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NATIONAL ASSEMBLY HANSARD 4 SEPTEMBER 2019 45-84
PARLIAMENT OF ZIMBABWE
Wednesday, 4th September, 2019
The National Assembly met at a Quarter-past Two o’clock p.m.
PRAYERS
(THE HON. SPEAKER in the Chair)
ANNOUNCEMENTS BY THE HON. SPEAKER
APPOINTMENT TO THE EXECUTIVE COMMITTEE MEMBERS
OF THE AFRICAN PARLIAMENTARIANS NETWORK FOR
DEVELOPMENT EVALUATION (APNODE)
THE HON. SPEAKER: Order, order. I wish to advise the House that the following are the Executive Committee Members of the African
Parliamentarians Network for Development Evaluation (APNODE), the Zimbabwe Chapter:
Hon. Sen. Chief Nechombo Chairperson
Hon. Mpariwa Vice Chairperson
Hon. Mhona Treasurer
Hon. Mavetera Secretary
Hon. O. Sibanda Committee Member
Hon. Sen. Mtshane-Khumalo Committee Member
Hon. Madzimure Committee Member
The main objective – [HON. CHIKWINYA: Inaudible interjection.] - Hon. Chikwinya, can I have your attention together with your neighbours there. The main objective of APNODE is to create awareness and promote culture and development evaluation amongst Parliamentarians in order to make informed evidence based decision making policy formulation.
APOLOGIES RECEIVED FROM MINISTERS
THE HON. SPEAKER: I have received the following names of the Hon. Ministers who have tendered for leave of absence:
Hon. Prof. M. Ncube – The Minister of Finance and Economic Development, Hon. Rtd Air Marshall Shiri – The Minister of Lands, Agriculture, Water, Climate and Rural Resettlement -[*HON.
SIKHALA: He called us dogs, monkeys and baboons, he should not come here in Parliament.] – [Laughter.] - I am going to send someone out now. Hon. Rtd. S. B. Moyo – The Minister of Foreign Affairs and
International Trade, Hon. Dr. Mangwiro – The Deputy Minister of Health and Child Care.
I want to advise Hon. Members in this House that I have written twice to His Excellency about non attendance of Hon. Ministers and I am told that the matter has been raised in Cabinet where all Hon.
Ministers were advised to attend parliamentary business in terms of Section 107 (2) of the Constitution of Zimbabwe. When I look around, I think we are all agreed, the absence today is appalling and pathetic. I have instructed the secretariat that those who have not tendered their apologies will have to be charged accordingly – [HON. SIKHALA: Those are fake apologies.] – I want to address myself to Hon. Sikhala, be ready for the worst.
Hon. Hamauswa having stood up to raise a point of privilege.
What is your problem Hon. Member? Can you sit down; I am holding the Chair – [Laughter.] –
I want to advise Hon. Sikhala and others that the Hon. Minister did apologise here in the House publicly. If you check your Hansard, the apology is there.
Hon. T. Moyo having stood up to raise a point of privilege.
THE HON. SPEAKER: Order, I have called for notices of motion. Hon. Mathe are you rising on a notice of motion?
HON. MATHE: Sorry Mr. Speaker Sir I thought you had gone to points of privilege.
THE HON. SPEAKER: No.
HON. T. MOYO: Thank you Mr. Speaker Sir, I rise on a point of privilege. My point of privilege, Mr. Speaker Sir, is drawn from
Sustainable Development Goal number 6 which was established by the United Nations General Assembly in 2015. This SDG number 6 calls for clean water and sanitation for all people. The official wording is, ‘ensure availability and sustainable management of water and sanitation
for all.’
Furthermore, I also refer to the International Water Convention of 1992 which reads that the Water Convention Act protects human health by better water management and by reducing water related diseases. The protocol provides for framework to translate into practice the human rights to water and sanitation.
THE HON. SPEAKER: Hon. Member, raise the issue of national importance now, not historically.
HON. T. MOYO: According to SDG number 6 and international water convention, I therefore call upon the Minister of Lands, Agriculture, Water, Climate and Rural Resettlement to expeditiously carry out the following measures to mitigate the effects of a real phenomenon.
- Expedite drilling of boreholes in rural areas.
- To carry out desiltation of dams
THE HON. SPEAKER: Order, order! I will ask the Chief Whips to assist the Chair. During your Caucuses, can you please discuss the question: what is a question of privilege? I feel very uncomfortable to ask the Member to sit down.
*HON. KARENYI: On a point of privilege. Thank you Mr. Speaker Sir. As women in Zimbabwe we have rights to choose what we want at a particular time, but you have seen Mr. Speaker, that as women we are not getting the respect when it comes to torture and abuses.
Mr. Speaker Sir, in this august House, that is where we represent people – [HON. MEMBERS: Inaudible interjections.] –
THE HON. SPEAKER: Order. I go back to my same ruling for Hon. Moyo. Yes, we cannot pursue privileges in the manner that I can see the trend developing. I am ruling that meet in your caucuses and discuss the matters accordingly. So I am not accepting any further – [HON. MEMBERS: Inaudible interjections.] – Order, order! Hon.
Member take your seat. Yes, I cannot make a ruling and unrule myself. Come back well prepared within the confines of our standing rules and present your privileges accordingly – [HON. MEMBERS: Inaudible interjections.] – It looks like we have a problem with power. We will proceed. The transcribers will be able to perform their tasks provided we can speak in English. The vernacular languages unfortunately have to be connected up there.
ORAL ANSWERS TO QUESTIONS WITHOUT NOTICE
HON. MUSIKAVANHU: My question is directed to the Leader
of the House. What policy measures are being put in place further to the observations by His Excellency the President, Hon. E. D. Mnangagwa that CITES is not working to the advantage of SADC countries on the backdrop that amongst ourselves, Botswana and Namibia we have a stockpile of elephant tasks valued at $600m?
THE MINISTER OF JUSTICE, LEGAL AND
PARLIAMENTARY AFFAIRS (HON. ZIYAMBI): I want to thank
the Hon. Member for the question indeed the issue of our elephants is a cause for concern in the region. We had a conference in Victoria Falls where as a bloc we agreed that the meeting that took place in Geneva - our Ministers went there with a view of arguing our case to CITES to indicate that between us and Botswana we have the largest population of elephants in the world.
We have a lot of human wildlife conflict. The people that are leading the campaign not to sell ivory, do not even have a single elephant. We need to maintain the elephants that we have. Our carrying capacity is now overcrowded and therefore we put our case. Hon Members will recall that CITES was not agreeable to what we were proposing. Our countries are of the view that there is a need to pull out of CITES because we cannot continue in that scenario where our carrying capacity has been over stretched. Our own population in those areas are now vulnerable to attacks by the animals and therefore, we are mulling a scenario where as a bloc we may decide to pull out of CITES for the sake of ourselves and our animals. I thank you.
HON. T. MLISWA: May I hear from the Hon. Leader of the
House whether in view of the challenges with CITES we are presuming any trading of live elephants to any other countries [HON. T. MLISWA:
He is not head of the House, he is the head of Government business head of the House is Hon. Speaker - next time.] –
HON. ZIYAMBI: Thank you Mr. Speaker Sir. At the moment, we are still bound by CITES and we cannot violate what we agreed to. So what we are doing is, we want to find a solution whereby if we move out of CITES then we can do what the Hon. Member is suggesting. I thank you.
HON. T. MLISWA: Thank you Mr. Speaker Sir. My question to
the Leader of Government Business is - this issue of overstocking of elephants has not been there. I would like the Minister to be honest.
What procedure and what arrangement was put in place when the then Ministers of Environment, Hon. Kasukuwere and Hon. Mupfumira were selling elephants to the Chinese? If that was happening here, why do they not continue with that because you are also working on, not only that but the money that was generating from those sales of elephants, we do not know where it went to. We talk about the value being 600 million elephants that went to China which was good, but where did the money go to and what mechanism was used to try and destock the elephants?
HON. ZIYAMBI: Thank you Mr. Speaker Sir. What I said are
facts that we have an overstocking of elephants. If the previous Ministers were selling, the Hon. Member is privy to that. On top of that, the Hon. Member said he does not know where the money went to, which means the sales that took place were done by the Ministers in their personal capacity; it was not a Government programme. What I indicated is that we have a very large population of elephants, it is a fact. We presented our case with a view of ensuring that we also benefit from our wildlife and ensure that we also uplift the lives of communities that are affected by those animals. As to the other allegations, I am not privy to that and I cannot answer that, I thank you.
HON. WATSON: Does the Minister have empirical evidence that proves overstocking and can he answer correctly what the Government is doing to ameliorate or reduce the population without selling elephants and what is the correlation between selling ivory and the number of live elephants.?
HON. ZIYAMBI: Thank you Mr. Speaker Sir. What I indicated that we have an overpopulation of elephants is a fact – [AN HON. MEMBER: Give us evidence.] – The exact number of elephants that we have at the moment, I can request that information because surely, it is expecting too much out of me to cram all the figures. What I know is, we have over-population of elephants and between us and Botswana, we hold over 80% of the world’s elephant population. What I can do is to bring information as to the actual number of elephants which we have. As to what happened when the previous Ministers sold the elephants, I cannot answer for them. What I can answer is what we are trying to do now to ensure that we reduce the elephant population so that our environment can carry the correct quantities of elephants; that I can answer. What I cannot competently speak about is what happened during the era of the previous Ministers. I thank you.
HON. KWARAMBA: Thank you Mr. Speaker Sir. Schools will
be open in a few days time and we notice that there is rampant increase in school fees. I would like to know from the Leader of Government Business what Government policy is in regards to fees increase?
THE MINISTER OF JUSTICE, LEGAL AND
PARLIAMENTARY AFFAIRS (HON. ZIYAMBI): Thank you Mr.
Speaker Sir. Last week, we dealt with the Education Amendment Bill and this issue was discussed extensively. The Minister indicated that Government schools and faith based schools, because they are supported by Government, their school fees are controlled by Government. They have to submit their proposals for increases and then the Government will assess and respond accordingly. As for private schools, the Government does not have any control; it is a matter that is between the private school and the parents. I thank you.
HON. SITHOLE: Thank you Mr. Speaker Sir. What measures
have been put in place to cater for those learners who are disadvantaged and may not be able to pay the fees?
THE MINISTER OF JUSTICE, LEGAL AND
PARLIAMENTARY AFFAIRS (HON. ZIYAMBI): Thank you Mr.
Speaker. The question is very broad and I am not sure which specific category of learners is being referred to. Mr. Speaker Sir, I may fail to pay my fees at St Georges College but I chose to go to St Georges College, therefore, Government would not put a policy regarding the fees. We put a policy for those learners that Government knows that the parents cannot pay fees, we already have a policy in terms of BEAM. It is not something that is coming out now because there are school fees increases. We already have a policy, parents, learners and school heads know the processes that have to be followed to ensure that those learners are catered for. I thank you.
HON. KASHIRI: I would like to applaud the Minister for establishing Anti Corruption Courts around the country. My question is, what is Government policy to recover the property acquired corruptly, including buildings that have been built with corruptly earned money?
THE MINISTER OF JUSTICE, LEGAL AND
PARLIAMENTARY AFFAIRS (HON. ZIYAMBI): Thank you Mr.
Speaker Sir. Yesterday I tabled the amendment to the Money Laundering Act. I brought in a Bill to address issues of unexplained wealth and we feel that is the easiest way to target people who would have acquired wealth corruptly whereby unexplained orders are issued and you have to explain. So, that Bill will be discussed here and I will be very happy if Hon. Members can debate, improve and enact it very fast so that we can deal with corrupt people. I thank you.
+HON. MAHLANGU: My question is directed to the Minister of Information. Is it Government policy to discriminate the Ndebele people?
THE MINISTER OF INFORMATION, PUBLICITY AND BROADCASTING SERVICES (HON. MUTSVANGWA): Thank
you Mr. Speaker. Zimbabwe is a unitary State. Zimbabweans fought together for the liberation of this country. Zimbabweans are all entitled to all what is within the boundaries of their country. It is not Government policy to discriminate each other. In this particular case which she is referring to, I am not aware and if there is a particular case let it be – [HON. MEMBERS: Inaudible interjections.] – I am not aware, the Constitution of this country does not allow discrimination so those individuals have a right to demand redress to that particular individual. As a Ministry, we would be happy to get the details so that we look into it. I thank you – [HON. MEMBERS: Inaudible interjections.] –
HON. GONESE: On a point of order. Mr. Speaker Sir, my point of order emanates from the fact that the statement in question was made on ZI-FM and it was broadcast live on radio. There have been a lot of tweets regarding the statement. I am astounded and perplexed that we have a situation where the Hon. Minister of Information comes to this august House and say that she is unaware of that. It is ether the Hon. Minister is not doing her job or – [HON. MEMBERS: Inaudible interjections.] – because it was the Hon. Deputy Minister of Information and we have got something which is so notorious, something which transpired, it was not just a tweet but it was on ZI-FM.
The Hon. Deputy Minister was a panelist with Hon. Molokela. I can understand if it did not come to the attention of some other people but for the Hon. Minister of Information - I believe that it is either as I have already indicated, she is not doing her job and she is not keeping herself abreast of developments in the country. Alternatively, she is misleading the House, she is aware but she does not want to own up. I believe that we cannot as an august House accept such a statement from the Hon. Minister, that she is not aware of something which has been widely publicised to the extent that this statement was publicised.
THE HON. SPEAKER: With that clarification Hon. Minister, can you proceed to answer.
HON. MUTSVANGWA: Thank you Mr. Speaker Sir, the
question was, is there a policy of discriminating other Zimbabweans and I thought I answered that question – [HON. MEMBERS: Inaudible interjections] –
THE HON. SPEAKER: Hon. Minister, can you be guided from
the Chair. There was a publication and the Hon. Members are saying that that was through a panel and the statement was against the Ndebele people – [HON. MEMBERS: Inaudible interjections] –
HON. MUTSVANGWA: What I want to make clear is that there is no policy of discrimination within Government.
HON. MAHLANGU: My supplementary question is this; if there
is no policy, then the Hon. Minister should apologise to the people of Matabeleland for what happened. What is making me say that is that there is no one who wants development in Matabeleland because they take us as refugees. No one wants to apologise for Gukurahundi because they think we are refugees. Therefore the Minister should apologise and state that we are not refugees. If you go to Matabeleland, there is no development because we are considered as refugees.
THE HON. SPEAKER: It is understood that there is no policy but your Deputy Minister made that statement. That is the question now.
THE MINISTER OF INFORMATION, PUBLICITY AND
BROADCASTING SERVICES (HON. MUTSVANGWA): Mr.
Speaker, I think I indicated already earlier on. I did not have an opportunity to listen to this interview. I will have to listen to it and then come back and explain – [HON. MEMBERS: Inaudible interjections.] -
THE HON. SPEAKER: Order, order, order. The Hon. Minister has undertaken to pursue the matter and come back to the House on the issue and the matter will rest there.
HON. MAMOMBE: My question is directed to the Minister of Health and Child Care. In his absence, I will direct it to the Leader of Government business.
We are seeing a notice that was given by the doctors on the strike that they want to undertake. This notice was saying that the strikes are going to take place from the 3rd of this month. I would like to know the permanent solution to the crisis that we are facing in the public health sector, particularly on the issues to do with strikes. How is the
Government going to deal with that problem, considering that our health sector is already crippled by the absence of electricity, unavailability of drugs and even equipment? We do not want to see a repeat of people dying like what happened the last time when doctors went on strike –
[HON. MEMBERS: Inaudible interjections.] -
.
THE HON. SPEAKER: Order Hon. Matangira, why do you interrupt the Hon. Minister? – [HON. MEMBERS: Inaudible
interjections.] -
THE MINISTER OF JUSTICE, LEGAL AND
PARLIAMENTARY AFFAIRS (HON. ZIYAMBI): Government is
committed to improving the welfare of all Government workers, doctors included. Negotiations have been ongoing to ensure that we reach an agreement as to the wages that have to be given to all Government workers. What the Government cannot do at this stage is to treat one sector with preference and neglecting the rest.
As to the second question of a permanent solution to strikes, world over, the right to demonstrate is allowed. I would not believe that one would have a prescription to unforeseen events that may happen that will dictate that a certain sector show their dissatisfaction with that particular event, therefore I cannot say.
HON. CHIKWINYA: In his response, the Hon. Minister says Government is committed to the welfare of civil servants in general, including doctors and nurses. The Minister of Finance in the previous week announced a 76% salary increment effective 1st August to Civil Servants in an effort to ameliorate the situation as schools are beginning to open – is it possible to explain to this House when this money is going to be paid to the Civil Servant as they expect to pay school fees and to cover some of the problems being raised by the doctors and nurses in the general civil service?
HON. ZIYAMBI: Indeed, we deliberated on this issue and the Minister of Finance and Economic Development undertook to ensure that before schools open, most likely by end of this week, he would have given the civil service their salary increases to cushion them with a view to ensuring that they pay school fees. It is something that is being done and I believe some have already received it.
HON. T. MLISWA: With due respect, the Leader of Government business must take to the fact that the economic situation is not good. As a nation, we cannot be insensitive to the plight of the people and being hard in response. For him to say that it is a democratic right to protest and demonstrate when the courts are saying that you cannot demonstrate because its national security concern – I think it is proper to say that the Government is trying by all means to ensure that we bring to an end the suffering of the people rather than him pushing that agenda of strikes.
It hit me hard because our people are suffering. I expect him to have a heart for our people and say that we are trying by all means to improve the conditions of our people. I remain guided by you Mr. Speaker. For him to say it is their democratic right yet the courts are saying they cannot march – there is nothing to lead us to democracy when the courts have clearly spoken. The Minister has a heart; he can speak better than that – [HON. MEMBERS: Hear, hear.] -
THE HON. SPEAKER: Let us not confuse issues. We are talking about doctors and the Hon. Minister contextualised the issue of how to cushion the challenges the civil service is facing now. It was not a general question about the challenges the people of Zimbabwe altogether are facing. This is in relationship to the doctors and civil servants accordingly. Let us not argue outside the original question.
So, I rule.
THE MINISTER OF JUSTICE, LEGAL AND
PARLIAMENTARY AFFAIRS (HON. ZIYAMBI): The question
from Hon. Mamombe was in two parts. The first part was - what are we doing about the doctors salaries, they have given a notice – [HON.
MLISWA: Inaudible interjection.] –
THE HON. SPEAKER: Order!
HON. ZIYAMBI: The second part was; she wanted a permanent
solution so that they do not strike. So I answered it in two parts and said we are looking holistically at the plight of civil servants with a view of improving their conditions of service - that shows sensitivity.
The second part was, what do we do with strikes so that they do not occur. In answer to that, I said you cannot determine now since we have a right that is there in the Constitution to demonstrate - a permanent solution. What if something happens in future that dictates that they have to take that route. It was in response to a futuristic event to say that you cannot prescribe what is going to happen tomorrow. It was not in reference to the present situation and the present plight. I thank you.
THE HON. SPEAKER: Order, order. I allowed the Hon.
Minister.
Hon. Tsunga having stood up.
THE HON. SPEAKER: What is happening my friend? I have
not finished.
HON. TSUNGA: I thought you had finished.
THE HON. SPEAKER: No, I had not. I indulged the Hon.
Minister and I think he has emphasised that the responses were confined to the questions originally asked. So, I do not think we can go outside the purview of that question and the attended supplementary questions.
HON. TSUNGA: My supplementary question, Hon. Speaker, is that the problem in the health delivery system is money fold. While the dimension of conditions of service and rates of pay for health personnel is critical, there is also the aspect of medication.
You may address the issue of salaries but the galloping prices of medication because once you get a prescription you still need to go to a pharmacy. How then do you address that other angle because I think the prices of medication is beyond the reach of many. Let us look at it in that perspective that it has to be a multi-pronged approach to solving the problem because it is really a crisis. Thank you Mr. Speaker – [HON.
MEMBERS: Inaudible interjections.] –
THE HON. SPEAKER: Order, I indicated earlier on that the question asked by Hon. Mamombe was contextualised to the doctors plight. The question of medication is another issue.
HON. MAMOMBE: Just a point of clarification
THE HON. SPEAKER: Clarification on what?
HON. MAMOMBE: A clarification on the 76% increment.
THE HON. SPEAKER: Ask a supplementary question.
HON. MAMOMBE: Hon. Speaker, my supplementary question is directed to the – [AN HON. MEMBER: Bvisa heti.] –
HON. T. MLISWA: Hon. Speaker ,on a point of order. Whoever said bvisa heti is very sexist, feminist and they must withdraw.
THE HON. SPEAKER: Who is saying that? – [HON. MEMBERS: Inaudible interjections.] – Can I listen to one person please?
HON. MAMOMBE: It is Hon. Nyabani.
HON. SIKHALA: You always allow them to get away with it.
THE HON. SPEAKER: Order, order! Order Hon. Member
there. Can I get the name properly?
HON. T. MLISWA: Hon. Speaker, I never lie; it was Hon.
Nyabani. If you refuse, the Hansard will pick you.
THE HON. SPEAKER: Order. The Hon. Member, can you withdraw your statement? – [HON. MEMBERS: Inaudible
interjections.] –
*HON. NYABANI: Hon. Speaker, for the sake of progress I withdraw – [HON. MEMBERS: Inaudible interjections.] –
HON. MAMOMBE: Thank you Mr. Speaker for that protection –
[HON. MEMBERS: Inaudible interjections.] –
THE HON. SPEAKER: Order!
HON. D. SIBANDA: On a point of order Mr. Speaker. The
Honourable here is not withdrawing. He is saying for progress sake.
Can he just withdraw because he has always been heckling – [HON.
MEMBERS: Inaudible interjections.] –
THE HON. SPEAKER: Order.
HON. MAMOMBE: Thank you Hon. Speaker. My
supplementary question to the Hon. Minister is that the strikes that were announced by the doctors and nurses, it was after the announcement that there is going to be an increment of 76%. Yes, the Government has tried its best. The Government is going to make an increment of 76% but on their petition, on their demands they are stating that they are not recognising that 76% of increment. What they want is that their money be paid in United States dollars on an increment which is in line with the inflation that is 500% or 700%. This is what the doctors want.
So the 76% increment that the Hon. Minister is talking about is not going to work. It is not going to stop the strikes that are ongoing and we are going to lose lives, Hon. Speaker, because already there are no drugs and no equipment and doctors have been making an effort. What is the
Government going to do about the current crisis? They want United
States dollars and they want an increment of 700%. Thank you Mr.
Speaker.
HON. ZIYAMBI: Mr. Speaker, I alluded to the fact that negotiations are ongoing – [HON. MEMBERS: Inaudible interjections.]
–
THE HON. SPEAKER: Honourable Members at the back there, can the Hon. Minister be heard in silence? Please carry on Hon.
Minister.
HON. ZIYAMBI: Mr. Speaker, I alluded to the fact that negotiations are ongoing. The rest of the civil service said okay, we agree to what Government has offered us but we will continue negotiating and we accepted that. It is the same with doctors, so I am surprised that she has already concluded that is the finality of the case when we are still negotiating with the representatives. I thank you.
+HON. F. K. MGUNI: Thank you Hon. Speaker. My question is directed to the Hon. Minister of Health and Child Care. I would like to know what Government policy says concerning hospitals without mortuaries or with mortuaries that are not functioning as well as those that do not have incinerators to burn waste. I thank you.
THE HON. SPEAKER: Can you repeat your question, what is the policy question?
HON. S. K. MGUNI: Thank you Mr. Speaker. I wanted to find out what Government policy says in cases where there are hospitals which do not have mortuaries which are functioning as well as proper incinerators to burn waste. I had directed my question to the Minister of Health and Child Care and in his absence, I would like to ask the Leader of Government Business in the House to answer the question.
THE HON. SPEAKER: Hon. Mguni, you are mixing up different issues, you are speaking of mortuaries as well as waste. You should ask just one question as these questions do not go hand in hand.
HON. S. K. MGUNI: Thank you Mr. Speaker. My question is - what is Government policy concerning hospitals which do not have functional mortuaries?
THE HON. SPEAKER: Government policy on ensuring that hospitals have mortuaries so that the dead bodies are preserved in dignity.
THE MINISTER OF JUSTICE, LEGAL AND
PARLIAMENTARY AFFAIRS (HON. ZIYAMBI): Thank you Mr.
Speaker Sir. I would like to thank the Hon. Member for the question. Indeed, we have hospitals which do not have mortuaries and the ideal situation is to have a mortuary at every hospital. That is an aspiration that we have to ensure that progressively all the hospitals have mortuaries. In the mean time, we are also working closely with funeral parlours so that where we do not have a mortuary; they can also help with facilities for body removal. I thank you.
HON. DZUMA: Thank you very much Mr. Speaker Sir. My question is directed to the Minister of Lands, Agriculture, Climate and Rural Resettlement and in his absence, I direct it to the Leader of the
House. What is the Government position on provision of tillage – [HON. MEMBERS: Inaudible interjections] – as we go into the new season. I thank you – [HON. MEMBERS: Inaudible interjections] –
THE HON. SPEAKER: Order. Hon. Dzuma, can you ask a
straight forward policy question please.
*HON. DZUMA: Thank you Mr. Speaker Sir. My question is directed to the Minister of Lands, Agriculture, Water, Climate and Rural Resettlement. What is the Government policy in relation to the loss of cattle due to the disease that attacked our stocks in the past and also in terms of the agricultural tillage equipment and other agricultural inputs?
What is the level of preparedness in relation to that?
*THE MINISTER OF JUSTICE, LEGAL AND
PARLIAMENTARY SFFAIRS (HON. ZIYAMBI): Thank you Mr.
Speaker Sir. This question was asked last week but the Minister of Agriculture will come and present a Ministerial Statement on the preparedness of the next season touching on issues of mechanisation as well. Thank you.
HON. KARENYI: Thank you Madam. Speaker. My question will go to the Leader of Government Business. What is Government policy on mothers who have their children admitted in hospitals; what is the
Government policy on their welfare? This is because, I visited Harare
Hospital where the policy is that when a baby is admitted, the mother is not entitled to bedding or food. So, what is the Government policy on the welfare of mothers who have their children admitted in hospitals?
THE MINISTER OF JUSTICE, LEGAL AND
PARLIAMENTARY SFFAIRS (HON. ZIYAMBI): Thank you
Madam Speaker. I want to thank the Hon. Member for the question. Indeed, our paediatric units by their very nature of their set up have no accommodation or bedding for the mothers. It is designed in such a manner that it will accommodate the paediatrics or children who are admitted in those units. What the Government can do pertaining to the mothers; she clearly indicated that the hospital articulated the policy that they take care of the patient and not the mother. That is the position.
HON. KARENYI: Thank you Madam Speaker. My follow up
question is - what is Government policy on that? I want to find out how you can have a child who is being breast fed and when the child is still being breast fed and the mother will be hospitalised with the baby? If the mother is not getting food, how is this child going to feed from the mother because mother needs food in order to breast feed. If this is not addressed, you end up having malnutrition in hospitals and I think Government must have a policy that the mother must get fed by way of breakfast, lunch and supper. That is my proposal.
HON. ZIYAMBI: The question of malnutrition for the babies is out of the question. The question that babies in children’s wards will have malnutrition does not arise. When we have our pediatric patients in wards, the hospital takes it upon itself to ensure that those pediatric children are well looked after. If you go to those children’s wards - nine out of ten times when the children are ill, they cannot even breast feed. So the hospital ensures that they supplement and that they get the relevant treatment and food supplements while they are in hospital.
As for the mother, I think if she has a suggestion that we should have a policy of feeding the mothers, this is the platform in Parliament to ensure she brings those issues and if they are agreed on by this House, it can be adopted. I thank you.
HON. GONESE: My supplementary question is that can the Hon.
Minister explain to us what is the rationale for that policy which he has articulated. The Hon. Miniser in his response is asking the Hon. Member to come up with suggestions but I want him as a Minister of Government to explain to us what is the basis upon which the Government has come up with that policy which is placing those children at a disadvantage?
Can the Hon. Minister justify the current policy position which Government has adopted, because as the original question has illustrated, we have got the situation where those children who are admitted are placed at a disadvantage. Perhaps, the Hon Minister can try to explain to us why Government is being so insensitive because that is what it amounts to.
HON. ZIYAMBI: It is the standard practice the world over in hospitals. If the Hon. Member believes that we need to shift from that because I am not aware of any disadvantage to any hospitalised child because of the current practice. I am not aware of any deaths that occurred because of malnutrition due to the current practice. If they have statistics that indicate that we have a problem with the current practice and they have comparable jurisdictions where they can compare that when a child is hospitalised the mother is also catered for, then we are free to adopt that. I thank you.
HON. KARENYI: My proposal would be: can the Minister visit Harare Hospital for him to know what is happening there. The nurses are even asking Government to help these mothers because if your child is admitted for three months you go there and sit on a chair for the whole night for three months. To be very honest it is not healthy. Can he go and have a fact finding tour at Harare Hospital so that he can have a policy which will help the women of this country?
HON. ZIYAMBI: It is the choice of the mother to sleep on the table and observe the child. It is not the policy of Government. Once your child is admitted, the child is under the care of the nursing staff and they ensure that the child is bathed, fed and the mother is there because she is the mother. She is not obliged by any law to sleep in hospital. Our policy is very clear. That is why I said if we can have comparable jurisdictions where mothers are admitted in hospital together with their children, then we can study that with a view of adopting it. What we are doing now is the current practice worldwide and we do not admit mothers together with their children. I thank you.
HON. P. ZHOU: My question is directed to the Leader of the House. In light of the oncoming rainy season, cognisant that urban councils are failing to execute their duties effectively, what is Government doing to reduce incidences of cholera outbreaks in the urban areas?
THE MINISTER OF JUSTICE, LEGAL AND
PARLIAMENTARY AFFAIRS (HON ZIYAMBI): End of last year
we had incidences of cholera and we are approaching a rainy season. The Minister of Health who was new then in fact landed in cholera, came here and gave a Ministerial Statement of what the Government was doing with a view of ensuring that we deal with the cholera epidemic. Hon. Members are guided that this is something that was deliberated here and Government insists like what the Minister of Health said, on hygiene and ensuring that we have safe water always. This is what we will continue doing. I thank you.
HON. CHINYANGANYA: Thank you Madam Speaker. My
supplementary question is we all know that cholera in urban areas is caused by unclean water. What is Government doing considering that there is continuous load sheding and this affects water treatment plants?
What is Government doing to make sure that – [HON. MEMBERS: Inaudible interjections.] – water treatment plants are supplied with power? I thank you.
HON. ZIYAMBI: Thank you Madam Speaker. Our sewer system
does not require electricity. We have had serious cases of cholera outbreaks when we had electricity. Cholera is a disease where sewer and water that we use mix and we end up with the cholera bacteria. I do not know why the Hon. Members want to link the current power outrages to cholera; perhaps he can show me the causal link between the two. I am failing to get where he is leading to. Whenever he had cholera, we had electricity. The pumping of clean water has nothing to do with cholera outbreaks or the lack of pumping. Secondly, the issue of reticulation falls within the purview of local authorities and the Hon. Member was advised to go to the local authorities, most of whom are controlled by the MDC – [HON. MEMBERS: Hear, hear.]- to interrogate and find out what they are trying to do to ensure that we ameliorate the situation.
HON. T. MLISWA: Thank you very much for giving me this opportunity. My question is directed to the Deputy Minister of Home Affairs. Indeed, the demonstrations were banned according to the courts of this country, which is in order. The police had gone to the courts stating that they did not have enough manpower. My question is - what measures are they taking to ensure that next time there are demonstrations, they are well equipped for that? They cannot continue with prohibition orders. So what measures are they taking to train the police to capacitate themselves so that they are able to deal with any demonstration in the country because it is actually quite dangerous for the police to announce publicly that we do not have the capacity to deal with any demonstration in the country? It exposes them and they being the law enforcement agency, for them to give such alertness to the populace of this country.
I would like to know what measure are being taken to ensure that next time there is a demonstration, the police will be well prepared and do not go back to court with the same reasons?
THE DEPUTY MINISTER OF HOME AFFAIRS AND
CULTURAL HERITAGE (HON. MADIRO): Thank you Madam
Speaker. The Hon. Member has asked an important question. However, I am not privy to the reason he is giving here which he purports to have been given by the Zimbabwe Republic Police. What I am aware is that the police actually have given different reasons that what he has given that there was potential for violence and therefore it is the responsibility of the police to prevent destruction of property to prevent lawlessness. Therefore, that is the action that was taken before the violence took place, rather than capacity to handle demonstrations. I think it is clear and common cause that the police handled the situation very well –
[HON. MEMBERS: Inaudible interjections.]
Madam Speaker I think I need to state it very categorically that the
Zimbabwe Republic Police had the capacity to handle the recent potential demonstration which was going to be destructive. So Hon. Mliswa should be advised that it is not about capacity and any future demonstration will be handled as it comes, I thank you.
HON. T. MLISWA: Thank you Madam Speaker, precisely my
question to the Hon. Deputy Minister; I am glad that the Hon. Deputy Minister has even cited the fact that there were concerns of violence. After the prohibition order what did they do to investigate those who were supposed to purport violence during the demonstrations? The issue is they cannot go to court, the issue is, what did the Ministry and police do to investigate the very same people that they had identified to have caused violence? There had not been any arrest of anybody and no suspect at all. So, what then are they doing in terms of that? The reason is that we do not want a situation where His Excellency, the President Hon. E. D. Mnangagwa is labelled to be a heavy handed leader in Government when pretty well we talk about a new dispensation which is supposed to allow certain things to happen.
The police must be able to tell us who they have picked, who they suspected was going to cause violence, who they have investigated and so forth. The people of Zimbabwe will still go back to the courts to seek for those demonstrations again. What reasons are they going to give next time when people go to apply for a demonstration and appear before the court?
HON. MADIRO: Thank you very much Madam Speaker. The
Hon. Member, his supplementary question is actually the same as his original question that the police within their – [HON. SIKHALA:
Inaudible interjections.] –
THE HON. DEPUTY SPEAKER: Order Hon. Sikhala.
HON. MADIRO: Hon Speaker, the Zimbabwe Republic police to
the best of their judgment and intelligent information gathered, we are informed and we are clear that the demonstrations had great potential for violence and therefore – [HON. T. MLISWA: Who did you engage and arrest?] –
THE HON. DEPUTY SPEAKER: Order Hon. Mliswa – [HON.
MEMBERS: Inaudible interjections] –
HON. T. MLISWA: On a point of order Madam Speaker. I
raised the question on a point of clarity.
THE HON. DEPUTY SPEAKER: Order! Order!
Questions Without Notice were interrupted by THE HON.
DEPUTY SPEAKER in terms of Standing Order No. 64.
HON. GONESE: On a point of order Madam Speaker. First of all, Madam Speaker, I do not know whether there is any need for us to have Deputy Ministers in this country.
THE HON. DEPUTY SPEAKER: Hon. Gonese, I did not
recognise you. May you take your seat?
HON. SIKHALA: Madam Speaker, I move that the time for Questions Without Notice be extended.
HON. D. SIBANDA: I second.
HON. CHINOTIMBA: We cannot continue wasting time –
[HON. MEMBERS: Inaudible interjections.] –
THE HON. DEPUTY SPEAKER: Order, order, is there any objection [HON. MEMBERS: Yes.] – There is an objection – [HON.
MEMBERS: No! no!] –
The Hon. Minister of Justice, Legal and Parliamentary Affairs having approached the Chair.
THE HON. DEPUTY SPEAKER: Order, order, we are extending with ten minutes – [AN HON. MEMBER: So, can the Hon. Minister answer Hon. T. Mliswa’s question?] – Hon. Deputy Minister, you may continue to answer Hon. T. Mliswa’s question.
THE DEPUTY MINISTER OF HOME AFFAIRS AND
CULTURAL HERITAGE (HON. MADIRO): Madam Speaker, with
your indulgence, can the Hon. Member repeat the question so that I am clear of what he wants answered.
*HON. CHINOTIMBA: On a point of order Hon. Speaker.
Madam Speaker, the Deputy Chairperson of MDC, Job Sikhala said that I ate some people but the truth is, he urinates on himself every time. I want to know from him when I ate people. I want him to withdraw that particular word. He must withdraw because he insulted me.
THE HON. DEPUTY SPEAKER: Hon. Chinotimba, those
words are unparliamentary, can you withdraw those words.
*HON. CHINOTIMBA: Madam Speaker, the truth is there, I do
not eat people but he said that I eat people. If he does not withdraw his words that I eat people, I am also not going to withdraw because I do not eat people. Hon. Sikhala should be the first person to withdraw his words because that is what he said.
THE HON. DEPUTY SPEAKER: Hon. Sikhala, please
withdraw your statement.
HON. SIKHALA: Madam Speaker, it is that every time when the
Speaker leaves the Chair and leaves the Deputy Speaker, ZANU PF MPs do not respect Madam Chair – [HON. MEMBERS: Inaudible
interjections] – I did not say anything.
*THE HON. DEPUTY SPEAKER: Hon. Sikhala, please
withdraw the words that you directed to Hon. Chinotimba.
HON. SIKHALA: You directed him withdraw his words, so he must simply withdraw. He must simply follow the ruling of the Chair.
He wants to create another matter for you to make a ruling.
*THE HON. DEPUTY SPEAKER: Hon. Sikhala, please
withdraw those words.
HON. SIKHALA: I did not say those words.
*HON. CHINOTIMBA: When I raised the point of order, I wanted Hon Sikhala to withdraw his words. Your ruling should ensure that he withdraws his statement – [AN HON MEMBER: Chinotimba waakuda kuzotijairira, enda unodzura ndebvu idzodzo] - – [HON.
MEMBERS: Inaudible interjections.] –
I withdraw my statement but I also plead with Hon. Sikhala to withdraw the statement that he directed to me.
*THE HON. DEPUTY SPEAKER: Hon. Sikhala, may you
withdraw your statement.
HON. SIKHALA: Which statement must I withdraw?
*THE HON. DEPUTY SPEAKER: That Hon. Chinotimba is a
cannibal.
HON. SIKHALA: Madam Speaker, I am not getting you.
*THE HON. DEPUTY SPEAKER: That Hon. Chinotimba is a
cannibal.
*HON. SIKHALA: Chinotimba, did I say that you are a cannibal? If I said so, I withdraw - [AN HON. MEMBER: I have an issue that is troubling me here. It is said that VaMnangagwa came into power as a result of demonstrations but you are prohibiting us to do the same.] -
THE HON. DEPUTY SPEAKER: Order Hon. Member. I have
not recognised you.
AMOUNT PAID TO HIRE PRIVATE GULFSTREAM JET FOR THE
FORMER FIRST LADY
- HON. GONESE asked the Minister of Finance and Economic Development to state the amount paid by the Government to hire a private Gulfstream jet for the former First Lady, Grace Mugabe to attend her mother’s funeral.
THE MINISTER OF JUSTICE, LEGAL AND
PARLIAMENTARY AFFAIRS (HON. ZIYAMBI) on behalf of THE
MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT
(HON. PROF. M. NCUBE): I am not in a position to answer this question. I will forward the question to the substantive Minister of
Transport who is responsible for that and he will come and respond.
HON. GONESE: I have a point of order Madam Speaker. If you notice, this question was deferred from 21st November 2018. It has taken almost eight months for the Hon. Minister to come with that response that the question must be re-directed. This is really unfair and it is a disservice to the people of Zimbabwe. This is a pertinent question and I believe that if the Hon. Leader of the House felt that the question was not directed to the appropriate Minister, he should have responded timeously. As such, I object to the course of conduct exhibited in this august House where the Hon. Minister of Finance who has not been coming to this House for a long time simply then deflects the question and says that it must be re-directed. I appeal to the Chair to really ask the Leader of Government business and the Executive to be more serious about the business of Parliament.
THE HON. DEPUTY SPEAKER: I have heard you Hon.
Gonese but I also urge you to redirect your question to the relevant Ministry. Thank you.
PLANS FOR THE REFURBISHMENT OF POWER STATIONS
- HON. TSUURA asked the Minister of Energy and Power Development to inform the House of the Ministry’s plans for the refurbishment of power stations which were established before independence.
THE DEPUTY MINISTER OF ENERGY AND POWER
DEVELOPMENT (HON. MUDYIWA): Thank you Madam Speaker.
I would like to thank the Hon. Member for the question. Madam Speaker, I would like to inform the House that there are plans to refurbish or repower the small thermal power stations, that is Bulawayo, Munyati and Harare Power Stations. The plans involve changing of the boiler technology so that these power stations can use a low quality grade coal to reduce the cost of generation and improve efficiency. Currently the power stations use a 10 grade technology that utilises high quality coal which is expensive.
A contract for the repowering of Harare is in place and the one for Munyati is being finalised. The progress in implementation has been negatively affected by lack of funding. The repowering of Bulawayo project is at procurement stage. Hon. Members should also note that apart from the repowering of the Small Thermal Power Stations, ZESA is also working on Hwange Life Extension Project, Hwange Power Station units which have exceeded the design operation life of 25 years, hence their frequent breakdowns and low than desired output.
The project aims to refurbish the six units, that is unit 1 to 6 in order to restore equipment reliability, firm output and extend life.
HON. WATSON: Could the Hon. Minister please tell us whether the refurbishment of Bulawayo power station which you are busy negotiating with will include the pipeline to ensure that the power station no longer uses Bulawayo’s precious portable water. I thank you.
HON. MUDYIWA: Thank you Madam Speaker. I thank you Hon. Member for the question. Yes there is upgrading of the power line from Hwange to Bulawayo to Kwekwe. It is ongoing.
HON. WATSON: Can I just repeat the question. The question is about the water being used in the Bulawayo power station. There was supposed to be a pipeline being built from Khami dam to the power station to stop the use of potable water in the power station because it is precious. I want to know that is included in the funding that you have obtained and the plan at hand. Thank you.
HON. MUDYIWA: At the moment the project that you are talking about according to the question is about the upgrading of the power station, but that will be considered in the near future. I think after the upgrading then we consider that.
HON. CHIKWINYA: I think because of the importance of Hon.
Watson’s question I will just try and walk through because it is the same project. On the production of electricity on these small thermal power stations there is high usage of water and Bulawayo included. So according to the design in Bulawayo to compensate for the water which is supposed to be used in the production of electricity - the design entails drawing water from Khami dam to Bulawayo so that you spare the municipal water for residential consumption.
Now Hon. Watson’s question is does your procurement also include drawing water from Khami to the CBD where the Bulawayo thermal power station is included. So as you answer you may relate to that. However, my supplementary question is that the cost of repairing the small power thermal stations because of their age now it is so much that can we not invest in new technology that is outside coal because (1) coal itself is becoming extinct to the extent that we are now finding it difficult to even supply Hwange which is our main power station. What measures are there Hon. Minister for us to invest in new technology, solar included so that at least we can quickly realise power production which can be fed into our grid? Thank you.
HON. MUDYIWA: Thank you Hon. Chikwinya for clarifying that question. Yes, the project to upgrade the Bulawayo Power Station includes everything that is involved, including the pipeline to draw water from Khami Dam as stated, it is in the project. Coming to his question, what was the question?
HON. CHIKWINYA: My question was, in her response, she said the power stations are now above 25 years of age. The upgrades include the use of coal that is not high in phosphorous content, which is currently difficult because it requires more energy to burn, that was her response. My issue is; the technology that they are continuously engaging in is expensive and requires fuel in coal which is becoming extinct in Hwange. Why do they not invest in new technology that is devoid of coal? I have suggested solar, which is easy to realise for the production of electricity which goes straight into our grid. Thank you.
HON. MUDYIWA: Thank you Madam Speaker. Yes, the
upgrading of the old thermal power stations is expensive at the moment, considering that there is new technology that we can take on board. However, the issue at the moment is that we cannot ignore those power stations which are already operational. It is just a matter of upgrading to the level where we can generate more electricity at the moment. The long term measure that we have is that, we are encouraging renewable energy, solar energy plants; we have a number of such projects which are under consideration and that will be added on to the grid in the near future once they are concluded. Thank you for that question.
HON. HAMAUSWA: Thank you Madam Speaker Ma’am. I
want to ask the Hon. Minister whether it is not possible for their Ministry to do a proper research and inform the House. I say this because the question asked by Hon. Watson is very important, which borders on the management of water, which is now becoming a scarce resource in Zimbabwe.
I will further explain with evidence from Kariba Dam; engineers are saying what we experienced was poor management of the water that was used to generate power where generators were using more water and there was no capacity to take the energy that was being generated. In the end, we are suffering as a result of shortages of electricity. My question is - why can the Ministry not do a proper research and inform the House on the status of water management in terms of generating power, other than to mislead the House to say those issues are going to be considered in this project, yet we know that nothing is happening similar to what the Minister would want the House to believe.
HON. MUDYIWA: Thank you Madam Speaker. We are
currently engaged in research work on the best way forward in terms of electricity generation. I cannot say we are ignoring that fact, we are considering that. The current power generation consumes a lot of water but we are looking at ways of how to mitigate that and get out of it and use better ways like renewable energy which uses the sun to generate solar energy.
WRITTEN SUBMISSIONS TO QUESTIONS WITH NOTICE
PURCHASE OF VEHICLES FOR CHIEFS IN 2018
- HON. MASUKU asked the Minister of Finance and Economic Development to inform the House on the amount of money used to purchase vehicles for chiefs during 2018.
THE MINISTER OF JUSTICE, LEGAL AND
PARLIAMENTARY AFFAIRS (HON. ZIYAMBI) on behalf of THE
MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT
(HON. PROF. M. NCUBE): Government provides chiefs with
vehicles in order to assist them in the discharge of their duties. Prior to
Government’s intervention in 2017, vehicles for chiefs were last procured in 2006 being a Mazda single cab B1800.
During 2017, Government procured 226 Isuzu double cab vehicles through issuance of US$7.5 million in Treasury Bills. The first batch of 30 vehicles was allocated to chiefs by the former President on 30 October 2017 during the Annual Chiefs Conference in Bulawayo. The balance of the vehicles was delivered and distributed during 2018. The expenditure incurred during 2018 with regard to US$4.66 million and was expended towards payment of import duty for the vehicles.
CONSTITUTION OF A COMMISSION OF INQUIRY ON
PAYMENT MODALITIES OF INSURANCE LOSSES DURING 2005
– 2008
- HON. SHOKO asked the Minister of Finance and Economic Development when the other Commission of Inquiry that looks at the payment modalities for persons and insurance losses incurred during the economic meltdown of 2005-2008 will be constituted as recommended by the first Commission of Inquiry report.
THE MINISTER OF JUSTICE, LEGAL AND
PARLIAMENTARY AFFAIRS (HON. ZIYAMBI) on behalf of THE MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT
(HON. PROF. M. NCUBE): Hon. Members will recall that the
Commission of Inquiry was approved by both the Cabinet and
Parliament in 2018. Paragraphs 991 and 992 of the report recommend IPEC, as the industry regulator to assume overall oversight over the implementation of the compensation framework by the industry as well as obligating the institutions to submit their proposed compensation schemes.
In this regard, IPEC has already been mandated to look into compensation modalities. There is thus no other Commission of Inquiry to be constituted.
I am also aware that IPEC will soon be engaging industry to discuss this issue. In fact, an initial consultative meeting was set to take place in the last month with industry players to kick start the process but has however been postponed to a later date.
MEASURES AGAINST BUSINESS PEOPLE OPERATING FOUR-
TIER PRICING SYSTEM
- HON. MADZIMURE asked the Minister of Finance and Economic Development to explain measures being taken against some business people who are operating a four-tier pricing system.
THE MINISTER OF JUSTICE, LEGAL AND
PARLIAMENTARY AFFAIRS (HON. ZIYAMBI) on behalf of THE
MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT
(HON. PROF. M. NCUBE): Government is aware that people are taking advantage of the current macro-economic environment and challenges on the foreign exchange market to continue operating different tier pricing systems –RTGS$, mobile money transfer, bond cash and US$.
These practices are normally meant to counter perceived risks related to the different exchange rates between the parallel and the interbank.
However, to some businesses, the practice is for rent seeking purposes. The key issue here is the current difference between the interbank and parallel exchange rates and the attendant foreign currency shortages in the market. In addition, an exit from multi-currency to a local currency regime is hard and peculiar to our situation.
Government is however prioritising key stabilisation measures which are already being implemented under the Budget and the TSP with a view of getting convergence of those two exchange rates which ultimately removes the rent seeking objectives and exchange risks.
Similarly, the soon to be introduced single local currency will also address this challenge and lastly, the ongoing efforts in improving performance of the economy including exports and other sources of foreign currency will also be critical and pursued.
Furthermore, the Ministry of Industry and Commerce will also play a supportive role through respective functions of removing unethical trading practices in the economy.
CONVERSION OF PENSION SAVINGS INTO EQUITY
- HON. CHIKUDO asked the Minister of Finance and
Economic Development whether the Ministry could consider converting into equity pension savings still stuck in long term non liquid assets dating back to 2009 in order to unfairly deprive pension funds contributors.
THE MINISTER OF JUSTICE, LEAGAL AND
PARLIAMENTARY AFFAIRS (HON. ZIYAMBI) on behalf of THE
MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT
(HON. PROF. T. NCUBE): Hon. Chikudo’s question is not quite clear as he seems to be talking of equity pension savings without specifying what equity he is referring to. He also talks of long term non liquid assets. It is not clear if he is referring to investment property which most pension funds are invested in or if he is talking of Government prescribed assets which pension funds are obliged to invest in. In the absence of clarity in Hon. Chikudo’s question, I will respond in the way I assume the Hon. Member meant to ask.
Pension funds are obliged to subscribe to prescribed assets to the tune of 10% of their assets. As at 31 December, 2018, prescribed assets amounted to $325.6 million which constitutes 6.24% of their assets.
Most of the prescribed assets invested in are short term instruments with maximum tenors of 3 years.
In view of this most of the instruments issued after adoption of the multiple currencies matured, hence there are no long term instruments contrary to Hon. Chikudo’s assertion that that funds are tied up in longterm instruments. Furthermore, the instruments are tradable, thus pension funds can dispose of them as and when they wish to do so.
Alternative investment by pension funds in projects of national interest on BOOT/BOT arrangements may also be considered for prescribed asset status. In addition Government in consultation with industry is exploring ways to preserve pension values.
POLICY ON SUPPORTING LOCAL INVESTORS
- HON. CHIDZIVA asked the Minister of Finance and
Economic Development to explain to the House Government policy on supporting local investors.
THE MINISTER OF JUSTICE, LEAGAL AND
PARLIAMENTARY AFFAIRS (HON. ZIYAMBI) on behalf of THE
MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT
(HON. PROF. T. NCUBE): Private investment per se is best supported through:
- Legal instruments which aim at guaranteeing on property rights
etc;
- A fair regulatory environment;
- Fair labour laws;
- Macro-economic stability and other appropriate policies void of policy reversals; and
- Infrastructure and public utilities such as good roads, water and electricity.
These are key supporting pillars which Government is pursuing in support of local and other investors. However, under our circumstances,
Government goes further to support local businesses or investors
through facilitating inflows or lines of credit, that is facilities from Afreximbank, PTA, China and India, engaging various external partners for investment including technology transfer.
In addition, through the Ministry of Industry and Commerce and other Departments Government supports the local industry in sourcing markets for our exports. Specific direct funding and other indirect sources of funding are also channeled to youths and women businesses under various economic empowerment programmes. To that effect, we have the Empowerment Bank which has so far disbursed more than RTGS$12 million.
Treasury also offers various tax and other incentives to local industries. These include tax holidays for Greenfields projects as well as preferential treatment in awarding contracts. These are just a few examples of how Government supports the local industry.
COMPENSATION OF BANK ACCOUNT HOLDERS WHO’S
SAVINGS WERE ERODED DURING THE ZIMBABWEAN
DOLLAR PERIOD
- HON. B. DUBE asked the Minister of Finance and Economic Development to explain the Government position regarding compensation of bank account holders whose savings were eroded during the Zimbabwean dollar period.
THE MINISTER OF JUSTICE, LEAGAL AND
PARLIAMENTARY AFFAIRS (HON. ZIYAMBI) on behalf of THE
MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT
(HON. PROF. T. NCUBE): The Hon. Member may be aware that Government has already finalised the demonetisation exercise commencing with Statutory Instrument 70 of 2015 of 12th June 2015 which demonetised the Zimbabwe Dollar and formalised the multicurrency dispensation. The demonetisation exercise was completed in 2015 when bank balances were converted from Zimbabwe Dollars to United States Dollars.
I therefore wish to advise the Hon. Dube that compensation for bank account holders whose savings were eroded during the Zimbabwe dollar period had finalised in 2015.
GOVERNMENT ASSISTANCE TO GWERU CITY COUNCIL ON
PURCHASING PUMPS
- HON. B. DUBE asked the Minister of Finance and Economic Development to explain measure being taken by the Government to assist Gweru City Council to raise the US$6 million for purchasing pumps for transmitting water from Mabongobwe Dam to the City.
THE MINISTER OF JUSTICE, LEAGAL AND
PARLIAMENTARY AFFAIRS (HON. ZIYAMBI) on behalf of THE
MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT
(HON. PROF. T. NCUBE): The city of Gweru’s water supply comes from two main sources, namely Gwenhoro and Amaphonokwe dams. To date the main water source has been Gwenhoro dam supplying more than 90% of the city’s water requirements and is now at 25% full equivalent to about three months water supply. There is therefore urgent need to address the imminent water crisis facing the city.
Amaphongokwe Dam on the other hand is 75% full equivalent to more than 12 months water supply. However, the pumping equipment is down, hence the urgent need to procure four raw water pumps to allow for the use of this available resource.
The council completed the procurement process in June and following Government support of 6.5 million Rands, the importation of pumps and equipment has since been done and the City of Gweru received delivery yesterday with installation of the raw water pumps expected to commence tomorrow and will take about two weeks to complete.
Completion of the project will address the challenge of raw water supply for the City of Gweru. In addition US$2.4 million will still be required for procurement of treated water pumps, civil works and electrical works among other works.
MEASURES TO MANAGE THE MULTI-TIER PRICING SYSTEM
- HON. S. BANDA asked the Minister of Finance and Economic Development to inform the House measures being taken to manage the multi-tier pricing system and state when the RTGS dollars will become the sole trading currency.
THE MINISTER OF JUSTICE, LEAGAL AND
PARLIAMENTARY AFFAIRS (HON. ZIYAMBI) on behalf of THE
MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT
(HON. PROF. T. NCUBE): I have already responded on measures in managing four tier pricing system and it is our plan, subject to an appropriate macro-economic environment that we operationalise the single local currency by end of the year.
HON. CHIKWINYA: On a point of order. From question 15 up to question 20 the Hon. Members are not in the House as well as the Minister, but your ruling is that the Hon. Minister may submit the answer. It is that there is an Acting Minister and if so, we are not seeing the Acting Minister submitting the answer. I am saying so because we cannot expunge these questions when they have not been responded to.
THE DEPUTY SPEAKER: Hon. Ziyambi is standing in for the
Minister of Finance and Economic Development.
MEASURES TO MONITOR AND ENFORCE COMPLIANCE TO
STATUTORY INSTRUMENT 142 RESERVE BANK OF
ZIMBABWE (LEGAL TENDER) REGULATIONS 2019
- HON. SEN. TONGOGARA asked the Minister of Finance and Economic Development to inform the House the measures being taken by the Government to monitor and enforce compliance to
Statutory Instrument 142 Reserve Bank of Zimbabwe (Legal Tender) Regulation 2019 as business operators in down town Harare continue to charge their products in foreign currency.
THE MINISTER OF JUSTICE, LEAGAL AND
PARLIAMENTARY AFFAIRS (HON. ZIYAMBI) on behalf of THE
MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT
(HON. PROF. T. NCUBE): SI 142 being a law is being monitored for compliance through various arms of Government and various instruments at each point in time. To those business operators down town Harare who continue to flout this law, they can only expect to face the full wrath of the law at an unexpected hour. For that matter, there is no policy reversal on this issue.
CRITERIA FOR ELECTRICITY LOAD SHEDDING
- HON. CHIMINA asked the Minister of Energy and Power Development to inform the House the criteria that is used for electricity load shedding and to explain why Mkoba 4, 5, 14, 15 and 19 suburbs are the only ones experiencing electricity power outages in Gweru.
THE DEPUTY MINISTER OF ENERGY AND POWER DEVELOPMENT (HON. MUDYIWA): Mr. Speaker Sir, the Ministry of Energy and Power Development would like to advise the House as follows;
Firstly, load shedding is carried out as a last resort to ensure stability and functionality of the national grid. It is about balancing supply and demand to avoid total system collapse.
Secondly, during the operation of the power system, unforeseen additional supply deficits do occur, thereby creating further shortfalls that may trigger the controller to increase the demand curtailment. What this means is that other sections or feeders that may not originally have been scheduled to be shed on that day will be shed urgently to maintain the balance.
After the recent securing of an additional 350 MW non-firm (during off-peak hours), power import from Eskom premised on the exporting customers’ arrangement, the implementing agent, ZETDC, should normally operate at Stage 1 load shedding (a scenario of shorter outages). However, due to the recent outages of two units at Hwange Power Station and poor performance of small thermal power stations
(Munyati, Harare, and Bulawayo), ZETDC is currently operating at Stage II load shedding (a scenario of longer outages) which has the effect of affecting previously unshed industries and other installations.
Now to the more specific issues as raised for the load shedding on
Mkoba 4, 5, 14, 15 and 19, I would like to respond by saying:
- The referred sections of Mkoba suburb are not the only ones that are being shed in Gweru. Most of Gweru town and its environs are experiencing the same shedding patterns as are other parts of the country as can be confirmed by other members of this House. The same prolonged shedding is affecting both domestic and agricultural customers.
- However, there are some circuits which are normally exempted from load shedding because of their sensitive nature. These include hospitals, security installations, water and sewer works as well as Commercial Business Districts. We need to point out that in most cases where such a feeder as one feeding a hospital exists; it has connected to it other circuits other than the hospital which circuits therefore benefit from the exemption but not by design.
- To separate these hang-on circuits from the hospital or security installation, feeders require a large amount of money and time to implement. Ordinarily, initial ZETDC network circuit designs and configurations did not have load shedding in mind because load shedding is an abnormal way of an operating system.
REPAIR OF FAULTY ELECTRICITY TRANSFORMER FOR
CHOMUNYAKA PRIMARY SCHOOL
30 HON. RAIDZA asked the Minister of Energy and Power Development to inform the House when the faulty electricity transformer which was sent for repairs will be repaired and restored to the Chomunyaka Primary School in Mberengwa East Constituency.
THE DEPUTY MINISTER OF ENERGY AND POWER
DEVELOPMENT (HON. MUDYIWA): Mr. Speaker Sir, the Ministry
of Energy and Power Development would like to firstly advise the
House that there is a huge backlog for replacement transformers in ZETDC, with over 2300 transformers faulting due to vandalism and other mechanical causes. In ZETDC Southern Region where Mberengwa falls, 249 transformers of various sizes are required to replace faulty ones across the Midlands Province. A further 116 are required for new connections. Efforts will continue to be made to get a replacement transformer for the school.
ZETDC has confirmed that indeed, a 25Kva, 11/0.4 KV transformer got burnt at Chomunyaka Primary School and the burnt transformer windings and laminations were burnt beyond repair. The prevailing foreign currency shortage has frustrated efforts to urgently get a replacement transformer.
In order to address the transformer shortages, the procurement process has been activated with suppliers for the delivery of 600 transformers of various sizes. Thank you.
THE TEMPORARY SPEAKER: Order Hon. Members. We no
longer have ministers to answer written questions so we move on to Orders of the Day.
MOTION
REPORT OF THE PORTFOLIO COMMITTEE ON BUDGET,
FINANCE AND ECONOMIC DEVELOPMENT ON MR. CHARLES
MANDIZVIDZA GANAGANA’S PETITION
HON. MHONA: I move the motion standing in my name, that this
House takes note of the Report of the Portfolio Committee on Budget,
Finance and Economic Development on Mr. Charles Mandizvidza
Ganagana’s petition to Parliament of Zimbabwe on the progress made on the implementation of the Recommendation of the Commission of Inquiry into the Conversion of Insurance and Pension Values from the Zimbabwe dollars to United States dollar (S.C 7, 2019).
HON. G. DUBE: I second.
HON. MHONA: Thank you Madam Speaker Ma’am. I want to
present a Committee Report on the Budget, Finance and Economic
Development on Mr. Charles Mandizvidza Ganagana’s petition to Parliament of Zimbabwe on progress made on the implementation of the recommendations of the Commission of Inquiry into the conversion of insurance and pension values from the Zimbabwean dollar to the United States dollar.
Madam Speaker Ma’am, I am actually thrilled to say that finally, the motion has been tabled today. It is my humble request to the Hon. Members to pay heed to this very important report which concerns the lives of the masses of Zimbabwe who have been prejudiced because of the pensions.
Parliament of Zimbabwe received a petition from one Mr. Charles
Mandizvidza Ganagana on 15 November 2018 which was referred to the Budget, Finance and Economic Development Committee for consideration. The petitioner beseeched Parliament to ensure implementation of the recommendations of the Commission of Inquiry into the Conversion of Insurance and Pension Values from ZW$ to US$.
The Committee invited Zimbabwe Pension Insurance Rights Trust
(ZimPIRT) together with the Insurance and Pensions Commission (IPEC) to appear before it on the 14th of January 2019. It was during this meeting that the Committee Members realised that the matter required a thorough appreciation and understanding. The Committee, therefore, resolved to convene a seminar to enable the former
Commissioners of the Commission of Inquiry into the Conversion of Insurance and Pension Values from ZW$ to US$ to unpack and fully equip the Committee Members with all the information on the matter. A two-day seminar with former Commissioners of the Commission of
Inquiry was subsequently convened in Mutare during the period 22 to 23 February 2019. The Committee after deliberating on the matters presented to it by the Commissioners and IPEC, felt that it was important to conclude the inquiry by inviting the insurance companies to also give their side of story before tabling a report in the House. Thus, the Zimbabwe Association of Funeral Assurers (ZAFA) and Life Offices Association of Zimbabwe (LOAZ) appeared before the Committee on the 20th of May 2019. Therefore, this report is an outcome with various stakeholders in the sector. I will actually table the entire report, so I will not bother you with a number of issues that I have.
Background
The Commission of Inquiry into the Conversion of Insurance and Pension Values from the Zimbabwe Dollar to the United States Dollar was set up by the then President in terms of Section 2 of the
Commissions of Inquiry Act [Chapter 10:07] by way of a proclamation in S.I. 80 of 2015 as amended in S.I. 1 of 2016. The appointed
Commissioners were Justice Leslie George Smith (Chairman), Mrs. Violet Mutandwa, Mr. Itayi Walter Chirume, Dr. Godfrey Kanyenze, Mr. Anesu Daka, Mr. Tapiwa Maswera, Mr. Brains Muchemwa, Mr.
Martin Tarusenga and Mr. George Dikinya (deceased - died on 16 March 2016) and the Secretary, Mr. Cuthbert Tafirei Munjoma. They conducted the Inquiry over an 18-month period from 1 September 2015 to 28 February 2017.
The Commission had 14 broad terms of reference, which included the establishment of the total value; nature and type of assets owned by insurance companies and pension funds; causes of loss of value of insurance and pension benefits; assessing the conversion methods and processes of ZW$ insurance and pension assets and liabilities to US$; establishing the extent of prejudice (if any) to policyholders and pensioners; recommending compensation where prejudice has been established; examining instances of regulatory failure; assessing soundness of the industry and the role of the insurance and pensions sector in the economy.
The Inquiry’s Report was finalised and submitted to the Minister of Finance and Economic Development in May 2017, for onward submission to the President.
The Minister of Finance and Economic Development tabled the
Inquiry’s Report in Parliament on 09 May 2018, for further debate and deliberations by Members of Parliament.
In a letter dated 16 July 2018, Government, through the Minister of Finance and Economic Development, mandated IPEC to spearhead postinquiry reforms although IPEC received the mandate letter on 31 August
2018.
Government re-affirmed its decision to mandate IPEC as the implementing agency of the post-inquiry reforms in the Transitional Stabilisation Programme, a position that was also re-stated in the 2019
National Budget Statement.
Major Findings of the Commission of Inquiry (CoI)
Total Industry Assets and their breakdown
It is contained in the CoI report that of the three sources of asset data considered namely financial statements; valuation and the regulator’s reports, the amount of total asset values differed depending on the source of information used. This indicates inconsistencies and non-standardised methods of disclosure of financial data. The regulator was not consistent in producing annual reports containing industry asset valuations, broken down by type of insurer, class of business and investment class during the investigation period. The Commission was alarmed to note that the regulator failed to produce annual reports for the period 2001 to 2003 and 2005 to 2008, which reports could have been a secondary source of asset data.
The total assets in the Insurance and Pension Industry, including
NSSA, were worth approximately US$5.13 billion in December 1996,
US$3.69 billion in December 2008 and US$5.1 billion in December
The Commission noted with concern the understatement of asset values for the period 1996 to 2008, attributable to the failure by big institutions such as Old Mutual, First Mutual, ZB Life and Fidelity Life, to provide accurate, consistent and reliable asset values for the period prior to dollarisation. Whilst the incomplete and inconsistent asset data submissions to the Commission could have been a genuine failure to maintain the data as required, the possibility of the motive to conceal incriminating information remains.
The assets were mainly invested in property and listed equities, which were a hedge against inflation and which occasioned negative real returns on fixed income securities such as bonds and money-market instruments. Contrary to the general perception in some quarters of the industry that most assets were lost through investments in bonds and money-markets during the high inflation period, such investments were very negligible during the period 2003 to 2008. The reduction in asset values during the period prior to 2008 was therefore largely attributed to misappropriation of assets and excessive expense structures, as opposed to hyperinflation. Over 85% of the existing assets in the insurance and pension industry were acquired before dollarisation in 2009, thus showing that the majority of assets survived hyperinflation. The question now is who is benefiting from such investments?
Causes of loss of value or prejudice
The loss of value in Insurance and Pension benefits mainly occurred before the conversion from ZW$ to US$ and dollarisation only revealed the extent of the loss. The Commission classified the causes of loss of value into three factors, macro-economic, regulatory and institution-specific.
Macro-economic Factors: The macro-economic factors that caused pensioner and policyholder prejudice were inflation, currency debasing and the exchange rate used during the de-monetisation of ZW$ to US$ in 2015. Inflation resulted in loss of benefit values through the erosion of fixed premiums and pension contributions that were not indexed to inflation. In addition, negative real investment returns on fixed income securities such as bonds, treasury bills and money-market instruments resulted in loss of value, hence insurance companies and pension funds divested from such investments during the period 2001 to 2008.
The removal of 25 zeros (currency de-basing) during the period August 2006 to February 2009 resulted in insurance companies and pension funds technically extinguishing their obligations to policyholders and pensioners without any actual payments being made. The industry players duly removed zeros on promised sum-assured or pension benefits when the ZW$ currency was de-based. This resulted in abnormally low ZW$ benefit values which upon conversion to US$, were for some pensioners as low as US$0.05, and in most cases zero despite several years of contributing to pension funds. Meanwhile, assets that were supporting insurance and pension liabilities were transferred to shareholders of insurance companies or became surpluses in some defined benefit pension funds.
The exchange rate of US$1 to ZW$35 quadrillion (15 zeros), which was used when the ZW$ currency was de-monetised in 2015 prejudiced insurance policy-holders and pensioners as it reduced the already worthless ZW$ values that had been deposited in individuals’ bank accounts to just a few US cents or at a maximum, US$5. Regulatory Factors: The CoI report identifies regulatory failure on the part of Government and the Insurance and Pensions Commission (IPEC) as having caused loss of value. There was failure by the Government and regulator to guide the industry during hyper-inflation, currency de-basing and during the conversion of insurance and pension values when the economy was dollarised. In addition, the delayed demonetisation of the ZW$ currency resulted in the various entities in the industry applying their own conversion methods, which were prejudicial to policy-holders and pensioners.
Regulatory failure on the part of IPEC manifested itself through failure to conduct on-site supervision and to investigate its licences, allowing arbitrary insurance product terminations by insurance companies, poor investment management practices, poor recordkeeping, failure to deal with predatory administration expenses which averaged 81% of total contributions and premiums in a dollarised environment, failure to protect policyholders and pensioners when deregistering insurance companies, failure to deal with pension contribution arrears as well as the failure to strengthen the weak legal and institutional frameworks for insurance and pension businesses. Institutional Factors: There was loss of value attributed to insurance companies and pension funds which included failure to index contributions, premiums and benefits to inflation; arbitrary and prejudicial conversion methods from ZW$ to US$; arbitrary terminations of products and closures; pension contribution arrears; failure to separate insurance; pension and shareholder assets; poor record-keeping as most institutions could not account for assets; investment returns and individuals’ contribution records; poor corporate governance practices; unsustainable administration and other expenses as high as 300% of pension contributions as well as compromised provision of actuarial services and absence of skills. There were only 2 resident qualified actuaries in Zimbabwe at the time of conversion.
Key Corporate Governance Irregularities Identified by the CoI Poor oversight by some boards: Some boards, at the time of the inquiry had last met as far back as 2011 with one classic example of a Board Chairman who was not sure if the institution whose board he chaired was still operational since the board had last met in 2011 (page 322). Some boards operated without any committee of the board, a serious deficiency in corporate governance and indeed, an indictment on
IPEC’s supervisory role;
Regulatory Capture through Failure to have Operational
Independence from both the Government and the Industry:
Individuals with beneficial shareholding in the company took executive roles in their business while some also served on the regulatory board
(IPEC) or industry association e.g. Moonlight, and Rutendo Funeral Assurance Companies.
Conflict of Interest: The IPEC Board was composed of members who had conflict of interest. Mr Richard Muirimi sat on the IPEC Board, at the same time he was a controlling shareholder of pension administrator, Comarton Consultants. The late Elisha Mushayakarara was chairman of both ZB Life and the IPEC Board. Mr Douglas Hoto, sat on the board of IPEC, and was also the CEO of Altfin Life
Assurance.
Non remittance of deducted pension contributions: It was discovered that the majority of corporates, e.g. the Mining Industry
Pension Fund (MIPF), NRZ, ZUPCO, CSC, Fidelity Printers Pension Fund and Unified Councils Pension Fund (UCPF) among others, were not remitting pension contributions to pension houses. Conversion of schemes from defined benefit to contributory schemes without regulatory approval nor consent of the employees. Highlights of the Complaints Received by the CoI
There were 68% complaints received in writing that were against private sector insurance and pension service providers, followed by the Government Pension Agency and NSSA, which had a combined 23% share of the complaints. Parastatal-related pension funds namely GMB, LAPF, NRZ, Unified Councils, and ZESA constituted 9% of the total complaints.
Complaints for the Government Pension Agency and NSSA were 54% and 46% respectively.
Almost 83% of public complaints were against life companies, followed by 7.9% against fund-administrators such as Comarton Consulting, Marsh Employee Benefits and Minerva Benefit Consulting, 4.9% were against funeral assurers and 4.5% against stand-alone pension funds;
Complaints in respect of Life Assurance Companies as a percentage of total Complaints Against Life Companies - Old Mutual
33.9%, First Mutual Limited 19.8%, Zimnat 19.3%, Fidelity Life 15%,
ZB Life 11.6% and Heritage Life 0.4%. Complaints in respect of
Funeral Assurance Companies as a % of total complaints against Funeral
Assurers - Doves 58%, First Funeral 19.3%, Moonlight 12%, Foundation Mutual Society 10% and Cell Funeral 0.7%.
The Commission commended Nyaradzo Funeral Assurance
Company which received not a single complaint related to loss of value in relation to funeral assurers established prior to dollarisation.
Zimpirt Submissions to the Committee
In its submission, ZimPIRT proposed urgent payment and honouring of rightful benefits due to pensioners, from pension and insurance schemes (contracts) that they contracted into, over very long periods.
- ZimPIRT expressed concern on the following:-
- Inappropriate Inquiry and recommendations of the Commission of
Inquiry;
- Appointment of IPEC as the implementing agent of post inquiry reforms.
- Apparent unwillingness on the part of IPEC to be transparent in pensions and insurance provision;
- IPEC being incompetent to compensate and regulate impartially; and
- IPEC being responsible for prejudicing pensioners.
IPEC’s Observations on Zimpirt’s Concerns
Inappropriate Inquiry and Recommendations of the Commission of Inquiry
IPEC noted ZimPIRT’s allegations of unprofessionalism in the way in which the inquiry was conducted, which eventually led to the purported resignation of a former Commissioner. IPEC’s view is that the alleged unprofessional conduct should have been brought to the attention of the appointing authority, who is the President. IPEC further noted that the purported resignation of the former Commissioner took place after the report was presented to Government.
Appointment of IPEC as the implementing agent of post inquiry reforms.
IPEC noted the ZimPIRT’s objection to the recommendation of appointing IPEC as the implementing agent for post-inquiry reforms. IPEC is of the opinion that that its appointment was informed by the fact that the post-inquiry mandate is generally of a supervisory nature and in line with the organisation’s statutory functions which include insurance and pension legal reforms, supervisory reforms, governance and institutional reforms. The observed weaknesses on the part of IPEC should be addressed without taking away its implementing role. Apparent unwillingness on the part of IPEC to be transparent in pensions and insurance provision.
It is the view of IPEC that it is a regulatory and supervisory institution for the insurance and pensions industry. By virtue of being a public institution, it is subject to disclosure requirements in terms of the
Insurance and Pensions Commission Act [Chapter 24:21], the Insurance Act [Chapter 24:07], the Pensions and Provident Funds Act [Chapter
24:09], the Public Finance Management Act [Chapter 22:19] and the Public Entities Corporate Governance Act [Chapter 10:31].
IPEC being incompetent to compensate and regulate impartially. IPEC submitted that it is not responsible for paying out benefits to policyholders and pension scheme members, and the issue of
“incompetent to compensate” is misplaced.
IPEC being responsible for prejudicing pensioners IPEC submitted that the report of the Commission of Inquiry attributed loss of value to the macroeconomic environment (43%), regulatory failure (21%) and the Insurance Companies and Pension
Funds (36%).
The report also attributed regulatory failure to outdated legislation, failure to enforce good corporate governance, failure to protect policy holders and pensioners as well as the failure to guide the sector on conversion of values from the ZW$ to the US$. It is therefore IPEC’s view that the regulatory weaknesses should be addressed as part of postinquiry reforms.
Submissions Received from Zimbabwe Association of Funeral
Assurers (ZAFA)
ZAFA comprises of the following members; Doves, Moonlight, Nyaradzo, First Funeral, Sunset, Vineyard, Foundation, Ruvimbo and
Passion Funeral Assurers.
ZAFA members duly took note of all the findings and recommendations made by the CoI, but however, raised some concerns with regard to some of the recommendations in the Commission’s report.
It was submitted that the hyperinflationary environment to a large extent was the cause of the loss of value and was no different to the act of God provisions in a funeral agreement, where by virtue of impossibility as a result of natural disaster, an assurer would not be able to assume liability to all insured. ZAFA members believe that the hyperinflation period phenomenon was beyond natural to the extent that the experience of hyperinflation must be considered as an unforeseen risk which may require impossibility of performing specific promises especially when the policy is not paid-up. The simple fact of termination by other assurers was that the agreement by both parties was eroded to the extent that there was no value in premium that could transcend to any reasonable investment or funeral service.
On paid up funeral policies, ZAFA pointed out that policyholders were not compelled to start afresh after dollarisation or were not subjected to unilateral alteration of promised benefits. It was submitted that all fully paid-up policies were still being honoured by ZAFA members. However, policy holders were given the options to upgrade their paid-up policies at conversion to allow policy holders to upgrade to new benefits which were not previously included such as bus for mourners and grocery cash pay-out. A commensurate premium was actuarially determined for all the policy upgrades.
We have a number of assertions from ZAFA but these will also appear in our Hansard. Submissions received from Life Offices Association of Zimbabwe comprises of the big players in the pension and insurance industry namely; First Mutual Life Assurance, Old Mutual
Life, ZB Life, Fidelity Life, ZIMNAT Life, Nyaradzo Life, CBZ Life,
Econet Life,. First Mutual Reinsurance (Life and Health) and Zep Reinsurance and Emeritus Reinsurance. The associations dispute some of the findings made by the Commissioner of Inquiry in particular that as the industry, they were responsible for 36% of the loss of value suffered by policy holders and pension fund members. LOAZ members are of the strong view that macro-economic environment as well as regulator’s failure was the key determinant factor for the loss of value experienced in the sector. It was heard that due to the hyper inflationary environment, most if not all companies failed to index contributions, premiums and benefits in line with inflation as it was proving to be difficult to keep pace with the rate of inflation which was more than doubling every hour. That is failure to index contributions, premiums and benefits to inflation was beyond the ability of the companies and that should be wholly attributed to the macroenvironment. They also attributed the product terminations and closures by policy holders, increased surrenders and lapses of policies by the policy holders as well as non-remittance of contribution by employers as caused by the astronomical inflation rates which dominated the macroeconomic environment.
The arbitrary conversion of insurance and pension values, poor record keeping, poor governance, poor risk management systems and poor accounting methods were cited as caused by regulatory failure by the Government and in particular, IPEC the regulator.
COMMITTEE OBSERVATIONS
The Committee took note of the issues raised in the petition by Mr. Charles Mandizvidza Ganagana on the implementation of the recommendation of the Commission of Inquiry into the conversion of insurance and pension values for the Zimbabwean dollar to the United States Dollars. In line with that, the Committee has also noted with concern the lack of implementation of most of the findings raised in the
Commission of Inquiry’s report.
The Committee also sadly noted that the 2008 era is repeating itself and there is need to safeguard the contributions and premiums by policy holders and pensioners. The Committee observed that the investment that we made in US dollars after 2009 such as prescribed assets have been converted to the local currency RTGs and bond notes when the RBZ Governor made the policy pronouncement to separate the RTGs, FCA accounts and the nostro accounts resulting in the loss of values. The demonetisation process also impacted negatively on the insurance and pension industry and the premiums of policy holders. Thus, the Commission is concerned by the lack of guidance by the Government on how to address the issue of loss of value that was experienced due to the hyper inflationary era of 2009, the demonetisation process in 2015 and the recent separation of FCA accounts on 20th February to 2019.
The Committee observed that the Commission of Inquiry report attributed loss of value to the macro-economic environment which comprises 43%, regulatory failure 21% and the insurance and pension industry 36%. Madam Speaker, the Committee is disturbed by the position that was submitted by the representatives from the Insurance and Pension Industry, which equated the hyperinflationary period to a natural disaster or an act of God and such an assurer would not be able to assume liability to all insured.
The Committee also noted with concern the legislative gap in the Insurance and Pension Industry that has negatively impacted on the performance of IPEC and the industry as a whole. The Committee observed that IPEC was inadequately capacitated to perform its regulatory and supervisory functions effectively; apparently this has been overtaken by events since there has been a board which has been constituted. The Committed noted that the delays being experienced in relation to compensation by the insurance companies whilst Government gave IPEC the mandate to spearhead implementation of post inquiry reforms including compensation. Further policy guidance is required on the following:
- Scope of the legal instrument to compel compensation by insurers and private and public occupational schemes.
- Compensation of policy holders prejudiced as a result of collapsed insurance companies.
- Indexation model to convert insurance premium, pension contributions and liabilities into US$ or its equivalent.
During the deliberations, the Committee noted with concern that NSSA and medical aid schemes were still being supervised by line ministries instead of the regulator, IPEC. NSSA falls under the Ministry of Public Service, Labour and Social Welfare and Medical Aid schemes under the Ministry of Health and Child Welfare. Thus, the current status quo is problematic given that the ministries do not have the capacity to supervise the operation of insurance and pension companies which are so technical but rather should provide guidance.
The Committee concurred with the findings by the Commission of Inquiry, which noted that some of the board members were conflicted and therefore, against the dictates of good corporate governance.
The Committee is disturbed by the legislative provision that bars insurance and pension companies from investing some of their investment portfolio offshore. The current legislation provides for limited investment options as follows; i.e 40% property, 20% unit trust, 20% equity and 20% cash. Thus, all these investment options collapsed in one way or another, save for property which remained even after hyperinflation although they are affected by the occupancy ratio which has not been to fully capacitate. After carefully deliberating on the evidence received, the Committee noted that one of the factors that contributed to the collapse of some of the insurance and pension funds were that they were not hedged against hyperinflation and that off shore investments were not allowed in line with best practice.
The Committee also observed that the predatory administrative and other expenses also contributed to the loss of value in the dollarisation period and eventually to the collapse of the pension and insurance sector. For example, it was submitted that total contributions and premiums received in the period 2009 to 2014 of life insurance companies and pension funds (including NSSA) amounted to US$3.67 billion, with administration and other expenses excluding benefit payments amounting to US$2.96 billion, translating to 81% of total contributions. The high expense ratios indicated above are more than 100 times bigger than that of jurisdictions such as the UK where all expenses are capped at 0.75%. Even the lowest expense ratio for standalone pension funds averaged 8% during the period 2009 to 2014.
Madam Speaker, in contravention of the provision of section 16 of the Pension and Provident Funds Act, all life insurance companies investigated failed to maintain separate and distinct funds of insurances and pension assets that were acquired during the investigation period of 1996 to 2014.
The Committee also observed that the failure to separate insurance and pension assets could have led to the use of pension assets in capitalizing the business of the insurance company for the benefit of shareholders. For example, the Commission of Inquiry report highlight that the reasons for the growth in Old Mutual’s shareholder assets at the expense of policy holder assets as well as the source of financing for such growth remained unexplained. Old Mutual policy holder owned 25% of the institution as at December 2014 against 75% for shareholders. Thus, the Committee concurs with the Commission’s findings that policy holder assets could have been transferred to shareholders of Old Mutual.
Committee’s recommendations Madam Speaker; the Committee is proposing that a holistic approach is adopted to support the implementation of the post inquiry reforms. The Ministry of Finance and Economic Development should take a leading role by ensuring that a post inquiry implementation plan with clear timelines and responsibilities of different stakeholders is developed by end of July 2019 which has just passed. The Committee is recommending that there be set in motion a compensation programme instituting appropriate accountability measures by end of 2019. It is being proposed by virtue of being a supervisor for the sector which enforces applicable laws and supervisory requirements. IPEC should provide guidance and ensure fairness of the process leading to compensation. The compensation process should recognise the different players in the industry and considered on a case by case-by-case basis. The Committee believes that if IPEC is fully capacitated, it can effectively spearhead the compensation process.
11.3. The Committee is also imploring the Minister of Finance and Economic Development to ensure that IPEC is adequately capacitated to effectively supervise and regulate the insurance and pension sector. The Minister should appoint the IPEC Board immediately to fill the critical posts by 31 December, 2019 of which he has done. The Committee is also urging the Minister to safeguard against conflicted board appointments at IPEC, in line with the Public Entities and Corporate Governance Act (Chapter 10:13).
11.4 With regards to compensation on the loss of value experienced by policyholders in the industry, the Committee is of the view that both the Government and the industry jointly seek a solution to the problem. The Government may meet the 64% of compensation and the industry meets 36% in line with the Commission of Inquiry Findings that the loss of values is attributed to the three main factors
(macroeconomic, regulatory failure and institutional). The Committee also welcomes the remarks by the Minister of Finance where he promised to ring fence the value of pension benefits and wish that the same could be extended to assurers. In some countries where such disasters were experienced, the Government played a significant role in the restitution process. However, there is need to nationally determine how this compensation process can be financed.
11.5 The Committee is imploring the government to amend some of the following laws under its ambit to address deficiencies identified by the Commission of Inquiry Report, namely Insurance and Pensions Commission Act [Chapter 24:21]; Pensions and Provident Funds Act
[Chapter 24:09]; the Insurance Act [Chapter 24:07]; National Social Security Act [Chapter 17:04]; State Service (Pensions) Act [Chapter 16:06]; and Medical Services Act [Chapter 15:13].
In view of that it is the Committee’s recommendation that the Ministry of Finance and Economic Development urgently tables a comprehensive review of the Pension and Insurance Legislation. The review of the envisaged laws governing insurance, public and private occupational pension funds should facilitate the recommended reorganisation of the insurance and pension by end of 2019.
11.6 The Committee is of the view that NSSA and Medical Aid Schemes should be under the purview of IPEC to enhance transparency, accountability, protection of policy-holders and consolidation of insurance and pension business under one regulatory body. The
Committee recommends that the process of transferring NSSA and Medical Aid Schemes under the regulation of IPEC be achieved by midyear 2020.
11.7 The Committee is recommending that a certain percentage of investments portfolios for the Insurance Pension companies be set aside for off-shore investments as measures to protect the values of insurers and policyholders.
12.0 CONCLUSION
Hon. Speaker Sir, allow me to conclude. The petitioner and other members of the public and investigated institutions are highly expectant and anxious to hear the outcome of the Inquiry. There is, therefore, urgent need to implement its recommendations. Equally important is the need to provide feedback to the public on the findings of the
Commission so as to bring closure and fulfill expectations. The Commission viewed this as the responsibility of the appointing authority. If implemented, these recommendations will undoubtedly change the landscape of the Zimbabwe insurance and pension industry for the betterment of social protection in Zimbabwe. Moreover, this will set a good precedent to guard against loss of value to pension contributors in the event of another economic shock. Thank you Hon. Speaker Sir.
HON. NDUNA: I want to thank the Committee on Budget and
Finance. Mr. Speaker Sir, the issue of retirement annuity is very important. It preserves value when somebody gets to be retired. The
Bible in Psalms 90:10, a man is appointed to live three score and ten. Three score is 60 and 10 is ten, therefore he is 70. If you live any longer than that, it gets to be 80. We are here as both members and the electorate out there to live out our lives to about 70 years.
Therefore at 70 years or after 55 we cease to be able to have the energy that we had and we then eat into our pensions. We eat into our retirement annuity. There are various ways of preserving these values, and that speaks to a local investment. It also speaks to off-shore shares, property, bonds and cash. I want to touch in particular on an observation by the Chair about the lack of investment permission by the Executive or by RBZ on the pension houses for them to be able to have some offshore investment on the retirement annuity.
It is my humble submission and it is my fervent hope and view that there be allowable investment off-shore of pension houses to the tune of 20% without any permission from the Executive or from the RBZ. Arising from this report, it is my hope that that permission given from this Report, aware that the Minister is supposed to come into this House and respond to this report within the timeframe of 21 days. It is my hope that at the close of 21 days, there will be authority granted to pension houses going forward to invest off-shore, 20% without even going through the regulating authorities. However, there can be more allotted to these pension houses in terms of investment. Mr. Speaker Sir, there is quite an assortment of companies in a variety of industries’ offsshore and local that the pension houses can invest the retirement annuity. It is sad reading that the issue of pension monies is embroiled or mixed up in the devaluation of our local currency or the US dollar. Aware that at inception or when we remit our pension funds, I was in Government for much more than ten years – it is my hope that at retirement I should be able to eat into the retirement annuity or savings because the retirement package’s value is preserved in property in particular and in other ways and means in general.
Therefore the issue of devaluation of the retirement annuity at this point does not arise. I am alive to the time when we used to make our contributions to Old Mutual in terms of policies. We received our contributions after our local currency lost its value from 1997 to 1999 – our Zimbabwean dollar lost quite some considerable value. At that time and point, I am sure that Old Mutual saw it fit to now give remittance back as reimbursement to the policy holders.
I saw that there was quite some value in the monies that we received from Old Mutual. Howbeit going forward, when our dollar devalued, we did not see any value arising and being given to the pensioners. This is the reason of this petition that has been handed over to the Chair of the Budget Committee because there is devaluation of the value of the pensioners’ funds. That having been said, the issue of the pensioners funds need to be preserved and it is preserved by the buildings and properties. The issue of devaluation certainly does not arise.
During the time I chaired your Committee on Transport and Infrastructural development where we proposed that there be some egovernance in terms of remittances and contributions as it relates to pension and insurance funds so that there can be a track record and trail of accountability if there is some e-governance in that sector. Having preserved the value and remittances through e-governance, it is now seen that there is quite a defined way and path as it relates to the direction that the pension and insurance funds are going.
When this route has been preserved, it is now incumbent upon the pension houses to make sure that when there is no claim for insurance for argument’s sake on third party or full cover on property insurance – there should be reimbursement to the electorate or the person who is remitting those funds at the close of each year. I say this so that the amount of money that is now being reimbursed to the one that is remitting should not only be the amount that has been paid for insurance but it should be the amount paid for insurance plus interest because that money would have been taken to preserve its value and it would have been invested in either shares, property both offshore and local in bonds or hard currency which is the US dollar which has value or in gold.
It is only prudent that we have fund managers who know what they are doing in the insurance sector because their mandate is very simple – it is to preserve the value of the person who is going to be aged in a not so distant future and who is not going to be able to work at 70, 75 or 80. *No matter what we do, there is a time that the heart would be willing but the flesh will resist. That is the time where we are supposed to get our pension funds.
As I conclude, the people of Chegutu West who have sent me to come to this House have also said that the issue of medical aid that the Chairperson has recommended that it be a preserve of IPEC and the pension houses – that is very prudent so that it is housed under one particular department. Further to that, I also say there needs to be expeditious establishment an Accident Victims Compensation Fund. That is also going to be housed under the pension fund. I say this because already 5% of the insurance funds that are coming from the automobile are already housed under the IPEC, because whoever is getting those remittances are the insurance and pension houses.
Further to what the Chairperson has proposed in his report, I also give this suggestion that fund which we call the Accident Victims Stabilisation Fund be houses under Ipack and the pension funds. I also say and make a clarion call that all the funds of the pensioners and insurance funds do and should not have their value depleted. As we speak, our local dollar has devalued but the property sector has appreciated.
THE TEMPORARY SPEAKER (HON. MUTOMBA): Hon.
Member, may I remind you that you just have five minutes to go.
HON. NDUNA: Thank you Mr. Speaker Sir. The appreciation of the property sector in which our pensions are housed that property has appreciated hence the devaluation of the pension funds should never be tolerated and also that any pension funds reimbursements and payments should be applied in retrospect with a value that it used to have – that is one as to one to our current dollar. If it so happens and pleases the Executive, the pension funds should be remitted on the day of payment they should take the value of the US dollar versus our local currency at the bank rate.
I want to thank you for giving me this opportunity to completely ventilate on the issue of the pension funds and I make that clarion call that they now be paid off to our pensioners. If it is going to be RTGS 50, it should be US$ 50 – one is to one versus the US dollar at the bank rate on the day of payment. Mr. Speaker Sir, I thank you. The people of Chegutu West Constituency also want to thank you.
HON. P. CHIDAKWA: Thank you very much Mr. Speaker Sir. I will be very brief. Mr. Speaker Sir, I would like to thank Hon. Mhona and his Committee for a job well done. This is a very important topic which affects the livelihood of our people. These people are no longer the normal people like you and me. These are people who, as Hon. Nduna has said, are above 70 years old and they are not as fit as they were before and, need our total support – [AN HON. MEMBER: He is a leaner.]- I am not a learner.
THE TEMPORARY SPEAKER: Hon. Member, who has said
that he is a learner. May you withdraw that?
HON CHIKOMBA. Unfortunately I was not expecting amateurisms but I withdraw the statement.
HON. P. CHIDAKWA: Mr. Speaker Sir, this is very sensitive.
With all due respect, I think there has been foul play here. The
insurance companies have played a very dirty game. If you look at the hyperinflation, the insurance company actually grew by US$100 million in terms of property. That money has not been shared by the people who contributed to purchase those properties. That money was enjoyed by the big insurance companies whose executives keep on driving their Mercedes Benz and living in their Borrowdale houses yet people are wallowing in abject poverty in Chendambuya and Dotito.
Going forward, for the insurance companies to cleanse the blood in their hands should…
HON. HAMAUSWA: On a point of order, Mr. Speaker Sir. I think in sign language doing this means something that we should not allow the Member of Parliament to do –[HON. MEMBERS: Inaudible interjections.] - It means something in our culture.
THE TEMPORARY SPEAKER: Okay, point of order over ruled. May you continue Hon. Member?
HON. P. CHIDAKWA: Thank you very much Mr. Speaker. Let us concentrate on more important things here. I think we have got a topic here which is affecting the livelihoods of people including people who voted for him. It is a pity if he takes this lightly.
THE TEMPORARY SPEAKER: Hon. Member, may you
address your Chair.
HON. P. CHIDHAKWA: Mr. Speaker Sir, without any delay, the insurance industry must implement the Justice Smith’s recommendations. They should pay the money to the pensioners and to equate hyperinflation to a national disaster, it is criminal. They have made money, they created the value and they were responsible for 50% of what happened. At least they should pay 50% of what is liable to their actions.
There is no point. You have Westgate and Eastgate which were built by pensioners money yet the pensioners are wallowing in abject poverty. The insurance companies have got blood on their hands and they should have a conscience or be forced to pay to the pensioners what they contributed. The pensioners are at our mercy. It is our duty as able - bodied people to make sure that they are protected. If we do not do
that especially here in Parliament, we also have got blood on our hands because it is our job to make sure that we push and make sure that the pensioners go forward and make sure they get what they deserve.
In any case, they are not a charity case. They contributed for this money because they were able bodied and the insurance companies should show good faith and pay. So on this one, Members of
Parliament, I urge you we must all unite on this cause to make sure that our pensioners who can no longer, with the NSSA payments, afford to pay tollgate fees to and from Harare. So with all due respect, it is our duty to make sure that these people get compensated.
Coming to NSSA, NSSA should fall under IPEC. Some of the problems which we are facing with NSSA right now, we would not be facing them if there was proper monitoring and evaluation of their products. So I fully agree with the Committee that NSSA and insurance companies should fall under IPEC.
Finally, Mr. Speaker Sir, thank you very much Hon. Mhona for a job well done. We have got a job to do. The nation is expecting that we could hit another brick wall going forward because of the devolution which has happened. We must not set a precedence. The insurance companies must pay back the money to the insurers. Thank you very much.
HON. ZHEMU: Thank you Mr. Speaker Sir. I also rise to add my voice on the report that was presented by the Chairman of Finance and Economic Development Committee. Let me start by commending the work that was done by the Committee.
Mr. Speaker Sir, I also note from the report that there are some inconsistencies that were obtained- inconsistencies in terms of information which was reported by IPEC which is the regulator and that which was held by the industry. Those were some of the observations that were read from the report. Also there was no proper enforcement of regulations by the regulator, especially in terms of remittances of contributions. I think that was also noted from the report that IPEC did not enforce the requirement for the industry to remit the money or contributions that were made by the pensioners themselves.
Also, IPEC did not provide a guiding framework especially during that time when there were some of conventions converting from the Zimbabwe dollar to the United States dollar. Also IPEC allowed too much administration costs to be incurred and they did not also regulate on that one. There was also failure by IPEC to regulate on the separation of assets because separate assets that are held by policy holders were supposed to be separated from the assets of the shareholders.
Mr. Speaker Sir, I also note from the report that was presented, that whilst there was a mention of supervening impossibility or the act of God, there was also assets that survived inflation. Those assets were taken to belong to the shareholders and not to the policy holders. I think that correction has to be made. Of course, it is understood that there was inflation but there are some assets that actually survived the inflationary environment.
I also take the recommendations that were made by the Committee to say, there was incapacitation of IPEC which the Chairperson of the Committee now said that has since been rectified because of the appointment of the new IPEC Board. There is also a recommendation that there is need to implement what was recommended by the Commission of Inquiry. I think that has taken too long because people are actually living in poverty, especially the pensioners. They have not been compensated. They made those contributions but up to now, they are actually living in dire poverty because of failure by IPEC to facilitate the compensation.
I would like to also add my voice that the Ministry of Finance and Economic Development takes this seriously to facilitate the compensation, now that there is a substantive IPEC Board. Mr. Speaker Sir, I would like to concur with the Committee that NSSA be transferred to fall under IPEC because we cannot have all these organisations or institutions like NSSA to be falling under the Ministry of Public Service. I think it will be proper that all institutions like NSSA fall under IPEC. I submit that Mr. Speaker Sir.
HON. MHONA: Hon. Speaker Sir, I move that the debate do now adjourn.
HON. MUTSEYAMI: I second.
Motion put and agreed to.
Debate to resume: Thursday, 5th September, 2019.
On the motion of HON. TOGAREPI seconded by HON.
MUTSEYAMI, the House adjourned at Eleven Minutes to Six o’clock p.m.