firstly in terms of policy and secondly in terms of resources so that we can use them as a springboard to resuscitate our industry.

With regards to the resuscitation of our agricultural sector, we should not look any further than the informal sector.  He who is selling the tomatoes both in the rural areas and in our towns, we need to see how we can promote their operation by beneficiating what it is that they are creating or what it is that they are producing, in particular, tomatoes.  I will give you an example in Chegutu West constituency in particular and Zimbabwe in general, they used to be a place called Bon Zim or Cane Pack which used to can tomatoes.

Madam Speaker, that place is closed and what it is that we are supposed to be doing is to make sure that we group all those tomatoes in the informal sector and re-open these canning factories.  So, it is revitalization of our agricultural sector to return Zimbabwe to its bread basket status from a basket case.

The third one will be the low interest loans to our SMEs and our businesses.  Let us make sure that we utilise what we have to get what we want.  The issues that are historic, archaic and moribund or banks that have to continue to operate in a manner that only speaks to the formal sector that is rather – [HON. MEMBERS: Inaudible interjections.] –

THE TEMPORARY SPEAKER (HON. DZIVA):  Order Hon.

Members.  I have appealed for this; you must lower your voices and when you want to fidget and laugh you go to the lobby please.

HON. NDUNA:  Thank you Madam Speaker. I congratulate you for asking them to fidget silently.  The issues to do with the banks, they should be an SME desk in every bank to promote SME utilising low interest rate loans so that we realise that our economy can only come up if we support the SME sector.  The issue that was alluded to by Hon.

Chidhakwa that speaks to revitalization of the economy by engaging our SMEs in the infrastructural development and public works programmes of this nation.  This should not be underestimated; it should not be undermined because our economy is skewed to the tune of 80% towards the informal sector.  Let us now formalise the informal sector, thereby also elongating or expanding the tax base for our economy so that we can optimally and efficiently support the Minister of Finance and

Economic Development or Treasury and get back to winning ways.

They should be engaged in multinational infrastructural development projects.  I speak as the Chairperson of Transport and

Infrastructure Committee.  As we engage in the Beitbridge-Chirundu

Highway, the SMEs should not be undermined.  When I speak of the

SMEs, I refer to those that own one or two tippers Madam Speaker

Ma’am.  They should be engaged and the Government, multinationals and the main contractors should make sure that they use the SMEs as subcontracted companies.

Madam Speaker Ma’am, we should also support our SMEs by creating a department in the SME sector that speaks to private sector research development and in particular those that are in the rural areas so that they know how they can conduct their businesses through ICT and modern day technology.

I need to speak of the revitalisation of entities such as ZISCO Steel and David Whitehead.  The Minister of Finance has already spoken about the support that he is giving to the cotton industry sector where he is giving three seasons full of support for free in order to revitalise the textile industry headed by David Whitehead.  This industry cannot be resuscitated Madam Speaker Ma’am, if we ignore the SME sector who are currently engaged in agricultural development of our cotton.

Madam Speaker Ma’am, the issue of resuscitation of ZISCO Steel, utilising our SMEs can also revitalise our National Railways of

Zimbabwe (NRZ) that used to transport 19 million tonnes at its peak, but is currently transporting 3 million tonnes.  If we revitalise ZISCO Steel using both our chrome and red-cliff, red-cliff in the context of its meaning, we are now skewing up the economy towards the formal sector.  So the informal and the SMEs sectors can be utilised to revitalise these former giants of our economy.

Madam Speaker Ma’am, the issue to do with black empowerment.

The reclamation of our identity and dignity through racial equality cannot be overemphasised, it cannot be spoken about if we continue to leave our SMEs in the fringes of the economy.  The issue to do with black empowerment and the empowerment programmes spearheaded by His Excellency, the President, Cde. Robert Gabriel Mugabe, should not be underestimated.  They should be complemented because if we do not complement his efforts in terms of black empowerment on land ownership, entrepreneurs and business people, our industry will still remain at 40%.

Madam Speaker Ma’am, when you talk of support to the SMEs, before independence, 35% of our black children had access to education.  Now we have 91% of children who have access to education.  That can all come to naught if we do not support our SMEs because our fathers and mothers are now selling tomatoes, newspapers and air time vouchers in order to get their children to school.  So let us support them in their areas of operation so that we go back to our winning ways.

Before independence, we had 4% of our children accessing secondary education and now we have 65%.  What we need to applaud is the support that is being given to the informal sector and the SMEs.  If we do not support the SMEs, all this is going to come to naught.  The STEM programme is going to come to naught and we are not going to have our children having access…

Hon. S. Chidhakwa having erroneously switched on the microphone.

THE TEMPORARY SPEAKER: Order Hon. Chidhakwa, why

are you using that microphone?

HON. S. CHIDHAKWA: There was an obstruction Madam

Speaker.

HON. NDUNA: Thank you Madam Speaker Ma’am.  As I

conclude, the issue to do with lack of access to education by our children has seen the Government of Zimbabwe introducing the Basic Education Assistance Module (BEAM).  However, because we have challenges in our economy, the Government is unable to play its part of the bargain in terms of capacitating that programme.  The part is being capacitated by the SMEs, lest we forget.  It is capacitated by those mothers and fathers who are selling at the market.  They are involved in low cost housing in the locations.

As we debate this, we should know that a lot of programmes can come to naught if we do not have deliberate policies to empower the SMEs.  The Affirmative Action policies have also seen a growing number of empowerment in the SMEs sector.  I also need to let you know that Affirmative Action has also seen a number of women

Parliamentarians coming to Parliament.  We have now grown up to 35% Madam Speaker and above the SADC barometer.  This is because we have acceded to affirmative action as a nation.  So, let us make sure that we continue this affirmative action…

Hon. Nduna having been addressing the Gallery.

THE TEMPORARY SPEAKER: Hon. Nduna, address the

Chair.

HON. NDUNA: Madam Speaker, it is not that I have been ignoring you, sometimes I get carried away, but going forward, I want to only concentrate on you Madam Chair, you alone.  I touched on the Affirmative Action that has seen us grow to the tune of 35% of women representation in this Parliament as enshrined in our Constitution.

We have a lot of things in our Constitution that we are currently unable as a nation to adhere to.  A country is measured by the way it upholds its Constitution.  The Minister of Finance has come here several times on the issue to do with devolution of power; we cannot build and empower those councils because we have no capacity because we are financially crippled.

However, what I want to say is that; if we cannot adhere to our own Constitution, we still have the right to change it until such a time when we have the resources to empower those sectors Madam Speaker

Ma’am.  As I conclude, the issue to do with empowerment of the SMEs also speaks to the increased access to the health care.  If we empower those people, they will be able to pay for their own health upkeep.  We have done well as a nation in that regard, so let us not draw back our efforts by not empowering and resourcing the SMEs.  I thank you

Madam Speaker Ma’am.

*HON. MASHAYAMOMBE: Thank you Madam Speaker.  I rise

to support the report on SMEs.  Here in Harare, SMEs are helping our economy to grow in Harare because of the good work that they are doing.  Firstly, I want to talk about financing SMEs, yes the Government is giving them some loans through SEDCO but the funds are very little. We are appealing to the Government to empower SEDCO by funding them so that our SMEs in Harare find somewhere to get loans from.

Most of the people who are engaged in SMEs do not have collateral security to borrow money from banks.  So, SEDCO has got flexible terms which will enable SMEs to get funds.  These SMEs also needs machinery to use in order to improve their business.  We also appeal to the Zimbabwean based banks that they should put better terms that will help the SMEs to borrow money from them.  Most of these banks support only big companies since they have collateral security.

I would also want to plead with the Government to support the SMEs by allocating them better places to work from.  If you look at the new complex along Simon Mazorodze, it is a very good and convenient for business. So, we could have many business complexes like that one, many of these SMEs will have somewhere to work from.  In Harare, it is difficult to get a good place to do your small business; if you walk along Robert Mugabe and Cameron Street, they are very congested because that is where people are selling their wares.  We want the City of Harare to relocate these people to good places where they can work from without disturbing those going to and from work.

Some of the rentals that are being charged to these SMEs are very exorbitant, so most of them cannot continue doing their activities because most of their profits are chewed by rentals.  So, if they are allocated reasonable places to rent, I am sure they will get better profit and buy machines to enhance their business.

SMEs in Harare are the ones holding our economy, so they should really pay their taxes.  The Government has to put in place laws that enforce SMEs to pay taxes since they have become so many in Harare doing business.  If you go to Siyaso, Mupedzanhamo, even in Area Eight in Glenview, you find out that there are expensive vehicles parked there yet they are not paying any taxes when they are getting a lot of money compared to those who are in the formal sector.  So, I think there should be laws in place so that everyone should pay tax in Zimbabwe in order for our Civil Servants to get paid.

I think we should desist from calling these SMEs, they should grow and participate in the area of production because if we only have SMEs who are vending, our economy will not grow.  So, the

Government and local authorities should put laws that support SMEs to grow.  If a person was doing a backyard business, after two or three years, they should be able to own their own companies.  These will help even those who want to do apprenticeship and those who are learning from them, will have something to aspire.  So, our laws should encourage our people to do businesses.

Madam Speaker, our country will only go forward if all  of  us are doing something gainfully.  When it comes to the issue of entrepreneurship, it is very important in a nation, people should learn about how to run business.  People need to know how to conduct business, even as Members of Parliament, we should have our own business so that when we come here, we should be able to know how to run a business.  This will help us even when debating issues like these; at least we will be using personal examples like Hon. Dorcas Sibanda who is engaged in quail farming.  We should keep supporting such things, even the people that we represent, will learn from us…

HON. D. SIBANDA: On a point of order! Madam Speaker, what the Hon. Member is saying, is being captured in the Hansard, so I would like him to withdraw that statement because I have never sold zviuta.

          THE TEMPORARY SPEAKER: I would like to advise you

Members of Parliament that you should always behave when you are in the House.  The language that you use, the comments that you pass can also end up destroying your integrity.  I am the Chair, and have also heard Hon. D. Sibanda saying that there are other people that are doing zviuta.  Hon. Mashayamombe responded yet you are not allowed to respond to Members that are seated and she is also not allowed to pass any comments.  So, I would like you Hon. Members to behave in the House and avoid such embarrassment.  So, Hon. Mashayamombe can you withdraw that she does zviuta business?

*HON. MASHAYAMOMBE: Thank you Madam Speaker.  I

withdraw the words that I have spoken of the quail business which I said Hon. Dorcas is engaged in.  Thank you.

However, I was referring to us as Members of Parliament that it is very important for us to be entrepreneurs because this will help us, even to know the environment out there.  We start as SMEs and then grow into big companies. SMEs provide a lot of employment in Zimbabwe, so if all of us as MPs support SMEs, it will be good because most of our relatives are engaged in SMEs business. I thank you Madam Speaker.

*HON. CHITURA: Thank you Madam Speaker. I thank the Hon.

Members who presented this motion, Hon. Munengami seconded by Hon. Chidhakwa. The debate on SMEs is a very important one because even in rural areas, people are indulging in SMEs. If you are living a docile life you are frowned upon by the people. They believe as a small scale farmer you should be selling tomatoes, potatoes; but what hurts most is that when these people come from the rural areas, they come to sell their produce in the cities. Local authorities and security officers are at war with these people and they confiscate their goods yet the peasant farmer will be trying to irk out a living for the benefit of his family.

At the moment, we have some peasant farmers who have now engaged in harvesting thatch grass and sell for a living. We have the middle man who intercepts these people and take advantage of the ignorance of them; they benefit more than the farmers. As a result, I am calling for education on running small businesses so that people are not taken advantage of by the small scale farmers. I am now asking and pleading with Government to put aside some funds to assist the SMEs so that they may engage in small businesses to irk out a living for the benefit of their families and the nation. – [HON. MEMBERS: Hear, hear.]-

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

HON. KWARAMBA: I second.

Motion put and agreed to.

Debate to resume: Tuesday, 16^th August, 2016.

MOTION

FIRST REPORT OF THE PORTFOLIO COMMITTEE ON

MEDIA, INFORMATION AND BROADCASTING SERVICES

ON ZIMBABWE DIGITAL BROADCASTING MIGRATION

PROJECT

HON. DHEWA: I move the motion standing in my name that this House takes note of the First Report of the Portfolio Committee on Media, Information and Broadcasting Services on Zimbabwe Digital

Broadcasting Migration Project.

HON. MUKWENA: I second.

HON. DHEWA:

1.0 INTRODUCTION

Broadcasting as an industry and as a practice is an integral mechanism for the promotion of freedom of expression and access to information by members of the public. The broadcasting industry plays a crucial role in economic development through creation of employment opportunities. The broadcasting industry is critical in developing artistic talent and showcasing a nation’s culture and traditions to the world. In an effort to improve the broadcasting environment, the Government is implementing the Zimbabwe Digital Broadcasting Migration Project (ZDBMP), aimed at replacing the current analogue television broadcasting system to the new digital broadcasting platform in line with the International Telecommunication Union (ITU) requirements. During the Official Opening of the 3^rd Session of the 8^th Parliament, the President, His Excellency, Cde R. G Mugabe indicated that Government has embarked on a US$125 million digitalization programme. In addition, the 2016 National Budget Statement emphasised the importance of the project by noting that the Broadcasting Authority of

Zimbabwe (BAZ) had earmarked US$132 million from the Broadcasting

Fund for this purpose. Pursuant to its oversight function, the Portfolio Committee on Media, Information and Broadcasting Services resolved to conduct an inquiry into the progress made towards the Zimbabwe Digital Broadcasting Migration Project. This report also follows the

Committee's First Report on “Alignment of media laws and progress made towards fulfillment of digitalization” which was produced in the 1^st Session of the 8^th Parliament.

2.0 OBJECTIVES

The Committee was guided by the following objectives; viii.      To track and monitor progress towards fulfillment of the

Zimbabwe Digital Broadcasting Migration Project; ix. To evaluate value for money with regard to the work on the ground;

1. Identify challenges and prospects on both legislation and policy and; xi. Offer recommendations for improvements.

3.0 METHODOLOGY

The Committee employed the following strategies in its inquiry;

3.1 Oral evidence sessions.

The Committee conducted an oral evidence session with the

Permanent Secretary for the Ministry of Information, Media and Broadcasting Services, Mr. G. Charamba. The Committee was updated on the progress made regarding television digitalization programme as well as the Ministry's efforts on aligning media laws with the

Constitution. The Ministry of Information, Media and Broadcasting

Services establish a Steering Committee comprises of Transmedia,

Broadcasting Authority of Zimbabwe (BAZ) and Zimbabwe Broadcasting Corporation (ZBC) with BAZ acting as the head of the project, to manage the Zimbabwe Digital Broadcasting Migration Project. The Committee also received oral presentation from the Steering Committee and was updated on the work on the ground regarding the engineering aspect of the digitalization programme. In addition, the Committee received written submissions from the

Permanent Secretary.

3.2 Study Tours

In a bid to assess the nation's preparedness and in an effort to appreciate and understand the television digitalization programme, the Committee conducted a familiarization tour of ZBC studios and transmitters. The visit was conducted from the 11^th - 17^th of April 2016. The visit proved to be of value as the Committee received hands on information.

4.0 COMMITTEE'S FINDINGS.

4.1 The Permanent Secretary for Information, Media and

Broadcasting Services. Mr. G. Charamba.

4.1.1 In his presentation before the Committee, Mr. Charamba highlighted that the Ministry of Information, Media and Broadcasting was alive to the need to align media laws with the Constitution.

Currently, the Ministry administers two statutes; the Broadcasting

Services Act and the Access to Information and Protection of Privacy Act. The two pieces of legislation need to be reviewed due to new and emerging matters such as; the new Constitution, development in the broadcasting and print sectors since the promulgation of the laws, the macro-technological developments since 2000, the general expectations of the populace and the  goals of the country.

4.1.2 He articulated that the Ministry used to be occupied with the engineering aspect of the Zimbabwe Broadcasting Digital Migration Project. However, the country was slowly passing the engineering aspect and concerns are now on content production. Zimbabwe has chosen the (High Definition) HD as compared to the SD, hence 12 channels will be available after completion of the project. A SADC meeting in Windhoek, Namibia on digitalisation raised the issue of content production as a major challenge. Zimbabwe produced and shared its content production strategy which was adopted by the region. A content strategy should be versatile enough to fill all the platforms.

4.1.3 The Permanent Secretary explained that in the era of digitalization, the broadcasting sector needs the “Content Law” which in jurisdiction is called the “Film Act” or “World Vision Act”. The law would deal with matters of content, build institutions, deal with interface between content producers and content users, provides for conflict resolutions, deal with rights and obligations, royalty, intellectual properties and other related rights. Zimbabwe therefore, should be a content producer as well as protects the content and be able to market and create profits on the global scale.

4.1.4 It was also reported that the Ministry had already started to engage content producers throughout the country in anticipation of the completion of the digitalization programme.

4.1.5 After completion of the Information and Media Panel of Inquiry (IMPI) process, the Permanent Secretary indicated that the Ministry was working tirelessly to host a multi-stakeholders conference, to deliberate on the IMPI outcomes and recommendations. The conference resolutions would then be developed into policy and legislation.

4.2 UPDATE OF THE DIGITALISATION PROGRAMME.

4.2.1 The Zimbabwe Digital Broadcasting  Migration Project is funded by the Government of Zimbabwe to the tune of  about $172, 950

68. This is broken down as follows;

ITEM	COSTS
1. Equipment	2.  US$94 000 000
3. Services	4. US$31 000 000
5. Civil Works +Set Top Boxes	6.  US$47 950 068
Total	7. US$172 950 068

 

4.2.2 Fund Utilization: Payments to the Contractor.

4.2.2.1 Government contracted Huawei International to carry out the digitalization project at a cost of US$125 000 000 broken down as follows: US$94 000 000 for equipment; and US$31 000 000 for services. From these figures, disbursements to date are US$22 655

420.86 for equipment and services, including 10% advance payment. Equipment worth about US$17.3 million has been received. The equipment includes the following: Head- end equipment; Satellite

Uplink equipment; power systems for Head End, Satellite Uplink; Pockets Hill and transmitter sites; transmitter equipment and antenna systems for 8 sites; transmitter satellite receiver equipment; Regulatory Content Monitoring equipment; 6 new tower material; Pockets Hill equipment for 2 studios; Master Control Room and Play-out Systems; and 500 test Set Top Boxes. Equipment worth about US$16 million is ready for shipment pending pre – shipment payment. However, outstanding payments to Huawei to date is about US$19 million for both equipment and services.

4.2.3 Civil Works.

4.2.3.1 Payments relating to civil works amounted to US$5 144 474.37. These civil works include development of access roads to new transmitter sites. It was reported that construction of Chimanimani equipment room and electrification has been completed. In addition, 7 out of 8 transmitter room expansions have been completed at the following sites: Mutare, Nyanga, Kamativi, Kenmaur, Rutenga, Mount Darwin and Karoi. All 6 existing transmitter site antenna and de- installation are completed for Kamativi, Kenmaur, Mutare, Masvingo,

Harare and Bulawayo. Repair of 7 transmitter towers were completed for

Pocket Hills, Bulawayo, Kadoma, Masvingo, Chimanimani,

Mutorashanga and Gokwe. Tower inspection is currently being carried out to check completeness of repair work.

4.2.4 Progress on New Transmitter Sites Civil Works (access roads and tower foundation).

4.2.4.1 The Committee was well informed that 13 out of 15 civil works on new transmitter sites civil works (access road) were completed. Tower foundation works commenced on 16 transmitter sites. Four of the sites (Kotwa, Binga, Hwange and Bindura) have tower foundations ready for tower construction.

Head- end and satellite Uplink terminal civil works.

4.2.4.2 Satellite Uplink civil works was reported to have been completed. Furthermore, the Head- end equipment room renovations was also completed. Satellite capacity for initial signal distribution  was secured from satellite provider Eutelsat and US$893 592 initial annual licence fees had been paid.

4.2.4.3 Equipment installation.

The Head- end equipment had been installed at Pockets Hill. The satellite Uplink equipment installation has also been completed. Power system installation for Head-end and satellite uplink completed.

Installation of two digital  television studios, Master Control Room , Play- out system completed at Pockets Hill done as well as installation of the first batch of five digital transmitter sites, namely Kamativi, Kenmaur, Mutare, Nyanga and Susamoya has been  completed (transmitter equipment, antenna systems, power systems, cooling systems and satellite receiver equipment has been installed). Installation of the second batch of 7 digital transmitters has commenced with the Harare site already completed, for the remaining 6 sites (Bulawayo, Kadoma, Mutorashanga, Gokwe, and Chimanimani) equipment delivery has been stalled by outstanding payments to the contractor.

4.2.5 Engineer Training.

Thirty three graduate engineers commenced attachment on the ZDBMP from June 2015, bringing to a total of 46 engineers on the digitalization project. Orientation lessons, lectures on satellite systems, installation attachments and formal training on equipment operation and maintenance has been and is being provided to the graduate engineers.

4.2.6 Content Production (supply of content to the digital platform).

4.2.6.1. It was reported that once the digitalization programme is fully completed, the demand for local content would be enormous. With six channels available, ZBC alone will require 144 hours per day, which translates to 1008 hours per week, 4032 hours per month and 48384 hours per year. In order to stipulate and supply content to the digital platform, the Ministry has embarked on a vigorous outreach campaign to rope in independent content producers. In order to assist these independent producers, the Ministry is in the process of renovating production studios at Production Services and equipping them with state of the art equipment. In addition, production equipment will be availed to the producers not only here in Harare, but also in the other provincial capitals.

4.2.6.2 A Content Commissioning Committee has been created to assess content production proposals and requirements for access to production equipment and facilities by content creators. The Committee has already worked on the applicable frameworks for access to equipment and the criteria for assessing proposals. The Committee has started its work in assessing over seventy proposals that have been submitted so far, with priority being placed on content that is easy to produce. So far three production teams are in the field producing content.

4.2.7 Outstanding payment of about $19 million for the acquisition of Set Top Boxes and other equipment has stalled the progress.

4.3 DIGITALISATION TOUR: Pocket Hills.

4.3.1 The Committee on Media, Information and Broadcasting Services conducted a familiarization tour in a bid to assess the nation's preparedness towards fulfillment of the television digitization programme. The Committee had a chance to tour the ZBC, Pockets Hill where civil works have been completed as well as modernization of the studios.  Five cameras, high efficiency LED lights which are remote controlled for brightness and controlled manually for movement had been installed in the studios. All the studios were reported to be ready for use.

4.3.2 Master Control Room, Satellite Uplink, The Head- End and Power Rooms.

The Committee also has an opportunity to visit the Master Control Room. The Master Control Room receives signals for internal and external studios.  The play out system has six high definition televisions that are used for monitoring, play out and signaling. The power room consists of back up batteries and the Uninterrupted Power Supply (UPS) which lasts for more than 24 hours.  The Head End section consists of a 250 KVA power system generator which carries 2000 litres of petrol.  It is an Automatic Voltage System (AVS) and has Uninterrupted Power Supply (UPS). The Satellite Uplink system is installed and operational.

4.3.3 Kotwa Transmitter Site, Mudzi.

4.3.4.1 The Committee visited Kotwa transmitter site which is still under construction although the foundation and the first diamond had been completed. Civil works had also been completed by the District Development Fund who was contracted to do the roads. The Committee was informed that Kotwa is one of the twenty-four new sites.  Kotwa provides coverage to Mudzi, an area that never received TV or radio signals. In addition to Mudzi, the coverage is expected to go as far as

Pungwe, Kotwa, Nyamapanda and Chikoze areas. The Committee was also informed that all the new sites are areas which never had any signal before.  Kotwa site is still under construction and the villagers relied on broadcasting services from Mozambique.

4.3.4.2 The challenges raised by the Steering Committee included the problem of transportation of heavy materials due to the terrain of the area as well as lack of space to store materials. Materials to fully complete the tower were reported to be held in Germany due to delayed payments.

4.3.4 Cecil Kopje Transmitter Site, Mutare.

On the 12^th of April 2016, the Committee visited Cecil Kopje transmitter site in Mutare. Before the site visit, Transmedia hosted the

Committee to a demonstration of digital broadcasting at Amber Hotel. The Committee managed to watch the new ZBC channels that are ready to broadcast on a digital platform. In essence, Mutare community is ready to receive digital broadcasting. The demonstration showed that there is high quality signal as it stood at above 60%. The picture quality was perfect as it was at 100%. Members were informed that Cecil Kopje tower is completed with full installation of antennas.

The Committee was also informed that research was being done by the local engineers, in a bid to design low cost home aerial.  It also emerged during discussions that flat screens are analogue sets hence they also need Set Top Boxes. The Committee then proceeded to the Cecil Kopje site where members were informed that Cecil Kopje tower was completed with full installation of antenna. Installed on the place is the downlink dish and antenna panels, and the tower is 120m height.  The site also has an appropriate warehouse, fully equipped and security provided.

4.3.5 Mashava Transmitter Sitem Mashava.

From Mutare, the Committee proceeded to Mashava.  It emerged that Mashava is one of the twenty-four new sites, and one of the fifteen currently under work in progress.  The Mashava tower will be expected to cover areas such as Chivi, Masvingo, Shurugwi, Mashava, a 40 to 60km radius coverage. At the time of the visit, the constructor was still excavating and putting in steel reinforcements.  Authorization was granted to power the concrete and construction was expected to start after 1 and half month.  Civil works had also been completed by the

DDF.

4.3.6 Zvishavane Transmitter Site, Zvishavane.

The Committee proceeded to the Zvishavane site which is at the same stage as with Mashava.  Zvishavane site covers areas such as Filabusi, Mashava, and Shurugwi. Construction of the foundation had been completed and inspected. Therefore, the Contractor was expected to resume construction of the tower after 1 and half month.

4.3.7 Montrose Studio, Bulawayo.

The Committee also toured the Montrose Studios in Bulawayo, which is the regional station that mainly caters for the Matebeleland

Province.  It was reported that Montrose studios beginning Sunday the 17^th of April 2016, would broadcast Indaba from Montrose.  There are two new radio studios at Montrose.  The Montrose transmitter tower has been repaired and was  ready for the installation of antennas. The Committee further toured the control room and were informed that the floors need to be raised so as to install cables underneath. The two main television studio rooms were still under refurbishment.

The studios were simply being restructured to suit the digital studio. The equipment room was completed and ready to house equipment, however the said equipment is the one still being held in Germany. The Committee further toured radio stations that have been meticulous refurbished. The new radio station (Radio 4) will broadcast all the 16 languages, including  Khoi San, Tswana and Ndau just to mention a few in line with the requirements of the Constitution. One studio was designed to be a multi-purpose and can be used for both radio and TV.

4.3.8 Kenmour Transmitter Site, Kenmour.

Kenmour Transmitter Site is one of the newly constructed sites and covers a formerly disadvantaged area of Lupane, as television has never been transmitted in the area. Before the Committee toured the transmission site, it was subjected to a demonstration whereby the engineers proved beyond doubt that the area is ready to receive ZBC on digital format. Kenmour is one of the 6 completed towers  and can safely be reported to be digital now. During the discussions, it was suggested that a TV set and a STB be donated to the Kenmour centre and that the first set of STB be sold there so that the community has a feel of television for the first time in a long time.  The Kenmour site is also identical to the other sites, that is, it has a powerhouse, transmitter and a satellite dish. Kenmour has a 60km radius and  is 145m tall as it is on flat land.

4.3.10 Kamativi Transmitter Site, Kamativi.

The Committee then toured the Kamativi site where construction was completed. The Kamativi site is an existing site. The tower is 155 m high, free standing and cover areas such as Hwange, Dete, Fatima High, Binga and Manjolo a radius of 50-60km. The Kenmour site is also identical to the other sites, that is, it has a powerhouse, transmitter and a satellite dish.

4.3.11 Binga Transmitter Site, Binga.

The Committee's last point of call was Binga, the construction of the tower was still underway however, almost completed.  The Binga area used to receive transmission from Kamativi. The construction process started in October with the excavation work.  They chose a rocky site as it is more stable.  The tower is 120m high and it took 21 working days to erect the tower.  What is left now are the electronics and for civil engineers to do some checks and balances. Full completion of the tower would also be derailed due to the equipment still being held in

Germany.

5.0 COMMITTEE OBSERVATIONS.

5.1 After considerations of both the oral evidence sessions and fact finding mission, the Committee made the following observations;

1. Erratic or non disbursement of funds, especially the much awaited US$19 million, will stall progress and further delay the completion of the project. The Committee questions the commitment by the Ministry of Finance and Economic

Development to fund the programme.

2. The Committee welcomes the subsidy of Set Top Boxes (STB) prices from US$43 to US$25, by the Ministry of Information, Media and Broadcasting Services. However, the Committee notes that the price is still high and beyond the reach of  most citizens.
3. There is need for the Zimbabwe Digital Broadcasting Migration Project Steering Committee to do more on awareness, to educate the citizens on the project and equipment they need to buy.
4. Despite tremendous efforts on the ground to complete the project, the Committee notes that the Ministry of Information, Media and Broadcasting Services has not yet questioned the continual importation of non digital television sets. This will result in Zimbabwe being the dumping ground of non digitally compliant television sets.
5. The Committee noted that there are places ready to receive digital transmitter sites, such as Mutare, Kamative, Harare among others, these should be prioritized in terms of distribution of STB.
6. The introduction of subscription fees present a challenge considering that most residents were used to receive ZBC signals for free for a long time. This has an effect to the citizens right to access information as enshrined in the Constitution,

Section 62.

7. The Committee welcomes the training of engineers as a positive development. During tours, the graduates exhibited full understanding and appreciation of their duties and responsibilities.
8. The Committee observed that the digitalization programme was once reported to be self financing through the selling of the digital dividend to the tune of US$200 million. This is far much more than the budgeted US$172 million. The Committee raised concerns that the digital dividend was bought by Telone. However, there is no explanation on the use of the money which was meant for the project.
9. Injuries and one death were reported during construction of transmitter towers due to failure by contractors to adhere to safety standards.

6.0 COMMITTEE RECOMMENDATIONS.

The following are the Committee's recommendations; iii. The Ministry of Finance and Economic Development should disburse US$19 million by mid August 2016, to allow for equipment held in Germany to be released and allow for progress on the ground. The project may soon be a white elephant programme, if Treasury does not give enough attention to the project.

1. In addition, by end of August 2016, a disbursement plan should be negotiated and established between the Ministries of Finance and Information so as to ensure that the programme is not stalled.
2. Set Top Boxes should be further subsidized to US$10 and should be sold by Transmedia at specific identified buying points in the districts to ensure availability of the equipment to the rural areas.
3. Subscription fees should be US$3 per month in accordance with the KPMG Report recommendations.

• The Ministry of Information, Media and Broadcasting Services should explain to the National Assembly why the money raised through digital dividend was not channelled towards the Zimbabwe Digital Broadcasting Migration Project, a month after presentation of this report.
• The Zimbabwe Digital Broadcasting Migration Project Steering Committee should conduct awareness campaigns, to educate the citizens on the project and equipment that they need to buy. In addition, they should run demonstrations at various district centres by end of August.

1. The Zimbabwe Digital Migration Project Steering Committee should engage Members of Parliament as a strategy to facilitate public awareness, through provision of educational materials among others.
2. Transmedia should make efforts to ensure that STB are assembled locally as well as television sets that are digitally compatible.
3. Areas that transmitters are ready should be prioritized for STB distribution. In addition, the Steering Committee should run demonstrations at business centres throughout the country.

• The Ministry of Information, Media and Broadcasting

Services should gazette regulations restricting further importation on television sets that are non compatible. In addition, importation of digitally compatible television sets should be encouraged through a reduction of a duty. The 2017 National Budget should cover the above matter.

• Content producers should be allowed deferment of duty on imported operational materials or equipment as a strategy to encourage more content production.
• The Committee recommends that a programme should be developed to be able to retain the trained engineers and avoid human skills flight.

7.0 Conclusion.      

Tremendous progress on the ground has been done, as quite a number of transmitter sites are almost completed. The Zimbabwe Digital Broadcasting Migration Project is an important national programme which will revolutionarize the broadcasting sector and bring a lot of development through employment creation. Non payment for the equipment held in Germany will further stall progress that have been witnessed. The Ministry of Finance should prioritize the funding of the project.  I thank you.

THE VICE PRESIDENT AND MINISTER OF JUSTICE,

LEGAL AND PARLIAMENTARY AFFAIRS (HON.

MUNANGAGWA):  I move that the debate do now adjourn.

Motion put and agreed to.

Debate to resume:  Tuesday, 16^th August, 2016.

TABLING OF THE 2015ANNUAL REPORT OF THE NATIONAL

PROSECUTING AUTHORITY OF ZIMBABWE

THE VICE PRESIDENT AND MINISTER OF JUSTICE,

LEGAL AND PARLIAMENTARY AFFIARS (HON.

MNANGAGWA):  I, as the Vice President and Minister of Justice,

Legal and Parliamentary Affairs, pursuant to section 262 of the Constitution of Zimbabwe, hereby lay upon the table the Annual Report for the National Prosecuting Authority for the year ending 31 December,

2015. I thank you.

On the motion of THE HON. VICE PRESIDENT AND

MINISTER OF JUSTICE, LEGAL AND PARLIAMENTARY

AFFAIRS (HON. MNANGAGWA), the National Assembly adjourned at Twenty Three Minutes past Four o’clock p.m. until Tuesday, 16^th

August, 2016. 

PARLIAMENT OF ZIMBABWE

Thursday, 28^th July, 2016

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

PRAYERS

(THE HON. DEPUTY SPEAKER in the Chair)

ANNOUNCEMENT BY THE HON. DEPUTY SPEAKER

VISITIORS IN THE SPEAKER’S GALLERY THE HON. DEPUTY SPEAKER:  I have to acknowledge the

presence in the Speaker’s Gallery of students and teachers from Matilika, Primary School from Manicaland Province, you are most welcome – [HON. MEMBERS: Hear, hear.] –

FIRST READING

LAND COMMISSION BILL [H.B. 2, 2016]

          THE MINISTER OF LANDS AND RURAL

RESETTLEMENT (HON. MOMBESHORA) presented the Land

Commission Bill [H.B. 2, 2016].

Bill read the first time.

Bill referred to the Parliamentary Legal Committee.

MOTION

BUSINESS OF THE HOUSE

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

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

HON. MANGAMI: I second.

Motion put and agreed to.

MOTION

PRESIDENTIAL SPEECH: DEBATE ON ADDRESS

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

Presidential Speech.

Question again proposed.

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

HON. D. SIBANDA:  I second.

Motion put and agreed.

Debate to resume:  Tuesday, 16^th August, 2016.

MOTION

FIRST REPORT OF THE PORTFOLIO COMMITTEE ON SMALL

AND MEDIUM ENTERPRISES AND COOPERATIVE

DEVELOPMENT ON THE OPERATIONAL ENVIRONMENT

AND ECONOMIC CONTRIBUTIONS OF SMALL AND MEDIUM

ENTERPRISES AND THE INFORMAL SECTOR IN ZIMBABWE

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

This House takes note of the First Report of the Portfolio

Committee on Small and Medium Enterprises and Cooperative Development on the Operational Environment and Economic

Contributions of Small and Medium Enterprises and the Informal Sector in Zimbabwe.

HON. S. CHIDHAKWA: I second.

HON. MANGAMI: I am going to present the First Report of the

Portfolio Committee on Small and Medium Enterprises and Cooperative

Development on the Operational Environment and Economic Contributions of Small and Medium Enterprises and Cooperative Development (SMEs).

1.0      INTRODUCTION

Madam Speaker, a new economic order has emerged in Zimbabwe where small and medium enterprises (SMEs) are now major players.

The 2016 National Budget Statement highlights that SMEs  account for 60% of the country's labour force and contribute 50% towards the gross domestic product (GDP).  In the same vein, the Zimbabwe Agenda for Sustainable Socio-Economic Transformation (ZIMASSET) underscores the important role played by SMEs towards employment creation and poverty reduction.  Although this sector has the potential to contribute more towards the GDP, it is saddled with a number of perennial challenges associated with; financing, infrastructure, technology, management, entrepreneurial skills and marketing. The Portfolio Committee on Small and Medium Enterprises and Cooperative Development resolved to conduct an inquiry pertaining to the operational environment and economic contributions from the SMEs and the informal sector.

2.0     METHODOLOGY

Madam Speaker, your Committee used the following methods to gather information:

1. Capacity building workshop with various stakeholders on the theme; Taxation and Accessibility to Financial Resources by the

SMEs and Informal Sector in Zimbabwe ii. Oral evidence from: the Minister and Officials of Small and Medium Enterprises and Co-operative Development; the

Zimbabwe Revenue Authority (ZIMRA) and the Zimbabwe

Chamber of SMEs.

3.0   BACKGROUND ON THE EMERGENCE OF SMEs AND

THE INFORMAL SECTOR

Your Committee was given a historical background on the emergence of SMEs in Zimbabwe by officials from the Ministry of SMEs and Cooperative Development. The sector emerged in the mid-1990s following the liberalisation of the economy and the introduction of the Economic Structural Adjustment Programme (ESAP), which in turn led to a rise in unemployment  due to company closures.

More company closures were experienced between 1997 and 2008, after the country went through severe economic pressures, characterised by hyper-inflation, leading to further job losses on the formal market.   Furthermore, in the last 3 years, 55 000 people have been retrenched following the closure of about 4 000 companies due to a number of factors, which include the lack of financial resources for Re-tooling or recapitalisation.  In addition, universities and tertiary institutions are churning out more than 10 000 graduates each year onto the job market.

The scarcity of jobs on the formal market has led the retrenched and unemployed to start their own enterprises as a safety net. This sector has experienced phenomenal growth, where in 1991, there were approximately 845 000 SMEs and informal traders  employing about 1.5 million people and by 2012, there were over 2.8 million SMEs and informal traders employing  approximately 5.7 million people, representing around 43% of the national population. (See graph below)

Graph 1: No of SMEs and Employment Levels 

cope Survey 2012

 

SME Surveys 1998 and Finscope Survey 2012

4.0      COMMITTEE FINDINGS

4.1    Legal and Policy Framework

Madam Speaker, an SME is defined in the Small and Medium Enterprises Act [Chapter 24:12], as a legal entity and is categorised based on its annual turnover and  gross value in assets. Your Committee was informed that SMEs are found in various sectors of the economy with agriculture accounting for the majority. (as shown on  Table 1 below).

Table 1: Sectoral Distribution of SMEs

Sector	Percentage (%)
Agriculture	43
Wholesale and Retail	33
Manufacturing	9
Other Services	7
Energy and Construction	3
Art and Entertainment	2
Transport	1
Mining and Quarrying	1
Tourism	1

          

Source: 2012 Finscope Survey

More women own businesses accounting for 53% of the total SMEs. In addition, 71% of SMEs are owned by individual entrepreneurs which at times creates challenges in terms of continuity of the businesses.  However, the Committee noted with concern that 85% of the SMEs are informal, hence are operating outside the laws and regulations of the country. There is no doubt that the Treasury and other revenue collecting agencies are being prejudiced by the non-remittances of taxes, levies and other charges from the sector.

Your Committee was briefed by the SME Associations on the reasons for this informality.  These factors include: multiplicity of regulatory requirements for starting a business, lack of understanding of the laws governing SMEs, lack of information from Government departments and fear by SMEs that formalisation will lead to higher operational costs.   Resistance to formalisation is further worsened by the relentless and forceful manner of revenue collection by the different agencies, such as; ZIMRA and local authorities. Furthermore, the

Committee was informed by the Minister of SMEs and Cooperative

Development that the country does not have a national database on  SMEs that are in existence, thus making it difficult for policy makers to develop targeted sectoral policies to encourage formalisation.  However, the Minister highlighted that the process of creating a national database on SMEs that are in the country is underway.

Your Committee also noted with concern that the policy and legal framework as it relates to the operations of SMEs is complex, particularly taxation laws. The majority of SMEs cannot afford to hire tax consultants.   Most of the laws and policies are written in English, in terms that are not easily understood by an ordinary person. Although the Ministry of SMEs and Cooperative Development has the responsibility to train SMEs on these policies and laws, it is heavily incapacitated due to limited financial support from the Treasury. In the 2016 National Budget allocations, the Ministry features in the bottom ten.

Madam Speaker, despite these challenges, the Committee was informed by the Ministry of SMEs and Cooperative Development, that with the support from the World Bank, it was conducting consultative meetings with SMEs on formalising their operations. It is anticipated that this process will lead to the crafting of a Formalisation Strategy.

The Committee would encourage the Ministry of SMEs and

Cooperative Development to expedite this process for the benefit of the economy.

          4.2    Infrastructural Facilities

Madam Speaker, infrastructural services are largely provided and maintained by local authorities. The Committee was informed by the Urban Councils Association of Zimbabwe (UCAZ) that SMEs and the informal sector are like nomads, as they are always shifting and reconfiguring.  In the process, it makes it difficult for town planners to design appropriate infrastructure and certain shelters and structures designed for SMEs have been abandoned.  On the other hand, UCAZ, together with the Ministry of SMEs and Cooperative Development acknowledged that  some SME structures had been abandoned because of inappropriate location and design of the infrastructure due to lack of adequate consultations or that the structures had inadequate facilities.  For instance, some SME structures in the manufacturing sector  only provide working space without facilities for storage or marketing of the finished product.

To address some of these challenges, your Committee was informed that the City of Harare had entered into   public-privatepartnership agreements (PPPs) where  decommissioned containers and sheds will be erected to create decent workspaces for SMEs. In the same vein, Old Mutual Private Limited, plans to build state of the art infrastructure in Harare to accommodate 500 SMEs.  The Committee would like to encourage all local authorities to venture into similar PPPs to facilitate the growth and development of SMEs.  Regional countries, such as South Africa and Mozambique have state of the art SME structures built through PPPs. These structures attract both  local and international customers.

The SME Associations informed your Committee that they were being marginalised from acquiring appropriate workspaces with a niche market in major towns in the country. The associations indicated that they would like to be accommodated in the central business district

(CBD) of major cities, in places occupied by businesses, such as OK and Pick and Pay.  The Committee believes this issue can be resolved through consultations between the sector and town planners.

4.3    Tax Compliance by SMEs and Informal Traders 

Madam Speaker, major tax contributions by the SMEs and informal traders are in the form of value added tax (VAT) and presumptive tax. The Committee was informed by experts from Ernst and Young that tax compliance by SMEs is made difficult by the onerous requirements from ZIMRA.  For instance, a bank account is a necessity for an SME to be on the tax register, yet most SMEs do not have confidence in the banking sector. In addition, SME associations highlighted that their members are not aware of any tangible benefits of  tax compliance, if anything, it is viewed as a cost burden to  be avoided.

The Committee was informed by the Ministry of SMEs and Cooperative Development that it had to intervene in some disputes where ZIMRA was charging exorbitant amounts on SMEs that were seeking to formalise their operations during the tax amnesty period. An illustrative example is an SME operator from Gweru who voluntarily approached

ZIMRA to regularise his position but was levied penalties amounting to US$87 000. This meant that the owner would not have been able to get tax clearance to continue with the business, if the Ministry had not intervened for a reduction. The Committee believes such kind of incidents discourage SMEs from formalising their operations.

Your Committee received a complaint from the Zimbabwe Chamber of SMEs  that presumptive taxes were too high and the association questioned the rationale behind the tax thresholds.  For instance, a hair saloon is required to pay US$1500  per quarter as presumptive tax, which according to the SME Association, was  unreasonably high given the low profit margins in that particular business. In response, the ZIMRA Commissioner General, Mr. G. Pasi highlighted to the Committee that the levels of presumptive tax appear unreasonably high but had to be understood in the context of the transition from the Zimbabwean dollar to the multi-currency system which was received with mixed reactions by different sectors of the economy. Furthermore, SME associations informed the Committee that since the pronouncement  that US$7.6 billion was circulating in the informal sector, ZIMRA had become ruthless in its revenue collection endeavors, creating more animosity between the sector and the agency.

Your Committee was informed by the Ministry of SMEs and Cooperative Development that revenue collection is more difficult because of the physical location of most SMEs and informal traders. About 39% operate from residential premises, 22% on farms, 11% operate from door to door, 9% work in the street or pavement and only 6% operate from a traditional market.  The Committee was also informed by ZIMRA that the Government was losing a lot of revenue through smuggling of cheap imports, particularly, fruits and vegetables and bales of secondhand clothing.  Most of these commodities find their way onto the local markets, dominated by SMEs and informal traders, such as Mbare Musika.

4.4    Access to Financial Resources by SMEs

4.4.1 Private Sector Initiatives

Madam Speaker, your Committee had an opportunity to interact with the Bankers Association of Zimbabwe (BAZ) and SME Associations on the challenges faced and available opportunities for SMEs in accessing financial resources from the  banking sector.  Indications were that there are very few opportunities for SMEs and informal traders to access resources from banks.  The Ministry of SMEs and Cooperative Development highlighted that, in 2014  loans advanced to SMEs stood at 6% of the total banking loan advances.  SMEs fail to access loans from banks due to a myriad of factors that include:

1. Negative perceptions on the operations of the sector, with views that some of the enterprises are involved in illegal activities;
2. SMEs usually require small loans which incur high transaction costs through processing, making it unsustainable for banks; iii. Banks require recognisable collateral which most SMEs fail to  produce;  A lot of documentation is required such as proof of residence,  business address, updated books of accounts, information which is not always at the disposal of most SMEs;
3. Some SMEs are unwilling to give full disclosure of their business  operations in fear  that the information will be sold to competitors. Consequently, banks are unwilling to provide loans to the businesses that appear hazy; vi. The maturity period for  most loans is too short and the interest  rates are too high. This does not give SMEs adequate time to make adequate profits to repay the loan; and vii.    Banks are not readily available in the rural areas.

Your Committee noted with concern, that SMEs are excluded from the banking sector and this forces the majority of them  to borrow from  micro-finance institutions which charge higher interest rates than banks.

4.4.2 Funding from Government 

Madam Speaker, the Small and Medium Enterprises Development

Corporation (SMEDCO) is the financial arm that provides loans to SMEs on behalf of Government.  However, the parastatal is heavily incapacitated. In 2015, SMEDCO received US$150 000 out of its total allocation of US$1.9 million  and in  2016, the parastatal has been allocated  US$2.4 million but as at March 2016, it had not received any disbursement.  In 2012, Parliament ratified a US$3 million loan agreement from the Arab Bank for Economic Development in Africa (BADEA) towards re-capitalisation of SMEDCO's operations. Your Committee was informed that efforts made by the Ministry of Finance and Economic Development to secure the loan on three occasions had not been successful. One of the challenges encountered in securing the loan was associated with the economic sanctions imposed on the country.

5.0   COMMITTEE OBSERVATIONS

5.1 The country does not have a formalisation strategy or clear incentives to motivate SMEs to formalise their operations.

5.2   There is no national database of SMEs that are currently in existence.

5.3   Most SMEs lack information on the policies, regulations and laws that govern and affect their operations.

5.4   The majority of SME structures are located on the periphery of major cities and towns.

5.5   Payment of taxes is not being linked to a realisable benefit, hence the resistance to pay taxes by SMEs.

5.6   There is a perception that tax compliance will lead to further  cost burdens on SMEs.

5.7   There is inadequate training for SMEs on key issues that affect their businesses, such as record keeping, management, among others.

5.8 There is inadequate and sometimes poor infrastructure for

SMEs to produce or market their commodities.

5.9   Poor relations exist between SMEs and revenue collecting agencies, such as ZIMRA and local authorities.

5.10 SMEs are not fully recognised by the banking sector.

5.11 The closure of companies, as well as, the low capacity utilisation levels by large companies presents an opportunity for SMEs to fill the supply gap.

5.12 Lack of access to affordable capital is one of the major challenges faced by SMEs in Zimbabwe.

6.0    RECOMMENDATIONS

6.1    The Ministry of SMEs and Cooperative Development should draft a National Formalisation Strategy with clear incentives to motivate SMEs to formalise their operations by December 2016.

6.2    The Ministry of SMEs and Cooperative Development should develop a national database of SMEs that are in existence by December

2016.

6.3 The Ministry of Finance and Economic Development should unlock the BADEA loan facility of US$ 3 million which was approved by Parliament to re-capitalise SMEDCO for the provision of adequate financial resources to foster the growth and development of the SMEs sector by December 2016.

6.4    Local authorities should plough back three percent (3%) of revenue collected from the SMEs towards the development of decent workspaces and for the provision of better services to the sector.

6.5    The Ministry of SMEs and Cooperative Development, in collaboration with ZIMRA and local authorities should hold countrywide awareness programmes on tax policies, by-laws and relevant regulations at least on a yearly basis.

6.6    ZIMRA and Local Authorities should establish an SME desk in their respective institutions as a strategy of improving relations with the SME sector by October 2016.

6.7    ZIMRA should establish offices in all the districts of the country by December 2017 and should not only be visible in the districts when collecting revenue.

6.8    The Ministry of SMEs and Cooperative Development must engage the Bankers Association for it to be flexible on the types of collateral, maturity periods and interest rates on loans to suit the business models of SMEs by September 2016.

6.9    The Ministry of SMEs and Cooperative Development should liaise with banks so that they are more visible in rural areas by October 2016, for instance, in the form of mobile banks operating at given intervals or coinciding with  key events in rural communities, such as the agricultural marketing seasons.

7.0    CONCLUSION

7.1    The growth and development of the SMEs sector in Zimbabwe is a dynamic process which calls for continuous review of policies and institutional frameworks to ensure optimum benefit for our economy. SMEs are here to stay and Government should find adequate space for them in all new settlements given that about 43% of the country's population is employed in the SMEs sector in the face of the ever shrinking formal sector, fueled by company closures. Other countries, such as Malaysia and India which have fully embraced this new dispensation are thriving economically, so should Zimbabwe.

ANNOUNCEMENT BY THE HON. DEPUTY SPEAKER

VISITORS IN THE SPEAKER’S GALLERY

THE HON. DEPUTY SPEAKER: I have to acknowledge the

presence in the Speaker’s Gallery of students and teachers from Ndondo

High School from Masvingo Province. You are most welcome. – [HON.

MEMBERS: Hear, hear.] –

HON. S. CHIDHAKWA: I rise also to add my voice to this very important sector of our economy of the small to medium enterprises. It is common knowledge that our industries have closed due to several reasons, chief among them bad policies by the Government hence the creation of the SMEs which now constitute 75% of the working population in the country.

The SMEs are contributing immensely to the unemployment rate in the country because there is no industry to talk of. It must be noted that it is not everybody who is now an informal trader by design. Some are forced to be informal traders because of the harsh economic conditions in the country. There are no jobs. There are some graduates who could be employed in formal employment but they have no choice and end up being informal traders.

Inasmuch as they are contributing to the unemployment rate in the country, they are not contributing any meaningful contribution to the fiscus because of the reasons such as the conditions which are put forward by ZIMRA which are so complex that it is very difficult for most of our SMEs to understand how ZIMRA system is operating. There is need for ZIMRA to simplify their method of collecting taxes.

The other reason is that the SMEs are very nomadic and are not stationed in one place. Today, they are operating at this corner and tomorrow they are operating on the other corner which is very difficult for  the revenue collection officers to track them. One other reason why these informal traders are so nomadic is that they do not have enough infrastructures. The local authorities are not putting adequate infrastructure for all the SMEs to operate from. If there are, some are built in very unfavourable areas where they cannot access the market and as a result, they are shunning to operate from those areas. Those are some of the challenges that these SMEs are facing hence they are failing to contribute meaningfully to the fiscus.

However, if these people are properly organized, the country can benefit much by way of taxes from these SMEs since there is no industry to talk of. These people are facing so many challenges. Some of the challenges have been mentioned in the report and it is very difficult for the SMEs to access any funding from the financial institutions because the conditions are that they have to provide title deeds which they do not have and like I said, most of them are operating from leasing structures from the council.  They do not have their own properties which they will have title deeds to surrender to the banks.  Also, there is a need for a paradigm shift from the local authorities to allocate those who are capable to put on their own structures to operate from so that at the end of the day, they will be able to get some title deeds which they will intend to use to access funds from the banks.

Madam Speaker, other challenge which these people are facing is security.  From where they are operating, at any given time, they are raided by the police.  It is either the municipal police or the ZRP and their wares are confiscated.  The mystery there is once these wares are taken, they are not accounted for.  Sometimes we hear that they are donated at rallies and so on.  Hence, this is hindering the SMES to grow.    We must also understand that these people are operating with very little or very small capital.  So, once they lose that capital, it is very difficult for them to rebuild so that they can continue.  Again, it is our suggestion that once these wares are confiscated, they must be returned to the owners.  Who is benefitting from these things?

The other challenge which the SMEs are facing is corruption.   If we are really serious and want to grow the SMEs as our only option left in the country since the industries are closed, we have to deal with the issues of corruption.  Most of these Government institutions are actually favouring big established companies in awarding them tenders because they are getting some kick backs from those companies, in the process, they are depriving the SMEs.

You would find that those big companies are being supplied by people who are operating from the SMEs those products which they will be using on those tenders which they will have secured from the Government.  So, it is a matter of saying the Government has not put in place some methods which will enable the SMEs to be able to also win some of the tenders if we want to grow these people.  There is no way the SMEs are going to grow when we are denying them the opportunities to participate in bigger contracts.

The infrastructure, Madam Speaker – most of the infrastructure which these people are operating from are substandard.  In some instances there is no water, there are not enough toilets.  How would we expect people to be serious business people when they are operating from such conditions?  During the rainy season, some of the infrastructure does not have enough shelter to protect their wares.  We had an opportunity of visiting some of the places.  It is deplorable.

There are no roads to access where they are operating from.

Also in some of these places, there are people who are called touts.  I do not know, probably some other Hon. Members who are operating some taxis here might know this word.  These are the people who were told they are running - like the fronts of the people who are operating business. In actual fact, these people are working for other people who are in authority, who are in power.  They are collecting money and remitting that money to some other people.

To our surprise, the council authorities seem not to have the power to evict these people.  They are not operating at night, they are operating during the day time and it is known they are operating illegally, but no one is making an effort to try and remove them.  So instead, these are the people who are benefiting from where they did not sow because they are actually charging more money than the operator and they are getting much more profit.  They are not paying any rent, they do not pay any wages, but the person who is making these products is the one who is suffering.  He is not making a meaningful margin in terms of profit.  So, it is another concern that we are appealing to the powers that be, to look into this issue seriously if we would want to protect the SMEs.

I talked, Madam Speaker, earlier on on infrastructure.  Although the municipality has entered into some PPs with the private sector, you also find the people who will benefit from those structures at the end of the day, are not exactly SMEs.  They are what they are calling space barons.  There are other big people who are in authority, who are in power, who run in front and grab those shelters and then in turn, they lease to the SMEs.  This is the corruption that I have been referring to.

So, it is another concern that if this is not corrected, even if the local authorities are saying that the SMEs are given those shelters on temporary basis, in other words, it is a place where they must operate maybe for a period of three or so years.  From there, they must graduate to be able to go into the formal sector, but it will not be possible because they will be paying very difficult rates.  They will be paying to the space barons and they will be paying to the local authorities and the profit that they will remain with will be very little.  So, that has to be corrected.

In conclusion, Madam Speaker, the Government has got to move in to protect the SMEs in terms of where they must be operating from, in terms of the corruption, the hurdles that they are facing in accessing the products, the hurdles that they are facing maybe in accessing the tenders which are offered by the Government institutions for them to be able to grow.  This is my recommendation.  Thank you Madam Speaker.  I rest my case.

*HON. MANGWENDE:  Thank you Madam Speaker.  I am

grateful to Hon. Mangami and Hon. Chidhakwa for raising this motion on SMEs.  As some of the people who reside in the city of Harare, we are benefiting a lot from the SMEs.  We have been indigenised through them.  We have SMEs complexes at Mupedzanhamo, Siyaso other market places in Harare. These market places have led to the economic growth of Harare.  We are appealing to the City of Harare to fully shoulder its responsibility because in some of these areas where SMEs are operating from there are no toilets.  The SMEs are an essential part of our economic development and therefore, the local authorities, not only in Harare but in other areas give priority to these SMEs.

If you move around in different areas, the furniture which you see is manufactured here in Harare.  The President, His Excellency, Cde R. G. Mugabe is also aware of the existence of the Glen View Furniture

Complex which has a lot of expertise and well manufactured products.  We wish that the City Councils or local authorities would take care of these places and keep them clean and maintain the standards of hygiene.   SMEs are taking care of the people who were retrenched.  We have 53% of women who are getting a lot of assistance from participating in these SMEs and they are able to take care of their families, sending children to school and feeding them.  A lot of people are benefiting from these SMEs because of unemployment in the country.   I thank you.

HON. NDUNA:   Thank you Madam Speaker.  I want to add my voice to the report from our Committee on SMEs that was presented here by Hon. Mangami and seconded by Hon. Chidhakwa.  I want to say that report was pregnant with a lot of information that if the Executive, Government and quasi Government departments followed and if the society of Zimbabwe followed, we would be able to make sure that our economy gets boosted using the informal sector as a springboard for our economic emancipation.

Madam Speaker, I need to hasten to say the SME where the artisanal miners are embedded is very key and the policies that were requested for establishment in this House by this Committee should be followed to the letter and they should also involve policies that make sure that our gold sector, headed in the informal sector by artisanal miners is purely and completely emancipated and optimally resourced so that we can as a nation be emancipated in our economic operations.  Gold is the only tradable commodity as we speak.  We have no currency of our own in Zimbabwe.  If we utilize that gold which is coming out to the tune of US$684m per annum as alluded to in this monetary statement by the RBZ Governor Mr. Mangudya.

If we make sure that we support that SME, that sector which is informal, in order to make sure we formalize it for the good of the economy, we are doing ourselves a good service in Zimbabwe.  I will move away from the issue to do with the only tradable commodity which is gold.

Madam Speaker, if we are to resuscitate the industry in Zimbabwe; we must utilise the SMEs, the informal sector as the springboard for the resuscitation of this industry.  Our industry currently is operating below 40%.  I should hasten to say this is the formal way of doing things that was ingrained in our minds and hearts by those that had the power before the black majority came to rule in this country; before total emancipation of the black formerly marginalized majority.  The issue to do with the big industries is what we know, is what we were taught to know, is what we grew up knowing but now the industry is skewed towards that informal sector which is under the Small to Medium

Enterprises.  It is now time to capacitate those SMEs, to capacitate them firstly in terms of policy and secondly in terms of resources so that we can use them as a springboard to resuscitate our industry.

With regards to the resuscitation of our agricultural sector, we should not look any further than the informal sector.  He who is selling the tomatoes both in the rural areas and in our towns, we need to see how we can promote their operation by beneficiating what it is that they are creating or what it is that they are producing, in particular, tomatoes.  I will give you an example in Chegutu West constituency in particular and Zimbabwe in general, they used to be a place called Bon Zim or Cane Pack which used to can tomatoes.

Madam Speaker, that place is closed and what it is that we are supposed to be doing is to make sure that we group all those tomatoes in the informal sector and re-open these canning factories.  So, it is revitalization of our agricultural sector to return Zimbabwe to its bread basket status from a basket case.

The third one will be the low interest loans to our SMEs and our businesses.  Let us make sure that we utilise what we have to get what we want.  The issues that are historic, archaic and moribund or banks that have to continue to operate in a manner that only speaks to the formal sector that is rather – [HON. MEMBERS: Inaudible interjections.] –

THE TEMPORARY SPEAKER (HON. DZIVA):  Order Hon.

Members.  I have appealed for this; you must lower your voices and when you want to fidget and laugh you go to the lobby please.

HON. NDUNA:  Thank you Madam Speaker. I congratulate you for asking them to fidget silently.  The issues to do with the banks, they should be an SME desk in every bank to promote SME utilising low interest rate loans so that we realise that our economy can only come up if we support the SME sector.  The issue that was alluded to by Hon.

Chidhakwa that speaks to revitalization of the economy by engaging our SMEs in the infrastructural development and public works programmes of this nation.  This should not be underestimated; it should not be undermined because our economy is skewed to the tune of 80% towards the informal sector.  Let us now formalise the informal sector, thereby also elongating or expanding the tax base for our economy so that we can optimally and efficiently support the Minister of Finance and

Economic Development or Treasury and get back to winning ways.

They should be engaged in multinational infrastructural development projects.  I speak as the Chairperson of Transport and

Infrastructure Committee.  As we engage in the Beitbridge-Chirundu

Highway, the SMEs should not be undermined.  When I speak of the

SMEs, I refer to those that own one or two tippers Madam Speaker

Ma’am.  They should be engaged and the Government, multinationals and the main contractors should make sure that they use the SMEs as subcontracted companies.

Madam Speaker Ma’am, we should also support our SMEs by creating a department in the SME sector that speaks to private sector research development and in particular those that are in the rural areas so that they know how they can conduct their businesses through ICT and modern day technology.

I need to speak of the revitalisation of entities such as ZISCO Steel and David Whitehead.  The Minister of Finance has already spoken about the support that he is giving to the cotton industry sector where he is giving three seasons full of support for free in order to revitalise the textile industry headed by David Whitehead.  This industry cannot be resuscitated Madam Speaker Ma’am, if we ignore the SME sector who are currently engaged in agricultural development of our cotton.

Madam Speaker Ma’am, the issue of resuscitation of ZISCO Steel, utilising our SMEs can also revitalise our National Railways of

Zimbabwe (NRZ) that used to transport 19 million tonnes at its peak, but is currently transporting 3 million tonnes.  If we revitalise ZISCO Steel using both our chrome and red-cliff, red-cliff in the context of its meaning, we are now skewing up the economy towards the formal sector.  So the informal and the SMEs sectors can be utilised to revitalise these former giants of our economy.

Madam Speaker Ma’am, the issue to do with black empowerment.

The reclamation of our identity and dignity through racial equality cannot be overemphasised, it cannot be spoken about if we continue to leave our SMEs in the fringes of the economy.  The issue to do with black empowerment and the empowerment programmes spearheaded by His Excellency, the President, Cde. Robert Gabriel Mugabe, should not be underestimated.  They should be complemented because if we do not complement his efforts in terms of black empowerment on land ownership, entrepreneurs and business people, our industry will still remain at 40%.

Madam Speaker Ma’am, when you talk of support to the SMEs, before independence, 35% of our black children had access to education.  Now we have 91% of children who have access to education.  That can all come to naught if we do not support our SMEs because our fathers and mothers are now selling tomatoes, newspapers and air time vouchers in order to get their children to school.  So let us support them in their areas of operation so that we go back to our winning ways.

Before independence, we had 4% of our children accessing secondary education and now we have 65%.  What we need to applaud is the support that is being given to the informal sector and the SMEs.  If we do not support the SMEs, all this is going to come to naught.  The STEM programme is going to come to naught and we are not going to have our children having access…

Hon. S. Chidhakwa having erroneously switched on the microphone.

THE TEMPORARY SPEAKER: Order Hon. Chidhakwa, why

are you using that microphone?

HON. S. CHIDHAKWA: There was an obstruction Madam

Speaker.

HON. NDUNA: Thank you Madam Speaker Ma’am.  As I

conclude, the issue to do with lack of access to education by our children has seen the Government of Zimbabwe introducing the Basic Education Assistance Module (BEAM).  However, because we have challenges in our economy, the Government is unable to play its part of the bargain in terms of capacitating that programme.  The part is being capacitated by the SMEs, lest we forget.  It is capacitated by those mothers and fathers who are selling at the market.  They are involved in low cost housing in the locations.

As we debate this, we should know that a lot of programmes can come to naught if we do not have deliberate policies to empower the SMEs.  The Affirmative Action policies have also seen a growing number of empowerment in the SMEs sector.  I also need to let you know that Affirmative Action has also seen a number of women

Parliamentarians coming to Parliament.  We have now grown up to 35% Madam Speaker and above the SADC barometer.  This is because we have acceded to affirmative action as a nation.  So, let us make sure that we continue this affirmative action…

Hon. Nduna having been addressing the Gallery.

THE TEMPORARY SPEAKER: Hon. Nduna, address the

Chair.

HON. NDUNA: Madam Speaker, it is not that I have been ignoring you, sometimes I get carried away, but going forward, I want to only concentrate on you Madam Chair, you alone.  I touched on the Affirmative Action that has seen us grow to the tune of 35% of women representation in this Parliament as enshrined in our Constitution.

We have a lot of things in our Constitution that we are currently unable as a nation to adhere to.  A country is measured by the way it upholds its Constitution.  The Minister of Finance has come here several times on the issue to do with devolution of power; we cannot build and empower those councils because we have no capacity because we are financially crippled.

However, what I want to say is that; if we cannot adhere to our own Constitution, we still have the right to change it until such a time when we have the resources to empower those sectors Madam Speaker

Ma’am.  As I conclude, the issue to do with empowerment of the SMEs also speaks to the increased access to the health care.  If we empower those people, they will be able to pay for their own health upkeep.  We have done well as a nation in that regard, so let us not draw back our efforts by not empowering and resourcing the SMEs.  I thank you

Madam Speaker Ma’am.

*HON. MASHAYAMOMBE: Thank you Madam Speaker.  I rise

to support the report on SMEs.  Here in Harare, SMEs are helping our economy to grow in Harare because of the good work that they are doing.  Firstly, I want to talk about financing SMEs, yes the Government is giving them some loans through SEDCO but the funds are very little. We are appealing to the Government to empower SEDCO by funding them so that our SMEs in Harare find somewhere to get loans from.

Most of the people who are engaged in SMEs do not have collateral security to borrow money from banks.  So, SEDCO has got flexible terms which will enable SMEs to get funds.  These SMEs also needs machinery to use in order to improve their business.  We also appeal to the Zimbabwean based banks that they should put better terms that will help the SMEs to borrow money from them.  Most of these banks support only big companies since they have collateral security.

I would also want to plead with the Government to support the SMEs by allocating them better places to work from.  If you look at the new complex along Simon Mazorodze, it is a very good and convenient for business. So, we could have many business complexes like that one, many of these SMEs will have somewhere to work from.  In Harare, it is difficult to get a good place to do your small business; if you walk along Robert Mugabe and Cameron Street, they are very congested because that is where people are selling their wares.  We want the City of Harare to relocate these people to good places where they can work from without disturbing those going to and from work.

Some of the rentals that are being charged to these SMEs are very exorbitant, so most of them cannot continue doing their activities because most of their profits are chewed by rentals.  So, if they are allocated reasonable places to rent, I am sure they will get better profit and buy machines to enhance their business.

SMEs in Harare are the ones holding our economy, so they should really pay their taxes.  The Government has to put in place laws that enforce SMEs to pay taxes since they have become so many in Harare doing business.  If you go to Siyaso, Mupedzanhamo, even in Area Eight in Glenview, you find out that there are expensive vehicles parked there yet they are not paying any taxes when they are getting a lot of money compared to those who are in the formal sector.  So, I think there should be laws in place so that everyone should pay tax in Zimbabwe in order for our Civil Servants to get paid.

I think we should desist from calling these SMEs, they should grow and participate in the area of production because if we only have SMEs who are vending, our economy will not grow.  So, the

Government and local authorities should put laws that support SMEs to grow.  If a person was doing a backyard business, after two or three years, they should be able to own their own companies.  These will help even those who want to do apprenticeship and those who are learning from them, will have something to aspire.  So, our laws should encourage our people to do businesses.

Madam Speaker, our country will only go forward if all  of  us are doing something gainfully.  When it comes to the issue of entrepreneurship, it is very important in a nation, people should learn about how to run business.  People need to know how to conduct business, even as Members of Parliament, we should have our own business so that when we come here, we should be able to know how to run a business.  This will help us even when debating issues like these; at least we will be using personal examples like Hon. Dorcas Sibanda who is engaged in quail farming.  We should keep supporting such things, even the people that we represent, will learn from us…

HON. D. SIBANDA: On a point of order! Madam Speaker, what the Hon. Member is saying, is being captured in the Hansard, so I would like him to withdraw that statement because I have never sold zviuta.

          THE TEMPORARY SPEAKER: I would like to advise you

Members of Parliament that you should always behave when you are in the House.  The language that you use, the comments that you pass can also end up destroying your integrity.  I am the Chair, and have also heard Hon. D. Sibanda saying that there are other people that are doing zviuta.  Hon. Mashayamombe responded yet you are not allowed to respond to Members that are seated and she is also not allowed to pass any comments.  So, I would like you Hon. Members to behave in the House and avoid such embarrassment.  So, Hon. Mashayamombe can you withdraw that she does zviuta business?

*HON. MASHAYAMOMBE: Thank you Madam Speaker.  I

withdraw the words that I have spoken of the quail business which I said Hon. Dorcas is engaged in.  Thank you.

However, I was referring to us as Members of Parliament that it is very important for us to be entrepreneurs because this will help us, even to know the environment out there.  We start as SMEs and then grow into big companies. SMEs provide a lot of employment in Zimbabwe, so if all of us as MPs support SMEs, it will be good because most of our relatives are engaged in SMEs business. I thank you Madam Speaker.

*HON. CHITURA: Thank you Madam Speaker. I thank the Hon.

Members who presented this motion, Hon. Munengami seconded by Hon. Chidhakwa. The debate on SMEs is a very important one because even in rural areas, people are indulging in SMEs. If you are living a docile life you are frowned upon by the people. They believe as a small scale farmer you should be selling tomatoes, potatoes; but what hurts most is that when these people come from the rural areas, they come to sell their produce in the cities. Local authorities and security officers are at war with these people and they confiscate their goods yet the peasant farmer will be trying to irk out a living for the benefit of his family.

At the moment, we have some peasant farmers who have now engaged in harvesting thatch grass and sell for a living. We have the middle man who intercepts these people and take advantage of the ignorance of them; they benefit more than the farmers. As a result, I am calling for education on running small businesses so that people are not taken advantage of by the small scale farmers. I am now asking and pleading with Government to put aside some funds to assist the SMEs so that they may engage in small businesses to irk out a living for the benefit of their families and the nation. – [HON. MEMBERS: Hear, hear.]-

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

HON. KWARAMBA: I second.

Motion put and agreed to.

Debate to resume: Tuesday, 16^th August, 2016.

MOTION

FIRST REPORT OF THE PORTFOLIO COMMITTEE ON

MEDIA, INFORMATION AND BROADCASTING SERVICES

ON ZIMBABWE DIGITAL BROADCASTING MIGRATION

PROJECT

HON. DHEWA: I move the motion standing in my name that this House takes note of the First Report of the Portfolio Committee on Media, Information and Broadcasting Services on Zimbabwe Digital

Broadcasting Migration Project.

HON. MUKWENA: I second.

HON. DHEWA:

1.0 INTRODUCTION

Broadcasting as an industry and as a practice is an integral mechanism for the promotion of freedom of expression and access to information by members of the public. The broadcasting industry plays a crucial role in economic development through creation of employment opportunities. The broadcasting industry is critical in developing artistic talent and showcasing a nation’s culture and traditions to the world. In an effort to improve the broadcasting environment, the Government is implementing the Zimbabwe Digital Broadcasting Migration Project (ZDBMP), aimed at replacing the current analogue television broadcasting system to the new digital broadcasting platform in line with the International Telecommunication Union (ITU) requirements. During the Official Opening of the 3^rd Session of the 8^th Parliament, the President, His Excellency, Cde R. G Mugabe indicated that Government has embarked on a US$125 million digitalization programme. In addition, the 2016 National Budget Statement emphasised the importance of the project by noting that the Broadcasting Authority of

Zimbabwe (BAZ) had earmarked US$132 million from the Broadcasting

Fund for this purpose. Pursuant to its oversight function, the Portfolio Committee on Media, Information and Broadcasting Services resolved to conduct an inquiry into the progress made towards the Zimbabwe Digital Broadcasting Migration Project. This report also follows the

Committee's First Report on “Alignment of media laws and progress made towards fulfillment of digitalization” which was produced in the 1^st Session of the 8^th Parliament.

2.0 OBJECTIVES

The Committee was guided by the following objectives; viii.      To track and monitor progress towards fulfillment of the

Zimbabwe Digital Broadcasting Migration Project; ix. To evaluate value for money with regard to the work on the ground;

1. Identify challenges and prospects on both legislation and policy and; xi. Offer recommendations for improvements.

3.0 METHODOLOGY

The Committee employed the following strategies in its inquiry;

3.1 Oral evidence sessions.

The Committee conducted an oral evidence session with the

Permanent Secretary for the Ministry of Information, Media and Broadcasting Services, Mr. G. Charamba. The Committee was updated on the progress made regarding television digitalization programme as well as the Ministry's efforts on aligning media laws with the

Constitution. The Ministry of Information, Media and Broadcasting

Services establish a Steering Committee comprises of Transmedia,

Broadcasting Authority of Zimbabwe (BAZ) and Zimbabwe Broadcasting Corporation (ZBC) with BAZ acting as the head of the project, to manage the Zimbabwe Digital Broadcasting Migration Project. The Committee also received oral presentation from the Steering Committee and was updated on the work on the ground regarding the engineering aspect of the digitalization programme. In addition, the Committee received written submissions from the

Permanent Secretary.

3.2 Study Tours

In a bid to assess the nation's preparedness and in an effort to appreciate and understand the television digitalization programme, the Committee conducted a familiarization tour of ZBC studios and transmitters. The visit was conducted from the 11^th - 17^th of April 2016. The visit proved to be of value as the Committee received hands on information.

4.0 COMMITTEE'S FINDINGS.

4.1 The Permanent Secretary for Information, Media and

Broadcasting Services. Mr. G. Charamba.

4.1.1 In his presentation before the Committee, Mr. Charamba highlighted that the Ministry of Information, Media and Broadcasting was alive to the need to align media laws with the Constitution.

Currently, the Ministry administers two statutes; the Broadcasting

Services Act and the Access to Information and Protection of Privacy Act. The two pieces of legislation need to be reviewed due to new and emerging matters such as; the new Constitution, development in the broadcasting and print sectors since the promulgation of the laws, the macro-technological developments since 2000, the general expectations of the populace and the  goals of the country.

4.1.2 He articulated that the Ministry used to be occupied with the engineering aspect of the Zimbabwe Broadcasting Digital Migration Project. However, the country was slowly passing the engineering aspect and concerns are now on content production. Zimbabwe has chosen the (High Definition) HD as compared to the SD, hence 12 channels will be available after completion of the project. A SADC meeting in Windhoek, Namibia on digitalisation raised the issue of content production as a major challenge. Zimbabwe produced and shared its content production strategy which was adopted by the region. A content strategy should be versatile enough to fill all the platforms.

4.1.3 The Permanent Secretary explained that in the era of digitalization, the broadcasting sector needs the “Content Law” which in jurisdiction is called the “Film Act” or “World Vision Act”. The law would deal with matters of content, build institutions, deal with interface between content producers and content users, provides for conflict resolutions, deal with rights and obligations, royalty, intellectual properties and other related rights. Zimbabwe therefore, should be a content producer as well as protects the content and be able to market and create profits on the global scale.

4.1.4 It was also reported that the Ministry had already started to engage content producers throughout the country in anticipation of the completion of the digitalization programme.

4.1.5 After completion of the Information and Media Panel of Inquiry (IMPI) process, the Permanent Secretary indicated that the Ministry was working tirelessly to host a multi-stakeholders conference, to deliberate on the IMPI outcomes and recommendations. The conference resolutions would then be developed into policy and legislation.

4.2 UPDATE OF THE DIGITALISATION PROGRAMME.

4.2.1 The Zimbabwe Digital Broadcasting  Migration Project is funded by the Government of Zimbabwe to the tune of  about $172, 950

68. This is broken down as follows;

ITEM	COSTS
1. Equipment	2.  US$94 000 000
3. Services	4. US$31 000 000
5. Civil Works +Set Top Boxes	6.  US$47 950 068
Total	7. US$172 950 068

 

4.2.2 Fund Utilization: Payments to the Contractor.

4.2.2.1 Government contracted Huawei International to carry out the digitalization project at a cost of US$125 000 000 broken down as follows: US$94 000 000 for equipment; and US$31 000 000 for services. From these figures, disbursements to date are US$22 655

420.86 for equipment and services, including 10% advance payment. Equipment worth about US$17.3 million has been received. The equipment includes the following: Head- end equipment; Satellite

Uplink equipment; power systems for Head End, Satellite Uplink; Pockets Hill and transmitter sites; transmitter equipment and antenna systems for 8 sites; transmitter satellite receiver equipment; Regulatory Content Monitoring equipment; 6 new tower material; Pockets Hill equipment for 2 studios; Master Control Room and Play-out Systems; and 500 test Set Top Boxes. Equipment worth about US$16 million is ready for shipment pending pre – shipment payment. However, outstanding payments to Huawei to date is about US$19 million for both equipment and services.

4.2.3 Civil Works.

4.2.3.1 Payments relating to civil works amounted to US$5 144 474.37. These civil works include development of access roads to new transmitter sites. It was reported that construction of Chimanimani equipment room and electrification has been completed. In addition, 7 out of 8 transmitter room expansions have been completed at the following sites: Mutare, Nyanga, Kamativi, Kenmaur, Rutenga, Mount Darwin and Karoi. All 6 existing transmitter site antenna and de- installation are completed for Kamativi, Kenmaur, Mutare, Masvingo,

Harare and Bulawayo. Repair of 7 transmitter towers were completed for

Pocket Hills, Bulawayo, Kadoma, Masvingo, Chimanimani,

Mutorashanga and Gokwe. Tower inspection is currently being carried out to check completeness of repair work.

4.2.4 Progress on New Transmitter Sites Civil Works (access roads and tower foundation).

4.2.4.1 The Committee was well informed that 13 out of 15 civil works on new transmitter sites civil works (access road) were completed. Tower foundation works commenced on 16 transmitter sites. Four of the sites (Kotwa, Binga, Hwange and Bindura) have tower foundations ready for tower construction.

Head- end and satellite Uplink terminal civil works.

4.2.4.2 Satellite Uplink civil works was reported to have been completed. Furthermore, the Head- end equipment room renovations was also completed. Satellite capacity for initial signal distribution  was secured from satellite provider Eutelsat and US$893 592 initial annual licence fees had been paid.

4.2.4.3 Equipment installation.

The Head- end equipment had been installed at Pockets Hill. The satellite Uplink equipment installation has also been completed. Power system installation for Head-end and satellite uplink completed.

Installation of two digital  television studios, Master Control Room , Play- out system completed at Pockets Hill done as well as installation of the first batch of five digital transmitter sites, namely Kamativi, Kenmaur, Mutare, Nyanga and Susamoya has been  completed (transmitter equipment, antenna systems, power systems, cooling systems and satellite receiver equipment has been installed). Installation of the second batch of 7 digital transmitters has commenced with the Harare site already completed, for the remaining 6 sites (Bulawayo, Kadoma, Mutorashanga, Gokwe, and Chimanimani) equipment delivery has been stalled by outstanding payments to the contractor.

4.2.5 Engineer Training.

Thirty three graduate engineers commenced attachment on the ZDBMP from June 2015, bringing to a total of 46 engineers on the digitalization project. Orientation lessons, lectures on satellite systems, installation attachments and formal training on equipment operation and maintenance has been and is being provided to the graduate engineers.

4.2.6 Content Production (supply of content to the digital platform).

4.2.6.1. It was reported that once the digitalization programme is fully completed, the demand for local content would be enormous. With six channels available, ZBC alone will require 144 hours per day, which translates to 1008 hours per week, 4032 hours per month and 48384 hours per year. In order to stipulate and supply content to the digital platform, the Ministry has embarked on a vigorous outreach campaign to rope in independent content producers. In order to assist these independent producers, the Ministry is in the process of renovating production studios at Production Services and equipping them with state of the art equipment. In addition, production equipment will be availed to the producers not only here in Harare, but also in the other provincial capitals.

4.2.6.2 A Content Commissioning Committee has been created to assess content production proposals and requirements for access to production equipment and facilities by content creators. The Committee has already worked on the applicable frameworks for access to equipment and the criteria for assessing proposals. The Committee has started its work in assessing over seventy proposals that have been submitted so far, with priority being placed on content that is easy to produce. So far three production teams are in the field producing content.

4.2.7 Outstanding payment of about $19 million for the acquisition of Set Top Boxes and other equipment has stalled the progress.

4.3 DIGITALISATION TOUR: Pocket Hills.

4.3.1 The Committee on Media, Information and Broadcasting Services conducted a familiarization tour in a bid to assess the nation's preparedness towards fulfillment of the television digitization programme. The Committee had a chance to tour the ZBC, Pockets Hill where civil works have been completed as well as modernization of the studios.  Five cameras, high efficiency LED lights which are remote controlled for brightness and controlled manually for movement had been installed in the studios. All the studios were reported to be ready for use.

4.3.2 Master Control Room, Satellite Uplink, The Head- End and Power Rooms.

The Committee also has an opportunity to visit the Master Control Room. The Master Control Room receives signals for internal and external studios.  The play out system has six high definition televisions that are used for monitoring, play out and signaling. The power room consists of back up batteries and the Uninterrupted Power Supply (UPS) which lasts for more than 24 hours.  The Head End section consists of a 250 KVA power system generator which carries 2000 litres of petrol.  It is an Automatic Voltage System (AVS) and has Uninterrupted Power Supply (UPS). The Satellite Uplink system is installed and operational.

4.3.3 Kotwa Transmitter Site, Mudzi.

4.3.4.1 The Committee visited Kotwa transmitter site which is still under construction although the foundation and the first diamond had been completed. Civil works had also been completed by the District Development Fund who was contracted to do the roads. The Committee was informed that Kotwa is one of the twenty-four new sites.  Kotwa provides coverage to Mudzi, an area that never received TV or radio signals. In addition to Mudzi, the coverage is expected to go as far as

Pungwe, Kotwa, Nyamapanda and Chikoze areas. The Committee was also informed that all the new sites are areas which never had any signal before.  Kotwa site is still under construction and the villagers relied on broadcasting services from Mozambique.

4.3.4.2 The challenges raised by the Steering Committee included the problem of transportation of heavy materials due to the terrain of the area as well as lack of space to store materials. Materials to fully complete the tower were reported to be held in Germany due to delayed payments.

4.3.4 Cecil Kopje Transmitter Site, Mutare.

On the 12^th of April 2016, the Committee visited Cecil Kopje transmitter site in Mutare. Before the site visit, Transmedia hosted the

Committee to a demonstration of digital broadcasting at Amber Hotel. The Committee managed to watch the new ZBC channels that are ready to broadcast on a digital platform. In essence, Mutare community is ready to receive digital broadcasting. The demonstration showed that there is high quality signal as it stood at above 60%. The picture quality was perfect as it was at 100%. Members were informed that Cecil Kopje tower is completed with full installation of antennas.

The Committee was also informed that research was being done by the local engineers, in a bid to design low cost home aerial.  It also emerged during discussions that flat screens are analogue sets hence they also need Set Top Boxes. The Committee then proceeded to the Cecil Kopje site where members were informed that Cecil Kopje tower was completed with full installation of antenna. Installed on the place is the downlink dish and antenna panels, and the tower is 120m height.  The site also has an appropriate warehouse, fully equipped and security provided.

4.3.5 Mashava Transmitter Sitem Mashava.

From Mutare, the Committee proceeded to Mashava.  It emerged that Mashava is one of the twenty-four new sites, and one of the fifteen currently under work in progress.  The Mashava tower will be expected to cover areas such as Chivi, Masvingo, Shurugwi, Mashava, a 40 to 60km radius coverage. At the time of the visit, the constructor was still excavating and putting in steel reinforcements.  Authorization was granted to power the concrete and construction was expected to start after 1 and half month.  Civil works had also been completed by the

DDF.

4.3.6 Zvishavane Transmitter Site, Zvishavane.

The Committee proceeded to the Zvishavane site which is at the same stage as with Mashava.  Zvishavane site covers areas such as Filabusi, Mashava, and Shurugwi. Construction of the foundation had been completed and inspected. Therefore, the Contractor was expected to resume construction of the tower after 1 and half month.

4.3.7 Montrose Studio, Bulawayo.

The Committee also toured the Montrose Studios in Bulawayo, which is the regional station that mainly caters for the Matebeleland

Province.  It was reported that Montrose studios beginning Sunday the 17^th of April 2016, would broadcast Indaba from Montrose.  There are two new radio studios at Montrose.  The Montrose transmitter tower has been repaired and was  ready for the installation of antennas. The Committee further toured the control room and were informed that the floors need to be raised so as to install cables underneath. The two main television studio rooms were still under refurbishment.

The studios were simply being restructured to suit the digital studio. The equipment room was completed and ready to house equipment, however the said equipment is the one still being held in Germany. The Committee further toured radio stations that have been meticulous refurbished. The new radio station (Radio 4) will broadcast all the 16 languages, including  Khoi San, Tswana and Ndau just to mention a few in line with the requirements of the Constitution. One studio was designed to be a multi-purpose and can be used for both radio and TV.

4.3.8 Kenmour Transmitter Site, Kenmour.

Kenmour Transmitter Site is one of the newly constructed sites and covers a formerly disadvantaged area of Lupane, as television has never been transmitted in the area. Before the Committee toured the transmission site, it was subjected to a demonstration whereby the engineers proved beyond doubt that the area is ready to receive ZBC on digital format. Kenmour is one of the 6 completed towers  and can safely be reported to be digital now. During the discussions, it was suggested that a TV set and a STB be donated to the Kenmour centre and that the first set of STB be sold there so that the community has a feel of television for the first time in a long time.  The Kenmour site is also identical to the other sites, that is, it has a powerhouse, transmitter and a satellite dish. Kenmour has a 60km radius and  is 145m tall as it is on flat land.

4.3.10 Kamativi Transmitter Site, Kamativi.

The Committee then toured the Kamativi site where construction was completed. The Kamativi site is an existing site. The tower is 155 m high, free standing and cover areas such as Hwange, Dete, Fatima High, Binga and Manjolo a radius of 50-60km. The Kenmour site is also identical to the other sites, that is, it has a powerhouse, transmitter and a satellite dish.

4.3.11 Binga Transmitter Site, Binga.

The Committee's last point of call was Binga, the construction of the tower was still underway however, almost completed.  The Binga area used to receive transmission from Kamativi. The construction process started in October with the excavation work.  They chose a rocky site as it is more stable.  The tower is 120m high and it took 21 working days to erect the tower.  What is left now are the electronics and for civil engineers to do some checks and balances. Full completion of the tower would also be derailed due to the equipment still being held in

Germany.

5.0 COMMITTEE OBSERVATIONS.

5.1 After considerations of both the oral evidence sessions and fact finding mission, the Committee made the following observations;

1. Erratic or non disbursement of funds, especially the much awaited US$19 million, will stall progress and further delay the completion of the project. The Committee questions the commitment by the Ministry of Finance and Economic

Development to fund the programme.

2. The Committee welcomes the subsidy of Set Top Boxes (STB) prices from US$43 to US$25, by the Ministry of Information, Media and Broadcasting Services. However, the Committee notes that the price is still high and beyond the reach of  most citizens.
3. There is need for the Zimbabwe Digital Broadcasting Migration Project Steering Committee to do more on awareness, to educate the citizens on the project and equipment they need to buy.
4. Despite tremendous efforts on the ground to complete the project, the Committee notes that the Ministry of Information, Media and Broadcasting Services has not yet questioned the continual importation of non digital television sets. This will result in Zimbabwe being the dumping ground of non digitally compliant television sets.
5. The Committee noted that there are places ready to receive digital transmitter sites, such as Mutare, Kamative, Harare among others, these should be prioritized in terms of distribution of STB.
6. The introduction of subscription fees present a challenge considering that most residents were used to receive ZBC signals for free for a long time. This has an effect to the citizens right to access information as enshrined in the Constitution,

Section 62.

7. The Committee welcomes the training of engineers as a positive development. During tours, the graduates exhibited full understanding and appreciation of their duties and responsibilities.
8. The Committee observed that the digitalization programme was once reported to be self financing through the selling of the digital dividend to the tune of US$200 million. This is far much more than the budgeted US$172 million. The Committee raised concerns that the digital dividend was bought by Telone. However, there is no explanation on the use of the money which was meant for the project.
9. Injuries and one death were reported during construction of transmitter towers due to failure by contractors to adhere to safety standards.

6.0 COMMITTEE RECOMMENDATIONS.

The following are the Committee's recommendations; iii. The Ministry of Finance and Economic Development should disburse US$19 million by mid August 2016, to allow for equipment held in Germany to be released and allow for progress on the ground. The project may soon be a white elephant programme, if Treasury does not give enough attention to the project.

1. In addition, by end of August 2016, a disbursement plan should be negotiated and established between the Ministries of Finance and Information so as to ensure that the programme is not stalled.
2. Set Top Boxes should be further subsidized to US$10 and should be sold by Transmedia at specific identified buying points in the districts to ensure availability of the equipment to the rural areas.
3. Subscription fees should be US$3 per month in accordance with the KPMG Report recommendations.

• The Ministry of Information, Media and Broadcasting Services should explain to the National Assembly why the money raised through digital dividend was not channelled towards the Zimbabwe Digital Broadcasting Migration Project, a month after presentation of this report.
• The Zimbabwe Digital Broadcasting Migration Project Steering Committee should conduct awareness campaigns, to educate the citizens on the project and equipment that they need to buy. In addition, they should run demonstrations at various district centres by end of August.

1. The Zimbabwe Digital Migration Project Steering Committee should engage Members of Parliament as a strategy to facilitate public awareness, through provision of educational materials among others.
2. Transmedia should make efforts to ensure that STB are assembled locally as well as television sets that are digitally compatible.
3. Areas that transmitters are ready should be prioritized for STB distribution. In addition, the Steering Committee should run demonstrations at business centres throughout the country.

• The Ministry of Information, Media and Broadcasting

Services should gazette regulations restricting further importation on television sets that are non compatible. In addition, importation of digitally compatible television sets should be encouraged through a reduction of a duty. The 2017 National Budget should cover the above matter.

• Content producers should be allowed deferment of duty on imported operational materials or equipment as a strategy to encourage more content production.
• The Committee recommends that a programme should be developed to be able to retain the trained engineers and avoid human skills flight.

7.0 Conclusion.      

Tremendous progress on the ground has been done, as quite a number of transmitter sites are almost completed. The Zimbabwe Digital Broadcasting Migration Project is an important national programme which will revolutionarize the broadcasting sector and bring a lot of development through employment creation. Non payment for the equipment held in Germany will further stall progress that have been witnessed. The Ministry of Finance should prioritize the funding of the project.  I thank you.

THE VICE PRESIDENT AND MINISTER OF JUSTICE,

LEGAL AND PARLIAMENTARY AFFAIRS (HON.

MUNANGAGWA):  I move that the debate do now adjourn.

Motion put and agreed to.

Debate to resume:  Tuesday, 16^th August, 2016.

TABLING OF THE 2015ANNUAL REPORT OF THE NATIONAL

PROSECUTING AUTHORITY OF ZIMBABWE

THE VICE PRESIDENT AND MINISTER OF JUSTICE,

LEGAL AND PARLIAMENTARY AFFIARS (HON.

MNANGAGWA):  I, as the Vice President and Minister of Justice,

Legal and Parliamentary Affairs, pursuant to section 262 of the Constitution of Zimbabwe, hereby lay upon the table the Annual Report for the National Prosecuting Authority for the year ending 31 December,

2015. I thank you.

On the motion of THE HON. VICE PRESIDENT AND

MINISTER OF JUSTICE, LEGAL AND PARLIAMENTARY

AFFAIRS (HON. MNANGAGWA), the National Assembly adjourned at Twenty Three Minutes past Four o’clock p.m. until Tuesday, 16^th

August, 2016. 

PARLIAMENT OF ZIMBABWE

Thursday, 28^th July, 2016

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

PRAYERS

(THE HON. DEPUTY SPEAKER in the Chair)

ANNOUNCEMENT BY THE HON. DEPUTY SPEAKER

VISITIORS IN THE SPEAKER’S GALLERY THE HON. DEPUTY SPEAKER:  I have to acknowledge the

presence in the Speaker’s Gallery of students and teachers from Matilika, Primary School from Manicaland Province, you are most welcome – [HON. MEMBERS: Hear, hear.] –

FIRST READING

LAND COMMISSION BILL [H.B. 2, 2016]

          THE MINISTER OF LANDS AND RURAL

RESETTLEMENT (HON. MOMBESHORA) presented the Land

Commission Bill [H.B. 2, 2016].

Bill read the first time.

Bill referred to the Parliamentary Legal Committee.

MOTION

BUSINESS OF THE HOUSE

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

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

HON. MANGAMI: I second.

Motion put and agreed to.

MOTION

PRESIDENTIAL SPEECH: DEBATE ON ADDRESS

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

Presidential Speech.

Question again proposed.

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

HON. D. SIBANDA:  I second.

Motion put and agreed.

Debate to resume:  Tuesday, 16^th August, 2016.

MOTION

FIRST REPORT OF THE PORTFOLIO COMMITTEE ON SMALL

AND MEDIUM ENTERPRISES AND COOPERATIVE

DEVELOPMENT ON THE OPERATIONAL ENVIRONMENT

AND ECONOMIC CONTRIBUTIONS OF SMALL AND MEDIUM

ENTERPRISES AND THE INFORMAL SECTOR IN ZIMBABWE

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

This House takes note of the First Report of the Portfolio

Committee on Small and Medium Enterprises and Cooperative Development on the Operational Environment and Economic

Contributions of Small and Medium Enterprises and the Informal Sector in Zimbabwe.

HON. S. CHIDHAKWA: I second.

HON. MANGAMI: I am going to present the First Report of the

Portfolio Committee on Small and Medium Enterprises and Cooperative

Development on the Operational Environment and Economic Contributions of Small and Medium Enterprises and Cooperative Development (SMEs).

1.0      INTRODUCTION

Madam Speaker, a new economic order has emerged in Zimbabwe where small and medium enterprises (SMEs) are now major players.

The 2016 National Budget Statement highlights that SMEs  account for 60% of the country's labour force and contribute 50% towards the gross domestic product (GDP).  In the same vein, the Zimbabwe Agenda for Sustainable Socio-Economic Transformation (ZIMASSET) underscores the important role played by SMEs towards employment creation and poverty reduction.  Although this sector has the potential to contribute more towards the GDP, it is saddled with a number of perennial challenges associated with; financing, infrastructure, technology, management, entrepreneurial skills and marketing. The Portfolio Committee on Small and Medium Enterprises and Cooperative Development resolved to conduct an inquiry pertaining to the operational environment and economic contributions from the SMEs and the informal sector.

2.0     METHODOLOGY

Madam Speaker, your Committee used the following methods to gather information:

1. Capacity building workshop with various stakeholders on the theme; Taxation and Accessibility to Financial Resources by the

SMEs and Informal Sector in Zimbabwe ii. Oral evidence from: the Minister and Officials of Small and Medium Enterprises and Co-operative Development; the

Zimbabwe Revenue Authority (ZIMRA) and the Zimbabwe

Chamber of SMEs.

3.0   BACKGROUND ON THE EMERGENCE OF SMEs AND

THE INFORMAL SECTOR

Your Committee was given a historical background on the emergence of SMEs in Zimbabwe by officials from the Ministry of SMEs and Cooperative Development. The sector emerged in the mid-1990s following the liberalisation of the economy and the introduction of the Economic Structural Adjustment Programme (ESAP), which in turn led to a rise in unemployment  due to company closures.

More company closures were experienced between 1997 and 2008, after the country went through severe economic pressures, characterised by hyper-inflation, leading to further job losses on the formal market.   Furthermore, in the last 3 years, 55 000 people have been retrenched following the closure of about 4 000 companies due to a number of factors, which include the lack of financial resources for Re-tooling or recapitalisation.  In addition, universities and tertiary institutions are churning out more than 10 000 graduates each year onto the job market.

The scarcity of jobs on the formal market has led the retrenched and unemployed to start their own enterprises as a safety net. This sector has experienced phenomenal growth, where in 1991, there were approximately 845 000 SMEs and informal traders  employing about 1.5 million people and by 2012, there were over 2.8 million SMEs and informal traders employing  approximately 5.7 million people, representing around 43% of the national population. (See graph below)

Graph 1: No of SMEs and Employment Levels 

cope Survey 2012

 

SME Surveys 1998 and Finscope Survey 2012

4.0      COMMITTEE FINDINGS

4.1    Legal and Policy Framework

Madam Speaker, an SME is defined in the Small and Medium Enterprises Act [Chapter 24:12], as a legal entity and is categorised based on its annual turnover and  gross value in assets. Your Committee was informed that SMEs are found in various sectors of the economy with agriculture accounting for the majority. (as shown on  Table 1 below).

Table 1: Sectoral Distribution of SMEs

Sector	Percentage (%)
Agriculture	43
Wholesale and Retail	33
Manufacturing	9
Other Services	7
Energy and Construction	3
Art and Entertainment	2
Transport	1
Mining and Quarrying	1
Tourism	1

          

Source: 2012 Finscope Survey

More women own businesses accounting for 53% of the total SMEs. In addition, 71% of SMEs are owned by individual entrepreneurs which at times creates challenges in terms of continuity of the businesses.  However, the Committee noted with concern that 85% of the SMEs are informal, hence are operating outside the laws and regulations of the country. There is no doubt that the Treasury and other revenue collecting agencies are being prejudiced by the non-remittances of taxes, levies and other charges from the sector.

Your Committee was briefed by the SME Associations on the reasons for this informality.  These factors include: multiplicity of regulatory requirements for starting a business, lack of understanding of the laws governing SMEs, lack of information from Government departments and fear by SMEs that formalisation will lead to higher operational costs.   Resistance to formalisation is further worsened by the relentless and forceful manner of revenue collection by the different agencies, such as; ZIMRA and local authorities. Furthermore, the

Committee was informed by the Minister of SMEs and Cooperative

Development that the country does not have a national database on  SMEs that are in existence, thus making it difficult for policy makers to develop targeted sectoral policies to encourage formalisation.  However, the Minister highlighted that the process of creating a national database on SMEs that are in the country is underway.

Your Committee also noted with concern that the policy and legal framework as it relates to the operations of SMEs is complex, particularly taxation laws. The majority of SMEs cannot afford to hire tax consultants.   Most of the laws and policies are written in English, in terms that are not easily understood by an ordinary person. Although the Ministry of SMEs and Cooperative Development has the responsibility to train SMEs on these policies and laws, it is heavily incapacitated due to limited financial support from the Treasury. In the 2016 National Budget allocations, the Ministry features in the bottom ten.

Madam Speaker, despite these challenges, the Committee was informed by the Ministry of SMEs and Cooperative Development, that with the support from the World Bank, it was conducting consultative meetings with SMEs on formalising their operations. It is anticipated that this process will lead to the crafting of a Formalisation Strategy.

The Committee would encourage the Ministry of SMEs and

Cooperative Development to expedite this process for the benefit of the economy.

          4.2    Infrastructural Facilities

Madam Speaker, infrastructural services are largely provided and maintained by local authorities. The Committee was informed by the Urban Councils Association of Zimbabwe (UCAZ) that SMEs and the informal sector are like nomads, as they are always shifting and reconfiguring.  In the process, it makes it difficult for town planners to design appropriate infrastructure and certain shelters and structures designed for SMEs have been abandoned.  On the other hand, UCAZ, together with the Ministry of SMEs and Cooperative Development acknowledged that  some SME structures had been abandoned because of inappropriate location and design of the infrastructure due to lack of adequate consultations or that the structures had inadequate facilities.  For instance, some SME structures in the manufacturing sector  only provide working space without facilities for storage or marketing of the finished product.

To address some of these challenges, your Committee was informed that the City of Harare had entered into   public-privatepartnership agreements (PPPs) where  decommissioned containers and sheds will be erected to create decent workspaces for SMEs. In the same vein, Old Mutual Private Limited, plans to build state of the art infrastructure in Harare to accommodate 500 SMEs.  The Committee would like to encourage all local authorities to venture into similar PPPs to facilitate the growth and development of SMEs.  Regional countries, such as South Africa and Mozambique have state of the art SME structures built through PPPs. These structures attract both  local and international customers.

The SME Associations informed your Committee that they were being marginalised from acquiring appropriate workspaces with a niche market in major towns in the country. The associations indicated that they would like to be accommodated in the central business district

(CBD) of major cities, in places occupied by businesses, such as OK and Pick and Pay.  The Committee believes this issue can be resolved through consultations between the sector and town planners.

4.3    Tax Compliance by SMEs and Informal Traders 

Madam Speaker, major tax contributions by the SMEs and informal traders are in the form of value added tax (VAT) and presumptive tax. The Committee was informed by experts from Ernst and Young that tax compliance by SMEs is made difficult by the onerous requirements from ZIMRA.  For instance, a bank account is a necessity for an SME to be on the tax register, yet most SMEs do not have confidence in the banking sector. In addition, SME associations highlighted that their members are not aware of any tangible benefits of  tax compliance, if anything, it is viewed as a cost burden to  be avoided.

The Committee was informed by the Ministry of SMEs and Cooperative Development that it had to intervene in some disputes where ZIMRA was charging exorbitant amounts on SMEs that were seeking to formalise their operations during the tax amnesty period. An illustrative example is an SME operator from Gweru who voluntarily approached

ZIMRA to regularise his position but was levied penalties amounting to US$87 000. This meant that the owner would not have been able to get tax clearance to continue with the business, if the Ministry had not intervened for a reduction. The Committee believes such kind of incidents discourage SMEs from formalising their operations.

Your Committee received a complaint from the Zimbabwe Chamber of SMEs  that presumptive taxes were too high and the association questioned the rationale behind the tax thresholds.  For instance, a hair saloon is required to pay US$1500  per quarter as presumptive tax, which according to the SME Association, was  unreasonably high given the low profit margins in that particular business. In response, the ZIMRA Commissioner General, Mr. G. Pasi highlighted to the Committee that the levels of presumptive tax appear unreasonably high but had to be understood in the context of the transition from the Zimbabwean dollar to the multi-currency system which was received with mixed reactions by different sectors of the economy. Furthermore, SME associations informed the Committee that since the pronouncement  that US$7.6 billion was circulating in the informal sector, ZIMRA had become ruthless in its revenue collection endeavors, creating more animosity between the sector and the agency.

Your Committee was informed by the Ministry of SMEs and Cooperative Development that revenue collection is more difficult because of the physical location of most SMEs and informal traders. About 39% operate from residential premises, 22% on farms, 11% operate from door to door, 9% work in the street or pavement and only 6% operate from a traditional market.  The Committee was also informed by ZIMRA that the Government was losing a lot of revenue through smuggling of cheap imports, particularly, fruits and vegetables and bales of secondhand clothing.  Most of these commodities find their way onto the local markets, dominated by SMEs and informal traders, such as Mbare Musika.

4.4    Access to Financial Resources by SMEs

4.4.1 Private Sector Initiatives

Madam Speaker, your Committee had an opportunity to interact with the Bankers Association of Zimbabwe (BAZ) and SME Associations on the challenges faced and available opportunities for SMEs in accessing financial resources from the  banking sector.  Indications were that there are very few opportunities for SMEs and informal traders to access resources from banks.  The Ministry of SMEs and Cooperative Development highlighted that, in 2014  loans advanced to SMEs stood at 6% of the total banking loan advances.  SMEs fail to access loans from banks due to a myriad of factors that include:

1. Negative perceptions on the operations of the sector, with views that some of the enterprises are involved in illegal activities;
2. SMEs usually require small loans which incur high transaction costs through processing, making it unsustainable for banks; iii. Banks require recognisable collateral which most SMEs fail to  produce;  A lot of documentation is required such as proof of residence,  business address, updated books of accounts, information which is not always at the disposal of most SMEs;
3. Some SMEs are unwilling to give full disclosure of their business  operations in fear  that the information will be sold to competitors. Consequently, banks are unwilling to provide loans to the businesses that appear hazy; vi. The maturity period for  most loans is too short and the interest  rates are too high. This does not give SMEs adequate time to make adequate profits to repay the loan; and vii.    Banks are not readily available in the rural areas.

Your Committee noted with concern, that SMEs are excluded from the banking sector and this forces the majority of them  to borrow from  micro-finance institutions which charge higher interest rates than banks.

4.4.2 Funding from Government 

Madam Speaker, the Small and Medium Enterprises Development

Corporation (SMEDCO) is the financial arm that provides loans to SMEs on behalf of Government.  However, the parastatal is heavily incapacitated. In 2015, SMEDCO received US$150 000 out of its total allocation of US$1.9 million  and in  2016, the parastatal has been allocated  US$2.4 million but as at March 2016, it had not received any disbursement.  In 2012, Parliament ratified a US$3 million loan agreement from the Arab Bank for Economic Development in Africa (BADEA) towards re-capitalisation of SMEDCO's operations. Your Committee was informed that efforts made by the Ministry of Finance and Economic Development to secure the loan on three occasions had not been successful. One of the challenges encountered in securing the loan was associated with the economic sanctions imposed on the country.

5.0   COMMITTEE OBSERVATIONS

5.1 The country does not have a formalisation strategy or clear incentives to motivate SMEs to formalise their operations.

5.2   There is no national database of SMEs that are currently in existence.

5.3   Most SMEs lack information on the policies, regulations and laws that govern and affect their operations.

5.4   The majority of SME structures are located on the periphery of major cities and towns.

5.5   Payment of taxes is not being linked to a realisable benefit, hence the resistance to pay taxes by SMEs.

5.6   There is a perception that tax compliance will lead to further  cost burdens on SMEs.

5.7   There is inadequate training for SMEs on key issues that affect their businesses, such as record keeping, management, among others.

5.8 There is inadequate and sometimes poor infrastructure for

SMEs to produce or market their commodities.

5.9   Poor relations exist between SMEs and revenue collecting agencies, such as ZIMRA and local authorities.

5.10 SMEs are not fully recognised by the banking sector.

5.11 The closure of companies, as well as, the low capacity utilisation levels by large companies presents an opportunity for SMEs to fill the supply gap.

5.12 Lack of access to affordable capital is one of the major challenges faced by SMEs in Zimbabwe.

6.0    RECOMMENDATIONS

6.1    The Ministry of SMEs and Cooperative Development should draft a National Formalisation Strategy with clear incentives to motivate SMEs to formalise their operations by December 2016.

6.2    The Ministry of SMEs and Cooperative Development should develop a national database of SMEs that are in existence by December

2016.

6.3 The Ministry of Finance and Economic Development should unlock the BADEA loan facility of US$ 3 million which was approved by Parliament to re-capitalise SMEDCO for the provision of adequate financial resources to foster the growth and development of the SMEs sector by December 2016.

6.4    Local authorities should plough back three percent (3%) of revenue collected from the SMEs towards the development of decent workspaces and for the provision of better services to the sector.

6.5    The Ministry of SMEs and Cooperative Development, in collaboration with ZIMRA and local authorities should hold countrywide awareness programmes on tax policies, by-laws and relevant regulations at least on a yearly basis.

6.6    ZIMRA and Local Authorities should establish an SME desk in their respective institutions as a strategy of improving relations with the SME sector by October 2016.

6.7    ZIMRA should establish offices in all the districts of the country by December 2017 and should not only be visible in the districts when collecting revenue.

6.8    The Ministry of SMEs and Cooperative Development must engage the Bankers Association for it to be flexible on the types of collateral, maturity periods and interest rates on loans to suit the business models of SMEs by September 2016.

6.9    The Ministry of SMEs and Cooperative Development should liaise with banks so that they are more visible in rural areas by October 2016, for instance, in the form of mobile banks operating at given intervals or coinciding with  key events in rural communities, such as the agricultural marketing seasons.

7.0    CONCLUSION

7.1    The growth and development of the SMEs sector in Zimbabwe is a dynamic process which calls for continuous review of policies and institutional frameworks to ensure optimum benefit for our economy. SMEs are here to stay and Government should find adequate space for them in all new settlements given that about 43% of the country's population is employed in the SMEs sector in the face of the ever shrinking formal sector, fueled by company closures. Other countries, such as Malaysia and India which have fully embraced this new dispensation are thriving economically, so should Zimbabwe.

ANNOUNCEMENT BY THE HON. DEPUTY SPEAKER

VISITORS IN THE SPEAKER’S GALLERY

THE HON. DEPUTY SPEAKER: I have to acknowledge the

presence in the Speaker’s Gallery of students and teachers from Ndondo

High School from Masvingo Province. You are most welcome. – [HON.

MEMBERS: Hear, hear.] –

HON. S. CHIDHAKWA: I rise also to add my voice to this very important sector of our economy of the small to medium enterprises. It is common knowledge that our industries have closed due to several reasons, chief among them bad policies by the Government hence the creation of the SMEs which now constitute 75% of the working population in the country.

The SMEs are contributing immensely to the unemployment rate in the country because there is no industry to talk of. It must be noted that it is not everybody who is now an informal trader by design. Some are forced to be informal traders because of the harsh economic conditions in the country. There are no jobs. There are some graduates who could be employed in formal employment but they have no choice and end up being informal traders.

Inasmuch as they are contributing to the unemployment rate in the country, they are not contributing any meaningful contribution to the fiscus because of the reasons such as the conditions which are put forward by ZIMRA which are so complex that it is very difficult for most of our SMEs to understand how ZIMRA system is operating. There is need for ZIMRA to simplify their method of collecting taxes.

The other reason is that the SMEs are very nomadic and are not stationed in one place. Today, they are operating at this corner and tomorrow they are operating on the other corner which is very difficult for  the revenue collection officers to track them. One other reason why these informal traders are so nomadic is that they do not have enough infrastructures. The local authorities are not putting adequate infrastructure for all the SMEs to operate from. If there are, some are built in very unfavourable areas where they cannot access the market and as a result, they are shunning to operate from those areas. Those are some of the challenges that these SMEs are facing hence they are failing to contribute meaningfully to the fiscus.

However, if these people are properly organized, the country can benefit much by way of taxes from these SMEs since there is no industry to talk of. These people are facing so many challenges. Some of the challenges have been mentioned in the report and it is very difficult for the SMEs to access any funding from the financial institutions because the conditions are that they have to provide title deeds which they do not have and like I said, most of them are operating from leasing structures from the council.  They do not have their own properties which they will have title deeds to surrender to the banks.  Also, there is a need for a paradigm shift from the local authorities to allocate those who are capable to put on their own structures to operate from so that at the end of the day, they will be able to get some title deeds which they will intend to use to access funds from the banks.

Madam Speaker, other challenge which these people are facing is security.  From where they are operating, at any given time, they are raided by the police.  It is either the municipal police or the ZRP and their wares are confiscated.  The mystery there is once these wares are taken, they are not accounted for.  Sometimes we hear that they are donated at rallies and so on.  Hence, this is hindering the SMES to grow.    We must also understand that these people are operating with very little or very small capital.  So, once they lose that capital, it is very difficult for them to rebuild so that they can continue.  Again, it is our suggestion that once these wares are confiscated, they must be returned to the owners.  Who is benefitting from these things?

The other challenge which the SMEs are facing is corruption.   If we are really serious and want to grow the SMEs as our only option left in the country since the industries are closed, we have to deal with the issues of corruption.  Most of these Government institutions are actually favouring big established companies in awarding them tenders because they are getting some kick backs from those companies, in the process, they are depriving the SMEs.

You would find that those big companies are being supplied by people who are operating from the SMEs those products which they will be using on those tenders which they will have secured from the Government.  So, it is a matter of saying the Government has not put in place some methods which will enable the SMEs to be able to also win some of the tenders if we want to grow these people.  There is no way the SMEs are going to grow when we are denying them the opportunities to participate in bigger contracts.

The infrastructure, Madam Speaker – most of the infrastructure which these people are operating from are substandard.  In some instances there is no water, there are not enough toilets.  How would we expect people to be serious business people when they are operating from such conditions?  During the rainy season, some of the infrastructure does not have enough shelter to protect their wares.  We had an opportunity of visiting some of the places.  It is deplorable.

There are no roads to access where they are operating from.

Also in some of these places, there are people who are called touts.  I do not know, probably some other Hon. Members who are operating some taxis here might know this word.  These are the people who were told they are running - like the fronts of the people who are operating business. In actual fact, these people are working for other people who are in authority, who are in power.  They are collecting money and remitting that money to some other people.

To our surprise, the council authorities seem not to have the power to evict these people.  They are not operating at night, they are operating during the day time and it is known they are operating illegally, but no one is making an effort to try and remove them.  So instead, these are the people who are benefiting from where they did not sow because they are actually charging more money than the operator and they are getting much more profit.  They are not paying any rent, they do not pay any wages, but the person who is making these products is the one who is suffering.  He is not making a meaningful margin in terms of profit.  So, it is another concern that we are appealing to the powers that be, to look into this issue seriously if we would want to protect the SMEs.

I talked, Madam Speaker, earlier on on infrastructure.  Although the municipality has entered into some PPs with the private sector, you also find the people who will benefit from those structures at the end of the day, are not exactly SMEs.  They are what they are calling space barons.  There are other big people who are in authority, who are in power, who run in front and grab those shelters and then in turn, they lease to the SMEs.  This is the corruption that I have been referring to.

So, it is another concern that if this is not corrected, even if the local authorities are saying that the SMEs are given those shelters on temporary basis, in other words, it is a place where they must operate maybe for a period of three or so years.  From there, they must graduate to be able to go into the formal sector, but it will not be possible because they will be paying very difficult rates.  They will be paying to the space barons and they will be paying to the local authorities and the profit that they will remain with will be very little.  So, that has to be corrected.

In conclusion, Madam Speaker, the Government has got to move in to protect the SMEs in terms of where they must be operating from, in terms of the corruption, the hurdles that they are facing in accessing the products, the hurdles that they are facing maybe in accessing the tenders which are offered by the Government institutions for them to be able to grow.  This is my recommendation.  Thank you Madam Speaker.  I rest my case.

*HON. MANGWENDE:  Thank you Madam Speaker.  I am

grateful to Hon. Mangami and Hon. Chidhakwa for raising this motion on SMEs.  As some of the people who reside in the city of Harare, we are benefiting a lot from the SMEs.  We have been indigenised through them.  We have SMEs complexes at Mupedzanhamo, Siyaso other market places in Harare. These market places have led to the economic growth of Harare.  We are appealing to the City of Harare to fully shoulder its responsibility because in some of these areas where SMEs are operating from there are no toilets.  The SMEs are an essential part of our economic development and therefore, the local authorities, not only in Harare but in other areas give priority to these SMEs.

If you move around in different areas, the furniture which you see is manufactured here in Harare.  The President, His Excellency, Cde R. G. Mugabe is also aware of the existence of the Glen View Furniture

Complex which has a lot of expertise and well manufactured products.  We wish that the City Councils or local authorities would take care of these places and keep them clean and maintain the standards of hygiene.   SMEs are taking care of the people who were retrenched.  We have 53% of women who are getting a lot of assistance from participating in these SMEs and they are able to take care of their families, sending children to school and feeding them.  A lot of people are benefiting from these SMEs because of unemployment in the country.   I thank you.

HON. NDUNA:   Thank you Madam Speaker.  I want to add my voice to the report from our Committee on SMEs that was presented here by Hon. Mangami and seconded by Hon. Chidhakwa.  I want to say that report was pregnant with a lot of information that if the Executive, Government and quasi Government departments followed and if the society of Zimbabwe followed, we would be able to make sure that our economy gets boosted using the informal sector as a springboard for our economic emancipation.

Madam Speaker, I need to hasten to say the SME where the artisanal miners are embedded is very key and the policies that were requested for establishment in this House by this Committee should be followed to the letter and they should also involve policies that make sure that our gold sector, headed in the informal sector by artisanal miners is purely and completely emancipated and optimally resourced so that we can as a nation be emancipated in our economic operations.  Gold is the only tradable commodity as we speak.  We have no currency of our own in Zimbabwe.  If we utilize that gold which is coming out to the tune of US$684m per annum as alluded to in this monetary statement by the RBZ Governor Mr. Mangudya.

If we make sure that we support that SME, that sector which is informal, in order to make sure we formalize it for the good of the economy, we are doing ourselves a good service in Zimbabwe.  I will move away from the issue to do with the only tradable commodity which is gold.

Madam Speaker, if we are to resuscitate the industry in Zimbabwe; we must utilise the SMEs, the informal sector as the springboard for the resuscitation of this industry.  Our industry currently is operating below 40%.  I should hasten to say this is the formal way of doing things that was ingrained in our minds and hearts by those that had the power before the black majority came to rule in this country; before total emancipation of the black formerly marginalized majority.  The issue to do with the big industries is what we know, is what we were taught to know, is what we grew up knowing but now the industry is skewed towards that informal sector which is under the Small to Medium

Enterprises.  It is now time to capacitate those SMEs, to capacitate them firstly in terms of policy and secondly in terms of resources so that we can use them as a springboard to resuscitate our industry.

With regards to the resuscitation of our agricultural sector, we should not look any further than the informal sector.  He who is selling the tomatoes both in the rural areas and in our towns, we need to see how we can promote their operation by beneficiating what it is that they are creating or what it is that they are producing, in particular, tomatoes.  I will give you an example in Chegutu West constituency in particular and Zimbabwe in general, they used to be a place called Bon Zim or Cane Pack which used to can tomatoes.

Madam Speaker, that place is closed and what it is that we are supposed to be doing is to make sure that we group all those tomatoes in the informal sector and re-open these canning factories.  So, it is revitalization of our agricultural sector to return Zimbabwe to its bread basket status from a basket case.

The third one will be the low interest loans to our SMEs and our businesses.  Let us make sure that we utilise what we have to get what we want.  The issues that are historic, archaic and moribund or banks that have to continue to operate in a manner that only speaks to the formal sector that is rather – [HON. MEMBERS: Inaudible interjections.] –

THE TEMPORARY SPEAKER (HON. DZIVA):  Order Hon.

Members.  I have appealed for this; you must lower your voices and when you want to fidget and laugh you go to the lobby please.

HON. NDUNA:  Thank you Madam Speaker. I congratulate you for asking them to fidget silently.  The issues to do with the banks, they should be an SME desk in every bank to promote SME utilising low interest rate loans so that we realise that our economy can only come up if we support the SME sector.  The issue that was alluded to by Hon.

Chidhakwa that speaks to revitalization of the economy by engaging our SMEs in the infrastructural development and public works programmes of this nation.  This should not be underestimated; it should not be undermined because our economy is skewed to the tune of 80% towards the informal sector.  Let us now formalise the informal sector, thereby also elongating or expanding the tax base for our economy so that we can optimally and efficiently support the Minister of Finance and

Economic Development or Treasury and get back to winning ways.

They should be engaged in multinational infrastructural development projects.  I speak as the Chairperson of Transport and

Infrastructure Committee.  As we engage in the Beitbridge-Chirundu

Highway, the SMEs should not be undermined.  When I speak of the

SMEs, I refer to those that own one or two tippers Madam Speaker

Ma’am.  They should be engaged and the Government, multinationals and the main contractors should make sure that they use the SMEs as subcontracted companies.

Madam Speaker Ma’am, we should also support our SMEs by creating a department in the SME sector that speaks to private sector research development and in particular those that are in the rural areas so that they know how they can conduct their businesses through ICT and modern day technology.

I need to speak of the revitalisation of entities such as ZISCO Steel and David Whitehead.  The Minister of Finance has already spoken about the support that he is giving to the cotton industry sector where he is giving three seasons full of support for free in order to revitalise the textile industry headed by David Whitehead.  This industry cannot be resuscitated Madam Speaker Ma’am, if we ignore the SME sector who are currently engaged in agricultural development of our cotton.

Madam Speaker Ma’am, the issue of resuscitation of ZISCO Steel, utilising our SMEs can also revitalise our National Railways of

Zimbabwe (NRZ) that used to transport 19 million tonnes at its peak, but is currently transporting 3 million tonnes.  If we revitalise ZISCO Steel using both our chrome and red-cliff, red-cliff in the context of its meaning, we are now skewing up the economy towards the formal sector.  So the informal and the SMEs sectors can be utilised to revitalise these former giants of our economy.

Madam Speaker Ma’am, the issue to do with black empowerment.

The reclamation of our identity and dignity through racial equality cannot be overemphasised, it cannot be spoken about if we continue to leave our SMEs in the fringes of the economy.  The issue to do with black empowerment and the empowerment programmes spearheaded by His Excellency, the President, Cde. Robert Gabriel Mugabe, should not be underestimated.  They should be complemented because if we do not complement his efforts in terms of black empowerment on land ownership, entrepreneurs and business people, our industry will still remain at 40%.

Madam Speaker Ma’am, when you talk of support to the SMEs, before independence, 35% of our black children had access to education.  Now we have 91% of children who have access to education.  That can all come to naught if we do not support our SMEs because our fathers and mothers are now selling tomatoes, newspapers and air time vouchers in order to get their children to school.  So let us support them in their areas of operation so that we go back to our winning ways.

Before independence, we had 4% of our children accessing secondary education and now we have 65%.  What we need to applaud is the support that is being given to the informal sector and the SMEs.  If we do not support the SMEs, all this is going to come to naught.  The STEM programme is going to come to naught and we are not going to have our children having access…

Hon. S. Chidhakwa having erroneously switched on the microphone.

THE TEMPORARY SPEAKER: Order Hon. Chidhakwa, why

are you using that microphone?

HON. S. CHIDHAKWA: There was an obstruction Madam

Speaker.

HON. NDUNA: Thank you Madam Speaker Ma’am.  As I

conclude, the issue to do with lack of access to education by our children has seen the Government of Zimbabwe introducing the Basic Education Assistance Module (BEAM).  However, because we have challenges in our economy, the Government is unable to play its part of the bargain in terms of capacitating that programme.  The part is being capacitated by the SMEs, lest we forget.  It is capacitated by those mothers and fathers who are selling at the market.  They are involved in low cost housing in the locations.

As we debate this, we should know that a lot of programmes can come to naught if we do not have deliberate policies to empower the SMEs.  The Affirmative Action policies have also seen a growing number of empowerment in the SMEs sector.  I also need to let you know that Affirmative Action has also seen a number of women

Parliamentarians coming to Parliament.  We have now grown up to 35% Madam Speaker and above the SADC barometer.  This is because we have acceded to affirmative action as a nation.  So, let us make sure that we continue this affirmative action…

Hon. Nduna having been addressing the Gallery.

THE TEMPORARY SPEAKER: Hon. Nduna, address the

Chair.

HON. NDUNA: Madam Speaker, it is not that I have been ignoring you, sometimes I get carried away, but going forward, I want to only concentrate on you Madam Chair, you alone.  I touched on the Affirmative Action that has seen us grow to the tune of 35% of women representation in this Parliament as enshrined in our Constitution.

We have a lot of things in our Constitution that we are currently unable as a nation to adhere to.  A country is measured by the way it upholds its Constitution.  The Minister of Finance has come here several times on the issue to do with devolution of power; we cannot build and empower those councils because we have no capacity because we are financially crippled.

However, what I want to say is that; if we cannot adhere to our own Constitution, we still have the right to change it until such a time when we have the resources to empower those sectors Madam Speaker

Ma’am.  As I conclude, the issue to do with empowerment of the SMEs also speaks to the increased access to the health care.  If we empower those people, they will be able to pay for their own health upkeep.  We have done well as a nation in that regard, so let us not draw back our efforts by not empowering and resourcing the SMEs.  I thank you

Madam Speaker Ma’am.

*HON. MASHAYAMOMBE: Thank you Madam Speaker.  I rise

to support the report on SMEs.  Here in Harare, SMEs are helping our economy to grow in Harare because of the good work that they are doing.  Firstly, I want to talk about financing SMEs, yes the Government is giving them some loans through SEDCO but the funds are very little. We are appealing to the Government to empower SEDCO by funding them so that our SMEs in Harare find somewhere to get loans from.

Most of the people who are engaged in SMEs do not have collateral security to borrow money from banks.  So, SEDCO has got flexible terms which will enable SMEs to get funds.  These SMEs also needs machinery to use in order to improve their business.  We also appeal to the Zimbabwean based banks that they should put better terms that will help the SMEs to borrow money from them.  Most of these banks support only big companies since they have collateral security.

I would also want to plead with the Government to support the SMEs by allocating them better places to work from.  If you look at the new complex along Simon Mazorodze, it is a very good and convenient for business. So, we could have many business complexes like that one, many of these SMEs will have somewhere to work from.  In Harare, it is difficult to get a good place to do your small business; if you walk along Robert Mugabe and Cameron Street, they are very congested because that is where people are selling their wares.  We want the City of Harare to relocate these people to good places where they can work from without disturbing those going to and from work.

Some of the rentals that are being charged to these SMEs are very exorbitant, so most of them cannot continue doing their activities because most of their profits are chewed by rentals.  So, if they are allocated reasonable places to rent, I am sure they will get better profit and buy machines to enhance their business.

SMEs in Harare are the ones holding our economy, so they should really pay their taxes.  The Government has to put in place laws that enforce SMEs to pay taxes since they have become so many in Harare doing business.  If you go to Siyaso, Mupedzanhamo, even in Area Eight in Glenview, you find out that there are expensive vehicles parked there yet they are not paying any taxes when they are getting a lot of money compared to those who are in the formal sector.  So, I think there should be laws in place so that everyone should pay tax in Zimbabwe in order for our Civil Servants to get paid.

I think we should desist from calling these SMEs, they should grow and participate in the area of production because if we only have SMEs who are vending, our economy will not grow.  So, the

Government and local authorities should put laws that support SMEs to grow.  If a person was doing a backyard business, after two or three years, they should be able to own their own companies.  These will help even those who want to do apprenticeship and those who are learning from them, will have something to aspire.  So, our laws should encourage our people to do businesses.

Madam Speaker, our country will only go forward if all  of  us are doing something gainfully.  When it comes to the issue of entrepreneurship, it is very important in a nation, people should learn about how to run business.  People need to know how to conduct business, even as Members of Parliament, we should have our own business so that when we come here, we should be able to know how to run a business.  This will help us even when debating issues like these; at least we will be using personal examples like Hon. Dorcas Sibanda who is engaged in quail farming.  We should keep supporting such things, even the people that we represent, will learn from us…

HON. D. SIBANDA: On a point of order! Madam Speaker, what the Hon. Member is saying, is being captured in the Hansard, so I would like him to withdraw that statement because I have never sold zviuta.

          THE TEMPORARY SPEAKER: I would like to advise you

Members of Parliament that you should always behave when you are in the House.  The language that you use, the comments that you pass can also end up destroying your integrity.  I am the Chair, and have also heard Hon. D. Sibanda saying that there are other people that are doing zviuta.  Hon. Mashayamombe responded yet you are not allowed to respond to Members that are seated and she is also not allowed to pass any comments.  So, I would like you Hon. Members to behave in the House and avoid such embarrassment.  So, Hon. Mashayamombe can you withdraw that she does zviuta business?

*HON. MASHAYAMOMBE: Thank you Madam Speaker.  I

withdraw the words that I have spoken of the quail business which I said Hon. Dorcas is engaged in.  Thank you.

However, I was referring to us as Members of Parliament that it is very important for us to be entrepreneurs because this will help us, even to know the environment out there.  We start as SMEs and then grow into big companies. SMEs provide a lot of employment in Zimbabwe, so if all of us as MPs support SMEs, it will be good because most of our relatives are engaged in SMEs business. I thank you Madam Speaker.

*HON. CHITURA: Thank you Madam Speaker. I thank the Hon.

Members who presented this motion, Hon. Munengami seconded by Hon. Chidhakwa. The debate on SMEs is a very important one because even in rural areas, people are indulging in SMEs. If you are living a docile life you are frowned upon by the people. They believe as a small scale farmer you should be selling tomatoes, potatoes; but what hurts most is that when these people come from the rural areas, they come to sell their produce in the cities. Local authorities and security officers are at war with these people and they confiscate their goods yet the peasant farmer will be trying to irk out a living for the benefit of his family.

At the moment, we have some peasant farmers who have now engaged in harvesting thatch grass and sell for a living. We have the middle man who intercepts these people and take advantage of the ignorance of them; they benefit more than the farmers. As a result, I am calling for education on running small businesses so that people are not taken advantage of by the small scale farmers. I am now asking and pleading with Government to put aside some funds to assist the SMEs so that they may engage in small businesses to irk out a living for the benefit of their families and the nation. – [HON. MEMBERS: Hear, hear.]-

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

HON. KWARAMBA: I second.

Motion put and agreed to.

Debate to resume: Tuesday, 16^th August, 2016.

MOTION

FIRST REPORT OF THE PORTFOLIO COMMITTEE ON

MEDIA, INFORMATION AND BROADCASTING SERVICES

ON ZIMBABWE DIGITAL BROADCASTING MIGRATION

PROJECT

HON. DHEWA: I move the motion standing in my name that this House takes note of the First Report of the Portfolio Committee on Media, Information and Broadcasting Services on Zimbabwe Digital

Broadcasting Migration Project.

HON. MUKWENA: I second.

HON. DHEWA:

1.0 INTRODUCTION

Broadcasting as an industry and as a practice is an integral mechanism for the promotion of freedom of expression and access to information by members of the public. The broadcasting industry plays a crucial role in economic development through creation of employment opportunities. The broadcasting industry is critical in developing artistic talent and showcasing a nation’s culture and traditions to the world. In an effort to improve the broadcasting environment, the Government is implementing the Zimbabwe Digital Broadcasting Migration Project (ZDBMP), aimed at replacing the current analogue television broadcasting system to the new digital broadcasting platform in line with the International Telecommunication Union (ITU) requirements. During the Official Opening of the 3^rd Session of the 8^th Parliament, the President, His Excellency, Cde R. G Mugabe indicated that Government has embarked on a US$125 million digitalization programme. In addition, the 2016 National Budget Statement emphasised the importance of the project by noting that the Broadcasting Authority of

Zimbabwe (BAZ) had earmarked US$132 million from the Broadcasting

Fund for this purpose. Pursuant to its oversight function, the Portfolio Committee on Media, Information and Broadcasting Services resolved to conduct an inquiry into the progress made towards the Zimbabwe Digital Broadcasting Migration Project. This report also follows the

Committee's First Report on “Alignment of media laws and progress made towards fulfillment of digitalization” which was produced in the 1^st Session of the 8^th Parliament.

2.0 OBJECTIVES

The Committee was guided by the following objectives; viii.      To track and monitor progress towards fulfillment of the

Zimbabwe Digital Broadcasting Migration Project; ix. To evaluate value for money with regard to the work on the ground;

1. Identify challenges and prospects on both legislation and policy and; xi. Offer recommendations for improvements.

3.0 METHODOLOGY

The Committee employed the following strategies in its inquiry;

3.1 Oral evidence sessions.

The Committee conducted an oral evidence session with the

Permanent Secretary for the Ministry of Information, Media and Broadcasting Services, Mr. G. Charamba. The Committee was updated on the progress made regarding television digitalization programme as well as the Ministry's efforts on aligning media laws with the

Constitution. The Ministry of Information, Media and Broadcasting

Services establish a Steering Committee comprises of Transmedia,

Broadcasting Authority of Zimbabwe (BAZ) and Zimbabwe Broadcasting Corporation (ZBC) with BAZ acting as the head of the project, to manage the Zimbabwe Digital Broadcasting Migration Project. The Committee also received oral presentation from the Steering Committee and was updated on the work on the ground regarding the engineering aspect of the digitalization programme. In addition, the Committee received written submissions from the

Permanent Secretary.

3.2 Study Tours

In a bid to assess the nation's preparedness and in an effort to appreciate and understand the television digitalization programme, the Committee conducted a familiarization tour of ZBC studios and transmitters. The visit was conducted from the 11^th - 17^th of April 2016. The visit proved to be of value as the Committee received hands on information.

4.0 COMMITTEE'S FINDINGS.

4.1 The Permanent Secretary for Information, Media and

Broadcasting Services. Mr. G. Charamba.

4.1.1 In his presentation before the Committee, Mr. Charamba highlighted that the Ministry of Information, Media and Broadcasting was alive to the need to align media laws with the Constitution.

Currently, the Ministry administers two statutes; the Broadcasting

Services Act and the Access to Information and Protection of Privacy Act. The two pieces of legislation need to be reviewed due to new and emerging matters such as; the new Constitution, development in the broadcasting and print sectors since the promulgation of the laws, the macro-technological developments since 2000, the general expectations of the populace and the  goals of the country.

4.1.2 He articulated that the Ministry used to be occupied with the engineering aspect of the Zimbabwe Broadcasting Digital Migration Project. However, the country was slowly passing the engineering aspect and concerns are now on content production. Zimbabwe has chosen the (High Definition) HD as compared to the SD, hence 12 channels will be available after completion of the project. A SADC meeting in Windhoek, Namibia on digitalisation raised the issue of content production as a major challenge. Zimbabwe produced and shared its content production strategy which was adopted by the region. A content strategy should be versatile enough to fill all the platforms.

4.1.3 The Permanent Secretary explained that in the era of digitalization, the broadcasting sector needs the “Content Law” which in jurisdiction is called the “Film Act” or “World Vision Act”. The law would deal with matters of content, build institutions, deal with interface between content producers and content users, provides for conflict resolutions, deal with rights and obligations, royalty, intellectual properties and other related rights. Zimbabwe therefore, should be a content producer as well as protects the content and be able to market and create profits on the global scale.

4.1.4 It was also reported that the Ministry had already started to engage content producers throughout the country in anticipation of the completion of the digitalization programme.

4.1.5 After completion of the Information and Media Panel of Inquiry (IMPI) process, the Permanent Secretary indicated that the Ministry was working tirelessly to host a multi-stakeholders conference, to deliberate on the IMPI outcomes and recommendations. The conference resolutions would then be developed into policy and legislation.

4.2 UPDATE OF THE DIGITALISATION PROGRAMME.

4.2.1 The Zimbabwe Digital Broadcasting  Migration Project is funded by the Government of Zimbabwe to the tune of  about $172, 950

68. This is broken down as follows;

ITEM	COSTS
1. Equipment	2.  US$94 000 000
3. Services	4. US$31 000 000
5. Civil Works +Set Top Boxes	6.  US$47 950 068
Total	7. US$172 950 068

 

4.2.2 Fund Utilization: Payments to the Contractor.

4.2.2.1 Government contracted Huawei International to carry out the digitalization project at a cost of US$125 000 000 broken down as follows: US$94 000 000 for equipment; and US$31 000 000 for services. From these figures, disbursements to date are US$22 655

420.86 for equipment and services, including 10% advance payment. Equipment worth about US$17.3 million has been received. The equipment includes the following: Head- end equipment; Satellite

Uplink equipment; power systems for Head End, Satellite Uplink; Pockets Hill and transmitter sites; transmitter equipment and antenna systems for 8 sites; transmitter satellite receiver equipment; Regulatory Content Monitoring equipment; 6 new tower material; Pockets Hill equipment for 2 studios; Master Control Room and Play-out Systems; and 500 test Set Top Boxes. Equipment worth about US$16 million is ready for shipment pending pre – shipment payment. However, outstanding payments to Huawei to date is about US$19 million for both equipment and services.

4.2.3 Civil Works.

4.2.3.1 Payments relating to civil works amounted to US$5 144 474.37. These civil works include development of access roads to new transmitter sites. It was reported that construction of Chimanimani equipment room and electrification has been completed. In addition, 7 out of 8 transmitter room expansions have been completed at the following sites: Mutare, Nyanga, Kamativi, Kenmaur, Rutenga, Mount Darwin and Karoi. All 6 existing transmitter site antenna and de- installation are completed for Kamativi, Kenmaur, Mutare, Masvingo,

Harare and Bulawayo. Repair of 7 transmitter towers were completed for

Pocket Hills, Bulawayo, Kadoma, Masvingo, Chimanimani,

Mutorashanga and Gokwe. Tower inspection is currently being carried out to check completeness of repair work.

4.2.4 Progress on New Transmitter Sites Civil Works (access roads and tower foundation).

4.2.4.1 The Committee was well informed that 13 out of 15 civil works on new transmitter sites civil works (access road) were completed. Tower foundation works commenced on 16 transmitter sites. Four of the sites (Kotwa, Binga, Hwange and Bindura) have tower foundations ready for tower construction.

Head- end and satellite Uplink terminal civil works.

4.2.4.2 Satellite Uplink civil works was reported to have been completed. Furthermore, the Head- end equipment room renovations was also completed. Satellite capacity for initial signal distribution  was secured from satellite provider Eutelsat and US$893 592 initial annual licence fees had been paid.

4.2.4.3 Equipment installation.

The Head- end equipment had been installed at Pockets Hill. The satellite Uplink equipment installation has also been completed. Power system installation for Head-end and satellite uplink completed.

Installation of two digital  television studios, Master Control Room , Play- out system completed at Pockets Hill done as well as installation of the first batch of five digital transmitter sites, namely Kamativi, Kenmaur, Mutare, Nyanga and Susamoya has been  completed (transmitter equipment, antenna systems, power systems, cooling systems and satellite receiver equipment has been installed). Installation of the second batch of 7 digital transmitters has commenced with the Harare site already completed, for the remaining 6 sites (Bulawayo, Kadoma, Mutorashanga, Gokwe, and Chimanimani) equipment delivery has been stalled by outstanding payments to the contractor.

4.2.5 Engineer Training.

Thirty three graduate engineers commenced attachment on the ZDBMP from June 2015, bringing to a total of 46 engineers on the digitalization project. Orientation lessons, lectures on satellite systems, installation attachments and formal training on equipment operation and maintenance has been and is being provided to the graduate engineers.

4.2.6 Content Production (supply of content to the digital platform).

4.2.6.1. It was reported that once the digitalization programme is fully completed, the demand for local content would be enormous. With six channels available, ZBC alone will require 144 hours per day, which translates to 1008 hours per week, 4032 hours per month and 48384 hours per year. In order to stipulate and supply content to the digital platform, the Ministry has embarked on a vigorous outreach campaign to rope in independent content producers. In order to assist these independent producers, the Ministry is in the process of renovating production studios at Production Services and equipping them with state of the art equipment. In addition, production equipment will be availed to the producers not only here in Harare, but also in the other provincial capitals.

4.2.6.2 A Content Commissioning Committee has been created to assess content production proposals and requirements for access to production equipment and facilities by content creators. The Committee has already worked on the applicable frameworks for access to equipment and the criteria for assessing proposals. The Committee has started its work in assessing over seventy proposals that have been submitted so far, with priority being placed on content that is easy to produce. So far three production teams are in the field producing content.

4.2.7 Outstanding payment of about $19 million for the acquisition of Set Top Boxes and other equipment has stalled the progress.

4.3 DIGITALISATION TOUR: Pocket Hills.

4.3.1 The Committee on Media, Information and Broadcasting Services conducted a familiarization tour in a bid to assess the nation's preparedness towards fulfillment of the television digitization programme. The Committee had a chance to tour the ZBC, Pockets Hill where civil works have been completed as well as modernization of the studios.  Five cameras, high efficiency LED lights which are remote controlled for brightness and controlled manually for movement had been installed in the studios. All the studios were reported to be ready for use.

4.3.2 Master Control Room, Satellite Uplink, The Head- End and Power Rooms.

The Committee also has an opportunity to visit the Master Control Room. The Master Control Room receives signals for internal and external studios.  The play out system has six high definition televisions that are used for monitoring, play out and signaling. The power room consists of back up batteries and the Uninterrupted Power Supply (UPS) which lasts for more than 24 hours.  The Head End section consists of a 250 KVA power system generator which carries 2000 litres of petrol.  It is an Automatic Voltage System (AVS) and has Uninterrupted Power Supply (UPS). The Satellite Uplink system is installed and operational.

4.3.3 Kotwa Transmitter Site, Mudzi.

4.3.4.1 The Committee visited Kotwa transmitter site which is still under construction although the foundation and the first diamond had been completed. Civil works had also been completed by the District Development Fund who was contracted to do the roads. The Committee was informed that Kotwa is one of the twenty-four new sites.  Kotwa provides coverage to Mudzi, an area that never received TV or radio signals. In addition to Mudzi, the coverage is expected to go as far as

Pungwe, Kotwa, Nyamapanda and Chikoze areas. The Committee was also informed that all the new sites are areas which never had any signal before.  Kotwa site is still under construction and the villagers relied on broadcasting services from Mozambique.

4.3.4.2 The challenges raised by the Steering Committee included the problem of transportation of heavy materials due to the terrain of the area as well as lack of space to store materials. Materials to fully complete the tower were reported to be held in Germany due to delayed payments.

4.3.4 Cecil Kopje Transmitter Site, Mutare.

On the 12^th of April 2016, the Committee visited Cecil Kopje transmitter site in Mutare. Before the site visit, Transmedia hosted the

Committee to a demonstration of digital broadcasting at Amber Hotel. The Committee managed to watch the new ZBC channels that are ready to broadcast on a digital platform. In essence, Mutare community is ready to receive digital broadcasting. The demonstration showed that there is high quality signal as it stood at above 60%. The picture quality was perfect as it was at 100%. Members were informed that Cecil Kopje tower is completed with full installation of antennas.

The Committee was also informed that research was being done by the local engineers, in a bid to design low cost home aerial.  It also emerged during discussions that flat screens are analogue sets hence they also need Set Top Boxes. The Committee then proceeded to the Cecil Kopje site where members were informed that Cecil Kopje tower was completed with full installation of antenna. Installed on the place is the downlink dish and antenna panels, and the tower is 120m height.  The site also has an appropriate warehouse, fully equipped and security provided.

4.3.5 Mashava Transmitter Sitem Mashava.

From Mutare, the Committee proceeded to Mashava.  It emerged that Mashava is one of the twenty-four new sites, and one of the fifteen currently under work in progress.  The Mashava tower will be expected to cover areas such as Chivi, Masvingo, Shurugwi, Mashava, a 40 to 60km radius coverage. At the time of the visit, the constructor was still excavating and putting in steel reinforcements.  Authorization was granted to power the concrete and construction was expected to start after 1 and half month.  Civil works had also been completed by the

DDF.

4.3.6 Zvishavane Transmitter Site, Zvishavane.

The Committee proceeded to the Zvishavane site which is at the same stage as with Mashava.  Zvishavane site covers areas such as Filabusi, Mashava, and Shurugwi. Construction of the foundation had been completed and inspected. Therefore, the Contractor was expected to resume construction of the tower after 1 and half month.

4.3.7 Montrose Studio, Bulawayo.

The Committee also toured the Montrose Studios in Bulawayo, which is the regional station that mainly caters for the Matebeleland

Province.  It was reported that Montrose studios beginning Sunday the 17^th of April 2016, would broadcast Indaba from Montrose.  There are two new radio studios at Montrose.  The Montrose transmitter tower has been repaired and was  ready for the installation of antennas. The Committee further toured the control room and were informed that the floors need to be raised so as to install cables underneath. The two main television studio rooms were still under refurbishment.

The studios were simply being restructured to suit the digital studio. The equipment room was completed and ready to house equipment, however the said equipment is the one still being held in Germany. The Committee further toured radio stations that have been meticulous refurbished. The new radio station (Radio 4) will broadcast all the 16 languages, including  Khoi San, Tswana and Ndau just to mention a few in line with the requirements of the Constitution. One studio was designed to be a multi-purpose and can be used for both radio and TV.

4.3.8 Kenmour Transmitter Site, Kenmour.

Kenmour Transmitter Site is one of the newly constructed sites and covers a formerly disadvantaged area of Lupane, as television has never been transmitted in the area. Before the Committee toured the transmission site, it was subjected to a demonstration whereby the engineers proved beyond doubt that the area is ready to receive ZBC on digital format. Kenmour is one of the 6 completed towers  and can safely be reported to be digital now. During the discussions, it was suggested that a TV set and a STB be donated to the Kenmour centre and that the first set of STB be sold there so that the community has a feel of television for the first time in a long time.  The Kenmour site is also identical to the other sites, that is, it has a powerhouse, transmitter and a satellite dish. Kenmour has a 60km radius and  is 145m tall as it is on flat land.

4.3.10 Kamativi Transmitter Site, Kamativi.

The Committee then toured the Kamativi site where construction was completed. The Kamativi site is an existing site. The tower is 155 m high, free standing and cover areas such as Hwange, Dete, Fatima High, Binga and Manjolo a radius of 50-60km. The Kenmour site is also identical to the other sites, that is, it has a powerhouse, transmitter and a satellite dish.

4.3.11 Binga Transmitter Site, Binga.

The Committee's last point of call was Binga, the construction of the tower was still underway however, almost completed.  The Binga area used to receive transmission from Kamativi. The construction process started in October with the excavation work.  They chose a rocky site as it is more stable.  The tower is 120m high and it took 21 working days to erect the tower.  What is left now are the electronics and for civil engineers to do some checks and balances. Full completion of the tower would also be derailed due to the equipment still being held in

Germany.

5.0 COMMITTEE OBSERVATIONS.

5.1 After considerations of both the oral evidence sessions and fact finding mission, the Committee made the following observations;

1. Erratic or non disbursement of funds, especially the much awaited US$19 million, will stall progress and further delay the completion of the project. The Committee questions the commitment by the Ministry of Finance and Economic

Development to fund the programme.

2. The Committee welcomes the subsidy of Set Top Boxes (STB) prices from US$43 to US$25, by the Ministry of Information, Media and Broadcasting Services. However, the Committee notes that the price is still high and beyond the reach of  most citizens.
3. There is need for the Zimbabwe Digital Broadcasting Migration Project Steering Committee to do more on awareness, to educate the citizens on the project and equipment they need to buy.
4. Despite tremendous efforts on the ground to complete the project, the Committee notes that the Ministry of Information, Media and Broadcasting Services has not yet questioned the continual importation of non digital television sets. This will result in Zimbabwe being the dumping ground of non digitally compliant television sets.
5. The Committee noted that there are places ready to receive digital transmitter sites, such as Mutare, Kamative, Harare among others, these should be prioritized in terms of distribution of STB.
6. The introduction of subscription fees present a challenge considering that most residents were used to receive ZBC signals for free for a long time. This has an effect to the citizens right to access information as enshrined in the Constitution,

Section 62.

7. The Committee welcomes the training of engineers as a positive development. During tours, the graduates exhibited full understanding and appreciation of their duties and responsibilities.
8. The Committee observed that the digitalization programme was once reported to be self financing through the selling of the digital dividend to the tune of US$200 million. This is far much more than the budgeted US$172 million. The Committee raised concerns that the digital dividend was bought by Telone. However, there is no explanation on the use of the money which was meant for the project.
9. Injuries and one death were reported during construction of transmitter towers due to failure by contractors to adhere to safety standards.

6.0 COMMITTEE RECOMMENDATIONS.

The following are the Committee's recommendations; iii. The Ministry of Finance and Economic Development should disburse US$19 million by mid August 2016, to allow for equipment held in Germany to be released and allow for progress on the ground. The project may soon be a white elephant programme, if Treasury does not give enough attention to the project.

1. In addition, by end of August 2016, a disbursement plan should be negotiated and established between the Ministries of Finance and Information so as to ensure that the programme is not stalled.
2. Set Top Boxes should be further subsidized to US$10 and should be sold by Transmedia at specific identified buying points in the districts to ensure availability of the equipment to the rural areas.
3. Subscription fees should be US$3 per month in accordance with the KPMG Report recommendations.

• The Ministry of Information, Media and Broadcasting Services should explain to the National Assembly why the money raised through digital dividend was not channelled towards the Zimbabwe Digital Broadcasting Migration Project, a month after presentation of this report.
• The Zimbabwe Digital Broadcasting Migration Project Steering Committee should conduct awareness campaigns, to educate the citizens on the project and equipment that they need to buy. In addition, they should run demonstrations at various district centres by end of August.

1. The Zimbabwe Digital Migration Project Steering Committee should engage Members of Parliament as a strategy to facilitate public awareness, through provision of educational materials among others.
2. Transmedia should make efforts to ensure that STB are assembled locally as well as television sets that are digitally compatible.
3. Areas that transmitters are ready should be prioritized for STB distribution. In addition, the Steering Committee should run demonstrations at business centres throughout the country.

• The Ministry of Information, Media and Broadcasting

Services should gazette regulations restricting further importation on television sets that are non compatible. In addition, importation of digitally compatible television sets should be encouraged through a reduction of a duty. The 2017 National Budget should cover the above matter.

• Content producers should be allowed deferment of duty on imported operational materials or equipment as a strategy to encourage more content production.
• The Committee recommends that a programme should be developed to be able to retain the trained engineers and avoid human skills flight.

7.0 Conclusion.      

Tremendous progress on the ground has been done, as quite a number of transmitter sites are almost completed. The Zimbabwe Digital Broadcasting Migration Project is an important national programme which will revolutionarize the broadcasting sector and bring a lot of development through employment creation. Non payment for the equipment held in Germany will further stall progress that have been witnessed. The Ministry of Finance should prioritize the funding of the project.  I thank you.

THE VICE PRESIDENT AND MINISTER OF JUSTICE,

LEGAL AND PARLIAMENTARY AFFAIRS (HON.

MUNANGAGWA):  I move that the debate do now adjourn.

Motion put and agreed to.

Debate to resume:  Tuesday, 16^th August, 2016.

TABLING OF THE 2015ANNUAL REPORT OF THE NATIONAL

PROSECUTING AUTHORITY OF ZIMBABWE

THE VICE PRESIDENT AND MINISTER OF JUSTICE,

LEGAL AND PARLIAMENTARY AFFIARS (HON.

MNANGAGWA):  I, as the Vice President and Minister of Justice,

Legal and Parliamentary Affairs, pursuant to section 262 of the Constitution of Zimbabwe, hereby lay upon the table the Annual Report for the National Prosecuting Authority for the year ending 31 December,

2015. I thank you.

On the motion of THE HON. VICE PRESIDENT AND

MINISTER OF JUSTICE, LEGAL AND PARLIAMENTARY

AFFAIRS (HON. MNANGAGWA), the National Assembly adjourned at Twenty Three Minutes past Four o’clock p.m. until Tuesday, 16^th

August, 2016.