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Thursday, 16th May, 2019

The National Assembly met at a Quarter-past Two o’clock p.m.


(THE HON. SPEAKER in the Chair)

          HON. CHIKWINYA: I rise on a point of privilege. Today as Members of Parliament, we had an invitation by the Zimbabwe Women Parliamentary Caucus (ZWPC) which I obliged and attended. At that meeting where the ZWPC were launching their book, the Minister of Information, Media and Broadcasting Services challenged Parliament and indeed her own parastatal which is ZBC, that women must also be given equal air time on the national television, in line with Section 17 of our Constitution.  Section 17 of our Constitution states, “The state must promote full gender balance in Zimbabwe society and in particular (a) the state must promote full participation of women in all spheres of Zimbabwean society on the basis of equality with men….” I therefore, propose that representing the Committee on Media, in consultation with my Chairperson, the Committee which sat today, we advise the broadcaster and the national television to give women equal air time and a special programme so that at least our women can be seen by the society what work they are doing in Parliament in promotion of the 50-50 gender parity. I do so under the hash tag HeforShe – [HON. MEMBERS: Hear, hear].

          THE HON. SPEAKER: In the absence of the Minister, we will carry the message to the Hon. Minister.

          HON. TSUNGA: I stand also on a point of privilege for a matter that this august House has been paying lip service to, in my view and for a matter that I think has been swept under the carpet for quite a while. In recent months and weeks, we have seen seven day eviction notices of villagers in settlements all around the country by Government. The urgency with which these eviction notices are being dispatched is worrying and there are no court orders to that effect.  There is need for these evictions to be halted in my view and that the need to prevent diseases, homelessness and humanitarian crisis-man made and internal displacement has to be halted. 

          Mr. Speaker Sir, in this vein, I would want this august House to ask the Hon. Minister of Lands, Agriculture, Water, Climate and Rural Resettlement to favour this august House with a Ministerial Statement that reassures all concerned about the protection of the affected poor.  Specifically, Mr. Speaker, Sir, I would want the Hon. Minister concerned to favour this august House with a description of the land where these mass evictions are being effected.  We also want to know the outcome objectives of these evictions, the rationale for the belated evictions, noting that some of the villagers being evicted have been on this land for over 20 years and these evictions are only being effected now.  What consultations Government has had with the affected people and stakeholders and whether there has been any objection or representations. 

          Mr. Speaker Sir, we need to know the number of households affected and the number of people affected, disaggregated by gender.  We also want a description of the suitable locations where these people will be resettled and whether there are suitable social amenities that will be able to service these people.  We need to know the nature of scope and compensation offered by Government as well as the time horizon for the compensation to be made. 

          Mr. Speaker Sir, we would also be happy to be furnished with an explanation as to why the evictions are being effected now before the Land Commission Report has been tabled and adopted.  We need to have the Minister identify the names of the new beneficiaries of that land from where these people are being evicted.  I end here Hon. Speaker, if that can be done.

          THE HON. SPEAKER:  I am not sure whether sometimes it is necessary to flog a dead horse when it is conspicuously obvious that the horse is dead.  This matter was dealt with yesterday and the Hon. Deputy Minister of Lands indicated that he would bring details and a proper response next week and that was agreed to.  So I am surprised why this matter is being raised again – [AN HON. MEMBER:  The matter was on water.] – It was not only water but evictions, it was done yesterday. Perhaps the Hon. Member was outside the House at the time but it will be very interesting - if you could hand over that piece of paper which has got very important points so that I can follow it up with the Hon. Deputy Minister who must liaise with the substantive Minister accordingly.

          Hon. Members, you will recall that yesterday the House adjourned before the Hon. Minister of Finance and Economic Development completed the Ministerial Statement.  We would like to start with that and then after the Hon. Minister has presented, then you can follow up with questions for clarification.  Hon. Minister, if you may take the floor.



          THE MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. PROF. M. NCUBE):  Thank you Mr. Speaker Sir for giving me the opportunity to conclude my presentation on the state of the economy…

          THE HON. SPEAKER:  Order, I think you must congratulate the Minister because you complained yesterday about the power point – [HON. MEMBERS: Hear, hear.] – If your demands have been met you must be happy.

          HON. PROF. M. NCUBE: Mr. Speaker, Sir, I would like now to proceed to the area of Devolution.  The 2019 National Budget allocated some US$310 million for the Devolution Programme under which resources are to be distributed to provincial and local tiers in line with the Constitutional provision under Chapter 14 on devolution.

          The devolution objective is to achieve growth and development that is equitable, shared and sustainable to the benefit of citizens at all levels.  Consequently, from the two percent tax, we ring fenced some resources and Treasury has so far disbursed US$42 million RTGs dollars from the ring fenced two percent revenues to the Ministry of Local Government, Public Works and National Housing for the devolution programmes under various provinces and districts.

          Let me move on to the issue of mitigating Cyclone Idai disaster.  In March, 2019, the country experienced the worst weather induced disaster in the form of Cyclone Idai which caused loss of lives, infrastructure, food reserves and other assets, particularly in Manicaland and Masvingo provinces. 

          Government initially earmarked RTGS$50 million towards mitigating the impact of Cyclone Idai and these resources targeted welfare of survivors, infrastructure rehabilitation in the areas of roads, bridges, water and sanitation, schools, health facilities, among others.  The above allocation has since been increased to RTGS$100 million to cover the emergency requirements. 

          Mr. Speaker Sir, Government is also grateful for complementary support received from various development partners, local authorities institutions, the public and the international community at large.

          Furthermore, given the severity of the disaster, the President has since launched a costed international appeal amounting to US$612.6 million in order to complement Government efforts towards restoration of livelihoods.

          Mr. Speaker Sir, let me turn to the budget deficit.  The budget balance for the period January to March 2019 was a surplus of $443, 1 million, against a target of $78,2 million, indicating a major shift in the management of Central Government finances from deficits to surpluses. As a result, since January 2019, no Treasury Bills nor the overdraft facility were utilised to finance the budget. The Treasury Bill issuances amounting to RTGS $180 million were for purposes of restructuring previous years’ maturing debt.

Treasury Bill issuances related to ZAMCO operations have also been frozen as announced in the Monetary Policy Statement. With respect to implementation of the Treasury Bill Auction System, I envisage that this will now commence by the fourth quarter due to the recent measures announced in the Monetary Policy Statement. This will allow the markets to settle on the Treasury Bill market.

The domestic debt stood at $9,2 billion down from $9,6 billion in December, 2018. This represents a $326 million decrease in domestic debt. The decrease in the stock of debt was on account of debt repayments with a minimal Treasury Bill issuance of $28 million for cash flow management purposes.

          Let me now turn to the external debt, Mr. Speaker Sir. The external debt stock stood at US$8,2 billion  at the end of March 2019. The bulk of the external debt is in arrears at 71% of the total external debt, a reflection of the country’s challenges to create enough fiscal space that will allow the Government to repay its external obligations as well as the foreign currency shortages bedeviling the economy. External debt owed to bilateral creditors is at US$5,6 billion and constitutes the largest share of external debt. 

          Multilateral creditors which are the IMF, World Bank, African Development Bank were owed US$2,6 billion as at 31 March, 2019. Government continues to engage various creditors for arrears clearance in which is an initiative which will also open up access to new development clients. What we have at the moment is a road map for arrears clearance which is also linked to the adoption of the staff monitored programme managed by the IMF. However, it is important to note that the country’s capacity to clear old arrears and meet obligations arising from new finances hinges on the strength of the economy which in turn requires implementation of reforms under the transitional stabilisation programme (TSP).

          Turning to the external sector, the TSP seeks to attain a sustainable balance of payments position underpinned by increasing exports, particularly through focusing on value added exports. The strategy also seeks to take advantage of opportunities arising from regional and international trade. Concurrently, the TSP targeted higher import substitution for goods and services which can be produced domestically, taking advantage of the country’s resources. In addition, Government envisaged curtailment of non-essential imports in view of foreign currency limitations.

          Mr. Speaker turning to exports, during the first quarter of 2019, the country’s merchandise exports grew by 15% from $886,1 million realised in the first quarter of 2018 to reach $1,02 billion. Exports for the period were mainly dominated by gold at 23%, flue-cured tobacco at 23%, nickel at 17%, nickel ore and concentrates at 11% of total exports, ferrochrome and industrial diamonds, among others but those first four were the dominant export items.

          South Africa, United Arab Emirates and Mozambique remain the country’s export destinations absorbing 51%, 17% and 8% respectively, whilst other countries absorbed 19% of our exports.

          Total merchandise imports stood at US$1,1 billion during the first quarter of 2019, at 33% increase from US$1,7 billion accumulated during the fourth quarter of 2018. This is also against US$1,8 billion recorded in the same period in 2018. The reduction of the import bill reflects the impact of imports demand management measures under implementation, including fuel price adjustments.

The diesel and petrol tractors, wheat vehicles for transportation and crude soya bean oil were the country’s major imports during the months of January and February, 2019. Diesel is at 17% and unleaded petrol at 9,4% of total exports. Those are the two dominant imports, Mr. Speaker and then whole tractors for semi-trails at 1,6%. The major import source during the period under review were South Africa, Singapore and China contributing 33%, 27% and 10% respectively. 

On the trade balance, balancing both imports and exports; what we see is that resultant in the trade deficit for the first quarter of 2019 stood at US$90,6 million which constitutes a 76% improvement from the 2018 fourth quarter deficit figure of $384,5 million. In comparison to the first quarter of 2018, the current account deficit improved by 88%. We almost achieved a balanced current account. We have achieved to close both the current account deficit because we have recorded these surpluses but also now we are beginning to close the fiscal side. So, both in a sense the twin deficit problem is under control and we are determined to keep it like that for both the current and fiscal account. However, there is much of managing the import bill targeting other non-essential imports in the $402,3 million as indicated.

I now turn to the structural issues within the economy in terms of the reform agenda, switching basically to public enterprises.

The implementation of the public enterprises reforms is being guided by the Cabinet decision of 10 April, 2018 and is enshrined in the Transitional Stabilisation Programme (TSP).  To this end, the following progress is worth noting.  Let me start with GMB. The GMB we have de-merged GMB into the GMB Strategic Grain Reserve which is financed directly by Treasury.  Every year we make an allocation for that and then the other part is silo food industries which is a commercial entity.  The commercial entity began operation formally on 1st April, and they are busy right now inviting additional shareholders to invest into the company so that it can expand the product range and boost their working capital, retool, re-equip and begin to compete effectively with peers in the private sector and Government agreed that we lower our equity in the company down to 26% of total equity.

Looking at NRZ and ZISCO, negotiations with strategic partners for NRZ and ZISCO are at an advanced stage.  I think more was discussed yesterday around NRZ and the Minister of Transport was able to answer questions on those transactions.  The ZISCO, transactions continue to be mulled over and again there is a determination to make sure that these two entities get back to full operations.  Besides, they are part of ecosystem as you all know that the railways was basically one of those we used for transporting coking coal into ZISCO for evacuating steel, linking that with Hwange.  Those three were part of an ecosystem and alas, they need to come back and begin as such again and we restore them to their formal glory.

On CSC, a concessioning agreement was signed between CSC and Bousted Beef Limited of United Kingdom.  We did present this transaction to Cabinet two days ago.  We realise that certainly, the private sector partner is on the ground, they agreed on assessment of various assets for CSC and we have a good feel that they are serious about moving forward.  The agreement really is a 25 year concession agreement to refurbish, operate and transfer back to Government.  They have to take over the employees they found with CSC.  They have done that and they have paid salaries as from 1st February. So there seems to be a good progress again in this regard. They are opening new markets to export beef to China, Angola and other regions.

Civil Aviation Authority (CAZ) the Civil Aviation Amendment Act has now been enacted and that was outstanding.  With IDC, we have resumed IDC’s role as a development finance entity and injected resources of $30 million seed capital that will then be used for developing new industries in Zimbabwe.  That is a role of the IDC that we have unbundled and we feel that needs to come back.  Also we have decided to lower our equity as Government in Willowvale, the car assembly company, to make sure that there are other partners who can come in and inject capital and I am sure that over time, we will get suitors for that equity stake.

With ZESA, we approved as Cabinet to re-bundle ZESA. As you know, there were five entities which had the board, CEOs and so forth. We decided to re-bundle it so as to cut out some inefficiencies in the corporate and we are waiting to receive reports on progress in terms of regaining those efficiencies within ZESA.  Regarding ZIDA, the one Stop Investment Service Centre is operational as an interim arrangement and ZIDA Bill is under consideration by this Parliament so that the One Stop Shop can begin to work as an amalgamation of the three entities. Joint venture entity from Finance will join that as well as the current Zimbabwe Investment Authority and then the Special Economic Zones entity.  The three of them are coming together to form One Stop Shop.  Each department in Government will seed some staff who then mann to make sure that each Ministry is represented within that One Stop Shop and be able to explain the opportunities that are available for each department and make sure that things move fast.  I was very impressed when I visited with His Excellency, the One Stop Shop in Azerbaijan where you can actually register a company in 15 minutes.  If you have a query, you go to a booth which is run through Skype and you speak to a virtual assistant and they can help you along.  This is where we need to go with ZIDA.  That should be the vision.

In addition to that, it is our vision as Government that there is no reason why we cannot also develop an offshore financial services centre again to take Zimbabwe to the next level, to make sure that things can move to the next level. 

Coming to TelOne and NetOne, these again have been partially privatised.  We have made a decision that they are being privatised as a bundle; as a package and as Government, we agreed to sell down our equity down to 26%.  There is something magical about 26% equity stake because this is the minimum level you need to be called a significant minority so that you can block any unpleasant prejudicial decisions by the board.

It is our vision at least, that these two entities being bundled together; need to be listed on the Zimbabwe Stock Exchange.  So, part of the equity is available to ordinary citizens. That will be wonderful indeed.  On Allied Timbers, again the entity has been cleaned up.  Government has an extension board being put in place; CEO put in place and make sure that we re-claim the estates that the company was utilising for doing business in the timber industries.  We know that there are some settlers on some of the land who have been cutting timber tree and so forth.

Allied Timbers by the way controls about 60% of Zimbabwe’s forest in terms of its business footprint, so it is quite a significant entity in this place.  ZMDC subsidiaries, we continue to investigate the quality of the resource that these subsidiaries control and again we bring back those entities that we feel have been sufficiently staggered back to the market for partial privatisation and we seek other suitors.  Other entities such as Agribank, they are all at a stage where they are looking for transaction advisers and suitors to sell equity.  Petrotrade is being targeted as well; ZIMPOST, I could go on and on.

On the ease of doing business reforms, if there could be a transition to that; Government under the TSP continues to pursue the ease of doing business reforms as part of broad measures on enhancing the country’s investment climate.  The reforms target administrative and other related legislative bottlenecks under various statutes and some milestones have been recorded in the following areas.  I will just summarise the objectives.  The objective is to remove regulatory transactional and administrative hurdles in doing business.  A lot of administrative procedures, timelines and costs have been reviewed and streamlined to facilitate the ease of doing business.  This was done between 12th February and 29th April, 2019.  These reforms are as follows:

-         Improving the overall quality and efficiency of the property registration system in Zimbabwe regarding a number of procedures from five to four and improved loan dispute resolution.

-         The establishment of a lot of administrative procedures, timelines and costs have been reviewed and streamlined to facilitate the Ease of Doing Business between 12th February and 29th April 2019.   The reforms are as follows; improving the overall quality and efficiency of the property registration system in Zimbabwe regarding a number of procedures from 5 to 4 and improved land dispute resolution.  The establishment of a credit registry to facilitate the obtaining of credit has also been completed.  Improving the enforcement of contracts through increasing the number of small claims courts from 2 to 10 and the establishment of commercial courts from 0 to 4.  The operationalisation of the magistrates’ courts to be done after the validation and gazetting of the requisite court rules.  Improving trading across borders through reviewing of checkpoints for both imports and exports clearance processes at Beitbridge border post resulting in a 41% reduction in compliance checkpoints. 

Over and above administrative issues, there is also progress on the legislative agenda looking at Insolvency Bill Estate Administrators Act.  The Estate Administrative Bill, Shop Licensing Amendment Bill, Public Finance Management Amendment Act, the Census and Statistics Amendment Bill, the General Laws Amendment Act, Companies and other Business Entities Act, the Regional; Town and Country Planning Amendment Act, the NSSA Act, Manpower Act, the Repealing of POSA and MOPA is before Parliament and we have gazetted it under consultations and eventually repealing of AIPA and replacing it with the three Bills.  We approved the principles for the Access to Information Bill Mr. Speaker Sir and these were Cabinet approved.  So there is a lot of progress on the institutional front and legislative front.

Mr. Speaker Sir, in conclusion, generally the economy has experienced significant headwinds and the cyclone that affected the country in March 2019 poses yet another obstacle to strong, sustainable, balanced and job rich growth.  Some of the challenges also emanated from inflationary pressures and these challenges are insurmountable and being targeted during the three quarters of the year.  I will be updating this House on further developments and other proposals during my 2019 Mid-Year Fiscal Policy Review presentation sometime in July 2019.  Thank you Mr. Speaker and I thank the colleagues for listening.

HON. CHINYANGANYA:  Thank you Mr. Speaker Sir for affording me the opportunity to seek clarification from the Minister of Finance.  I want to thank the Minister for his presentation, though it lacked the nitty grities, the essential issues that the general populace are looking for.  My question Mr. Speaker Sir is; the Minister alluded to the fact that the 99-year lease is now a bankable document.  Mr. Speaker Sir, a lease does not offer real right but it offers personal rights.  How are the financial institutions going to give loans to farmers who do not have real rights to the land that they occupy?

HON. NDUNA:  Thank you Mr. Speaker Sir.  I am quite elated that devolution is now coming to the fore.  My question is to the issue of devolution and also trying to alleviate the country’s plight on the external debt, give suggestion....

THE HON. SPEAKER:  Order.  Please sit down.  Hon. Members, anyone who is going to make a statement, I will ask you to sit down.  You have to ask questions and clarifications, straight to the point.  Please Hon. Nduna, proceed with your question of clarification.

HON. NDUNA:  Mr. Speaker Sir, I have with me here, on devolution, external debt and the Executive as suggestion in terms of how – [HON. MEMBERS:  Inaudible interjections.] – I have a suggestion Mr. Speaker.  I feel it is in line Mr. Speaker and I am within my right to try and complement and augment....

THE HON. SPEAKER:  Order.  If you are not going to follow my instruction, you will be deemed to have defied.  Ask a question of clarification please.

HON. NDUNA:  Thank you Mr. Speaker Sir.  My question is, armed with the amount of gold that he has said has been exported;  would it not be prudent to apportion each Ministry with a gold claim in order that their budget can be taken care of by the extractive industry, the extraction from each of the gold mines?  We have more than 26 gold mines and his budget can be streamlined according to extraction from those gold mines.  Would it not be possible Mr. Speaker Sir, to give each Ministry a gold mine...

THE HON. SPEAKER:  Order, order.  Hon. Member, I give you the last chance.  I did not hear the Hon. Minister talking about apportioning gold to various Ministries.  So there is no point of clarification in that regard.  Can you stick to what the Hon. Minister of Finance said?  Please proceed.

HON. NDUNA:  Thank you Mr. Speaker Sir.  Gold is one of the most exportable commodities he spoke about.  Would it not increase the amount of gold exported if 26 gold mines were apportioned to 26 Ministries in order that each Ministry and individually, extract from those gold mines in order to extract – [HON. MEMBERS:  Inaudible interjections.] –

          HON. SIKHALA: I do not know why the Speaker likes him a lot, he is always given the chance. – [Laughter.] -          

          THE HON. SPEAKER: Order, Hon. Sikhala, can you withdraw your statement.

          HON. SIKHALA: I withdraw Mr. Speaker Sir.

          HON. HAMAUSWA: I saw Hon. Nduna doing something that is insulting to other Members. He raised the finger.

          THE HON. SPEAKER: Order, there is no excitement about the finger. Did you raise that finger Hon. Nduna?

          HON. NDUNA: Mr. Speaker Sir, these people hate me with a passion. You just need to protect me. I did not raise a finger and I will not raise a finger and I have never raised a finger.

          HON. MADZIMURE: Thank you Mr. Speaker. I want to thank the Minister for the precursor to the Mid-Year Statement that he will give. Hon. Minister, when you talked about the improvement in the economy, can you explain in your own understanding of a food basket. How much a Zimbabwean food basket is now, according to your own understanding - the basic commodities that we normally use as Zimbabweans and explain to this House whether that does not reflect more than 300% inflation?  

          HON. GONESE: Thank you very much Mr. Speaker Sir. Yesterday when he made his presentation he talked about an increase in the revenue inflows and my question to the Hon. Minister is that in view of inflation which he also reflected that there is inflation and also in view of the fact that in terms of collection, we now have a situation where for instance when you are looking at customs duty, we have had a situation where we now use the Inter-Bank rate. Can the Hon. Minister say in real terms there has actually been an improvement, bearing in mind the factors which I have already referred to? Are we talking of an actual increase?

          My second question relates to the issue of the exchange rate. The Hon. Minister accepted or conceded that we still have trading on the parallel market. My question is why is it that people are still going to look for foreign currency outside the formal market which has been created by the inter-market rate?

          HON. MAVETERA: Thank you Hon. Speaker Sir. Thank you again Hon. Minister for a well rounded state of the economy address. In terms of your ease of doing business reforms, I just wanted to find out as a point of clarity on the disparity of maize prices that we are having of $427.00 to millers and $726.00 to farmers at GMB? May we please have a point of clarity on that?

          HON. PARADZA: Thank you Mr. Speaker Sir. This year the country experienced this drought and there are A2 farmers who borrowed through contract farming. Is the Minister considering rolling over those loans or what? On another clarification, the Government is compensating former white commercial farmers, but who is going to compensate former workers of those commercial farmers who were not paid their monies?

          HON. MATEWU: I have got two questions to the Hon. Minister on his figures. Yesterday in his figures he said the revenue base or the revenue collections are increasing from $6 billion to $9 billion. The $6 billion was in the Blue Book and the $9 billion he is saying because of the change in the exchange rate, but if you calculate $6 billion to $9 billion, it does not go hand in hand in terms of the exchange rate which was said by Hon. Minister. How did he calculate this from $6 billion to $9 billion? The other question is on the nominal GDP. He said the nominal GDP translated to the US$ was $25 billion, but again into the revised RTGS, it is now $42.8 billion. How does he make these calculations when his own inter-bank rate market is saying the ratio between then US$ and the RTGs is 1 to 3? Thank you. 

          HON. CHIKUKWA: Thank you Mr. Speaker Sir. My question to the Hon. Minister is that after Cyclone Idai, are you going to reconsider your budget that you had given to Civil Protection Unit?

          HON. MUSABAYANA: Thank you Mr. Speaker Sir. I would like to seek clarification from the Minister on how he is addressing the divide between the parallel rate and the official market rate in terms of foreign exchange. The other question is to do with the bankability of the 99 year leases. As alluded earlier on or the question before, there seem to be a conflict with the assertion by the Bankers Association of Zimbabwe. We had a meeting with them last month as a Committee and they refuted the claims that the 99 year leases can be bankable. So we need clarification on that if there is proper engagement.

          On the commodity prices of soya-beans and maize, there were producer prices that were announced by the Hon. Minister. We wanted to find out if there is room for adjustment to try and track the parallel rate because if that does not happen, it means our soya-beans and maize might end up being cheaper than the rest of the region because people will be using the parallel rate. Thank you Mr. Speaker.

           The Hon. Speaker having confused Hon. Markham for Hon. Houghton.

HON. MARKHAM:  Thank you Hon. Speaker.  Hon. Speaker to help you, Hon. Houghton is from Kariba, I am Markham from Harare North.  Vanogara kuHarare North vanondiziva because vakandivhotera – [Laughter. ] –

HON. SPEAKER: Do you know why I confuse you with your colleague who is next to you?


HON. SPEAKER:  It is your white beard – [Laughter.] -

HON. MARKHAM:  Thank you Mr. Speaker Sir.  My point of clarification is on the issue of farmers’ compensation. Yesterday the Minister stated that 68 million had been given to 93 farmers.  Does it include the 36 million that was given by the Netherlands which is in the Blue Book or does it not?

Secondly, the Minister mentioned 876 000 tonnes of maize which was stored from March, it is supposed to last seven months, is this from March or today? It is imperative to know so that we know when we are going to run out of maize.

The third issue is on the 99 year bankable lease.  Can the Minister confirm categorically that the banks have agreed to fund on the basis of a 99 year lease?  This unlocks a lot of money for us and we need to know now before the preparation season starts.

Finally, I would like to go into the issue of parastatals. Can the Minister confirm that while they gave 30 million to IDC – can he confirm that no money has been set aside for ZESA as capital seed to be injected to ZESA which is in dire straits?

HON. T. MLISWA:  Thank you Mr. Speaker Sir.  I think for the purposes of clarity, it is important for the Minister to tell us whether it is figures in RTGs or US$, because the Budget was in US$.  He keeps saying that there has been some income generated which is more than what it is in US$ at the end of the day.  So it seems to confuse everyone. He needs to talk about the US$ which was the Budget approved by this Parliament in this House. I would like first of all to find out whether it is RTGs figures you are giving us or US$ figures or interbank figures again.  Nobody knows.

The other issue is on the parastatals. Which company is going to do the valuation of those parastatals?  What figures are you looking at in terms of disposing these parastatals because you want to raise a certain amount of money?  In raising a certain amount of money, what is the worth of each parastatal and the shareholding you want to dispose of and the due diligence that will be done. Who will do that, because we see a lot of agreements that Government has gone into. They do not seem to see the light of day.  For some reason, each Minister who comes in wants a new agreement. 

The NRZ deal that he spoke about, the Minister did not actually say what we thought he would say.  There are allegations that the company DIDG did everything necessary.  I actually got information of all the documents which they say they had supplied to Government.  They were actually shocked to hear the Minister in Parliament saying that they had not met the requirements which I will furnish with you as well.  NRZ is going to be on track but Hwange….

THE HON. SPEAKER: Hon. Mliswa, go to the question please.

HON. T. MLISWA:  The question is that the parastatal which supplies coal to Hwange is not functional.  You have also sold to Billy Rautenbach and others the richest concession at the coal mine.  It is no longer under Hwange.  What is the point of having rail when Hwange which is controlled by the State is no longer supplying coal and as we speak, is in intensive care?

HON. MAMOMBE:  I have two questions to the Hon. Minister of Finance.  The first question relates to the agricultural sector where you have mentioned the decrease in tobacco sales which is also affecting our forex as a country.  This crisis of forex that we are facing as a country which is ultimately leading to the problems we are facing today, particularly the service delivery issues, what is your plan to salvage the tobacco season to earn the country the much needed forex because you are just citing the problem that you have but what plan do you have so that we can earn the foreign currency that we need as a country?

The second question is the issue to do with the GDP and also the revenue that you have highlighted which has increased, where these  surpluses you are talking about, why are they not translating to the real incomes that the ordinary people can benefit because we are just hearing figures. Where is the money going Hon. Minister?  Thank you.

HON. PROF. M. NCUBE:  Thank you Mr. Speaker Sir.  I thank the Hon. Members for the useful questions that will help clarify issues.  The few questions on the 99-Yearleases -  I recall that even small scale farmers prior to Independence used to have leases and these leases were bankable.  This is not correct that leases are not bankable.  There must be something in some of the clauses in the 99-Year leases which I am not aware of which is making them unbankable.  I think that the issue of the content of these leases is not closed, if there are issues that need to  renegotiated better understood by the financial institutions.  That avenue is still open.  We have to fine tune it to a level of where they are acceptable to financial institutions.  Ultimately, what would work best is title deeds but we are not yet there.  If banks are sufficiently innovative, you do not even need a 99-Year lease to lend to a farmer, you can basically securitise the crop for a farmer and use innovative instruments that do not require collateral in the form of land itself.  There are so many examples on how this is done.  

A question from I think Hon. Nduna regarding perhaps distributing gold mines and mining ownership to each Ministry to support their budgetary requirements.  Well, what is a gold as an exportable - it is nothing other than foreign currency.  So in essence, the request is to allocate foreign currency to each Ministry. I am not so sure that we want to go that route.  I think the real issue in the gold sector is what he referred to as a kind of a second subsidiary question which is how do we increase output in that sector.  The bulk of the producers are small scale miners at the moment and so, it is not even the large scale miners but it is small scale miners and what they need is support in terms of equipment. Also, the miners need support in terms of further exploration;  so investment in upstream exploration and also in equipment for mining is critical.  So, the gold fund resources need to be supplemented and we will be doing that to make sure that we can support output.  I am also acutely aware that the Central Bank has added some price incentive as well to cojole the miners to deliver their gold to Fidelity and not to stock pile it or indeed sell it on the side or export it illegally.  So that will go a long way in increasing foreign currency receipts into the economy.

          On the question on what constitutes basically a basket or upon which inflation is measured, of course, this basket has a variety of things; it is food, fuel and services. Those are typical things that one consumes as typical basket and you consume those items in different weights.  The bulk is food and certainly not services. So there are different weightings within that basket and the weights do change from to time when we think that they are inappropriate. Inflation is based on that kind of basket and the weightings on that basket and food inflation is the biggest driver within that basket in the inflation figures that you have said.

Now, in terms of revenues, one Hon. Member asked about whether this increase is real or not real in terms of being inflation adjusted.  I did indicate that this is nominal increase and not a real increase.  One can always convert it to real increase over time but on a daily basis you are consuming nominal revenues and that is what you do. 

Why is the parallel market thriving, that was a second question.  Obviously, the parallel market thrives if the official market is deemed not well functioning as yet. If you recall, the interbank market was only introduced on the 28th of February this year.  It is a young market, it is growing in confidence and our view is that over time there will be more confidence in this market, but we too as Government need to do a lot of working in making sure that we build that confidence within the market and make sure that it is efficient.  There is a better priced discovery process. In fact, I recall that when Nigeria introduced such a market it took no less than six months for that confidence to be built and for the parallel and interbank markets to converge.

In the interim, we will continue Mr. Speaker Sir, to supply more foreign currency into the market through various credit lines, some of them contracted directly by Government in terms of guarantees or something like that.  Also, a private sector credit – we have actually found a way to get the private sector to borrow without the involvement of Government even under tough credit conditions. We can just supply forex and perhaps reduce the demand for forex in the parallel market.  We should be able to make some announcement in the not so distant future in that regard.  So, the trick is to build confidence in the interbank market, that is what we will, I guess reduce the activity in the thriving parallel market.

On the ease of doing business which I think in the end mutated to a question about perhaps the different prices for millers and farmers at GMB.  The thing with millers - what we want to do is to offer a price that will not add to the inflation in the final good that is consumed.   So, if it is wheat, we want to make sure that we curtail increases in the bread price. We want to be able to offer a price that does not contribute to that inflation and price build up in the final good.  To farmers, we have a different objective to make sure farmers are incentivised to go back to the land, till the land and supply to GMB for onward production of bread.  You get a disparity between the two prices of course and that will constitute a subsidy; that is okay as long as you can afford the subsidy and that is not necessarily a bad thing, because really what you are subsidising in the end is a price of a final product such as bread at the same time getting the farmers to till the land.

I did not quite understand the question about contract farming, I missed that completely but I suspect whether I am reconstructing here.  Perhaps, if I have not missed some of the pronouncements, maybe this is about making sure that we supplement what we are doing in terms of Command Agriculture, getting companies let us say the oil expressers to do more contract farming with the soya bean producers for example, or some of the milling companies. If this was the case, certainly this is what we would like to promote. I have been engaging basically with the industry, agro processers to make sure they also support farmers on a contract basis including contract farmers. 

On the issue of revenues, an Hon. member asked Mr. Speaker Sir, that on the revenue conversion....

THE HON. SPEAKER: Order, I think there is a bit of confusion on the issue, can you clarify the question.

HON. PARADZA: This was about the issue of command farming, those farmers who borrowed money and were given inputs, the A2 farmers but because of this drought, what is going to happen because they are not going to be able to repay the loans. What is Government going to do about it, are they going to roll over or what?

THE HON. SPEAKER: Hon. Minister, I think the question is clearer now.

HON. PROF. M. NCUBE: Thank you Mr. Speaker Sir, I thank the Hon. Member for clarifying the question which was clearly not understood at all. Indeed, we will look into the issue and try to understand the extent of that issue and see to what extend the farmers can pay and the remainder, we may have to absorb that but I am speaking off the cuff. We need to look at the extend of the challenge in the first place and understand its budgetary implications before we make a decision.  Once again, we want to make sure that the farmer is supported so that they can get back to tilling the land for their own food security and also for the security of the entire nation.

On revenues, there was a question regarding the conversion of the US$6b revenue in United Stated dollars when we had the 1:1 exchange rate to the projected US$9b revenue for 2019 and wondering how I moved from US$6b to US$9b given the exchange rate. This was not just a simple exchange rate converstion but rather looking at the level of inflation because you are collecting inflation from values of things, of services of goods, whether it is VAT or PAYE or whatever.  So, the big driver there is inflation which of course is linked to the exchange rate but it is the inflation projection that we have used for calculating that increase in revenues and this was done by the way of bottom up.  So, I requested ZIMRA to really go back and work out tax revenue line and do a projection month by month for the whole year and we build this US$9b dollar figure bottom up for the entire year; we are arrived at that and we are confident.  We used inflation level not rate because that is what we use for working out values and tax rates are based on those values rather than the exchange rate.   Perhaps if the colleagues want to know about rates that mainly applies to import duties. That is clearly a rate related type duty but the bulk of our revenues Mr. Speaker Sir, is value driven rather than exchange rate driven in that way.

On the issue of the GDP, let me explain. When you rebase GDP in USD before the 1st October when we launched TSP, when we rebased, that had to do with the change in the structure of the economy and that we wanted to align with international standards.  That rebasing moved our GDP from 18 billion dollars to about 25 billion dollars.  So, that was done before year end 2018.  Now in 2019, on the 28th February, we then introduced the interbank market and there is an exchange rate at play, initially at 2, 5 RTGS$ to the US$1.00 and now it is hovering just above 3.

          So, the 42 billion dollar figure for GDP basically is the figure for 2018.  We have gone back and valuated what was going on in the last quarter of the year, where I said that the economy now shows that it grew by 6,2% as opposed to just over 4%.  We revalued that using the new exchange rate so that we could have a base from which we can then work out the GDP for 2019 and 2020 going forward because we need a base. So we need to move everything to the same currency and then move forward.  So, that came to 42 billion dollars.

          For the record, Mr. Speaker Sir, the GDP as of the end of December 2018 is RTGS$42 billion.  Now, moving forward to the end of 2019, then now we have a base and then we work things going forward, apply the exchange rate with inflation levels, everything that we need to do to work out GDP.  Therefore, our estimate for the 2019 GDP figure by December, 2019 is RTGS$70 billion.  So, everything from now on is in RTGS$.

          As to the issue of Cyclone Idai and as to whether we need to increase the budget for the Civil Protection Unit, this was asked some time back and what has happened since is that the budget for the Civil Protection Unit has increased almost by stealth.  We have allocated a RTGS100 million for the immediate relief of our people who are suffering because of the cyclone.  This 100 million will go towards repairing of schools, repairing bridges – [HON. MEMBERS: Inaudible interjections.]-

          THE HON. SPEAKER: Order, order! I think the Hon. Minister would give comfort to the Hon. Members, I think they have forgotten that in the budget, you always have reserve funds –[HON. MEMBERS: They have exhausted]-   Can you allow the Minister to finish?  Hon. Members, can you listen otherwise you will be confused.

          HON. PROF. M. NCUBE: In the constant appeal for Idai Mr. Speaker Sir, the President has requested from international partners US$630 million, that is the cost of repairing the damage caused by the Cyclone.  So, the paltry RTGS$100 million that we as Government have applied to this problem is nowhere near that required figure.  Certainly going forward, we will make sure that the Civil Protection Unit gets more resources.  We know in the budget it was only RTGS$3 million, now we have allowed it to receive or rather to implement the disbursement of RTGS$100 million.   I think that is commendable in order to meet the damage and suffering of our people.

          There is a question asked about the gap between the official and parallel rate as to when this would close, how it could close; that question is related to earlier questions asked.

          HON. SIKHALA: On a point of order!

          THE HON. SPEAKER: I will give you time to ask.

          HON. PROF. M. NCUBE: Thank you Mr. Speaker Sir.  The gap between the official interbank rate and parallel rate was noted by an Hon. Member, that perhaps this gap needs to be closed.  I had replied to an earlier similar question that we are determined to close this gap by two ways. Firstly, by making sure that the interbank market begins to work efficiently, it is also trusted by the market.  We are working on this but at the same time, in the interim before that happens, is to supply more foreign currency into the market so that players do not feel the need to go to the parallel market but are ably using the interbank market more and more.

          There was a repeat question from the same Hon. Member regarding the 99 year leases and I have already answered that question to say look, we have had cases in the past where farmers have accessed resources from banks, credit lines from the banks on the back of leases. Perhaps, we need to find out what the issue is regarding the 99 year leases, maybe there are clauses that this institution is not comfortable with and we need to deal with that.  We are always open to this.   In the long term, what really would work well are title deeds and will probably get there at some point.

          There was a question, I did not quite follow from the same Member the third question, I was writing fast trying to catch up with them speaking, and I think I missed part of the question, perhaps they could ask that at some point.

          Regarding farmer compensation – on the farmer compensation, 53 million which is in the budget, we are targeting vulnerable farmers, the elderly and we have a received a list already of those farmers.  Their association is busy vetting those submissions and we will receive them soon and then begin the compensation exercise.  However, I must hasten to say that this is the normal budget allocation per annum that is done annually and we are busy working on a comprehensive agreement with the farming community so we can agree on the final figure for compensation and then begin to work out a mechanism for compensating them in full for improvements largely but also for the value of land for those who are covered by beepers as well.

There was also a question about the maize tonnage. This figure in our survey was going to last 7 months and the figure was basically as from March, 2019. So, it is an April 1 figure that I gave you but of course, every month we have to take stock and check to see how much is left in there and how much longer it can last but this is the figure as of the end of March. 

Again, there was another question on the 99 year leases which I have tried to deal with.  Then there was a question as to whether there is a capital set aside to recapitalise ZESA, maybe the 30 million which was set aside for IDC, part of that we set aside for recapitalising ZESA.   I think that is an issue we would need to look at in great detail. Again another question on the 99-Year Leases which I have tried to deal with.

          Then there was a question on whether there is $30m capital set aside to recapitalise ZESA. I think that would be an issue that we need to look at in great detail. ZESA will have to produce some kind of strategic plan so that we understand where they are trying to take the institution as a board and to understand whether Government needs to be injecting capital or we need to be inviting strategic partners, whether private or semi public to take equity. We will have to evaluate that but we would need a strategic and clear plan on that as to whether it should be Government itself or rather it is a strategic partner outside Government.

          Then there was a question by Hon Mliswa saying that I am confusing the audience in terms of US$ and RTGS$. I think he did miss my first presentation on the statement yesterday where I tried to clarify that. The US$ apply prior to the Monetary Policy Statement and RTGS$ apply post the Monetary Policy Statement. What we have to do if you want to compare like with like is to convert the past GDPs back up to 2009 into RTGS$ as well, then we can compare like with like going forward.

          On the issue of which company is valuing parastatals. There is a process. First of all, we had a Cabinet decision in April 2018 that would have decided on the roadmap for each parastatal – partial privatisation, liquidation, full privatisation or restructuring. Then Inter - Ministerial Committee is then set up,  that Inter - Ministerial Committee has a technical committee attached to it and then its job is really to give a broad macro roadmap and then move on to appointing a transaction advisor through an open bid process. Expression of interest is done and professional advisors bid and then one is selected. It is a full procurement process.

          For each State owned enterprise transaction, there are different transaction advisors but also there are full processes for the appointment of each transaction advisor for each parastatal. That is the first thing. Once a transaction advisor is appointed, they then run the process working with this Inter - Ministerial Technical Committee. They invite bids for equity participation if that is the target in the first place for whatever level of equity, they express interest and that will then be evaluated by the transaction advisor. They then make their recommendation which is then considered by this technical committee working with SERA and a final bidder is then chosen. There is a whole sequence   and I would be happy at some point to avail the documentation for this process. It is very carefully worked out.

          The Hon. Member then referred specifically to Hwange saying that the company is not going to function and investment in rail will not serve any purpose. I do want to start giving strategic answers to that issue. There are others who are more able than me on how that company is working – what strategy is and how that links to the national railways. I would not want to start pronouncing on it. All I said when I mentioned the company was in the light of the past to say you had Hwange, NRZ and ZISCO Steel and that was a self reinforcing ecosystem where coal and coke would move from Hwange through the rail to ZISCO for production of steel. It was in that context. I would not wish to speculate on the strategy going forward.

          On the agricultural sector and how to improve the tobacco sales. First of all, let us look at the reasons. It has been really the poor rainfall pattern this season which has impacted the tobacco sector and lowered the average prices for tobacco. One thing that we did was to remove the…

HON. T. MLISWA: Tobacco was not affected by the rains, it was the price. Maize was the rain. I am a farmer. It was a good tobacco season. So, you must not lie.

THE HON. SPEAKER: Order Hon. Mliswa. Would you withdraw your statement that the Minister is lying.

HON. T. MLISWA: I withdraw the word lying and replace it with misleading because we had a good tobacco season but it was the prices which were not good.

THE HON. SPEAKER: You need to appreciate that I understand your English.

HON. PROF. M. NCUBE: If I can carry on, looking at the tobacco prices, if you look at the average prices at TSF, it is US$1.66 per kg, Boka is US$1.59 per kg and Premium Tobacco Floors is US$1.55 per kg. The average is about US$1.77 per kg. Certainly the prices are lower because last year the average was US$2.76 per kg. Basically, it is like there is a 38% drop in the average price of tobacco. The Hon. Member who asked the question was right that there are issues in the sector and prices is one of the issues. My explanation as I speak to the experts who are tobacco farmers as well and I note is that the quality of the crop was impacted by the late onset of the season. The quality of the crop has been impacted by the rain pattern and that lowered the price.

What we have been doing in trying to move the price upwards is to speak to some of the tobacco merchants to make sure that they could start offering higher prices and we are having conversations with them. When I visited the tobacco floors a couple of months ago, I was told that the 2% tax was impacting transactions and trading on the floor. I immediately gave an exemption on that. I am delighted that I got a positive response to say that was a good thing to do. In trying to answer some of the things that we have done, those are some of the things that we have done.

On the revenue surplus Mr. Speaker Sir, where the Hon. Member noted that the ordinary people are not feeling the surplus on the ground; we are already making use of the surplus. We are financing the food relief programme in rural areas. We have also begun distributing food in the urban areas.  In the history of the country, we have not been giving out food and social protection programmes in urban areas. We have started doing that and we will continue to improve.

The other thing that we need to consider is whether we should also look into cash transfers by making sure that these cash transfers are conditional on public works programme and also the food relief in the rural areas especially, should be linked to some kind of public works programme.

Also, the food relief in the rural areas especially should be linked to some kind of public works programmes or food for work programmes. We think that this is ideal going forward. Again, the surplus is being used to support the demand for the cyclone and importation of additional food stocks. As I speak, a tender has been issued by GMB for the importation of grain and that tender will expire tomorrow. So, we are making use of the surplus to better the lives of our people. I thank you.

HON. MUSABAYANA: Mr. Speaker, one of my questions that I asked on commodity prices was not answered. I asked a question pertaining to the producer prices that were announced by the Minister of Finance on soya beans, maize and wheat. I asked how the Minister is going to ensure that farmers will be able to retain value because the parallel market is running away and our producers or farmers are very good at competition. If the Minister does not try to synchronise the parallel rate and the producer price, it means our soya beans, maize and wheat would be cheaper than the rest of the region. This implies that we will have people in Zimbabwe exporting the soya beans which is in short supply.

HON. MARKHAM: My one question was touched on but not answered and to make it easier for the Minister, a simple yes or no will suffice. Is the 99-year lease a proved and bankable document so that we can borrow money on a 99-year lease tomorrow? The second one was totally ignored and I asked the question and I was very specific. The $68 million which was paid out to 93 farmers as he told us, I asked a specific question. Does that include the $56 million that was given by the Netherlands in the Blue Book at the year end?  Is it in the public debt? Yes or no?

HON. SIKHALA: Thank you Mr. Speaker. My questions of clarification are going to be very short. Firstly Hon. Minister, when RTGS was introduced as money in our country you announced on the day in question when it was launched that it was trading on the market at 2,5 as per US$. You said our budget was made in US$. Are you going to revise the budget to adjust it to RTGS? Secondly, Hon. Minister, the rhetoric of having lease agreements being bankable, we have lived with it for a long time. Please let us assist you. At law, a lease agreement is not bankable because it bequeaths only personal rights, not real rights. How are you going to give a provision in a lease which bequeaths a personal right not a real right for it to be bankable? Clarify that. Yesterday Hon. Minister, you said  

THE HON. SPEAKER: Order Hon. Sikhala, address the Chair and just cool down.

HON. SIKHALA: Hon. Speaker, yesterday the Minister said that year on year inflation was at 66,8%. After having checked it, I realised that it was at 77,8% . Why did you mislead the House yesterday by not telling the truth but lies that year on year inflation was at 66,8%.

THE HON. SPEAKER: Can you retract the word ‘lies’, but misleading - yes.

HON. SIKHALA: The word ‘lies’ is retracted Hon. Speaker and then why did you mislead the House yesterday that year on year inflation was at 66,8% when it was at 77,8%? I do not know Mr. Speaker Sir, my last submission is that we do not know where the Hon. Minister was found but honestly speaking, we are disappointed as a nation and the best thing for him not to continue misleading this House is for him to resign.

THE HON. SPEAKER: Order Hon. Sikhala, can you withdraw the judgmental statement because it is not part of our procedure – [HON. ZIYAMBI: Mr. Speaker, on a point of clarification. I just want to clarify …] – [HON. MEMBERS: Inaudible interjections.] – No, I am in the Chair. I want him to retract the judgmental statement?

HON. SIKHALA: The judgmental statement is withdrawn Mr. Speaker but my appeal to him is he should consider withdrawing his appointment I think we will all be happy – [HON. MLISWA: He is dealing with corrupt people, it is not his fault.] – [HON. MEMBERS: Inaudible interjections.] –

THE HON. SPEAKER: Order! You are trying to come back through the back door – [Laughter.] [AN HON. MEMBER: Headmaster!] – Can you withdraw the entirety of that statement? 

HON. SIKHALA: Withdrawn Mr. Speaker Sir.

THE HON. MINISTER OF JUSTICE, LEGAL AND PARLIAMENTARY AFFAIRS (HON. ZIYAMBI): I want to clarify on what my learned colleague – [HON. MEMBERS: Inaudible interjections.] –

THE HON. SPEAKER: Hon. Minister, I have ruled – [HON. MEMBERS: Inaudible interjections.] – Order! Please allow the Leader of Government Business to correct the legal aspect.

HON. ZIYAMBI: Thank you Mr. Speaker Sir, what I wanted to correct is, in this country, under the Deeds Registry Act, any lease of 10 years or more is bankable. That is the reason if you go – [HON. SIKHALA: Which section?] –

THE HON. SPEAKER: Can you wait.

HON. ZIYAMBI: The majority of small scale farmers including even commercial farmers in Zimbabwe had leases and they were bankable. What I am stating is a fact at law. He can go and research. A lease in Zimbabwe under Deeds Registry Act, of 10 years and above is bankable – [Inaudible interjections] –

          THE HON. SPEAKER: Order, order!  When I say order you please sit down. There is still room to go and research, we are still there next week.  So, do not lose tempers for nothing.

          HON. NDEBELE: Thank you Mr. Speaker Sir.  I wish to seek clarification in about four areas and these are straightforward. Ghost workers are a creation of mankind, I do not envy the Minister for his position, but I just want to find out from him how he intends to deal with the spectre of ghost workers? When I raised this issue with the previous Minister he said once it walks on it twos has a nose and eyes, it is no longer a ghost saka vazukuru nechikaranga.  How is the Minister intending to deal with vazukuru vamashefu who are hired as ghost workers?

          The Minister has mentioned the ZMDC product that we really need to interrogate, but l want to invite the Minister to explain to this House how some assets that now fall under ZMDC came to be?  The properties of  SMM. The Minister also touched on these in his budget statement for 2019 that these are now assets...

          THE HON. SPEAKER: Order, can you stick to the Ministerial Statement?

          HON. NDEBELE: Yes I am but I do not operate in a vacuum.  He mentioned it today.  So, I wish to invite him to clarify how the SMM assets became ZMDC? Put differently, does it mean that once a company is put under  reconstruction it is automatically a Government entity?

          THE HON. SPEAKER: Order, order! Hon. Member, I listened very carefully to the Hon. Minister’s Statement.  There was no mention of SMM in his Ministerial Statement.  So, can you stick to the Ministerial Statement?

          HON, NDEBELE: Because these assets relates to Hwange.  If it makes members of the ruling party very uncomfortable I can leave it – [Inaudible interjections.] –

          Hon. Mliswa and another Hon. Member having exchanged words after the Hon. Speaker’s ruling.

          THE HON. SPEAKER: Order, order! You are defying my orders Hon. Mliswa and the Hon. Member at the back, I want you to leave the House?  Order, order! Do not be in the line of expulsion from the House? Hon. Ndebele, can you be guided by the Chair and ask questions relating to the Ministerial Statement?

          HON. NDEBELE: Thank you Hon. Speaker, I am always polite.  My last clarification from the Minister of Finance is around tax tables; the question of PAYE.  Tax tables Hon. Minister are literally still in US dollars, though the base currency is in RTGs.  What is the Minister doing to remedy this mischief?  I know the application of Statutory Instrument 33 seeks to arrest this mischief, but at the end of the day taxes remain unfair to those who earn their salaries in US$.  I thank you.

          HON. A. MPOFU: Thank you Mr. Speaker.  The first clarification that I am seeking from the Hon. Minister; he highlighted the progress on debt reduction, I would like him to clarify the impact the  2% tax may be having on our ability to service the debt.  The second clarification...

          THE HON. SPEAKER: Which debt?

          HON. A. MPOFU: The national debt.

          THE HON. SPEAKER: Domestic or external?

          HON. A. MPOFU: Domestic debt.  Secondly, in the context of his statement may the Hon. Minister clarify what may give him optimism that prices may stabilise over the next few months?  Lastly, he stated that obviously inspite the challenges, there have some positive developments in the economy.  May the Hon. Minister clarify on the state of jobs growth in the context of the statement that he made?  Thank you Mr. Speaker Sir.

          HON. ZENGEYA: Thank you Mr. Speaker Sir.  My question to the Hon. Minister is since water is a fundamental right enshrined in the Constitution, I would want to know what mechanisms have they put in place to ensure that the local authorities get foreign currency to buy water treatment chemicals?  I thank you.

          THE HON. SPEAKER: Order, order, how does this arise from the Ministerial Statement?  It is a general question.  I want questions of clarification.

          HON. GABBUZA: Thank you Mr. Speaker.  My two questions to the Minister, the first one what the Minister pronounced he is going to do for the State Enterprise has been tried before and it has never worked.  This time around, what mechanism is he putting in place to ensure that it will be successful?  The second question is, industries are not capacitated and I did not hear in his Ministerial Statement on how he intends to capacitate industry so that we reduce the import bill that he is crying about so that we start producing locally.

HON. CHINHAMO:  Thank you Mr. Speaker Sir.  The Hon. Minister talked about the issue of preparedness for farmers to do the winter crop.  May the Hon. Minister explain how farmers can deliver sufficient winter crop in the prevailing circumstances of insufficient fuel, electricity – we are now having load shading and the low water levels in the dams.  I thank you.

HON. TUNGAMIRAI:  Thank you Mr. Speaker Sir.  My name is Tawanda Tungamirai, Zvimba East, son of a war veteran – [laughter] –

THE HON. SPEAKER:  Order! Order!  The Hon. Minister did not speak about sons of war veterans – [laughter] – Straight to the point.

HON. TUNGAMIRAI:  I withdraw Mr. Speaker.  I am just seeking a point of clarity.  The tobacco industry was spoken about but the Minister did not really clarify on the 50% retention.  He spoke about the tobacco prices that are down but we want to seek clarity.   How does the 50% retention work?  Does it come into your account after three days, does it come in immediately as your sales come in because many tobacco farmers are not understanding how the 50% retention is working, we want clarity.

HON. C. MOYO:  Thank you Mr. Speaker.  My first question is, is RTGs not fuelling the serious fluctuations in the exchange rate, because I realise that according to Huawei rate 2014, there are characteristics of currency and the RTGs does not meet those characteristics.  The second question is, was there no other name to call our currency rather than to call it RTGs because RTGs is globally known as real time gross settlement.  Can you clarify why we are calling our currency RTGS?  Yesterday, Mr. Speaker, the Hon. Minister spoke about alleviating poverty, how can he say he is alleviating poverty when kombi fares are now $1.50 to $2.00 and bread price is now $3.25 to $4 and some are saying $5.  Thank you Mr. Speaker. 

*HON. MATAMBANADZO:  Thank you Mr Speaker Sir for affording me opportunity to ask my question so about the Ministerial Statement.   I understand what this midterm budget has done for the nation.   My question pertains to inflation.    I recall Honourable Minister the last time you addressed this august House, you spoke about the exchange rate that was prevailing at that particular time and about the money that was printed, $200 to $300 million.  You spoke about the new currency; the RTGs dollar against the US dollar was determined by the market.  You mentioned that the amount of money that was circulating in different banking platforms was around $9.2 billion, if I am not mistaken. When comparing this figure with around 500 million of liquid cash that was printed, initially $200 million was printed and $300 million dollars was eventually printed, which adds up to $500 million.

My last question pertains to the ease of doing business approach which you alluded to in your speech.  Hon. Minister, investors need access to their US dollar.  As you are aware, the USD is only available in the streets not in the conventional banks.    Foreign investors might not be comfortable going to the streets to obtain the US dollar because they have a reputation to protect and they abide by the laws of the land.  As Hon. Members, we are afraid of going to the streets to get the US dollars.  Hon Minister, what measures have you put in place to address the issue?

HON. TSUNGA:  Mine is relating to devolution.  The Minister has talked about $42 million having been disbursed for devolution.  How will the funds be administered in the absence of an appropriately constituted implementation structure?  My fear is that money may be abused.  Thank you very much.

THE HON. SPEAKER:  As last, we will meet at the Mid-Year Term Statement.

THE MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. PROF. M. NCUBE):  Mr. Speaker Sir, I thank the Hon. Members for the questions for clarification.  Let me start...

THE HON. SPEAKER:  Order.  Just a minute Hon. Minister.  The Hon. Member just hiding behind there, Mushoriwa is it?  Yeah you are not Prophet Elijah.  Please hold on and leave things that belong to the Executive and let us deal with our own here in Parliament. 

HON. MUSHORIWA:  I am sorry Mr. Speaker Sir.  I was just saying, after Hon. Gumbo left ...

*THE HON. SPEAKER:  Kwete, kwete.

THE MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. PROF. M. NCUBE):  Mr. Speaker Sir, once again, I thank you for allowing me to respond to the questions and queries and requests for clarification.  I thank the Hon. Members for their quiz and questions.  The first one I want to deal with is how we are going to ensure that farmers are able to retain value for the producer prices they are receiving in the face of an exchange rate that may be running away from them including the parallel rate.   Of course, this pertains to us dealing with the parallel rate making sure that it converges with the interbank rate.  We are doing everything we can making sure that the interbank market can begin to work better and we supply the market with additional foreign currency so that convergence could occur.  Of course, in terms of the producer price itself, we continue to review it upwards to make sure that action as well as the action we are taking on the exchange rate market combined can then impact the value for the farmers positively.  In terms of the 99 year leases, are they bankable or not, in a yes or no answer, my answer is yes. On the issue of the $68 million including $36 million, the answer is yes. On the question from Hon. Sikhala about whether I will give the budget in RTGs in the Mid-Term Statement, the answer is yes. I think that was his question. Again, are the 99 year leases bankable, the answer is yes. The question about inflation, the figure I quoted yesterday was the March figure and the April figure, I would say 77% owed was only released this morning and it is April figure. So, there is no misleading of the House at all.

          From Hon. Ndebele, the first question on how we are dealing with the issue of ghost workers – we are. In the budget, I announced that we were going to adopt a biometric system where we will request all the bonafide Government workers to re-register through this system to be bonafide employees of Government. The process is under way and we will be rolling out this system soon and hopefully that we will give it a lasting blow in dealing with this perennial issue.

          On the issue of ZMDC companies, it is certainly true as you ruled Mr. Speaker, that I did not refer to SMM in my presentation. What I referred to was six companies under ZMDC that were withdrawn from the partial privatisation and restructuring process because we had not done a full analysis of the quality, quantity or value of the resource under each of those six companies. So, we were concerned as Government that by selling them off too quickly, giving up equity so quickly would lose value rather than maximise value for the ultimate shareholders which is the tax payers and people of Zimbabwe.

          On his question regarding the tax tables, yes indeed initially there was some confusion with these tables. These are being revised to make sure that the right tables are used to implement the PAYE under the RTGs$ regime. On VAT, there is no confusion in terms of the different tables because again in terms of the budget we can accept VAT payment in US$ or foreign currency but also in RTGs$, either currency will work. So, different tables may apply but we will make sure that this PAYE issue is dealt with to make sure that the confusion is removed.

          On the impact of the 2% tax in our ability to service debt, the answer is yes. It has given us room in the budget to be able to service our debt. We have started paying off our domestic debt. That is why there was a decline in the domestic debt. I am also happy to report to the House that as of two weeks ago, we have started making token payments on our foreign debt to the European Investment Bank, World Bank and to the African Development Bank. These are token payments to begin to service those arrears that are causing us trouble as we try to finance our arrears clearance road map.

          There was a comment about price stabilization, whether in the next few months we will see price stabilisation, inflation being stable and so forth going forward. A lot relies on how quickly we can stabilise movements in the exchange rate market. We know that this exchange rate market has been driving the inflation pricing models for companies and I am on record to say that I do not think even that is appropriate to link domestic price increases directly one on one correspondence to the exchange rate. Surely, there ought to be better pricing models of which the exchange rate is only a fraction of the ultimate price in terms of the price build up.

          On the job figures, we are currently undertaking an exercise to work out our growth in the job market. I will be able to report certainly in the Mid-Term Interim Statement and budget progress on these figures.

There was a question pertaining to water and water treatment chemicals, whether we are prioritising them in the forex allocation or some other mechanisms. Of course, I did not cover this in my statement but indeed it is an important question. We do prioritise issues such as these. It is important and we need clean water and without the water then there will be trouble in our cities.

          In terms of State Enterprise Reform, the Hon. Member alluded to the fact that this kind of reforms has never worked, but I do not think the status quo prior to reform also worked.  So, we must try something else and it is our view that there are challenges in governance and it shows through the bolts that do not function in the corruption, in the CEOs, some of whom have been in and out of jail. That alone is a signal that something is wrong and we must do something about it, and that is what we are doing.

          There are parastatals for instance the telecommunication sector, Net One, Tel One where we know that they are short of new technology and short of serious capital and it is important to bring in suitors who can provide technology and capital. That is how it works. If you look at their competitor in the market such as Econet, they have got capital and technology and a strong management as well because with capital technology then you can attract and retain the right people. We need to do the same with Government companies. I am certain that if it is done right, the country’s State Enterprise Reform will go a long way in strengthening the service delivery or dividend delivery for Government from these parastatals.

          The same Member alluded to the fact that I did not say a lot about production and supporting the industry. I mentioned this yesterday to say that we continue to source more foreign currency for industry. One of the facilities that we are working on is a facility where we will target exporters who also import from a specific country, making sure we can put in place a trade finance facility where they can source raw material and equipment, produce for local consumption, export and then we escrow the export revenues to service the loans and the rest is remitted back to Zimbabwe. So, we are working on these terms of capacitating the industry and we know the issue is foreign currency. That is what we are really dealing with as far as industry is concerned.

          Another Hon. Member asked an important question about the constraints that farmers are facing in terms of winter cropping in terms of fuel shortages, power and other shortages. We are doing everything we can to make sure that there is delivery of fuel to farmers and also, they have access to electricity, but also other inputs like fertilizer, seed and so forth. We have two successful programmes, the Presidential Input Scheme for subsistence farming basically, own food consumption and also Command Agriculture for more commercial food production. Both of those programmes really try to deal with the issue of inputs supply to the agricultural sector and we are continuing to do that.

          One thing we will need to do going forward is to make sure that in terms of allocating foreign currency, we prioritise the issues around agro-chemicals and fertilizers so that we can plan early enough in terms of those kind of inputs into the sector. In terms of the tobacco, the 50% foreign currency retention, can it be accessed immediately – this is really transmitted into the account of the farmer and they ought to be able to access that immediately. If there are any issues, we will certainly look into them to make sure that this is ironed out. We would want our tobacco farmers to be happy with the system and feel that they have been sufficiently incentivised to go back onto the land and produce tobacco next year.

          There was a question about whether the RTGs itself is fueling the exchange rate. The RTGs balances are part of the exchange rate mechanism in the first place. For a start, the RTGs$ is our domestic unit of account but secondly, you have balances in the banking system of the order of $9 billion which was mentioned by another speaker in RTGs$, but if you look at the real effective RTGs$ in circulation that would impact exchange rate movements, it is less than a billion RTGs dollars. That is what is really freely floating that could impact the exchange rate.  It is not the full 9 billion, the rest is stuck in credit to the private sector or in saving bonds or other forms of illiquid assets.  The real liquid assets that can impact the exchange rate is less than a billion dollars.

In a thin market like a parallel market for example, any dollar above zero would really impact the movement on the market.  If the market is thin, small changes in liquidity will move prices easily.  It is not even so much the quantum but the thinness of the market.  The Member also talked about poverty levels rising because of increase in transportation, bread and other such things; that is why I talked about the need to do more under social protection measures.  We are beginning to do that, we have a thriving programme – rather an effective programme in the rural areas.  We have always done that in tough times and we are beginning to move into the urban areas of Bulawayo and Harare.  We are perfecting the system but we still have to do more in terms of social protection programmes in the urban areas as well.

Our international partners have come on board and are running successful social protection programmes.  The United Nations has put out a call of about US$290 million for social protection for Zimbabwe.  So we see more resources coming into the country for the cyclone specifically because there is some overlap.  Last week we received US$75 million from the World Bank and we are expecting to receive more from the African Development Bank among other stakeholders and other countries.

Then a question from Hon. Matambanadzo - I hope I got the name right as I was writing quickly.  He spoke with respect to inflation.  He indicated that RTGs balances in order of 9.2 billion dollars and then bond note balances – 500 million dollars; he asked what we are doing to make sure that RTGs balances do not grow and become a problem in future that could fuel inflation.  First of all, what we did is that we analysed the cause of the growth in money supply in the first place and we discovered that not too much to our surprise that it was the deficit.  The first order of business was to pluck the fiscal deficit and institute fiscal discipline – now we are recording surpluses.  Going forward, we will make sure that even if there is a deficit, it stays low.  Our projection for the year is that our deficit will be below 5% of GDP.  

The Government deficits were being monitised – basically being changed into usable money and thus increasing the growth of money supply.  Remember, in my first statement I did talk about money supply growth of the order of 40%. This is way back in October and even now under these kind  of inflation levels, year on year money supply growth is 25% and month and month, actually the last figure in January; the growth in supply was actually negative rather than positive.  So, fiscal discipline leading to lower growth in money supply goes a long way to deal with exchange rate stability and also inflation control in the long run.

Then on the question of what we are doing about foreign investors who are trying to take out their dividends and profits within the country as foreign investors – of course, you are allowed to remit 100%.  The only reason why they cannot is because of the shortage of foreign currency but we continue to allocate the foreign currency to them from their allocation to make sure that they can remit little by little. Some of the investors have been happy to buy into savings bonds that will pay them off in five or ten years.  They have re-invested their profits and dividends in domestic saving bonds that are highly yielding and therefore, are comfortable with this kind of investments that will be paid out in future.

Finally, Mr. Speaker Sir, a question on devolution – how can we expect any progress without proper implementation structures yet?  This is the first time that we are devolving in this way in line with the Constitution.  There might still be a lot of work in terms of fine tuning the systems.  What we have done as Treasury is to transfer these resources to Local Government.  Local Government has local Government structures but of course, we understand that what needs to be done is – those right down in the district should come up with projects especially projects that pertain to infrastructure, create jobs and things like that - tangible things and not just recurrent expenditure.  That takes time.  Once these projects meet the various criteria, they can be funded through these resources.  That is being fine-tuned through the Ministry of Local Government.  We will get there Mr. Speaker Sir.  I thank you and I thank the Hon. Members for listening to my responses.

HON. C. MOYO: The Hon. Minister did not answer my question with regards to RTGs being known globally as Real Time Gross – why did he call our currency RTGs dollar?

HON. PROF. M. NCUBE:  I thought I had omitted an interesting question. Thank you for reminding me Hon. Member.  Well, we did mull over a few names as we were thinking about what name we would give to this unit of account and we thought of calling it RTGs dollar would work better because citizens are already used to using RTGs as electronic currency.  They are using it and it is a well known name.  Almost everyone knows about it.  We did not want to come up with a completely new name which would then confuse the public.  We thought RTGs dollar was already well known and perhaps would work. 



THE MINISTER OF JUSTICE, LEGAL AND PARLIAMENTARY AFFAIRS (HON. ZIYAMBI):  Mr. Speaker Sir, I seek leave of the House to move that the provisions of Standing Order Number 51 regarding the automatic adjournment of the House at Five Minutes to Seven o’clock p.m. on sitting days other than Friday and at Twenty Five minutes to One o’clock on a Friday be suspended for the series of sittings in respect of the Companies and Other Entities Bill [H. B. 8, 2018] and the Tripartite Negotiating Forum Bill [H. B. 5, 2018].  I thank you.

Motion put and agreed to.



THE MINISTER OF JUSTICE, LEGAL AND PARLIAMENTARY AFFAIRS (HON. ZIYAMBI):  Mr. Speaker Sir, I move that the provisions of Standing Order Number 51 regarding the automatic adjournment of the House at Five Minutes to Seven o’clock p.m. on sitting days other than Friday and at Twenty Five minutes to One o’clock on a Friday be suspended for the series of sittings in respect of the Companies and Other Entities Bill [H. B. 8, 2018] and the Tripartite Negotiating Forum Bill [H. B. 5, 2018]. 

Motion put and agreed to.

HON. SIKHALA: On a point of order Mr. Speaker Sir.  The House does not have a quorum and the appeal by the Minister cannot sail through.  This House does not have a quorum.  Let us follow the procedures.

          [Bells rung]

          Some Hon. Members having walked out of the House.

          THE HON. SPEAKER: Hon. Sikhala, I thought you were hungry for debate. Call your colleagues back.

Order, Hon. T. Khumalo, you have demonstrated good example but the head of train without a trailer or trailers cannot move, you tried but can we send a word that in the national interest and respecting the tax payers’ money, we need to do business as much as we can so that we cover up in the legislative agenda.  I would urge you as the National Chairman of the main opposition party to ensure that next week when we come back, we have to cover what should have been covered today plus much more which will be presented to us by the Leader of Government business so that we are within the time lines of finishing the legislative agenda during this session.  It is very important.

          Also, I had instructed that no coupons be given, there is an officer, for some strange reasons, who has been issuing out coupons.  Our instruction was that we issue coupons after the adjournment of the House.  I am going to follow that administratively so that we have to satisfy the expectation of the nation.

          Notice having been taken that there being present fewer than 70 members, the bells were rung for Seven Minutes and a Quorum still not being present, THE HON. SPEAKER adjourned the House without question put at Three Minutes to Five O’clock p.m. pursuant to the provisions of Standing Order Number 56. 

          NOTE: The following members were present when the House adjourned: Hon. Chanda G; Hon. Chidakwa P; Hon. Chikukwa M. R; Hon. Dzuma S; Hon. Gwanongodza E; Hon. Kachepa N; Hon. Kashambe M. T; Hon. Kashiri C; Hon. Khumalo M; Hon. Khumalo S. S; Hon. Khumalo T; Hon. Kwaramba G; Hon. Maboyi R. M; Hon. Machingura R; Hon. Madhuku J; Hon. Madiro M; Hon. Madziva S; Hon. Makoni R. R; Hon. Maronge C; Hon. Masango C. P; Hon. Matambanadzo M; Hon. Mavenyengwa R; Hon. Mavetera T. A; Hon. Mguni O; Hon. Mguni S. K; Hon. Mkandla M; Hon. Mliswa M. T; Hon. Moyo Priscilla; Hon. Mpofu A; Hon. Mudarikwa S; Hon. Munetsi J; Hon. Murire J; Hon. Musabayana D; Hon. Musiyiwa R; Hon. Mutambisi C; Hon. Mutomba W; Hon. Ncube E; Hon. Ncube M; Hon. Ndiweni D; Hon. Ndlovu N; Hon. Nguluvhe A: Hon. Nkani A; Hon. Nkomo M; Hon. Nyabote R; Hon. Paradza K; Hon. Raidza M; Hon. Rungani A; Hon. Samukange J. T; Hon. Shamu W. K; Hon. Shava J; Hon. Shirichena E; Hon. Singo L; Hon. Sithole Josiah; Hon. Sithole S; Hon. Tsuura N; Hon. Tungamirai T; Hon. Ziyambi Z;






National Assembly Hansard NATIONAL ASSEMBLY HANSARD 16 MAY 2019 VOL 45 NO 51