- Download 0
- File Size 574 KB
- File Count 1
- Create Date December 31, 2018
- Last Updated November 17, 2021
NATIONAL ASSEMBLY HANSARD 31 OCTOBER 2018 45 14
PARLIAMENT OF ZIMBABWE
Wednesday, 31st October, 2018
The National Assembly met at a Quarter-past Two O’clock p.m.
(THE HON. SPEAKER in the Chair)
ORAL ANSWERS TO QUESTIONS WITHOUT NOTICE *HON. CHIKOMBA: Thank you Mr. Speaker. My question is
directed to the Minister of Public Service, Labour and Social Services regarding pensions. According to labour laws, a person should work up to 65 years but due to illnesses, it is now difficult to reach 65 years. If a person dies earlier than 65 years, what will happen to the pension due to that person? It means NSSA will be just collecting these funds for its own use. We need to reduce the retirement age to 55 years. If the
Minister is not there, I direct the question to the Leader of the House.
THE HON. SPEAKER: We are suspending your question until
we get the Leader of the House.
HON. MASENDA: My question is directed to the Minister of
Finance and Economic Development. When Ministers and Senior Government official go abroad, they stay in lavish hotels and spend quite a lot, yet we are told that ordinary Zimbabweans should tighten their belts on expenditure. What does this mean? – [HON. MEMBERS:
Inaudible interjections.] -
THE HON. SPEAKER: Order, order! The Hon. Member who
asked the first question, can you repeat the question again?
*HON. CHIKOMBA: The health condition of the people in this country means that the people of Zimbabwe have had their life span reduced to 35 years before they can reach the retirement age of 65 years.
We are requesting the Government to reduce the pensionable age from 65 to 35 years because people have to benefit from their pensions.
If the worker or the spouse dies before their retirement age, what happens to their funds accruing?
THE MINISTER OF PUBLIC SERVICE, LABOUR AND
SOCIAL WELFARE (HON. DR. NZENZA): The retirement age of
65 years is policy; however it can be subject to review. So, when the time is right and we have gathered enough information, we will certainly take that on board.
*HON. CHIKOMBA: The Minister has just responded saying
when the time is ripe there is going to be a change. However, we need to have a time frame to when the action is going to be implemented on the reduction of the pensionable age from 65 years.
HON. DR. NZENZA: I am not able to give time limit at the moment. Thank you.
THE HON. SPEAKER: The second Hon. Member who asked a
question can you repeat your question straight to the point please!
HON. MASENDA: The question goes to the Minister of Finance
and it is in regard to travelling abroad by Ministers and Senior
Government official. We receive reports that they live lavishly and they spend big when they go abroad, yet there is an encouragement that ordinary Zimbabweans should tighten up their belts in terms of the economy. The question is: what does this mean in terms of Government sincerity to improve the country’s economic situation? Thank you.
THE MINISTER OF FINANCE AND ECONOMIC
DEVELOPMENT (HON. PROF. M. NCUBE): Thank you Hon.
Member for the question. On the issue of travel, there is no lavish travel. On the contrary we are very prudent as a Government. For instance on domestic travel in terms of vehicles, we have not authorised purchase of vehicles for Ministers.
Hon. Speaker Sir, I am talking about all travel. So, locally we have not authorized the purchase of vehicles for Ministers so far and also for Members of Parliament.
On travel abroad, again, there is no lavish travel, there is necessary travel, and there is no travel by me or any other Minster that I know on first class, absolutely not. On the contrary, one of our budget priorities is to cut back on the travel budget and on general waste by Government. You will hear me mention or rather mention this very strongly in my budget statement. I thank you.
HON. MLISWA: Hon. Minister you alluded to the fact that you have equally cut down on Members of Parliament’s vehicles compared to the Executive. Those are two different departments and Members of Parliament have a mandate to ensure that the effective running of the country comes from them. How can they be under-resourced? Can the Hon. Minister compare the expenditure on cars for the Executive and those for Members of Parliament?
We are only entitled to one car yet they have got a 4 X 4, Mercedes
Benz and they are also entitled to cars from parastatals. So, can the Hon. Minister justify why Members of Parliament are put in the same category when we are expected to perform? Can you please do that, thank you.
THE HON. SPEAKER: Order, order, Hon. Mliswa, you address
yourself to the Chair and not can you! Can the Hon. Minister please, kindly refer to your Standing Orders.
HON. MLISWA: Thank you Mr. Speaker Sir, I stand guided.
THE MINISTER OF FINANCE AND ECONOMIC
DEVELOPMENT (HON. PROF. M. NCUBE): Thank you Hon.
Speaker, in terms of vehicles for Members of Parliament, those will be taken care of in the fullness of time – we are working on it. We are aware that they have got a lot of work to do in terms of visiting their constituencies and running their programmes. We will do it but in the fullness of time. As of now, we also need to signal as the Executive and as Parliament that we mean business about austerity and that we are ready to meet the people of Zimbabwe halfway. I thank you. – [HON.
MLISWA: On a point of clarity Mr. Speaker!] –
THE HON. SPEAKER: Order, order, you cannot ask two supplementary questions.
HON. MLISWA: It is not a question but a point of clarity Mr.
THE HON. SPEAKER: On a point of clarity but please be brief.
HON. MLISWA: Hon. Minister, you said …
THE HON. SPEAKER: Hon. Minister!
HON. MLISWA: Hon. Minister, Mr. Speaker Sir, you mentioned in the fullness of time. Members of Parliament cannot work according to your schedule. They have a mandate, when are they going to get their cars?
ZANU PF Hon. Members were given cars before the elections and the Opposition including myself do not have cars – [HON. MEMBERS: Inaudible interjections.] - We cannot have a situation where there was money spent by the ruling party to buy the cars and members of the Opposition do not have cars – so it is not balanced. In terms of priority, can he then prioritise members of the Opposition to get cars because members of ZANU PF have got cars. – [HON. MEMBERS: Inaudible
THE HON. SPEAKER: Order, order, can you sit down please.
HON. PROF. M. NCUBE: Thank you Mr. Speaker Sir and I also thank the Hon. Member for the question that they posed to me.
First of all, the business of asset ownership, acquisition and disposal at political party level is the business of the political parties – [HON. MEMBERS: Hear, hear.] - It is not the business of the
Executive. Now, when it comes to the vehicles of the Members of Parliament, I did say that these would be provided in the fullness of time. We are obviously working on our budgets. I am going to be presenting a Budget Statement at the end of November on the 22nd – that is the date we have proposed. Then at that stage, I will be able to say when I am able to provide Members of Parliament with transport. I am acutely aware of the important work that they do – they do very good work. We will support them as much as possible but as of now, I am not yet ready to buy and provide them with those vehicles. I will do so in the fullness of time. They will be the first to know when I am ready because I will let them know. I thank you. – [HON. MEMBERS: Hear, hear.] –
An Hon. Member having whistled.
THE HON. SPEAKER: Order, order, I wish I had noticed properly the person who was whistling. We are not herding cattle here –
HON. GONESE: My follow up question to the Hon. Minister of Finance and Economic Development is whether he can inform the nation what policy measures the Government has taken in order to review, from a policy perspective, the spending on travel abroad? For instance, it has been reported that the Zimbabwean delegation to New York was staying at the most expensive hotel, the Waldof Astoria.
I would like the Hon. Minister to explain to this august House and to the nation at large, what specific measures have been taken to review the allowances which the Hon. Ministers and their delegations receive when they travel abroad in order to tighten their belts as the Hon.
Minister has indicated?
HON. PROF. M. NCUBE: Thank you Hon. Speaker Sir, and I
also thank the Hon. Member for that question. First of all, we have various stipulated rates for each destination to which we travel, whether it is the United States, Europe or whatever. There is a standard rate which is typically linked to United Nations and World Bank rates. So we make use of those rates in deciding on what level of allowances to provide to each member of the delegation and also depending on their level – that is the first point.
The second point I want to emphasise that I am not aware of and neither do we live in lavish hotels; we work extremely hard and live within the means of the budget that we can afford but also within the travel allowances in terms of globally accepted standards as per the
World Bank and UNDP rates. I am not aware of the hotel that the Hon. Member mentioned, hence I cannot say anything to that but we were living within our means.
He also asked what steps we were taking to curtail this? That is exactly what I had answered to an earlier enquiry by another Hon. Member which is that, in the Budget Statement we will be more precise in terms of our ideas about addressing the expenditure, overall whether you are looking at wage bill, travel and dealing with retirement policy.
Mr. Speaker Sir, all of this is contained in the Pre-Budget Strategy paper which I suspect Hon. Members have had sight of at least within their committees. Next week we will have the opportunity when we are in Bulawayo on the 7th to 11th to discuss further and go into detail as to how we are going to deal with the issues that they have just raised which are very important. I thank you.
HON. MKANDLA: My question is directed to the Minister of Finance and Economic Development. How is the Government going to deal with the Reserve Bank of Zimbabwe (RBZ) overdraft?
THE MINISTER OF FINANCE AND ECONOMIC
DEVELOPMENT (HON. PROF. M. NCUBE): Thank you again
Hon. Speaker and I thank the Hon. Member for that question.
The RBZ overdraft facility currently stands at about $2.3 billion. We have a strategy for dealing with it. We are aware and have already made it public that this is well above the 20% target where it should be in terms of expenditure for the previous year. It should not be more than 20% and we are way above that. We have acknowledged this in public and I have said so. We have opened books on this.
In terms of strategy for dealing with it, our strategy is as follows: first of all, we are going to curtail the use of the window when it comes to Government expenditure, by cutting Government expenditure in the first place. Secondly, we have unremitted taxes to the tune of $2.3 billion from ZIMRA, 50% of which private companies have not remitted to ourselves. So, we have got some liquidity out there that we use in part to cover that hole with the RBZ, but 20% of those remittances to us as Treasury are from parastatals and local authorities. We are aware of that. We are doing everything we can so that we can raise those funds.
Mr. Speaker Sir, if you add the interest on that $2.3 billion, it is an additional $1 billion. In actual fact, it is $3.3 billion out there that has not been remitted to us. We will collect it as aggressively as we can and we will make sure that this goes towards closing the hole with the
Reserve Bank of Zimbabwe. Thank you Mr. Speaker Sir.
HON. BITI: Hon. Speaker Sir, my question is to the Minister of Finance and Economic Development. In view of the fact that the biggest challenge we are facing is the challenge of over expenditure and budget deficit that is now over 25% of GDP; also, in view of the fact that
Zimbabweans are actually overtaxed, the percentage of our revenue to
GDP is over 30%. Why did the Minister introduce the transaction tax of 2% to the people of Zimbabwe when the challenge and obligation should be on expenditure retrenchment and not looking for more resources –
[HON. MEMBERS: Hear, hear.] –
THE MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. PROF. M. NCUBE): Hon. Speaker Sir, I
think that it is opportune that the Member of Parliament is a former Finance Minister and he has full knowledge of what it takes to run that office. It requires determination, energy and focus and sometimes you walk on your own. Let me come to the question. When it comes to the strategy for reducing expenditure and increasing revenue, you need to be innovative but the ultimate goal is to reduce the budget deficit.
It is quite clear that the budget deficit is double digit, which is quite high by African standards and also by global standards. As Treasury and the Minister of Finance, we are determined to cut this deficit down to single digit. In the Pre-budget Strategy paper, I have given a trajectory as to how the evolution of the budget deficit will look like over the next three years towards that lower single digit figure of below 4%. That is the roadmap to cut that down.
The strategy for reducing the deficit is twofold Hon. Speaker Sir. One is to deal with expenditure control on the part of Government. I have already explained that this I will deal with during the Budget Statement in terms of dealing with the Government wage bill and restructuring the Public Service. Here I do not walk alone, there is the Chairman of Public Service Commission, the Minister of Labour and Social Welfare, all my fellow Cabinet Ministers and the President. It is a concerted effort on how to handle the wage bill and the reform of The Public Service, cutting back on waste. The issue of vehicles that we spoke about earlier; all of that will be dealt with in terms of expenditure control.
On the support for parastatals, you would see that in our figures, we had to lend them something like US$500 million, which explains the overrun in the budget deficit that Hon. Biti mentioned. Again, we are accelerating the privatisation programme to make sure that those parastatals can be privatised as speedily as possible. I will come to revenue in a moment. I am still dealing with the cost containment measures. Privatisation is very important Mr. Speaker Sir, to make sure that Zimbabweans can participate; parastatals can be listed on the Stock Exchange and diaspora can also invest in some of these companies. Ultimately for Treasury and Government, we want to reduce the reliance of these SOEs on Treasury and that will help us curtail expenditure.
I switch now to the revenue side because we need both; cost containment and revenue side. This is what has happened Mr. Speaker Sir over the last ten years; the economy has expanded. That is why you noticed that a few weeks ago, we formally announced re-basing of the economy. Officially, the size of the economy has moved from $18 billion to about $25 billion and that is a 40% increase. This was not me, this is something that my esteemed Hon. Member knows about. Every five years, countries re-base whether in Africa or wherever, I can name them. It is normal and I can assure you that in another five years, we will re-base again. So in short, the economy has expanded. Just check the number of ‘mushikashikas’ as an indicator, on the road, you will agree with me that there is economic activity out there – [HON.
MEMBERS: Hear, hear.] –
Mr. Speaker Sir, not only the economy has expanded, the informal sector has grown substantially and there is scientific evidence to this effect. The question is - how do you design a tax system that is inclusive – [HON. MLISWA: Answer the question!] – That is what I am answering.
THE HON. SPEAKER: Order, order! With all due respect Hon. Mliswa, if you have got some supplementary question, you are allowed to do so. Please do not disrupt the response.
HON. MLISWA: I am sorry Sir but he is being academic – [HON. MEMBERS: Inaudible interjections.] – He is being academic like a professor at Harvard. He needs to give us the response – [HON.
MEMBERS: Hear, hear.] –
THE HON. SPEAKER: Order, order! Hon. Mliswa, do not contest the ruling of the Chair. Hon. Minister, if you may conclude.
HON. PROF. M. NCUBE: Thank you Mr. Speaker Sir. If I could proceed. It was important at the beginning for me to explain the rationale behind the 2% tax and that was the build up for me to get to the answer. When an economy is informalised Mr. Speaker Sir, one should design a tax instrument that is inclusive, that also touches on the informal sector. So, we decided to introduce an electronic transaction tax in the way that we proposed it but also we put exemptions because we are acutely aware that our population that is at the bottom of the pyramid, to use that phrase, transactions of $10 and below should be exempted, otherwise the tax becomes regressive. At the same time, we are acutely aware that corporates are also providing jobs. They are responsible citizens and they are paying taxes. There should be a cap on the amount of tax they pay overall through this 2% transactions tax.
There is also a list of other exemptions such as exemptions for instance for pensions, equity investments, money market and so forth. So, we believe that this tax will go a long way in making sure that we have an inclusive tax system. A tax system that will also help us stop the bleeding in terms of the size of the budget deficit and I will quickly switch to cost containment measures, that is cutting Government expenditure which I will announce at the time of the budget. I thank you Mr. Speaker Sir.
HON. BITI: I have a supplementary Hon. Speaker. Hon. Minister, for all intends and purposes, the country is in a recession. Therefore, introducing a tax and one that is so retrogressive, I say so because it treats everyone as equal; whether you are rich or poor, you will still pay the 2% transaction that is very cruel. So, you cannot introduce a tax and collect more when people are actually in a recession and need to spend. In addition to this, Zimbabweans have resorted to the use of alternative methods of payment including mobile phone transfers and electronic transfers because we cannot use our cash. Our cash disappeared because of the overdraft facility you were talking about. You cannot force us to use cashless money and then follow and tax. There is something cruel about that and you cannot do that.
THE HON. SPEAKER: Hon. Biti, you have made a statement
but there is no question.
HON. BITI: The question is that why is the Government imposing this additional transaction tax when we are in a recession? Why are you imposing the transaction tax when you forced us to abandon the use of cash because of the overdraft facility that was implemented by the Government?
HON. PROF. M. NCUBE: Thank you Hon. Speaker and thank
you Hon. Member for that supplementary question which will help clarify issues as I answer. First of all, Zimbabwe is not the first country in Africa or in the world to introduce this kind of tax. In other countries, the tax rate is even higher. It is much higher in other countries and 2% is not as high as in other countries. Secondly, the tax is not retrogressive.
On the contrary, it is progressive and I will explain.
The previous tax did not take into account the value of the transaction and that is why we amended it. It was really by the fact that you pay the same amount per transactions regardless of the value. This time around, it is linked to value. So, it is progressive in that sense. We actually corrected a regressive situation and turned it into a progressive tax. Hon. Speaker, it is also not correct to argue that the economy is in a recession. The economy is not in a recession. There is a technical definition of recession which is two successive quarters at least of negative economic growth. I submit that we have not had two successive quarters of negative economic growth, neither do we expect future growth to be negative. On the contrary, we have increased our projection of economic growth to the order of 6%. Thank you Hon. Speaker Sir.
HON. PHULU: The supplementary is whether the Minister is saying Government policy is to tax poor people who for instance pay school fees using RTGs as opposed to those who can source actual cash and have more money and can pay their school fees in cash?
HON. PROF. M. NCUBE: Thank you Hon. Speaker Sir, and I
thank the Hon. Member for that question. Clearly this new dispensation is not – [HON. MEMBERS: Inaudible interjections.] - THE HON. SPEAKER: Order at the back there!
HON. PROF. M. NCUBE: Clearly this new dispensation is not
anti-poor. On the contrary, it is pro-poor. We have explained this in our vision 2030 where we say that one of those pillars is to achieve inclusive growth, which really means that we are sensitive to those, if I can use the term at the bottom of the pyramid in terms of income. The issue was really to make sure that those who are in the informal sector are netted in and also contribute to the fiscus and they become responsible citizens. After all, those who contribute to the fiscus also have better citizenry priorities. They demand better services and accountability. So, it is important that everyone contributes to the tax revenue.
Certainly we are pro-poor and you will see that when it comes to the budget. This year we are going to comply with the constitutional provision that 5% of the budget should go to the provinces. We hope that the Hon. Member within their provincial council will make sure those resources are applied properly to programmes that will uplift the poor communities around the country. One of the variables we will use in the allocation formula is poverty levels. We have got an up to date poverty map of Zimbabwe by province and by district and our allocation, that 5%, will be according to that poverty map. Thank you Hon. Speaker.
*HON. KAPUYA: Thank you Mr. Speaker. My question is
directed to the Minister of Agriculture. What is Government policy regarding the dipping of cattle? This is because our cattle are dying from tick borne disease and yet we know that cattle are the measurement of wealth in our African culture. So, what is Government policy regarding dipping of cattle to prevent tick bonre diseases? – [HON. MEMBERS:
Inaudible interjections.] -
THE HON. SPEAKER: Order, order!
THE MINISTER LANDS, AGRICULTURE, WATER,
CLIMATE AND RURAL RESETTLEMENT (HON. RTD AIR
CHIEF MARSHAL SHIRI): Mr. Speaker Sir, cattle should be dipped on a regular basis so that they do not suffer from diseases caused by ticks. During winter, cattle should go at least once a month but if it is during spring, it means cattle should be dipping every week. We realise that in the time between January and May, we have diseases which come from this ticks and they cause cirrhosis and in many areas, cattle were killed by these tick borne disease. As a result, we ask farmers to liaise with their field administrators and Agritex officials on this.
*HON. S. CHIKWINYA: The question raised by the Hon.
Member was on the dipping of cattle and Government has embarked on command agriculture where farmers were given cattle and these cattle are now dying. We have noticed that we have people who are supporting the tender given to the Department of Agriculture to support these people in command agriculture. What is the Government procurement policy regarding the awarding of tender to supply farming implements to these farmers? They are supported by Queen Bee.
*HON. SEN. RTD. AIR CHIEF MARSHALL SHIRI: Thank
you Mr. Speaker Sir. I know there is a tender processing and there is also a procurement system and all these are being implemented in the command agriculture programme and as far as I am concerned, if we need something, we can go through the tender. At times there is a laid down process of procurement of that particular item which we want. As far as I am concerned, there was no abrogation of any rule on procurement or tender in supplies.
HON. CHOMBO: My question is directed to the Hon. Minister of Finance and Economic Development. Do you have any policy in place to address the black market crisis noting that now the black market has become the white market?
THE HON. SPEAKER: Just a minute Hon. Members, I seek your corporation. Since the Hon. Minister is going to give a Ministerial
Statement on the economy, I suggest that we waiver the question so that the Hon. Minister can give his Ministerial Statement and then from there we can ask the questions.
HON. MATSIKENYERE: Sorry Mr. Speaker Sir. I wanted to direct my question to the Minister of Finance and Economic Development.
HON. MAMOMBE: Thank you Mr. Speaker Sir – [HON.
MEMBERS: Inaudible interjections.] – [Laughter.] –
THE HON. SPEAKER: Order, order, Hon. Members at the back – [HON. MEMBERS: NdiZhou.] – Hon. Zhou, we are not at a rally here where we pronounce political slogans, stop it.
HON. MAMOMBE: Thank you Mr. Speaker Sir. My question is directed to the Minister of Home Affairs. We have seen recently the clamp down on people who are exercising their rights to demonstrate. A recent example is a clamp down on the Zimbabwe Congress of Trade
Union; people were beaten and harassed by the police. What is the
Government doing against that in case we are going to a police State.
Also we have seen the journalists who were recently harassed by the same police. I want to know what is Government policy in terms of harassment of Zimbabweans by the police? I thank you.
THE DEPUTY MINISTER OF HOME AFFAIRS AND
CULTURAL HERITAGE (HON. MADIRO): Thank you Mr.
Speaker Sir. I want to acknowledge the very important question from the Hon. Member. It is not Government policy for police to harass any citizen nor is there any citizen who deserves to be harassed. It is not true that the police deliberately harasses individuals. It is also a constitutional right – [HON. MEMBERS: Inaudible interjections.] – Mr. Speaker Sir, if there is anyone who wants to demonstrate, the right to demonstrate is provided for in our Constitution but one has to follow the law and the police is not there to approve or disapprove demonstration but only that citizens who want to demonstrate must follow the law. I am not aware of situations where any individual was harassed because they wanted to demonstrate. I thank you Mr. Speaker Sir.
HON. MAMOMBE: Thank you Mr. Speaker. My supplementary
question to the Minister who has just responded is to say that I have clearly...
THE HON. SPEAKER: Order, it is the Hon. Minister.
HON. MAMOMBE: Thank you Mr. Speaker Sir. To the Hon. Minister who has responded, my supplementary question is – I have clearly stated that there were members of Zimbabwe Congress of Trade Union who were beaten up and harassed by police during their demonstration in Harare recently. Also, I have given an example of the journalists who were recently harassed by the police. So these are some of the examples that I have clearly pointed out to. So, you cannot say Hon. Minister that there were no persons who were harassed by the police. I thank you.
HON. MADIRO: Thank you Mr. Speaker. The Hon. Member has asked a specific question and with due respect, I would implore on the member to put it in writing so that we investigate those specific cases.
We are not aware of that. I thank you.
HON. S. BANDA: Mr. Speaker Sir, they are tankers which are right outside there, are we in a state of war because every time we come here we find that there are always those tankers. So, those guys who are coming from that side are the ones that are going to beat people who are going to demonstrate. My question is, are we now in a milieus state? I thank you – [HON. MEMBERS: Inaudible interjections.] -
THE HON. SPEAKER: Order, that question does not follow –
[HON. MEMBERS: Inaudible interjections.] –
*HON. NYABANI: Thank you Mr. Speaker Sir. My question is directed to the Minister of Primary and Secondary Education. What is Government policy regarding the difference between the quality of education for learners in urban areas and rural areas. Learners in rural areas are deprived of learning materials and yet their counterparts in the cities have a lot of learning materials which put them way ahead of their rural counterparts. What is Government policy on leveling the playing field in primary education?
*THE MINISTER OF PRIMARY AND SECONDARY
EDUCATION (HON. PROF. MAVIMA): Thank you Mr. Speaker Sir.
I am also grateful for the Member from Kushinga who has asked this pertinent question. As Government, we have put down some plans which are implemented by different departments and Ministries which are aimed at uplifting the learning environment for the rural learners. We know that in most instances there were a lot of areas in rural areas which had no schools and as of now we are in the process of contructing 17 schools which should be completed before year end. The combined enrolment of these schools is 10 000 pupils and most of these pupils were learning in open spaces, some in tobacco barns or any other unsuitable learning space.
We also have a policy which we want to introduce in Parliament where we will talk of the Education Building Fund. This will be in attachment to the Amendment to the Education Act. This follows that when we have crafted the Education Fund, we will then take it to the Ministry of Finance and then we write joint venture agreements and Memorandums of Understanding which are aimed at building schools which will be adequate for learners in rural areas. These schools should be nearer to where these learners stay. Our target is to construct about 2 000 new schools.
The second plan which we have at hand – [HON. BITI:
Nokudzidza kwawakaita ikoko unganyepa kudaro.] –
THE HON. SPEAKER: Order, Hon. Biti can you withdraw your
HON. BITI: I withdraw the fact that he is lying.
HON. PROF. MAVIMA: The second plan which we have is that
in the past few months, my Ministry has been distributing literature to 6 000 schools. This literature was aimed for the teachers and learners but targeting the impoverished schools. As we speak, we have 700 mobile science laboratories which are under manufacture and these will be distributed to rural schools because we realised that science education was not in the right proportion, especially when we compare with schools in urban areas.
The Ministry of Higher and Tertiary Education, Science and
Technology Development gave us some funds so that we construct 10 laboratories targeting learning institutions in rural areas. We have also asked for additional funding from the Ministry of Finance and Economic Development so that we construct another separate 10 science laboratories in rural areas. When you look at all these programmes, they are aimed at giving equal education opportunities for both rural and urban learners - because we believe that in some instances, parents are capable of supporting themselves but others cannot. We know that we have some potential engineers in rural areas like Dotito and Tsholotsho who cannot support themselves so they need Government support. I thank you.
*HON. G. SITHOLE: Thank you Mr. Speaker. My
supplementary question to the Minister of Primary and Secondary
Education is what is Government policy following Section 75, which says that those learners who are supposed to have support from the Basic Education should have their support readily and easily?
*HON. PROF. MAVIMA: Thank you Mr. Speaker. The
programme which is aimed at giving free basic education is a topic which is under discussion and what I would like to inform Hon. Members of this august House is that the amount which is needed for a country to have free basic education is the money which is supposed to be generated from within the country. We cannot borrow funds for such a programme. If we say today we want to have free basic education, it means we have to increase our taxation levels so that we accumulate funds for this programme.
We are all aware that as of now our financial position does not allow us to have free basic education because the only taxes which are making education possible are the taxes that are levied against the parents which they use as school fees and other levies. From these levies we are collecting $1 billion from parents and then $1 billion from Government. As a result we are running our education programme on $2 billion per year. I thank you.
*HON. NYABANI: My supplementary question is, is it not
possible that when people are looking for learning positions in local universities, preference be given to people who come from rural areas? This is because people in urban areas have easy access to some of these institutions but preference and favouritism should be given rural areas students.
THE HON. SPEAKER: That question does not arise because the
Hon. Minister said he would want to rationalise the quality of education of both urban and rural centres so that there is quality assurance at these two centres.
*HON. CHIKWINYA: My supplementary comes from the
response given by the Minister when he talked about the construction of science laboratories in rural areas. As of now, some of the examinations in science subjects need these learners to be engaging in practical subjects, but when we look at the situation that these learners do not have laboratories why do we not have a new way of asking – asking questions which does not involve the use of laboratories but ask general questions, so that we do not disadvantage those students in rural areas?
THE MINISTER OF PRIMARY AND SECONDARY
EDUCATION (HON. PROF. MAVIMA): I would like to thank the
Hon. Member for that question but this House should be informed that in 2014, the Ministry distributed science kits to every secondary school in this country. Learners at all the secondary schools have been engaging in science practicals based on those science kits that we distributed. This year Mr. Speaker Sir, in preparation for the Combined Science practical examination the Ministry engaged all our secondary schools to make sure that they were ready for that practical. I am actually glad to say that Combined Science practical was written yesterday with very little logistical problems encountered because of the preparations that we had made as a Ministry and our examination council, ZIMSEC. Thank you
*HON. MUCHENJE: My supplementary question to the Minister is that he has said they want to construct more schools targeting rural areas so that children are near their schools. What is the Ministry’s position regarding the teachers because at the moment these learners have problems of traveling long distances, because teachers shun these rural areas due to poor conditions. What plans has the Government put in place so that these new schools are properly staffed with qualified teachers?
HON. PROF. MAVIMA: Thank you Hon. Member for that very important question. We have a teacher establishment of 122 000 and we have a shortage or rather a vacancy rate of 12 000. The matter really is between us as Ministry, Ministry of Finance and the Public Service Commission. We currently have a general freeze because of the fiscal situation that prevails in the country which has not allowed us to recruit those teachers that we need in order to fill those vacant positions. I am assured in discussions with the PSC and the Ministry of Finance that as soon as the fiscal situation permits we will be able to recruit those teachers to fill those positions. Thank you.
HON. RAIDZA: My question is directed to the Minister of Industry and Trade regarding the shortage of basic commodities. We understand the Government has amended Statutory Instrument 122 of
2017 as a temporary measure. What long term plans do they have as a Ministry?
THE MINISTER OF INDUSTRY AND TRADE (HON. N. M.
NDLOVU): Thank you Hon. Member for the question. My Ministry has amended SI 122 of 2017 and this is a temporary amendment where we continue to monitor the availability of goods. To address the Hon.
Member’s question, the long term plan is that we continue to support the local producers with forex allocation and when we note that we are able to supply our local industry we will be able to review the amendments. I thank you.
HON. HAMAUSWA: My supplementary question relates to other bottlenecks, especially related to border controls. We acknowledge the amendment of the Statutory Instrument but there are other issues like when people …
THE HON. SPEAKER: What is your supplementary question please?
HON. HAMAUSWA: My supplementary question is, what is the Ministry doing to remove other bottlenecks, especially related to the importation of goods? For example when you are importing goods from outside, the Government says you only import four items duty free and we have other people who are being affected. What is the Government doing on that?
HON. N. M. NDLOVU: I wish again to thank the Hon. Member for the question. With regards to border control Mr. Speaker Sir, I wish to get clarity from the Hon. Member. He raised an example which is not controlled by my Ministry in terms of the goods or quantities that you are allowed to bring in. I can only comment on what is under my purview, but from his question that is not under my Ministry. I thank you.
HON. MADHUKU: My question is directed to the Minister of Health. We understand that the cholera epidemic has been contained. What efforts are been made by the Ministry to ensure that this epidemic does not recur?
THE HON. SPEAKER: Order, order. This question was dealt with very extensively previously by the Hon. Minister of Health where he indicated to this august House that teams were established in all provinces, and in some cases in districts to deal with the matter.
HON. MADIWA: My question is directed to the Minister of Public Service. What measures are you going to take to ensure efficiency in the Public Service on the issue of placement, especially of senior government officials with relevant skills for a particular job and those who are already in the service on a particular job but without the relevant skills.
THE MINISTER OF PUBLIC SERVICE, LABOUR AND
SOCIAL WELFARE (HON. DR. NZENZA): Thank you Mr. Speaker
Sir. The Public Service Commission will be undergoing a review and the purpose of the review is to identify the right skills for the right jobs and also to provide adequate training for those who require training. At the same time, I would also like to point out that there will be performance management systems and also reward mechanisms. Thank you.
HON. SIKHALA: Thank you very much Mr. Speaker Sir. My
question is directed to the Minister of Home Affairs. There was a very critical policy pronouncement that was done by the President during the time when he started taking over the controlling of this country concerning issues of human rights. From that specific policy, he mentioned by name that the Government of Zimbabwe is going to make sure that they are going to find the whereabouts of Itai Dzamara. How far has the Government gone, it is now three years and eight months after the disappearance of Itai Dzamara. How far has the Government gone in finding the whereabouts of him as announced by the President?
THE DEPUTY MINISTER OF HOME AFFAIRS AND
CULTURE HERITAGE (HON. MADIRO): Thank you Mr. Speaker Sir. Whilst the Hon. Member has asked a very important question, the question is very specific. The question the Hon. Member has asked is specific to Dzamara, a particular person. I would say that it is work in progress and can the Hon. Member put that in writing.
THE HON. SPEAKER: I think the Hon. Deputy Minister is right.
Can you put your question in writing so that it can be dealt with next week?
*HON. ZWIZWAI: Mr. Speaker Sir, the issue regarding Dzamara
has been discussed for quite a long time. The High Court ordered that we are supposed to be given a briefing on the disappearance of Itai Dzamara and what we need is a Ministerial Statement.
Mr. Speaker, you also made a ruling that Parliament is not a rally; we should not put on party regalia. I have noticed that Hon. Mutodi is putting on some party regalia; he is putting on some insignia written Mnangagwa. Will it also be fair for us to bring something written
Chamisa on our person? - [HON. MEMBERS: Inaudible interjections]-
THE HON. SPEAKER: Order, order!
*HON. MATAMBANADZO: Thank you Mr. Speaker Sir. My
question is directed to the Minister of Local Government, Public Works and National Housing. What is the policy statement on vendors? There were vendors who were working at those places where they were supposed to be operating from. They listened to what the Government had instructed that they should move off the places where they were operating from as a way of fighting cholera. Right now, these people are still operating away from their centres and are now asking for Government to grant them the permission to return to their places of operation which were officially allocated to them since the cholera epidemic has been contained. Do you have a day which you are going to announce that people should move back to their former places of operation?
THE HON. SPEAKER: I had not made a ruling before the Hon. Minister answers. It is common cause that there was a public statement that there would be some periodic narrative on the question of Dzamara.
So the Hon. Minister can prepare a Ministerial Statement to update the House.
*THE MINISTER OF LOCAL GOVERNMENT, PUBLIC WORKS AND NATIONAL HOUSING (HON. J. MOYO): Thank
you Mr. Speaker Sir, the Hon Member asked a pertinent question. What we know about cholera is that it will not be eradicated forever but we should make preparation for fighting it. One of the ways of fighting this is vending but we are saying that we cannot prohibit vending. All we are saying is asking local authorities to prepare specially selected areas for vending which will help in eradicating and resurfacing of cholera.
As we speak, most of the local authorities are working on new vending areas and some of them had even allocated some prohibited places for vendors to carry out their activities, hence the local authorities are busy on that exercise. As a Ministry, we are saying, which are the most likely places to have cholera? We identified some hot spots whereby should the rains come without adequate preparations there can be a cholera outbreak.
Currently, we have places like Buhera where there is a cholera outbreak because we have some people, for religious reasons who do not access medication. We are educating them on the best practices of preventing the contamination and spread of cholera.
Questions Without Notice were interrupted by THE HON.
SPEAKER, in terms of Standing Order No. 64.
BUSINESS OF THE HOUSE
THE MINISTER OF JUSTICE, LEGAL AND
PARLIAMENTARY AFFAIRS (HON. ZIYAMBI): Thank you Mr.
Speaker Sir, the Minister of Finance and Economic Development has a Ministerial Statement to give. So I move that we suspend Questions with Notice and allow the Hon. Minister to proceed to give his Ministerial Statement. I thank you.
THE HON. SPEAKER: Order, order may I now call upon the
Hon. Minister of Finance and Economic Development to make the Ministerial Statement. Please, you can write down areas of clarification so that we do not waste time.
Motion put and agreed to.
STATE OF THE ECONOMY
THE MINISTER OF FINANCE AND ECONOMIC
DEVELOPMENT (HON. PROF. M. NCUBE): Thank you Mr.
Speaker Sir. I would like to give a very short statement on the state of the economy. I will give a detailed analysis when we have a retreat next week in Bulawayo with Hon. Members of Parliament as we discuss the Budget and also at the end of November there will be a more detailed analysis in my Budget Statement.
Mr. Speaker Sir, in terms of growth, the global economy is projected to grow at 3.7% for both 2018 and 2019 and this is robust growth that is mainly driven by what we call emerging markets. I mention this so as to put in context the growth projections for Zimbabwe to say that in terms of that prognosis, we are among the highest growing countries in Africa and around the world. The partial recovery in commodity prices globally has really driven the uptick in global growth and also the impact, especially in the United States of the cut in taxes has fueled growth in that economy. If we look at some of the drivers that pertain to Zimbabwe really in terms of broad drivers is China’s growth. China is projected to grow at about six and a half percent at least per annum and that growth in China has a strong relationship with the outlook for commodities given that Zimbabwe is a commodity producer. So it matters to us that the economy continues to perform well – it augers well for the outlook of commodities.
In that realm, India continues to grow strongly and that again is helping prop up commodity prices which augers well for our mining sector. Looking closer home in the region and in sub-Saharan Africa itself, we notice that the growth rate for sub-Saharan Africa is about 2.7
% but expect it to be higher next year to 3.8%. Again, you will see why
I mention this in the context of how Zimbabwe is doing. The oil price continues to move sideways, well above the $75.00 per barrel. This helps those countries that are oil producers but it does not help Zimbabwe at all because we are a net oil importer. So this is something for us to stay concerned about in terms of fuel prices. Neighbouring countries as we know, to the west of us, have already increased the price of petrol in the last few weeks in response to these strong oil prices. Again driven by the strong growth and demand from the so called, emerging markets.
Moving closer, as you can see I am slowly zeroing in onto
Zimbabwe and giving our own global context. Under the new
Government, there is a gradual restoration of business confidence in
Zimbabwe and truly Zimbabwe is open for business. In the first half of 2018, the Zimbabwe Investment Authority (ZIA) received 165 applications worth $15.8 billion over and above the investment inquiries with various line ministries and other individual companies.
Mr. Speaker Sir, Government is pursing the various investment inquiries with the objective of increasing the share of external investment from US$1.8 billion anticipated in 2018 to US$2 billion that we anticipate next year in 2019.
Meanwhile, the economy is expected to surpass its initial budget growth projection of 4.5% to 6.3% in 2018, riding on strong performance in sectors such as agriculture which is showing growth of about 12.4%, the mining sector showing growth of about 26% and the construction sector showing growth of about 14%. I have with me Mr. Speaker Sir, in my written statement, a table on how all the various sectors are performing so that we know which ones are the levers that are really driving this economy and perhaps pointing to where we should apply our energies and policies to stimulate growth.
Growth in agriculture is premised on solid performance of cash crops such as tobacco, cotton, sugar cane and soya beans. The first half performance in minerals such as gold, coal and chrome also point to better prospects for 2018 compared to 2017.
The services sector such as transport, communication and distribution are also anticipated to make average contribution to GDP growth of 5%. Now, turning to inflation which really speaks to the domestic value of currency and purchasing power, Mr. Speaker Sir, the rising money supply occasioned by budget deficit financing coupled by foreign currency shortages has seen a surge in inflationary pressures during the first half of 2018. Annual inflation stood at 5.4% in September 2018, with signs of resurgence compared to the first six months where it was relatively stable. On the paper, I have a graph showing the trend in inflation, which is showing this upward trend Mr. Speaker Sir.
- The main drivers of inflation during this period have been parallel market exchange rates driven by foreign currency shortages, giving rise to speculative demand, as well as, induced demand from US dollars as a an asset. The eventual pass through effect of rising exchange rate premiums has been filtered into sudden price increases, particularly on basic goods and commodities. This was worsened by firming oil prices and the depreciation of the South African Rand against the United States Dollar. I have in my statement Mr. Speaker Sir, data and information on the state of public finances.
In terms of tax revenues, up to September, we have collected something to the tune of $3.8 billion, just to give a signal that we are doing well. As of yesterday, my team at ZIMRA confirmed that we have met our target for the year in terms of ZIMRA collections and chances are of course we will surpass the target for 2018 and hope to even do better in 2019.
- have to mention as well that companies have not been remitting what they have been collecting in terms of PAYE, VAT and so forth and we are owed a principal amount of $2.3 billion and then we add an interest of $1 billion, taking it to $3.3 billion. This will go a long way in covering the hole regarding the Reserve Bank window where we have been borrowing.
- Speaker Sir, with cumulative revenues of $3.824 billion and expenditures of $6.278 between January and September, the resultant budget deficit of $2.454 billion is unsustainable in light of the constrained capacity to close the gap. Financing of the deficit was through Treasury Bill issuances, which some Members of the House could be aware of. We are determined that going forward, the issuance and sale of Treasury Bills will be through an auction system as opposed to a direct placement system. An auction system will allow us and the players in the market to achieve a better price discovery and could save us a few percentage points in terms of interest that we ought to pay on those Treasury Bills. Also, as Treasury Bills mature Mr. Speaker Sir, we will make sure that we lengthen the maturity of the Treasury Bills so that we can grow what is called a ‘hill curve’ which is a very important instrument in the financial markets for the pricing of all assets in the market. Lengthening that hill curve by reissuing longer dated paper is the way to go but also it spreads the liability to Government over the years.
- have to say something about the Central Bank facility window which again will close as we go forward. I have got figures as to what it looks like month to month from January to August, which I will be able to share if so requested.
- The money supply stock stood at US9.14 billion in June 2018, translating to a year on year growth of 40.81% from US$6.49 billion in June 2017. It is projected that money supply will grow by 38.2% in 2018 compared to an initial projection of 20.14% and this growth has been largely driven by net claims on Government.
Looking at the nature of domestic credit; the split between the portion going to the private sector and portion going to Government, the split is as follows: the credit to Government is 61.77% compared to obviously the residual which is 32.39% for the private sector. Clearly, the private sector is being crowded out, hence we are determined. I said earlier that we will make sure we reduce the budget deficit, rationalise the issuance of Treasury Bills to make sure that banks and individuals are not drawn to watch Treasury Bills because of the interests rates and because they are safe but also feel the need to take risk and lend to the private sector so that it can continue to create jobs and grow our exports.
- Mr. Speaker Sir, exports of goods and services are projected to close the year at US$5 billion in 2018, largely driven by mineral and tobacco exports whilst overall, imports of goods and services are projected to be US$7.3 billion for the same period. Mr. Speaker Sir, actually as a country we have what we call a twin deficit problem, which is your balance of payments deficit as shown by the gap between exports and imports and also a fiscal deficit as I have explained before.
I would now want to mention two other issues Mr. Speaker pertaining to external engagement that given the size of external debt and the fact that we are in arrears. I have specific questions on that and I can give specific figures. We need to engage our external partners which are basically at two levels. The first level is what you call your preferred creditors, which is the World Bank and the African
Development Bank whom we owe about $1.8 billion. So, without clearing these arrears with these two institutions, we have difficulties in restoring our credit standing. We are determined as Treasury and Government that we clear these within the first 12 months. Of course, the challenge for us is to clear both at the same time.
Once we have done clearing these two institutions as a first phase, we will then switch to what we call the Paris Club. I have had extensive negotiations with members of the Paris Club one on one in Bali and I continue to meet the ambassadors locally who obviously represent the various countries. We owe the Paris Club members another $2.8 billion and we continue to engage them on this as part of our arrears claims.
This will restore Zimbabwe’s credit standing if we are successful. There has been debate as to whether we should follow the HIPC route, none HIPC route and so forth. It is not for us to choose the routes. This is something that is negotiated and almost dictated by the credit base. Quite clearly, we are open to whatever route gives us relief as a country and restores our credit standing.
Finally Mr. Speaker Sir, I want to say that the state of the economy, the budget principles and whatever we desire to do in the budget all stems from the transitional stabilisation programme, which is a programme that is designed to restore stability to the economy and create the base for us to move to that aspirational upper middle income country in 2030. External engagement, restoring the fiscal balance, dealing with the current account deficit issues, privatisation, improving environment of doing business, financing of agriculture et cetera, all those issues are dealt with in the TSP and I urge all Members of Parliament to familiarise with the document so that we can all work together and improve the lives of our Zimbabweans and I urge every Member of Parliament that it is now all hands on deck. Thank you Mr.
THE TEMPORARY SPEAKER (HON. MUTOMBA): Thank
you Hon. Minister. May I now give Hon. Members time to ask pertinent questions that are relevant to the Ministerial Statement and also to raise areas that you need some further clarifications and no debate.
HON. BITI: Thank you Hon. Speaker. I have got a question to the Minister of Finance. You have indicated that you are going to move to a system where you auction Treasury Bills and my question is in light of the fact that there is clear evidence of increased revenue. You have indicated that ZIMRA has already met its target for year ending 2018. Why do you need to continue borrowing and why are you not pursuing fiscal consolidation? Why are you not abandoning Treasury Bills absolutely so that you live within your means because if your revenue is increasing, surely you do not need to borrow?
You also speak of a growth rate of above 6%. My question to is what is the component of the increase in revenue attributable to inflation, in this case hyper-inflation? All of us are going through shops and we are living hyper-inflation. Some Scholars for instance Prof. Steve Hanke are calculating our inflation to over 200% annualized. So, the growth you are projecting, what is the extent that is predicated on inflation?
On the debt question, you seem to suggest that you are going to find money to clear the arrears and my question is, what country is going to give you the almost US$2 billion that you would require to pay off the arrears to the World Bank? Finally, when the Minister came from Bali, he indicated that they were going to pursue HIPC but I find that a contradiction in view of the fact that you have rebased the economy to US$25 billion. Therefore, we are no longer low income country, which is the qualification for HIPC. You have to be a low income country. So, I find that a contradiction in that on one hand we are calling ourselves a middle income country but on the other hand we still see HIPC as an option because it is only available to low income countries. I thank you Mr. Speaker.
HON. MLISWA: Thank you very much. Mr. Speaker Sir, there was the issue of domestic resource mobilisation which was the anchor in terms of growing the economy. It was the mantra of the then Minister of Finance Hon. Chinamasa that we would be able to grow our economy through the domestic resources which are available. We even went on a pre-budget seminar to Bulawayo if Members of Parliament recall, but it does not talk about production from the domestic resources mobilisation in attending to the resuscitation of the economy. Economy can only be resuscitated through the resources of the country. The Minister does not talk about that. So, what other means has he got to be able to grow the economy? He is bent on taxation. Which country has ever sustained an economy through taxation?
The reason why the Minister has a bill from ZIA, an account of US$165 billion of applications but he does not talk about how much money has come in. These are applications and the reason why they are not coming in is the taxation system. We are sitting with over 30 or 40 taxation programmes in a country. When the investors get to that, they do not bring in the money. So, US$165 billion application means nothing if nothing has gone into action. We might as well forget about that. Why is it that those applications have not been approved?
The Minister again talks about the issue of cutting down on the
Executive. Mr. Speaker Sir, the Minister must understand that this Parliament has endured this for a very long time. Executive expenditure will be cut down and there is no timeframe. We cannot operate on an economy without a timeframe. It is impossible. The Minister must be able to tell us because we represent people and when we go back to the people, they want to know when the economy will take off. That can only happen when the Minister is clear in terms of articulating the timeframes. So, I would want to understand – [HON. MEMBERS: Inaudible interjectionsi.]- Hon. Members, you do not have the intellectual capacity that I have. – [HON. MEMBERS: Inaudible interjections.]-
THE TEMPORARY SPEAKER: Order, order Hon. Members.
Order Hon. Mliswa, order in the House.
HON. MATANGIRA: On a point of order Mr. Speaker Sir.
THE TEMPORARY SPEAKER: My point of order is that the Hon. Member has used...
Hon. Zwizwai having stood up talking.
THE TEMPORARY SPEAKER: Hon. Zwizwai,
taakuzotandanisana manje muno umu. Hon. Mliswa, I am quite surprised that you seem to be showing some disrespecting attitude towards your Chair.
HON. MLISWA: Why is Hon. Matangira standing up?
THE TEMPORARY SPEAKER: I have recognised him because
he has raised a point of order. I am quite surprised Hon. Mliswa. That is so unparliamentary language. What is your point of order Hon.
HON. MATANGIRA: My point of order is that in this august
House, we should treat each other as Hon. Members because you cannot talk of members who have no mental capacity. – [HON. MEMBERS:
Inaudible interjections.] -
Hon. Matangira having continued to speak.
THE TEMPORARY SPEAKER (HON. MUTOMBA): Hon.
Matangira, go out.
Hon. Matangira left the House.
- [HON. MLISWA: Waitengesa kuna Grace, wakarohwa iwe and some inaudible interjections.] -
THE TEMPORARY SPEAKER: Hon. Mliswa out – [HON.
MEMBERS: Inaudible interjections.] –
Hon. Mliswa having continued to insult Hon. Nguluvhe.
THE TEMPORARY SPEAKER: Hon. Mliswa out. Please
Sergeant-at-Arms escort Hon. Mliswa out.
Sergeant-at-Arms escorted Hon. Mliswa out of the House.
THE TEMPORARY SPEAKER: Order in the House.
HON. NDUNA: Thank you Mr. Speaker I have a few points for
clarity. The first one is we are currently getting paid in RTGs – [HON.
MEMBERS: Inaudible interjections.] – We are currently getting paid in RTGs; I just want to know when the Minister is going to address the disparity because prices have gone up and the shops are asking...
An Hon. Member having stood up.
THE TEMPORARY SPEAKER: Hon. Member why are you
standing up? Hon. Nduna can you please continue.
HON. NDUNA: When is the Minister going to address the disparity between the RTGs and the US dollars because we are currently getting paid in RTGs but the shops are asking for US dollars and there is a disparity that is the first one? Secondly, – [HON. MEMBERS:
Inaudible interjections.] –
THE TEMPORARY SPEAKER: Hon. Members, can the Hon.
Member be heard in silence.
HON. NDUNA: Mr. Speaker Sir, the Minister spoke about the
40% in terms of growth in the construction sector. This is what has been said, what I need to know is the contractors that have been subcontracted by the Government get paid maybe in 10 – 15 or 30 days. How is the Minister going to secure the strength or the value of the monies that the contractors are owed? Yes, there is growth in terms of 40%, but as they are paid 30 days later, the value of their monies through RTGs will have been eroded.
The third one Mr. Speaker Sir; we saw the barrel of fuel go down globally from US$120 to US$40 in some year, but Zimbabwe did not get any benefit in that time. The price of fuel in Zimbabwe remained the same – [AN HON. MEMBER: E.D.] – is there going to be a downward review of the price of fuel in Zimbabwe when the global average or the global price goes down as you have alluded to US$75 per barrel currently? If it goes down to US$70 or US$60 per barrel according to global trends, are we going to see a downward review? If we are not going to see a downward review in Zimbabwe is there a reason why?
The last one is what earlier on the Minister alluded to the growth of our economy attributing it to the proliferation of the umushika-shika.
There are thousand vehicles that are being registered monthly by Central
Vehicle Registration (CVR) and those mushika-shika cost minimum
US$4 000 from Japan or ex South Africa. If you multiply that by US$4 000, this is US$4m going out of the country in terms of US dollars hard currency each month.
At some point as a Committee Chair of Transport, I put across a proposition that if you could bring in these companies, warehouse –
[HON. MEMBERS: Inaudible interjections.] –
THE HON. TEMPORARY SPEAKER: Order Hon. Nduna, may
you be reminded to ask questions and not to debate like I said earlier on.
HON. NDUNA: Thank you Mr. Speaker Sir, it is the last one. It was my proposition for revenue generation that we bring in those companies that are selling the mushika-shika at US$4 000 per unit and make sure that we warehouse those companies and hold those vehicles in bond and those vehicles get bought here in Zimbabwe; the same vehicles using that hard currency. We request that those that are receiving that US$4 just bank 10% of their hard currency into our financial sector and that is going to make sure that we grow our economy. Is the Minister amenable to such a proposition and if so how do you see that going into the issue of growing our economy in the future using the mushika mushikas.
THE MINISTER OF FINANCE AND ECONOMIC
DEVELOPMENT (HON. PROF. M. NCUBE): Thank you Hon.
Speaker Sir. First of all, let me thank Hon. Biti for his questions. He wanted to know why we continue borrowing when in fact we have already met our revenue targets. Actually we have stopped borrowing, we have not issued Treasury Bills since I took over and also this is in the light of my desire to make sure that we do not over borrow and there is no over issuance of Treasury Bills and certainly we begin to curtail expenditure. It does not mean that we do not borrow in future. In fact what we would like to do at some point is to be able to test the auction system with a small Treasury Bill issuance at some time in the future. We need to find out if the system really works. We have a market it clears and the pricing is below the 10% interest rate that has been applied to Treasury Bills so far.
He also asked about the debt clearance issue that I did mention sometime back coming from Bali that we will pursue the Heavily
Indebted Poor Countries (HIPC) route, I never said that. I said that the HIPC route is one of the options on the table, actually the reality is that the HIPC route, non HIPC route, quasi-HIPC route, adhoc route, all it means they are other ways to restructure debt without using the HIPC route. He is correct that HIPC route is reserved for poor countries, and given that we are rated a middle income country, we are not a poor country but it does not mean that we are not eligible for HIPC - like type restructuring. That is why we are keeping this option on the table.
He also asked about the impact of inflation and growth on revenue collection; what is its impact. Indeed, it has an impact. I can actually give you the exact figures offline or as a follow –up, I am happy to do that just to find out how that growth of 6% has impacted on revenue collection and how inflation equally impact has on revenue collection. It is true that…
THE TEMPORARY SPEAKER: Order Hon. Minister?
HON. BITI: On a point of order. My point of order Hon. Speaker is, with respect, the Minister has not answered my questions. So can I just restate them very quickly so that he can answer them? On the question of debt clearance, I said you have indicated in your statement this afternoon namuhla, that you are going to try and clear the arrears that Zimbabwe has at the World Bank and African Development Bank. I am saying given the quantum of that debt, and given the fragility of our own situation now, which country is prepared to lend us the money that Zimbabwe has to use to clear?
On the question of inflation, I said given the high rate of inflation which some people are putting at 158%, should you not revise your growth figures, because your growth figures are based on these inflation outcomes. Your increase in revenue is coming from inflation. People are paying more because of inflation, not because we are producing. So when you celebrate the growth in GDP, you are in fact celebrating the growth in inflation, not the growth in real output, that is my question.
HON. PROF. M. NCUBE: Thank you Mr. Speaker Sir. I thank the Hon. Member for restating his questions with clarity, before, it was not clear to me. On the issue of debt clearance and which countries are going to help us, at the stage of clearing the FDB and World Bank balances, the issue is not about being HIPC or non- HIPC it is just about clearing that. As to which countries; of course we will negotiate with the various countries who are shareholders in those institutions and of course the Paris Club countries. We will negotiate with them, the G7, there are other members of European Union and in Europe who are willing to talk to us about this. We have had a conversation with them already, so we will continue to explore with them as to whether they can give us relief, but there are countries that we are speaking to.
I cannot be specific; the discussions have just started and I will be able to shed more light in future. On the issue of inflation, GDP growth is actually real GDP growth, net of inflation, it is not nominal GDP growth. I want to make that clear, it is real GDP growth which already takes care of inflation. As to whether inflation is being under measured, Stephen Hank at the Cato Institute in the United States that is not the case, there are many ways to measure inflation. It depends on the purpose. In most countries, the purpose of a specific methodology that we use is to be able to capture really the cost of typical basket for a household family and that requires that you use a weighted basket approach to measuring inflation. That is what most countries do and that is what we are doing in Zimbabwe.
So, when we say inflation is of the order of whatever, it is based on this basket of consumption approach. What other people do, they use all manner of high frequency data, leading indicator - sometimes they just focus on housing alone as an indicator and other measures to measure the velocity in terms of increase of prices. There are many ways to do it and the researcher that is mentioning Mr. Hank, he has a specific way of measuring inflation.
My views are this, I do not keep arguing with him on his methodology, methodologies differ but really it is about the message that inflation is an evil that we must always watch out for and deal with. For me this is the message not whether it is hyper or none-hyper inflation, but we have our methodology tried and tested. By the way Zimbabwe also subjects statistical measurement standards to those of the IMF, Afrixim Bank and World Bank. There is a whole group around statics that measures the way or rather monitors the way statistics are presented and we comply with best practice globally in terms of whatever variable we issue out from ZIMSTATS.
Let me come to the question from Hon. Mliswa, he said that in my statement I have not mentioned much about perhaps support for the productive sector; how to get the economy going and so forth. As I said, this was a short statement on the state of the economy. It was not a pronouncement on policy in terms of what I will do. I am reserving those for the budget. I do not want to start debating the policies here when I am as yet to announce, it was about the state of affairs - but looking at what needs to be done then, it is about really supporting the productive sector.
You may have seen snippets of it in terms of ideas, for instance in terms of a fund for retooling of industries a national venture fund for retooling the mining sector in addition to what we have already explained and other incentives for supporting value addition, whether it is in the diamond sector, supporting the re-opening of new mines and introducing a simpler fiscal regime for the mining sector. We have all those plans but it was not my intention today to explaining what those policies are rather than to explain perhaps the state of the economy.
On the Executive expenditure, timeframe and all that, the cost containing measures will be implemented during 2019, that is the timeframe for dealing with those expenditure control measures. I now move on to Hon. Nduna who asked several questions. On addressing the pricing in terms of RTGs prices and the disparity thereof between RTGs prices, I suspect against the benchmark, US Dollar prices. As Government we have a policy which is that we have a one to one convertibility between these types of multi-currencies within a multicurrency regime. That is the official policy.
We are not necessarily in control of what people do in the parallel market; how they exchange value out there, but we have a policy and want to guarantee that value – people have the memory of what happened in 2008/2009 where they lost value and we are concerned that we should work hard to preserve value for everyone. He erroneously mentioned that I said the growth rate for the construction sector is 40% but I think he corrected, it is 14% and he wanted to find out how again we are going to preserve value although the 30 day delay in terms of payment, but I guess this should apply to anyone who is subjected to this kind of pricing practices where there is disparity in RTGs and dollars pricing. As I said, really we are not in control of what happens when people trade their balances wherever they trade but we guarantee a one to one conversion. In fact, there is an instrument that pertains to this multicurrency pricing which confirms that there should be unitary pricing in this multicurrency regime.
The price of fuel, why it does not fluctuates downwards when the global oil price fluctuates downwards and so forth – look, every country has its policy in terms of fuel pricing. I know that without mentioning countries, there are trucks that keep coming into our country to buy our cheaper fuel and going on to retail it in their country for I guess a wholesome profitable amount, which suggests that perhaps our fuel is not as expensive as we think at least within the neighbourhood. Let me hasten to add that we are a landlocked country, so transport and other costs kick in when you transport fuel from the high seas, at least from Mozambique, Beira into Zimbabwe and that is bound to add some premium on the price of fuel. I think it is fair to say that within the region our fuel is not too expensive and it is within affordable limits. It could be that in future, of course we move to variable prices but you know what, imagine what will happen when the oil price goes back to a $100 per barrel. That would be really punitive to the population. Perhaps we should be careful about linking the price to the global oil price.
On the issue of mushikashika, just to correct Hon. Nduna, I was not saying that mushikashikas are contributing to the growth of the economy. I was saying that it is a leading indicator that there is vibrancy in the economy in terms of the cars that one sees on the road. I am just using that as one example. I do not want to say it is the example. I want to be clear about that but then he went on to say, perhaps even with this issue there is some opportunity where this vehicle economy could contribute to the broader economy. I welcome those ideas. There are some who have even suggested to me that we should start charging for import duties on cars in US$ but all those are ideas and certainly, we welcome those days especially just before I give my Budget Statement to this august House. Thank you.
HON. GONESE: Thank you very much Mr. Speaker Sir, for
giving me this opportunity to seek some clarifications on the statement that the Hon. Minister has been pleased to give to this august House this afternoon. Firstly Mr. Speaker, I would like to get clarification from the Hon. Minister with regard to the transaction tax. In giving his justification for imposing that punitive tax, the Minister has given the impression that one of the motives is to try to broaden the tax base so as to incorporate the informal sector. I want to ask the Minister as to whether his assumption is that those who are in the informal sector are not using mobile money transfer because we find that civil servants for instance and all those people who are salaried actually get their money transferred into the bank and they have no choice when they want to move that money from their accounts to Ecocash; they are taxed the 2%. It becomes double jeopardy because they are taxed the first time. When you have got several accounts, if you want to move money from one account to the other for personal accounts – it is only the company accounts that have been given an exemption, but individual accounts have not been exempted. Again, that is punishing the individual. So, I want the Minister to clarify why he is doing that which is going to punish the people who actually have no choice but to use mobile money transfer because of the unavailability of cash.
The second clarification I would like to have from the Hon. Minister Mr. Speaker, is in relation to the contradictions on the exchange rate. The Hon. Minister when he was in London was quoted as having said it was obvious that the bond note and RTGs were not equivalent to the US$ and he did not say he was misquoted. Therefore, I would like the Minister to reconcile what he is reported to have said while in London and what he is telling us now that they are one is to one. We want an explanation.
Further Mr. Speaker Sir, I would like the Hon. Minister to explain to us how he intends to tackle the parallel exchange rate because there is nothing which he has said to give us an appreciation and understanding of how the Minister would like to tackle that scourge in our economy. More importantly Mr. Speaker Sir, issues have been raised about a cartel and about Queen B who are in control and have been given a monopoly, for instance on the importation of fuel. I want the Minister to explain to us what the rational is for having the Reserve Bank allocating foreign currency to players in the …
THE TEMPORARY SPEAKER: Order, Hon. Member. What
you are now referring to is not actually from the Minister – [HON.
MEMBERS: Inaudible interjections].
HON. GONESE: No, but it is in relation to the issue of the exchange rate. It talks about the exchange rate Mr. Speaker – [HON.
MEMBERS: Inaudible interjections.] –
THE TEMPORARY SPEAKER: Order, order Hon. Members!
HON. GONESE: Mr. Speaker, with due respect, can I clarify. It is in relation to the issue of the parallel exchange rates which is very relevant Mr. Speaker and it is very pertinent. It is imperative for the Minister to explain to this august House and to the nation at large because those are matters of serious concern for Zimbabwe. We would like the Hon. Minister to explain to us what the Hon. Minister and the Executive are going to do about those issues relating to the monopoly and also to the allocation of foreign currency to the favoured few to the exclusion of the people who actually generate the foreign currency. We have got the exporters who are only given 30% of foreign currency earned.
Lastly Mr. Speaker, I would like the Hon. Minister to clarify whether it is not a tacit admission that the RTGs and US$ are not equivalent when the Hon. Minister has superintended over a process where you now – I know that the monetary policy came from the Governor of the Reserve Bank but the bottom line is that you now have two different sets of accounts. What is called an RTGs (FCA), to me is contradictory because FCA means foreign currency account and you are now calling it RTGs (FCA). Then we have what you call the nostril (FCA), to me it is nonsensical with due respect Mr. Speaker, to have two separate accounts designated differently with the nominal same value because if they were the same, there will be no need to –
HON. MKARATIGWA: Mr. Speaker Sir, my question to the
Hon. Minister is - when is the Transitional Stabilisation Programme going to be launched. I believe it has got all the answers to the problems that we are facing right now. So, the sooner it is implemented, the better.
HON. SARUWAKA: Thank you Mr. Speaker. My question to
the Hon. Minister is relating to his efforts to raise money even from the international community. I would want to understand whether he is aware of the report from the European Union and the NDI report referring to our election as being unverifiable. The international institutions which release money are not happy about the legitimacy of the elections. So, the matter – [HON. MEMBERS: Inaudible interjections.]-
THE TEMPORARY SPEAKER: Order, order! My first point to
the House was that you need to be asking questions that are pertinent and relevant to the Ministerial Statement.
HON. SARUWAKA: The issue is about mobilisation of resources
and arrears clearance. So, the Hon. Minister would need to go to these institutions and countries to seek support. How is he going to do it in light of the issue that there are legitimacy issues surrounding – [HON.
MEMBERS: Inaudible interjections.] -
HON. PROF. M. NCUBE: Mr. Speaker Sir, I thank the Hon.
Member for his questions. The first question he mentions pertains to the 2% electronic transactions tax in that perhaps those in business are not as impacted because they are not using mobile money. Everyone is impacted because it is about all electronic transactions and not mobile money transactions only. So, I would like to clarify that – that is why you find that the exemption is really cutting across different types of economic segments because we are aware that everyone is impacted by this kind of tax.
He mentioned that perhaps there maybe need to fine tune certain aspects where there are accumulative aspects of the tax in terms of impact. I am quite aware of this and as we go along, we will fine-tune it to make sure that it does not have cumulative and unnecessary impact on our consumers and everyone else. We are fully aware of this and we will fine tune as we go forward. It is normal for any policy to be unfine
-tuned Hon. Speaker.
Then he refers to a contradiction regarding some statements which were supposedly made elsewhere regarding the exchange rate and the 1:1 convertibility. The official position of Government and my official position is 1:1 convertibility but again we are aware that out there, there are different exchange rates, the so called parallel exchange rate that obtain and that is what really the comment was about, if he is referring to that comment that I made on foreign lands. I repeat; the official policy is 1:1 convertibility.
He then moves on to ask about whether we have an approach for dealing with the parallel exchange rate. For us, the first order of business was to deal with preservation of value and that means guarantee that 1:1 convertibility which I have already mentioned about. When it comes to the dealings in the parallel market which have transmitted into inflation, we have taken other measures because we are targeting the impact of this activity on inflation. So on that, we have engaged in terms of two approaches; one was based on moral suasion and that is why you find that as of yesterday the fertilizer and seed sector have reduced their prices. The prices were as high as $110 per 10kg and now they have come down to half that. So, that moral suasion is working and again it shows a spirit that the Government has in terms of discussion. We are continuing to engage with the private sector as we started on Monday and yesterday. I will also be meeting more members of the private sector later in the week.
The other approach to dealing with the impact of the parallel market activity is by lifting of import controls, Statutory Instrument 122 which will bring in goods that will supplement domestic activity; so we can increase supply, lower prices because we are worried about the inflationary impact of exchange rate movements in the parallel market.
On issues around the oil sector, cartel and so forth; clearly this was not in my statement and I am also not the best person. However, let me say this, I am aware that there are several players in the fuel market - Trafigura, IPG, Engen, Total. So, there is a multiplicity of players, I am not sure that there is one single player - there are certainly more players.
On the issue of separation of FCA accounts and so forth; this was really the first step for us in trying to deal with monetary sector reforms. If you look at the Monetary Policy Statement carefully, you find that there are several components in it. The first thing is the separation of the FCA accounts because we want to make sure that those who were hiding United States dollars under their mattresses perhaps for a good reason, they will be able to begin to trust the banking sector and start depositing their monies in the banking sector. As a strategy for strengthening the banking sector and building confidence in that Monetary Policy Statement, we reminded banks to make sure that they increase their capital base to 100 million by December 2020 as pronounced earlier.
We also make sure that we seek to enhance the operations of the Monetary Policy Committee to make sure that it can support monetary policy decisions. In order to deal with access liquidity in the market, we introduces a 5% reserve requirement. It literally remove 5% of the liquidity sloshing and sterilising it so that it does not contribute to extra demand and therefore push up prices and inflation.
So, there is a lot in that Monetary Policy Statement all designed to move us along the road of monetary sector reforms which I am sure we will reach in the fullness of time.
There is an Hon. Member who asked when we will launch the
Transitional Stabilisation Programme because it contains a lot in terms of answers to some of the questions that are being asked…
HON. DUBE: On a point of order! Hon. Speaker, I wanted you to note that the Hon. Member in white doek was sleeping with her mouth open – [Laughter.] –
THE TEMPORARY SPEAKER: There is no point of order. Can
you resume your seat, Minister you may continue with your debate?
HON. PROF. M. NCUBE: Thank you Hon. Speaker. We have
already launched the TSP; I launched it just before I went to Bali, because this is an economic reform programme that I needed to present to the international community. So what we are continuing to do Hon. Speaker Sir and also to the Hon. Member is that, we will now be going on a road show internally and nationally to really launch and make sure that the TSP is understood and also to make sure that it is understood in our vernacular languages. It is explained to everyone as to what this is about and he is certainly correct that it contains a lot of the answers to the questions Hon. Members have been asking this afternoon. It is also the source document for the Budget that I will be presenting at the end of November.
Finally Mr. Speaker Sir, there is a question of whether I am aware of the European Union( EU) report regarding our elections and so forth, questions of legitimacy? Again, I must say that I am not the best person to answer that neither was it in my Statement. What I know is that the electoral process was further subjected to the judicial process after the appeal and on both occasions, the winner was confirmed the winner. Also to add onto that, the issues raised by our external partners, that is how I like to view them, are not things that are alien to Zimbabweans. These are, in my view, probably constructive ideas and views which I am certain will be taken into account as we continue to grow in our democratic endeavors. – [HON. MEMBERS: Inaudible interjections.] THE TEMPORARY SPEAKER: Order, order, I am well
informed that the Minister of Finance and Economic Development would want to table the Auditor-General’s report. May I give you the floor Hon. Minister? – [HON. MEMBERS: Inaudible interjections.] – Yapera, yapera.
HON. GONESE: On a point of order Mr. Speaker Sir, I believe that we have not exhausted the Ministerial Statement. It is the right of
Hon. Members of this august House Mr. Speaker to seek clarification. We only had two rounds of questions and under normal circumstances, Mr. Speaker Sir, we have been in this august House for a long time.
When we have got an important matter such as the state of the economy, it is imperative that Hon. Members who are representatives of the people of this country, which people are not in this august House but are represented by the Hon. Members here present. That those Hon. Members here present be afforded a reasonable opportunity to really exhaust the issues which are before us. Then the Auditor- General’s report can be tabled at a later stage when we have really done justice to the issues that are bedeviling our nation. – [HON.
MEMBERS: Hear, hear.]
THE TEMPORARY SPEAKER: Order, order in the House
Hon. Members. I think the Hon. Minister was so clear when he delivered his Statement – [HON. MEMBERS: Inaudible interjections.] – I am in the Chair and I am saying that the Hon. Minister was so clear that this is a mini-Statement – [HON. MEMBERS: Inaudible interjections.] – Order, order in the House!
The unfortunate thing is that when I give you the floor, you are delving into areas that are not pertinent to what the Hon. Minister is saying. You are taking a lot of time pushing across questions that are so immaterial. Yes, just two questions from you and no debate.
HON. CHIKWINYA: My first question is that the Hon. Minister
said that one of the strategies of reducing budget deficit was to go after the uncollected tax which is resident with the tax payers. He also then said that ZIMRA, as of yesterday, advised him that they had reached the target for the 2018 revenue collection. My question therefore is that:-
- Is the ZIMRA revenue target not too low to the extent that we are setting targets that are too low and are easily achievable when we are just around three quarters midway to the year and then we begin to celebrate?
- What measures is he putting in place to enforce revenue collection mechanisms to go after the tax that is resident with the tax payers out there?
- My second question is what value …
THE TEMPORARY SPEAKER: Order, order that is your third
Question, I said two questions Hon. Member – [HON. MEMBERS:
Inaudible interjections.] –
HON. CHIKWINYA: But it is connected Mr. Speaker – [HON.
MEMBERS: Inaudible interjections.] –
THE TEMPORARY SPEAKER: Order, order, you may
HON. CHIKWINYA: What value does the Government extract
by continuously denying the reality that the exchange rate is not 1:1?
HON. MATARANYIKA: I would like to ask a very specific question to the Minister of Finance and Economic Development. Could the Hon. Minister explain to this House why we are not moving away from the bond note in farvour of the multi-currency specifically the United States Dollar and the Rand, considering that our people have warmed up to the use of plastic and mobile money use and also considering that the bond note is probably one of the causes of the parallel market problem? I thank you.
HON. MADZIMURE: What is the Hon. Minister going to do
regarding the civil servants who get their monies through money transfer? When they go to the shops, what is happening is that the prices have gone up by not less than 200% to the effect that a Government employee who earns $500.00 takes his salary to the same shop where he used to shop – he is going to be able to buy things worth just US$100.00 or even US$10.00?
The other question is the Hon. Minister informed the House that the applications for foreign direct investment (FDI) are around 165 and are equivalent to about $15 billion but he did not tell us the uptake?
What exactly has been invested in the market?
My final question is that we have been sponsoring agriculture through command farming yet we are still producing oil seeds. We produce soya beans that are enough to oil Zimbabwe for only two months. You go to wheat, we only produce wheat that is enough to feed Zimbabwe for three months – meaning we are continuously importing yet we are saying agriculture is going to grow by 12%. Can the Hon.
Minister please explain?
HON. KARENYI: I just want the Hon. Minister to explain what measures he is going to put in place pertaining the issue of purchasing of drugs because people are buying drugs in United States dollars?
I think the issue of chronic diseases is at a high rate and people want to buy drugs for hypertension, diabetes, asthma and other diseases.
So what is he going to do because there is an outcry out there and we cannot afford to buy drugs using forex?
*HON. MATAMBANADZO: My question is directed to the
Minister of Finance and Economic Development. What is Government policy regarding the issue that Government should not be controlled by the black market in setting up the rates? For instance, 50kg fertilizer was at $100 at the black market but Government has negotiated and the price has been set at $50. This means the Government is under the control of the black market.
We are now talking of $9 billion where we are talking of swipe and plastic money. The money would be taken to the banks and we now have a total of $9 billion. What is the Minister going to do to curtail this financial misuse regarding transfers and plastic money? The exchange rate on the black market is 900 bond notes to US$100. If you want US$100 you need to pay 900 bond notes. What are you going to do about that?
My last question is you printed bond notes worth $500 million for the country. When bond notes were introduced, we were given assurance that this money was going to be bonded by $200 million loan facility. Who bonded the other $300 million so that we have more money? Companies are now confused and that is why they are demanding US dollars.
HON. C. MOYO: Thank you Hon. Speaker. The Hon. Minister
talked about bringing confidence. Surely, out there there is ecocash price, bond note price, RTGS, Rand and US dollar price. Is bond note working? Secondly, the Hon. Minister started with crowd funding for cholera and I think he has a perception that people have got money.
Does he know that people are poor? Thank you.
HON. PROF. M. NCUBE: Thank you Hon. Speaker Sir. Let me again appreciate the Hon. Members for their wonderful questions. On the revenue target from ZIMRA on whether we have reached the target or we have set the target on too low in the first place, obviously the target was driven by the capacity that ZIMRA had when the target was set. Also this target is still below the expenditure expected. It does not mean that if it is on the target, it means that the deficit is closed. It means that it is within the capacity that is target that has been set. What I have done by introducing this other tax, literally what I have done is to move the target to make sure that we have more collection points and more inclusive taxes. I suspect when we measure the target as to whether ZIMRA has met their target at the end of the year, I will make sure that I do not include the 2% tax because that came well after they had set their target.
Regarding the value we are extracting from the one to one convertibility principle, we are not extracting value as Government. We are trying to make sure that the citizenry of Zimbabwe extract value. We are trying to protect their value, not our value. People have a nasty experience of the 2008 -2009 hyper inflation period so we are trying to make sure that value is protected.
On the question on why we are not moving away from the bond note, when we are going to demonetize, is it working and so forth, if we look at the size of balances between RTGS and the bond notes, quite clearly the bigger balances are with the RTGS. Also, we are maintaining that we have a road map in terms of currency reform. I explained earlier what we did in the Monetary Policy Statement. The first step was so that we have FCA accounts and I hope Hon. Members have opened their FCA accounts and will begin to trust the banking system – [HON. MEMBERS: Inaudible interjections.] - I am also hearing that there is an increase in the banking of bond notes as well. They are coming out of the mattresses and people are beginning to bank more of those. All this is welcome as we chat this road map for currency reform. It is a step in the right direction. In my view, it is not a big bang approach to currency reform.
On the civil servants who are receiving money transfers and they get to the shops and find that they cannot reach the same level of consumption basket, of course, I do feel a lot of sympathy for civil servants and any Zimbabwean especially those earning below $400 because they are below the poverty datum line. That is why we are taking these measures; a combination of moral suasion as well as increasing supply by lifting SI 122 in terms of using imports to try to help us push prices down. All of these are strategies where we are trying to make sure that the goods in the shops are in good supply and affordable.
Regarding the figure of how much investment has actually come in, I can come back to this House Hon. Speaker with the exact figure. What I was trying to signal with that statement I made was just interest that Zimbabwe has generated out there and the interest from investors to put their money here in Zimbabwe. Every day we are receiving delegations upon delegations of individual companies wanting to invest in Zimbabwe but of course the conversion ratio in terms of actual investment is another issue and I will be happy to furnish the House in the fullest of time as to what those figures are.
The Hon. Member also asked on importing wheat, soya beans and so forth. One of our illustrious companies is a company called Delta Corporation. It has never imported a single grain of barley for its sorghum beer. This is because Delta finances barley growers who then supply it with that ingredient for the manufacture of beer. This is an example of a corporate that is not dependant on imports. Again, I really urge all corporates and I hope Hon. Members can support me in that; all corporates that are linked to agriculture, I urge them to do the same. For instance, oil expressers should be supporting soya bean growers so that we reduce the amount of soya bean that we are importing. This is always supplementing what we will be extending through the banking
I have said that going forward, we will use more measures to crowd in the banks and the private sector in the financing of agriculture. For example, we will consider issuing guarantees, especially to state owned banks if they lend to agriculture. We are aware that for us to crowd in the banks, we need to fine tune and complete the exercise for our 99 year leases so that they become legal tender and project that property rights are being protected. Nevertheless, we will crowd the banks through schemes such as the guarantees going forward. I agree that we need to reduce imports and we need to do so quickly.
On the purchase of drugs in US dollars, I would really want to urge the drug companies and pharmacies to accept RTGS and bond notes. I really want to urge them because there are poor people who have no access to US dollars. I really want to urge them to support bond notes and RTGS. There are people in the rural areas who have no access to US dollars and that is why these bond notes are very useful. They also solve the issue of divisibility, which is a small change issue. That is what the bond coins also do.
It was asked why the Government is controlled by the black market. It is not. The problem is that the black market then tries to control prices which are hurting our people, so the Government is responding to the inflationary impact, the price impart of the parallel market on basic goods and commodities. That is the issue. We are not controlled by the parallel market at all.
On the bond notes, initially US$200 million was announced and it is now US$500 million. The difference - is covering that difference, we have got facilities that we have arranged that are covering this exposure on the issuance of bond notes. We have made a statement to that effect in the Monetary Policy Statement. On the issue of confidence again to bond notes, I have already answered this question and then finally, on the crowd funding, this is a very innovative approach to financing in
Africa. Do not underestimate the innovative capacity of our people. Mobile banking was invented in Africa. Zimbabwe has perfected mobile banking and it is way ahead of the rest of the world, if you ask me. Do not underestimate, especially the youth. Do not underestimate them in that they are smarter than most youths around the world.
So, the issue of crowd funding is a very good one because it is not compulsory. It is voluntary. It is just a mechanism to allow those who are willingly wanting to help those who are affected by cholera with their small monies, whether it is a dollar or two dollars, because we want them to be able to donate, and they are dying to donate. By the way, they have been donating. I am happy to give the nation a statement in future on how much we have raised so far. That crowd fund triggers something else which is the contributions from corporates immediately took off. The corporate realised that individuals are doing their bit by contributing a dollar and two dollars. They started contributing and that is a good thing.
It actually shows that for some of these emergencies, we can truly have PPPs where Government does its bit to deal with a scourge like this. Also individuals and corporate do the same thing and match Government. So, I am very proud of the crowd fund, and in fact, there are two countries in Europe who look at us and say that is interesting, we would like to copy that. Equally, with the electronic tax, there is a country which will remain unmentioned which said, this is a very interesting idea if you had time to design an inclusive tax system, progressive system. We would like to copy it. So now you have developed countries wanting to copy from a developing country such as
Zimbabwe, and that is commendable. Thank you Mr. Speaker Sir.
Hon. Matambanadzo having asked about the response to his question
THE TEMPORARY SPEAKER: Order, order Hon. Members.
Your question Hon. Matambanadzo has been responded to when you had gone out. Hon. Minister, can you go ahead to table the Auditor
TABLING OF REPORTS
THE MINISTER OF FINANCE AND ECONOMIC
DEVELOPMENT (HON. PROF. M. NCUBE): Thank you Mr.
Speaker Sir for inviting me to table certain reports which I ought to table annually. In terms of Section 12 (i) of the Audit Office Act [Chapter 22:18], I lay upon the table reports of the Auditor General For the year ended December 31, 2017 being:
- Narrative report on Appropriation Accounts, Finance
Accounts, Revenue Statements and Fund Accounts.
- Narrative report on State Enterprises and Parastatals; and
- Narrative report on Local Authorities.
Mr. Speaker Sir, I also lay on the table the following reports. In terms of Section 309 (2) of the Constitution of Zimbabwe read together with Section 11 (1) of the Audit Office Act [Chapter 22;18].
- Follow-up report on the implementation of recommendations in the 2016 report on Appropriation Accounts, Finance
Accounts, Revenue Statements and Fund Accounts; and
- Follow-up on the 2016 report on State Enterprises and
Parastatals. Thank you Mr. Speaker Sir.
On the motion of THE MINISTER OF FINANCE AND
ECONOMIC DEVELOPMENT (HON. PROF. M. NCUBE), the
House adjourned at Twenty One Minutes past Five o’clock p.m.