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SENATE HANSARD 22 JULY 2020 VOL 29 NO 44
PARLIAMENT OF ZIMBABWE
Wednesday, 22nd July, 2020
The Senate met at Half-past Two o’clock p.m.
PRAYERS
(THE HON. PRESIDENT OF SENATE in the Chair)
HON. SEN. DR. MAVETERA: On a point of privilege Madam President.
THE HON. PRESIDENT OF SENATE: What is your point of privilege?
HON. SEN. DR. MAVETERA: Thank you Madam President. My point of privilege is that, I think it is no longer a secret that we have a crisis in the health sector. The COVID pandemic is now here with us. I think we used to see it happening to foreign countries and we thought it was a myth. Now, with the escalating statistics, it needs no brainer to show us that as a country, we need to take urgent steps to mitigate the effects of this pandemic. Madam President, as we speak right now, there is a crisis in the health sector.
Health care workers have got no adequate personal protective equipment and as a result, I happen to actually interface with health care workers, some are actually taking sick leave just to try to protect themselves from the exposure. So, Madam President, I think as a Government, we really need to make sure that we address this. There is no way we can actually mitigate or control the pandemic if we cannot finance and arm our forefront workers.
Madam President, just to emphasise my point, I think recently we do not know the reasons but there has been Chief Executive Officers of public institutions that have been dismissed. We are not talking about the merits, they may have cases to answer but what really baffles the mind Madam President is, I will give an example of a holding company which has got 5 subsidiaries, then in one day, they fire all the managing directors saying they are incompetent. I think there is a problem and the timing is one which is actually disturbing. If you look at the health sector, right now we do not have a Minister, there is an acting Minister, we do not have a permanent secretary, there is an acting one. The people who should actually be responsible when the top strata are being re-arranged are the chief executive officers of the respective public institutions but unfortunately, they have also been asked to leave. So, I am calling, through you Madam President, on the Government to come and explain to the nation what we need to do because I think we cannot sit here and pretend things are normal when the health sector is in intensive care unit. I hope Madam President, with these words, we also need to call upon the Minister of Finance to come and show cause why resources should not be released to mitigate the COVID pandemic and support the health care workers.
I think His Excellency, a long time back, declared COVID as a state of disaster and I understand that declaration on its own means that we need to take action and divert resources to address that urgent issue. I thank you Madam President.
THE HON. PRESIDENT OF SENATE: Thank you Hon. Senator. I think you have raised a matter which is very important and we are going to make sure those statements are made by the relevant ministers.
MOTION
RECOMMITTAL OF THE 2020 NINTH EDITION OF SENATE STANDING ORDERS
THE MINISTER OF JUSTICE, LEGAL AND PARLIAMENTARY AFFAIRS (HON. ZIYAMBI): I move that the Ninth Edition of the 2020 Standing Orders be recommitted to the Senate in order to reconsider Standing Order No. 79.
Motion put and agreed to.
SECOND READING
MARRIAGES BILL [H. B. 7A, 2019]
Second Order read: Adjourned debate on the Second Reading of the Marriages Bill [H. B. 7A, 2019].
Question again proposed.
*HON. SEN. CHINAKE: Thank you Madam President for giving me this opportunity. The Marriages Bill came to the august House and most Senators debated it according to what they know. Considering how we live, I believe that there are things that were not considered and let me add a few issues. When the Marriages Bill started, it was an issue that had been long overdue because it is now 40 years after attaining Independence. My first issue is that if I have raised my daughter who is educated and has a career, for her to just get married without any bride price being paid, it is not right. If there is no bride price paid, it is not right. I am sure the traditional leaders who are in this House were given powers to be marriage officers but they will face challenges because if people meet along the way they can just go to the chief and get married. The issue of the bride price unites parents, their children and also families. It gives value to the institution of marriage. I think it is something that needs to be considered.
Secondly, the issue that also came out was that a woman can be allowed to stay with a man at the age of 16 years but can only marry at the age of 18 years. It is an issue of concern in our communities where we reside. When the child is 16 years, who is the custodian? Tomorrow we will cry foul when all these elderly man have two or three wives. We believe that the age of consent and the marriageable age should be aligned. It should be 18 years. That issue needs to be addressed. Again, we are the leaders of this nation, so let us uphold our cultural values no matter how educated we are, how many degrees we have and the fact that we can speak English and have stayed in western countries should not change our culture because we are educated. This needs to be maintained.
Without our dignity as Africans we are nothing. We need to uphold this. Long ago, our parents did not have money but the bride price was even paid in the form of hoes. This was done to show that they are married. The age limit was there and the aunties made sure that the child had reached marriageable age. With these few words, I implore Members here that we need to safeguard and maintain our culture. Even those in western countries can do all other things but they uphold and maintain their culture. We should do the same. I thank you.
*HON. SEN. MOEKETSI: I also want to support the motion that was brought in by the Minister. I want to say that I will not be able to pinpoint all the issues but I want to say that today we have certain things that we are implementing that have drawn us back as the people of Zimbabwe and these things are wrong. My request is that for our country to have integrity, the son-in-law should pay the bride price and it also gives value and respect to the daughter-in-law because the bride price would have been paid.
The Bill before us is alien to our culture and my request is that we have our traditional leaders, the chiefs. If the chiefs bring this up, I believe that we will be on the right direction. The chiefs would be alerted if a daughter eloped and that family had to pay a goat or a chicken. This is now being infiltrated by the western culture that we are taking up. What is happening is that the father comes in after two days and the child hires someone else. The person who is hired will tell you that you cannot give me rules and orders in this house because you never paid anything. So we are saying that we need to uphold our culture in Zimbabwe for people to stay together, living as husband and wife without lobola being paid is not a good practice. Honestly for parents who raised their daughter from nine months until she reaches 18 years and then the girl just goes and gets married, I tell you the next thing that girl will go to the Moeketsi family without any bride price. That makes us lose our cultural values. I was thinking that when such Bills come, they should be referred to the Chiefs and the Traditional leaders who should engage their communities and we solicit views of what the communities in the rural areas think. For us to just copy some of these practices and make them laws, that is not good. I thank you Madam President.
THE MINISTER OF JUSTICE, LEGAL AND PARLIAMENTAR AFFAIRS (HON. ZIYAMBI): Thank you Madam President. Madam President I move that the debate do now adjourn.
Motion put and agreed to.
Debate to resume: Thursday, 23rd July, 2020.
MOTION
BUSINESS OF THE HOUSE
THE MINISTER OF JUSTICE, LEGAL AND PARLIAMENTARY AFFAIRS (HON. ZIYAMBI): Madam President, last week the Minister of Finance and Economic Development delivered his Mid-Term speech in the National Assembly and the Senate was in recess, so the Minister felt that it is appropriate that he gives a statement. I seek leave of the House to have the Minister deliver the statement.
THE HON. PRESIDENT OF SENATE: Thank you Hon. Minister, I think the Senate will be very happy to have that statement from the Minister of Finance and Economic Development.
Motion put and agreed to.
MINISTERIAL STATEMENT
SUMMARY OF 2020 MID-TERM BUDGET AND ECONOMIC REVIEW
THE MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. PROF. M. NCUBE): Madam President, Members of the August House, we felt it important that I should give a statement on the economy and on the Mid-Term performance for the first half of the year. We had an opportunity to present this in full to the Lower House last week and you were in recess and felt that we should respect you and I should come here and make a similar statement. It will be compressed - hopefully short, sharp and to the point. I will not read it for one and half hours and send everyone to sleep.
Madam President, from a policy point of view, as Government we want to affirm our commitment to fiscal discipline. That is why we did not request for a presentation before you of a supplementary budget. We do not want to chase inflation, we want to commit to fiscal discipline. This will be the second year that we are doing this in terms of balancing our budget. Secondly, we want to commit to a balance in our balance of payments, which is our external balance. Again, I am happy to report that progress so far is in the right direction. We are committing to that. We also want to commit as policy workers to monetary discipline to accompany fiscal discipline. We are acutely aware that committing to these three things is what is needed that is incentives and that is the fuel to us pursuing a successful objective around raising productivity and growing our economy again.
So focus on productivity does require us to make that commitment and that is what our policy announcement last week tried to convey. We need to create jobs and we also need to make sure that we drive the country’s competitiveness. Also, we want to make sure that we do everything we can from an economic point of view to stabilise our currency which is the root cause of price increases in the shops and which is eroding the livelihoods of ordinary citizens.
As we do this, we also want to make sure Madam President that we stimulate demand so you find that I made proposals, for instance to increase the tax bands and to increase threshold for taxation. Also, we want to stimulate the supply side - not just the demand side but the supply side of the economy. This we are doing through the stimulus package which I announce earlier but then affirmed through the Mid-Term Review. That is our roadmap, that is the direction and we want to make that commitment and show that focus. Let me be more granular, having said those words as a preamble.
It is important that as a House, as Government, we must separate issues around simple economic review, budget review from a request for additional funding through a supplementary budget. That is prudent, it is consistent with global practice of that separation, and in line with the open budget requirements and that is what I did. You would have noticed that we moved up in world rankings in terms of our transparency and execution of the budget. We want to maintain that record and I must thank this august House for the work that you do in preparation for the Budget when we do the retreat, that is a very important process in the budgetary process. So is this process now, in terms of reporting back as to how we are doing on the budget.
So, I want again to just reaffirm that we have not changed course, with or without COVID, our focus is on productivity, growing our economy, job creation, improving competitiveness and we make every effort to drive shared growth so that no one is left behind. I also want to say that we are committed to our target in terms of the budget deficit. We said expenditure is about $63 billion and our revenues we are about $58 billion and then our budget deficit was the order of $5 billion, which is one and half percent of the GDP. That is our target in terms of fiscal discipline.
I must say we have suffered some shocks. I do not know an economy that has gone through a cyclone, not just one but two. I do not know and economy that has been hit by drought, which not only has impacted agriculture, but also impacted the production of electricity causing power outrages. Also like every other economy, we have been hit by the COVID crisis. So we have had four crises within a space of 18 months, but we are still standing. I am hopeful, optimistic and please join me in that optimism - the future is bright. I have no doubt about that.
Now, let me say something about COVID. You see Madam President, COVID impacts our economy through various channels. So, it is through the global supply chain disruption which is impacting our manufacturing sector so we expect industry to show some negative growth this year of 10%. It also impacts our mining sector, although I must say we have been lucky - some minerals are doing very well like for instance what we call the PGMs group, the diamond sector and the coal sector. By the way Madam President, I must say, I encourage all of you to visit Hwange and witness for yourselves the growth of the hydrocarbon sector, the growth of the coal sector in this country, it is a miracle.
So, we have seen growth in that sector in the first half of the year of the order of 16% and it is growing. It is also growing foreign direct investment. So the mining sector remains our largest foreign currency earner. Sixty percent of the earnings are from the mining sector and it is expected to even overtake agriculture as the main contributor to the economy. It is currently at 8%. We think it will grow above that if the space is maintained but some sub-sectors within that have not done as well. Let us take the gold sector for example. The gold price has gone up because that is a refuge point when in times of crisis because of the COVID-19 crisis, but the deliveries at Fidelity have dropped and that has to do with various things like matsotsi who are taking gold out and all manner of things.
We are dealing with them, but we also dealt with the other thing which was a retention issue. We changed retention ratio from 45:55 to 70:30 in favour of the miner. So at least we have done our part as Government. We still have to deal with the elicit side. So when we say gold output has gone down, it is not really correct. Technically, in a sense, it is about official deliveries to Fidelity but the actual gold output out there has gone up. We know that only that pane matsotsi, otsotsi bayakhupha igolide leliyana. That is our problem, but the future is bright with the mining sector, Madam President.
Now if you turn to the sector that has been hit the hardest, in our view it is the tourism sector. Virtually shut down. We had arrivals and room bookings literally drop by as much as 90% and that is a global phenomenon. It is very serious on the whole sector because it is not just hotels and tourism, the distribution sector together. We are expecting a decline of about -7.4% although what is happening is that the retail sector is then buoying the rest of the sector countering that negative decline in tourism and also the airline industry.
Looking at the transportation sector; that again has been impacted because once we have a drop in activity in the other sectors, then there is less to transport. So that also has calmed down, but I must say as I say this, there are other sectors that have benefited, for example the health sector. In any health related supplies into the economy, that has benefited whether looking at chemical sector in terms of the production of sanitisers and face masks. So those sectors have benefited but also the ICT sector has also benefited. We are trying to track the terabytes, as they may call them, that have been used in the last six months. Those have gone up by as much as 3% and continue to go up because clearly, that is how meetings are being held, that is how conversations are being held. It is through virtual ICT platforms and this trend I am describing about our economy is very similar to the trend globally where the same similar sectors are behaving in a similar way.
I must say, Madam President, our projection for GDP growth is -4.5%. If you recall at the beginning of the year or rather end of last year, we said it is +3% but everything has changed. COVID-19 has just changed, it is a new normal now. We do not recognise people anymore, everything is a face mask. That is why I wore something transparent. At least I can be seen but everyone has masks. You cannot tell people apart. So growth is -4.5% for the year but next year we expect it to be brighter. For the rest of the world, Madam President, we are expecting a growth rate of -5% for the whole world, but within that, the developed countries are going to be hit the hardest. Their average rate of growth is going to be -8%. So with -4.5%, we have negative growth, but you can see that we are slightly better off than the developed world, but we all expect recovery in 2021. So our GDP growth looks like that; the sharp drop in 2020, then a sharp recovery again in 2021. So for Zimbabwe, we are expecting a growth rate of +7.4% in 2021. Again we pray for no more. I think they call them black swan events. I think that is the phrase for it - something that hits you out of the blue from nowhere. That is exactly what COVID-19 did to us. So we expect a brighter 2021.
I must say something about agriculture. It is a very important sector. If you look at the winter crop, what we are hearing, what we are being informed by the Ministry of Lands, Agriculture, Water, Climate and Rural Resettlement is that the yields are not too bad. We should have a decent winter wheat crop. The yields are not too bad at all and the output, at least the yields will be slightly better than the last seasons, so that is encouraging, but I must say looking back at the grain production, we had an increase from last season in terms of grain output. The increase was more notable in the traditional grain sector more than just the maize and the usual sorghum, millet and so forth. That is where the increase was notable. Well over 300% increase in output.
I think if we go to places like Muzarabani, this is visible and we really want to encourage our citizens, especially those in the dry areas to plant more traditional grains as a climate mitigation measure in order to feed themselves. I must say that the Government, through the Ministry of Lands, Agriculture, Water, Climate and Rural Resettlement, has an agriculture recovery plan that we are working on and that would drive our summer programme. For example, for the Presidential Input Scheme, Madam President, we are emphasising this Pfumvudza system which is meant to improve productivity. One sixteenth of a hectare being the target for a family of say five and their carefully planted maize crop - the number of lines counted properly, number of crops counted properly and it is more than enough for a family of five or so to water the field in the absence of rain water. So that is productivity we are focusing on.
Then on the summer command programme again, our partnership with the banks carries on and again, we are targeting 5 000 farms or so who are very productive, who have a track record and typically have access to water. So if they have access to irrigation, that is preferred naturally, but we will not exclude those without that if they have other ways of keeping their crops wet and well irrigated. Again the emphasis is on productivity and climate proofing our agriculture. What we have added this year, Madam President, is the mechanisation side. We have acquired tractors, combine harvesters and other equipment which is administered again through the banks because we want to make sure that everyone honours whatever obligations they have in terms of leasing this equipment and we have requested Agribank to establish a listing division to manage this equipment so that it is well looked after and as I say that obligations are met by the borrowers or the lessor of his equipment. So that is our strategy for agriculture. We are determined that again after four seasons, we should not be importing food again. Let us banish food imports forever.
Madam President, there is a sector that is also important and it is all part of the real economy, it is just energy output. Again, we have seen an improvement in energy output. The water levels in Kariba have been coming up, the catchment areas have seen more water being deposited through the water levels and the Zambezi and then Kariba have gone up and that is encouraging. It means that our hydropower output is set to go up. This is pleasing indeed.
I did mention that looking at the external side, we are determined to banish any balance of payments or current account deficits. I am happy to say that in the first half of the year, the current account position is positive and we expect that by year, end the current account would be US$1.9 billion. This is important. When your current account is positive it means you are exporting or earning forex more than you are importing. When you have a deficit, you are actually exporting jobs, incomes and economic opportunities. We have started doing the opposite. It is actual proof, Madam President, that our currency strategy is working because when you have a domestic currency that is weaker than obviously the foreign currency, you expect it to promote exports and discourage imports. You expect to turn your current account position around and this is what has happened. So, that objective has been achieved through currency reform.
On the Z$18 billion, I talked about the supply side push, the stimulus package, of course it covered agriculture, repositioning the agriculture sector budget of $6.1 billion to be more productivity oriented and we are doing that. We have a working capital facility for industry of $3 billion and the industry is starting to access that and we also want to support the mining sector, especially the gold sector. Some of you live in constituencies that have been targeted for the establishment of gold centres – we want to support those.
We also want to support the SMEs with half a billion dollar facility and people have lost jobs and indeed the tourism sector which is virtually shut and we want it to report. The operators ought to access credit through the facility. We supported the sports people and we have done a lot in the health sector in terms of revamping our health facilities. I have never seen so much focus on the health sector and every Cabinet Minister now is a doctor or have some knowledge of health issues because we have concentrated our minds and energy on this issue and I think that the results are there to see. Of course, it is never enough because COVID- 19 is what it is but we have worked very hard to deal with issues in the health sector.
Then in terms of the cash transfers for the vulnerable, our target has been 1 million people and the registration process is slower but it is coming up. But, we would like citizens to come forward and register because surely, if you are feeling the pressure and deprived, come forward and register with the Department of Social Welfare and the $300 per month is waiting for you. That is what we promised. We have a budget of $2.4 billion for citizens who are vulnerable. So, please come forward and register so that we can support you.
Then coming to the budget outturn itself, I must say that so far, for the first half of the year, we received about Z$34 billion in terms of inflows/revenues and in terms of expenditure, we had spent about $30 billion so far. Do not be fooled. It is not that the difference is $4 billion. There are other outstanding payments of about $3 billion. So, our budget position is a positive or a small surplus of Z$800 million. So, the takeaway Hon. Members is that our budget is balancing - we are living within our means and that is the message that we wanted to send.
Then in terms of expenditure, so far we have only spent 47% of our budget, we have 53% to spend but it varies across Ministries because some have above 50% and some have less than that. I can give you details as to which ones have spent less. But I want to encourage Members that when it comes to devolution, please, we need those projects on the ground. You represent areas, regions, and we need those projects on the ground as Government so that we can support development at the local level. Development is a bottom up process because at the top, we just drive policies. If the project is not coming up at the actual level, we are not going to make progress and please, do that. So far we have spent about Half a billion dollars in terms of the devolution resources which I know you track. Our budget is $2.9 billion, so, we have a long way to go. We need those projects from yourselves as the actors on the ground.
You will recall in 2018 that we put in seed money for about $70 million for the Government Pension Fund for civil servants and I am happy to report that the fund is growing and the resources now under the fund amount to about Z$768 million. That is now how far it has grown from $70 million to $768 million. This also includes contributions of course, over the last year but also it includes growth in the value of the assets that the fund is invested in. It has been invested on the stock market, in the money market here and there. So, it is making progress. There is no change in terms of what we owe others in terms of external debt. It is about US$8 billion and then our domestic debt is about Z$12 billion but I must say that in the external debt, we have been making token payments in the usual way and we are continuing to do that but we need, in a sense, to negotiate for that final debt restructuring agreement that we have been working on in terms of our engagement.
The monetary sector is a critical issue. If you look at the growth in money supply, of course it has been going up because some of it is about US dollars being converted at whatever exchange rate into domestic currency, that has been going on but reserve money which is critical in supporting the exchange rate, that has been steady and in fact it has been declining and has been under control so far.
The banking sector Madam President remains strong in terms of the balance sheet; in terms of non-performing loans, those have been declining. One important issue is the exchange rate which I mentioned earlier. We have introduced in our auction system – it is a Dutch auction system which means that you come in and bid. If you bid too high, we cut you off, if you bid too low, we cut you off but there is a range of bids and we honour those bids and we are able to sell you foreign currency at whatever level you have bid within that range. I am happy to say that it has started off well and we have done five auctions so far and the last one was yesterday which rate was about 72.1 and we sold foreign currency to the tune of about US$14. 5 million or so. For the first time, we saw participation from exporters and that is what we want. It should not be just the Central Bank offloading resources on to the market but we want the market itself to offload its own resources into the market so that the market begins to take over the leadership. But, what the auction has done is to give leadership to the foreign exchange market and we have seen some stability and even convergence. That is what we desire because once we have convergence, we have stability that will deal with the pricing system and inflation, then we expect it to drop. Our expectation is that, year-on-year inflation will drop to about 300% between now and December. But, if you take what we call blended inflation, we have allowed for the use of free funds in the market, so those hard currency transactions combined with the domestic currency transaction, the inflation out of that which we call blended inflation is of the order of about 450%, which is lower than the Zimbabwe dollar inflation which is about 735%. Quite clearly, our strategy the COVID- 19 transition period is helping citizens or the whole country to lower inflation.
Clearly, someone who is using US dollars when they are going to the shops, they are facing a different level of inflation pricing compared to someone who is using the Zimbabwe dollars and that is what we are trying to catch because that is our reality on the ground since we allowed this to happen but we expect inflation to go down and we expect the month-on-month inflation to go down as low as about 5% or so by year end.
Madam President, on structural issues, we always like to give a fuller report. This is the nine economic reforms. I think let me highlight the three important things: - one, we know about the repeal of POSA in replacement by MOPA and that is done and everyone knows what it is all about. Then recently you as Senate repealed AIPPA through the enactment of the Freedom of Information Bill a few weeks ago. So there is progress on those two.
Then finally, another structural issue is the environment for doing business. We improved with one of the top 20 performers last year in terms of improvement in the environment for doing business. We want to keep getting better; so as Government we have identified 16 areas for improvement and each Ministry has an area to focus on over the next two years so that we can improve our environment for doing business. His Excellency has continued convening the activities of the POLAD process; building and making sure our political parties come together, discuss issues and the future of the country.
I have two more points before I sit down Madam President. One is on the National Development Strategy - that process has started. We have done a concept note and identified about 11 areas regarding the National Development Strategy which will drive the Budget for 2021 and successive budgets for the next five years. Some of the areas that are emerging from the consultations involve macrostability, focusing on the youth and culture, focusing on governance, focusing on industrialisation and value chains, health and well being; housing issues are important, building human capital; the environment is critical, devolution, protecting the vulnerable – social protection, transportation, infrastructure issues and issues around food security and nutrition. Digital economy is also included. These are some of the issues that are emerging as critical for us to have a successful strategy for the next five years in the form of the National Development Strategy (NDS). It is our aim Madam President, that by end of October the NDS is completed and launched because we need that to drive our thinking for the 2021 Budget.
My final point is on revenue measures which we have already offloaded to say, look we needed to stimulate both the supply and demand sides. On the revenue measures, our request which also come through formerly for approval to Senate, has to do with the tax bands which we have pushed up as well as the tax threshold that used to be ZWL$2 700.00 which is not taxed. We have doubled that threshold to ZWL$5 000.00 now, standard tax bands but also we have made a commitment that health sector workers would not pay VAT on their risk allowance. So we have removed that and we will ask you to endorse that as Senate and the USD$75.00 COVID-19 allowance is also non-taxable. We will also request that permission.
I must say that we will also request you to endorse our proposals for the incentives that we have put in place for the Victoria Falls Stock Exchange which again is one of those things that we will use to drive Foreign Direct Investment into our economy. So again, we will ask you to endorse some of our proposals and approve those to drive that sector. We have a few things to fine-tune on royalties for the mining sector. Anyway, there is a full bouquet of requests that will come to you in the next few weeks and in the fullness of time.
Madam President, let me say the future is bright, I can see the light and growth will be better next year. We are on a winning wicket for those of you who like cricket. I will find the right expression for those who like soccer. I thank you. – [HON. SENATORS: Hear, hear.] –
THE HON. PRESIDENT OF SENATE: Thank you Hon. Minister, if you may take the front seat at the moment because I think Hon. Senators may need some clarifications since they will not have chance to debate on this issue.
HON. SEN. ENG. MUDZURI: Thank you Madam President. I really want to appreciate the difficulty that the Hon. Minister is going through in terms of crafting the budget. The clarification we are looking at is that the budget looks highly technical in the sense that the Hon. Minister has been talking about the banking system being stable and going to stabilise whilst it is floating the money. My grandmother in the rural areas does not understand what floating of currency is and in actual fact, the biggest challenge is that when you go to the bank you cannot directly use your plastic money to transfer money, which means that if I have just received money from tobacco auctions, from abroad or I am using a Master Card, there is no way you can swipe and directly exchange. Go to Mozambique or South Africa, that is how their money translates. There is no translation of that floating system into the use of plastic cards so that when people come in they can transfer their money.
The other area that I am not clear of is - he mentioned about 11 areas which he is concentrating on in terms of improving the economy in developmental areas. I could not pick up where the Hon. Minister and the Government is concentrating on. Really, this country needs production and areas where there is productivity. Yes, we have got COVID-19 but we need to focus on certain areas where we say we are likely to earn our foreign exchange. I did not pick areas where we are likely to benefit. He spoke of mining but which minerals are likely to get the money which comes into the budget?
Previously when we used to look at the budget, I was still young but Chidzero’s budget would actually show you the figures that this will come from cigarette, liquor, agriculture, et cetera and there is real transfer so that you can tell that the productivity from this sector is likely to bring so much money into the budget and that budget would be sustainable. Now, I am not getting the balance of where the probability of having the money coming in and going out is.
Our chief currency earners could be tobacco or whatever but we have not concentrated on what we are likely to receive. Yes, inflation has come, everything has come and we are not clear to say when I am being asked, ‘VaMudzuri, where is your foreign currency balance of payment coming from?’ I will not be able to explain yet at my level I should be able to speak about this language to say, ‘No, we are likely to do a, b, c and d’, and also what you call Ease of Doing Business. We have been talking about Ease of Doing Business but I do not see it coming out here because; go to most ministries and institutions honestly, it is like we are …
THE HON. DEPUTY PRESIDENT OF SENATE: Order, order! Thank you. Hon. Senators, this was a Statement by the Hon. Minister and what we are asking you to do is to just seek clarifications – short clarifications. A complete Bill is going to come with the Hon. Minister which you can then debate on. This opportunity is just for you to seek some clarifications and not to start debating. You may conclude your clarification.
HON. SEN. ENG. MUDZURI: Thank you Hon. President. I may have gone at length but the clarification comes in the sense that I have to speak to this budget when I come out to say, Senator what are you talking about in this area and that area. So, the clarification when he explains I will be clear of what we are looking at in the economy.
However, I do not want to waste a lot of time after being corrected but I want to insist that you have talked also in the area of $1000 for those who have to register their names; some $2,4 billion which you are likely to give those who are socially strained. For those who are socially strained, they have to come to register. I believe that you might need to explain to us who will register. What category is registered because what we see is, a lot of people do not understand who qualifies. I strongly believe that there should be a policy to say, once you are 70 years you qualify because of your strain, not necessarily that you have children. There are a lot of people who are straining. I am just giving as an example. If you say children in this range, then they will come to register. The problem is also that the people who are likely to register as I have experienced in the rural areas especially, are not even in the Social Welfare Department. There is a lot of changing of goal posts, so if we can have the criteria from both the Ministry of Finance and Ministry of Public Service, Labour and Social Welfare well clarified in Parliament so that we will be able to explain to our people on who qualifies. I can also bring names to you and say these have been refused. I thank you.
HON. SEN. KOMICHI: Thank you Mr. President and thank you Hon. Minister of Finance. I just want to seek clarification. I did not get you clearly. When are the people going to receive their US$75? Secondly, the economy of this country cannot be touched; it is not there because people cannot feel it in their pockets. I know you have presented a very good document but at the end of the day the people themselves do not have any tangible benefit out of what the country can provide in terms of economic delivery. The people of Zimbabwe would want to know why the Zimbabwean economy is not performing to the point where they should be able to benefit. Out of those whys, if you can give us those whys. As Zimbabweans, can we not be able to resolve those whys? Some of the issues that we have heard is that this country must embark on political and economic reforms. Have those reforms that have been done so far paid any dividends to the Zimbabwean economy? I want to allege that the Government is not serious on that. What makes us fail to effect those reforms if they are going to benefit the people of Zimbabwe? Thank you very much.
HON. SEN. DR. MAVETERA: Thank you Mr. President. I just want to thank the Minister for his presentation and also for identifying that there is a lot of leakage on the minerals especially gold but from the presentation of the Minister, it did not come out clearly whether there are any strategies to minimise leakages on other minerals. This is because he seems to have concentrated on gold. For example, what I see right now is, if you go to the countryside, there is a lot of earthmoving happening. Sometimes you find out of raw minerals, the ore on its own is being exported. I do not know what the Government strategy and policy is and how far we have reached in terms of beneficiation and value addition because we are losing. I do not think the Chinese are stupid when they can actually take the whole lot of raw chrome, put it on ship and take it to China. It is not the chrome but there are a lot of base metals where some are important for aircraft, which we actually cannot identify. We have been talking about this for quite a long time. By now, if we were really serious, there are certain strategic minerals in the country where whoever should or has got an appetite for investing in that strategic area has to first of all put a smelting or processing plant. At the end of the day, I do not think we are getting much with the lot of mining happening. We are a small nation with a small population and we can actually survive just on minerals. We do not even know how the diamonds are doing.
On the pensions, I heard the Minister saying he did put about $70 million and now it has probably multiplied ten times but it was not clear because it was a mixed bag. What was the contribution from investment from that $70 million? Some of it is our contribution that cannot be explained as performance. I think for us to say we are really performing, we want to see that $70 million which was ceded. How much has it achieved? That is not performance. I thank you.
*HON. SEN. CHIEF CHARUMBIRA: Thank you Mr. President. The Hon. Minister of Finance, we want to thank you; you have done well. The issue of gold you mentioned that does not come through Fidelity, we need clarification. You said that you know that there are illicit gold dealings that are taking place, I agree with you that we are losing a lot of gold. In Charumbira area in Wards 7 and 10, when milling is being done, there are a lot of mills that are set up and what is happening is visible to all of us. We know the characters who are engaged in mining and taking the ore to the mill. If the Mining Act is not addressed, it will be a challenge because that is where the real issues are.
What the Act says is that if a person comes to mine in an area without responsibility to the people in the area, there is no oversight of people who are in the community because the powers or authority was issued by the Government. So I think we need to inform the communities of the new miners in their area and give us the mandate to check how much is being acquired or earned from the mining that is taking place. They get a lot of grammes and they sell. They get the money at 5 o’clock and at 6 o’clock they are already drunk. There are people coming from South Africa in Masvingo and they know that if you get a few grammes of gold, you go and sell to certain people. People think ownership is not for us, so let us put people in the communities to oversee mining activities so that they can avail information on the gold that we are losing through illicit gold dealings. I thank you.
*HON. SEN. SIPANI-HUNGWE: Thank you Mr. President.
Hon. Sen. Sipani-Hungwe having lowered her mask.
THE HON. DEPUTY PRESIDENT OF SENATE: Hon. Member, wear your mask properly.
*HON. SEN. SIPANI-HUNGWE: I would like to seek clarification since the Minister mentioned that we able to trade in USD. When we get into the shop and pay in USD for example I pay US$20, I get a receipt which does not show the currency. For Government to have made strides, the shop owners should pay tax. If the Minister goes to claim tax, does he claim tax on the US$20 or RTGs20 when I have bought using USD?
Furthermore, the employees of the business owners are trading in USD but they are paying salaries in RTGs. I request you Minister since you are responsible for finance in this country, what is really happening?
THE MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. PROF. M. NCUBE): I would like to thank Hon. Members for their comments as well as questions. Let me start with Hon. Sen. Eng. Mudzuri; he mentioned that we need to be able to use plastic cards and be able to transfer money from one end to another. I agree with him that this is an innovation or service that is required. We will make sure that we push our banking sector in that direction.
On the National Development Strategy (NDS), he said he did not hear any priority areas – all I was highlighting on the NDS was to say that the process has started. I also wanted you to know the eleven areas that have been highlighted in terms of national concentrations but within that, the issue of productivity is key and permeates right across areas of focus that pertain to the real sector. I want to assure him that he mentioned specifically that is exactly what we are doing. He went on to say that perhaps in my presentation I was not too clear as to where taxes where coming from and where we are going, this was not a Budget presentation. It was a compressed statement generally about the key drivers in terms of our revenues and so forth and the growth of the economy.
Quite clearly, if he wishes to know; which of the sectors are best in export performance – it is gold, the PGMs and also tobacco. Those are our best performers in terms of exports. We have this information but of course I have no desire to give the full detail in terms of numbers. I am happy to also give him that information off line.
On welfare, he says that perhaps we need to be more explicit and be public about who qualifies – that is in order and in the fullness of time we can request the Minister of Social Welfare to be explicit about that and maybe issue a statement to make it clear as to who qualifies.
Hon. Sen. Komichi wanted to know when civil servants could start spending their US$75; I must say that the systems are ready now. We had to make sure that the accounts were opened because these are special Foreign Currency Accounts. It looks like that process is complete now and maybe one or two areas or people still need to do this but most people have opened their accounts now. The banks have said they are ready to certainly issue the cards for use in the shops and the shops are now saying they have configured their machines to be able to receive payment through the card system. We would not want individuals to withdraw cash from the bank from this US$75 allowance because we are concerned as Government that it will end up in the parallel market. That would be undesirable. We want individuals to use this in the shops for payment of goods and services where possible.
Hon. Sen. Komichi also said that the economy is not being felt in people’s pockets and so forth – reforms can take a while to be felt but we are certainly going in the right direction and the reforms will be felt. Our focus on productivity and job creation is certainly the right focus. There is nothing you can fill in your pocket better than a new job if you indeed have taken on a new job or higher income. Reforms do not work immediately, there is always a delay in the way they work. I have no doubt that we are in the right direction. I think that this House has been very helpful in helping us craft or approve a Budget that is strategically targeted at those areas that will enable the economy to grow so that it is felt in the pockets of ordinary citizens.
Hon. Sen. Mavetera on strategies for minimising leakages. I think you really focused on beneficiation and so forth, that is Government policy in the mining sector that for every mineral there must be some form of beneficiation but obviously speeds of progress are different for mineral by mineral, for some we have got smelters and for some we do not. That is a thrust and a full engagement with the Minister of Mines and Mining Development will reveal this in terms of our strategy for beneficiation as we try to create the 12 billion dollar industry.
The Hon. Sen. also wanted to know about the pensions in terms of differences between contributions and the performance of the market. That is a very good question indeed and I will give a very precise answer from the presentation – the full review. As of June 2020, the contributions were $423.4 million and then obviously the remainder becomes performance. The difference then between $768 million and $423 million becomes what is explained by performance, including the seed capital that we put in of 70.4 million.
In terms of what the asset allocation – should you wish to know that in terms of where it is invested; 60.3% is invested in the equity market, 9.94% in the money market and 1.15% in some other interest bearing money market instruments. Cash in the bank is 28.7%. If we add that up quickly it adds up to 100%. That is the split and it is in the full statement. I will make sure that every member receives a copy. Hon. Sen. Chief Charumbira talked at length about the leakages in the gold sector which we know and we are using a variety of strategies to deal with that. Last year we launched Operation chikorokoza ngachipere - that was one initiative. We also launched Operation rubber shoe, again to deal with these leakages and then we also have a Gold Mobilisation Unit which is multi-departmental ministerial, but largely driven by the Central Bank that is another unit. We have also increased security around our borders so you will find most of our interventions are mainly security oriented, which is a security issue in the main.
We now overlay a pricing issue which is that we have changed the retention ratio from 55, 45 to 70, 30 and that has resulted in an improvement in the gold deliveries at Fidelity. I suspect those who were smuggling gold find it harder to do so with COVID-19, there was no easy movement at the borders; it was not easy to penetrate during the COVID-19 era. There is an upside to COVID - after all on a lighter note but we are doing everything to deal with this gold issue. The one which was the retention issue has been dealt with by the Central Bank. Hon. Sen. Hungwe mentioned a very important point about retailers issuing receipts which do not show what currency was paid and therefore what tax and in what currency was paid. We are dealing with it in the Bill that I am bringing forward. There is a paragraph that pertains to this to compel retailers to show the receipt in the currency of trade and to pay their taxes in the currency of trade. I thank you.
THE HON. DEPUTY PRESIDENT OF SENATE: Thank you very much Hon. Minister, I am advised that the statement which the Minister has made has already been sent to all the Hon. Senators on your platforms. So, you have got the benefit of going through it and then when the Minister brings the Bill in our next sitting, you will be able to debate from an informed position. I thank you Minister once again.
MOTION
BUSINESS OF THE HOUSE
THE MINISTER OF LANDS, AGRICULTURE, WATER, CLIMATE AND RURAL RESETTLEMENT (HON. RTD. AIR CHIEF MARSHAL SHIRI): Thank you Mr. President, I move that Orders of the Day, Nos. 3 and 4 on today Order Paper be stood over until Order of the Day No. 5 has been disposed off.
Motion put and agreed to.
MOTION
PRESIDENTIAL SPEECH: DEBATE ON ADDRESS
Adjourned debate on motion in reply to the Presidential Speech.
Question again proposed.
HON. SEN. MUZENDA: Mr. President, I move that the debate do now adjourn.
HON. SEN. TONGOGARA: I second.
Motion put and agreed to.
Debate to resume: Thursday, 23rd July, 2020.
On the motion of THE MINISTER OF LANDS, AGRICULTURE, WATER, CLIMATE AND RURAL RESETTLEMENT (HON. RTD. AIR CHIEF MARSHAL SHIRI), the Senate adjourned at Four Minutes to Five o’clock p.m.