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SENATE HANSARD 6 SEPTEMBER 2022 VOL 31 NO 66
PARLIAMENT OF ZIMBABWE
Tuesday, 6th September, 2022
The Senate met at Half-past Two o’clock p.m.
(THE HON. DEPUTY PRESIDENT OF SENATE in the Chair)
ANNOUNCEMENT BY THE HON. DEPUTY PRESIDENT OF SENATE
SWITCHING OFF OF CELLPHONES AND WEARING OF MASKS
THE HON. DEPUTY PRESIDENT OF SENATE: Firstly, your gadgets and telephones must be put on silent or better switch them off. Secondly, it is still mandatory in this country to wear masks when you are indoors. Hon Senators are reminded to put on their masks
FINANCE BILL [H. B. 9A, 2022]
THE MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. PROF. M. NCUBE): Mr. President, on 28th July 2022, I presented to this august House the 2022 Supplementary Estimates amounting to ZWL$929.3 billion that is Vote Appropriation amount of ZWL851.4 billion and Constitutional and Statutory appropriations (Pensions, Interest and inter-governmental fiscal transfers) totaling ZWL$77.8 billion.
The vote appropriations of ZWL$851.4 billion are broken down as follows:
- Employment Costs ZWL428 billion
- Use of Goods and Services 8 billion
- Capital Expenditure 5 billion
Mr. President, the purpose of this Bill is to give effect to the Supplementary 2022 expenditures that were presented to the National Assembly.
I seek approval for a supplementary budget of ZWL$851.4 billion to cater for additional provisions and reforms mainly related to the following areas:
- Stimulation of production, targeting agriculture, industry and other productive sectors;
- Food security, including grain procurement to mitigate the effect of drought conditions and support towards agricultural inputs.
- Welfare of civil servants and pensioners;
- Social services and delivery and social protection;
- Infrastructure and utilities;
- Constitutional requirements, including transfer to provincial councils and local authorities and support for governance institutions;
- Support for Government operations including the salaries of Members of this august House.
The supplementary expenditures being proposed are, however, designed in a way that they are in line with increased revenues and will be implemented without compromising fiscal discipline and upsetting set fiscal targets.
To accommodate the additional requirements, I have revised the 2022 budget of ZWL968.3 billion, taking account of the additional expenditures of ZWL929.3 billion to bring the total budget to ZWL1 897 trillion.
I am, therefore, presenting to this august House, the Supplementary Estimates for 2022 and the accompanying Appropriation [Supplementary] Bill (2022) for consideration and approval by Hon. Members.
Mr. President, I move that the Bill be now read a second time.
HON. SEN. ENG. MUDZURI: I would like to welcome the presence of the Minister of Finance and Economic Development. However, we have had a promise from the Minister of Finance that he will come to explain to us. We can go to the Second Reading and go through it but we have argued here as Members of Parliament that when you brought in the gold coins and how they are going to mitigate the economic situation and the volatility of the Zimbabwe dollar was going to be done by yourself in this august House to explain to us before we go and approve a budget which we do not understand how it is going to work.
We have been going to our constituencies, thank God we got some money to drive to our constituencies but we have no answers to explain exactly how this economy is going to run. We can approve the billions that you have talked about but we cannot explain this hyper-inflationary position where we are now approving a budget which is more than three times what we had at the beginning of the year. We need an explanation from you Hon. Minister before we debate your finances.
HON. SEN. KOMICHI: Thank you Hon. President. Let me also take the opportunity to thank the Hon. Minister. I think the people of Zimbabwe have got higher expectations out of your budget. Currently, the people of Zimbabwe are languishing in extreme poverty. Those who are formally employed at the moment have virtually no difference with the ones that are unemployed. Probably the ones that are not formally employed are better off because they are able to engage in parallel deals that will give them valuable money.
As we speak right now, the salaries that are earned by civil servants, even if you add the US$175.00 and the RTGs, no one can make a comfortable life out of that. The cost of living in the country is too high. The price of goods is beyond reach. At the end of the day, a civil servant goes home with less than US$250.00. The RTGs value which the civil servants are earning is not even enough for airtime. People have got kids who go to school and also need medical attention, clothing, payments of rent out of the money that civil servants are earning. It is very impossible to fulfill these basic requirements.
Even the Members of Parliament (MPs) that you see here, they have been turned into vendors. After every Parliamentary sitting, MPs are seen parading in the streets converting coupons into cash in order to raise money for school fees and basic requirements. This is unacceptable. This has turned Zimbabweans into extreme poor people. Hon. Minister, we need to look into this seriously. We need to look into methods which can be employed to make sure that we balance between people’s expectations and the targets that you might have as a Minister to turnaround our economy. The time has been long; people have been very patient but things seem not to be improving at all. So, salaries should be reviewed such that after every month end, a person should be able to smile. Currently, people get stressed as the month comes to an end because they know whatever they are earning is not going to help in any way.
We do have farmers who are crying. Farmers work very hard to have their produce but the prices that the GMB is offering is actually peanuts. We are aware that the private buyers are paying US$300 per tonne of maize yet if you sell your produce to GMB, you are given 100 000 RTGs and US$90.00. Comparing this to the private buyers, the difference is too huge. Our experience is that farmers are no longer prepared to sell their produce to the GMB. That is going to put the country at risk in terms of food security.
We have quite a great challenge. Next year we might not have farmers ready to produce maize because they see no value of producing maize. The cost of agricultural inputs such as fertiliser is very high and is charged in USD. We need, Hon. Minister, to be transformative; to think outside the box and see what we can do to ensure that our farmers are happy and ready to engage again into maize production next year. I wonder what will happen if we do not take action immediately. It is our plea that this budget should have enough money to make our farmers happy.
At one GMB depot, we compared the deliveries that were done at the same period this year and last year. That GMB depot has received 12 000 tonnes this year, yet last year it received more than 104 000 tonnes of maize. Truly speaking, the farmers are hoarding their produce. These two figures must put us in a panic mode and engage the farmers, talk to them, find out what they want so that they can be motivated to produce more maize next year. I thank you.
HON. SEN. CHINAKE: Thank you Mr. President. I would also like to thank the Minister of Finance for the budget he brought to this House. I think for the past years, you have been presenting these budgets, most ministries were getting less than 25% of what they wanted to get. I do not know Hon. Minister, if now you are ready to give them 100% of what they want. When they make their budgets, like now the whole country is waiting for you to see if anything is going to move. Even ministries are waiting to get the money because they have got their projects waiting in line so that when they get their money, they do their jobs. It is not about the Ministry but it is about the country Zimbabwe. So if they get 25% or 30% of what they wanted, it then means they will not be doing anything.
Hon. Minister, every time you make your budget, yes you tell us you want all those figures. Are these figures in the air or it is something which you know you will not get the money? Every time you make your budget, you do not really explain to us as a House how you are going to get the money. That is why the ministries are not getting 100% or 75% of the money that they want. Myself, my child, my cousin, if we ask for something, we need it. If you allow the ministries to submit their budgets and they do not get the money, they will end up doing nothing. Remember, that Ministry has got some workers. It will not be good for them not to get their money. It is better to tell them not to do budgets because the money is not there. Since last year, if you get to any Ministry, they are crying.
I am glad the last speaker spoke about agriculture. It is something which is hurting the people of Zimbabwe. When you import maize from outside the country, you give them good money. Why can you not give it to the farmers in this country so that next season they will be able to get back to the fields as they will be having enough money? How can you support other countries and give them good money whilst you cannot give it to farmers in Zimbabwe?
The second thing Hon. Minister, if you go around shops now, fertilizer for this year has gone up and we cannot afford to buy it. How do you expect those people to go back to the fields to plant crops while they do not have fertilizers? Hon. Minister, I think it is one of the items where if you can subsidize the fertilizer or whatever is being needed by the farmers so that they can do their job easily. If you ask any farmer now, they are saying they cannot do anything. Can you try and do something because importing food stuffs from other countries is too expensive for this country. It is better to subsidize farmers with fertilizer and chemicals so that they will be able to go back to the fields and plant. Thank you Mr. President.
*HON. SEN. CHIMBUDZI: Thank you Mr. President for giving me the opportunity to support with a few words, the Supplementary Budget which was brought to this august House by the Hon. Minister of Finance and Economic Development. Let me start by thanking the Hon. Minister for the explanation that he gave which regards this Supplementary Budget. The previous speakers brought about quite pertinent issues.
Our desire is to restore the agriculture sector to its former glory. Government should ensure that our farmers are capacitated. Mr. President, we had the Command Agriculture Programme. This has been quite beneficial because our GMB depots have been receiving a lot of grain. Because of the stopping of that particular programme, we saw farmers being referred to the CBZ bank. The challenge is that the agreement between Government and farmers and what is transpiring now where CBZ requires collateral, it is affecting the progress of the initiative. Mr. President, I believe that it is good for Government to look at the interests of farmers so that every farmer is able to cultivate for the benefit of the nation.
AFC is beneficial to farmers but there are a number of challenges that farmers are complaining about. Government should ascertain first the operations of AFC because sometimes farmers have big expectations. We want Government to investigate its operations. We cannot have hunger in Zimbabwe yet we have people who work hard. Zimbabweans work hard but they need to be capacitated with fertilizers, herbicides, implements, et cetera which would have our commercial and communal farmers. You would find that sometimes people get basal fertilizers in December and top dressing in January. I would like to implore Government to look into the issue. I stood to buttress the issue that Government should restore the Command Agriculture Programme which benefitted a lot of people and that is why our silos were full. We moved around districts and we were shocked to discover that at times you find only five tonnes of grain.
Mr. President, I want to support the Budget but I would like to suggest that farmers should be given implements and inputs so that everyone can produce. It is important to review the operations of CBZ because only few farmers are able to get loans. Thank you Mr. President.
HON. SEN. C. NDLOVU: Thank you Mr. President for giving me this opportunity and thank you to the Hon. Minister for the background and brief of the budget that he is going to be presenting to us. I think my question and debate is also with the concern that the Minister is coming to this House and most of the Senators, including myself are not very familiar with what is happening in the Ministry with regards to how the Minister is going to try and stabilise the economy. We have had debates in this House and we have been assured that the fundamentals of the economy are in place, but as the Minister was giving a brief, the figures that he is giving do not sound or give confidence that the fundamentals of the economy are in place because we are looking at almost double the budget that was approved previously and yet this is a supplementary budget.
We have infrastructure development that is taking place across the country and some of these projects have come to a halt due to none payment of service providers. This is due to the inflationary period we have gone through and we are facing. The Minister has previously indicated and almost convinced us that he has got this under control but what is happening in the economy is proving to be the opposite. The introduction of gold coins as the Hon. Members have indicated were meant to address the inflation that we are expecting but as Hon. Members of this Senate, we hardly understand what is going on and as we approve this budget or are going to approve this budget, there will be very little understanding of what we are approving. I am worried that the Hon. Senators- of course, I am aware that they may not change this budget, they may have to refer it back to the lower House but our input at this moment does not have really much value because of lack of understanding of what is happening in the economy.
I plead that maybe going forward, if the Minister and his deputy can take this House seriously and engage us in the processes and understanding of what is going on in the economy. When Members have got questions, when they have got concerns, may we be addressed so that as we sit and approve some of these important and vital issues in society, we should understand what we are doing. I thank you Mr. President.
HON. SEN. CHIEF MAKUMBE: Thank you Mr. President for giving me this opportunity to contribute a few points on this supplementary budget. Thank you Minister for coming to this august House in order that we share a vision for the country with regards to the finances.
If you look of the figures that we are talking about over ZWL300 billion, vis-à-vis the amount that we budgeted for as a country last year, all point to inflation. As unschooled as I am, I would want the Minister to show us how he intends to stabilise the Zimbabwean dollar so that it takes its correct position in the league of currencies because our biggest challenge here is inflation. From ZWL300 billion, maybe we might end the year at ZWL1 trillion and we will still have a deficit, but now how are we going to tame the inflation that we have in this country?
My heart bleeds for the workers in Zimbabwe who are earning far below the poverty datum line. Some have not been able to send their children to school because of eroded RTGS monies which they are earning. So we need also to see how the Minister is going to deal with this kind of inflation.
Furthermore, as Zimbabwe, I want to just buttress a point which has been raised by other Hon. Members earlier on. Zimbabwe is an agricultural country. We rely on agriculture per se. I want to know at what point you subsidise the farming community. Do you subsidise the miller or the producer because our fertilizers are now at US$D70 per kg and if we are going to calculate mathematically, you will find that most of our soils require eight bags of fertilizer D per hectare. If you are going to look at the productivity therein where a farmer at most can produce five tonnes per hectare, you will see that I, as a farmer, will not go for maize because I will not earn anything. If ever I do anything, maybe I might not even reach breakeven point. So I want to know how as a Ministry you want to deal with this issue of the imbalances in input costs in the very backdrop of our economy which is agriculture because the input costs are the biggest challenges.
Now we are going towards the rainy season. Today is September 6th and I am sure every clever farmer out there has had his preparations done. We do not have fertilizers in the shelves, the prices are not permitting, fuel is going up, RTGS money that we are paid, the 100 000 per tonne is coming maybe within three days and the other US$90 is just a promise. Farmers are not receiving that money. What incentive are we going to use to make the farmer go back to till that piece of land again? These are some of the things that we require to know so that we can approve this budget with confidence that it will boost the very essence of the existence of this country, that is agriculture; for agriculture is the backdrop of Zimbabwe. Without agriculture there is no Zimbabwe to talk about.
Another thing also is that of education. We have schools that are charging monies in RTGS yet inflation is driving the input cost up. The cost of putting the children in the schools is going up as a result of inflation. Prices of basic commodities which the schools rely on goes up every other time and it would be a pity if these children end up very hungry because we are forcing a situation. So basically, my point is I need to appreciate how you are going to tame inflation regardless of the figures that you are going to present here. How do you intend to tame inflation? How do you intend to deflate the wayward behaviour of the economy? I thank you.
*HON. SEN. CHIEF CHARUMBIRA: Thank you Mr. President. I want to add my voice to the supplementary budget. The Minister said he has no problem in me speaking in Shona, he understands. Coming to the issue of the supplementary budget, firstly, I would like to agree with the previous speaker. This budget you have brought to us before the Senate, we need to work together as a team so that next time we will not engage into a blame game. Inflation was there before you were even appointed to become a Minister. You are not the one who brought inflation; it was there already. We must work together so that we solve this inflation issue.
I think it is better to do a workshop where we can discuss some issues so that when the budget is brought to the Senate, it will be very easy because we will have contributed to it before. I think it will be prudent to consider suggestions of legislators before you present a budget. The other issue that has been mentioned is about gold coins. It now seems the economy is stabilising, it seems things are normalising.
Hon. Minister, we must consider seriously the issue of school fees. This is very disappointing as schools are hiking fees anyhow they like. Parents are suffering, if you see the salaries of civil servants and to think that they have children in boarding schools, the rentals they are paying, daily expenses and you try to match that to their salaries; you actually see that you equate the money they are getting to nothing. Where are they getting this extra money to live a normal life? All this is to encourage corruption. It is my plea that we fix the economy.
The other issue is that of agriculture. We must look at the output we are getting from agriculture. We can talk of inputs and mechanisation and if people are failing to show ability to do the agriculture part of the country, we will continue to suffer from lack of food.
Let us look at wheat; if you see someone who cannot produce five hectares, that person is not a farmer. Let us look at the issue being raised by farmers that they are lowly paid. If we look at the issue that maize being brought from Zambia to Zimbabwe is charged at almost half price; maize is being brought from Brazil to this country at US$120 per tonne but on the other hand, our farmers are complaining that they are lowly paid and cannot go back to the field, why is it like that? Did we analyse the reason beyond all these requests? It is because of productivity. Let me tell you this Hon. President - I have a combine harvester. I once offered to help someone and he said he does not have money, so I asked him to give me 10 bags. I did the job and I did not manage to even get the 10 bags, but I only got eight bags. You see on five hectares of land, I could not even get 10 bags. So the problem is not the harvest. Are people using the inputs they would have got from command correctly? They sell inputs and use the little remaining, like fertilizers and the like and it will not be enough to produce enough yields compared to the hectares they have. I plead with the Hon. Minister that they must supervise to see if farmers have used the inputs correctly.
We are embarrassed as Africa. As a continent, we must not be seen to be importing maize from other countries. I am worried about Zimbabwe as a country because where I come from, we need to change our position. There is a ship that brought food from Djibouti and that ship came from Ukraine where there is war; it is delivering in Africa where there is no war. It is embarrassing that we get maize from Ukraine. It is not one country, but a lot of countries in Africa are doing that and it is a shame. It is very easy for Zimbabwe to come out of such a situation. It is very clear every two months it is always important that we brain storm since we will find solutions out of such a process. People do not have an opportunity to give their opinions. We have legislators who have brilliant ideas, if only we are involved in decision making.
Truthfully speaking, we love you Hon. Minister and we will approve the budget despite the fact that we have some concerns and the fact that we will suffer afterwards. The position is that we are supposed to approve it. Even you Hon. Minister, you will see that the Hon. Senators have approved the budget but it was very difficult for them but they had to do it; that is politics. You must call us in advance to discuss the budget together so that you can also have our opinions. With these few words, I thank you.
*HON. SEN. MWONZORA: Thank you very much Hon. President Sen. Gen. Nyambuya. I would like to thank the Minister of Finance and Economic Development, Hon. Prof. M. Ncube. I have just stood up to join others to give my comments on the budget that we are discussing in this Senate. Our budget is of no use if it does not address the suffering being experienced by the people of this country. Zimbabweans are languishing in poverty. Our budget should mention things which are going to be implemented to alleviate poverty. We also need to address the issue of unemployment in the country. Quite a number of people have finished their education but there is no employment. What are we doing through this budget to ensure that there is employment creation in this country? If a country is said to be a developed country, there are skyscrapers, improved infrastructure and in that same country with a first world infrastructure you see poor people. Mr. President, the development we anticipate to see in this country is development that is inclusive. Is this budget inclusive?
Let me talk about the Peace and Security Thematic Committee of this House. We went around the country looking at the issue of food security. We noticed that people have got the desire to do their farming but farmers are being asked to produce collateral security by banks. We are supposed to be injecting a lot of capital in farming so that we are able to produce food that is enough for citizens and also abundant produce that can be exported. We want surplus so that we can give others in Africa. For us to say if a farmer needs money from the bank he or she should bring collateral security in form of a house or something which is of value is something that has derailed farming in the country.
Countries that are really focused on farming including Ukraine have subsidised agriculture. It is something that has always been there to say there is financial support rendered to a farmer. Agricultural support was given to farmers even during the colonial era. If you go to countries like America, you will see that agriculture is being subsidised but here what we have done is making it even more difficult for the farmers. It is difficult for the farmers as they try to produce for this country.
Mr. President, even if you look at our pensioners those who are paid through NSSA and the war veterans, the pensions that they are getting are not assisting them in anyway. They are not able to buy food with the money that they are earning. Most of those pensioners have health issues and that money cannot assist them in anyway. When you talk about the budget, I anticipate it is the budget to highlight such issues. For this country to develop, we should look at our youth. It is not correct to just say that the young people are the leaders of tomorrow without empowering them. Through Amendment No. 2, we said we want the youth to come into Parliament; that is a bit of political power we are giving them but they also need economic power.
Mr. President, we should look at ways of empowering them regardless of their political affiliation so that they benefit something from this economy. Are they getting services so that they start or resume businesses as entrepreneurs? It is the same as women in this country. Women are very much into enterprise, they are very good mathematicians. They bring their tomatoes from Mutoko to Harare and they do their mathematics very well. A child may go to school barefooted but they would have paid the fees. These women should be uplifted through empowerment and it is something that we should consider in our budget.
Our country has a lot of wounds. It is something that we have done to ourselves through political conflicts, for example Gukurahundi, things that were done in 2000, 2008 and 2018. We are only talking but there is no compensation for Gukurahundi. When is the compensation going to come through to benefit those who were victims, those who lost their beloved ones during Gukurahundi? The Motlanthe Commission produced a detailed report to us mentioning those who were killed or injured on the 1st August, 2018 disturbances and recommended payment to those people. Has that been captured in our budget?
I would like to support Hon. Sen. Chief Charumbira that as Senators, we are not here to make like difficult for you Hon. Minister. We are here to make sure that the children of Zimbabwe that we represent in this House are well catered for. With those few words, I thank you.
*HON. SEN. CHIRONGOMA: Thank you Mr. President for giving us an opportunity to say a few words in this House. I would like to thank the Minister of Finance for the budget. The country does not survive when we do not have a Minister of Finance. We love the budget that he has brought. By bringing a supplementary budget in this House, it shows that you acknowledge that there are people. Farming is what gives this country a better position. We can only survive as a result of good farming. Since childhood, from the farms, we have seen and we have known champions in agriculture. We even copied from the colonialists their farming skills. We used to farm with ploughs on our farms but we have changed the farming methods.
Now, coming back to my issue and when we talk about the issue of the budget, we have tobacco farmers who stand alone. We have people who are very good at farming tobacco and specialists who are very good in maize farming. Each and every crop has something that it needs when it comes to the budget and it should be given deserving attention according to its own time. We would like to thank the Second Republic and His Excellency the President Dr. E. D. Mnangagwa.
Through Pfumvudza, people are able to farm in time and find it easy to do their farming. We have different soils as farmers where we come from. When the rain gives you a signal, we engage in farming. The issue of the budget, I have seen farmers who are really good at farming doing a budget. The country will have put its budget but as a farmer, he will have his own budget. They used to be financing houses that used to lend to farmers. Back in the days, Standard Chartered used to give loans to farmers. I know of a farmer who used to go to Standard Chartered Bank to make a request of $2 million. They would promise him and the next day he would get the money as a farmer. Small grain farmers and other produce, and each and every crop needs its own budget.
We speak as Senators but we get specialists, when it comes to agricultural budgeting, can be found in farming organisations. Those are the ones who actually look closely with an analytical eye to say this kind of crop needs what kind of a budget. Those are the specialists and the people I encourage the Minister to engage with. If those people are engaged, we are guaranteed of a better income. Our President having noticed the problems we were having as farmers, introduced Pfumvudza and there was maize all over the country.
We fully acknowledge that we are in the deep end with sanctions and at the moment there is nothing that the Minister can do. You are trying by all means Hon. Minister to keep us afloat. As a Minister, it is important that you engage the different departments for their problems are different. It is important Hon. Minister to say let us look at those farmers who used to do very well. Those who are scaling down, engage them and ask them what is happening. They will explain and pinpoint exactly where they need assistance.
The money that comes after people have sold their tractors and livestock, and the other organisations which I will not mention that used to finance farmers and take away people’s property because of the interests they would have charged; I would like to thank you as you got through some of the problems. We would like to raise and develop our country in terms of agriculture. If you want to give women land for farming, the country would have banked because when women engage into farming, they will forget about the urban areas. They will forget they are married to a husband who is back in the city.
We would like to say we are very happy with what you have brought in this House Hon. Minister. Yes, we have people like teachers who are uplifting this country through the work that they are doing. May you please remember them? There are our people and we kindly ask you to remember them. Kindly look for other means of revenue collection, so that they are assisted and we have intelligent children who are taught by hardworking teachers in the country. Let us remember teachers Hon. Minister. For so many years they have suffered and it is time we uplift them. Thank you.
+HON. SEN. A. DUBE: I would like to thank the Minister of Finance for the budget that he brought before us. We want to acknowledge you as a hero because the war of the economy is much even worse than the war of guns. What is important is that it needs someone who is brave and we also need to take note as Zimbabweans. The budget is presented and we will be satisfied but it is affected by inflation. We need funds to be released to ministries in due course because by the time the funds are released, they will be people waiting to use these funds.
We thank you for all the efforts. You have the wisdom of Solomon. The Hon. Senators have spoken that we expect that the Ministry of Agriculture should be allocated much of the budget because Zimbabwe, when it comes to agriculture, everything that pertains to this budget should be addressed to agriculture and we need most of the funds to be released quickly to the agricultural sector so that people can farm in due course. If people practice farming and produce their own food they can have surplus to sell and use the funds for other things. The issue of climate change is also affecting our agriculture. The President indicated that the issue of collateral is a challenge to the youths and women when wanting to get money from banks. Women and youths can uplift the economy of this country if funds are availed to them. It is important that we also give adequate budgets to the youths and women’s bank. Most of our youths are perishing due to drug abuse because of idleness, so we want them to be engaged in value adding projects to assist them.
When you look at the health sector, there are no medicines in hospitals. We are here as Senators because we are healthy and if you do not finance our health sector, we will not be able to come here due to illness. The farming and health sectors are very important but it does not mean that the other departments are not important, they also are important. Even our civil service is very important and we want them to be given money timeously. When their salaries are increased to $20 000, a loaf of bread’s price will increase to $5 000, which means that they will continue to live in poverty. We want to sit down as Zimbabweans to see what we can do. We are supposed to look at the issues and see what we can do so that our inflation rate remains stable.
You will find that the price you see on the shelf today will have changed the following day. Today the price is ZWL10 and tomorrow it will be ZWL200. People are struggling to make a living because commodities are very expensive out there. The civil servants’ welfare should be looked into. We want the civil servants and the people in the health sector’s welfare to be always looked into because most of them are not in good shape because of the budget conditions.
When the budget is presented in here, it is very pleasing but when it goes out, there are lions waiting to devour the budget and that is inflation. When it is released to the people, the 35% will not be enough though when it was being presented, it sounded like it was 100%. I want to thank the Minister for the supplementary budget. No country can survive without the Ministry of Finance. The Minister is a very important individual who also needs assistance. We are not supposed to look up to him but we are also supposed to assist him, both of us here and those in the National Assembly. We need to assist him with advice on issues that affect our economy. These issues should not only be for the Ministry of Finance because if he passes away tomorrow and we wake up without a Minister of Finance, what are we supposed to do?
It is difficult that he is presenting his budget today with his briefcase but tomorrow his budget will be affected by inflation. We need to assist him and also give him ideas as our Minister of Finance because most of us here have various talents. I think that this budget came at a good time but it will soon be affected by inflation. So, I urge the Minister to release the funds urgently before they are affected by inflation. I am not the only one who will be affected by inflation but all of us will be affected.
*HON. SEN. CHIEF NHEMA: Thank you Mr. President. I also want to add a few words to the debate on the supplementary budget. I would urge the Minister to look at the industry in this country. I will give an example of a bag of cement, you get it for USD5 or USD6 from outside but the local cement is costing USD20. On Friday before I came here, I went to N. Richards with the intention to buy cement. Lafarge cement (32) was USD20 and the other one was USD10. The reason given for such a high price was because of the parallel market. The bank rate is killing us. Why can they not be allowed to just price their products using their profit margin without using the bank rate? We need to look at that issue Hon. Minister. If you look at those in the rural areas, they rely on livestock as their wealth but you have only talked about agriculture and not considered our livestock. In the rural areas, agriculture and livestock make people survive. Our livestock has been suffering from the January disease for almost six years now and research has not found a total cure for this disease. If you come to the rural areas, cows are being sold for USD50 dollars because you cannot hang on to them as they will all die due to this disease. On the other hand, it is this livestock that we regard as our sole wealth, for survival and school fees. Our livestock is our bank and our monetary investment. As rural folk, we look forward to livestock as a source of income. What have you done in your budget to consider and tackle this January disease? When the Hon Minister does certain things, we always ask each other whether the Minister does not have elderly relatives back at home.
Hon. Minister, do your calculations and see how many bags of cement I am able to buy with the salary that I earn. Even building infrastructure, where will this get us, considering your Budget? People are crying and they think you are living in heaven. You are seated there and it seems you are not affected by these things. You are seen on a daily basis presenting different papers and Bills – people think that you do not experience this life in Zimbabwe. People are suffering out there.
For farmers in Chiredzi, our issue is on taxes - Minister, do you know these taxes and do you understand them? Before we consider farming or farming chemicals, there are a lot of taxes that are charged – almost ten agencies collect taxes. These range from ZIMRA, council, lands, NSSA and so forth. How do we produce on the farms? When we were growing up, we knew that Smith and other white farmers used to lend to white farmers and after ten years they would stop because they would know that they had done well.
A good example is that of a sugar cane farmer at Tongaat – before I even cut down my sugar cane, they would have deducted their money, hence I remain in the same position.
Our vehicles need servicing and I think you do not know that because you do not experience what we come across. I cannot buy a tyre as a Chief. The salary that you give me as a Senator is not enough – I cannot do anything. What about a teacher or those in rural areas? My wife is a teacher and she brings her payslip and when I look at it she asks me – are you sure that you mingle with the Minister? What then are you doing if you are spending time with the Minister in the Senate? I thank you.
THE HON. DEPUTY PRESIDENT OF SENATE: Hon. Senators, avoid making tedious repetition.
*HON. SEN. CHIEF NGEZI: Thank you Mr. President. I would like to say a few things that have been left out. Does the Minister look at any ways of empowering chiefs? There is an issue pertaining to boundaries and the outcry is for your Ministry to finance such processes. Kindly remember Local Government so that we may be attended to as chiefs. That would be a corrective measure to deal with critical issues that are affecting us as chiefs.
On farming equipment, there are a lot of people who come to the chief’s homestead – a chief cannot engage in Zunde raMambo using donkeys. Tractors are the modern equipment that are used for farming. We kindly ask the Minister to consider us in that manner. The chiefs are the fathers of this country. They should be empowered so that they are able to assist people who fall under their jurisdiction. I thank you.
THE MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. PROF. M. NCUBE): Thank you Mr. President and I also thank the Hon. Senators for their contributions. I have listened very carefully and taken copious notes. I hope that my responses will add value to their sentiments as I respond.
I will start with Hon. Sen. Mudzuri who raised an important matter regarding gold coins and how they work. Indeed, a request was put to us to come back to this House to explain the introduction of gold coins, their rationale, what they are supposed to do and how they work. Let me summarise as follows but I am happy to come back and give a full statement. I hope this is a good start.
Gold coins were introduced as one of the measures for mopping up excess liquidity in the economy but for also giving alternative value to our hard working citizens. These were introduced on the 24th June 2022 (an announcement was made) and they went on sale on 25th July 2022. On this particular day, we sold about 2000 coins and we kept this going. Gold coins can be bought in domestic currency (ZWL) or in foreign currency. When you buy in foreign currency, you prefer to hold the coin rather than the USD under the impression that the price of gold will go up or you feel that it is a much safer asset to hold as hard currency asset compared to the USD. If you use ZWL, it is because you believe that the coins will preserve value for you – that is what exactly what those Zimbabweans who are buying coins are doing to preserve value.
As Government, we wanted the gold coin to mop up liquidity from the market in the sense that those excess ZWL which were finding their way on the parallel market are now finding their way towards the purchase of gold coins. It is helping us to sterilize that excess Zimbabwe Dollar (ZWL) which was causing havoc when the parallel market was moving up sharply. I think you have seen, Hon. Senators, that the parallel market movement has been tampered with and there is a bit more stability, and even the month on month inflation is beginning to come down. We expect this to hold as long as we are able to really enforce these liquidity measures.
Let me say a bit more about the coin itself. Currently, the coin is one ounce - that is its denomination. It is a made of gold, it is a gold coin. I am trying to really go through its characteristics for the record. Its purity in carats is what we call 22 carats level, which is about 92% gold in terms of purity. It is a 32mm coin in diameter. It weighs about 34grams, and the thickness is about 2.63mm. I was advised to give the exact characteristics since this is a House of records Mr. President.
As I said, at the risk of repeating, anyone can buy the coin, and the good thing about the coin is that you can use it as security. If you want a small loan, you can present it to a bank and the bank can accept it as security; you can choose to, having bought it, to keep it yourself or keep it in your bank, your bank can keep it for you. Also if you are a Pension Fund, the Pension Fund can buy gold coins; these also count as investments in the Pension Fund portfolio, very similar to buildings, shares on the stock market, and Treasury Bills for example. So they are an investment assert even for Pension Funds. We also said that even if you are living outside Zimbabwe, you can only buy gold coins using hard currency, that is, United States Dollars, Rand or some other hard currency and not ZWL but we will allow you to buy so that you use hard currency.
We received suggestions from the public to say that currently, if the gold coin is only one ounce Mr. President, perhaps it is not accessible to the bulk of our citizens; we need to issue smaller denominations. We have listened carefully and have taken this into account, and we intend to issue smaller denominations of this coin which would be cheaper than the current coin. Currently, the coin is going for about USD1.800 per coin because that is the price of gold per ounce and gold has an international price. We do not set the price; we only charge a small fee for producing the coin and fee of the ordinary 5% but otherwise it is an international price that are the price-takers. So it is expensive to a certain section of our society, so we will be issuing smaller denominations and we will make the announcement appropriately once we are ready for these coins to begin circulating and anyone can come and buy these coins. So, at the moment, if you want to buy a coin, you can approach your bank and they will be able to advise you on how best to buy or pay for it and also act as your custodian as well – that is all I wanted to say on gold coins for now Mr. President but I am happy to elaborate and come back to give an even fuller statement going forward.
I now turn to the contributions from Hon. Sen. Komichi, Hon. Sen. C. Ndlovu and also Hon. Sen. Chief Charumbira about the need for us as Treasury, and for me, to come and workshop with this august House on the economy in general so that we can discuss various aspects and so that we are all better informed at the end of the day to advise our citizens as to what is going on. I agree with this, I will work with you Mr. President and your Office to see how best we can put this together. I do not think we want to wait for the usual retreat; it should happen before that so that we speak generally about the economy, I stand ready to do that. I have been doing that with the business people even off camera. Why not with this august House? So, it should start here, I really accept that challenge and agree with that, we will arrange with your staff Mr. President.
Hon. Sen. Komichi then raised an issue regarding protecting the vulnerable and dealing with poverty and social protection. In this budget, we have set aside quite a big chunk of it towards social protection which will cover our typical social protection programme, starting of course, with the Pfumvudza Programme; which is a productive social protection programme where we are providing inputs, that is, fertiliser, seed and so forth. Then we come to support for the vulnerable in terms of the BEAM Programme, health support as well as other forms of support for the vulnerable. In fact, the bulk of this budget is focusing on social protection. So, I agree with you that that is what we should do and that is exactly what it is trying to do. 53% of the budget will go towards civil servants salaries, just a little more than half. So that is exactly what we are targeting and that is the point that you mentioned. We are having conversations with civil servants through the Tripartite Negotiating Forum (TNF) platform, conversations are going on and, at the right moment, we will be able to announce whatever adjustments we agree upon and whatever time we agree upon.
Then on the support for farmers, I must say that Hon. Sen. Komichi raised the issue about support for farmers, the price and so forth, and if you look at other countries like Zambia, South Africa, and Malawi around us, they do not typically set producer prices as such. They usually allow the market to operate so that the farmer is able to exploit the demand to their best advantage in terms of prices that are being offered out there. We are also slowly moving in that direction but we want to make sure that at least there is a minimum support price that a farmer will be accorded so that they make money out of this very important venture; in fact, that they do not lose money rather. So, a minimum support price is what is needed but above that, a farmer should be able sell their produce. We intend to try out this approach, we are emulating other countries, and we intend to do it starting with the Winter Wheat Programme now so that you are accorded the best price available out there.
Even on the issue of perhaps building our strategic grain reserve, once we have stipulated that it is 500 000 metric tonnes, that is what we should target as Government and no more. The rest, a farmer should be free to sell to the market, as long as the maize Mr. President, is within our borders, what is our problem? Whether it is sitting at the Grain Marketing Board (GMB) or in someone’s private silo; it is fine. So we should not worry whether it is at GMB or not. So we do not have to buy all the grain as Government but at least buy enough to last us for six months because that has been the metric that we target six months in terms of our rate of consumption and that is about 500 000 metric tonnes of grain. I must hasten to say, Hon. Sen. Komichi and colleagues, that we have set aside ZWL38.1billion in this Supplementary Budget for the strategic grain reserve in any case, just to make sure that there is enough at GMB to support us during lean times.
I now turn to Hon. Sen. Chinake who mentioned an important point about ministries not receiving enough budgets in terms of what they bid for, maybe 25% or so and so forth. This is true; ministries never get 100% of what they bid for. In fact, every year, you will find that what they bid for is three times of what is available and sometimes, it is actually equal to the size of the economy. In fact that is what happens; you find that the bid is equal to the size of the economy and that is not sustainable. If you look at the supplementary budget, it was in trillions and yet we do not have that kind of money and they should do that. Mwana asingachemi anofira mumbereko ka, unotofanirwa kuchema – which is what happens; if you ask for more, you get less.
However, you make an important point about making sure that we have early release and that is a fair point. Frankly, we try to live within our means and cashflows are never easy. We are on sanctions and we do not get enough support from abroad. In fact, the support that comes in from the NGOs does not come through central Government by the way. We have no control; we just watch it flow in. They do not even account to us but we allow that to happen because if we do not, then what are we saying? When others are trying to help our citizens, then we try to stop them; we cannot do that. It would not be right but we have no control.
With other countries, as I speak, you find that some of the countries just rely on donor funding for their main budget. They pay civil service salaries, the nurses, the teachers everyone from donor funding. It is going on around Africa, which is an issue that Sen. Chief Charumbira raised about what is wrong with us. We should be doing better.
Hon. Sen. Chinake, you mentioned the issue about being clear or explaining better where our money comes from. Our money comes from taxes; we are eating what we are harvesting from taxes. So, it is your VAT and your income tax, corporate tax from companies, the 2% tax, any other taxes, excise duty and so forth – that is where our income is coming from as Government. I will be very happy to give you a breakdown if you need the exact figures in terms of this specific supplementary budget – I am happy to do that should you want the details.
Then on the issue of fertilizer prices, you are right. Fertilizer prices have gone up, maybe at this moment I should mention the impact of the global situation on the economy. It is very serious. What we have seen is a sharp rise in prices; it is even slowing down economic growth in major countries like America, Europe and so forth.
If you look at America and the rest of Europe, they are experiencing the highest inflation ever in 40 years since 1980. So, it is spilling over into our economy. We are not the only ones affected but every other African country is affected. Yesterday, I was just going through an article which was telling us about the food crises in West Africa, not because there is a drought but the drought is in East Africa and that is another problem; it is in West Africa. It is about food prices globally due to high fertilizer prices or just the unavailability of wheat from the traditional suppliers, which is Ukraine and Russia.
The wheat price issue is real, it is global but we are doing everything possible to mitigate against the two issues, which is availability and price. The challenge about this fertilizer issue is that it is just also not available easily globally and then the price is high. So, on supply, we have removed import duties on imported fertilizer with immediate effect.
Secondly, we are also increasing the capacity in terms of local production. Yesterday, you might have seen in the media that His Excellency the President, commissioned fertilizer plant in Msasa which is going to increase our domestic production of fertilizer under the Chemplex Brand Company which is owned by Government. So, it is actually Government which is investing more in fertilizer production capacity, therefore we are doing everything we can.
I am glad also to say that for the winter wheat programme, we had enough fertilizer to support the winter wheat programme. We did not have any issue of supply; the issue was just price. We are really looking forward to a very successful harvest this season for winter wheat. We are expecting in terms of figures from the Ministry of Agriculture, about 380 000 mt on wheat compared to our consumption of about 360 000. So, we should not be importing any wheat this year and that would be the first time in 20 years that we have not imported wheat. If that really comes true, I think we deserve a pat on the shoulder for the whole nation.
Let me also come to questions raised by Hon. Chimbudzi who expressed that they were happy with the extra supplementary budget but we need to support agriculture a lot more. You will find that in this supplementary budget, agriculture and education are the top recipients with over a 100 billion each. So, we have really targeted the agriculture sector and for just the input support scheme alone, we have added 22, 5 billion for the Pfumvudza/Intwasa Programmes. So we really try to do quite a bit on agriculture including supplementing the budget for these grain reserves that build up.
However, the issue of prices is an issue; we raised the issue of CBZ AGRO-yield that you feel you are not happy that demanding collateral but I am a bit baffled by that but maybe there is something that I am missing. As Treasury, we have extended a Government guarantee to that CBZ AGRO-yield which should do away with the need for collateral unless perhaps there is a portion, maybe there is something that is not covered, I need to be educated as well – I thought that this was covered.
As we speak, we worry about farmers who are not paying back to the bank and then Treasury has to come in because they provided the guarantee. So, maybe something needs to be fixed. I will look into this collateral issue; I thought that we had set that aside through this guarantee facility.
You also mentioned the issue of access to equipment through AFC Holding that perhaps this is not working well – again, we will look into that to see if we can make it easier for farmers to access their equipment.
From Hon. Ndlovu, you basically referred to the issue of stability that what measures are we putting in place to deal with stability; the source of instability is in twofold. One is external and the other is internal. External instability issues arise out of the crises globally as I mentioned, we are importing global inflation. We feel that half of the inflation locally is imported through the price of fuel, fertilizer and just the price of raw materials generally. Those are the channels of importation of that inflation which is leading to instability.
For fuel, we have responded by adjusting the levy on own fuel. The standard levy is about 12,7 cents for both diesel and petrol and we keep adjusting it accordingly. So as I speak, we have taken down the levy on diesel to zero but the levy on petrol is still at about 12, 7 cents. Every week we keep adjusting it to absorb the shock of the increase in the fuel prices.
On fertilizer, at the risk of repeating, I have talked about increasing domestic supply, removing import duties just to make sure that we have got adequate supply. It is not easy how we can best deal with the pricing but at least for those under Pfumvudza, they will get their fertile anyway. We have to buy at any price and deliver to the number of households, three million households that will receive inputs. So that is external, and internally we increased interest rates for borrowers. What we noticed is that borrowers were basically getting free money because inflation was lower or rather was higher than the interest rates, what we call negative yearly interest rates.
So money was free and speculators know that when we give them free money they will go and get the free money from banks and then go and speculate in the parallel market and cause trouble. Once the parallel market moves up, it affects inflation because the pricing is on the back of the parallel market. As Central Government as well, we have said we want to enforce this notion of value for money because we noticed that some Government contractors are pricing their contracts at parallel rates and this is not helping us. It means that we are spending more than we should be spending.
Part of the reason why we have the supplementary budget is because of this overpricing which is pushing up expenses and it is not very helpful at all. So at the end, we have to come before you and seek support to spend more. We are dealing with that issue of contractors. There are other measures that we have taken and I could give a whole bouquet of the measures, for instance that His Excellency announced and I also added some measures to the Central Bank and so together those measures constitute the package that we have pronounced to deal with the instability. I think it is fair to say in the last few weeks we are beginning some stability in some shops and some prices are coming down.
We are also seeing some stability in the movement of the parallel market itself. Some measures are really working well. We will watch the space and see if we need to institute some more or we should leave things as they are or make adjustments where necessary.
Hon. Sen. Ndlovu talked about gold coins and I have addressed that one. Hon. Sen. Chief Makumbe talked about the vagaries of inflation that the reason why this supplementary budget is being brought here is because of inflation and that is true. In fact, inflation cuts both ways. It has given us more revenue than anticipated and we need permission from you to spend the extra revenue on Government programmes.
It has also increased expenses beyond the approved budget and again we need approval for that. So it is true, inflation is at the heart of this but the budget tries to deal with the causes or the accompanying policies within the budget and around the budget are trying to deal with this inflation.
The issue of civil servants, I said 53% of the budget will go towards civil servants salaries and we are in discussions as to how best to manage the next round of adjustments.
There is the issue of agricultural support; the Ministry that is going to receive the highest amount of support is the Ministry of Lands, Agriculture, Fisheries, Water, Climate and Rural Resettlement and Ministry of Primary and Secondary Education. In terms of subsidies, already the Pfumvudza programme is subsidised and electricity is also subsidised. I hope some farmers here can confirm that we have been pricing electricity for the farming community at about three to four cents per kilowatt/compared to what for instance the mining companies are paying, which is closer to 10c per kilowatt/hour. Those are some of the subsidies that are going to the agricultural sector. We have not been subsidizing fertilizer for commercial farmers and this is something that we should work harder and see if we could spread those subsidies to other areas of the value chain for a typical farmer.
I now switch to Hon. Sen. Chief Charumbira who agreed with Hon. Sen. Ndlovu on the need to work together and have this workshop done well before the usual retreat. We will find a slot at the risk of repeating Mr. President, to have this workshop where we can all discuss about our economy.
On the gold coins as well, Hon. Sen. Chief Charumbira, again I have elaborated on how it is assisting with mopping up liquidity and contributing to the stability that is much needed, and then assisting with school fees and raising salaries for civil servants, again I have tried to address that and this is always work in progress in a high inflationary environment.
When it came to agriculture, Hon. Sen. Chief Charumbira addressed a very important point that we often debate within Government, that of productivity. Our pricing models when we come up with producer prices for wheat, we usually target about four and half tons per hectare and that is low. I agree with you that it is low and we should work harder at improving productivity. That is the only way to realise higher profits. I know that the Ministry of Agriculture tries to work hard to capacitate their Agricultural Extension Service employees and so forth. They need to call them Business Support Services now, to really tell the farmers that at the end of the day farming is a business, it is not a social programme and it should be treated as such.
I hope that over time this will go a long away in improving productivity within agriculture in general. I think what is key is to make sure that we move more towards market determined prices as opposed to us fixing prices even on a cost build up model, perhaps moving closer to the market is the way to go here so that the farmer can maximise benefit from their sweat. You made a broader point about Africa’s performance in agriculture. We are now getting support from others and from countries that have got less fertile land. So Africa has the largest land mass that is available for agriculture, the whole world over, 60% of land for agriculture is available in Africa and yet we tend to beg for food and those are the facts, we tend to beg food from others. So, something ought to be done and it can be done fast and we should not be starving when we have so much fertile land in Africa. So, I agree with you.
Hon. Sen. Mwonzora said the budget needs to deal with welfare issues like poverty alleviation. That is why we are focusing strongly on the social protection agenda within this budget and a good part of the budget has gone towards that. I must hasten to say, remember this is a supplementary budget, in fact on the point of job creation which is a very important point - it is a supplementary budget to a budget that already exists. It is supplementing what you already approved in December last year. We have not changed those policies but we are just supplementing it but when it comes to job creation for example, we had already approved for instance among the youth, this tax rebate programme for companies that employ anyone below the age of 35 including the disabled. So that has not changed and all we are doing is to support that kind of policy until we change it but it is still in place. Perhaps in November we could look at other programmes. For example, I have received representation from the youth who have said we want to be employed but we also want to be entrepreneurs – Hon. Minister, why do you not introduce a duty rebate system for companies that are owned by the youth so that they get certain rebates when they import certain raw materials. All those are suggestions that we are mulling over, let us see where we end up in November.
You also raised the issue of collateral for agriculture loans which I said there is a Government guarantee and so I need clarity as to why they are demanding further collateral. Maybe there is something that is not adequately covered by the Government guarantee that we needed to fix. The issue of pensions is well noted again with that 53% of the budget being spent, I said civil servants, it also includes a pension support in Parliament.
Let me say more on the issue of the youth. I mentioned the rebate programme for companies that employ the youth. Recently, we also operationalised the Youth in Mining Programme where certain pieces of land has been set aside in every province to support any youth who wish to go into mining and they approach the Ministry of Mines and Mining Development through the various provincial offices to see where they should go to exploit those mining opportunities. This was pronounced formally by Government about a month ago.
Hon. Sen. Chirongoma raised the issue on equitable treatment between maize and tobacco. It is a fair point that is why I said earlier that we just need to move towards market determined prices the same way that tobacco farmers enjoy the market determined prices. That is the way to go over time and move away from dictating specific prices because we get the prices wrong. All we should do as Government is agree on a minimum support price but above that price, a farmer is free to sell their maize at market to realise maximum gain. The same applies to wheat that you mentioned.
The programme for support for teachers of making sure that up to three children in their family can attend state schools with a subsidy of up to ZWL20 000 per child, that programme has started. It has begun in earnest. It took a while because there were some administrative hitches but it has started and that benefit is being extended to teachers. We did announce a package that included institutional accommodation, support for transportation and importation of a car duty free and so forth. There is a package that we hope over time, we will supplement the monetary benefits.
Hon. Sen. Dube welcomed that budget and that we should work together which I agree. We should work together because this budget is all ours. On the issue of inflation chewing up the value of the money that is released and the need to release these monies as soon as possible, I agree with this. The issue is the availability of cash. As soon as the cash is available, it is released and we try to make progress.
On the issue of banks and collateral demands from the youth and women entrepreneurs; this is not helpful but there is need to give them more resources. This we have done and we are going to give more resources to these two banks. We are also aware of the strides that the Ministry of Youth is making towards restructuring the bank and making sure that it is more effective. The Women’s Bank has always been a good performer, of course they should make loans cheaper for you and it is quite important for women entrepreneurs. In terms of its performance as a bank, we feel that is well managed and we keep giving them additional resources from time to time.
Hon. Sen. Chief Nhema raised the issue of cement selling at different prices from two domestic suppliers such as PPC and La Farge. That is the issue of exchange rate instability which we are dealing with. As the exchange rate stabilises, that disparity should go away and that is what we are working on.
On livestock support, you mentioned the January disease and I am pleased to report that we have started producing the vaccines for the January disease commercially. Previously, the bulk of it was imported and we are now producing it locally and then we move on to produce other vaccines. We are investing quite a bit in research and development in vaccine production.
On the various taxes for framers, some of these are not really taxes which I collect but it is Government nonetheless, either central or local. I agree with you that perhaps there is a multiplicity of levies and taxes and sometimes the farmer feels very choked before they even think about fertilizer inputs. Perhaps over time, we need to commission some kind of analysis and try to understand the various levies and taxes that the farmers are paying and see where we can alleviate some pressure on the farmer. This is well noted.
Hon. Sen. Chief Gezi talked about the welfare of chiefs and access to certain equipment like tractors. This we will look into as a target group going forward.
I think I have tried to cover all the questions and queries and I move that the Bill be now read a second time. I thank you.
Motion put and agreed to.
Bill read a second time.
Committee Stage: With leave, forthwith.
FINANCE BILL [H. B. 9A, 2022]
House in Committee.
Clauses 1 to 40 and schedule, put and agreed to.
THE MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. PROF. M. NCUBE): Thank you Hon. Chair. Regarding Clauses 2 and 3, it is necessary for us to make sure that there is no confusion in interpretation by our tax practitioners at ZIMRA and other places, so it will be necessary to make what we call a notice of advice so that we make sure that confusion is removed. The Bill is passed as the Chair has advised. Thank you.
THE MINISTER OF JUSTICE, LEGAL AND PARLIAMENTARY AFFAIRS (HON. ZIYAMBI): Thank you Hon. Chair. I was just making reference to the Fifth Schedule, subsection 6, where it speaks about disagreement between Houses. This House has recommended what the Minister has introduced to say that we need to clean up those two clauses. So when we transmit it to the National Assembly, it will be a recommendation to the National Assembly because in the Constitution it says we do not make amendments if it is a money Bill. So when the Clerk transmits, he will then have to indicate that the Senate is recommending that it be in the manner that the Minister has presented. I submit Hon. Chair.
HON. SEN. KOMICHI: Can the Hon. Minister please repeat so that we can understand what he was trying to say.
HON. PROF. M. NCUBE: Basically if you check on the Bill, go to Clause 3 and look at the first line. We have got those six bands each with various tax rates that apply. For instance, from the first band which is 0 to 900, that tax rate is zero. What happens is, that figure is expressed in normal annual terms, which is a calendar term of 12 months. However, the tax experts distinguish between a calendar year from a tax year. So, the tax year because we have a supplementary budget which kicks in on 1st August, they will split our calendar year of 2022 into two tax years for assessment. The first tax year is the first seven months to end of July; the second tax year is from 1st August to 31st December, 2022. So it is seven months and five months respectively. That interpretation can cause a lot of confusion to tax practitioners. We just want to make sure they are not confused. What they should do when they interpret the law is, when they consider the 0% tax threshold, it is not to consider the 900 but to consider 375 because it is only five months of the year that are left. It is not the whole 12 months, “kwasara five months chete.” It is a notice of recommendation to the Lower House to amend these numbers accordingly to avoid confusion in interpretation. Thank you.
Bill reported without amendments but with notice of recommendation to the National Assembly.
Third Reading: With leave, forthwith.
FINANCE BILL [H. B. 9A, 2022]
THE MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. PROF. M. NCUBE): Mr. President Sir, I now move that the Bill be read the third time.
Motion put and agreed to.
Bill read the third time.
APPROPRIATION (SUPPLEMENTARY) BILL [H. B. 8, 2022]
Second Order read: Second Reading: Appropriation (Supplementary) Bill [H. B. 8, 2022].
THE MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. PROF. M. NCUBE): Mr. President, due to the inflationary pressures that are upon this economy, mainly driven by external and some internal factors linked to the exchange rate, we are now collecting more revenue than anticipated, but also our expenses as Government have gone up again commensurately with the same inflation. They have gone up to a point where there is need for us to come before this House and seek permission to spend the extra revenue to meet the extra expenses.
I am therefore coming before this House to request that this House allows us to spend an extra ZWL851 billion. These resources are mainly targeted at the social aspects of our public expenditure protecting the vulnerable but also to support our hard working civil servants. Fifty-three per cent of the budget, in fact will be targeted towards public sector wages - including pensions, including those who are in this august House.
Some of the resources will be spent towards supporting agriculture, our inputs programme which supports the vulnerable. Some of the resources will also be spent on completing some of our important infrastructure projects. All this is necessary for Government to achieve its goals, Mr. President; all which are enshrined in our NDS1 overall but were in the budget in the first place. We need to achieve those targets.
So I am coming before this House to seek that appropriations be made to the order of ZWL851 billion in various sectors. When you look at which sectors we are targeting, in fact I would say which Ministries are now the implementing agencies, it is the Ministry of Education, Ministry of Lands, Agriculture, Fisheries, Water, Climate and Rural Resettlement, Ministry of Health and Child Care and then obviously if you check within each Ministry right across, we have got the salaries of civil servants which are spread across. They are not sitting in one Ministry but are spread across Ministries. You will find out where this 53% of the supplementary budget is sitting.
So the top absorber of these resources in Ministries is Education and Agriculture. We also have set aside some resources for the back pocket as we call it or the unallocated reserves and this will go towards supporting the various needs that are unforeseen and in the Lower House; I must add that we have already started chipping away at this unallocated reserve to support certain areas such as for instance prison support services and infrastructure to support the work of this august House, the Constituency Development Fund for the Members of Parliament in constituencies and allowances from the Members of Parliament including the development of constituency offices.
So Mr. President, that is how we intend to make use of this supplementary budget to supplement what we had already budgeted for in November last year for the 2022 budget, but we are now making extra resources available to meet the extra expenses on the back of the extra revenue.
Mr. President, I must end up by saying in so doing, we will remain fiscally prudent. We will continue to live within our means and we are still on target for achieving our budget deficit target of 1.5% of GDP. We do not intend to go above that. Certainly, doing it while knowing that we are doing it, that is not my intention. We will stay within that prudent target. I thank you.
HON. SEN. NDLOVU: Thank you Mr. President. Just a quick one to the Minister, he indicated that he wants to spend the excess revenue collection on infrastructure development and there are projects that have been abandoned by service providers and in his budget, he is indicating that 53% is going towards salaries and various other Ministries that he mentioned like Agriculture.
I just wanted to find out if the infrastructure development which actually provides livelihoods for some communities and have been abandoned, whether his budget has factored that in that they have got to resume and that those projects are going to be completed. I thank you.
*HON. SEN. CHIEF CHARUMBIRA: Thank you very much Mr. President. When you look at the public sector salaries, I anticipate to see that they earn salaries that are above the poverty datum line. I just want to mention the issue of review of their salaries. There are those people who so much deserve to get assistance like civil servants; they are getting very little income. We are happy with what the Minister of Transport is doing but there are areas in rural areas that need to be worked on. It is our anticipation that in Lupane, Nkayi and Zaka, the roads must be rehabilitated because they are in a bad state.
*HON. SEN. MUZENDA: Thank you Mr. President. Are our hospitals going to be equipped with medication because now we hear that even panadols are out of stock? I also want to know children who are on BEAM, their fees have not been paid. Are they going to get the necessary assistance? During our tour to schools, we noticed that there is always a delay in paying for BEAM children. Although it was agreed that no child will be chased away from school, we observed that schools continue to send children home for non-payment of fees. I thank you.
*HON. SEN. CHIEF MAKUMBE: Thank you Mr. President. We are having problems with user ministries and departments. We have passed budgets for other ministries to receive money whilst other projects are not receiving anything. Without mentioning names, we are having unpaid people who would have finished doing their jobs but others are getting advance payment without first doing anything. If there are people who have worked for the development of the nation, these people should be paid. This is what is taking us back as a country. Some projects are paid and others are ignored; we need to look closely at that. What methodology are we using as a country? Some people are considered more equal than others. We have companies that have done their work and it is now four years without being paid. Others are getting money daily going to the black market, this is disappointing.
HON. SEN. MOHADI: I thank you Mr. President. As citizens, we are concerned with the budget because the disbursements are not done in time. At the end of the day, if disbursements are delayed and considering this inflation, by the time they get the money there will be no money to talk about.
Secondly, on AFC and CBZ, we do not know exactly which one to approach for loans. If you go to AFC, they will say go to CBZ and vice versa. At the end of the day, people are not helped. Hon. Senators who are here need loans to buy inputs but it is not clear on where to go and borrow. I thank you.
*HON. SEN. KOMICHI: Thank you Mr. President. The figures that we are looking at, the salaries of the civil servants, are you sure that they will be given money that is above the poverty datum line because that is what we are looking forward to? Are farmers going to be paid good money so that they get profit and will be able to go back to the fields? The money that pensioners are getting does not last two days; did you consider pensioners in your budget? This affects us as parliamentarians too because we are also employees. It is said that one can only get pension after they have served two terms. After five years, you can lose your job. Is that factoring that if you have only worked for five years you should go on full pension and get benefits that are equivalent to the work. Also, the workers that are here should get a chance of getting loans so that they can construct houses. We know that there is a provision that we can get stands but if I work for five years and when I am given a stand, I will not be able to construct a structure at that stand. I think everyone should be able to construct a four roomed house. In Nigeria after every five years, a new MP gets a house which has been built but those who come back for the second term do not get a house. This is very good because for a Member of Parliament who has worked for five years, when they go back to the rural areas they should not stay in places which are not inhabitable. I think we should be able to build houses so that we live well.
The other issue is of electricity challenges. We have a lot of black-outs in the country. I have seen the figures, is there anything that can be done on having more electricity? I do not know if that figure is enough for us to get more electricity, or even to buy from Zambia and Mozambique.
Mr. President, the other thing that I have seen is the small figure on houses. We have a lot of backlog of people who do not have houses. I once heard other workers saying, ‘if we go to the new Parliament, how are we going to get to our residence from the new Parliament?’ Can they not build two roomed houses for us there so that when we finish work late, then we have somewhere to put up? I think we should look into that as well. It cannot be a big house but there should be some form of accommodation because from here to the new Parliament, it is going to be a new challenge. I have seen that these figures on housing are small. I think we should make the lives of our workers easier. Thank you.
*HON. SEN. SIPANI-HUNGWE: Thank you Mr. President for this opportunity. Also, I want to thank the Hon. Minister of Finance for this supplementary budget. Looking at the Minister of Justice, Legal and Parliamentary Affairs, I want to focus on prisons. As a Committee, we had an opportunity to tour our prisons focusing on women who are incarcerated and staying with children in prison and those who are pregnant as well. We have seen that the way they are staying there is not proper. Also, the food that is being given to children is not good because they are sharing food with their mothers. I urge the Minister to look for ways to look after the children that are in prison together with their parents so that they are also not incarcerated together with their parents. I think the Minister should channel money so that the Ministry can get healthy food for them. Also, when women are in labour, they face some challenges. The Hon. Minister should look into that so that there are ambulances to ferry those women to hospitals. I thank you.
+HON.SEN. KHUMALO: Thank you Mr. President for affording me this opportunity to talk to the Minister of Finance. Bulawayo is dry, there is no water, people can go for a month without getting water from the taps but there is an old project where we are supposed to get water from Zambezi. It is supposed to cover the green belt. My plea is, if the Hon. Minister can look into this because people are going to suffer from many diseases like cholera and other waterborne diseases. Hon. Minister, please try and do something about the water system in Bulawayo.
THE MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. PROF. M. NCUBE): I want to thank the Members of this august House for the comments and questions. Let me start with Hon. Sen. Ndlovu regarding the abandoned projects that need to be resumed and that some of these projects are for social development. Yes, we are aware of these projects and some of them were abandoned because of priorities by ministries or Ministers because they change. These things happened but for this supplementary budget, we have set aside a budget of ZWL44.7 billion for road rehabilitation in addition to the current budget. We believe this will go a long way in resumption of those projects.
Mr. President, Hon. Sen. Chief Charumbira talked about cushioning the vulnerable, yes and again the supplementary budget covers the vulnerable. For social protection, we have set aside ZWL34.4 billion and for BEAM, it is ZWL14.9 billion. Then the issue of resources for the road rehabilitation, I have tried to address that from the question by Hon. Ndlovu but I think Hon. Chief Charumbira, some of these projects are multi-year projects. They cannot be perhaps completed in one year and will spread over a couple of years. However, the faster we do them, the better. While the amount here is important for us to do them quickly but we hope these resources will go a long way tin that resumption.
From Hon. Sen. Muzenda regarding the health sector, yes we have added another ZWL62,2 billion towards supporting the health sector. This will go a long way in the quest to procure drugs and much needed medicines and support for the health sector. For the BEAM programme, as I have mentioned, we have allocated ZWL414, 9 billion an additional budget for the programme.
Hon. Sen. Chief Makumbe mentioned the issue of use of resources by some ministries where you find that they favour certain contractors, paying them for doing nothing. They are paid deposits upfront and those contractors do not deliver and some are not paid anything at or some late. Those who are actually doing well are paid late. That is why we have now introduced the value for money concept or process where we want to check every contract for proper pricing, quality of the contractor and then we also follow up as they perform. So every time they submit an invoice on the same contract, we check more carefully what is going on from now on to make sure that they deliver value for money and produce keep moving forward.
Hon. Sen. Mohadi on disbursements being slow, we agree they have been slow and our difficulty has been the cash availability. We live within our means, using the cash that we collect to support these projects. So there are certain delays that happen because we need to find the cash even though the budget has been allocated. We seek to do better on this, going forward.
Then this confusion mentioned by Hon. Sen. Mohadi between AFC and CBZ that borrowers do not know who to go to. Frankly, we are supporting both. Our hope was, previously we had only CBZ and now we have two and any other basic house beginning to support agriculture. We thought this was better but now it is creating confusion, so maybe I will need to have a word with the Minister of Agriculture on how best to direct potential borrowers in terms of which bank they should go to. Our thought was either bank should be able to support. They both received a Government Guarantee to support farmers but we seek to do better on service delivery in support of farmers.
From Hon. Komichi on whether some of the adjustments which we are talking about which shall likely be covered by this supplementary budget support, will that get to PDL. Typically, we target 75% of the PDL. Our intention is to get to that 75% of PDL as we do these adjustments. Why do we target 75%? We always feel that as economists, if we get to 100% and we try to match, we will actually end up fuelling inflation. As soon as we announce a salary increase, prices go up before you even pay. We try to manage that way. I do not know whether we are very successful because just a mere announcement does stuff, but we target 75% of PDL.
Are we able to cover prices for pensioners and agriculture through this budget? Yes, we will adjust the pensions and also try to improve the prices for farmers. On the pensions for Senators, currently the rule is that you are pensionable after two terms and same applies to the Members of the Lower House. We had a robust debate in the Lower House and we felt that on this issue, we needed to consult further with the Public Service Commission that manages the pension account. As experts, they felt that they were going to be some actuarial difficulties if we moved quickly to one term. They feel that two terms is what they can sustain, given what is in that fund but we agreed in the Lower House. I hope I can seek your agreement here as well that let us continue to discuss this issue and have an agreement in November. If it is one term, hopefully we can agree on that and it becomes one term.
Other MPs raised other issues, for instance as to what should happen when a spouse dies for example, how to access their pension. There was an issue that I wanted to bring forward to the House and thought I would drop it in this budget which had to do with Members of Parliament, some of them are now Senators, who have served continuously for more than two terms. So they have been contributing a pension and before you know it, and God forbid, someone passes on. All they have been doing is contributing but have not drawn down on that pension. They have not benefitted. What should happen in that situation?
I propose that there should be an age limit or triggering age where beyond that age, they can start drawing down on their pension but continue serving as Senators or MPs because we cannot punish someone for being liked by people and they keep being re-elected and we say you cannot benefit. Actually, they should be rewarded for winning elections continuously. Those are some of the issues that are emerging Mr. President. I am proposing that we should have a robust debate with Members of this august House and the Lower House as well on this issue. Whatever advice you give us; I will take back to the Public Service Commission for that adequate support regarding pension.
On issues of stands, this is an issue. I also feel that this issue we could have handled it a lot better and a lot earlier because in the last Parliament, we were aware that members of this House were allocated stands. It has taken a while to get those stands serviced but even to know where they are. Sometimes you pinpointed to a hill in Shawasha or somewhere in Mashonaland Central but even I do not know where it is and I live in that area. I think that needs to be cleaned up. We are working hard on it and hopefully we will do so in the next few months.
The other one is for those sitting in this Parliament, they also need their stands. Ideas are emerging where there is a proposal to say look perhaps we should come up with a limit and say allow Members of Parliament to buy a stand or access a loan to build on a stand up to a certain threshold. Some figure that we think is manageable from the budget but you should be able to find a stand anywhere. Of course, some of you do not live here so it will be advisable to find a stand here in Harare so that when you build, you can live on that property.
There are other ideas perhaps just saying look target purchase of an apartment for example. I am also hearing ideas around setting aside land in the new city near the new Parliament; again to give you stands over there or just build accommodation. This issue needs to be resolved. I do not think we have really begun to have a robust debate on this issue of supporting members in this Parliament and I will be the first one to admit that. We need to grab the bull by the horns and support our Hon. Members.
On the issue of electricity supply that was raised by Hon. Komichi on Hwange 7 and 8, Unit 7 is coming on stream by year end and Unit 8 should be the first quarter of next year. That should improve power supply and that is being funded through a loan from China, as you are aware. The refurbishment on Kariba Dam is going well and again, we expect power supply to improve over time. Also, the independent power producing companies those producing power from coal in Hwange, we are seeing an increase in their sale of electricity to the grid. Some of the independent power producers are mini-hydro operators.
I know Nyangani independent power producer which is operating from Honde Valley has various projects and are increasing their sell of power on to the grid. We are also trying to conclude what is called a Government implemented agreement which will support investors in solar power. It is a special type of arrangement where we guarantee three things; a good tariff and they want a tariff of the order of 9,5 cents per kilowatt hour, a Government guarantee in the case that ZESA cannot pay for the electricity Government must step in and pay, and they want us to guarantee what we call access and currency convertibility, foreign currency that is, so that if they have borrowed money to invest over here in Zimbabwe, they should be able to access forex to service those loans. So, they want three things and we are finalising those agreements to support solar energy producers and investors. That is a package which I think will go a long way in improving our power supply.
Then you also raised the issue of housing but housing is an issue of a shared opportunity with the private sector through mortgage arrangements with financing institutions. So, the burden is not just on the fiscus but it is about structuring the right arrangement for resources to be accessed from the private sector such as banks and pension funds. I think more of that will deliver more housing rather than direct housing provided by Government. However, provision of housing in the cantonment areas has to be Government and we are doing that already. You have seen some of the work that we have done in Chikurubi Prison. I went there for a tour with the Minister of Justice so we could see what was going on there. We have started some positive things and some of the housing that we have begun to deal with is at William Ndangana Barracks in Manicaland. We have plans to also work on the institutional housing for Amaganya Barracks in Plumtree and work on the officers’ barracks in Senga in Gweru. Then you look at the defence forces here in Harare; we have housing developments, we are making in the Dzivarasekwa area. So, a lot is happening on the institutional front but I think for the rest of the housing stock, we need to partner as Government with the private sector, pension funds and mortgage companies. We will deliver more houses rather than just relying on the fiscus.
Then from Hon. Sen. Hungwe, the budget for prisons focusing on the issue of imprisoned mothers with children is very important and I was whispering to my Hon. friend here that perhaps we should virement our Justice budget a little bit to focus on that critical area. Certainly, it is a very good and important issue that you raised. In fact, in the Lower House, when we came to the Ministry of Justice, I agreed that we raise the budget by ZW$1 billion so as to cater for the prison service issues that you have raised.
Hon. Sen. Khumalo, on the issue of water for Bulawayo, you said taps are dry. There are maybe three things. First of all, the issue of water transmission within the city is actually an issue for the City Council and it is an issue of supporting the City Council of Bulawayo to upgrade the reticulation infrastructure. We supported them when they acquired the facility from the active Robben bank which has gone a long way in upgrading water infrastructure within the city and lowering the seepage of water from taps, et cetera. Then the second issue is providing raw water, which basically is a Central Government issue or ZINWA issue. So for that one, we have drilled the boreholes in the Nyamandlovu aquifer, which should increase the supply of raw water to the City of Bulawayo to 53million mega litres of water a day. That is what should be happening but we are aware that because of power outages, the boreholes go down and there is no water. We hear those things but technically there is enough water down the aquifer and those are deep boreholes going down 100m to 120m. I went there to see that myself and spent a lot of time because I knew it was a very important issue. However, what we need to do is to build a water reservoir then we can pump water into that reservoir and also create a green belt in that area so that water does not just leave the area for Bulawayo and the villagers there do not benefit anything. That will also cause us another problem. So, I am acutely aware of that. The third point I want to mention is the Zambezi Water Project, which…
THE HON. DEPUTY PRESIDENT OF SENATE: Order, order Hon. Members. Hon. Senators, when I tell you to put your phones on silent I mean it.
HON. PROF. M. NCUBE: Coming to my third point on the Zambezi Water Project, that is also a kind of multi-stage project. Firstly, it is about the project for impounding water in the dam. There is good progress in terms of building the Gwayi-Shangani Dam. It is moving quite well. I have been there a couple of times already. Others have also been there including His Excellency the President and the Minister responsible for water, Hon. Dr. Masuka.
The second phase is the pipeline, which has started. We have companies that are laying down the pipes all the way down towards the Nyamadhlovu area then from there it will go on to the City of Bulawayo. So, that is progressing and the idea is that we will create a green belt along the area as we move along that pipeline so that citizens do not see water escaping to other areas and at the end of day, do not benefit anything. It is a very important project and I can assure you that we are onto it. We will do the right thing. I thank you Hon. President Sir and I move that the Bill be now read a second time.
Motion put and agreed to.
Bill read a second time.
Committee Stage: With leave, forthwith.
APPROPRIATION (SUPPLEMENTARY) BILL [H. B. 8, 2022]
House in Committee.
Clauses 1 to 5 and Schedule, put and agreed to.
Bill reported without amendments.
Third Reading: With leave, forthwith.
APPROPRIATION (SUPPLEMENTARY) BILL [H. B. 8, 2022].
THE MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. PROF. M. NCUBE): Mr. President, I now move that the Bill be read the third time.
Motion put and agreed to.
Bill read the third time.
On the motion of THE MINISTER OF JUSTICE, LEGAL AND PARLIAMENTARY AFFAIRS, the House adjourned at Four Minutes to Six o’clock p.m.