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SENATE HANSARD 19 MAY 2022 VOL 31 NO 44

PARLIAMENT OF ZIMBABWE

Thursday, 19th May, 2022

The Senate met at Half-past Two o’clock p.m.

PRAYERS

(THE HON. PRESIDENT OF SENATE in the Chair)

ANNOUNCEMENTS BY THE HON. PRESIDENT OF SENATE

PRESENCE OF MINISTERS IN THE HOUSE

THE HON. PRESIDENT OF SENATE: I wish to welcome Hon. Ministers and our Leader of the House, Hon. Minister of Information, Publicity and Broadcasting Services as well as the Minister of Finance. If we can welcome our Ministers, please they are here.

APOLOGIES RECEIVED FROM MINISTERS

THE HON. PRESIDENT OF SENATE: I have received a list of apologies from the Executive; Hon. Rtd. Gen. C. D. G. N. Chiwenga, Vice President and Minister of Health and Child Care; Hon. O. C. Z. Muchinguri-Kashiri, Minister of Defence and War Veterans Affairs; Hon. Prof. P. Mavima, Minister of Public Service, Labour and Social Welfare; Hon. Dr. A. Masuka, Minister of Lands, Agriculture, Water, Fisheries and Rural Resettlement; Hon. V. Haritatos, Deputy Minister of Lands, Agriculture, Water, Fisheries and Rural Resettlement; Hon. J. G. Moyo, Minister of Local Government and Public Works; Hon. Chiduwa, Deputy Minister of Finance and Economic Development; Hon. E. Moyo, Deputy Minister of Primary and Secondary Education; Hon. D. Karoro, Deputy Minister of Lands, Agriculture, Water, Fisheries and Rural Resettlement; Hon. W. Chitando, Minister of Mines and Mining Development; Hon. Mangwiro, the Deputy Minister of Health and Child Care and Hon. S. Nzenza, Minister of Industry and Commerce. We will have to work with those who are here. Fortunately, the Leader of the House is here.  

ORAL ANSWERS TO QUESTIONS WITHOUT NOTICE

HON. SEN. KAMBIZI: Thank you Madam President. I am quite pleased to see the Minister of Finance here after a long time. We have been clamouring to have him in here and my question is directed to him. Madam President, all the streets of Harare are flooded with money changers selling all types of currencies from USD, Zimbabwe dollar, RTGS, Pula or the Rand. The black market rate is skyrocketing at  USD1 to between ZWL$450 and ZWL$500. May the Hon. Minister favour this House by giving us a full explanation as to what Government policy is with regards to people who sell money on the streets? What measures are being put in place by the Government through his Ministry to arrest the skyrocketing rate of exchange that is running at a black market speed, rendering all Zimbabweans earnings useless?

THE MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. PROF. M. NCUBE): Thank you Madam President. I thank Hon. Sen. Kambizi for the question regarding the exchange rate, money changers and the parallel market. The players in the parallel market are numerous. It is not just the ordinary citizens at the street corners. It is also the corporates. It is also banks. I think we know what money changers do – they change money. So their business is clear but illegal at the same time. Some of the corporates are going into the banking sector to borrow cheaply because of low interest rates and use those resources to acquire inventory, to store the inventory or to put it on shelves at higher exchange rate.  Every time they do that, then the whole cycle starts all over again. We have a situation where even corporates were pushing up the parallel rate. This is announced by some faceless people that there is a new parallel rate. I do not know where that is coming from.

Some of the banks were doing exactly that on their own account using their own resources, taking positions in the market. There are numerous players and all trying to get easy money, which then makes the exchange rate unstable and creates a power rate whose level is very different from our official auction rate or the willing buyer willing seller rate.  So, what actions have we taken and continue to take?  Let me be clear – we are using both the ZW dollar and US dollar.  It is not one or the other and there is a very good reason why we are doing that.   The good reason is that we have sanctions on us, challenges with credit lines and so without credit lines, you have to be creative.  So we introduced the auction, a surrogate credit line access mechanism where we are accessing the US dollars that are already here through the 20% surrender tunnel as well as the export retention scheme that is in place for exporters as well as whatever Government needs to pay through Treasury sells onto the auction to pay civil servants another Zim dollar liability.  So we need both currencies and I had to be clear about that from the onset. 

I also hear arguments about US dollarisation or ZIM dollarisation.  Please, I urge the public to desist from that argument.  It is not a useful argument because we need both currencies.  If you go the root of ZIM dollars alone, for now it is too early to do that.  It would mean that we will not allow you to hold US dollars like in any other countries where you cannot use US dollars to shop.  We will also not allow the banks to keep foreign currency.  We cannot let them have one and half billion US dollars in the bank.  We cannot allow that because a mono currency regime does not permit that.  Furthermore, companies would have to restate their balance sheets in a manner that happened in 2008/2009 which is very dangerous.  So, please understand that we need both currencies and the current system but we need stability. 

So what are we doing to deal with stability?  It starts with the key fundamentals of a stable currency that we do not want huge budget deficits.  As I speak, in the last four years, we have not been running large budget deficits.  In some years like in 2020, we even ran a surplus.  In 2021 however, we had a very small deficit, one and half percent deficit which is within the three percent target that SADC has mandated all countries to run their countries properly.  That is where we start – fiscal discipline. 

Then we have monetary policy discipline as well.  As His Excellency announced the previous week, the target for MO which we all worked together with him should be zero percent growth in reserve money growth for the rest of the year.  It is very important that we keep tight monetary and fiscal policy and that they are coordinated.  It is also important that we continue to support our exports which we are doing through various incentives.  Our remittances are coming in, so our current account is positively strong.  Those fundamentals are the first order of business.  Then I now turn to the behavioural.  These start with the behaviour of our financial institutions in terms of disintermediation of liquidity or monetary policy enactments where banks with some corporates or individuals are found rather than channeling liquidity into the real sector which is called the monetary transmission mechanism liquidity which finds its way onto the parallel market or stock market.  So, we now have a speculative bubble which we had to clip through the suspension of lending that we put in banks.  It was a big hammer but it was needed.  However, the hammer was lifted yesterday to make sure that those who were in the wrong are careful.  So the investigations continue but lending has resumed.  The impact is, this has halted the parallel market somewhat.  We have seen that and we are pleased with that.  This is also a behavioural issue on the stock market where we tightened regulations.  What was happening in the stock market is very similar to what was happening with ecocash, where you have got a stock broker with a trust account, which sits with a bank.  Below the trust account, we have a series of accounts belonging to many individuals but you cannot see those accounts.  So, whenever our shares are being bought or sold, money just moves below the trust account but you do not see the movement in the official account.  So, things were happening here but also the money was being moved from one individual to another, which is called third party account and this created a loophole for trading on the parallel market.  At the same time, creating an asset bubble in the stock market which was very unhealthy and so we had to prick that bubble and we sufficiently did so as of now.  We did well in terms of dealing with behaviour. 

Of course while we have a dual currency, we feel we still need to strengthen the demand for our domestic currency.  So, the MTT tax was increased for US dollar transactions to signal that we prefer our own currency.  We have done a lot for what it is worth and I will be very happy to circulate to Members through your office the measures we have taken, one by one, to try and stabilise our currency. 

We are also quickly aware of the transport woes.  I am digressing, you did not ask me about transport but His Excellency also opened the market for other players to come in and this is all designed to create competition and make transportation easy and the cost of transportation affordable.  We have done a lot to stabilise our currency.  Let me explain the action that we took at the beginning of the week regarding opening up borders to basic goods.  Two things were happening; to start with, we have a global situation where we have imported inflation.  Inflation has been rising globally since the last quarter of 2021 due to the perceived success of the global vaccination programme and the opening up of global value chains.  Inflation has been going up so has been oil price.  That is where it started and by the time we got to the conflict now happening in the eastern part of Europe, that only accelerated what had already started.  So, now we have inflation being pushed through our economy through the fuel channel and other goods and raw materials that we are importing, which is the global value chain.  It is also coming through the fertilizer, cooking oil and wheat market channel. That is something we should be wary of that globally, we might be heading into a very tight food security challenge for the rest of the year and this is worldwide, and not just for Zimbabwe.  Secondly, locally we have seen a spike in prices for no reason really other than profiteering.  So we had to act and try to make sure that basic commodities for the global and local reasons are available to citizens at affordable prices.  So, we opened up the border for basic needs and I think that is a good thing that Government has done to really look after citizens and to ensure affordability and availability of these goods. 

Industry is still getting a lot of incentives through the various tax rebate schemes that I always bring before this House every time you approve the budget.  So they are getting those benefits as well as rebates for retooling.  They should have been retooled by now.  We cannot keep retooling forever.  We should have retooled and the cost of production should have improved and productivity should have also improved.  So, industry has been protected and it is now time to protect and support the citizens.  That is what we have been doing in terms of the mix of policies as they say policies have winners and losers.  In our own assessment, this bouquet of policies seem to indicate that there are winners than losers and that is what we want in any policy mix.  I thank you Madam President.

HON. SEN. KAMBIZI: I wanted to ask the Hon. Minister to zero down to the level where I am, where I represent the ordinary citizen. All this vocabulary the ordinary person cannot understand. What I am merely asking the Hon. Minister with the ordinary citizen in mind is to explain in a manner that the ordinary mbuya back in the rural community and ordinary citizens can understand because the rate keeps going up. Our own ZWD - the brand new notes have flooded the streets and I presume they are coming from our banks which fall under the command of the Ministry of Finance. Where is that money coming from? Is it not controlled? Since last year we have been talking about the exchange rate on the black market and it is not stopping despite the loan arrangement that we have done, it is moving much fast. Now, all Zimbabweans have been reduced to paupers because of that. What is the Ministry doing to at least assist the ordinary citizens? Hon. Minister, you can award salary increments, for example an ordinary teacher earns RTG$32 000, divide that by $400 on the black market because when a teacher goes to the bank he cannot access the USD. He has to go to the streets and ends up holding US$80. The people then think that the Government is not doing much. That is your Ministry Hon. Minister.

HON. PROF. M. NCUBE: Hon. Kambizi has highlighted three areas and I tried to decipher what he was talking about. On the civil servants, what he said is not correct, I have to disagree with him. He said that the teacher has no access to USD, which is not correct. The teacher has access to US$175 hard currency. That is exactly what we have done in terms of civil servants’ salary. We have the US$75 which we link to COVID and US$100 which was added at the beginning of the year to make it US$175, so it is not correct to say that the teacher has no access to USD.

On what we are doing about the person around the corner, mbavha, matsotsi – we are arresting and fining them. We have the Financial Intelligence Unit that has got teeth and has been going after these criminals, be they companies, individuals but a thief is a thief even when you have got the best policemen in the world we will always have thieves. It is a continuous project trying to catch criminals when they think they have an opportunity. We have been chasing these people and that is why they run around whenever they see us.

From our own assessment, I think that the person on the street  corner has become less important; the real culprits are now the big players, which players were then dealt with by temporarily suspending lending. That is what is going on; corporates are pushing the rates up through the goods that are sold in the shops. When we deal with prices, we are assisting the common person. When we open up borders and say tengai zvamunoda, surely we are helping the citizen. It cannot be said that Government is not doing anything; no it cannot be the case. We can disagree on degrees of effectiveness or policies but clearly we are taking action. Kana President vakasimuka kuti nhasi I am opening up the transport system and ZUPCO no longer has a monopoly, surely we are helping the citizens. It cannot be that we are helping anyone else other than the citizens.

HON. SEN. KOMICHI: My question to the Minister is: are we not in the same situation as we were in 2007/8 in which our ZWD was so pathetic that it failed to sustain our livelihood? As we stand, the public and civil servants are earning nothing. You disputed that US$80 and added US$175, it then came to US$255, still it is not a reasonable salary for any person to live on. Are you in control of the Government or you have lost it to the cabals?

HON. PROF. M. NCUBE: I want to thank Hon. Komichi for the question. Are we now in the 2007/8 era? First of all, we did not have a balanced fiscal position and we did not have tight monetary policies. We did not have the sort of fundamentals that you see now. Secondly, we also did not have the official dual currency that we have put in place which has allowed citizens, corporates and other agencies to utilise these currencies as they desire. We are not.

Coming to salaries, there is also a fallacy Madam President that the salary back in October 2008 for civil servants - we keep hearing a figure of US$540 per person but that is not correct because back then the effective salary was in fact half of that. It was about US$275 and I can prove it. The demands for a salary of US$540 are completely misleading and the kind of package that we have put in place is for civil servants and we will continue to do that.

Are we not doing a lot already as Government? I think we are and I said we are doing a lot for the teachers. We have a commitment to build institutional accommodation and we are doing that. Importation of vehicles duty free, supporting teachers in terms of school fees up to three children in a Government school of course. Nurses - we have similar slew of non-monetary benefits as well. Surely, we have really applied our minds and done a lot to support our hardworking civil servants and they are hardworking because I work with them.  I just wanted to debunk the thinking that we have not reached the kind of October 2008 levels of salary because even that figure is actually fallacious.

HON. SEN. ENG. MUDZURI: Hon. Minister, you have been highlighting in all our budget sessions that there are about ten people who are crooked in terms of this economy.  You have also said today that the corporates are in charge of the runaway inflation or currency.  We have not seen any of these people being arrested and there is strong mistrust between your Ministry and the public in that they believe that all the corruption is on the exchange rate within the Reserve Bank. I do not know how you can undo that to the public to say why do you not arrest those people because we cannot continue to be told that there are crooks or thieves. 

HON. PROF. M. NCUBE:  We now know these crooked individuals.  Some of them have already been arrested and some have been fined.  I think that the honey-pot of doing the illegal activities is so rich that some of them keep coming back in one form or another.  Those are the facts.  So we have to keep on arresting them and re-arresting them, fining them and re-fining them.  That is what we have been doing.  It is not that we are not doing anything.  We are certainly doing something and dealing with them. We are still going through this transition of both currencies and we need to live with some of these ugly facts but we are dealing with the culprits and we are fining them.

On the trust between the public and the Ministry – there is very good trust between the public and the Ministry such that when I go around the country, I engage very well with citizens.  I have no problems engaging with any citizens.  Citizens appreciate a lot of things that the Government is doing and I have a long list of things; whether it is the quality of the roads, the quality of the dams and what we have done through the Pfumvudza/Intwasa programme to empower our citizens.  All that is tax payers’ money coming through Treasury or the Government. Certainly, I do not get a sense that there is mistrust.  There is a lot of trust.  What the public does not trust imbavha idzi – that is the truth.  Really, Government is committed to make sure that we bring to book anyone who is malcontent as far as this challenge is concerned. 

THE HON. PRESIDENT OF SENATE: I would like to let you know that we have the following Hon. Ministers in the House: Hon. Kazembe Kazembe, Minister of Home Affairs; Hon. Madiro, Deputy Minister of Transport and Infrastructural Development; Hon. Dr. E. Ndlovu, Minister of Primary and Secondary Education; welcome Ministers. 

*HON. SEN. CHIEF CHUNDU: My question is directed to the Minister of Health and Child Care.  In his absence, I will direct it to the Leader of the House.

Malaria is now back in the low veld and Zambezi area which are hot regions.  There is the prevalence of the anopheles mosquito that causes malaria.  There are not kits to test for malaria.  What is Government doing to ensure that the kits are available and easily accessible to our villages so that village health workers can distribute them to the people?  May the Government also do another exercise of spraying households so that mosquitoes die?

THE MINISTER OF INFORMATION, PUBLICITY AND BROADCASTING SERVICES (HON. SEN. MUTSVANGWA): This is a serious concern because we know that malaria can kill a lot of people.  May Hon. Sen. Chief Chundu put this question in writing and be directed to the relevant Ministry of Health and Child Care so that they can come with the details.

I know Government policy is that malaria should be eradicated, people should be treated, homesteads should be sprayed and kits should be readily available to the people.  It is Government’s policy that all people be alive because it can only exercise its function with a living population.

*HON. SEN. TONGOGARA: My question is directed to the Minister of Finance and Economic Development.  When we had the pre-budget seminar, economic experts informed us that if we have our own local currency, we should have something that should support it so that it will not be valueless.  Since we have a lot of minerals in this country, is anything being done to ensure that some of the minerals, instead of being sold outside the country, are being kept in order to support the local currency value so that it becomes strong.

THE MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. PROF. M. NCUBE): Apparently, we have some structures where we are able to access credit lines from abroad and certain banks using our gold.  The gold is supporting access to those credit lines that we can borrow and support projects.  We also have some credit lines that are supported by platinum.  So those are the two minerals that we have used to support our credit lines.

In terms of gold reserves that stand behind the Zimbabwe dollar, at the moment we do not use gold or platinum reserves.  We use these minerals to support the access to the loans in the first place.  However, overtime, we will build gold reserves because we are noticing that to build these gold or platinum reserves which are in fact ‘hard currency or USD assets’ you have to buy them with USD in the first place.  So if the gold needs to come into the hands of Government, because it is in private hands kumakorokoza kwese kwese – it comes through Fidelity and Government has to buy that gold using USDs but the gold itself is ‘USD’.  Now you are exchanging USD for USD and you are not building reserves, you are actually using one form of reserves and gaining another.  However, we have a programme where, overtime we will start to accumulate some gold so as to supplement our USD reserve.  This is a unique situation out of the fact that we are using the USD as a transacting currency.  If we only had the ZWD and then the hard currency was reserved currency, then for some of the USDs, we could exchange that for gold and immediately we would have gold reserves.  So the difference is in the choice of the currency, that is what is causing us to be in this situation but we are using our minerals for another purpose, which is to acquire resources from abroad from certain banks.  I thank you.

*HON. SEN. MALULEKE: Thank you Madam President for affording me the opportunity to ask a question to the Minister of Environment, Climate Change, Tourism and Hospitality Industry.  The question is about the problem of human-wildlife conflict that we are experiencing in our constituency.  Last week a woman had a fractured arm and I observed that there is human-wildlife conflict.  Wildlife is now a nuisance in the Hippo Valley sugarcane fields and some are in the Save Valley.  What measures have you put in place to help people so that they do not suffer from this wildlife menace where some are killing people?

THE MINISTER OF INFORMATION, PUBLICITY AND BROADCASTING SERVICES (HON. SEN. MUTSVANGWA): Thank you Madam President.  I would like to thank Hon. Sen. Maluleke, if I heard her correctly, the question is on human-wildlife conflict that there are animals which are causing problems going out of the National Parks and encroaching onto human settlements and killing some people.  It is a case that is under consideration by the Government.  If you were listening, the Cabinet Minister Hon. Mangaliso Ndlovu, the Minister in charge of that Ministry, spoke about a conference that will lead to sustainable conservation of wildlife because we have an overpopulation of elephants and that we are failing to sell ivory because of CITES regulations.  We now have a huge stockpile of elephant tusks, which can assist us in terms of managing the elephant herd and conservation so that people who are victims of human-wildlife conflict can be compensated.  It is an issue that is receiving top priority and it is being properly researched on to ensure that the people who live in areas which are prone to human-wildlife conflict can be assisted, hence the call for these workshops and meetings.  Our community leaders like chiefs and other traditional leaders should be present.  Once there is human-animal conflict, please inform the Parks and Wildlife Department as quickly as possible so that the problem is attended to.  I thank you.

HON. SEN. KHUPE: Thank you Madam President for giving me this opportunity to ask my question.  I think it is now a song, the Head of State is always saying corruption, corruption. Corruption is the evil in this country.  I would like to pose my question to the Minister of Home Affairs.  Recently, the Ministry which he is presiding over, scooped the price as the most corrupt Government department.  Madam President, I would like the Hon. Minister to appraise the House, what strategies he has used to achieve that feat and what measures has he put in place to ensure that he does not continue to occupy that post?

THE MINISTER OF HOME AFFAIRS AND CULTURAL HERITAGE (HON. KAZEMBE): Thank you Madam President Ma’am.  Let me start by thanking the Hon. Senator.  I hope I got the question correctly but what I seem to have heard is the allegation that the Ministry scooped a prize for corruption or is it the Police.  I am yet to receive that price Madam Speaker Ma’am.

THE HON. PRESIDENT OF SENATE: I thought it is under your Ministry.

HON. KAZEMBE: Yes Madam President, the Police is under the Ministry but what I am not aware of is the price that we scooped.  Maybe it is on its way.  Nonetheless, I got the gist of the question which I will respond to.  Yes, corruption is indeed a scourge, it is totally unacceptable and I do admit that we do have some rogue cops amongst the police.  Not every cop is corrupt but definitely yes, that issue is there and is a challenge.  Corruption is totally unacceptable everywhere, whether it happens at the police or in any other Ministry or the private sector, corruption is there and we are saying it is not acceptable and is illegal, we must deal with it.

There are two ways of dealing with corruption, I have said it before and I will say it again.  The first one is that there is no way one person can be corrupt by themselves, it takes two or more people to be corrupt. This then points at us as citizens; we are also aiding corruption, police cannot be corrupt themselves, but they are corrupt because they are being paid by us.  If we all take a collective responsibility and say to ourselves we do not want corruption, it will end today because nobody will be prepared to be corrupt or offer a bribe to a police officer.  Everyone will become a police officer, policing another police officer if we all say no to corruption, starting today Madam President.

What normally happens, for instance if it is a traffic offence or there is a roadblock, police officers at times are offered – it is us the citizens who offer first to say ‘aah, wangu hapana zvatingaite here pano.’ (my dear, can we not do something here.)  We do that and obviously it gives us some challenges that we are encountering, they will accept.  Sometimes it is the police officer who starts but it is because we are accepting to give them the bribes.  I am saying the starting point, all of us as Zimbabweans, let us say no to corruption and let us take it upon ourselves to expose corruption.  Where corruption has been exposed, we have dealt with it, we have arrested police officers, there is no one who is above the law but it takes you and me to deal with it collectively. That is one way of dealing with it.

Secondly, I am sure if the Hon. Senator was listening to Hon. Minister Mutsvangwa when she gave the Cabinet briefing, she talked about the direction that we have taken of introducing technology.  To me or in accordance with my school of thought, that is the way to deal with corruption. Let us remove the human element. While there is the structure that was approved by Cabinet -where we are going to be installing traffic management systems, those in my view will remove the human interface. You cannot bribe technology, neither can it go for tea. We are deploying that system which will ensure that those who speed and those who cross red robots and all those who misbehave – the system is so complex and sophisticated such that it can pick a lot of offences.  As it will be linked to ZINARA and Civil Registry, it will be an integrated solution. If you commit an offence today, because it includes facial recognition cameras, it is able to pick up your registration number and your face. Your face will be linked to the database at the national centre which is linked to Civil Registration. So we can tell who you are, even your family and or your girlfriends. We can tell from the database.

From there Madam President, we will link you to ZINARA so that if you pick up the registration number we can tell who the owner of the vehicle is. So it will all be integrated. Even the police officer is there, the technology will have captured everything and automatically you will be fined. In short Madam President, I believe technology is the way to go.

*HON. SEN. TSOMONDO: Thank you Madam President. My question is directed to the Minister of National Housing. In his absence, I redirect it to the Leader of House. What is Government policy regarding demolition of property after the client fails to service the agreement they would have entered into with the land developer?

*THE HON. PRESIDENT OF SENATE: That is a specific question and you need to put it in writing so that the Ministry makes investigations and bring a comprehensive response to the House.

*HON SEN. KOMICHI: Thank you Madam President. My question is directed to the Minister of Home Affairs but in the absence of the relevant Minister, it may be redirected to the Leader of the House. There is a four year old boy, Kudakwashe Mahachi who was abused by his father and stepmother in South Africa. The four year old Kudakwashe Mahachi was smuggled into Zimbabwe through illegal entry and dropped at his grandmother’s place. This is extreme child abuse, which is a crime which deserves death penalty. 

*THE HON. PRESIDENT OF SENATE: This is a specific question which should be put in writing and referred to the relevant Minister. This is a matter which has aroused much public debate and we would want to get to the bottom of this case. Also inform us of the measures that will have been taken.

*THE MINISTER OF INFORMATION, PUBLICITY AND BROADCASTING SERVICES (HON. SEN.  MUTSVANGWA): Thank you so much Madam President. I also thank Hon. Sen. Komichi for raising such a disturbing issue involving a four year old. Madam President, you have aptly answered the question. It is a question that needs to be referred to the Ministry of Home Affairs if the case has been reported to the ZRP. It also calls for the involvement of the various Government departments that deal with the welfare of minors. The Social Welfare Department may assist in the payments of this child’s medical bills since it is Government police to assist disadvantaged citizens.

*HON. SEN. SHUMBA: Thank you Madam President. My question is directed to the Deputy Minister of Transport. My question is related to the operations of the tollgates. First and foremost, I would like to congratulate him for the construction of the state of the art Beitbridge-Harare Road.  Traffic volume has now increased, now we have a problem at the tollgates that leads into Harare where motorists are forming large queues. This has led to the opening of the gate that is opened for exempted vehicles and their positioning an officer who will be collecting toll fees and putting them into a sack. Those tollgates attendants can spend more than 30 minutes with one car, so people leave the queue and pass through the side road meant for people with exemptions.  I am one of the people who also paid money through this modus operandi and I witnessed the money being thrown into a sack.  So my question is, are there any plans to stop this pilferage at the tollgates from continuing? Is there no way you can use modern technology to ensure that all monies get into Government coffers?

*THE DEPUTY MINISTER OF TRANSPORTAND INFRASTRUCTURAL DEVELOPMENT (HON. MADIRO):  Thank you Hon. Sen. Shumba for your question.  It is true that Government is trying to construct state of the art roads. However, on the issue of tollgates, we are still way behind to achieve state of the art tollgates which utilise modern technology.  Government has plans to have spacious tollgates which should cater for more cars in less time than is being taken currently.  Government and the private sector have PPP plans for eight tollgates including the one referred to by Senator Shumba which is on the Harare/Beitbridge Road, Shamva tollgate and Norton tollgate, among others.  We have reconstructed the Harare-Beitbridge Road but the bridges have not been widened as yet.  So we still have to widen the tollgates and bridges to reduce accidents on our roads and ensure fast service at the tollgates. 

Questions without notice were interrupted by THE HON. PRESIDENT OF SENATE in terms of Standing Order Number 67.

HON. SEN. KOMICHI:  I move that the time for questions without notice be extended by 15 minutes.

HON. SEN. CHINAKE: I second.

Motion put and agreed to.

*HON. SEN. TONGOGARA:  The Minister said it well that the culprits are being arrested and arraigned before the courts. I want to find out if follow ups are being made to ensure that the culprits are being incarcerated, because if no such follow ups are made, there will not be anything to deter would be offenders.

*THE HON. PRESIDENT OF SENATE:  Hon. Sen. Tongogara, the Hon. Minister did not say that they have arrested people with sacks full of money.  Instead, it was Hon. Sen. Shumba who said that she witnessed an employee of ZINARA who had a sack full of money collecting toll fees from motorists, including the Hon. Senator.

HON. SEN. MUZENDA:  My question goes to the Minister of Finance.  I want to find out from the Minister what the challenges are if we were to let the US dollar be determined by market forces because at the moment, we have the auction rate; willing buyer-willing seller rate and the parallel rate.  This also brings challenges when people are buying because we have different prices for swiping, using ecocash and also if using cash.  I thank you.

THE MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. PROF. M. NCUBE):  I thank Hon. Sen. Muzenda for that very important question.  The exchange rate is being determined by market forces.  When we established the auction, we were easily selling US$50 million but now we have come down to average US$25 million.  In fact, two days ago, we only sold US$7 million because the demand was quite low.  That exchange rate was arising from a Dutch Auction System, which means that you could go there and demand whatever exchange rate you wanted.  So that is ultimate freedom and choice.  However, we realised that perhaps even that expression of freedom and choice of your exchange rate, the price discovery process was still not good enough.  So we decided to go ahead and introduce the willing buyer, willing seller hoping for better price discovery.  We did notice that the exchange rate from the willing buyer- willing seller window is higher than the auction window.  As of Tuesday this week, we noticed that even the auction rate rose and we are noticing that they are approaching and converging.  So, we do believe in a market determinant exchange rate and we have taken certain actions to get to that market exchange rate.

          There is no difficulty in having a market exchange rate because already if someone believes that the parallel rate is the market exchange rate, that is already what is determining prices in the shops and that is the challenge. It is no longer an issue in that sense but we are also noticing something that the parallel rate is not what we call a spot rate but actually it is reflecting the future called forward pricing. Someone is thinking that if I am going to replace this gadget in a month’s time prices would have moved and therefore I need to charge in such a way that I reflect the exchange rate in that one month’s time. So, it is reflecting the future.

          When you think that the parallel rate is the market rate now, actually it is a market rate for the future, which means we also need to fine-tune some of our policies to deal with the notion of a forward rate rather than a spot rate. One of the reasons why the gap between the official rate, whether it is willing buyer willing seller auction rate and the parallel rate continues to be there, is because there is always a gap between a spot rate and a forward rate. It is always there in all the markets in the world.

          Sometimes we have to accept that maybe the gap will never be closed but we want it to be narrow. Perhaps we should not think that by somehow changing the system so dramatically, those two systems will merge. They might not and those are some of the things that we are noticing which will need further fine-tuning of the auction system and our forex determination system. I thank you.

          (v)+HON. SEN. CHIEF NGEZI: I heard the response by the Hon. Minister of Finance regarding the issue of parallel and official rate but the truth is that our people live with the parallel rate not the bank rate or Dutch system. Their livelihood depends on the parallel rate and my question is; why is it that those retailers who sell goods using the parallel market rate which is illegal are not sentenced or fined and are allowed to determine their own prices because what they are doing is the same thing with the street guy selling money because the effect is the same?

          HON. PROF. M. NCUBE: The Hon. Senator basically asked why retailers who are using parallel rates to set their prices are not punished or disallowed as compared to money changers on the streets. Those in the shops are disallowed from using exchange rates other than the auction rate and as of this week, it is other than the willing buyer willing seller rate. In fact, we have set a variation margin of 10% either side of the willing buyer willing seller interbank rate. There are guidelines as to how pricing ought to be done.

          As I said, the honey pot from deviation is deep, very juicy and sweet, so they keep breaking the law. You go after them, fine them and they break the law again. So, there is that aspect but there is a level playing field. We are not treating shoppers or retailers differently from money changers. The law applies to all. There is pari passu treatment in terms of the eyes of the law.

          +HON. SEN. GUMPO: My supplementary question to the Minister of Finance is how the Zambians achieved to stabilise their currency when they found themselves in this sort of situation some years back. I remember Zambians used to sell money on the streets but now they no longer use the USD but use their own local currency for transacting.

          HON. PROF. M. NCUBE: I thank the Hon. Senator Gumpo for his question. Zambia was never in our situation, which is a situation where you have debt arrear, sanctions, whichever way you look at it. This is a very unique situation where you have no access to credit lines. We have a situation right now where we have paid off IMF but the IMF is not allowed by law to give Zimbabwe anything but we do not owe them. Why? Because we owe the sister institution, the World Bank something. So, Zambia was never in that situation of being shut off in terms of access to credit lines.

          Therefore, it was enough for Zambians to just focus on fundamentals, get their budget deficit right, re-engineer their monetary policy in the same way we have done and do all the macro-economic actions that are taken when you have a challenge with your currency. That was enough and they are where they are now but even they are not yet there by the way as I speak, this is public knowledge so I can talk about it – they have a huge external debt which is currently under resolution.  There are many other countries that have gone through similar situations as Hon. Sen. Gumpo has explained – we have Uganda in the mid 80s; Tanzania in the mid 80s too and a lot of other countries.  All these countries had one thing in common that they were able to go back because they were in a normal situation.  They just happened to be mismanaging something but in our case, there are certain factors that we are not able to deal with.  If sanctions are put on you, you do not remove them yourself.  Someone has to remove them.  We are in a different situation and that is why we cannot easily do it like Zambia or Uganda abandon the hard currency and move to our own currency when we are unsure of the source of the hard currency.  One day we will get there but it has to be a process, otherwise as I said, you will create a situation where now everyone has to be forced to liquidate USD and only hold on to the Zimbabwean dollar.  I think that will be too soon for us to act in that way but the point is well made Madam President.

Questions Without Notice were interrupted by THE TEMPORARY PRESIDENT OF SENATE in terms of Standing Order No. 67.

On the motion of THE MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. PROF. M. NCUBE), the Senate adjourned at Five Minutes to Four o’clock p.m. until Tuesday, 7th June, 2022.

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