You are here:Home>National Assembly Hansard>Vol. 37>NATIONAL ASSEMBLY HANSARD - 31 MAY 2011 VOL. 37 NO. 32


Tuesday, 31st May, 2011

The House of Assembly met at a Quarter-past Two o'clock p.m.






THE DEPUTY SPEAKER: I have to remind hon. members to switch off their cellphones before business commences as the cellphones may interfere with the digital audio equipment.



THE MINISTER OF DEFENCE: I move the motion standing in my name:-

THAT WHEREAS Subsection (1) of section 111B of the Constitution of Zimbabwe provides that any convention, treaty or agreement acceded to conclude or executed by or under authority of the President with one or more ForeignStates or Governments, or international organisations shall be subject to approval by Parliament;

AND WHEREAS the Concessional Loan Agreement between the Government of Zimbabwe and the Export-Import Bank of China relating to the construction of the National Defence College of Zimbabwe being implemented by the Ministry of Defence was concluded on the 21st of March 2011 in Harare, Zimbabwe;

AND WHEREAS the entry into force of the aforesaid Concessional Loan Agreement for the construction of the National Defence College is conditional upon ratification by the parties in accordance with their respective constitutional procedures;

NOW THEREFORE, in terms of Sub-section (1) of section 111B of the Constitution, this House resolves that the aforesaid Agreement be and is hereby approved for ratification.

MR. GONESE: Thank you Madam Speaker. I rise on a point of order. I want to seek clarification from the member that, last time we sat, no motion was appearing. The hon. minister did not give notice that he was going to move such a motion. In terms of procedures of this House, notice must be given. I believe we must proceed in accordance with the Standing Orders of this House and not have a situation where orders appear on the Order Paper in the manner that this particular issue has arisen.

THE DEPUTY SPEAKER: Hon. Chief Whip, can you repeat your concern because it was not very clear.

MR. GONESE: The point that I am making is that this notice of motion has suddenly appeared on the Order Paper. The last time we sat in this august House we adjourned and no notice was given that this motion was going to be presented today. I believe that we are guided by the Standing Orders of this House whereby even ministers are required to give notice of any motions that they intend to bring before this august House and where there are matters of urgency, the minister has to seek the leave of this House before the matter can be inserted on the Order Paper. In respect of this particular motion, it appears that it has been smuggled on to the Order Paper without following the appropriate procedures. That is the point of order I am raising that this matter has not been properly placed before this House.

THE DEPUTY SPEAKER: The notice is correctly on the Order Paper in terms of Standing Order 194(2) which reads "the government business to be transacted on the day on which the House so meets shall not withstanding the provisions of Standing Order numbers 32 and 38 and subject to the publication of notice thereof on the Order Paper to be circulated on or before the day on which the House so meets". Minister can you please proceed and say out your motion.

THE MINISTER OF DEFENCE: Thank you Madam Speaker. I wish to appreciate the observation made by Hon. Gonese which has led to having the Chair explain the procedures which are alternative to what he has said which is also true except that under certain circumstances, what the Chair has said prevails.

Madam Speaker, it is necessary in terms of our Constitution that this august House approves the loan facilitation which the government of Zimbabwe negotiated with the Export-Import Bank of China. The imperative to establish the NationalDefenceCollege was a consequence of obtaining a global security environment. Such a national institution is envisaged to:

(a) Serve the national coordination platform, to enhance constructive and collective engagements in crafting national defence and security policy of our country.

(b) Provides senior military officers and their civilian counterparts with intellectual tools to address complex defence and national security challenges.

Therefore, the NationalDefenceCollege shall be the national specialised professional military and civilian learning institution to provide high quality education, training and research on national security issues.

Madam Speaker, the purpose of this presentation is to acquaint hon. members with the roles of the NationalDefenceCollege which it is expected to perform in contributing to national security in the context of current global security challenges. We have distributed the actual loan agreement to every hon. member, this is just a statement that I am making.

I wish to familiarise hon. members with the location of the college, development work presently underway and its funding. I wish to acquaint hon. members with the perceived roll-out of intended academic training programmes.

On 5 September 2008, the Head of State and Government and Commander in Chief of the Zimbabwe Defence Forces authorised the establishment of the institution following recommendations by the Ministry of Defence as the line ministry. As a follow up to this landmark development, the Ministry of Defence and Defence Forces Headquarters acquired 60 hectares of land along the

Mazoe Road

opposite St LuciaPark on our way to Mashonaland Central for the construction of a purpose-built NationalDefenceCollege in October 2008. As you may be aware, the Head of State and Government and Commander in Chief of the Zimbabwe Defence Forces laid the foundation stone to initiate the construction of the college on 25th August 2010. The construction is now underway and it is anticipated that the project will be complete in less than three years.

This institution will serve as the premier defence education centre in Zimbabwe imparting specialised training in the field of national security and defence to selected military and civilian officers from various segments of the society. This university will also act as a think tank for providing research on military, defence and national security for the National Security Council, Ministry of Defence and other government organisations. It will also conduct seminars and workshops to co-ordinate national security issues. It will publish commissioned research as done in most Commonwealth countries. It will also enhance and widen participants' understanding of the role of Zimbabwe's foreign policy in promoting national interests and security as well as providing an understanding of the role played by the military in national security. It enhances the participants' understanding of the process of formulating national security policy and maintaining a data and information bank for use by individuals engaged in research and development of national security policy. It will prepare senior military officers, senior public officials and senior officials from the private sector and their equivalent from friendly countries for higher responsibilities in their respective organisations by developing their analytical powers, knowledge of defence and international security and strategic issues through high professional training and exchange programmes.

It will enroll from the rank of Colonel or group Captain in terms of the Air Force or above or their equivalent rank in other State organisations. It will also take on board, selected SADC and other countries who will be invited to subscribe to each course through the National Defence College Control Board according to criteria that will be specified in each invitation. The inclusion of civilians and defence and security officers from other countries is designed to ensure as much interaction and cross fertilisation of ideas of people from as varied backgrounds as possible.

Madam Speaker, the general rule governing subscription quotas for each course will be determined by the National Defence College Control Board from time to time depending on financial constraints and other considerations. Every effort will be made to ensure equitable gender representation on each course. Evidence from similar education and training institutions elsewhere in the international system suggest that appointments into notable key vacancies in the civil service are directly or indirectly dependent on the compulsory attendance of the National Defence course. Such international institutions include the KenyanNationalDefenceCollege at Karen where the appointment by government of International Trade Attaches, Secretaries and Deputy Secretaries within ministries, is strictly dependent on the successful completion of the twelve month 'ndc' at Karen. There is a large number of graduates from such institutions within the Zimbabwe Defence Forces who can testify to the importance of the critical role National Defence Colleges play in the National Manpower Development Agenda.

The governance arrangements of the NationalDefenceCollege will be as follows:

The National Defence College Control Board (NDCCB) which shall among other things develop the curriculum, general courses, research and development work; the annual budget proposals of the NDC; the investment plans of the NDC.

There also shall be the National Defence College Council. The National Defence College Council will be providing curriculum policy guidance to all courses at the NDC, in particular: the National Defence Course syllabus and its implementation; other studies including the general courses, research and development work; the NDC Final Project Paper, the optional MSc (International Studies) dissertation and research proposals. It will also provide as initially it will be affiliated to the University of Zimbabwe for the Master of Science Degree in International Strategic Studies.

Madam Speaker, the National Defence College will be expected to run an independent budget allocated to it by the National Treasury through a separate sub-vote under the Vote for the Minister of Defence (MOD). The Commandant NDC shall be the sub-accounting officer for the NDC Budget whose major drivers shall comprise:-

a. purchase of capital equipment and stores

b. Allowances (travel, accommodation, tuition fees and allowances for guest speakers)

c. Establishment of library facilities

d. Maintenance works and services such as telecommunications

e. Utilities such as water, electricity

f. Physical infrastructure construction.

13. The operationalisation of the NDC is premised on the injection of an independent budget.

Accreditation Finally Madam Speaker, the National Defence will be affiliated to the University of Zimbabwe (UZ) through the Political and Administrative Studies (POLAD) Department for the optional Master of Science International Strategic Studies Programme at least in the initial phase of the launch of the College and its intended programmes. The accreditation of the NationalDefenceCollege to the University of Zimbabwe through the affiliate status will lay a solid foundation for the subsequent development of the institution to a full fledged National Defence and Security University (NDSU), tentatively by 2016 as enunciated by the President, Head of State and Government, and Commander-in-Chief of the Zimbabwe Defence Forces.

Interim Funding Madam Speaker, it is my singular honour to submit that to establish this critical national institution as soon as possible the Government of Zimbabwe through the Ministry of Finance, secured a loan amounting to US$98 000 000.00 (United States Ninety Eight Million Dollars) from the People's Republic of China as provided in the Loan Agreement which has been circulated.

Conclusion It is now my humble submission, Madam Speaker, to propose the adoption of the loan for the NDC by this august House. As Honourable members have already realised, is it indisputable that the NationalDefenceCollege is an ideal platform to address complex issues and challenges presented by the global security environment dominated by real politik. By definition therefore, the NDC is intended to be the highest specialised professional military and civilian learning institution to provide high quality education and training on national and international policy, defence and security issues in Zimbabwe. More specifically the theme dominating the preoccupation of the NationalDefenceCollege is the issue of national security amply defined as "defence against challenges to a nation's vital interests." Already, the construction is almost 50% at the hospitality of the contractor who started using his own finance.

Madam Speaker, I now therefore, in terms of sub-section (i) of Section 111 (b) of the Constitution, this House to resolve that the aforesaid Agreement be and is hereby approved for ratification. I thank you.

MR. CHIKWINYA: Thank you Madam Speaker for allowing me this opportunity to present my sentiments with regards the motion before us by the Minister of Defence.

Madam Speaker, the intention of the motion being presented by the Minister to this House is being said to resolve and ratify the Loan Agreement. May I please draw the attention of this House to the fact that we must make it a past habit when this Parliament was used to conduct such ratifications on behalf of the people whom we represent. This Agreement only got to our pigeonholes, for those who were in Harare, as early as Friday and for those who stay out of Harare - this afternoon. Now to go through this Agreement, I am sure this is what the Hon. member who spoke before us, the Chief Whip Hon. Gonese was saying to defer this motion and go and read and understand it instead of ratifying something which you would not have understood.

First and foremost, the Minister of Defence, as he was outlining the motion this afternoon, he purely put across the justifications of the project, something which I want to believe was done at the time of convincing Cabinet and the Head of State. We cannot append ourselves to a project which we do not understand as Members of Parliament, a project whose intentions have not been made known to Members of Parliament. I therefore, seek that this House resolves to defer this Agreement until we have all had opportunity to go through it and see what is good and what is bad about this Agreement.

I do not doubt that this Parliament supports the Ministry of Defence, I do not doubt that this Parliament supports the national security of this country, but we cannot commit ourselves and expose ourselves to a Chinese deal which we have not been acquainted to. It also boggles our minds Madam Speaker, that as we debate this Agreement, a top hierarchy of the Chinese Defence Forces yesterday currently met the Head of State and what much coincident does it bring to us that top of a hierarchy involved in this deal and Parliament has been brought forward to sit and consider this Agreement - this is the only new item on the Order Paper. What a coincident where Parliament is being forced or coerced to push through or ratify something which we have not been made to understand. Madam Speaker, I therefore ask Members of Parliament that we defer this very good motion, we will go and discuss it further and then we will come to assent it or ratify something which we can all go back to the people of Zimbabwe to say that it is good for them.

+MR. F.M. SIBANDA: Thank you Madam Speaker - [HON. MEMBERS: Inaudible interjections] -

THE DEPUTY SPEAKER: Order, order hon. member. I will soon send you out of this august House.

+MR. F.M. SIBANDA: Thank you Madam Speaker for the opportunity that has been given to me to speak on the motion by Hon. Minister of Defence, Hon. Mnangagwa. Our soldiers need training so that they do not take sides. As you have seen, they are living on the history of the country and they still support political parties. I have seen that this college can help them so well that our soldiers can become professionals. I say this because last week, one of the leaders of the soldiers, Brigadier Nyikayaramba showed it very clear that soldiers of this country are not educated and they are still engaged in guerrilla war-fare issues, so they should be educated. Soldiers of this country need to be educated to defend this country and not political parties that came up because Zimbabwe will not come to an end. Yes, we will die but the country will remain, so military defense are going to learn more about strategic studies. This helps them not to support political parties but to support the country. I therefore realise that we are not given the opportunity to ratify this agreement. We therefore want to ask for time to go and read and understand it, then when we come back in good faith, we will be able to agree not to be forced to rubber stamp something we do not know.

Our policemen are not supposed to be partisan and not beat up people, they should not do slogans and not engage in anything that is done by someone who is not disciplined. When the government has changed all soldiers are going to be chased out of the country. Therefore we need to go back and read and understand the Agreement.

MR. BHASIKITI: Thank you Madam Speaker. I want to support the motion that has been put forward by the minister. To any sound reasoning human being, it does not take a minute to tell and explain that here we have a good plate of a meal before us. To wait and study as one hon. member was asserting, that he wants about a week to study about the meal, is being unreasonable. Madam Speaker, what I want to explain to the members is that as the legislative arm, we accept the roles and responsibilities and the separation of duties we have before us. The matter which has been presented here was thoroughly looked at and I had it in my pigeon hole three days ago and I was able to study it. There is nothing which I think can be added or subtracted from that Agreement or loan agreement. I was also happy to see that the Minister of Finance, Hon. Biti has already assented his signature to it, indicating the importance of the business to be conducted. The college has already been supported by Hon. Sibanda, that it is very important that we have this college and that it is strategic. It is not a partisan college, it is a college for National Strategic Studies for the nation of Zimbabwe. So I do not see where we can have problems in strengthening our own institutions.

What some of our members are used to is that when a Motion or Bill is presented before the House by a minister who comes from the other party, they do not see the sense in that Bill. They see the party which the minister belongs to, it should not happen in this august House. Madam Speaker, what I am just saying is that when we approach these national issues, we should not be partisan. We should not look at who is the minister presenting it because it is on behalf of our nation. The college is for the security and the strategic planning of our nation, the college is for the security and strategic equipment of our nation. I could see from the onset that the debate was derailed by a member who just thought that it should not happen and we should not have ministerial motions debated as they should. You can see clearly that this is a misplaced notion and the debate is not about the merit of it but where it is coming from. It is pathetic that we can waste time arguing over that context. I would like to emphasize the importance of the DefenceCollege for our nation. We are a nation which is being looked at by many other African countries to provide most of these strategic services. I am happy that next month our nation will be taking lead in chairing the organ of politics and defence within the African Union Security Council, which is an indication that our nation has to live to the expectations of other African countries that we are strategically placed and we have the personnel to guide and assist our friends and colleagues. The coming in of this loan agreement should not be delayed by any other political posturing.

What is fundamental is that issues of security are very critical and those who are seized with the issues and know them better, know that it is time to act, to build and to speed up processes with security issues. Some of the members who want the delay of the process have no idea what the security entails. If our country is attacked, you do not need to sit down and say let us study and see the reasons for the conflict. Those who are faced with the issues will just need the support to carry out their mandate and in this case, the issue before the House is very clear. It is a DefenceCollege to train and equip our security forces from senior levels and I do not see why we can delay such a programme. Those who have not studied it, take confidence in us who have done it on your behalf. The issue before the House is very clear, it is not a partisan issue. What I want to appeal from my other hon colleagues is that let us put our heads together and see the sense and the urgency which is contained in the matter before us and give it the necessary support. Madam Speaker, I move that this motion gets the support of the House and we want to endorse it with the full support that it deserves.

MS. MANGAMI: I rise to add my voice as well on the motion before us. The NationalDefenceCollege is just like any other college in the country, it is tertiary education and it is a noble idea to train to advanced level as a Zimbabwean national. It is important that we further our security and get enough protection so that whenever you are in the country, you know that there are qualified personnel who are looking after us. I further suggest that the duration that has been given to complete the college may be reduced so that we get enough services whilst there is time. I also want to look at the issue of tertiary education and party politics. Everybody is free to enroll, a Member of Parliament, anyone, any party. The enrolment, I have been told, if you want to join the army, you can do that. It is even understood that the SADC region can also enroll. We can as well get money since training can be done. It is important that we support this motion since the project is already under construction. It is important that we complete the project. The DefenceCollege is just like any other tertiary institution. Furthermore, most of us are used to 1 month or 6 months training which is not effective. This college will further the knowledge of our personnel which is so important. Lastly, I move that this motion get the attention that it requires so that continuation of the building of this college is done. I thank you.

MR. H. MUDZURI: I wish to add my voice to the motion which is underway. First of all, I would like to restate that this college, though it may seem to be important, it is not priority at the present moment considering where we are coming from. Our priorities should have been focused on economic and political stability. Coming to the army, our priority should have focused on the provisions that we give them, the uniforms, their salaries, their conditions of service.

Madam Speaker, it is absurd that a hungry person, a person who is starving is being given a suit, it is actually irrelevant. We need to understand where we are, where we are coming from so that we put our priorities correct. If we are to compare the benefits now and the burden involved in building this college, in making the country have the burden of that debt - let us remember that this debt will take years to repay. Let us remember that this debt will be inherited by our children. So we are saying, is it worth it for our children to inherit such a debt at this point in time. I think that is not correct.

Madam Speaker, from the look of things, the way this agreement has been put to Parliament, it was meant to be fast tracked. It was a surprise so that no meaningful debate and no meaningful insight and thinking is given to this protocol. Then we are questioning, why, why and why? We have already heard that the project is underway, we are saying, where did the government get the money to build the project in the first place? Parliament was not made aware of such a project, it is only now probably when you need a lot of money from the Chinese that you are calling Parliament to assist which I think - Parliament at the present moment is not ready to do that. We now come to the issue of this college, we are saying, we borrowed money as a country to build Kariba dam. The nation is benefiting, we are having hydro-electricity, fish and tourists. Instead of borrowing money to build a defence college, why can we not borrow 675 Million Yen to finish Tokwe-Mkhorsi, was it not a better choice? From what the minister has said, the curriculum, that can still be done at the UZ. I know there is a course called Diploma in War and Strategic Studies. They can do those courses there whilst we look at other priorities. Why, why are we just targeting the DefenceCollege?

Madam Speaker, our experience is causing us to be suspicious and think otherwise. We are saying, are we not oiling the machinery that is going to ruin us? Are we not sharpening the axe that is going to be used to chop our heads off? Are we not making gun powder for the gun that is going to be used against the civilians of this country? I think this is not the time to venture into this NationalDefenceCollege. I thank you.

THE DEPUTY SPEAKER: Order, order, can the owner of this vehicle, ABA 3666 go and remove it please, it is blocking other cars outside.

MR. J.M. GUMBO: Thank you for giving me this opportunity to make my contribution on this presentation made by the Minister of Defence. I just want to remind my colleagues and myself that as a House, we recognise the separation of powers and the fact that the minister is coming up with this presentation for ratification is not a new thing. This is one of the agreements that our inclusive government has entered. I want to say that the concerns being raised by members across the board do not reflect that we are taking this issue on political party lines. We are just talking as Members of Parliament that we feel that we should have been given time to have a look at the documents. I accept that and I think the minister has taken note of that. Having said that, we have to look at the merits of the debate at hand. If the document that we are supposed to ratify is of importance to our country, we should not be found heckling at each other in the House, calling each other names, even of political parties because we will be known as the 7th Parliament of Zimbabwe that will be known for very wrong reasons, just making noise and not looking at issues. Yes, maybe the Executive have erred, but it is not the Minister of Defence as some people might want to say. It is the issue of the Executive. The Executive have sat down as an Executive and we are all aware that this agreement as we know, was entered into in 2008, at the early stages of the Inclusive Government. So it should not be taken on partisan lines, it is our issue and we as Members of Parliament are supposed to look at the merits of it. When I listened to the Minister of Defence making his speech, and also putting together what I know about the NationalDefenceCollege which is not an issue that is peculiar to Zimbabwe only but to many countries. In Africa here, we have got South Africa, Kenya, Nigeria, Egypt - they have similar colleges. We have been sending our own officers to be trained outside this country to these countries that I have mentioned, spending a lot of money to get that knowledge that we want to get in Zimbabwe. America and Britain have benefited from our own money through the fees that we have been paying to the officers that have been going to those countries. So, I appeal to my colleagues that yes, we might want to complain, we have aired our views and I think the Executive listens, not the Minister of Defence but the Executive that whenever there is an issue they must bring it to the House in time if that is what the members are calling for, but we must also remember that at times there is an urgency for something to be brought into the House at a time when it does not suit you - there might be reasons for doing that.

Ratifications are meant to be done by us as Members of Parliament but the discussions of those Agreements are not made at Parliament, they are made at Executive level and that is the issue of Separation of Powers. So, I am appealing to my colleagues that let us not politicise something which is not to be politicised, let us look at an issue and see what it merits and consider it on the merits and demerits that apply to it. And in this manner and matter, Madam Speaker, we have no choice, the choice we can have.. - [HON. MEMBERS: Inaudible interjectionsThank you, we have a choice, the choice we can make is to reject; the choice we make is to pass it but we must look at the consequences and what it means for the House … - [HON. MEMBERS: Inaudible interjections] - Yes, you can defer, yes I agree. I have been given the floor. You can want to defer but even if you defer and come back - you will pass.

The point I am trying to make here Madam Speaker is that, yes the issue under debate now might have come to some members late as they say but those are emergencies and we have to deal with them but what we must look at which I am very confident and very sure of is that, the calibre of the Members of Parliament that we have here is par excellence - they are very capable of looking at issues and come up with decisions there and there. I think two days or two hours is enough for the Members to look at something and say, the merits are there to pass it, this is my appeal to the Members of Parliament. I thank you Madam Speaker.

MR. CHINYADZA: Thank you Madam Speaker, obviously I stand to participate in this discussion and I would like to contextualize the issues which are in front of us. I am in no way trying to decry the importance of defence in this country - I think it is absolutely important and our country should have properly trained and strategic soldiers.

However, before we think in terms of approving this Agreement, the issue which I think is of critical importance relates to the economic issues which surround the decision to come up with a loan for this particular purpose. If we look at the debt profile which we have in Zimbabwe, we are well aware that in fact we are not, as a country, able to service our debt and because of that we know our country is labouring - agriculture is not doing as well as it should because we do not have the finances; commerce and industry is not doing well because we do not have the finances; our people, our school children are not doing as much as they should in their classes because of the debt problem - we do not have the finances. We have problems with our civil service because we do not have the finance. We know too that we are not in good books with the IMF because of the debt profile where we have not been able, as a country, to advise ourselves to what extent our nation from the resources which we are generating is able to service that debt?

My feeling really is, before we even start talking about contracting additional debt, we should convince ourselves that we are able to pay to the extent that in fact most of the debt that we have received has been tied to important resources which should go out to finance development in this country to the extent that everything has gone towards that. I think, it is wrong on that basis to continue to lumber the nation with additional debt. Assigning our own resources, I can see that from here, in fact our diamonds are going to pay for this. I think, it is wrong to take the resource which should be used for development purposes purely to advance one item on the agenda. I have said before that I do not believe that defence is an issue which should be relegated to the periphery.

However, in any circumstance where in fact we should plan for our economy, we should plan for the emergency of this economy - we have got to be able to balance between productive investment and social investment. I am not saying that social investment is wrong but all the same, we must be able to raise the production level so that everybody benefits. There is no point in thinking that once we advance one side which is for example in this case here the military, then the rest of the economy will benefit - they will not benefit. I believe that we should be in a position to look at this thing very carefully and I would like either the Minister of Defence or the Minister of Finance to assure this House that we will be able to repay this debt and also be able to repay the debts which are already there in this particular point in time. We must have a financial plan that is acceptable to this House before we begin to talk about contracting additional debt.

I think, this is very important that we should do this rather than to rush to accept an additional debt before we do our housekeeping, before we know we have adequate resources for this additional burden. I thank you.

MR. MATONGA: Like most hon. members, I got to read this document today. I understand the concerns by hon. members that it has been at short notice, that they should have gotten ample time to go through the document. That should be expected in any democratic society. When I read the document, it was already signed by the Minister of Finance. If he has signed that document, it means that our unity government has met, discussed and agreed that it was necessary to sign this document and have it ratified. These are issues of defence and security nature. What you need to understand is that you will not get the details until you are part of that team. We need to understand the merits and demerits of having that institution. When we had the United Nations inviting the Zimbabwean policemen, Zimbabwean soldiers and Zimbabwean prison officers to train colleagues in troubled forces like Sierra Leone and Liberia and East Timor, Zimbabwean soldiers were running those institutions. We spent a lot of money sending our soldiers for training to the United States, United Kingdom, Pakistani and South Africa, so we are not asking for money to go to war. This is to capacity ourselves as civilians and our military for further training.

So it is good for our country that we have a well equipped and disciplined army. Also Members of Parliament may go through that training so that they may understand the importance of supporting and defending their country in times of need. When we look at the figures, it is nearly a hundred million and it is a lot of money, but then if we look at the training period and the interest rate of 2 percent to be paid over a period of 20 years; because of that, I think it is a favourable deal. You can ask yourselves, did the minister have to come to this august House to present it to be deferred. He could have just made an announcement and it becomes a thing of the past but because there is need for transparency and support, that is why this Agreement has been brought to Parliament for us to ratify. I would like to urge hon. members that we have got concerns and money could have been spent somewhere but this is an issue of defence. You can not have a stable country when you do not have a strong and disciplined army. So for you to enjoy the freedom that you have now is because you have a disciplined army. Yes, we have challenges here and there but unless you have got a trained army, you will not be able to sit in this Parliament and debate on whatever you want. So I would want to urge hon. members to support this motion.

What I have heard from Parliamentarians is that they support this and I understand the minister is listening. If there are issues that need to be discussed then that is something else. What is important is let us support this and understand why it has been brought as a matter of urgency. I think there is priority to supporting this motion. I want to urge hon. members to see that this process is supported and ratified so that we will go for other issues.

MS. T. KHUMALO: Madam Speaker, I would like to congratulate the Minister of Defence for this motion. It is a noble motion and it is acceptable. A DefenceCollege we accept, but the challenge we have as hon. members is that we are not singing from the same hymn book with the Minister of Defence so that we can start supporting him hook-line and sinker. All we are asking is for Members of Parliament to walk us through so that we understand where you are coming from with that college, why it is there and what is the benefit to Zimbabweans? Is it too much to be asked from the Minister of Defence?

We are talking of planning, and there is nothing as painful as you bringing a meal at the table at eating time like Hon. Bhasikiti has said. When you are preparing a meal there are some people who have got allergies like myself. So you have to ask me, we are preparing a meal who are those that have got requirements in terms of cooking so that we can tell you that I am allergic to spices, I do not eat pork so that when you are dishing I am aware of the food that you have cooked. There is no way I am going to sit and eat food that I did not see being cooked. So Hon. Minister we would love you to walk us through. People cannot go and cook meals and bring them over to Parliament and expect us to eat, we cannot.

Talking of separation of powers granted, we have got to respect the Executive and so the executive must do the same to the Legislature. You have made a decision in which some of the nitty-gritties we are not supposed to know, but surely we want at the end of the day, to make sure that the money you went and borrowed from the next door has to be paid back and I have to be part and parcel of that process. So the Executive must also be able to give us the latitude to understand what they are doing, why they did it and where they are coming from so that we can work together? We are committing ourselves to US$98 million and as a country we have got an external bill of US$7 billion, so the million dollar question that I want to ask is how then are we going to pay back the US$98 million when we are saddled with US$7 billion? We are talking of a US$98 million for a college, today ZESA is sometimes available and what is needed is to refurbish, it is less than US$98 million. We are talking of water, a few months ago Harare was running dry. Talking of Bulawayo, it is even worse and all we need is the Mtshabezi Water Project which is worth US$4 million and here we are spending US$98 million for a college. There is an outbreak of cholera tomorrow where we will now need some more money to treat these people. Are our priorities misplaced? Is that what we needed for Zimbabwe? We wanted a college and I am not disputing that but we are saying the needs and wants of the Zimbabwean people are very simple - electricity, water, etc. We are talking of civil servants today who are taking nothing home and we are sitting here spending US$98m. How then do we factor in the US$98m and the US$7bn that we are owing as a country? I would love to graduate in that college, provided I was a student. There is no way anyone can graduate from any college when they are not a student. We are being made, as legislators of this country, to graduate in approving this motion to say it is okay when we never participated in the training process. I need to understand it so that I can graduate.

All what we are asking for is give us some time to understand this document then we can accept what you want because you have already committed the country. However we have to air our sentiments vis-a-vis that commitment, to say you have committed us. The justification of committing us into that deal was not fair because of A,B,C and D from our point of view as legislators. There is nothing wrong with that and we have a right to criticise them. Even at home, the decision makers are the parents. There comes a time when we say to them no, this is not correct, as children even if we are going to be overruled but what is important 'chiri mumusakasaka chinozvinzwira.'

MR. S. NCUBE: I would like to thank the Minister of Defence for this motion on the government concessionary loan. Hon. Minister, I think it is proper for you to give us time to look at this, maybe we can contribute more meaningfully. I have just perused a few pages. We need about US$98m for this. If by any chance, our soldiers who are poorly paid, who do not have transport or rations are failing to take their children to school, are listening to us Members of Parliament saying we are passing US$98m. I think there is something wrong, we are failing even to budget for our own army.

We need just to look into that. When we come to our friends, the Chinese, when you go to that college, they are moulding their own bricks. They do not want to leave the money here to give to Africans. They are worse than the colonisers, they are harassing our own people. We have gone back to slavery. It pains me, only two days we were reading the stories where our own Zimbabwean people were being harassed by the foreigners. We need to actually look at that. The last thing I will ask the Minister of Defence is to give us the chance to go over this, then we can debate it.

*MRS ZINYEMBA: Let me say I want to thank you Madam Speaker. I have listened to hon. members' contributions. At the moment what the country needs is security before anything happens. If you look at wars that are taking place at the moment, they are sophisticated. If you saw the death of Bin Laden, it is not anyone or any general soldier who went there, but a specific type of soldier was chosen to go. This is what we want in Zimbabwe, everybody needs those special forces. We all need that security and therefore we need to support that motion. Right now if anything happens, everyone jumps up because we are all scared of dying. We all need security, for us to be able to rule, to be educated and to be professionals.

If we say we want to clothe our soldiers in uniforms, can those uniforms protect us? What the soldier needs is weapons and the knowledge so please let us be like those who want to build the country. This debt we are talking about is nothing really because it is okay if I run into the province as long as I am secure than to leave our nation open such that whoever comes can easily attack us. I urge members to support that motion as early as possible.

MR. MADZIMURE: I stand before you fully aware of the separation of powers and also fully aware of the duty placed upon us by the people we represent and also the role of Parliament to exercise the oversight role over the Executive and the fact that we are also in the Inclusive Government. I am aware that the signature of the Minister of Finance is also on this loan agreement. Therefore, their contribution is going to be based on what I understand from the little I got from the Minister and also from the loan agreement itself. I am cognisant of the fact that we have heard statements often accusing the Minister of Finance of not doing enough to fund the Defence Forces and now I am shocked that his signature is also endorsed where he is agreeing to an agreement which is tying Zimbabwe to US$98 million which is 10% of a billion dollars. That is also adding to the other billions that we owe. What this means is that we are also partly surrendering our sovereignty as far as this debt is concerned because there is no way we are not going to pay China. If we do not pay the Chinese, they are going to attach our property.

Madam Speaker, I have heard a lot of people talking about what we have as resources. The biggest problem is that we do not even understand the period of a loan and even the loan interest. - [AN HON. MEMBER: Payable over 20 years] -you can only talk of 20 years if you are a government which is generating income, which is creating wealth. You can take a loan payable in 100 years but as long as you are not generating wealth, you will not be able to pay. The other thing is that when people look at their lives, like Hon. Bhasikiti, he is not sure whether he will still be alive in those 20 years, he is only worried about himself. We are doing this not because of us, we are committing the people who are not here.

The issue of security, it is important that when we deal with national issues, we go beyond the issue of partisan, we go beyond the issue of face values. US$98 million even for a college, it is on the upside. I think we did not come here to get favours, we came here to perform our duty. We must debate these issues as a nation, I do not care whether I will get a single cab or not because my responsibility here is not to enrich myself but to carry out the duties I was elected for. If I came here poor, I must get out poor, I do not expect to get rich because of Parliament.

The other issue which is not clear in this document is, where are the Chinese going to get the labour? We have known the Chinese bringing almost everything including wheelbarrows. This is not clearly spelt out, we already have enough well trained builders and inspectors but we have noticed that on all Chinese programmes, they bring in their own labour. A lot of countries have developed because they use their own manpower. You cannot bring bricklayers into Zimbabwe and this is not well spelt in this document. I was going to be happy if the minister was going to include statistical figures as to how the people around Harare where the college is going to be built are going to benefit from that project. This is how an economy grows, we cannot continuously pump out our resources - [AN HON. MEMBER: We have diamonds] - you are talking of diamonds but we still have not seen the balance sheet which tells us we have diamonds in Zimbabwe. We are even poorer than we were. So we do not have the money to do that.

In conclusion, I also want to touch on the issue of security. We must not overstate the issue of security as we have a threat which we know, that we are going to be attacked. We have no reason whatsoever for Zimbabwe to be attacked. If we are to defend Zimbabwe, what we have to do is go to Thornhill and make sure that our planes can land at night. Right now the night capability, we do not have so what defence are we talking about. What will a college do to our defence if we do not have night capacity at Thornhill. We have not done enough to do the basics for the army, the army needs basic things and that is what we should do for them. I strongly feel that we have to give them those basics. The professors who are going to come out of that college, the majority of them will be consultants, they will not even work in the army. Some people think that we are going to train some infantry at that college, we are not talking of that. We have got enough centres to train our soldiers to fight but they do not have the equipment. So let us give them the equipment rather than building colleges. Thank you very much.

MR. MAVIMA: Thank you for the opportunity to give my views regarding this agreement which has been brought forward by the Minister of Defence. Firstly, I would like to direct my comments to the hon. member who raised the issue of deferment of the debate of this loan agreement. I do not believe that the ratification of the agreement should be deferred, it should be debated as what is happening now. After everybody has debated as much as we can up to 7 p.m. if necessary, then it will be ratified. Hon. members here are well educated, very articulate and can easily digest the contents of the agreement. Therefore the request for deferment makes me think otherwise about the calibre of Members of Parliament we have.

I also believe that the introduction of this agreement shows creativity on the part of government, maybe more creativity on the part of the Ministry of Defence that they were able to go and source and borrow funds when the IMF and all the other western donors cannot give us any funding. This is for infrastructure development, whether you like it or not, this is educational infrastructure which is being brought to Zimbabwe through the efforts of the inclusive government. I believe also that members are being unnecessarily mischievous by asking for deferment. We have had Bills, agreements, protocols, brought into this House including a Budget where we had not been given time to digest, to understand but we passed it. Let us not be two faced hon. members, let us face facts as they are. The executive makes these decisions, we have our role to debate as we are doing, to raise issues. We hope that those issues that are pertinent will be taken into consideration. At this point in time, I think we have debated and there is more time to debate, at the end of the day, the issue is to ratify an agreement made by the Government of Zimbabwe. I also want to reiterate a point made by several members of this House that let us not be partisan

when it comes to discussion about Agreements, Bills or motions in this House. We have come a long way as an inclusive Parliament where we have passed things that we did not even want as Parliamentarians but because our Executive or government had entered into those agreements or had passed those budgets and Bills, we did so. Why now, why change now? Hon. members, let us be consistent in what we do.

The issues that are contained in the Agreement are standard loan agreements. When I was sitting there for twenty minutes, I went through twice and completely understood what was engaged. I do not believe that the request for deferment is genuine but I think it is to derail the entire Loan Agreement.

Therefore Madam Speaker, I urge and move that this House adopt and ratify the Agreement signed by the Government of Zimbabwe.

MR. MUSHONGA: I want to draw the attention of the members to the document. Let us go through the document, after the index, paragraph C, the Ministry of Defence of Zimbabwe, herein after referred to as the end user and Ahu Foreign Economic Construction Group Cooperation; these are the parties who are going into the Agreement. We are not having a Zimbabwean Company engaged in this US$90 million or so. We are not and there is no value to the Zimbabwean people except the structure.

We want contracts which involve the government to also give a portion. Why are we talking about the 51%? Where is the 51% in this Agreement? We want and as this House we demand 51% to go to Zimbabwean companies unless I am told that when we contract with Chinese, Zimbabweans are irrelevant. We will not accept that in this House.

We want 51% for Zimbabwean companies. Not only that, the 51% should go to indigenous Zimbabweans and we want it incorporated in this Agreement if we are to pass it in this House. Where is Minister Kasukuwere? I am standing in for him and 51% in this Agreement - we want an amendment for 51 % indigenisation in this Agreement or it will not pass in this House. The minister has to undertake that amendment - 51% to Zimbabwean indigenous companies - [HON MEMBERS: Inaudible interjections]There is no 51% on page 6 unless 51% is amended, we do not want to pass it. The object about the college is honourable, we are not against the college, no.

We do not want discrimination in this House. The Chinese are foreigners. We want 51% because they are not Zimbabweans. It is therefore on the basis of that note that I move this House across the board that unless the hon. minister puts the Clause that 51% goes to indigenous Zimbabwean companies, let us unite in asking the Minister to go back and have it amended.

MR. MUDARIKWA: I rise to round up on this debate. I want to thank the Hon. Minister of Defence for what he has done to bring this Agreement to this august House. It is unfortunate that some people might be arguing but this is part of democracy. Let people say but allow those who know to speak and then people listen. As a graduate of Buben Potak Military Academy No. 809 in Yugoslavia. This college is not meant for soldiers but it is meant for every Zimbabwean. It is aimed at improving your intellectual capacity, your capacity also to win the elections. It is not a command center.

The idea of having our comrades from China to assist us in the construction - China has been Zimbabwe's all weather friend. Starting from the armed struggle, they supported us and it is at this great juncture that the people of Zimbabwe and China must continue to cooperate and develop, share ideas. Last year I attended the graduation of one of the colleges in China. There are some people coming from America to be part of the students at this MilitaryAcademy. Where I fail to understand is that this is not meant to develop what you think - it is not a college of marching. It is a College of developing your skills.

Many people are thinking it is a College of marching and there is going to be a range and drill, it is not there. It is a College of thinking where people move together as a nation. The College also gives you an opportunity, it gives civilians an opportunity to sit and share the same desk. Colonels from the army will be sharing the same desk with officers from the police force, permanent secretaries and everybody else. The element of management of national resources is critical. You need educated people and you need people with strategic management.

Mr. Speaker, the most interesting thing is this - everybody is participating. It shows the popularity of our army as a people's army where everybody feels he want to be part of the Defence Forces of Zimbabwe. We had several debates in this House and there has not been any debate which is as livening as today's debate. There are some people we know to be very quiet but today they have the capacity to rise. The Chinese have a saying which says "a journey of 1 000 km begins with a single step". Comrades and friends, hon. members, the single step is with us to have and ratify this Agreement before this august House. It is your revolutionary duty, your international commitment to serve the interests of Zimbabwe, the interests of Africa, to serve the interests of SADC, to serve the interests of the International World that we create a force that is accepted.

Our Zimbabwean Defence Forces have been a shining star in Mozambique, Somalia, the whole idea is if you have got two sons in your house, one is very dull and the other one is very intelligent, you buy a lap top and give to the intelligent son. So this is an honour to the intelligent people of Zimbabwe to be part of the ZimbabweDefenceCollege. Mr. Speaker Sir, to those who have been listening, I thank them very much and also to those who have not been listening, I thank you for keeping quiet.

MR. MAHLANGU: It is unfortunate that we seem to be debating the content and also the process. There are two things that are involved here. What has come up from the MDC is that we are not against the agreement but what wee are against, is that this House is not being respected by your office. By bringing this issue today and also getting this agreement today in our pigeon holes, it means that my ability to come here as a Member of Parliament for Nkulumane and debate meaningfully becomes very impossible. So what we are asking the minister is that can you defer the debate for today, then you will come either tomorrow and we debate the agreement because as far as I am concerned, I have been reading it and I have noticed that there are a lot of things that need to amended.

Yes, it was signed by the Minister of Finance and the representative from China and we respect that but, we expect the Executive to respect this House in terms of whatever they are giving us. We believe that as Members of Parliament we have a right to play our oversight role over anything that is done by government. So hon. minister, with due respect, let us defer this agreement. Yes, as Zimbabweans we know that we are good at fast tracking issues but for this matter which is before us today, it is not a matter for fast tracking but it is all about this country to be respected by external forces, external countries like the Chinese and even Americans. They should know that things in Zimbabwe are discussed and we do not just rubber stamp issues in this Parliament. We need to earn respect from these Chinese and it is good that they are in this country as we are debating they are listening to us.

I was wondering why this Parliament was called? I was at COPAC there and I finally realised that we have been called here to rubber stamp an agreement that was done and signed by two people, whoever did it. So I am asking the minister through the Speaker of Parliament that let us defer this debate, then we will come back and debate meaningfully. However, this House should be respected by the hon. minister and also by the people from this side.

MR. NDAVA: I would like also to add my voice to the motion that was brought by the Minister of Defence. First of all, I need to congratulate the Minister of Defence for taking it upon himself to bring this agreement for ratification by this august House. Like most of hon. members who spoke before me, I also had sight of the agreement yesterday and I went through it. I have got few issues that I want to share with hon. members present. The payment period is 20 years and the interest rate is 2% per annum. The Minister of Finance who is charged with the financial matters of this country has signed the agreement. So it is good that we are debating this issue but I think any economic and political stability of any country depends on the basis of its security. What we need to agree is that these are issues of a security nature that it is not also fair to our Chinese friends who have extended this gesture for us to debate on a loan that they have given us 20 years to pay when everyone else around the world cannot give us money at all.

As for the college, I think it will be a very important step in Zimbabwe's history that we are going to be having people from the region, local and international to share ideas and experiences. This will help to equip those from the military and civilian sectors of our countries. On the basis of economics, it was a very noble idea that the Minister of Finance has signed this agreement in order to save money. From 1980 to date, the Zimbabwe military and other security organs have always been trained and have attended such colleges in different countries around the world. I think it will be very unfortunate on our part to deny ourselves a chance to save money and to put a college of that nature in our country. I have had sight of the infrastructure. From my own judgement, I think it is about 70% complete from what I saw, so I think for us to start debating about who should get what contract, it is a bit too late. It is true that the Chinese who are working there, we have got only specialists and the majority of people employed there are Zimbabweans. Let us be factual about things. We have been there and witnessed what is happening there. The cement and the steel they are using, they buy it here in Zimbabwe and it is helping our industry. It is actually a stimulus package to the industry of Zimbabwe which is actually facing a lot of financial problems.

In conclusion, I need to thank the Prime Minister who was present when this agreement was being signed. I think he is one person whom I can say sees the importance of the security of this country. Hon. members I urge you to ratify this agreement today inorder for our Chinese friends to extend more help to the needy Zimbabwean economy and I understand also US$500 is waiting for the Minister of Finance to put pen to paper to be used in the Ministry of Health. We are very grateful to the Chinese and I would also want to thank the Minister of Defence for having brought this agreement to us. It is now time for us to ratify the agreement so that we put this issue to rest.

MR. MATSHALAGA: Mr Speaker Sir, thank you for giving me this opportunity to contribute to what appears to be a live debate. I am however disappointed by the tone of the debate for what is a simply constitutional requirement of this House, approving a loan agreement between the Government of Zimbabwe and the Chinese Government. The loan Mr. Speaker, I have never seen a loan so well structured, it is a very cheap loan. Anybody who is listening to the quality of debate in this House would wonder what honourable members require.

In terms of principle, it is agreed and this is agreed by this House that there is separation of powers. The role of the Executive in terms of this loan agreement was to look for where to get the funds. Before they did that, they had a project document which outlines what they intended to do and the objectives of this college which were very clear and approved not only by ministries, government officials and lawyers but by our own principals and it was duly signed. The role of the Executive was to look at the best source of funds and nobody can doubt that this is the best source of funds. It is not that they just looked at peak to the Chinese loan, they negotiated. It is the final conduct of negotiations between the two governments. Negotiations in the Beijing, negotiations in Harare. This is exactly why it is now signed. Mr. Speaker Sir, I think you will protect me. This loan is being brought to Parliament in terms of the Constitutional processes that are in our Constitution which we should respect. It is not rubber stamping because you do not need more time except to know that this loan is for the construction of a national defence college. The hon. Minister has outlined the purpose of this college. There is no wise man who would require any additional information besides what is provided. Some honourable members think they need more time and for the first time, I heard some argument that we need more time to go and consult. I do not know whether it is true that they are consulting their constituencies or they are consulting elsewhere. We are aware that hon. members are good at consulting at other places and we will not have this House or this process held to ransom by members who want to consult other people.

This is not the first time where we have had a Bill being pushed through in this manner. The urgency of this matter should be well understood by members. I understand my honourable colleagues, others are saying these funds should have been used for other purposes. When you have a project you design it and then want to fund it. Do not confuse funding of a specific project with funding of other projects, otherwise it will be a mis-match. The funding that is being proposed, I have said it once again, this is a 20 year loan, 7 years grace period with a commitment free of 0.5%. Even the IMF, let me say categorically here, for debt indebtedness countries, they recommend that they enter into loans of this nature which are well spread and give the country time to repay. There is no need for any deferment of any reason because others are saying the benefits are not very clear. When you construct a state institution, you can not hide and we say this is an institution par excellence, MilitaryDefenceCollege. Other countries have it. America has it, Britain has it. Staff college is a lower rank and it is like saying we do not want universities because we have political technology. What kind of thinking is that, it is polluted thinking and it cannot be coming from original members except for people who have been funded or sponsored to come and derail this process. Mr. Speaker Sir, with these few words, may I also stand to recommend that we do not defer this and this should be approved.

*MR MUTOMBA: Thank you Madam Speaker for the time that you have given me to add my voice on the agreement that is before us. What I see as a problem is that we are looking at this agreement in isolation. This agreement is targeted towards developing a national issue. It is not focused on developing the army only. Let us look at the problems and challenges that we are facing at the moment and what is causing them. Our industry is not producing why, because there is no money. We had so many people from the Executive who went outside the country to source funds for the industry but they came empty handed. Now we are faced with companies closing down and there are two reasons why these companies are closing down.

Firstly, there are no credit lines for them to be able to recapitalise. The second reason is that the country as a whole is facing problems in terms of liquidity crunch, there is no cash. Now, looking at this loan agreement of US$98 million, let us take this opportunity as a country as a way to finance our industry. I first of all want to ask the minister, if possible, that it should be part of the agreement that at least 60% of the building materials should be locally sourced. This will assist in creating employment for the building sector, those companies that manufacture window frames and door frames. These companies are not able to produce at the moment because there is no demand and there is no money. US$98 million is a big injection into the building industry.

My plea to the minister is that raw materials should not come from China. We want our people to benefit through employment. If we look at this project in isolation, then we are losing direction. The country is in the doldrums because we do not have cash. Let us not look at China and say they are friends of a certain political party, let us look at what they are doing in terms of developing the country. It is high time that we unite in this House, let us be united for a purpose. Let us be one people for the purpose of developing our country. We should not look at national issues along political lines as we are doing at the moment. Let us see the benefits that are accruing.

If we look at last year's budget, the biggest source of revenue came from sales tax, duty and income tax. If people are employed, this will increase income tax which is payable to government and those people will spent that money in our shops and thus increasing revenue for the government. The government will benefit a lot in terms of revenue. My last plea is that we have debated a lot, as a House, as one people, it is high time for us to approve this agreement.

THE MINISTER OF DEFENCE: I wish to thank all the hon. members who have contributed to this debate. I am heartened that the quality of debate was very high inspite of a few instances when some hon. members did not direct their intellectual capacity to the debate on the table. However, I wish to assure the House that this is one of the best arrangements that the Government of Zimbabwe has secured from the Export-Import Bank of China. Others have addressed the question of materials being used at the site. Let me assure you that there is no sand being brought from China, no bricks are coming from China, no water is coming from China and no steel is coming from China. All those materials for construction are domestic and local. This in terms of turning around our economy, it is a short in the arm. In terms of the number of workers, there are over a 1 000 Zimbabwean workers on site. They range from ordinary workers, artisans, architects, engineers who are Zimbabwean. We have less than 40 professionals from China in various areas of construction, architects and engineers.

I have no doubt that after spending two and half hours of debate, we could regard the two and half hours of quality debate to be regarded as a process of rubber stamping. I believe that we have given justice for us to air our views and in fact, some of the views that have been expressed were really very useful to us in the defence sector and I thank those who have done so.

Madam Speaker, this loan is a 20 year loan and the Loan Agreement, you have the papers with you - the Loan Agreement is with you and I think was negotiated by the best man we have in our financial sector, in government. Currently we have a delegation that left last Friday, again led by our Minister of Finance to China to do further negotiations for us to be assisted by China to build other projects in this country. It is not China which came here and said, we have money who wants it? No, we went to China to look for the money so we should feel grateful that we have secured this.

Let me also inform you that this is not the first time these things are being done. Currently we have over 122 military officers from the rank of Brigadier General upwards and something like 36 from the rank of Colonel in institutions abroad taking various courses from BSc to MSc Degrees and the least that we pay per student is fifteen thousand ($15 000.00) and the maximum is up-to fifty thousand ($50 000.00) per student. We have students that have gone to graduate from the United States of America, from the United Kingdom, the Islamic Republic of Pakistan, the People's Republic of China, the Republic of Korea, Republic of South Africa, Vietnam, Republic of Kenya, Nigeria, the Republic of Egypt and Ethiopia. These are some of the institutions where some of our students are taking these courses.

However, we have to congratulate our leadership in Inclusive who have vision for the future generation of this country, who have allowed that Zimbabwe must move in step with development in the world, to create such an institution where we produce skills among our officers graduating from this institute to compete with the world leaders in this field. It is not proper for us to remain behind and continue to be led by others. Zimbabweans are a proud people, a proud nation and we have students, we have our brothers and sisters who are very brilliant. We have the Professor of Robotics here - when he went to America, he beat all the Americans and he is here, he is our son. So, why should we now deny others to take these courses.

I am gratified that none of all those who have contributed have expressed any sentiment against the establishment of the institution - none - all of you are in agreement. It was only those who felt that they had not been given adequate time but I am pleased that even those, in their conclusion, came round and accepted that the institution is needed and this House should rise to the occasion and approve it.

On that note, Madam Speaker, I move that in terms of sub-section (I) of Section 111 (b) of the Constitution of the Republic of Zimbabwe, this House resolves that the aforesaid Agreement be and is hereby approved for ratification.

Motion put and agreed to.



Second Order read: Second Reading: Deposit Protection Corporation Bill [H.B. 7, 2010].

THE MINISTER OF FINANCE: Madam Speaker, I hereby present the Deposit Protection Corporation Bill for the consideration of this august House. What I am presenting here is a culmination of work that started way back in 2000 when government recognised the need for a protection scheme to protect the public, especially small depositors from the worst consequences of bank failure which became operational in 2003 in terms of Part 12, Section 65 and 72 of the Banking Act Chapter 24:20. The establishment of the Deposit Protection scheme was a result of efforts of various stakeholders including my predecessors in the Ministry of Finance namely Honourable Simba Makoni, Hon. Murerwa and Hon. Mumbengegwi. Prior to the establishment of the scheme, a public policy document was developed which envisaged a phased implementation of the scheme. In the first phase, the Deposit Protection Scheme would mainly be a pay box with limited powers under the Reserve Bank whilst in the second phase, the scheme would be operationally independent and have an expanded mandate of participation in the resolution of failing or failed banks.

The first draft of the Deposit Protection Corporation Bill was produced in 2007 when the second phase should have commenced. However due to the developments in the financial sector, the Bill had to be amended in 2009. this is the Bill that I am now presenting before this august House. In short Madam Speaker, what we are trying to do at the present moment is that you have got Part 12 of the Banking Act which sets up a pay box Deposit Protection Bill, that is what you pay in determines the extend of the pay out. So if you pay in US$500.00, you also get a pay out which is limited insurance.

So what we are trying to do is that we are trying to create an independent stand alone board outside the armpit of the Reserve Bank which goes beyond the principal of the pay box. The importance of having this thing now particularly given the bank's failure that has occurred at Renaissance Bank and I am going to speak on that. In short, we seek to replace the current Deposit Protection Board with a new Statutory Board because the Deposit Protection Corporation Bill; this Bill will give the Corporation enhanced powers to protect depositors, particularly small depositors, against losses caused by the failure of banks and other financial institutions. The public policy objectives of the Deposit Protection Corporation Bill that are presently administered by the Board of Trustees are:

1. to protect small and less financial sophisticated depositors;

2. to promote stability in the financial system through strengthened depositor confidence in the banking industry as a whole;

3. to enhance competition in the financial sector as depositors will more rightly put money into various banks and building societies if they know that they will be protected by the SKIP in the event of bank failures.

As observed in our three year micro-economic policy and budget frameworks STEP 2, the development of the Deposit Protection Scheme up to the state termed Phase One which has mainly been a pay box. The payments that were made from this scheme Madam Speaker included the following: Century Discount House. There were payments that were made on the 20th January 2004, Rapid Discount House, there were payments that were made on the 2nd of December 2004 and Sagit Discount House, there were payments that were made on the 12th of July 2006.

Having implemented the above function since its inception, it is now necessary for us to move into Phase 2 which gives the scheme greater scope as a risk minimiser with powers and responsibilities to ensure deposits, monitor insured institutions and provide orderly mechanism for failure resolution. This should enhance the scheme's role in contribution towards the stability of the financial system and enhance competition in that system whilst protect the Deposit Protection fund against loss. Furthermore, following the recent international financial turmoil, there is general consensus on the importance of effective depositor compensation arrangement.

In view of this, core-principals for effective deposition insurance systems, we developed in July 2008 by a Committee comprising the Bars or Committee on Banking Supervisors, Cross Border Bank Resolution Group in the International Association of Deposit Insurers. The principals give guidance to countries in reforming their Deposit Insurance Schemes and have been incapacitated into the new Bill. Some of the principles deal with the mandate and powers of the Insurance Deposit Scheme, governance issues, membership and coverage, public awareness, failure resolution as well as compensation to depositors in the event of insolvency of the contributory institution.

There are certain weaknesses Madam Speaker which are in the current law. The first weakness is a weak corporate governance framework and I am going to come back to this using the example of Renaissance Merchant Bank. As mentioned earlier, the Deposit Protection Board was established in terms of Section 65 to 72 simply Part 12 of the Banking Act. Under this arrangement, the scheme has limited powers in the resolution of failing banks as is expected from such schemes. In survey done of African countries with Deposit Insurance Schemes, it was observed that Zimbabwe's done schemes have the most limited mandates and powers as they are mainly pay boxes and what we are saying here Madam Speaker is that the current law's systemic failure and vulnerability occurs in a bank, the Central Deposit Fund is only there to pay out and what we are proposing in this present law is to give powers to the Central Deposit Protection Scheme of carrying out regular and wreck in surveys with a view of preventing other than waiting for a disaster and then a paying out. The point I am trying to make here is that of all the countries on the African continent, only Somalia and Sudan are using the sitting dark method where you wait for a crisis to occur and then you pay out.

What we are proposing here is that, we need to empower the new independent Central Deposit Protection with powers of investigation to monitor cases and instances of banking sector vulnerability and systemic risk in the sector. The other weakness as well is that the Central Deposit Protection Board that we have is a sub-department of the Reserve Bank. The core mandate of the Reserve Bank is not Deposit Protection. The core mandate of the Reserve Bank in terms of Section 6 of the Reserve Bank Act is Monetary Policy Implementation, stabilisation of the Zimbabwean dollar if it exists advising the government and the Banking Sector Regulation. It is not the oversight of a Central Deposit Fund.

So international best practice is that we establish an independent stand alone Deposit Protection Board. That is what we are seeking to do and again I will come to Renaissance. The Renaissance issue proves beyond reasonable doubt why we should have had this Bill six years ago. I will now deal with details of the Bill. Clause 5 of the Bill provides the following:

- It will allow the Deposit Protection Corporation Bill to participate in early stage restoring or winding up failing or failed financial institutions in collaboration with the Central Bank;

- It will set conditions and standards that must be observed by financial institutions if their depositors are to be covered by the Deposit Protection Scheme;

- The rules for entry and exit from the scheme must be clear and transparent and then;

- To participate in conjunction with the Central Bank in the decision whether or not a financial institution should be registered;

- To determine which issues to be covered by the scheme, the Deposit Protection Corporation Bill must be able to make this determination, send the Deposit Protection fund will bear the risk of loss in the event that an institution fails.

In making the determination, the nature of the institutions and the objectives of the institutions must be taken into account. These functions are necessary in the new corporation to minimise risk in the Deposit Protection Fund. The Deposit Protection Fund will prevent financial institutions that are failing or are under curatorship from participating in the scheme as this will go a long way towards fostering capability in the scheme. Under the Banking Act in this current state the Board cannot exercise new functions given that the resolution of failing or failed financial institutions is the sole function of the Central Bank. I will deal very briefly Madam Speaker with the powers of the new Deposit Protection Corporation.

- It is to conduct special examinations of familiar institutions or to require the supervisory authority to conduct such examinations.

- To execute insight inspection of troubled financial institutions

- To receive information relating to the financial institutions from both the supervisory and the registering authorities particularly in the case of failing or failed institutions;

- To impose penalties to the non-payment of contributions to the fund;

- To terminate an institution participating in the Deposit Protection Scheme if the institution is in financial difficulties or is failing to observe the corporation's preferred standards ;

- To appoint the curator of a failed or failing financial institution which is the power that is presently invested in the Central Bank. Lastly, to be consulted on all winding up or failed institutions. Section six then deals with the board which will be the representative of the RBZ, the representative of the Ministry of Finance, representative of financial institutions and then an executive officer. Contributions will come from the public sector, deposits taking micro-finance institutions which we presently do not have. Because we are going to anticipate to set up deposit taking micro finance, Cabinet has already approved the principals and we are already budgeting for that. Then clause 30 deals with the issue of compensation. Clause 46 and 47 deal with issues of monitoring and curatorship. Then of course we have to deal with transitory amendments to marry Acts with this new law.

I want to say four things Madam Speaker, the best practice now, particularly given the systematic failures of the Global Financial Systems (GFS) that were ushered by the fall of Leeman Brothers in September of 2008 is that there is no financial system which can function normally without regulation. Part of the problem and part of the cause of (GFS) of September 2008 was the failure of regulation, so you now have a situation where there is now a movement towards the creation of Financial Services Authority that are overseeing the issue of regulation. In Zimbabwe we actually have a problem, the problem which has been highlighted by the same crisis we have. We have got for instance the securities commission, the function of the securities commission is to oversee, not companies listed on the Zimbabwe Stock Exchange but to simply oversee stock exchanges, stock markets and in Zimbabwe we have got one. So, we have created parastatals, a commission which is overseeing one market, the Zimbabwe Stock Exchange.

In future there will be other stock exchanges, I know there is commodities stock exchange, I am sure in three or four years we will have bonds market, derivative market and junk board market but we do not have an overseer listed on the stock exchange. The current war is that the stock exchange regulates itself, but we have a problem that the people who are stock brokers are also players who seat on the board. The anomaly of a person who is both the player and a referee. If you take for instance, the Renaissance Merchant Bank issue, you have people who are sitting on the board of the Stock Exchange who are working for Renaissance Bank, I will not mention them by name. So we have a situation where one is an umpire and at the same time a player so, we have a weak regulatory framework. The issue is we have scattered regulation, again the Renaissance Bank issue illustrates this. You had problems at Renaissance Merchant Bank, Renaissance Merchant Bank is owned by 100% Renaissance Financial Holdings, Renaissance Financial Holdings owns 30% of Afre. Afre is an insurance company, it used to be FML. Renaissance Financial Holdings also owns 12% of Rainbow Tourism Group. So, you now have a Bank an insurance company and that insurance company you know Madam Speaker that after the demutualisation that took place in Old Mutual, the First Mutual Life split itself into an insurance company Afre, a property company Pearl. So you now have a situation where you have an insurance company, a bank, a holding company, and a hotel group. Each of which have different regulatory frameworks. So, the insurance company is guided and supervised by a board called Ipack the insurance co-operation shared by Mr. Mushayakarara that is one regulator. You now have a situation that Afre is also listed on the Stock Exchange, technically it is also covered by the oversight on the Stock Exchange indirectly, regulated by the Securities Commission.

Then you have the Bank whose oversight is under the Reserve Bank in terms of section 6 (RBZ) Act. Then you have the company RTT Rainbow group which is under the Ministry of Tourism and the Tourism Trust Chaired by Mr. Kaseke. Incestuous things were happening in all these companies which were exposed and one of the problems is that you do not have a regulator so the RBZ does not know what is happening to the Bank. But all are connected because you are talking of three companies. Part of the work we are doing here through the first step of a move through a harmonised framework is for our co-operate environment. We are far from compliant for corporate framework. The second thing which is very clear which again has been exposed by the Renaissance saga is the importance of regular inspections, regular stress checks in banks regular analysis of balance sheet and profit and loss account as well as deposits that are coming in and out. The Renaissance Bank saga is a failure of regulation.

We have a situation Madam Speaker, no. 1, there is a total breakdown of the shareholders, the management, and the board and we have a situation where the management were both the shareholder running it like a tuck shop ka bottle store kekumusha kaye, chienda mbuya and Sons. Vatete vauya endai munopihwa ma sweets; mainini Lucia vauya itaikuti vapihwe mabanzi. You know what I am talking about, the board the management were merely rubber stamping the decisions of the shareholders.

The second thing is the issue of the breach of our laws. The law is very clear if you are going to be an individual member owning a Bank on your individual capacity as Amos Chibaya, you are not allowed to own 10% of your Bank. If you are going to be a company, you are not allowed to own 25% of a bank. In this Madam Speaker, there were individuals who would own 7%, 10%, then some trusts were created the alter egos of the members that the shareholders were lending money to themselves. So you are a shareholder, you lend money to your son, sekuru and that created the hole that is in the bank. Sometimes it was done quite crudely as has been exposed by the report of the RBZ that was presented on the 30th April 2011.

The fourth thing which has been exposed by this crisis is the role of loan sharks in our economy. Zimbabwe is suffering from lack of capital, there is no money in this economy. We are the only country in the world where our revenues are 32% of GDP. Our ratio is higher than SA which is on 27%. What it simply means Madam Speaker is that we are financing government activities through one fiscal instrument, our own domestic revenues. We do not have the Vote of Credit, overseas development assistance, we do not have meaningful foreign direct investment. So capital is required.

In 2009, the bank came up with capital requirements of US$12 million. The law is clear, a bank cannot finance its capitalisation from deposits because that is stealing. Secondly, you cannot finance your equity in a bank from borrowing. So you cannot go and borrow from Standard Chartered Bank in order to buy 50% or 8% of a bank. If you have to borrow it means hauna mari, so keep away from a bank. What happened is that people went to borrow in order to buy and make equity contributions which is a reflection that you should not have been a banker at all because the presumption yekuti kana wada kuita bank urimbozha, urishoroma. Saka hauchanokwereta because ukanokwereta urikunyepera vanhu. So there was a breach of Section 32 of the Banking Act. Now, that is where the loan sharks come in now because the loan sharks are sitting on pockets of money that they made during the hyper inflationary era from illegal dealings with the Government of Zimbabwe. So they have been giving people usurious rates of interest.

Madam Speaker, in one of the agreements, a shareholder was charged a rate of interest of 5% per month on a debt of US$5 million. So US$3 million was paid. Where in the world do you have a return of US$3 million on US$5 million. Even George Soros, a financial guru cannot make that money. Then over and above this rate of interest, they created something called a Capital Upliftment Clause - in my 16 years as a lawyer, I have never heard of a Capital Upliftment Clause. How this works is that, the presumption is that I have given you money, therefore your business has been uplifted. In this case, the agreement said, I have given you US$5 million, you have to repay at 5% the US$3 million. Over and above that, there is capital upliftment. So the assumption is that the US$5 million I have given you has uplifted your business by US$25 million, I want US$12 million. So there is US$3 million, plus capital upliftment which is the equivalent of US$12 million. So on an investment of US$5 million, the return is US$12 plus US$5, which is US$17 million. To say it is usurious, is an insult to the word usury, hachizi chimbadzo, we have to find a new lexicon and these are the kind of things that were happening.

Clearly, part of the thing that we have to come up with is a new enhanced law that deals with the issue of regulating people that are not even money lenders. You cannot lend money in Zimbabwe unless you are a registered money lender in terms of the Money Lending and Rates of Interest

Act. So I am saying this to highlight why this Bill is overdue. I want to say Madam Speaker that, when a crisis like this happens, small banks suffer particularly indigenous banks. We have problems in the banking sector but largely and structurally as a result of the fact that our economy does not have money, so that has to be accepted. Many of our banks, the small ones are actually well run and I want to say this to the depositing public out there, many of our banks are well run and are actually in good hands but we have got this issue of Renaissance Merchant Bank which is the bad apple. Even Renaissance Merchant Bank itself is not a mickey mouse bank. The deposits that were held in Renaissance Merchant Bank were US$66 million and that is a lot of money which is why, what you simply require at the present moment is an interim situation to accommodate the current crisis. Four things must happen Madam Speaker.

1. We have to pass this Bill as part of Chapter 1 of Financial Service sector reform. The creation of a meaningful, well funded Deposit Protection Board that will be able to protect depositors against a defaulting bank.

2. We have to strengthen the regulatory framework. If we maintain the current law that is, the RBZ continuing to be both a licensing agent and an overseer, then we have to amend the RBZ Act to make certain tests obligatory. You cannot have a situation where a bank can go for more than a year or two years without being monitored or tested.

3. Thirdly, we also have to make sure that we create a durawall, we create a wall between the relationships of the regulator and those to be regulated. It is not possible to regulate someone when you are drinking beer with the same, we have to create a durawall to avoid incestuous relationship between the regulatory authority and those to be regulated.

4. We have to consider seriously the issue of a Financial Services Authority, a regulator that is regulating the entire financial services so that we do not have this eclectic piecemeal regulation where, insurance, they have got their own little insurance regulator, banks have got theirs, asset management companies, equity houses, venture capital companies have got their own regulator and then companies listed on the ZSE have got their own regulator. We need one regulator with one uniform standard, that is best practice.

5. We have to come up with a regime of corporate governance, I know that people have been talking about King 3, we have to put in our statutes, codify King 3. There is a creature in Zimbabwe called the Executive Chairperson, the Executive Chairperson is an aberration because he is an executive monster, most of them are men. He runs the shareholders, he runs the board, he runs the management. In this day and age, we cannot have a creature called an Executive Chairperson.

6. We have to make amendments to the Securities Act. We had to struggle when we suspended trading in Rainbow Tourism Group and in AFRE. We had to struggle to find a provision that gave us that power because the current law says the Securities Commission recommends to the Stock Exchange to say, suspend but the Commission is recommending to the person who has failed. Ndatsikwa mubhora then munhu wanditsika onzi ndiye anofanira kupa red card or yellow card - it does not work that way. So, we have to amend the Securities Act.

The fifth thing, Madam Speaker, we have to computerise the Stock Exchange, we have to come up with a new central deposit condition. What happens on the Zimbabwe Stock Exchange at the present moment is that investors work through Stock Brokers. So, I can be John Chiendambuya or Van Strauss sitting in London - all I need to do is to phone a Stock Broker and say, buy my shares. My identity is not known - it is not good corporate governance; number two are these nominal creatures that we have created - these funny names. If you go at Afre, RTG and if you go at Renaissance - you will find that there are essentially two or three people that are owning those institutions, but when you go to the company's share register there is a whole plethora yetukwambo twakango hwanda this and this Private Limited, this and this Trust - there is no full disclosure. When you have a central deposit, you stripe the veil as it were, you remove the corporate veil and we know who we are dealing with. So, if there are cases and instances of insider trading - you know who has done insider trading unlike the current situation where pane ka Trust kanonzi Chiendambuya; kamwe kanonzi Dotito, kamwe kanonzi Tsholotsho kamwe kanonzi Nkayi. We have to computerise the central deposit.

Then the last thing that we have to do is de-mutualisation of the Zimbabwe Stock Exchange. What do I mean by this? The Stock Exchange, theoretically right now - the position of the law was this. The Stock Exchange Act was passed in Zimbabwe in the year 1895, so it is a colonial piece of legislation. So, naturally the Zimbabwe Stock Exchange should belong to the Government of Zimbabwe but over the years, the Stock Exchange belongs to the committee and because it belongs to a committee, it is run like a 'boys club'. You know, a small committee runs, the same people who meet everyday and so forth. The best practice now is that there must be someone who actually owns the Stock Exchange, if you go to South Africa there is Johannesburg Stock Exchange owned by the Reserve Bank and other bodies. In Zimbabwe we could have NSSA, for instance, Infrastructure Development Bank of Zimbabwe, the Reserve Bank being say 51% shares and then the stock Brokers owning the 49%.

Why is this important? It is important for regulation - you need that and part of the problems we are having at the Zimbabwe Stock Exchange is that you have a situation in which you have no Board; there is no management; there is no ownership; you have a situation where there is no infrastructure. There is basically one gentleman, Cde. Munyuki, who is running it - we have to have a corporate framework. So, we are coming with this - this is the first thing.

Let me also take the opportunity to enlighten the House and hon. members on what is happening at RMB. The government of Zimbabwe is not putting money in any failed bank - I want to make this very clear, for two reasons. One - we do not have the money anyway, hatinawo mari yacho anyway; two - we have a duty to protect depositors and depositors alone. We cannot have a situation where someone has worked so hard to save his/her money and suddenly because of the kleptomaniac tendencies of some of us, that money is gone. Waseenza mari yako, wapinda mubank and that money goes - if you look at the deposit book of this bank; you have got little organisations yekumusha kwenyu there is a Burial Society - Zvimba Burial Society six thousand dollars (US$6 000.00). I am sure these are ordinary peasants - it is there on that thing then you have a lot of schools fourteen thousand (US$14 000.00); then you have Trust accounts of Lawyers with small little amounts - eight thousand; two thousand; four thousand - these are honest hard working people, we have to protect depositors.

Protecting depositors, Hon. Speaker, is not the same thing as protecting shareholders. What we have done is to say to NSSA because you are sitting on US$130 million and to the extent that this Renaissance Financial Holdings has got decent assets represented by 30% shareholding in Afre and the 12% shareholding in Rainbow Tourism - do a due diligence, if you find that this makes commercial interest to go in, then go in on your own. So, a myth has been created by some quarters that we have directed NSSA to give money - we have not, but I want to say this Madam Speaker, we could have done that in terms of Section 26 (A) of the Insurance Act, The Minister of Finance has got powers of directing the deposits of insurance companies into what are called 'prescribed assets'.

So, I have got the power of directing ZIMRE, AFRE, the Old Mutual - all insurance companies and NSSA to say, put your money there. So, if we wanted to act on the matrix and the myth that has been created in the newspapers - we would have directed as government or I would have directed as Minister to say, using my powers in terms of Section 26 (A) of the Insurance Act, you insurance companies put twenty million dollars in Renaissance - we have not done that. But what we have said is that NSSA can conduct due diligence if they do not want to get in there, then they do not get in, then there are other options that we have. The Banking Act provides so many options and alternatives that we can deal with.

I want to emphasise, Madam Speaker, that we have to protect the depositors. Two - we have to protect the contagion effect, the multiplier effect of a failing bank because these banks are connected - they have got inter-deposits that mature at different times. So, the collapse of one bank if not managed well can create a domino effect on the entire banking sector. Our financial sector is vulnerable, as of February 2009, this banking sector in its entirety had mere deposits of US$324 million; it had built deposits, end of December 2010, close to US$4 billion but given that our GDP is US$8 billion. The money supply we require is around US$12 billion because your money supply is greater than your GDP. So, if you compare US$4 billion it is 50% - we need much more than 100 - 120%. It is a fragile sector that we need to nurse and that is where we are coming from as regulators.

In conclusion, I want to say Mr. Speaker, that we have learnt big lessons from this saga but the biggest lesson we have learnt is that of regulation - there has to be continuous regulation but having learnt from that, it cannot be business as usual. We have to come up with this raft of reforms that I have outlined above starting with the Deposit Protection Bill but I want to say by and large, our banking sector is vulnerable because the tendency is that once you have a crisis like this, money flights from the banks which are beckoned to the big traditional banks like Barclays Bank and so forth. I want to appeal to our public that if you are keeping your money at Chiendambuya Bank, keep your money in Chiendambuya Bank - it is safe and sound. I thank you hon. Speaker. I now move that the Bill be read a second time.

Motion put and agreed to.

Bill read a second time.

Committee Stage: With leave; forthwith.



House in Committee.

Clauses 1 to 35 put and agreed to.

On Clauses 36 and 37:

THE MINISTER OF FINANCE (MR BITI): I move that the Clauses be deferred for consideration to tomorrow.

Motion put and agreed to.

Clauses 36 and 37 deferred.

Clauses 38 to 65 put and agreed to.

On Second Schedule:

THE MINISTER OF FINANCE: I propose that the amendment be deferred for consideration tomorrow.

Second schedule deferred.

House resumed.

Progress reported.

Committee to resume: Wednesday, 1st June 2011.

On the motion of THE MINISTER OF FINANCE , the House adjourned at Twelve Minutes to Six O'clock p.m.

Last modified on Thursday, 21 November 2013 13:40
National Assembly Hansard Vol. 37 NATIONAL ASSEMBLY HANSARD - 31 MAY 2011 VOL. 37 NO. 32