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NATIONAL ASSEMBLY HANSARD - 6 DECEMBER 2011 VOL. 38 NO. 19

Tuesday, 6th December, 2011.

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

 

PRAYERS

(THE DEPUTY SPEAKER in the Chair)

THE DEPUTY SPEAKER: -[HON. MEMBERS:Inaudible interjections]- Order honourable members.

MOTION

FINANCE BILL: BUDGET DEBATE

First Order read: Adjourned debate on motion that leave be granted to bring in a Finance Bill.

Question again proposed.

MR. ZHANDA: Thank you Madam Speaker. Whilst enough time was not allocated for Parliamentary Committees to scrutinise and unpack this budget, I stand to present the report of the Committee on Budget, Finance and Investments.

MR. BHASIKITI: On a point of order Madam Speaker. I know that this motion was deferred to the 13th December when the House sat last week. So, this motion cannot be debated today.

THE DEPUTY PRIME MINISTER (PROF. MUTAMBARA): Madam Speaker, as a matter of record, I was the Acting Leader of the House on that day - the motion was deferred to Tuesday, 6th December, which is today.

Madam Speaker, if there is that reflection in the Hansard then that record is not correct. The motion was deferred to the 6th December, 2011. - [HON MEMBERS: Inaudible interjections] -

MR. HLONGWANE: It is obviously clear that there is no correct record of what transpired in the House, whether the debate of the Appropriation Bill was deferred to the 13th December, 2011. The House adjourned to do further consultations on the Budget. We want to work by the recording that is in theHansard to determine whether debate was adjourned to today or to the 13th December, 2011.

THE DEPUTY SPEAKER: The Hansard made an error by -[HON. MEMBERSInaudible interjections.] - Order, honourable members.

MR. MATSHALAGA: Madam Speaker, if there was an error in the Hansard, this could have been corrected before the sitting of the House.

THE MINISTER OF CONSTITUTIONAL AND PARLIAMENTARY AFFAIRS: Whatever differences made, you have already made your ruling and we have to leave -[HON. MEMBERS: There is no ruling.]-

THE DEPUTY SPEAKER: Order honourable members, I am not going to recognise anyone anymore. Can you resume your seat. I understand the Hansard made an error, so we are debating. I made my ruling and my ruling is final -[HON. MEMBERS: Inaudible interjections.] - Order honourable members.

MR. MWONZORA: Madam Speaker, I rise to present the Report of the Portfolio Committee on Justice Legal and Parliamentary Affairs -[HON. MEMBERS: Inaudible interjections]-

MR. J.M. GUMBO: On a point of order Madam Speaker!

THE DEPUTY SPEAKER: What is your point of order?

MR. J.M. GUMBO: Madam Speaker you had asked an hon. member to make contributions on the -[HON. MEMBERS: Inaudible interjections]

THE DEPUTY SPEAKER: Order, order, hon. members, please stop turning this august House into a pub - [AN HON. MEMBER: Anga achiti imbwa]- Order, order, order.

Hon. Mupukuta, I do not want to be pushed to put you out of this House -[ laughter]- hon. members, please let us behave, we are wasting time. Hon. members order, order.

MR. HLONGWANE: If an hon. member has referred to Hon. Gumbo that he is a dog, I think Hon. Matutu - [HON. MEMBERS: Inaudible interjections]-

THE DEPUTY SPEAKER : Order, order, order!

MOTION

FINANCE BILL: BUDGET DEBATE

First Order read: Adjourned debate on motion that leave be granted to bring in a Finance Bill.

Question again proposed.

MR ZHANDA: Introduction

.1. Mr. Speaker Sir, whilst enough time was not afforded to the Parliamentary Committees to scrutinize and unpack the 2012 National Budget, the Budget, Finance and Investment Promotion Committee has also found it difficult to produce a report within this limited timeframe.

.2. Mr. Speaker Sir, going forward, it is desirable to amend the Public

Finance Management Act (PFMA) to allow Parliament enough time to consult and analyse the budget to avoid continuous discord between the Executive and Parliament.

.3. Mr. Speaker Sir, no National Budget will ever be able to please

everyone, be it individuals, Organisations, Government departments and Parliamentarians, especially in our case where we have a limited fiscal space. The challenge, however that is before us, the stakeholders and this august House is how do we grow the resource envelope. The major question is "How do we reach a $10 billion dollar budget in three years time?"

.4. Mr. Speaker it is therefore only fair to thank the Minister of Finance, Hon. Tendai Biti for coming up with a very reasonable budget under very difficult circumstances.

.5. The Committee would like to thank the Minister and his team on the consultative process they undertook across the country, meeting with various stakeholders and organizations.

 

.6. Mr. Speaker Sir, year in, year out, your Committee has found it very difficult to undertake the pre-budget Public Hearings effectively due to bureaucracy within the administration of the Parliament and more so because of lack of financial resources. The Committee, therefore, resolved that, in future, the Ministry of Finance and Budget, Finance and Investment Promotion Portfolio Committee jointly conduct national budget consultations.

 

 

.7. Having said that, we however, feel that there were some issues, which did not receive adequate attention, and we wish to make the following submissions to the Honourable Minister of Finance for his consideration.

· AREAS OF CONCERN

Energy

.1. Mr. Speaker, the biggest challenge that the economy continues to face is that of Energy and Infrastructure. As Zimbabweans, it is high time we learn to prioritise issues within a reasonable timeframe. In this regard, your committee is concerned on the shortage of Energy and the deteriorating situation at NRZ.

.2. The Committee therefore, recommends an urgent organisation of the Energy and Investment Conference to deal with these challenges.

 

.2.1. The Committee recommends a harmonisation of duty on petrol, diesel, paraffin and levy on ethanol. This will reduce false declarations that are so prevalent at the borders. It is estimated that this measure will bring additional revenue to the fiscus of more than $200 million.

Agriculture

.3. Mr. Speaker Sir, agriculture got a fair share out of a limited envelope and the Committee welcomes the idea of an Agriculture Three-Year Rolling Financing Strategy. However, the Committee is of the view that alternative financing sources outside Government must be found and made available to the sector.

.4. The Committee anxiously waits for the privatisation of Agribank so that it is adequately capitalized and be able to provide much needed specialised funding to agriculture.

 

.5. Agriculture cannot continue to rely on Government resources for financing. It is also very wrong Mr. Speaker Sir, for government to continue to do this on behalf of the private sector. It is high time the private sector should follow the footsteps of Delta and cotton merchants in financing the farmers for their raw materials requirements.

 

.6. Government funding will continue in areas of Research and Development, extension services and irrigation infrastructure. Mr. Speaker Sir, the future of agriculture financing is contract farming.

.7. Energy however, remains a challenge and no matter how much financing is made available to agriculture, as long as energy is not reliable, farmers will find it difficult to increase productivity to meet both domestic market requirements and exports.

.8. Mr. Speaker Sir, the Committee also welcomes the imposition of customs duty on fresh farm produce, which will boost the viability of small holder farmers and communal farmers, most of whom operate in the open markets such as Mbare Musika.

Manufacturing

.9. The initiatives put in place for the manufacturing industry are welcome. However, the Committee would want to see NSSA playing a leading role in the funding of the industry since it derives its existence from the pension contributions of the labour from this sector. NSSA should provide a greater part of the Distressed Industries Fund which will be a source for capital funding to the manufacturing sector.

.10. We also thank the Honourable Minister for reducing customs duty on some raw materials not locally produced for this will ensure that prices of locally produced goods are competitively priced for both the domestic and export markets. However, we implore the Honourable Minister to extend the principle to all raw materials across the industry.

 

.11. The Committee also urges the Honourable Minister in collaboration with other relevant ministries to move with speed in setting up industrial hubs and growth clusters and promote value addition to the regional mineral and agricultural resources.

Mining

.12. We commend the Minister for revising upwards the royalties of gold from 4,5% to 7% and platinum, from 5% to 10%. However, there is need for a general review of the mining taxation system.

.13. The current capital redemption allowances system where mining companies are not obliged to pay tax on capital expenditure is not sustainable. The Committee therefore proposes that capital redemption allowance be staggered at the rate of 25% per annum.

 

.14. Mr. Speaker Sir, during the decade of economic meltdown, the mining houses entered into agreement with Government, allowing them to bank their export proceeds outside the country. This was a noble strategy at that time. However, now that there is macroeconomic stability in the country, your Committee urges the revision of these agreements so that all export proceeds of mining houses are immediately repatriated and banked in Zimbabwe. There is no doubt that this will go a long way in easing the liquidity situation in the country.

 

.15. Mr. Speaker Sir, the Committee would like to emphasize on the need for transparency and accountability in the mining of all mineral resources in the country and ensure that every Zimbabwean benefits from these finite resources.

Tourism

.16. Once again, the Committee congratulates the Minister of Tourism and Hospitality, Hon. Mzembi for winning the bid to host the 2013 United Nations World Tourism Organisation General Assembly to be held in Victoria Falls.

.17. We also welcome the allocation of funds towards the Joshua Mqabuko Airport in Bulawayo and hope that with this allocation, the airport expansion works will be finally completed.

.18. However, Victoria Falls Airport needs urgent attention and it is the Committee's view that in its development, Botswana and Zambia could be involved so that Victoria Falls becomes not only a regional tourism hub but also a regional financial hub connected with direct flights.

.19. Mr. Speaker Sir, about 5000 delegates are expected to attend the United Nations World Tourism Organisation General Assembly, the Committee urges Government to ensure that the conference centre is ready, airports are ready and an "Open Skies Policy" is implemented to ensure more direct flights to Zimbabwe in general and Victoria Falls in particular. Efforts to find a suitable technical partner for Air Zimbabwe should be intensified.

 

.20. Further, there is need to urgently implement the use of plastic money in the tourism industry, which is now long overdue.

Financial Sector

.21. While we welcome the US$100 million Fund allocated to the Reserve Bank to enhance its lender-of-last resort function, the Committee still believes that total sanity in the banking sector, can only be achieved once there is sanity at the central bank itself. The Committee expects the central bank to be the torch bearer of transparency and accountability in the banking sector.

.22. The demonetization of the Zimbabwe dollar deposits has been outstanding for a long time and it is time the matter is concluded. The unilateral abuse of foreign currency accounts by the Reserve Bank, unfavourable interest margins, high bank charges and the unavailability of coins continue to dampen confidence in the banking sector, resulting in large sums of money circulating outside the banking system.

Debt Overhang

.23. Mr. Speaker Sir, the country continues to be saddled with a debt burden of $7.4 billion. The Committee notes with concern that Parliament's role was reduced to rubber-stamping through ratification of the debt instead of taking part in the whole debt origination and contracting process.

.24. Mr. Speaker Sir, the Committee urges for amendments to the PFMA to ensure Parliament plays an active oversight role in debt origination and contracting by analysing, reviewing and scrutinising the purpose of debt and its terms and conditions before the agreements have been signed by Government.

Health

.25. Mr. Speaker Sir, your Committee has noted with concern the continued increase in the prices of sanitary wear, making them unaffordable for the majority of women in the country, particularly in the rural areas.

.26. Mr. Speaker Sir, our women continue to succumb to cervical cancer due to the use of alternative methods like rags, tissues, cow dung and newspapers which cause reproductive tract infections in women.

.27. The Committee, implores the Honourable Minister to come up with measures that ensure the availability of sanitary wear in all public places and reduction of prices of sanitary wear so that they are affordable and accessible to the majority of our women.

Privatisation

.28. Whilst the Committee commends the Minister for not allocating any funds to the loss-making entities, the Committee is of the view that, as long as their doors remain open, they will continue to incur debts which at some stage will be taken over by the Government.

.29. Mr. Speaker Sir, parastatals which are compromising on service delivery cannot continue to be protected. In addition, one of the major constraints faced by parastatals is the amounts they are owed by Government ministries and departments. The Committee urges the Government agents to ensure that they pay for all services they get from parastatals.

 

.30. Mr. Speaker Sir, the Government continues to talk of rationalization, restructuring and commercialization of parastatals, but the fact of the matter is all these strategies require capital injection. Consequently, what is therefore needed is the implementation of strategies which lead to adequate funding of parastatals without further delay.

Constituency Development Fund (CDF)

.31. Mr. Speaker Sir, one of the best development strategies which the Inclusive Government has ever implemented is the introduction of the CDF. It is the fairest and equitable way of ensuring inclusive development in all the constituencies of the country.

.32. Given the tangible results that have emerged from the implementation of this Fund, the Committee proposes that the Honourable Minister should increase the current allocation from $8 million to a mere 1% of the national budget for all the constituencies. Mr. Speaker Sir, such an allocation will go a long way in changing the outlook of the country.

Procurement Process

.33. The country's public procurement and tendering process urgently needs to be revamped, reformed and made transparent.

.34. Given that the Minister is proposing to achieve an inclusive growth with jobs, procurement could be used in resolving the challenges of high unemployment, liquidity and balance of payment pressures. In other regional countries, public procurement has been effectively used as a strategy for the implementation of indigenisation and economic empowerment programmes through positive affirmative action strategies.

.35. The current procurement system which favours foreign suppliers deprives our country of foreign currency through repatriation of tender proceeds while no employment is created for local people and local production is not encouraged as all raw materials are imported.

.36. Mr. Speaker Sir, while the Committee acknowledges the Minister's statement on this matter, we urge him through this budget, to immediately stop the continued bleeding of the economy.

Fiscalisation

.37. Mr. Speaker Sir, the proposed penalties to the taxpayer are misplaced and not fair. Business cannot be required to stop operations, if electricity is not available. This is detrimental to the country's growth and development objectives.

.38. Given that, electricity supply in this country is usually off than available, this measure will worsen the investment climate in the country. We therefore, implore the Honourable Minister to let taxpayers continue to operate, but require them to ensure that their transactions are recorded in line with generally accepted international accounting standards which allow for an audit trail.

  • CONCLUSION

 

.1. In conclusion, Mr. Speaker Sir, we implore the Hon. Minister of Finance to consider increasing the allocation to the CDF from $8 million to a mere 1% of the budget and additional funding being taken from $62 million Unallocated Reserves of the Ministry of Finance or the estimated $200 million expected from the harmonisation of tariffs on petrol, diesel and paraffin and levy ethanol.

.2. We also implore the hon. minister to come up with a clear statement that will stop the bleeding of the country's squeezed liquidity through the procurement system.

.3. Mr. Speaker Sir, with these reasonable proposals which we strongly recommend for the hon. minister's consideration, we will not find it difficult to pass the budget. I thank you.

MR. MWONZORA: I rise to give a report of the Portfolio Committee on Budget, Legal Affairs, Constitutional and Parliamentary Affairs. Budget Analysis for the Ministry of Justice and Legal Affairs. (Vote 21)

1.0 Introduction

The Ministry of Justice and Legal Affairs is mandated to deliver Justice throughout the country and uphold the Constitution of Zimbabwe. Its other responsibility is to rehabilitate offenders. The Ministry derives its mandate through the maintenance of legal services to the State, reviewing and reforming the laws of Zimbabwe and provides legal research and formulation of legal policies. Its key result areas are the administration of Justice in accordance with the law, provision of legal services and incarceration and rehabilitation of offenders. It also caters for the Zimbabwe Electoral Commission, The Zimbabwe Human Rights, the Judicial College and the Legal Aid Directorate.

1.1 Achievements of the Ministry during the 2011 fiscal year

The Committee noted that during the 2011 fiscal year, the Ministry achieved the following;

· Secured office space for the Zimbabwe Electoral Commission and the Zimbabwe Human Rights Commission

· Trained prosecutors, Auditors, Accountants and Registry

· Secured seven security vehicles for ferrying prisoners to court

· Acquired ten tractors for farming operations at the prisons

  • Provision of Legal Aid

1.2 Key Objectives and Policy Developments

The Committee noted that the major policy priorities for the period 2012-2014 are;

· Increase production at prison farms

· Decentralisation of the Legal Aid Directorate and facilitate equal access to justice to the Zimbabwean population

· Operationalisation of the Zimbabwe Human Rights Commission

· Operationalisation of the Attorney General's Office Act

· Resuscitation of the Judicial College for the training of prosecutors, magistrates and other court personnel

· Construction of prison facilities

· Rehabilitation of prison infrastructure

· Successfully hold the referendum and general elections

· Re-engineering of the department of Deeds and Companies

1.3 Overview of the 2012 Budget

The National Budget is projected at US$4 Billion and this represents an increase of 45.7% from the revised 2011 budget of US$2.746 billion. The 2011 budget increased by 44.3% from the 2010 level. The 2012 budget is anchored on domestic financing which implies that the budget shall depend on the performance of revenues.

1.4 2012 Justice and Legal Affairs Expenditure Analysis (Vote 21)

The expenditure allocated to the Ministry of Justice and Legal Affairs increased by 33.1% from US83,495,000 allocated in 2011 to US$111,168,000 allocated in 2012. This percentage increase is however lower than the overall 45.7% increase of the National Budget. The allocation represents 2.8% of the total budget. The Ministry had bid for US$ 199 094 031 and was allocated only 30% of their request. In the 2011 budget, the Ministry's share of the total budget was 3.04% and so for the 2012 budget there is a decrease of 0.24%. This is regardless of the fact that the Ministry is still regarded as one of the top ten priority Ministry in the National budget.

Table 1: 2012 Top Ten Budget Allocations

Ministry

Allocation 2011

US$

Allocation 2012

US$

% share of budget

Education, Sport, Arts and Culture

469 420 000

707 325 000

17.7

Health and Child Welfare

256 198 000

345 688 000

8.6

Defence

198 437 586

318 272 000

8

Home Affairs

200 021 000

308 330 000

7.7

Higher and Tertiary Education

158 695 400

296 171 000

7.4

Finance

167 607 237

284 677 000

7.1

Agriculture,Mechanisation,

& Irrigation Development

124 210 800

226 791 000

5.7

Office of the President and Cabinet

121 253 272

172 471 000

4.3

Public Service

75 921 005

126 360 000

3.1

Justice and Legal Affairs

83 495 000

111 168 000

2.8

NB. The Ministry retained its 10th position from the previous budget of 2011.

1.5 Current Expenditure versus Capital Expenditure

The Ministry's total capital expenditure is $13 050 000, which represents 11.7% of the total Ministry allocation. The current expenditure is $ 98 118 000 which is about 88.3 % of the total Ministry budget. In the 2011 budget Capital Expenditure was US$ 13 380 000 which was about 16.02% of the budget. There is therefore a decrease in the allocation for capital expenditure and the budget for this Ministry is more consumptive as much of the revenue is used on operations and employment costs. This is expected as the Ministry is a service provider and not a productive one. The Ministry may therefore find it difficult to achieve all its intended objectives, especially the ZPS that wants to construct prison facilities and rehabilitate prison infrastructure. Employment costs alone will consume $ 50 755 000 of the total Ministry budget and this constitutes about 45.7% of the budget. This is an increase from the previous budget where employment costs consumed about US$29 063 000 which was 34.8% of the Ministry allocation. The increase in employment costs may result in improved staff welfare which will in turn increase the efficiency in the Ministry's operations.

Table 2: Distribution of the Ministry budget according to Departments.

%total budget distribution to Departments

2011 allocation

2012 allocation

% 2011

% 2012

Administration and General

23 920 000

24 515 000

28.65

22.05

Zimbabwe Prison Service

56 793 000

82 740 000

67.97

74.43

Attorney General's Office

2 822 000

3 913 000

3.37

3.52

The Ministry has three sub votes as shown in table 2 above. The table shows that there has been an increase in percentage allocation for the sub votes for the Zimbabwe Prison Services and the Attorney General's Office but there has been a decrease in the sub vote for Administration and General. In this regard, the Administration and General got an allocation of US$24 515 000 which represents about 22.05% of the Ministry's total allocation. The Zimbabwe Prison Service was allocated US$82 740 000, which represents about 74.42% of the allocation and the Attorney General's Office was allocated US$3 913 000, which represents about 3.52% of the Ministry's total budget. The Committee noted that the amount allocated to the Administration and General is very minimal. The amount allocated is US$24 515 000 but this has to cater also for Zimbabwe Electoral Commission, the Zimbabwe Human Rights Commission and the Judicial College and other programmes like the Political Parties and HIV/AIDS.

Table 3: Economic Classification of the Vote

Category

2011

2012

%change

Proportion of vote 2011

Proportion of vote 2012

Current expenditure

53 195000

81 934 000

54.02

0.64

73.7

employment costs

29 063 000

50 755000

74.6

0.35

0.46

Goods and services

23 005 000

22 745 000

-0.01

0.28

0.20

Military procurement,supplies and services

100 000

140000

40

0.00

0.00

maintenance

4 255 000

5674000

33.3

0.05

0.05

programmes

1 772 000

2 620 000

47.9

0.02

0.02

Current transfers

11 860 000

16 184 000

36.5

0.14

0.15

Capital expenditure

1 3440 000

13 050 000

-0.03

0.16

0.12

Acquisition of fixed assets

6020000

10650000

76.9

0.07

0.10

Capital transfers

7 420 000

2 400 000

-67.7

0.09

0.02

Total

83 494 000

111168000

33.1

100

100

Table 3 shows that current expenditure increased by 54.02% while the capital expenditure decreased by 0.03% Employment costs increased by 74.6% while funds allocated to programmes also increased by 49.7%. Maintenance costs increased by 33.3% while expenditure on goods and services decreased by 0.01%. Expenditure on acquisition of fixed assets increased by 76.9% while capital transfers decreased by 67.7% with an overall negative impact on the capital expenditures. The largest proportion of the allocation (73.7%) goes to the current expenditure and this is expected as the Ministry is a service provider. The increases in expenditure categories are simply a reflection of an increase in the overall budget.

1.6 Submissions by the Ministry

· The Ministry is worried that there are no clear indications for the salaries of the civil servants. What is only indicated in the budget are employment costs which do not guarantee an increase in the salaries for civil servants as these costs may cater for vacant posts within the Ministry. There should be a global picture as to what should be expected across the ministries for the civil service salaries.

· The Ministry is worried that the Judicial College cannot run on a budget of US$10 000.

· The allocation for the Zimbabwe Electoral Commission is not sufficient. The Commission was allocated US$7 463 000 against their bid of US$24 610 144 for recurrent expenditure and US$1 500 000 against their bid of US$ 37 266 173 for capital expenditure.

· The withdrawal of the International Committee of the Red Cross has severely compromised the operations of the Prison Services as they cannot adequately feed the prisoners.

· Most of their requests for operations are not met.

· The Ministry is also worried that there are always delays in the disbursement of allocated funds and this severely compromises service delivery.

· The Zimbabwe Human Rights was allocated US$1 500 00 which is not sufficient to run such an important commission

1.7 Recommendations

· The Minister allocated US$30 million for Constitution making and Referendum as shown in paragraph 734 of the Budget Statement but this allocation is not shown in the Blue Book. The Committee therefore recommends that this allocation be shown in the Blue Book.

· The Ministry is failing to meet some of its obligations like payment of utility bills because of delays in the release of funds from Treasury. The Committee recommends that there should be a timeous disbursement of funds for the Ministry to efficiently discharge its duties.

· For prison farms to be more efficient and productive there is need to equip the department with the necessary inputs for it to be self sufficient on food requirements for the prison inmates. The Committee therefore recommends that there be initial capital injection for such projects to be undertaken.

· It would be ideal if some of the operations can be commercialized to improve on efficiency. This will inevitably save money for the Government in the long run.

· The Judicial College should be allocated sufficient funds for it to be operational. The College was allocated US$10 000.00 which is not sufficient at all. The college would cater for the critical shortage of staff within the Ministry.

· Prisoners are humans and have rights; therefore there is need for the rehabilitation of all prisons that are dilapidated for them to meet the minimum United Nations Standards. There is urgent need to address the clothing situation within the prison as a prison has only one set of clothing.

· The allocation for the Zimbabwe Electoral Commission is insufficient considering that the country may go for elections next year. The amount is not sufficient for the effective running of credible elections since there would be funds needed for voter education, ballot paper printing and the voting itself. The Committee feels that this needs to be addressed as a matter of urgency.

2. Constitutional and Parliamentary Affairs (Vote 30)

2.0 Objectives of the Ministry

The Ministry's mandate is to administer the Constitution and to formulate constitutional reform policies. The Ministry also ensures the efficient and timeous conduct of Parliamentary sessions. Its key result areas are; administration of the Referendum, Privileges, Immunities and Powers of the Parliament Act.

2.1 Major Achievements in 2011

Data collection and preparation reports for the Constitutional making process, capacity building workshop for the education of the Nation on the Constitution making process and administration of the Constituency Development Fund.

2.2 Priorities for 2012-2014

The major policy priority for the Ministry is to advance and safeguard basic freedoms through legislative reform and Constitutional Process. The Ministry also envisions the promotion of social and economic development in constituencies through the Constituency Development Fund. The Ministry's other priority is to monitor and evaluate the drafting of the Constitution and Referendum process

2.3 Overview of the allocation made to the Ministry

The Ministry received an allocation of US$ 10 040 000 and this constitutes about 0.25% of the total budget. This is against the Ministry's budget bid of US$ 18 271 313. This means that the Ministry got only 54.9% of their budget bid. This is a decrease from the 2011 allocation of US$ 18 122 000, a decrease of 80.5%. The Ministry is ranked 27th in the overall budget against its 19th ranking in the 2011 budget. The reason for this could be that since it was a new Ministry it received a larger vote because it was being capitalised.

Table 4: Ministry of Constitutional and Parliamentary Affairs

 

2011

2012

% change

Proportion of vote 2011

Proportion of vote 2012

Current Expenditure

1 582 000

1 851 000

17

0.09

0.18

Employment Costs

187 000

351 000

87.7

0.01

0.03

Goods and Services

1 070 000

1 238 000

15.7

0.06

0.12.

Maintenance

318 000

247 000

-22.3

0.02

0.02

Programmes

7 000

15 000

114.3

0.00

0.00

Current transfers

8 500 000

-

 

46.9

-

Capital Expenditure

8 040 000

8 189 000

1.85

0.44

0.81

Acquisition of fixed assets

40 000

189 000

372.5

0.00

0.02

Capital transfers

8 000 000

8 000 000

0

0.44

0.80

Total

18 122 000

10 040 000

 

100

100

2.4 Current versus Capital Expenditure

Current expenditure constitutes US$1 851 000 which is about 18.43% of the total budget whereas the capital expenditure consumes US$8 189 000 which is about 81.57% of the total budgetary allocation. The total current expenditure increased by 17% and the capital expenditure increased by 1.85%.The Constituency Development Fund remained at US$8 000 000 and constitutes the bulk of the capital fund which is a transfer. This allocation is in line with the Ministry's vision of promoting social and economic development in constituencies through the Constituency Development Fund. This will help local people participate in the development of their local areas. The capital fund also has a provision for the purchase of vehicles that will significantly improve the efficiency of the Ministry in the administration of the referendum and other operational functions. This is a very small Ministry and as such employment costs are expected to be very low and much of the capital expenditure are transfers.

The Committee though feels that the allocation of US$120 000 for vehicles plant and mobile equipment will not be sufficient to cover the 210 constituencies.

2.5 Recommendations

· The Constituency Development Fund has a strong bearing on the development of constituencies. It is in this regard that the Committee feels that the fund be quickly disbursed to enable the Members of Parliament to undertake their Constituency duties.

· The Committee is also concerned that the Constituency Development Fund allocated in the previous budget of 2011 has not yet been disbursed. Since the auditing is ongoing, these funds should be disbursed quickly.

  • There is need for the fiscus to allocate resources to Constituency Centres for them to run efficiently

· The physical condition of Parliament needs to be addressed, that is, create more space and improve the air conditioning of the House.

3. The Judicial Services Commission

Budget Analysis for Judicial Service Commission. (Vote 38)

3.0 Introduction

The Judicial Service Commission is mandated to administer justice in accordance with the laws of Zimbabwe. Its key result areas are to uphold the Constitution of Zimbabwe, justice and human rights, to deliver criminal and civil justice in terms of the laws of Zimbabwe and to undertake Judiciary research in the Courts in Zimbabwe and formulate policies.

3.1 Achievements of the Judicial Commission during the 2011 fiscal year

The Commission has not achieved much in 2011 in terms of clearing or reducing case backlogs.

3.2 Key Objectives and Policy Developments

The Committee noted that the major policy priorities for the period 2012-2014 are;

· To reduce case backlog by 50% by the year 2014

3.3 Overview of the 2012 Budget

The National Budget is projected at US$4 Billion and this represents an increase of 45.7% from the revised 2011 budget of US$2.746 billion. The 2011 budget increased by 44.3% from the 2010 level. The 2012 budget is anchored on domestic financing which implies that the budget shall depend on the performance of revenues.

3.4 2012 Judicial Services Commission (Vote 38)

The expenditure allocated to the Judicial Service increased by 47.05% from US$15,515,000 allocated in 2011 to US$22,815,000 allocated in 2012. This percentage increase is marginally higher than the overall 45.7% increase of the national budget. The allocation represents 0.57% of the total budget.

3.5 Current Expenditure versus Capital Expenditure

The Commission's total capital expenditure is US$6,530,000 which represents 28.6% of the total allocation. The current expenditure is $ 16,285,000 which is about 71.4 % of the total Commission's budget. In the 2011 budget, Capital Expenditure was US$ 2,780,000 which was about 17.9% of the budget. There is therefore an increase in the allocation for capital expenditure and the budget for the Commission is more inclined to judicial infrastructural development than to current expenditure. The construction and rehabilitation of courts is expected to enhance the objectives of the Commission in fulfilling its mandate. Employment costs alone will consume US$9,285,000.00 of the total Commission's budget and this constitutes about 40.70% of the budget. This is an increase from the previous budget where employment costs consumed about US$6,711,000 which was 38.35% of the Commission's allocation. The increase in employment costs may result in improved staff welfare which will in turn increase the efficiency in the Commission's operations.

Table 3: Economic Classification of the Vote

Category

2011

2012

%change

Proportion of vote 2011

Proportion of vote 2012

Current expenditure

12,735,000.00

16,285,000.00

27.88

82.08

71.38

employment costs

6,711,000.00

9,285,000.00

38.35

43.25

40.70

Goods and services

2,006,000.00

2,472,000.00

23.23

12.93

10.83

Maintenance

2,886,000.00

3,630,000.00

25.78

18.60

15.91

Programmes

1,132,000.00

898,000.00

(20.67)

7.30

3.94

Capital expenditure

2,780,000.00

6,530,000.00

134.89

17.92

28.62

Acquisition of fixed assets

2,780,000.00

6,530,000.00

134.89

17.92

28.62

Total

15,515,000.00

22,815,000.00

33.10

100

100

Table 3 shows that current expenditure increased by 27.88% while the capital expenditure also increased by 134.89%. Employment costs increased by 38.35% while funds allocated to programmes decreased by 20.67%. Maintenance costs increased by 25.78% while expenditure on goods and services increased by 23.23%. Expenditure on acquisition of fixed assets increased by 134%. The largest proportion of the allocation 134.89% goes to capital expenditure and this is expected as there will be construction for the Civil, Magistrates and Rehabilitation courts in Marondera, Chinhoyi and Gwanda taking place.

3.6 Recommendations

· The Committee recommends that the Judicial Services Commission be allocated sufficient funds so as to reduce the brain drain from the sector.

· Funds for the construction and rehabilitation of these projects should be disbursed timeously so that the Commission may be able to meet its intended objectives for the year.

· For the Commission to meet its objective of reducing the court cases backlog by 50%, a provision for the purchase of service vehicles would have been a welcome development. This would enable the court officials to visit all centres.

· The allocation for witness has dropped from US$1000 000 to US$700 000. The Committee feels that this will compromise court proceedings as it will be difficult for witnesses to go to attend court cases.

Conclusion

The two Ministries that are covered by this Committee are service providers and as such the bulk of their allocations are consumed by employment costs and operations and this is as expected. However, the Committee strongly feels that if the Zimbabwe Prisons Service is adequately funded on its productive projects like farming, this would greatly reduce its dependence on the fiscus for feeding the inmates. The Committee also has a strong feeling that the Constituency Development Fund was the only available resource that can enable Members of Parliament to interact on developmental issues with their Constituencies. It is in this regard that the Committee feels that the fund be quickly disbursed to enable the Members of Parliament to undertake their Constituency duties. Thank you.

 

MR. KANZAMA: Let me start by thanking the Minister on his presentation of the Budget. Minister, before I raise some issues in the Blue Book, I have some comments which I wish to make for your attention.

The first one being that, I remember in 2009 when you became Minister of Finance, when you were presenting your budget and talking of the roads, Minister Mutasa was here: I want to give reference to Minister Mutasa when you mentioned that you had allocated funds for Headlands/Chiendambuya Road - he walked out and from then, I have not seen him attending budgets because he is always worried that funds are not being allocated.

I am driving my point Minister to express my views on why the Minister walked out and why some of us feel the way the budget is crafted, at times, is not favourable to Members of Parliament. First, I want to disagree with the method being used by the Ministry that, whenever there is consultation of the budget, no Member of Parliament is approached to air their views on what they feel should be done in their constituencies. We always notice that Provincial Administrators, District Administrators, Chief Executive Officers of Councils submit whatever they think should be done in the constituencies, which we feel is not fair.

If I am to give reference to Members of Parliament, Members of Parliament are elected Members of Parliament and when we are campaigning Minister, every time we go for campaigns, we tell people that when we are elected from a political party, we formulate policies and these are some of the policies that we are going to come up with when we are elected into office. To our surprise, when we are elected into office, if development is carried out in rural areas or whatever area in the country, no Member of Parliament is consulted to suggest whatever they feel should be in the Budget. So, I want to bring this as a concern Hon. Minister that, in my particular case, I am not happy because now even the officers I am referring to, the Provincial Administrators, the District Administrators and the Chief Executive Officers have not consulted me for my suggestion on what I feel should be done in my constituency. I am not happy and want to appeal to you to come with a better way so that we have more input into the budget than our appointed officers. We are not appointed Members of Parliament but elected Members of Parliament and I want to suggest that some policies have to be changed on that matter.

Be that as it may, I want to come onto the Blue Book Minister and want to start on DDF. You have allocated DDF - Gravelling of roads, you have said it is US$5 million, then Road Maintenance Equipment is US$6.5 million, Bridge Construction is US$2m, Borehole Drilling is US$2m and so forth; but my problem is, you have allocated this wholesomely, but if I am to ask, the whole of next year, which road is going to be gravelled in my constituency? I may not know who is the decision maker now. If this money is allocated to Jonga, the Director General of DDF, has he any consultation with your ministry or with me that we are going to grade this road in your constituency. The problem I have now is, how is the US$5 million going to be allocated to reach my constituency? How is the bridge construction going to reach my constituency if the money is allocated to one department but there are no specifications of which road they are going to disburse the money to? I have got a problem with that Minister, I do not know how you can assist us to make sure that some of these projects reach our constituencies.

Public Works, if I go round in provinces where Government buildings are located, you will discover that most of these buildings have got no lifts. Most people who want service delivered by approaching these buildings, you will find them going via the steps because most of these lifts are not working. So, I urge you to allocate money for the lifts to be repaired because most of the lifts are not working.

On NSSA, the major contribution is coming from the Civil Service Bill, so I think you would do good service to the civil service if most of these lifts are repaired, maybe from NSSA funds. If you cannot meet the budget with the revenue you are collecting, you can collect funds from NSSA so that you can repair these lifts. It is a suggestion I have on that one, so I am bringing it to your attention because it is now a situation which is worrisome to most of our civil service.

Then I want to come on to Ministry of Defence. Ministry of Defence, what I want to suggest is that you will find that in your budget you have proposed that youth and women are going to get US$10 million each for projects and the empowerment of whatever they want to do. My concern is, if you check on the War Veterans Administration Fund, I have a problem with our War Veterans, most of them beside those who are working in Government are living an unhealthy life.

Again, the issue of the wives of the heroes, I want to suggest Minister, that if you can also create a funding for the war veterans so that most of them are allocated money either for farms, projects or whatever projects they intend to do through the Ministry of Defence because I understand the Ministry of Defence, there is a column that is giving them a provision that they can be allocated funds. Instead of them going through the banks or other means of getting funds and queuing, because of the contribution they made to this country, it is better you allocate them funds through the Ministry of Defence. Even if they are to bring their proposals, they can put them through the Ministry or you can create a particular bank where only war veterans can access that money so that they can do their farming in a correct way and sustain their living. That will give us a better picture as a country that we are looking after our war veterans. So, I urge you Minister to look into that as well.

Minister of Finance, on your department, the Forbes Border Post is becoming a busier border in Manicaland in Mutare there. Considering that there are so many trucks moving at Forbes Border post, I can see something but I do not know whether it is going to be enough for you to complete the project. It is about $500 000 that has been allocated. Looking at how busy the border is, I think there is need for the completion of the border so that free movement of vehicles is speeded up. There is danger that we are realizing that most of these trucks, when they are coming with fuel from Beira, are located somewhere in town whilst they are waiting for their papers to be cleared. If something happens there, it can blow the whole town. As government, I think we need to put immediate attention there otherwise we will burn the nation one day. So, I urge you to quickly look at the issue of Forbes Border Post and come up with measures so that something like that will not happen.

Coming to the Audit Vote, I have a problem with the Comptroller and Auditor General that most of the Government departments have not been audited for some years back because there is not enough money. So these departments need to be audited. Because of that, you find that the programmes you have allocated money, Local Authorities, Parastatals and Value for Money Audits, I do not know how it is done in this department but if they go unchecked always, I think as Government we will fail to account for whatever we are doing. So I urge you to come up with a better way of how our Government departments can be audited.

Then I have a problem again with the Ministry of Industry. Maybe I need your guidance here on trade attachés in foreign missions. For now, I do not know how many we have in foreign missions, but looking at our current economic situation, I do not know whether they are serving any purpose that we should have trade attachés in foreign countries. But if they are there and if it is necessary for them to be there, I think we need to be very selective on which countries should we have these foreign trade attachés. When you have foreign trade attachés, they must be results that show that something has been benefitted from that particular country to Zimbabwe. So I urge you to sit down with the Ministry of Industry and maybe Ministry of Foreign Affairs to come up with statistics of how much this country is benefitting from the foreign trade attaches and see whether it is necessary to continue having them or we have them in phases or whichever way.

I want to come on to Ministry of Agriculture, focusing on what I think is important in my constituency. The issue of dip chemicals, these dip tanks Minister, I do not have statistics of how many dips I have in my constituency. If I am to look again at the allocation you have given to the Minister of Agriculture, I do not know how much in litres terms will be allocated to my constituency, to say in my constituency I have so many cattle that are going for dipping and it is helping the people of my constituency. I also raise the same issue I raised for DDF that something has to be done to see that if money is allocated for dips, how much is going to be allocated to a particular constituency. Every rural constituency has got cattle and cattle out there have to be attended to when it comes to the issue of dipping. That again is a concern Minister, that if the money is allocated to a ministry, how much will come to a particular constituency? So, I also want to draw you to that point and see how you can adjust.

I want to talk of the Ministry of Tourism. Tourism Minister, my constituency is also a tourist area and most of the Parliamentarians workshops are held in Vumba at Leopard Rock Hotel, but you find that on approaching where Vumba road starts, grass is getting into the tarred road because there is no service of cutting grass. So, I urge you Minister to see to it that money is again allocated to see that this road is cleared. No money has been allocated for that, particularly in Vumba. I also urge you to look, not only at Vumba, but most of the roads leading to tourist areas.

On Foreign Affairs, I want to thank you Minister for allocating funds for the creation of a new office in South Sudan which just got independent. You are applauded for taking the decision to open an office there because it is going to be a country we will be sending more exports to and it will improve our revenues as well. The other offices were also allocated money and it shows you are thinking of improving the country's image and I want to thank you for that. I want to urge you to speed up the release of the money so that work commences in South Sudan so that whoever is going to South Sudan is quickly assisted at our offices.

On the Ministry of Health,

MR. F.M. SIBANDA: On a point of order.

THE DEPUTY SPEAKER: Hon. Sibanda, what is your point of order?

MR. F.M. SIBANDA: My point of order is that the member is speaking on general terms, I think he should zero in on his committee because it is becoming more like a Presidential speech. I thank you.

THE DEPUTY SPEAKER: Point of order is overruled. Hon. member, can you continue with your debate?

MR. KANZAMA: For the guidance of the hon. member, I think he should understand that when debating the budget, you will be debating the Blue Book, so if you do not do that, people of your constituency will desert you.

THE DEPUTY SPEAKER: Order Hon. Kanzama, can you concentrate on your debate?

MR. KANZAMA: On the Ministry of Health, I am concerned because you have allocated money to the Provincial hospitals such as Marondera Maternity, Lupane Provincial and on district hospitals, there is Mahusekwa, Gokwe North, Hwange, St Luke, Shamva Out-patient, Concession Entry and Tsholotsho. Other than that, there are capitals that you have also allocated money but Minister, if you go to my constituency, I have got clinics in every ward which are in a dilapidated state and for the past two years, there has been no allocation. People always ask me what they should do about the bad state of the clinics and I have even gone to the Minister of Health to appeal to him and he simply says there is nothing in the Blue Book. It is a concern that needs to be addressed when allocating funds.

I am trying to drive the point that not even a single cent has been allocated to my constituency. I am an elected Member of Parliament and tomorrow, if I want to go back to the people and want to appeal to them to vote for me, do you think they will vote when there is nothing that I have done for the constituency using Government coffers?

Then on the Ministry of Education- I want to thank you and I hope this is going to be practical that each school is going to have a borehole drilled and not turn like has happened to DCF this year. I really applaud that move. I hope you will not put those funds in Minister Coltart's Ministry otherwise it will take time to reach my constituency as well and it will fail.

I am also concerned about the Ministry of Education, Sport, Arts and Culture which you put under Senator Coltart. If you go in the region to such countries as India, South Africa and Zimbabwe in Chipinge or Matabeleland, you will emulate the way they do things in their culture. The problem I have, which is not mine but the Inclusive Government's problem, which put Senator Coltart as Minister of Sport, Arts and Culture, I do not know how much he understands culture that he has submitted to the Ministry that we should continue emulating our culture as Zimbabweans because that guides us as human beings. So, I also want to urge you Minister to look into the issue of culture and see how much you can allocate to improve our culture.

Then on schools themselves, besides the drilling of boreholes, you know some of the classrooms and furniture are in bad state. During Minister Mnangagwa's tenure as Minister of Rural Housing and Social Amenities, he at-least allocated me some few funds which Minister Mutsekwa is now completing. There was a school in my constituency that was built of dagga and thatched with grass and as I am talking to you today, that school is looking better now and I am waiting for the Minister to give me a date to officially open the school. I am however looking at other schools in my constituency and something has to be done to improve those schools. Besides books, I understand there are some improvements that are needed. When you are talking of furniture itself, yesterday I was watching television and I heard that CDF at least assisted in the constituency of that Hon Member who is in this House at the moment -[ Laughter]-

Minister, I want you to see the criticality of CDF, that it has at least assisted in some of our Members of Parliament in buying benches and tables for the schools and so on. Again, I want to bring it to your attention that in my Constituency, it is a big problem. So, it is a thing that I always face whenever I start to visit these schools and something again has to be done. I want also to applaud Hon. Zhanda's message that you allocate at least 1% of that amount to CDF to improve on some of these things that I am talking about.

THE DEPUTY SPEAKER: Order hon. member, you are left with only five minutes.

MR. KANZAMA: On youth fund and women's fund, again I have a problem that when these funds are allocated, they are allocated at central office but how much will reach my provinces and my constituency is my concern. I am of the view that something must be done through your Ministry to make sure that every province and district is allocated these funds so that all the youths and women are allocated these funds.

I also want to thank the Minister who is here that in my constituency, this year's funding, I think it is last year's one, there are about 6 clubs in my constituency which have benefited from this fund of up to US$200 000. Yes, I want to applaud that but it is a minimum number considering the number of women in my constituency and considering that I am also voted into office by a bigger percentage of women. So, I also want to urge you to see how much will reach my constituency and in particular my province.

On Home Affairs, we have a problem that is continuing to grow in this country that people are finding it difficult to acquire birth certificates, passports and so forth. I do not know what you can do to improve on this because it is becoming a bad programme in our country as an image and something has to be done. If you go anywhere in the region, there is no where people are queuing to acquire passports, I.Ds and so forth. So, because of the minimum resources that the Ministry is getting, I think something has to be done. Even some of the buildings, I have seen that in Manicaland Province, you have allocated money in Nyanga, just Nyanga Office but there is nothing for the entire province. Again it is a concern Minister.

Then, there is an issue on Immigration as well because they need to improve their I.T system to meet the United Nations General Assembly programme that we are going to convene next year. So, there is a concern that their retention scheme is about US$100 000 and I think if things can be looked into, it would be better if you would adjust and further their retention scheme to may be at least US$200 000 or more so that we do not inconvenience the coming United Nations Conference on Tourism.

On CDF, some of the projects that we carried out last year, we left them unfinished and in my case, I have mbuya dzemisika dzatakasiira panzira mastructures akati wandei anticipating that this year we will get something and complete them and start more others. It is becoming a concern and this is why you hear that some members have not used the money properly because they think that the project is unfinished and the Member of Parliament has used the money otherwise. I think you should rescue this situation and see how much we can quickly get or even to give the money in phases other than waiting for it to be US$60 000. You can bring it in phases and we gradually do these projects.

So Minister, with those few recommendations, if you can amend some of what I have suggested, I will not hesitate to support the approval of your budget.

MS. D. SIBANDA: Hon. Minister, your proposal on allocating of the US$10 million for the Maternal and Child Health care, on behalf of the women of Zimbabwe, I would like to applaud you and thank you for the job well done.

However, the women together with the girl child in Zimbabwe kindly request you to consider in your budget the subsidising of the sanitary wear. My Chairman Mr. Zhanda mentioned it but I felt that he mentioned it in a way that did not go down well with me. Hon Minister, every woman in the world will go through the menstruation period for five days in a month, which is 5 days in a month times 12 months in a year, it gives us 60 days, which is 2 months a year of which some of the girls, especially those in the rural areas, they will not be able to go to school because of lack of sanitary wear. That is when they are forced to use rugs, newspapers, cow dung like what Hon Zhanda has said. They use tissue and that is not healthy. It has been said some will use the soft part of chiguri so that the girl should be able to go to school and that causes them to get infections and cervical cancer.

Therefore Minister, we request as Zimbabwean women and the girl child, free supplies of the sanitary wear in our schools, hospitals, clinics, universities, colleges and even here in Parliament. On several times, I have noticed that we have female condoms in our toilets. We also ask you to put the sanitary pads there which we will get free of charge. Again you will consider that we are one of the best producers of cotton in Southern Africa region and women and the girl child are those who work more in those cotton fields.

So, we hope and trust that our request will be taken on board hon. minister and be considered in your budget. Thank you very much.

THE DEPUTY SPEAKER: Order hon. members. The practice is that we give precedence to Committee Chairpersons to present on behalf of their Committees. Therefore, that is what I am going to do now.

MR S. NCUBE : I rise to present a report on the Committee on Higher and Tertiary Education and Science and Technology.

  • INTRODUCTION

Since 2009, the Ministry was facing several challenges that include brain drain (lecturers), limited students' educational support and poor infrastructures in institutions of higher learning. The Ministry is aimed at rehabilitating institutions of higher learning. The Ministry supports universities, teachers and technical colleges.

· OBJECTIVES AND RECENT POLICY DEVELOPMENTS

The key objectives for 2012 are

· completion and rehabilitation of infrastructure

· completion of on-going projects

· increasing enrolment in higher and tertiary education

· increasing staff compliment

Thus, the Ministry's 2012 budget policies were targeted to finance existing capital project and lobby for increased student support.

  • 2012 HIGHER EDUCATION BUDGET EXPENDITURE ANALYSIS

Educational ministries received a total amount of $1,003,496,000 that is 25.1% of total budget a figure which is slightly above SADC standard of 22% of overall government budget. In 2011 the educational ministries received $626,134,400 (19.3% of total budget). The Higher and Tertiary education ministry was allocated US$296,171,000 for 2012 representing an increase of 88.9% from US$156,767,000 in 2011. This allocation translate to 41.9% of total educational budget , again this is above the encouraged 2:1 ratio distribution between lower and higher education. However, in recent years, the world over, there is call for government finance to be biased towards primary education than tertiary. In the 2012 allocation the ministry was prioritised in national budgeting, lying in the top 5.

  

3.1 Sectoral allocations of $296,171,000.00

The distribution of the total budget to higher education sectors is summarised below.

   

2011

2012

% change

ADMINISTRATIVE

current expenditures

108,465,000.00

195,988,000.00

80.7

 

capital expenditures

25,270,000.00

45,163,000.00

78.7

 

total

133,735,000.00

241,151,000.00

80.3

TEACHER EDUCATION

current expenditure

8,448,000.00

48,009,000.00

468.3

 

capital expenditure

1,975,000.00

4,490,000.00

127.3

 

total

10,423,000.00

52,499,000.00

403.7

TECHNICAL COLLEGES

current expenditure

7,912,000.00

10,884,000.00

37.6

 

capital expenditure

4,697,400.00

7,637,000.00

62.6

 

total

12,609,400.00

18,521,000.00

46.9

The Committee noted that Administrative and General Division received the largest share ($241,151,000.00) which represent an increase of 80.3% from 2011. The large proportion of the expenditures are transfers to state universities. Teacher education was the second priority with an allocation of $52,499,000.00 and Technical colleges were the least on the 2012 priority. Although expenditures generally increased, the Committee noted that there was significant increase in teacher education; current expenditure increased by 468.3% while capital by 127.3%.this shows that the budget focused on teacher educational institutions which might have lagged behind, (under-funded in previous years) .

3.2 Analysis of the expenditure allocations

 

2011

2012

% change

1. ADMINISTRATIVE AND GENERAL

     

current expenditure

     

employment

2,981,000.00

4,322,000.00

45.0

goods and services

1,317,000.00

1,320,000.00

0.2

maintenance

380,000.00

377,000.00

(0.8)

current transfer

102,866,000.00

188,668,000.00

83.4

programmes

921,000.00

1,301,000.00

41.3

capital expenditure

     

acquisition of fixed capital assets

100,000.00

90,000.00

(10.0)

capital transfers

25,170,000.00

45,073,000.00

79.1

total

133,735,000.00

241,151,000.00

80.3

2.TEACHER EDUCATION

     

current expenditure

     

employment costs

6,548,000.00

30,089,000.00

359.5

operational expenses

1,750,000.00

17,770,000.00

915.4

current transfers

150,000.00

150,000.00

-

capital expenditure

     

acquisition of fixed capital assets

1,975,000.00

4,490,000.00

127.3

total

10,423,000.00

36,499,000.00

250.2

3. TECHNICAL EDUCATION AND TRAINING

     

current expenditure

     

employment costs

3,629,000.00

6,584,000.00

81.4

operational expenses

4,283,000.00

4,300,000.00

0.4

capital expenditure

     

acquisition of fixed capital assets

4,697,400.00

7,637,000.00

62.6

total

12,609,400.00

18,521,000.00

46.9

TOTAL EXPENDITURE

156,767,400.00

296,171,000.00

88.9

Under the administrative and general sector, all expenditure categories increased except for marginal decrease in maintenance due to decrease in fuel, oil and lubricants and acquisition of fixed capital assets. The 45% increase in employment cost imply an increase in salaries and wages next year. Although it will be a small increment, the increment will help to boost worker moral. All programmes were provisioned including the research and intellectual expo that show cases higher institutions research output but of concern of lack is increment for Higher Education Examination Council. Both current and capital transfers increased significantly by an average of 80%. This shows continued prioritisation of infrastructure rehabilitation and development in universities. Under teacher education, the huge increase in employment cost from US$6,548,000.00 to US$30,089,000.00 is highly appreciated as there will be significant increases in salaries that will help to curb brain drain. The slight increase in capital expenditures under technical education may signal less new capital projects as most might have been funded in 2011. The major capital expenditures in these colleges will be acquisition of fixed capital assets. This meant the budget is targeting equipment and other learning tools.

Transfers to Universities

Transfers under administrative and general, requires further detail as they represent the financing of universities. US$188,668,000 is current transfer while US$45,053,000 capital expenditure. This shows that more funds were allocated to finance operational and employment cost. The breakdown of these current transfers to state universities is summarised below:

detail of current transfers

2011

2012

% change

Ranking

bindura university

6,365,000.00

12,751,000.00

100.33

8

chinhoyi university

9,895,000.00

13,350,000.00

34.92

7

great zimbabwe

6,876,000.00

14,645,000.00

112.99

6

harare institute of technology

3,457,000.00

7,091,000.00

105.12

9

lupane university

1,367,000.00

4,046,000.00

195.98

10

midlands university

10,528,000.00

22,237,000.00

111.22

4

national education and training fund

15,000,000.00

24,000,000.00

60.00

2

national university of science and tech

10,739,000.00

23,103,000.00

115.13

3

university of zimbabwe

27,774,000.00

44,504,000.00

60.24

1

zimbabwe council for higher education

410,000.00

894,000.00

118.05

13

zimbabwe open university

8,373,000.00

16,985,000.00

102.85

5

scholarships foreign students

2,000,000.00

3,000,000.00

50.00

11

subscriptions to various organisation

82,000.00

82,000.00

-

 

Zimbabwe manpower development fund

 

2,000,000.00

 

12

total

102,866,000.00

188,668,000.00

83.41

 

University of Zimbabwe received the largest share (US$44,504,000) which represent an increase of 60.2% from 2011, the second institution is NUST followed by Midlands, of interest is the National Education and Training fund which is meant to support university students was also prioritised as it was allocated US$24,000,000, the 60% increase will go a long way in supporting students in 2012 who are facing financial problems. The Committee also noted that the Zimbabwe Manpower Development fund was provisioned in 2012 with an amount of $2,000,000.

(a)Capital transfers also require further detail as it increased by 70.1% in 2012. The following table summarises capital transfer to universities.

capital transfer

2011

2012

% change

Ranking

bindura university

2,915,000.00

4,003,000.00

37.32

3

chinhoyi university

1,270,000.00

2,480,000.00

95.28

8

great zimbabwe

1,965,000.00

3,280,000.00

66.92

7

harare institute of technology

2,395,000.00

3,680,000.00

53.65

5

lupane university

4,415,000.00

8,240,000.00

86.64

2

midlands university

1,395,000.00

3,380,000.00

142.29

6

national university of science and tech

5,265,000.00

13,980,000.00

165.53

1

university of zimbabwe

4,800,000.00

3,900,000.00

-18.75

4

zimbabwe council for higher education

90,000.00

800,000.00

788.89

10

zimbabwe open university

660,000.00

1,060,000.00

60.61

9

HEXCO

 

270,000.00

 

11

total

25,170,000.00

45,073,000.00

79.07

 

The largest share was received by National University of Science and Technology (NUST), the major projects are the construction of main library and students residence units (this will ease accommodation problems faced by students. On the second ranking is Lupane University; major projects will be construction of faculty of agriculture and civil works; then Bindura faculty of science phase 2, rehabilitating lecture rooms, and boreholes drilling, University of Zimbabwe is on fourth position . Harare institute of technology is on ranked fifth. There is a decrease in capital expenditure to UZ (18.75%) because some renovations were catered for in 2011 the major project will be rehabilitation of students halls of residents. the committee appreciated that capital projects will be undertaken in all universities, including the library at NUST and halls of residence, it is however concerned that there is no provision for libraries at Great Zimbabwe and Chinhoyi universities.

Current transfers to Teacher colleges.

Under teacher colleges, the Committee noted that operational expenses increased in 2012. Although there was a slight decrease on Belvedere Technical colleges from US$245,000 in 2010 to US$ 220,000 in 2011. Nonetheless this increment will improve service delivery in these institutions.

(b)Capital transfer to teacher colleges on acquisitions of fixed capital assets

Teachers colleges

2011

2012

% change

vehicles, plant and mobile equip

 

170,000

 

belvedere

390,000.00

500,000.00

28.21

hillside

170,000.00

430,000.00

152.94

madziwa

320,000.00

420,000.00

31.25

marymount

170,000.00

420,000.00

147.06

masvingo

230,000.00

430,000.00

86.96

mkoba

130,000.00

430,000.00

230.77

morgan zintec

175,000.00

420,000.00

140.00

mutare

110,000.00

420,000.00

281.82

seke

160,000.00

430,000.00

168.75

united college of education

120,000.00

420,000.00

250.00

total

1,975,000.00

4,320,000.00

118.73

· The Committee noted that Total allocation in capital expenditures increased marginally by 12.2% in 2011 from 2010.

· The 2012 budget provisioned vehicles and mobile equipment amounting US$170,000. This is highly appreciated as it is going to alleviate transport problems. And would facilitate the monitoring of these institutions. All teacher colleges received increment of nearly above 100% except for Belvedere, Madziwa and Masvingo although Belvedere received the largest allocation. Nonetheless, all colleges will acquire equipment necessary for teacher education. This is a positive development.

(c) Current transfers to technical colleges

Generally, there is a slight increase in operational expenses from US$4,283,000 in 2011 to US$4,300,000 in 2012. Although some marginally lost in 2012, they are likely to survive with such amount given that most have just used nearly 20% of their 2011 allocations. This is the case for Bulawayo and Msasa industrial park.

Capital transfer for technical colleges on acquisitions of fixed capital assets

technical colleges

2011

2012

% change

vehicle, plant and mobile equip

 

187,000

 

workshops equipment

 

2,500,000

 

bulawayo

480,000.00

520,000.00

8.3

gweru

180,000.00

460,000.00

155.6

harare

600,000.00

460,000.00

-23.3

industrial training and trade testing

18,400.00

40,000.00

117.4

joshua nkomo

1,250,000.00

860,000.00

-31.2

kushinga phikelela

770,000.00

610,000.00

-20.8

kwekwe

480,000.00

400,000.00

-16.7

masvingo

245,000.00

400,000.00

63.3

msasa industrial training centre

144,000.00

400,000.00

177.8

mutare

150,000.00

400,000.00

166.7

westgate industrial training centre

380,000.00

400,000.00

5.3

total

4,697,400.00

7,637,000.00

62.6

There were winners and losers in 2012. Joshua Nkomo received the largest share, although the allocation decreased by 31.2%, this is because most work had been completed in 2011. However, Msasa industrial training centre and Mutare's allocations increased significantly as they received less in 2011. This will enable the completion of resuscitated projects in 2011. Moreover, there is provision for workshops equipment and vehicles. This will ensure that all workshops are equipped. Technical colleges teaches practical skill that can only made possible by equipment.

  • STUDENT SUPPORT

· The committee noted that the budget has allocated US$24,000,000 on national education and training fund. The fund is meant to support students. The amount has been increased from US$15,000,000 to US$24,000,000. The amount is meant for Cadetship Support Scheme to finance education of disadvantaged students. This increment is highly appreciable.

· There is also fiscal policy intervention; students grants and Loan scheme, which has been allocated US$25,000,000.00. This amount will be complemented by Barclays- US$20,000,000 and ZB Bank - US$10,000,000 which is purely students loan scheme. This is welcome but the Committee concerned on the following;

· grant and loan scheme will be financed by diamonds revenue, meaning can only be operationalised upon the receipt of the revenue meaning there is a time lag before student have access to these funds. Delays in disbursement will negatively affect students welfare.

· sustainability of the private banks students loan scheme. There is the issue of collateral security and interest rates issues, and repayment period. The high unemployment rate might delay the servicing of the loans. Failure to service this loans may lead to the collapse of the system as the fund must revolve.

  • COMMITTEE OBSERVATIONS

· The integrated skills outreach programme continued to receive US$50 000 which might hamper efforts to ensure continued education of students who fail entry into higher education.

· Libraries, major learning infrastructures in higher learning were not provisioned at Chinhoyi and Great Zimbabwe.

· delayed disbursement of funds by Treasury.

· There were new provisions in the budget (workshops equipment and vehicle procurements)

· Cadetship Support Scheme Programme will compete with Student Grant and Loan scheme.

  • RECOMMENDATIONS

· The Ministry was one of the prioritised in 2012 and the allocation to educational affairs is above regional standard. The Committee appreciate this recognition by treasury. The allocation will fairly fund most programmes and projects, though large proportion of the budget is current expenditures (80.7%) compared to capital expenditures (19.3%). The current expenditure allocation will significantly help to improve the welfare of workers.

· Universities continue to be allocated high proportion of the capital expenditure and less in teachers colleges. This will ensure persistent rehabilitation of learning infrastructure. Existing projects in most institutions will continue running without stoppages. However the committee is concerned with the failure to provide for libraries at Great Zimbabwe and Chinhoyi universities. The committee recommend funds be allocated to these key projects. Moreover, ZOU which has no proper learning infrastructure and relies on rented infrastructure is again underfunded in 2012.

· Key strategic teacher's colleges Hillside and Mutare which specialised in science and maths students teachers are fairly funded. Although operational expenses decreased from US$245,000 to US$170,000 on Hillside. The huge increase in capital expenditures will ensure availability of most learning laboratories equipment. The provision on vehicle and workshop equipment in these colleges is greatly appreciated.

· The student support increased from US$15,000,000.00 in 2011 to US$24,000,000.00 in 2012. The amount is inadequate given the high demand of the Cadetship scheme and also the Ministry already has a deficit of US$42,206,145 from the 2010 and 2011 commitments. Government is yet to clear the 2010 debt under this Scheme and universities are owed a total of US$24 851 610. This unfortunately continues to negatively affect operations of institutions as the funds do not come in expected amounts or at expected frequencies. Failure of this system points to the fact that it would be impossible to consider the Loans and Grants Scheme if the funds available are inadequate to cater for the existing debts. The Committee therefore requests increase in allocation to this fund to clear accumulating debts and cater for the next academic year, and ease restrictions on accessing the fund. The Treasury must also timeously disburse funds. The complementary Students Loan Scheme from private banks is positive development. However the Committee recommends that the conditions of the loans be relaxed to suit all deserving students.

· The budget seems to have fairly covered most issues; however there is need to timeously release of allocated funds, otherwise capital projects may not be finished on time.

MINISTRY OF SCIENCE AND TECHNOLOGY DEVELOPMENT - Vote 26

1. INTRODUCTION

The ministry's major thrust is to promote research and development and the use of Science, Technology and innovation in all spheres of life. In this mandate, the ministry has four executing agencies : National biotechnology Authority, Research Council of Zimbabwe, Finealt and Verify Engineering. Countries that do not Research into technology usually face trade imbalances that result in outflows of foreign currency. The challenges of the ministry include promotion and awareness, commercialisation of research output, no permanent home for the ministry, and worn equipment and furniture.

1.1 2012 Key Objectives

· To raise awareness of the significance of science and technology

· commercialisation of research results especially fuel from coal.

· To promote innovation in science and technology institutes

The promotion and advocacy outreach programme (operational expenditure) that would publicise the role of science and commercialisation of existing research results (fuels) (capital expenditure) were the major target expenditures in 2012 budget allocations.

2. 2012 BUDGET EXPENDITURE ANALYSIS

To achieve the set goals, the ministry proposed a total bid of $50, 962,260,00 of which $40,087,670.00 was targeting commercialisation of research output (i.e. 78.7% as capital transfer). The ministry was allocated $9,450,000.00 (18.54% of the amount required) up from $5,000,000 in 2011 which translate to 89% increase. Thus the allocation severely affected capital transfer (87.9% deficit) although it covers over 65% of budgeted current expenditures. Despite the fact that the allocation increased by 89%, these figures in terms of percentage of GDP translate only to 0.00062% of GDP in 2011 and 0.079% of GDP in 2012. The slight increase is appreciable although, the allocation is still below regional standard: SADC is encouraging national expenditures on Research and Development to be 1% of GDP by 2015. Even though the ministry is still in the bottom 10 in budget allocation, in 2012 it has move up in terms of priority which may be a revelation of the ministry's importance and acknowledgement by treasury. The table below summarises the bottom 10 allocation

 

Ministry

2011

Share of budget (%)

 

Ministry

2012

share of budget (%)

1

SMEs

5,589,000.00

0.19%

1

Science and Techno

9,450,000.00

0.24%

2

Media

5,585,000.00

0.19%

2

ICT

9,423,000.00

0.24%

3

Mines

5,175,000.00

0.17%

3

Industry and Comm

9,087,000.00

0.23%

4

Science and Tech

5,000,000.00

0.17%

4

SMEs

8,950,000.00

0.22%

5

Industry and Comm

4,198,000.00

0.14%

5

Mines

6,921,000.00

0.17%

6

Audit

3,787,000.00

0.13%

6

Tourism

6,015,000.00

0.15%

7

Tourism

3,637,000.00

0.12%

7

Audit

5,075,000.00

0.13%

8

Economic Plan

2,129,000.00

0.07%

8

Economic Planning

2,762,000.00

0.07%

9

Regional Integration

1,662,000.00

0.06%

9

Regional Integration

2,378,000.00

0.06%

10

State Enterprises

1,331,000.00

0.04%

10

State Enterprises

1,875,000.00

0.05%

The ministry has increased in rank priority in budget allocation as is now leading the bottom 10 and its share of total national budget increased from 0.17% in 2011 to 0.24% in 2012.

Distribution of expenditure allocated ( US $9,450,000.00)

76.2% - current expenditures (US$7,200,000.00 up from US$3,940,000.00 in 2011)

23.8% - capital expenditures (US$2250,000.00 up from US$1,060,000.00 in 2011). This shows that current expenditures increased by 82.7% and will alleviate most administrative and operational expenses. This clearly shows less capital projects will be conducted in 2012.

The table below summarises how these expenditures were allocated to different departments and the four executing agencies.

SUMMARY OF THE DISTRIBUTION OF EXPENDITURE ALLOCATION TO DIFFERENT SECTORS

Text Box: Expenditure category	2011	2012	% change	% of allocation
Current expenditures	   1,337,000.00 	    1,400,000.00 	                 17.7 	16.7
    Employment costs	     301,000.00 	       502,000.00 	                 66.8 	5.3
    Goods and services	     847,000.00 	       748,000.00 	                -11.7	7.9
    Maintenance	     189,000.00 	       150,000.00 	                -20.6	1.6
Current transfers	   2,603,000.00 	    5,626,000.00 	                116.1 	59.5
     Biotech	     126,000.00 	       325,000.00 	                157.9 	3.4
     Research council of Zimbabwe	     246,000.00 	       686,000.00 	                178.9 	7.3
     Finealt	     650,000.00 	    1,600,000.00 	                146.2 	16.9
     Verify engineering	     581,000.00 	    1,515,000.00 	                160.8 	16.0
Innovation and commercialisation  	   1,000,000.00 	    1,500,000.00 	                 50.0 	15.9
Programmes 	 	       174,000.00 	 	1.8
promotion and advocacy	 -	       171,000.00 	 	1.8
HIV/AIDS awareness	 -	           3,000.00 	 	0.0
Capital expenditures	 	 	 	0.0
     Acquisation of fixed capital assets	       40,000.00 	         50,000.00 	                 25.0 	0.5
Capital transfers	   1,020,000.00 	    2,200,000.00 	                115.7 	23.3
     Biotech	     260,000.00 	         50,000.00 	                -80.8	0.5
     Research council of Zimbabwe	       20,000.00 	         50,000.00 	                150.0 	0.5
     Finealt	     340,000.00 	       800,000.00 	                135.3 	8.5
     Verify engineering	     400,000.00 	    1,300,000.00 	                225.0 	13.8
Total 	   5,000,000.00 	    9,450,000.00 	                 89.0 	100

 

 

 

 

 

 

 

The current expenditures to the ministry were distributed as follows;

  • Administration and general - $1,400,000.00 (i.e. 16.7% of total budget allocation) representing an increase of 17.7% from $1,337,000.00 in 2011. This will affect Ministry operations and other programmes which might hamper service delivery. Of this amount, 748,000.00 is allocated to goods and services although it decreased marginally (-11.7). Under goods and services, $289,000.00 will be rentals and hire expenses. This is because the ministry does not have permanent home thus represent an otherwise avoidable cost.
  • Programmes, received only US$174,000.00. Only promotion and advocacy was catered for with funds amounting US$171,000.00. Other complimentary programmes that would popularise the ministry such as celebrating the SET week and provincial shows will be shelved. This will hamper the efforts to popularise the significance of the ministry which is yet to be fully appreciated in the economy.
  • Current transfer to executing agencies - US$5,626,000.00 (representing 116.1% increase from US$ 2,603,000.00 in 2011. This shows 59.1% (US $5,626,000.00) of the budget are current transfer to executing agencies. Finealt and verify engineering received the bulk of the transfers. Finealt is the winner as current expenditures increases by 146.2% from US$650,000 in 2011 to US$1,600,000.00, while for Verify Engineering current expenditures increased by 160.8% from US$581,000.00 to US$1,515,000.00.

Text Box: Institution	2011	                    2,012.00 	% change
     Biotech	           126,000.00 	                 325,000.00 	                         157.9 
     Research council of Zimbabwe	           246,000.00 	                 686,000.00 	                         178.9 
     Finealt	           650,000.00 	              1,600,000.00 	                         146.2 
     Verify engineering	           581,000.00 	              1,515,000.00 	                         160.8 
Innovation and commercialisation  	         1,000,000.00 	              1,500,000.00 	                           50.0

These increments are highly appreciable because:

· expect increment in salaries and wages as employment costs increased by 66%. This will boost worker motivation.

· innovation fund -US$1,500,000 which increased by 50% from US$1,000,000.00 in 2011. This is a welcome development since increase in funding will perpetuate innovation and promote the commercialisation of small scale research output.

· However the rental and hire expenses under goods and services still concerns the committee: 289,000.00 from US$748,000.00.

The capital expenditures which cater for capital projects, furniture and equipment were distributed as follows;

  • Capital expenditure to the ministry: - Acquisition of fixed capital assets was allocated US$50,000.00 from US$40,000.00, this represents a 25% increment, this will affect the purchase and maintenance of aged equipment. As a relatively new ministry, it does not have enough chairs and desks, thus staff moral will be negatively affected. The Committee appreciated this on-going equipping of the new ministry, however, no provision of vehicles, plant and mobile equipment. This implies it will be difficult to coordinate research across the country.
  • Capital transfers : - amounted to US$2,200,000.00 which increased by 153.5% from US$1,020,000.00 in 2011. This increment seems plausible but fell short than the amount bidded for. The table below summarise capital transfer distribution to executing agencies in 2012.

Institution

2011

2012

% change

% of allocation

Biotech

260,000.00

50,000.00

-80.8

0.5

Research council of Zimbabwe

20,000.00

50,000.00

150.0

0.5

Finealt

340,000.00

800,000.00

135.3

8.5

Verify engineering

400,000.00

1,300,000.00

225.0

13.8

· prioritised Verify Engineering, but amount fell short of the target and Biotech was the loser as capital expenditure fell by over 80%. This could be explained by the fact that previously funded capital projects are nearing completion at this institution. Verify engineering the strategic executing agency targeted for large scale commercialisation of research output ; coal liquefaction in 2012, is the most affected. The agency required US$37,707,898.00 to finalise the coal to fuel plant. The US$1,300,000.00 is just 3.45% of budget requirement. The Committee is saddened with this since fuel is key to not only easing availability but as an economic strategic tool that can aid development.

· Finealt as it received the US$800,000.00 as per budget requirement. this will ensure that laboratory equipment and other furniture requirements will be purchased, so as construction of warehouse and comprehensive research on Jatropha (raw material in biodiesel)

3. OBSERVATIONS

The Committee noted that the ministry key objectives are;

a) commercialising coal liquefaction and

b) raise awareness of the significance of science and technology through promotion.

· Verify engineering was underfunded despite being a strategic agency in current problems affecting the country. Country does not have fuel deposits.

· Promotion and advocacy programme although provisioned but under-funded given that most Zimbabweans do not appreciate the role and importance of science and technology.

· acquisition of fixed capital assets was also under funded, the US$50,000 is not enough for new equipment and furniture, and maintenance of the equipment.

4. RECOMMENDATIONS

· The ministry is important in modern economic growth strategy. The budget allocation is still below the standard of 1% of GDP. The Committee encourages the treasury to continue increasing allocation towards this standard.

· The 2012 budget was supposed to fund the commercialisation of research output (coal liquefaction). This is strategic as it will ease current fuel problems in the country. The country must be self sufficient in fuel. The fiscal policy statement was concerned of external sector imbalance; growing Balance Of Payment problem. For the US$2 billion current account deficit, fuel imports account for over US$1 billion. This project requires only US$40,000,000.00 that would bring solutions to current problems

a) reduce BOP deficit

b) drive economic growth - Most developing countries that are doing well in the world economic affairs rely on fuel especially oil; in SADC we have Angola fuel from oil, South Africa fuel from coal. At a commercial scale, this coal to fuel plant will generate up to US$2.6 billion revenue per annum from low grade coal. If the country can produce fuel worth US$2.6 billion and fuel import bill is just above US$1 billion. This will translate to an excess of over US$1 billion which can be exported to other countries. Thus the project can solve the BOP problem as the country would move from net importer to net exporter of fuel. The South African SASOL is a good example. Indeed this project will help the country to accumulate foreign reserves.

c) more over there are several by products of significance to current problems such as Ammonia that would help fertiliser manufacturing.

d) at full capacity it will employ over 1000, not including the downstream petro chemical industry.

The Committee therefore recommend that Verify Engineering be FULLY funded by allocating the remaining US$37,707,000.00 , as there are huge spill over benefits to the whole economy.

· the promotion and advocacy amount also be increased up to at least financing provincial shows.

· The committee also recommended that the ministry be housed as this will relief additional funds which was meant for rentals (US$289,000) to other projects such as promotion and advocacy.

· the Treasury must timeously release funds as per request for successful completion of capital projects.

· Overally, though the Ministry is underfunded in capital expenditures the increment on current expenditures is highly appreciable. Thank you.

MR. MATSHALAGA: Thank you Mr. Speaker Sir. Let me present the report on the Portfolio Committee on Health and Child Welfare. The committee did look at vote 16 and commended the Minister for having made the allocation that he did under very difficult circumstances. We welcomed his idea that the Health Vote should be consistent with the Abuja Declaration of 15%. However, when we looked at the Vote itself, we were surprised that it is, far below the Abuja Declaration. That means it is roughly between 8.6% and 9%. Though we noted that in terms of per capita provision, the Minister had been creeping from 21% per capita to about 26%, but we would commend the Minister each time he has opportunity to ensure that Health is prioritised as a social sector. Health is very important to development. We then reviewed the performance of last year's Budget and we discovered that, notwithstanding the high allocations that had been made, the expenditures were far on the average between 30% to 45% below the budgeted amount. That means most of the voted items were under provided at least by the end of November to about 71%. The Ministry had spent only 71% of its Vote. We would encourage the Minister, particularly where the Ministry owes funds to other trading institutions, to make sure that these entities are paid as quickly as is feasible.

We also noted that the Ministry is having difficulties in manpower development, notwithstanding that we have got a surplus of doctors and nurses. We discovered that the Ministry has put a curb on the recruitment of both nurses and doctors but there had been attempts to unlock but particularly on the nursing and other medical professions, there are still qualified nurses roaming the streets.

We had wanted the Ministry to confirm whether sufficient funds for deployments were provided to get the institution a full complement on their manpower.

We were actually advised that, that was not the case but that discussions were still going on and we would urge the Minister that he pays a sympathetic hearing to the Ministry.

There was one worrying feature of the budget particularly in the procurement of the drugs. We were pleasantly surprised that about 98% of the drugs in this country are donor funded and only 2% are provided for in the budget. Yes, we appreciate the Minister concerned but we would urge the Minister and Ministry and support as Parliamentarians to ensure that we reduce this high donor dependence on drugs.

We also noticed that most of that funding is going for curative services, notwithstanding that there is an old adage that "prevention is better that cure."

The recommended level of funding is about 16-20% for preventive medicine that will ensure that we do not have outbreaks of typhoid, cholera and other diseases.

Still on NATPHAM, we discovered that NATPHAM is a Government Medical Stores though it is struggling. The Ministry of Health has consumed almost all the drugs from NATPHAM to up to US$3,65 million, but it has not paid NATPHAM. The Medical Stores is struggling and they are saying there is weak management at NATPHAM together with poor management.

We did visit NATPHAM and we were surprised that the problem was more with the Ministry of Health and Ministry of Finance than with NATPHAM so we would urge the stakeholders in this process to ensure that at least 3/5 of the budget is paid at least this year. When it was created, it was supposed to be a trading entity but it is so under-capitalised and it is like saying ndava kurumura mwana but you do not give them milk. We would encourage this House to support recapitalisation of NATPHAM.

One of the disturbing features is the structure of the building. There is a lot of space but they are donor funded. The Ministry of Health window has only pamphlets and no drugs. The Minister has a habit of going to the field in Dotito and so on, but he has to visit that place for about 30 minutes.

The other problem that was disturbing is on the roof. It is a special roof that is supposed to keep the heat out but is sagging and there was some puss that was leaking but the medicines are kept on pallets so that when water flows, it does not affect the medicine. We would also urge some kind of cooperation to arrest that situation. We also discovered that the cold room there, that is meant to keep the medicine and save the nation, most of them are leaking. They are a bit old and they need to be refurbished or replaced.

One of the disturbing features is that if a fire breaks out there, unless the fire brigade is very efficient, there is one where there is no fire hindrance.

Mr. Speaker Sir, I think I would like to join my Committee and would like to give some accolades to the Minister for free medical maternity health care, but we discovered that when it comes to funding, it appears to be more funded by donors than by the Ministry.

We also looked at the issue of ARVs because most of our relatives are on ARVs. I do not know whether Members of Parliament are on ARVs or not. We were told by the medical professionals that once you are on a drug, if you miss the drug regime, you will be seen six feet down there. So we would want it as a matter of protection to make sure that the Government plans for that eventuality whereby 600 000 people will be on drugs in the event that the donors quickly withdraw.

We were pleased that you had provided funding for capital projects, particularly the mortuaries. Our mortuaries in the main hospitals are in a sorry state, but Hon. Minister, when we visited some of these mortuaries, we discovered that the bodies were decomposing and one of the most difficult issues is when you take your relative from the mortuary, you do not want to think he is smiling and I do not think it will cost a lot of money to make the mortuaries refurbished or for new ones to be built.

The last issue which is a cross cutting issue, I know as a Government, we have a policy that no subsidies and the reason is that if you put subsidies on milk, then Hon. Muchena will be benefiting. There will be no unintended beneficiaries should you put subsidies to sanitary pads, they have no other use other than that.

Mr. Speaker Sir, I would also want to congratulate the minister and also to emphasise the need for you to take a serious look jointly with your colleague next to you on the CDF. The CDF is one of the most important innovation that you came up with but you spoiled the broth. You promised us money, we promised all our constituents that money was coming and that we were going to distribute the funds. Suddenly - you did not even have the courtesy to tell us that you were not going to give us US$60 million. What we are saying, based on the experiences of other countries like Kenya - I wish you could take your officers to Kenya. The current design of the CDF, particularly the accounting demands, is not amenable to management by MPs. We do not even want such kind of management because this is what is hindering even the Tender Board. The paperwork is so cumbersome that the paperwork becomes more important than the project. I do not think that was ever the intention.

Mr. Speaker, in other countries they have made sure that the CDF is not dependent on the minister. It has been incorporated into their legislation so that we have Mr. Biti now, next time it is Mr. Mavima, he cannot just do away with it. We do not have such frivolous excuses. So, I would urge the Minister to take seriously our recommendation for only 1%. It will cover a lot of your small problems because in this country, we are good at minute problems. By just putting 1%, you transfer small problems and schools and clinics will be revamped.

Let me go to the overall budget thrust, I think you got it minister, you visited, you consulted but generally, I am worried that there appears to be some - I do not know whether it is some executive arrogance or bureaucratic

arrogance. Most of the Votes this year were under-spend, maybe there is something wrong with our paper trail. Despite the fact that you say we eat what we kill, I do not think we are eating all that we are killing right now - [laughter] - we could be chimukuying. I think we probably need to address that through some kind of capacity building. The idea is not just mere allocations and financial prudence because what it means is, did you spend the money or not. What we want is effective and efficient programmes. Do we have some kind of expenditure planning in the ministry? Do we have some public expenditure review before we go to the next budget? This should not be just throwing numbers here or there to satisfy the whims of ministers and permanent secretaries - [laughter] - I hear I have ruffled some feathers.

If you notice Hon. Minister when you came in, you provided US$4 million for the Joshua Mquabuko Nkomo Airport, that was in 2009. 2010, another US$1 million, 2011 another US$1 million and I am sure 2012 another US$1 million. The committee is concerned about this kind of unclear cut allocations. We think it provides opportunities for - I do not like to say whoever is in that business but for other opportunities other than the implementation of the project.

Mr. Speaker, one of the biggest problems that we have in this country is the structure of our buildings. Our buildings, our offices - at the headquarters, yes there is a lot of refurbishment. At the provincial and district level, most of these buildings are almost in ruins. You probably need a special task force to arrest that. Not only buildings minister, you may not be aware that you are the custodian of all Government assets. The level of disused assets that are in piles and piles behind hospitals, district offices leaves a lot to be desired. You could raise a lot of money. We suggest that for old furniture that is no longer usable, if you give it to hon. ministers, they can get it refurbished under their CDF and put it back to the classrooms. I thank you very much and commend this Budget for consideration.

MR. JIRI: I rise to give a report on the Portfolio Committee on Agriculture, Water, Lands and Resettlement. Post Budget Report for the Ministry of Agriculture, Mechanization and Irrigation Development.

The Ministry of Agriculture, Mechanisation and Irrigation Developmentis responsible for ensuring food security in the country and agricultural produce for the manufacturing sector. It is mandated to facilitate a sustainable and viable agricultural sector by creating an enabling environment for food production and provision of raw materials. It carries out this mandate by providing technical, administrative, advisory research and regulatory services to the sector. The Ministry fulfills its mandate through the following department; Administration and General, Agricultural Research for Development, Agricultural Technical and Extension Services (Agritex), Veterinary Technical Services, Veterinary Field Services, Tsetse Control Services, Agricultural Regulatory Services, Agricultural Engineering and Mechanization, Livestock Production and Development and Irrigation Development.

The Ministry is classified under the economic sector and hence resourcing it becomes paramount if the objective of achieving economic growth is to be pursued. Zimbabwe's economy is heavily depended on agriculture which contributes 15% GDP, 16% of exports share and 60% of the raw materials in domestic manufacturing industry are from agriculture. Agriculture also provides livelihoods to over 70% of the rural population in Zimbabwe.

Objectives and Policy Developments

The Parliamentary Portfolio Committee on Agriculture, Water, Lands and Resettlement noted that the Ministry's objectives are

· To ensure food security at household level.

· Improve food crop and livestock varieties by improved research

· Increase agricultural extension services coverage

· Increase crop and livestock productivity and production

· Improve the quality and accuracy of agricultural production statistics

· Improve farmers access to agricultural inputs on time

· To seek to enhance smallholder production by promotion of private sector contract farming companies partnerships with the farmers

· Improve farmer's access to both local and international markets

The key results of the Ministry:

· Crop production, productivity and research

· Animal production, productivity and research

· Irrigation development

· Agricultural mechanization

· Farmer training and extension

· Access to markets

Overview of 2012 Budget.

The Honorable Minister of Finance made strong mention that it was important to create a conducive, "Doing Business Environment". This would then boost investor confidence which the country dearly needs for capital injection. The Minister emphasized the need to give special focus on rural under-development through addressing rural energy, water and agriculture. The budget for the year 2012 has put deliberate focus on inclusive growth with job creation and to also work at decentralization of resource allocation and to work at even and equal treatment of Province. Given the little assistance from the Donor community on the 2012 budget, the Minister pointed out the need to redesign the financial services sector to promote saving, financial deepening, viability, sustainable to the business sector, as well as reduction of financial sector vulnerability. This being the case, the projected US$ 4 Billion which is a 45.67% increase from the revised 2011 budget of US$2.746 billion shall mainly depend on domestic finance thus it is heavily reliant on domestic revenue collection and performances.

Ministry of Agriculture Mechanization and Irrigation Development Budget Allocation Analysis

Agriculture plays a pivotal role in Zimbabwe's economy and has the potential to significantly reduce poverty, enhance economic growth and entrench economic stability. The budget is not suggestive to this fact as the Ministry's budgetary allocation is the seventh of the top ten ministries which is not different from the 2011 allocation. The 2012 provision compared to 2011 provision has increased by 82.59% which is a fall compared to the 119% increase of the 2011 budget compared to the 2010 budget.

However, the Ministry got 5.66% of the total budget which is 1.86% more compared to the 2011 budget which was 3.80% of the pie. The 2012 allocation falls 4.44% short of the Maputo declaration by AU Heads of States which recommends that national budgets should dedicate at least 10% of fiscal resources in support of agriculture as shown by Table: 2 below. The increase reflects that Ministry of Finance is taking agricultural production seriously.

Achievements of Ministry of Agriculture, Mechanization and Irrigation Development

Despite the delay and poor timing in release of funds from Treasury, the Ministry managed to do the following in the year 2011:

· The Ministry managed to mobilize resources for the agricultural sector

· The nation had an increase in tobacco output of above 130million kilograms in the 2010/2011 season from 70 million kilograms in 2009/2010 season.

· Managed to control animal disease through vector control and vaccination programmes

· Managed to disseminate information through farmer training, field days and demonstration on best practices.

· In the small-holder sector, 726ha of arable land was availed for irrigation benefiting 1500 households and an additional 1700ha have been availed for irrigation under private partnerships benefiting 3400 households.

· Implemented the project on small grains in the marginal areas of Zimbabwe at national and provincial levels.

· Establishment of an agricultural testing center and mobile workshops for the repair and maintenance of farm machinery across the country.

· During the 2010/2011 season, the calving rate was 45% up from 35% in the 2009/2010 season, while kidding and lambing rates were at 108% and 43% respectively.

· Formulated and implemented a National Conservation Agriculture Strategy.

· Facilitated Public Private Partnerships to enhance production and productivity in the agricultural sector

Compliance with some sections of the Maputo Declaration

Revitalization of the agricultural sector; the 2012 budget has made provision for rehabilitation of 56 irrigation schemes to the tune of US$ 15million contained in Annexure 6 of the national Budget statement, US$16.6 million towards Research and Extension Services, and a further US$3 million for agricultural training centers to develop human capacity, in support of livestock development, Government availed US$2.5 million in 2011 through Agri-bank, which also topped the amount with another US$2.5 million to give a total of US$5 million. To further re-capitalise livestock development US$6.5 million was allocated, this will be complemented by additional resources raised by the banking system. Contract farming arrangements with private sector are in place for 2012, mainly supporting the production of cash crops. With regards to tobacco, the TIMB, in partnership with other stakeholders, has already confirmed US$418 million funding arrangements for production under 70 000 hectares. Half of this hectarage will be financed through contract growing and marketing, while the balance relates to bank borrowings and use of own resources.

The Treasury team was involved in nationwide consultative meetings to receive the views of the people across the country which is one of the resolves of thedeclaration.

Governments are to ensure the establishment of regional food reserve systems, including food stocks; and budget proposes to set aside some US$50.2 million towards grain procurement for the GMB, also targeting build-up of our Strategic Grain Reserve up to the stipulated 946 000 tons, guaranteeing National capacity to deal with any famine. So far, grain payments to the GMB under the 2011 Budget, mainly against 2011 deliveries by farmers, have amounted to US$56 million, with an outstanding balance of US$26million owed to farmers.

Figure 1: Maputo Declaration Comparison with 2012 Allocation

 

Bid for 2012

2012 Allocation

Ministry of Agriculture

593,848,966.00

226,791,000.00

Maputo Declaration

400,000,000.00

400,000,000.00

Variance of from the declaration

193,848,966.00

- 173,209,000.00

Percentage Difference

148.46%

56.70%

Percentage of over/under budget

48.46%

-43.30%

As shown by the figure above, the Ministry according to the budget had over budgeted by 48.46% in terms of the Maputo declaration. However Treasury allocated 43.30% less than the requirements of the Maputo Declaration. There is need to allocated 10% to agriculture so as to stimulate primary production which will cascade to other sectors of the economy. If Treasury avails the 10% requirement to Agriculture it be come easy for the donor community to see the country's commitment to its signatory on the Maputo declaration.

The Top Ten Allocations for the Year 2012

Table 1: Top Ten (10) Budget Allocations for the Year 2012

Top 10 Allocations for 2012

2011

2012

Increase/Variance

% Change

Total budget

2,746,000,000.00

4,000,000,000.00

1,254,000,000

45.67%

1. Education

496,420,000

707,325,000

210,905,000

42.49%

2. Health

256,198,000

345,688,000

89,490,000

34.93%

3. Defence

198,437,586

318,272,000

119,834,414

60.39%

4. Home Affairs

200,021,000

308,330,000

108,309,000

54.15%

5. Higher Education

158,695,400

296,171,000

137,475,600

86.63%

6. Finance

167,607,237

284,677,000

117,069,763

69.85%

7. Agriculture

124,210,800

226,791,000

102,580,200

82.59%

8. Office of the President and Cabinet

121,253,272

172,471,000

51,217,728

42.24%

9. Local Government

100,474,000

90,281,000

-10,193,000

-10.14%

10. Energy and Power

66,863,000

49,742,000

-17,121,000

-25.61%

Table 2: A comparison of percentage budget allocation to Agriculture of 2011 and 2012

Percentage Allocation of Agriculture to the 2012 Budget

5.66%

Percentage Allocation of Agriculture to the 2011 Budget

3.80%

Percentage increase to Agriculture in 2012

1.86%

 

Bids From The Ministry for 2012

In its 2012 bid the Ministry has made a total bid of $563,848,965 for the ministry including Parastatals. Treasury has however availed USD 226,791,000 out of the USD 4 Billion dollars. The bulk of the allocation goes to salaries, capital transfers, lending and equity participation, and current transfers which account for USD 165,153,000 leaving USD 61,638,000 for capital projects development, agricultural colleges, operational expenses, maintenance of vehicles and equipment, programmes and goods and services. With such an inadequate allocation of the financial cake, the onset of 2012 take off with crippled operational capacity for the Ministry of Agriculture which does not paint a good picture for a nation which depends on primary production.

Table 3 below shows the comparison of the actual allocation for 2011 the Ministry and the proposed 2012 provision. In the quest to promote sustainable agricultural production, the Ministry made the following divisional bids and allocations where given by treasury for 2012. Table:4 below then compares the two and indications are that the Ministry got 38% of the total funding they had applied for. The table also shows the divisional bids and their allocations.

Table 3: 2012 Budget Allocation Versus 2011 Budget Allocation

Division/Sub-vote

2011 Provision

(A)

2012 Provision (B)

Variance

(C=A-B)

% Variance (D=C/A)

Administration and General

35,875,700.00

104,244,000.00

68,368,300.00

191%

Agricultural Colleges

5,541,000.00

5,100,000.00

- 441,000.00

-8%

Agricultural Research for Development

11,274,000.00

13,327,000.00

2,053,000.00

18%

Agricultural Technical and Extension Services

21,742,000.00

34,888,000.00

13,146,000.00

60%

Veterinary Technical Services

2,896,000.00

3,240,000.00

344,000.00

12%

Veterinary Field Services

17,373,000.00

23,785,000.00

6,412,000.00

37%

Tsetse Control Services

3,537,000.00

4,734,000.00

1,197,000.00

34%

Agricultural Regulatory Services

4,839,000.00

5,792,000.00

953,000.00

20%

Agricultural Engineering and Mechanization

3,304,000.00

4,305,000.00

1,001,000.00

30%

Irrigation

15,958,500.00

22,349,000.00

6,390,500.00

40%

Livestock Production and Development

1,870,000.00

5,027,000.00

3,157,000.00

169%

Total

124,210,200.00

226,791,000.00

102,580,800.00

83%

 

Table 4: Comparison of 2012 Bids Versus 2012 Allocation

 

Text Box: Division/Sub-vote	2012 Bid 
(A)	2012 Provision (B)	Variance (C=A-B)	% Variance (D=C/A)
Administration and General	   348,933,168.00 	       104,244,000.00 	- 244,689,168.00 	-70%
Agricultural Colleges	        7,774,300.00 	           5,100,000.00 	-     2,674,300.00 	-34%
Agricultural Research for Development	     23,030,457.00 	         13,327,000.00 	-     9,703,457.00 	-42%
Agricultural Technical and Extension Services	     37,240,210.00 	         34,888,000.00 	-     2,352,210.00 	-6%
Veterinary Technical Services	     12,697,046.00 	           3,240,000.00 	-     9,457,046.00 	-74%
Veterinary Field Services	     37,252,479.00 	         23,785,000.00 	-   13,467,479.00 	-36%
Tsetse Control Services	     12,416,958.00 	           4,734,000.00 	-     7,682,958.00 	-62%
Agricultural Regulatory Services	     18,418,832.00 	           5,792,000.00 	-   12,626,832.00 	-69%
Agricultural Engineering and Mechanization	     26,016,984.00 	           4,305,000.00 	-   21,711,984.00 	-83%
Irrigation Development	     58,660,222.00 	         22,349,000.00 	-   36,311,222.00 	-62%
Livestock Production and Development	     11,408,310.00 	           5,027,000.00 	-     6,381,310.00 	-56%
Total	   593,848,966.00 	       226,791,000.00 	- 367,057,966.00 	-62%

Implications of the Allocation to Sub-vote

The committee noted the following implications of the 2012 budget allocation:

· The Ministry made it clear that treasury was delaying in funds disbursements given that planning for the Agricultural season would require funds early in the year. The little available funds if released in time would go a long way in promoting and stimulating production. It was agreed by both the ministry and the Committee that it would make a big difference if three quarters of the funds should be released in the first quarter of the year and the reminder spread over the remaining three. The untimely release of funds has also meant that farmers get inputs late in the season as opposed to them receiving funds before the start of the season. This leads to delays in planting which then translates to poor yields. Examples here are the winter wheat and the summer cropping. There is urgent need to address this mindset with Treasury. Agriculture is a lifestyle with a different set of rules.

· The increase under Administration and General is not on operational expenses but rather on the capital transfer, and most of it going to GMB for grain procurement. The Ministry appreciates the gesture from treasury of realising the need to capacitate GMB to enable procurement of strategic grain reserves, the allocation is little considering that of the USD 50 million allocated to GMB, USD 40 million is the actual amount meant for grain procurement and the remainder going to handling costs.

· Parastatals within the Ministry are white elephants at present; it would be good to get in Private sector-Public Sector partnerships which will ensure growth of these entities while the government becomes a silent partner. This will create employment and revenue for the government and at the same time the objective for which the parastatals where set up for will be met.

· Veterinary Technical Services; the budget line for the institutional provisions has been under financed. Old equipment is now making it difficult to produce vaccines for Anthrax, Newcastle and Foot, and Mouth, meaning that in the event of an outbreak the vaccines have to be imported. Foot and Mouth and Disease (FMD) has spread from the usually endemic areas. The reason being the fence that controls the movement of buffalo requires rehabilitation and maintenance. The need to restrict the movement of buffalo is because the beast is the host of the FMD which affect all cloven hoofed livestock. The vet technical service is currently producing vaccine for the disease but do not have modern technology to produce enough stocks of the vaccine. This therefore means the balance is imported from Botswana and this is expensive for the Ministry.

· Veterinary Field Services; Dipping infrastructure in most rural areas need urgent attention the budget has not made provision for this. The budget has made provision for half of the chemicals which are required the other half has been offered by FAO. The ministry made mention that there was need to ensure vector control so as to reduce the occurrence of tick borne diseases which can result in the reduction of livestock head in the country. The underfunding has the following implications, the department does not have transport and hence not visible on the ground, making it difficult to monitor and act promptly in the event of an outbreak as the staff is not motorized. Disease control measures especially movement controls have been inadequately provided for undermining effective disease control. Given that some of the animal diseases are zoonotic, they are a cause of concern in for human health too, treasury should also take this into consideration.

· Staff housing in the rural areas, the ministry still does not have adequate housing in the rural areas and this does not motivate staff to work in these areas where raw materials for manufacturing are produced. The allocation for staff housing needs to increase so as to attract and maintain the current staff establishment.

· Motorization in the Ministry has slightly improved, but there is need to ensure that people on the ground (Districts and Wards) are motorized as they are the one responsible for monitoring the day to day activities for farmers. Most district offices in the Ministry have remained unmotorized and have had to relay on the NGOs for monitoring which is not the best mode of function for Nation who boast of agriculture being the back bone. There is urgent need to provide at least 2 Vehicles and 70 motorbikes for each of the 60 AGRITEX Districts and for the 8 provincial offices 2 vehicles each. AGRITEX has the greatest interface with the farmers compared to all other departments and hence we cannot over look their impact on productivity issues.

· Research Stations. 70% of all the research stations have outdated and mul-functioning equipment. Information is power, and information for successful farming is generated though intensive research. Zimbabwe is known to have produced some of the highest yielding varieties in maize and tobacco, meaning that the potential still remain here, treasury has to realize that to make money in agriculture the country has to invest in research so as to improve the yields and practices. Funding for such programme should be independent of the main budget; they should be directly under treasury so that nothing stops the process of research at any point. Laboratories are in need of new state of the art equipment to use for research. Agricultural research will require mobility so as to collect data, at present none of the 15 stations has reliable vehicles. It would be essential to provide 2 vehicles per research station to make them 30 and 5 motorcycles per station to promote participatory research in the rural areas. It should be remembered that when Zimbabwe was the best tobacco producer there was a lot of research that was put into it and we cannot run away from the fact that it will cost money. The orientation of research should focus on the fact that we now have more small scale farmers and hence need to research on issues to do with intensive production. Research should also focus on issues to do with product quality and standards plus markets.

· Tsetse Control Services. Lack of adequate funds implies that more than 500 000 cattle and 170 000 households in Rushinga, Doma, Dande and Kotwa are going to be exposed to trypanosomiasis. There is need to control the Tsetse fly which is the vector of the disease. In the year 2010 the country lost ground to Tsetse by +2500kmin the Sanyati area and we are still to recover this area.

· Agricultural Regulatory Services: with rise in the number of imported agricultural products and inputs, this department is mandated to control the quality of agricultural genetics that comes in to Zimbabwe. They are also responsible for monitoring the quality of inputs that agro-companies produce and importing.

· Irrigation Development; in agricultural production water is one of the most important resources that control quality output. None availability of water will result in the risk of losing crops due to Mid-season droughts,, with this in mind the budget has made provision of USD15 million of irrigation development and rehabilitation which is a positive sign for rural development. These irrigation schemes become great centers for possible contract farming as water is guaranteed and hence become attractive for private sector player to support with inputs given the creation of longer production cycles.

· Livestock production and development: the department has got responsibility of restocking the national head. There has been no allocation towards the procurement of new vehicles and this will make it difficult to monitor progress of the restocking programme. The department requires office space and no allocation has been given to it. In 2011 and 2012, beef production is projected to marginally grow by 0.5% and 0.1%, respectively from 0.2% in 2010. However, this sector has potential to grow by over 5% as in the 1990s, also supporting the canning and leather industries, among others. In support of livestock development, Treasury availed US$2.5 million in 2011 through Agribank, which also topped the amount with another US$2.5 million to give a total of US$5 million.

  • Recommendations

5. There is need for the Treasury to be compliant and own up as signatory to the Maputo Declaration which requires that 10% of the national budget be allocated to agriculture.

6. The Treasury should release funds timeously if the budget is to make any meaningful impact to the Ministry and the Agricultural Sector. The increase in budget allocation should also translate to an increase in releases.

· There is need for the Ministry to submit their financial situation to the committee every quarter so as to ensure that the committee makes timely appeals to the Ministry of Finance on issues to do with release of funds from treasury.

The Committee noted that the Ministry of Finance has to consider employing agricultural specialist who should advise the Minister on the best time to finance agriculture and its value chains. Treasury should have crops production, animal production, Horticultural Production, Agricultural engineering and Agro-processing specialist who work closely with the Ministry of Agriculture so as to advise the Minister of Finance in time given that agriculture is the back bone of the economy. I thank you.

MR. CHEBUNDO: Thank you Mr. Speaker for giving me this opportunity to present the report on behalf of the Committee on Transport, Communication and Infrastructural Development or Vote 13 of the 2012 Budget.

1.Introduction

.1.The core responsibility of the Ministry of Transport and Infrastructure Development is to manage transport, communications, meteorological, seismological and infrastructure services. Its key result areas are Transport and Communications Infrastructure Development, Safety Management and Transport Management. For the Ministry to successfully deliver on its mandate, adequate budgetary finance is required.

.2.The Portfolio Committee on Transport and Infrastructure Development held a post budget analysis meeting with Ministry Officials on Monday, 28 th November 2011.

  • 2011 Budget Performance Review for the Ministry

2.1 The Ministry was allocated $74.4 million for the 2011 financial year. Out of this allocation, only US$25.1 million was disbursed and the Ministry managed to achieve the following:

· Significant progress on the dualisation of the Harare-Norton and Harare -Skyline roads

  • Road maintenance

· Completion of works on the Harare International Airport taxi way

· Attended to over 200km of cautions for the rail

· Procured equipment for 20 automatic weather stations

· Initiated the progression of Meteorological Services to ISO certification by 2013

  • Rehabilitation of 1 000 boreholes
  • Completion of 5 clinics
  • Construction of 500 blair toilets

· However, the Ministry faced the following challenges during the 2011 financial year:

· Cumbersome procurement procedures

· Cashflow problems (inconsistent receipts from Treasury)

· Inadequate funds from fiscus

· Inadequate personnel due to skills flight

· Payment delays to contractors by IDBZ for lending and equity projects

  • Key Objectives

3.1The Ministry's major policy priorities for the period 2012-2015 are;

7. Rehabilitation of road, rail, telecommunications and aviation infrastructure

8. Reduction of traffic accidents

9. Achieve traffic services growth

10. Increase access to reliable weather forecasts

11. Increase the provision of water, sanitation and hygiene services in communal areas.

Therefore adequate resources are needed to enable the Ministry to undertake projects and programmes that will lead to the achievement of the above objectives.

  • Overview of the 2012 Budget

4.1 The 2012 Budget is projected at US$4 billion, representing a 45.7% increase from the 2011 revised budget estimate of US$2.7 billion. The 2012 budget is anchored on domestic financing which implies that the budget shall depend on the performance of revenue inflows.

4.2 The Ministry was given US$109,477,000, that is, 2.7% of the total vote appropriation, which is the same as the previous year's proportion. However, this is a 47% increase on the 2011 allocation of US$74,424,500. While the Ministry was on position 13 with regards to the budget allocations in 2011, this time it has moved two places up to settle on the 11th position. This is depicted in Table 1 below.

Table 1: Top 11 Ministries (Vote Appropriations)

   

VOTE APPROPRIATIONS

   

2011

% of Budget

2012

% of Budget

1

Education

469 420 000.00

17.09%

707 325 000.00

17.68%

2

Health

256 198 000.00

9.33%

345 688 000.00

8.64%

3

Defence

198 437 586.00

7.23%

318 272 000.00

7.96%

4

Home Affairs

200 021 000.00

7.28%

308 330 000.00

7.71%

5

Higher Education

158 695 400.00

5.78%

296 171 000.00

7.40%

6

Finance

167 607 237.00

6.10%

284 677 000.00

7.12%

7

Agriculture

124 210 800.00

4.52%

226 791 000.00

5.67%

8

Office of the President and Cabinet

121 253 272.00

4.42%

172 471 000.00

4.31%

9

Public Services

75 921 005.00

2.76%

126 360 000.00

3.16%

10

Justice

83 495 000.00

3.04%

111 168 000.00

2.78%

11

Transport

74 424 500.00

2.71%

109 477 000.00

2.74%

             

Distribution of the budget according to Departments within the Ministry

The Ministry has three major departments namely Administration and General, Meteorological Services and Departments of Roads. In this regard, the Administration and General received 62% of the budget, US$67 701 000 while Met Services and Roads received US$4 103 000 (4%) and US$37 673 000 (34%) respectively.

TABLE 2: Departmental Shares

Department

2011

%

2012

%

Admin and General

35 836 000

48

67 701 000

62

Met Services

3 822 000

5

4 103 000

4

Roads

34 766 000

47

37 673 000

34

Total

74 424 000

 

109 477 000

 

The allocation to Administration and General increased by 89% to US$67,7 million while allocations to Meteorological Services and Department of Roads increased by 7% and 8% to US$4,1 million and US$37,7 million respectively.

Table 3: Departmental Allocation and % Changes

Department

2011

2012

% Change

Admin & General

35 836 000

67 701 000

89

Met Services

3 822 000

4 103 000

7

Roads

34 766 000

37 673 000

8

Current Expenditure versus Capital Expenditure

The Ministry's total capital expenditure is $92 455 000 representing 85% of total allocation whilst current expenditure is US$17 022 000 (15%). There was a 50% increase in allocations to capital expenditure, with the increase for current expenditure being 34%. While these developments are welcome, the key lies on the disbursements of funds. In the 2011 financial year, only US$25.1 million (33%) was disbursed out of the allocated amount of US$74.4 million. If there is no improvement on the disbursement of funds from Treasury, the same projects that could not be undertaken in 2011 will still fail to take off in 2012.

Departmental & State Enterprise Requirements versus Allocation

Despite the Ministry being ranked 11 in terms of the amount of allocation under the vote appropriations, the allocated amount of US$89 725 000 to its departments and state enterprises fall way short of their project requirements totalling US$734,688 215, that is, 12% of requirements. DDF was not allocated funds under the Ministry's vote but US$17,5 was allocated under the Office of the President and Cabinet (OPC).

Table 4: Departmental Requirements versus Allocations

Department/Parastatal

Total Requirement

Actual Allocation

%Actual/Requirement

Roads

255 310 000

32 830 000

13

Met Services

14 120 000

1 330 000

9

Transport Management

4 500 000

2 065 000

46

DDF

109 248 215

 

-

CAAZ

70 000 000

17 500 000

25

TelOne

207 500 000

5 000 000

2

NRZ

28 680 000

20 000 000

70

DID

45 330 000

11 000 000

24

TOTAL

734 688 215

89 725 000

12

The Secretary for Transport and Infrastructure Development informed the Committee that the above scenario means that other parastatals need to find alternative sources of funds rather than rely on cheap budget money for example, TelOne, NetOne, CMED and NRZ. He, however, stated that non-commercial departments such as Roads, DDF and Meteorological Services need to be funded through the fiscus. He highlighted that the Ministry was fortunate to have departments like VID and CVR which generate revenues which the Ministry is allowed to retain.

While Air Zimbabwe can generate revenue, all things being equal, under the present circumstances, its capacity is heavily compromised. In the 2012 budget, no funds were allocated for the airline contrary to expectations. Air Zimbabwe needs budgetary allocation to meet its basic necessities unless there are other alternative arrangements outside the budget. The non-allocation of funds to Air Zimbabwe has raised concerns to the Ministry, the airline and its creditors and staff. At the moment there are outstanding amounts owing to fuel suppliers and other creditors and staff salaries that need about US$15 million.

The Committee recommends that efforts on looking for strategic partners for entities such as TelOne, NetOne and Air Zimbabwe be intensified. However, the Ministry highlighted that those who approached the Ministry were offering unfavourable terms thus delaying the process. With regards to NRZ, the Committee recommends owning the infrastructure and the rolling stock entity being privatized and opened to other players. A regsub-sector will need to be established. This will reduce pressure on the fiscus.

Ministry officials were of the view that as long as CMED's major client is Government (which does not pay and currently owes it $10 million) it will remain fettered. They recommended that if Government pays its debt, CMED would not need budgetary support. The same applies to TelOne whose account was garnished by ZIMRA whilst it is owed $75 million by Government.

Recommendations.

· The Committee also recommends that Government recapitatlises and

finds strategic partners for the above entities such as Air Zimbabwe, TelOne and NetOne as a matter of urgency.

· The Government procurement procedures need to be revisited with a view to enhance efficiency. A case in point is an amount of US$5 million for the acquisition of equipment, which ha not yet been disbursed from Treasury.

· While it is appreciated that disbursements are linked to revenue inflows, the Ministry of Finance needs to respect Ministry priorities and quicken the disbursement process.

· The committee recommends that Government should pay parastatals for services rendered in order for them to be viable and not depend on budgetary finance.

· The Committee is extremely disturbed that TelOne and CMED are owed US$75 million and US$10 million by Government, ZIMRA, which collects revenue for Government, went ahead and garnished TelOne's account. We strongly recommend that Government pays debts owing to these entities.

· Furthermore, it is the Committee's recommendation that CMED be allowed to import its own fuel for operation to enhance viability.

· The committee further recommends that ZINARA be allowed to collect toll gate fees on its own.

· The Committee also recommends that NRZ's operations be unbundled with Government owning infrastructure while the rolling stock arm is privatized and other players allowed to come in.

· Furthermore, the Committee recommends that Ministries include amounts for debts owing to other stakeholders in their budget bids

MR. MAVIMA: I would like to present the report on the budget analysis by the Portfolio Committee on State Enterprises and Parastatals.

Introduction

The restructuring of State Enterprises and Parastatals and the promotion of good corporate governance among them, has the potential of lessening the Government fiscal burden, promoting efficiency and the overall competitiveness of the economy. If well executed, the task will manifest itself in sustainable economic growth and development. The Ministry of State Enterprises and Parastatals therefore has a very important role to play in the economic transformation of Zimbabwe.

In the budget statement, the Minister acknowledged the approval of a framework for the restructuring of State Enterprises incorporating privatisation, commercialisation and restructuring . Sadly, the Minister noted the lack of progress and commitment by respective line Ministries in restructuring identified public enterprises. To address this problem the Minister proposed the development of an effective implementation strategy with clear timeliness to speed up implementation.

Notwithstanding this, the Minister noted the following achievements by the MoSEP during 2011:

a. Principals of SEP Management Bill approved by Cabinet;

b. ZISCO and NOCZIM restructured, restructuring of Agri-bank approved, restructuring of GMB and Air Zimbabwe considered by Working Party;

c. Corporate Governance roll-out implemented for all SEPs;

d. Principles of SERA Bill presented to Cabinet;

e. Restructuring proposals being formulated in respect of ZPC, CAAZ, Telone and Netone;

f. National framework agreement finalised at working party level and being provided for in the Labour Act;

g. Concept paper on comprehensive stock circulated to stakeholders for improvements;

h. Jointly with OPC hosted a workshop to introduce e-Government to SEPs;

I. Hosted conference on restructuring of SEPs;

j. Draft regulatory framework for SEPs to be distributed to stakeholders for improvement by November 2011.

FUNCTIONS OF THE MINISTRY OF STATE ENTERPRISES AND PRASTATALS (MoSEP)

The Ministry is responsible of the following overall functions:

  • Facilitating restructuring of SEPs;
  • Promotion of Good Corporate Governance;
  • Improving Performance Monitoring in SEPs

· Improving the Regulatory Environment for SEPs;

  • Mandate and legislate Review for SEPs;
  • Policy Development and Review of SEPs.

The ministry's priorities and programmes for 2012 are as follows:

· Restructuring of identified SEPs;

· Develop an exchange for SEPs, SMEs and other growing companies;

· To develop a policy framework on Gender participation in restructuring;

· To achieve full Corporate Governance compliance in all SEPs;

· Development of Performance Monitoring Framework for SEPs;

· Introducing results based management in SEPs;

· Development of a Regulatory Framework for SEPs;

· Carry out mandate and legislative review for SEPs;

· Finalisation of SEPs management Bill and SERA Bill

The committee noted the programmes listed above will involve interaction with stakeholders, mainly through consultative workshops, benchmarking to international best practises, monitoring and evaluation and capacity building.

OVERALL BUDGET PERFORMANCE 2011-2012

The National Budget increased by about 23% from US$3.246 billion in 2011 to US$4 billion 2012. In 2011 the budget had increased by 44.3% from 2010 budget of USD2.25 billion. Total budget as a percentage of GDP is set to increase from 31,7% in 2011 to 33,6% in 2012. Table 1 below shows the MoSE&P's budget expenditures in relation to the national budget and GDP.

TABLE 1: THE SIZE OF THE MoSE&P'S BUDGET EXPENDITURE

Item

2011 Projected

2012 Projected

     

Ministry's Vote allocation (US$)

1 331 000

1 875 000

National Budget (US$)

3.2bn

4bn

Nominal GDP (US$)

10.1bn

11.9bn

Total National Budget as %of GDP

31.68

33.61

Ministry's vote allocation as a % of National budget

0

0

Ministry's vote allocation as a % of GDP

0

0

VOTE ANALYSIS

The MoSEP received a vote allocation of US$1 875 000 for 2012, up from US$1 331 000 in 2011. This presents a 40,9% increase in vote allocation. Overall Vote Appropriation increased by 47,8% in 2012, from US$2 467 600 000 in 2010 to US$3 647 968 000 in 2012. The Ministry got a good share from the budget as is vote allocation moved in line with the budget. Comparing with other ministries, the allocation to Education, Sport Arts and Culture increased by 50,7%, Health and Child-welfare (34.9), Energy and Power Development (-25.6%), Agriculture, Mechanisation and Irrigation Development (82.6%). Table 2 shows the Ministry vote allocation against the bids submitted.

Table 2: for 2012 Budget analysis for the MoSEPs

 

2012 allocation

2012 Bid

Variance

%VAR

Operations

1 056 000

1 229 080

(173 080)

-14.08

Capital

50 000

70 300

(20 300)

-28.88

Employment

350 000

-

350 000

 

SERA

       

Employment

175 000

-

175 000

 

Operations

144 000

144 260

-260

-0.18

Capital

100 000

100 000

0

0

TOTAL

1 875 000

1 543 640

331 360

 

Of the US$1 875 000 allocated in 2012, US$419 000 are current and capital transfers to SERA. The Ministry had bided for US$1 229 080 for its operations but was allocated US$1 056 000, resulting in shortfall of US$173 080. It was noted that operations mainly involve workshops, capacity building activities involving interaction with foreign cooperating partners. In this regard, to manage the shortfall in the vote allocation, the Ministry proposed to reduce the number of these activities. Innovative ideas will also be pursued and these include approaching cooperating partners for finance of some of the activities.

Table 3 shows the changes in allocation in each expenditure category between 2011-2012. Under current expenditures, employment costs were increased the most by 78.57%, followed by current transfers to SERA (69.68%) goods and services (18.62%). The allocation for maintenance were reduced by 7.38% from US$122 000 in 2011 to US$113 000 in 2012. capital transfers to SERA were effected for 2012 by US$100 000.

Table 3: Changes in Expenditure allocation

 

2011 (UD$)

2012 (USD)

% Change

Vote allocation

1 331 000

1 875 000

40.87

Current expenditures

1 113 000

1 725 000

54.99

Employment costs

196 00

350 000

78.57

Goods and services

795 000

943 000

18.62

Maintenance

122 000

113 000

-7.38

Current transfers

188 000

319 000

69.68

Capital expenditure

Acquisition of fixed capital assets

Capital transfers

30 000

30 000

-

150 000

50 000

100 000

400

66.66

100

Table 4 shows the composition of expenditure categories in the total ministry budget allocation. Current expenditures continue to dominate the Ministry's expenditure at 92% versus capital expenditures at 8%. This was well received by the ministry which acknowledged that its main role is on service delivery and operations. Moreover, most of the capital equipment is in place serve for the research department which requires additional capital in the form of computers. Thus in 2012, current expenditures consume most of the budget when compared to 2011, while capital expenditure decline in the budget. Of the current expenditures, goods and services will consume 50.1% employment (18.7%, and maintenance (6%).

Table 4 Composition of Expenditure in the total ministry budget

 

2011

2012

Total SE&P expenditure (US$)

1 331 000

1 875 000

Current Expenditure (%)

83.6

92

Employment Costs (%)

14.7

18.7

Goods and Services(%)

59.7

50.1

Maintenance(%)

9.2

6

Capital expenditure(%)

16.4

8

Acquisition of fixed capital assets (%)

2.3

2.7

Capital Transfers (%)

2.3

5.3

     

Capital expenditure allocation

Capital expenditure allocation increased by 400% from US$30 000 in 2011 to US$150 000 in 2012. The acquisition of fixed assets will improve in 2012. However, concerns were raised over the late disbursement of capital funds by Treasury.

Employment Costs

Employment costs are set to increase by 79% from US$196 000 in 2011 to US$350 000 in 2012. The share of employment costs in the Ministry budget has also increased from 14.7% to 18.7%. The increase in employment costs may result in improved staff welfare which will in-turn increase efficiency in the Ministry's operations.

Conditions of Service for SERA Staff

The Committee was enlightened of the poor conditions of service for SERA staff. This was in light of the fact that SERA does not fall under the Public Service Commission, and as such, staff members are not entitled to housing and transport allowances available to other civil servants.

Cost Recovery Elements

On cost recovery, the Committee noted that the SERA has no legal framework for charging fees. The SERA bill is currently overlapping with existing legislation and should be harmonised with other existing legislation including the legislative framework for PPPs. The Committee also noted that the lead, manage and coordinate function is difficult given that Parastatals are governed by Acts of Parliament within their respective line Ministries. The Committee noted the need for the separation of the ownership from the regulation function.

RECOMMENDATIONS

· The ministry should develop an effective implementation strategy with clear time-lines for restructuring identified Enterprises and Parastatals so as to speed up the implementation process.

· The MoSEPs should harmonise the SERA bill with all other existing legislation. The SERA Bill should be incorporated with clauses that allow SERA to charge fees on its services for cost recovery purposes.

· Ownership should be separated from the regulatory function across line Ministries responsible for State Enterprises and Parastatals. This will enable MoSEPs to effectively perform its role.

· There is need for raising awareness on the importance of managing and conserving conflict zones especially on the part of ZINWA and EMA. I thank you.

MRS MATIENGA : I will give a brief background to the Ministry of Women Affairs, Gender and Community Development.

Introduction

1. Gender equality is a major dimension for human development. Women constitute 52% of the total population in Zimbabwe. It is therefore important that their representation and participation in the development process is commensurate with the numerical and demographic reality.

2. The Minister of Finance, in the 2012 budget statement, acknowledged that women in our country constitute an important force that has high potential to effectively contribute towards achievement of the three prioritised Millennium Development Goals (MDGs) goals 1, 3 and 6. He further stated that an enabling environment, including access to credit and skills training is, thus, required to enhance their participation in mainstream economic activities.

3. The Minister acknowledged that disparities arising from gender and other peculiarities have often meant that Budget interventions are not always responsive to the needs and demands of citizens in a neutral way. He highlighted that his Ministry is formulating Expenditure proposals, (Treasury Budget Call Circulars) and can always call on ministries to integrate gender issues from the strategic planning stage, through to consolidation of their Expenditure Proposals.

4. The target is to ensure that policies deliver to women and men, boys and girls more equitably. The Minister further encouraged line ministries to use gender budgeting as a tool for gender inclusiveness in the budget process. The Minister highlighted that Gender sensitive budgeting is not about increasing allocations or having separate budgets for men and women, but rather, it is about re-orientation of programmes within sectors in order to promote more effective use of resources to achieve both gender equality and human development.

Functions of the Ministry of Women Affairs, Gender and Community Development

5. The Ministry is mandated to empower women through gender mainstreaming. It carries out its mandate by coordination and implementation of the National Gender Policy: institutionalising gender budgeting in all budgets, policies and programmes of Government and private sector organisations, raising awareness on laws that affect women and providing financial assistance to vulnerable women's groups through the Women's Development Fund and Community Development Fund.

6. The Ministry has three technical departments namely Women Affairs, Gender and Community Development, with supporting departments of Finance and Administration, Human Resource and Internal Audit. The Ministry is decentralised up to Ward level.

7. The Ministry works with several civic organisations involved in community development, women and gender issues.

Overall budget performance

8. The total national budget increased by about 23% from US$3,246,000,000 in 2011 to US$4,000,000,000 in 2012. The allocation for the Ministry of Women Affairs, Gender and Community Development increased by about 47% from US$6,857,000 in 2011 to US$10,063,000 in 2012.

9. The comparison between the Ministry's bid of funds for 2012 versus the allocation provided by Government: we have employment costs which were actually US$5m and goods and services US$6m but the actual given was 1,127,000 with a variance of 5,028,899.75.

Women's Development Fund

The Ministry was allocated US$3 000 000 for the Women's Development Fund., up from US$2 000 000 in 2011. The increase in this fund is a welcome development, however, the allocation for 2011 has still not been disbursed, allocation becomes irrelevant in ensuing years. In the event that the fund is availed, the Ministry should state the number of women benefiting from it and should further disaggregate beneficiaries by demographic characteristics such as age, and geographic location.

The Committee has recognised the need for transparency and accountability in the distribution of this fund. It has come to light that most beneficiaries who accessed this fund did not qualify for the assistance received.

Gender Mainstreaming

The Ministry was allocated US$100 000 for Gender Mainstreaming in Government. The allocation is meager, given the level and intensity of work undertaken by the Ministry such as the review of the National Gender Policy. The gender mainstreaming budget should be increased to address gender gaps in all line ministries. Each line ministry should also be allocated a budget for gender mainstreaming with concomitant key result areas. In the current budget, only six ministries have a clear budget line for gender mainstreaming, namely:

a) Public Works (50 000)

b) Agriculture, Mechanisation and Irrigation Development ($20 000)

c Ministry of Higher and Tertiary Education ($30 000)

d) Regional Integration and International Co-operation ($2 000)

e) Constitutional and Parliamentary Affairs (5 000)

f) Women Affairs, Gender and Community Development ($100 000)

Implementation of gender equality outcomes needs adequate financing. In accordance with agreements that Zimbabwe has signed as well as the Treasury Budget Call Circular, it is therefore imperative for each ministry to reflect gender mainstreaming in their budgets, through a gender specific budget line that is adequately funded.

Fixed Capital Assets

The ministry is decentralised, with offices up to ward level. In light of the size and the nature of work of the ministry, the ministry had made a request for US$3 481 351.00 to cater for purchase of basic equipment such as vehicles and computers. Of this request, the ministry was allocated a meager US$400 000, which is insufficient.

Recommendations

14) The allocation for gender mainstreaming must be increased and 5% of all other line ministry budgets should be allocated to gender mainstreaming.

15) The ministry should work closely with the Parliamentary Portfolio Committee on Gender and Youth to ensure timely disbursement of the women's development fund from Treasury.

*Then the last recommendation in Shona, I am requesting the Minister of Finance, if it is possible, may be on favour or in hooks or crooks, if you can, on that 2011 budget of US$2 million, which is on white paper, if you can take it and add it to 2012, I think our Ministry of Women's Affairs will be helped to meet its mandates. I am asking you Minister of Finance on that.

You know that we are the mothers who are responsible for looking after the families and if you can please help us?

There is need for increased transparency in the disbursement and administration of the women's development fund by the ministry.

MINISTRY OF YOUTH DEVELOPMENT, INDIGENISATION AND EMPOWERMENT

INTRODUCTION

The youth are an important group in the development agenda. The Minister of Finance in his Budget statement alluded to the fact that for self-evident reasons, it is important to democratise the economy and place youths at the centre thereof. This is fundamental in constructing an inclusive equitable economy.

The Minister also applauded the establishment of the Youth Empowerment Fund which was launched on 16 November 2011. The Fund, which has been established by Old Mutual, will be administered by CABS and should benefit all creative youths irrespective of tribe, religion, ethnicity or political preferences. Government, is in further discussions with other partners with a view to augment the Youth Empowerment Fund.

Functions of the Ministry of youth Development, Indigenisation and

Empowerment

· The Ministry is responsible for empowerment of youth and indigenous citizens in order to achieve sustainable and equitable development. The Ministry promotes skills training at vocational training centres spread countrywide and skills outreach programmes. The current focus of the Ministry is the implementation of the revised National Youth Policy and the National Youth Service training programme, full implementation of the Indigenisation and Economic Empowerment Act.

· The Ministry has one sub-vote: Administration and General in which all support divisions, namely Finance, Administration, Human Resources, Internal Audit are housed. The Ministry is also responsible for running 42 vocational training centres throughout the country and supports youth self-employment initiatives through enterprise development and start up capital.

· The Ministry's proposed budget estimate for the 2012 financial year is US$48 280 000. The major component of this budget is employment costs at US$29 660 000 which is 61% of the total budget. The next significant budget allocations is the current transfers which was allocated US$12 110 000 which translates to 25% of the total budget. Goods and services allocation is US$3 384 000 which is 7% of the total budget. Maintenance allocation is only US$1 206 000 which is 2.5% of the total budget. Programmes allocation is a meager US$300 000. Total capital budget estimate is US$1 620 000 which is 3.3$% of the total budget.

BUDGET ESTIMATES ANALYSIS

  • Employment Costs

Total allocation of US$29 660 000 was based on existing employees in post which currently stands at 7420. Vacancies as at Budget date stood at 7 000. Expenditure on this vote item shall depend on the level of salary increases to be awarded to the civil servants and also on future recruitment policies to fill in the existing vacancies.

  • Goods and Services

Total allocation for goods and services for both general administration and vocational training is US$3 384 000. This item shall cater for teaching and training materials, office accommodation, fuel, vehicle hire, utilities and other service charges. Provision of adequate budget will facilitate quality education at the ministry's 42 vocational training centres and quality service at all ministries institutions.

  • Maintenance

Due to the poor state of the Ministry's infrastructure at vocational training centres and National Youth Service centres, there is a critical need to upgrade these facilities. Maintenance of buildings at vocational centres will be given priority during this financial year. This vote item shall also cater for the maintenance of motor vehicles. The current fleet of vehicles is now old and therefore needs constant repairs and servicing at a high cost. Also Ministry institutions are using old technical equipment and tools which constantly breakdown thereby requiring a huge budget for repairs and maintenance.

Current Transfers

Employment Creation Fund

The ECF has an allocation of US$36 000 for the year 2012 against a bid of US$1 million. This allocation constitutes only 36% of the required amount for the year 2012. The money is required for setting up youth business hubs and clusters and the establishment of milling plants in all provinces. The fund is therefore grossly under-capitalised to meet these planned activities.

Youth Development Fund (YDF)

YDF has an allocation of US$4 500 000 against a bid of US$5 000 000. The fund is going to support youth enterprise start ups for self employment. The allocation is reasonable and will be complemented by youth empowerment facilities (YEFs) availed by some companies that include Old Mutual and Meikles.

National Indigenisation and Economic Empowerment Fund (NIEEF)

The NIEEF bid was US$10 000 000 and the allocation is 60% of the bid at US$6 000 000. This amount falls short in supporting both the National Indigenisation and Economic Empowerment Board (NIEEB) and NIEEF (for financing Indigenisation and economic empowerment transactions). This defeats the objective of achieving a broad based empowerment, as there are no resources to support empowerment transactions for the majority of the indigenous Zimbabweans.

Programmes

YOUTH PROGRAMMING ACITIVITY BUDGET FOR 2012

Development of the National Data Bank

US$100 000 was allocated for 2012. To date, the data bank template has been developed and designed to capture data and information on youth including the following.

· Youth register with personal details of out of school youth including information on individual development needs disaggregated by province and district.

  • Register of youth serving organisations.

Institutional data base.

Data collection will be done at ward level by youth officers and uploaded at district level for the on-line transmission to head office.

Data will be accessible on-line to stakeholders.

The $100 000 in 2012 will be used as follows:

Activity item

Description

Amount

Total Amount

Development of data collection tool

· Printing and distribution of 10 000 Questionnaires

$5 000

$5 000

Internet connectivity in all provincial and district offices

· Purchase of computers for provincial offices ($500x10)

· internet connectivity charges - 10 provinces and 72 districts ($1000/province)

$5 000

$10 000

$15 000

- - - - - -

Staff Training

· 1x National TOT workshop for provincial youth officers

· Provincial training workshops for district youth officers (10x$5000 per province)

$10 000

$50 000

$60 000

Project Launch

  • 1x national project launch ceremony

$20 000

$20 000

Total

   

$100 000

Youth Grants

· $100 000 was allocated for 2012.

· This will be used to support youth interact centres, youth exchange programmes and provide establishment grants to support youth associations as follows:

Item

Amount

Support for established Youth interact centres (Tsholotsho and Mt. Darwin)

$30 000

Youth exchange programmes

$54 000

Establishment of grants to support pre-registered youth associations

$16 000

Total

$100 000

Youth Interact Centres

· In 2011 the Ministry, with support from UNFPA embarked on a project of establishing youth interact centres. These are youth friendly centres designed to facilitate provision of ICT services including internet, HIV/AIDS awareness, career guidance, entertainment etc. for the development of the youth in rural areas. Where these services are not readily available. The centres also act as platforms for engaging youth in community and national development programmes.

· Two pilot centres were established in Tsholotsho and Mt. Darwin districts. The target is to establish one interact centre in every district.

In 2012, an amount of $30 000 will be used to support the interact centres at Tsholotsho and Mt. Darwin mostly to pay for the bandwidth subscription for the centres.

Youth Exchange Programmes

· In the joint commissions held in 2011, the ministry committed to cooperating in youth development through the Memorandum of Understanding (MOU) with a number of countries which include the DRC, Malawi, Mozambique, South Africa, Botswana, Namibia, Iran and China. One of the areas specified in the NOUs is organising youth exchange programmers as a way to strengthen bilateral relations as well as help develop youth in our respective countries through sharing experiences, best practices and creating networking opportunities for youths.

· In 2012, from the funds allocated, $54 000 will be used to facilitate exchange learning visits by youth and officials to Namibia since the ministry has already agreed on an MOU with the ministry of Youth Namibia. With funds permitting, the ministry would also want to facilitate youth participation at international conferences such as the AU Summit, the UN and AU Ministers Conferences and other youth conferences in line with the African Youth Charter and the commitments made by the AU member states in various conferences such as COMY.

Establishment of Grant to support Youth Associations

In 2012, the ministry will use $16 000 to support pre-registered youth associations by way of establishment grants or to support their initiatives and projects. It is anticipated that this amount will be distributed equally in all 10 provinces.

Indigenisation and Empowerment

A total amount of US$100 000 has been allocated for 2012 for all indigenisation and empowerment programmes as compared to US$150 000 in 2011. This allocation is just 3% of the requirements for 2012. The Budget is required to complete the implementation of indigenisation and empowerment programme in the other 12 sectors of the ceremony staring with manufacturing sector.

Acquisition of Fixed Capital Assets

This Vote item shall cater for furniture and equipment, vehicles, buildings and irrigation schemes. Furniture allocation is $120 000 and this allocation shall be used to buy furniture for new Ministry offices especially Bulawayo and Harare Provincial offices. The Ministry has been allocated $150 000 for the procurement of motor vehicles. Approximately, only 7 vehicles can be procured from this Budget. The current fleet is very old and expensive to maintain and there is need to replace the current fleet of vehicles. Five construction works were allocated funds and three of them refer to irrigation schemes and the remaining two are for Lupane vocational centre and Shamva office block. A significant amount of US$400 000 was allocated for the re-equipment of vocational training centres. This will go a long way in improving training standards at the Ministry's centres.

Capital Transfer

NIEEF was allocated a paltry US$400 000 as capital transfer to the fund. This falls short of the fund's requirements for the procurement of shares for warehousing and supporting other indigenisation transactions for the indigenous Zimbabweans. More resources are required if the objects of indigenisation and empowerment are to be attained.

Recommendations

· The allocations for the Youth Programme Fund are commendable but there is need to state how many youths are going to benefit from the fund and disaggregate them by sex.

· The Indigenisation and Empowerment Fund which is US$100 000 should be reviewed as it is hardly adequate to fulfill its objectives. I thank you.

MS. MANGAMI: I am presenting the Budget Report on the Ministry of Education, Sport, Arts and Culture. First of all, I would like to inform the House of the Ministry's mandate. The ministry's mandate is the provision of quality, inclusive and relevant education, namely Early Childhood Development, Primary and secondary education, schools psychological services and special needs education, life-long and continuing education, as well as promotion and development of sport, arts and culture. An equally significant component of the mandate is also to ensure that there is increased access, retention, completion of grades/forms and improved achievements.

As in the previous year, the structure of the Ministry comprises five sub-votes, namely, administration and general, primary education' secondary education, education coordination and development and sport and culture.

The Ministry has five parastatals, namely, the Zimbabwe Schools Examination Council (ZIMSEC) and the National Library and documentation Services (NLDS) which fall under the Department of Education Coordination and Development. The National Arts Council of Zimbabwe (NAC), the National Art Gallery of Zimbabwe (NAGZ) and the department of Sport, Arts and Culture.

As will be appreciated, the ministry is labour intensive and has an approved establishment of 138 950 with 101 027 members in post as at 30 November 2011. It is very important that the ministry's programmes, projects and activities are adequately funded in ordered to achieve the desired results.

BACKGROUND TO THE 2012 BUDGET

Under normal circumstances, ministries would submit their bids, in line with their strategic plans, which they would defend before Treasury. In this vein, the Ministry had come up with a bid of US$270 000 000, excluding employment costs. However, for the 2012 Budget, the whole expenditure target was determined by Treasury as indicated in their call circular no 9 of 2011, dated 17 October 2011. For this Ministry the expenditure target was pegged at US$72 080 000. Of this amount, US$40 000 000 million was for recurrent expenditure while US$32 080 000 was for capital expenditure. In terms of the afore-cited circular: paragraph 4.8 and 4.10 there was no scope for redirecting any amount from one expenditure head to another.

The Committee noted that; accordingly, the Ministry's Budget proposals had to be within above the ceiling in line with Treasury Call Circular which stipulated that " of this amount US$40 000 000 is for Recurrent Expenditure, with no scope for redirecting any amount from one expenditure head to the other"...."Accordingly, your budget proposals should be within the above ceiling. Budget proposals that do not observe the given ceilings (ET) will be returned to respective Ministries for revision." (Treasury Call Circular p8)

Consequently, ministry had to re-prioritise and cut its programmes, projects and activities in line with allocated amount of US$72 080 000.

Madam Speaker, the Committee also noted that; following the meeting with Treasury officials on 5 November 2011, where the Ministry discussed and highlighted the inadequacy of the allocation, Treasury then re-adjusted the allocation to US$78 879 000, which still is inadequate for the needs of this Ministry.

ANALYSIS OF THE 2012 BUDGET ALLOCATION

Mr. Speaker, the Ministry was allocated US$707 325 000 from the 2012 Budget proposals tabled before Parliament by the hon. Minister of Finance. This represents only 17.7% of the total Government budget against the SADC benchmark of 30% for education.

The bulk of the budget allocation is for employment costs which are at (USD 628 446 000), accounting for 89.0%. The accounting officer has no control over the employment costs which are directly under the Public Service Commission. After removing salaries, the Ministry remains with US$78 879 000. Included in this figure is US$5 363 000 (0.8%) which is an allocation to Ministry, Parastatals and subscriptions to various professional organizations. This leaves US$73 516 000 (7.2%) under the direct control of the Accounting Officer. The allocation for capital investment is US$32 350 000 remains with US$41 166 000 (5.8%) for operations. It should be noted that the recurrent budget was prepared within a limit of US$40 000 000 allocated by Treasury. Table 1 analyses the Ministry's allocation and Table 2 gives a comparative analysis of the 2012 budget allocation for the Ministry of Education, Sport, Arts and Culture with two other ministries.

Table 1: Ministry allocation

 

Amounts allocated

Percentage

Employment costs

USD 628 446 000.00

89.00%

Capital transfers to parastatals

USD5 363 000.00

0.80%

Funds for the development of education

USD73 516 000

10.20%

Table 2 Comparative analysis of Ministries

 

HEALTH

DEFENCE

MOESAC

Authorized establishment

35680

45944

138950

Total allocation

345 688 000

318 272 000

707 325 000

Employment Costs %

131 432 000

38%

216 790 000

68%

628 446 000

89%

G&S %

23 012 000

6.7%

49 610 000

15.6%

11 152 000

1.57%

Maintenance %

1 980 000

0.5%

15 182 000

4.7%

2 520 000

0.4%

Transfers %

80 677 000

23%

7 200 000

4.4%

26 543 000

3.8%

Programmes

%

44 232 000

12.8%

7 200 000

2.2%

6 314 000

0.9%

Capital %

64 355 000

18.6%

15 340 000

4.8%

32 350 000

4.6%

The impression created by the figure reflected under the Ministry's allocation is that it has the highest allocation of the total national budget. However, numerical evaluation reveals that the Ministry is the third on allocation compared with similar key Ministries like Health and Defence. The biggest component of the allocation is on employment costs. That is US$628 446 000 representing 89% of the Ministry's total allocation.

e) Goods and Services

A total of USD 11 115 200 or 1.6% of the budget for the Ministry or 3% of the total Government allocation for goods and services was allocated for service support. This translates to USD7.00 per month (Equivalent of 4 litres of fuel) per employee to carry out his/her tasks. The Ministry is number 11 in terms of allocation for goods and Programmes, number 8 in terms of allocation for Government Programmes, number 10 in terms of capital investment allocation and number 5 in terms of transfers. The budget allocation on goods and services has gone down compared to the 2011 allocation of USD15 683 000. Allocation of goods and services for the Ministry of Health per employee is USD 644 against USD79 per employee of the Ministry of Education, Sport, Arts and Culture.

Support for operations (programmes)

The Ministry has been allocated USD6 314 000 to support programmes. This represents 0.9% of the budget for the Ministry and it does not positively compare with USD44 232 000 or 12.8% for the Ministry of Health.

Maintenance

The Ministry was allocated USD2 520 000 for maintenance. The Ministry procured 92 vehicles in 2011 and another 59 are expected to be procured in 2012. The budget allocated under this item will surely not be enough to ensure adequate maintenance of the fleet.

OBSERVATIONS

The following observations have been made by the Committee:

· While the impression and painting of the budget proposal create a picture of the Ministry receiving the biggest allocation the real facts clearly show that the primary and secondary education is not on the top priority sector areas of the Government work programme.

· Inadequacy of the budget to fund the Ministry's programmes. Projects and activities.

· The Call Circular and the subsequent allocation limited the Ministry's budget to US$78 879 000 as compared to the Ministry's bids which totalled US$270 000 000 excluding employment costs (see Annexture 2).

· Limited release of allocated funds when required which impacts negatively on achievement of results. The following are examples of releases made in 2011.

 

Budget Provision

Released Amount as at 30 November 2011

Unreleased Balance

Programmes

3 780 000

522 600

3 257 400

Acquisition of fixed assets

3 560 923

86 082

3 474 841

Rehabilitation and Building Grants, PSIP

19 000 000

3 000 000

16 000 000

Tuition grants

5 000 000

1 800 000

3 200 000

Per Capita Grants

9 800 000

3 200 000

6 600 000

RECOMMENDATIONS

In view of the fore-going, the Committee puts forward the following recommendations:

· It is of strategic importance that Treasury adequately considers the Ministry's bids to adequately relate the allocations to Ministry's planned programmes, projects and activities.

· That allocated funds be timeously released to enable appropriate use by Ministry and where this is not possible, Ministry be advised accordingly to enable re-prioritisation of activities.

· Given the negligible amount allocated to Arts, Sport and Culture, the Committee recommends that the budget allocation for Arts, Sport and Culture be improved so that a wholesome child can be produced. In addition, the Committee strongly recommends that there be a separate Ministry of Sport, Arts and Culture be created to put more emphasis in these crucial aspects which have great potential for the child.

· The Committee also recommends that the Ministry should revise its 2012-2014 policy priorities to give reasonable emphasis on Sport, Arts and Culture to augment Primary and Secondary Education.

· The Committee recommended that a clear policy be put in place regarding the issue of Early Child Development (ECD) regarding among other things;

a). The training and payment of ECD teachers

b). The infrastructure, curriculum and related books.

c). That there be standardisation/uniformity since this is fundamental to the development of a child.

· The Committee recommends that an important component like the Basic Education Assistance Module (BEAM) be administered by the Ministry of Education and not the Ministry of Labour and Social Welfare.

CONCLUSION

· Education is an important factor for the development of any country. It is therefore important that it be adequately funded to achieve the intended objectives and results. Regrettably, Education has not been adequately funded for the last decade. It is hoped that as the economy recovers, funding of education will be improved.

ANNEXTURE 1

MINISTRY'S PERFORMANCE TARGETS

MINISTRY'S KEY RESULT AREAS

In line with the Ministry's Integrated Performance Agreement, Performance Contract between the Chief Secretary and the Secretary for the Ministry of Education, Sport, Arts and Culture, the Government Work Programme and Ministry's Medium Term Plan.Ministry's Key Result Areas include the following:

· Provision, promotion and development of inclusive, holistic, quality and relevant Early Childhood Development, Primary and Secondary Education.

· Provision of efficient Education Support Services Promotion and development of Sport, Arts and Culture

1.1 VISION AND MISSION

1.1.1 VISION

To be the leading provider of quality education, Sport, Arts and Culture for the development of united and well educated Zimbabweans with unhu/ubuntu who are patriotic, balanced, competitive and self reliant.

 

1.1.2 MISSION

To promote and facilitate the provision of high quality, inclusive and relevant Early Childhood Development (ECD), Primary and Secondary Education, life-long and continuing Education, Sport, Arts and Culture.

1.2 STRATEGIC OBJECTIVES

For the 2012 Strategic Plan, the following six strategic objectives have been selected:

· To lobby for, and advocate for the restoration of the professional status of teachers through payment of a living wage and improvement of their other conditions of service.

· To improve conditions of teaching and learning with special focus on improving school infrastructure including sport and cultural facilities as well as rehabilitation of the ministry's administration offices.

· To improve the quality of education service delivery through the provision of relevant curriculum, requisite learning and teaching materials, qualified personnel, information communication technology (ICT) and strengthening supervision and capacity development.

· To reinvigorate Education system governance at all levels

· To enhance the access, retention, and achievement in education for the disadvantaged learners including the orphaned and vulnerable children (OVCs) and those with special needs in order to achieve the education/learning for all goals.

· To revitalize the promotion and development of Sport, Arts and Culture with a view to improving the quality of life for all.

1.3 GOALS AND OBJECTIVES FOR 2012

GOAL

OBJECTIVES

1. Increasing access by 1%, retention from 68 to 75% and achievement by 5% at all levels in respect of ECD, Primary and Secondary Education, Life-long and Continuing Education, Sports and Culture.

· To improve the quality of education through compiling and processing 5000 reports on Primary Schools and 3 500 Secondary reports per year and presentation of the Secretary's merit award by 31 December 2012

· To open inclusive ECD 'B' classes in all Primary schools and ECD 'A' in 40% of all Primary schools by the end of 2012

· To improve public examination pass rates as follows: Grade 7 from 42% (2010) to 48% (2012). 'A' level from 82% (2010) to 84% (2012)

· To reduce the number of double sessioning in schools through completion of existing programmes in 8 Primary and 16 Secondary schools.

Improving the quality of education through the provision of relevant curriculum, the requisite teaching and learning materials, qualified personnel, information communication technology (ICT) and strengthening gender equity and HIV and AIDS awareness

· To improve the textbook to pupil ratio from 1:10 to 1:1 in core subjects sponsored by ETF and from 1:15 to 1:10 ('O' level) 1:5 to 1:4 for 'A' level.

· To improve the teaching and learning processes through the development and review of 13 subject syllabuses, printing and distribution of 12 subject syllabus titles totaling 80 000 copies by 31 December 2012.

Enhancing the provision, promotion and development of Sport, Arts and Culture for all learners in mass, amateur and professional levels by 2015.

· To enhance participation in Sport, Arts and Culture through involvement of at least 45 000 in-school and 20 000 out-of school participants in mass amateur and professional Sport, Arts and Culture in at least five disciplines or genres by 31 December 2012.

Strengthening the teaching and learning of mathematics and science, tech-voc and ICT including e-learning, Art and music education as shown by the number of candidates registering for and writing the respective examinations at "O" level in all schools by 2015

· To strengthen the teaching and learning of tech voc and ICT including e-learning, Art and music education as shown by the number of candidates registering for and writing the respective examinations at "O" level from 176 000 to 177 000. By 31 December 2012

Increasing the provision of access to psychological services and special needs education throughout the system by 2015

· To enhance implementation of the Ministry's policy on inclusivity, through increasing the number of schools offering psychological and psychosocial support services and special needs education from 2 500 to 3000 by 31 December 2012.

Improving the management of financial, human and material resources by training of at least 50% of school heads and other senior managers by 2015

· To increase standardization of Ministry's operations through enhanced compliance with policies, rules and regulations throughout the system by the end of 2012.

Enhancing and promoting gender equity, HIV and AIDS awareness, life skills and livelihoods education at all levels of the school system by 2015.

· To improve the quality of service delivery through capacity development of at least 25 000 members including the handling of cross cutting issues of the curriculum such as gender equity, HIV/AIDS awareness, life skills and livelihood education.

 

MR. CHINDORI-CHININGA:

  • Overall Assessment: The Budget allocation to the Ministry of Mines increased by 33.7% from US$5 175 000 in 2011 to US$6 921 000 in 2012 but it is saddening to note that the Ministry which is expected to provide more than US$1 billion to Treasury in 2012 was given one of the least allocations, totalling 0.17 % of the entire budget.
  • Royalties: The Committee noted with concern 3 critical issues pertaining to royalties as enunciated in the Budget Statement were gold and platinum were increased from 4.5% and 5% to 7% and 10% respectively. Firstly, this will have a negative impact on small-scale gold producers who are also required to pay presumptive tax of 3%. The Committee foresees a strong possibility of leakages and smuggling of gold and this will in turn affect revenue inflows to Treasury.

Secondly, the thrust of increasing royalties does not show government's commitment of addressing the real cause of poor revenue inflows to the fiscus. An increase in royalties is only a piecemeal approach towards addressing the fiscal regime governing the mining sector. The fiscal regime in the mining sector should be addressed holistically and not in a piecemeal fashion a government is currently doing. The Executive must have the political will to holistically address mining taxation regime in consultation with mining and other stakeholders. We must stop the blame game and address really issues that are the causes for low mining sector contribution to Treasury and yet there are high export revenues.

Thirdly, the Committee is concerned that when the Ministry of Finance took over the responsibility of the collection of royalties, this was followed with a decrease revenue to Treasury. At the same time a gap was created in terms of mining production accounting because ZIMRA does not have the knowledge and expertise on mining operations and do on mine site production accounting. The Committee is also concerned that MMCZ has now become a mere conduit for the collection of royalties for ZIMRA whereas in the past the organisation could outsource expertise to do production accounting and other key duties.

  • Review of Mining Fees and Licenses: The aim of this review is to discourage holding of mining claims for speculative purposes and improve revenue inflows to the Treasury. However, the Committee would like to see an increase in the cash retention for the Ministry. This will enable the Ministry to buy critical equipment such as GPS, motor vehicles and other expert equipment for its mining commissioners and to offer better incentives to retain critical staff such as geologists and metallurgists. Secondly, the review on mining fees and licences should be supported by a legal instrument. Thirdly, the Committee is concerned that some license holders especially diamond cutters were not able to get the product despite the fact that they paid US$20 000 ending at this financial year. A mechanism should be put in place to compensate people who have been disadvantaged through no fault of their own. Lastly, the Committee supports a review increase after there has been consultations with all the key stakeholders in the mining sector.
  • Diamond Sector: In 2011, diamond dividends receipts to the Treasury amounted to US$122 256 491. In 2011, it is expected that additional US$600 million will be realized following the green light from the KPCS for the country to freely export its diamonds. This is a welcome development as it will improve inflows into the fiscus. However, maximum benefits from diamond mining should be supported by a strong legal framework. Therefore, it is imperative that government enacts the Diamond Act as well as review the Mines and Minerals Act. Proposals to review the Mines and Minerals Act have been on-going for more than 10 years and finality should be brought on this matter. A sound legal framework will promote transparency and accountability in the diamond sector as well as the rest of the mining sector.
  • Mining Exploration: While it is commendable that government wants to set up an exploration company, it is imperative that government should also be willing to create a conducive environment and allow private players to participate in the exploration of minerals. At same time the Committee noted that government does not seem to be serious on its commitment to carrying out exploration work because no money was set aside for the establishment of the exploration company both for this year and last year.
  • Mining Industry Loan Fund: The budget statement noted the importance of small scale miners especially in terms of employment creation in the country. Treasury however failed to provide adequate funds to this sector. The US$1 million allocated to the fund falls far short of expectations and will make minimal impact, considering the number of small scale miners in the country and the cost of procuring basic equipment such as compressors which costs in the region of US$10 000 apiece. At the same time government should devise strategies of formalising the 'illegal' panners in order to improve revenue inflows to the fiscus as well as containing environmental degradation.
  • External Accounts: The Committee believes one of the strategies of encouraging mining houses to bank their money in Zimbabwe, is for government to create a special fiscal regime that requires all mines to bank within Zimbabwe and move away from special agreements. This should be done in consultation with all the key stakeholders. The Committee believes that it is no longer acceptable for big mining companies to continue to bank their monies outside the country, when the country is experiencing severe financial resources critical for re-capitalising most of its industries. The financial and banking sector in Zimbabwe is now stable and using hard currency. This measure would stabilize the economy.
  • Motor Vehicles and Skilled Staff: The Ministry of Mines is a technical institution that requires specialized technical skills in order to discharge its duties. Currently, there is a 60% vacancy rate due to non-take up of available post and resignations. This compromises the ability of the Ministry to efficiently carry out its duties. Secondly, the Ministry only received funds to purchase vehicles for Administration department and other key departments such as monitoring and surveillance, geological survey did not receive anything and yet they play a key role in curbing smuggling and leakages of the country's minerals.
  • Recommendations:

9.1 Royalties: The royalty on gold should not be increased specifically for small-scale producers who are also required to pay a 3% presumptive tax. This will ensure that gold produced by small- scale miners will not be traded on the black market.

9.2 Mirror Accounts: A special fiscal regime should be provided to mining companies so that they can bank their revenues locally. At the same time, mining houses should be encouraged and required to participate on the local Stock Exchange with a specific required minimum participation of local stock exchange.

9.3 Regulatory Framework: Government should implement its commitment of reviewing the Mines and Minerals Act, developing a mineral policy as well as enacting a Diamond Act. This will go a long way in promoting transparency and accountability in the mining sector, which will in turn improve revenues inflows

to Treasury.

9.4 Skills Shortage: A mechanism should be put in place by government to curb the brain drain of technical and skilled personnel in the mining sector. Incentives should be put in place to retain or to lure the right kind of personnel.

9.5 Mining Title System: This project which has been on the Ministry's program for the past 10 years needs to be completed as soon as possible in order to promote investment, transparency and accountability in the sector.

9.6 Cash Retention: The cash retention threshold of 25% should be increased to enable the Ministry to re-equip its structures taking into account the fact that the Ministry is also expected to generate almost a quarter of the national Budget revenue.

9.7 Strategic Mineral Reserves: Government should consider the establishment of reserves on gold and diamonds for future use. This is critical especially in times of economic recession or national disasters or for the benefit of future generations. The gold and diamond reserves will strengthen and stabilize Zimbabwe financial standing internationally.

9.8 Increase of Levies and Fees: The Ministry should ensure that the proposal for the increase of levies and fees is supported with a statutory instrument. At the same time, these increases should be effected after consultations with all the key stakeholders in the mining sector.

9.9 Exploration of Minerals: Government should be encouraged to create a conducive environment were private players can participate in the exploration of minerals because this activity is very expensive and government cannot do it alone

9.10 'Makorokozas': The Ministry needs to create strategies of incorporating makorokozas into the main-stream mining sector, through the establishment of panning centres. This will enable government to control environmental degradation as well as improve on revenues emitted to local authorities and Treasury.

9.11 Collection of Royalties: The collection of royalties should be reverted back to the Minerals Marketing Corporation of Zimbabwe (MMCZ), because the Ministry of Finance through ZIMRA, does not have the expertise on mining issues such as production accounting.

9.12 Motor Vehicles: Government should seriously consider purchasing vehicles for the Ministry especially for those departments involved in surveys, monitoring and surveillance in order to curb leakages and smuggling of minerals.

9.13 Mining Industry Loan Fund: This US$1 million is inadequate and more is required to stimulate growth of small-scale miners.

9.14 Budgetary Allocations: Ministry of Finance should be encouraged to honour its obligations by releasing all the funds allocated to the Ministry as highlighted in the Blue Book. This will enable the Ministry to effectively plan its programs.

Ministry of Energy and Power Development

  • Overall Assessment: The Ministry of Energy received US$49 742 000 against a bid of US$56 769 300 which represent 86.7 of what the Ministry had requested from Treasury. The amount allocated to the Ministry of Energy for 2012 represents 1.24% of the total budget; this is lower than the allocation for 2011 where the Ministry's allocation accounted for 2.43% of the total budget. However, despite the fact that the Ministry received a substantial amount of its bid, the Committee was informed by the Ministry officials that it would not be able to achieve some of its set targets.
  • Rehabilitation of Hwange Power Station: The Committee noted with concern that government does not seem to have a permanent solution in terms of the refurbishment and rehabilitation of HPS. It seems there is always as constant drop in the supply and distribution of electricity from the 6 generators at HPS due to incapacity of the parastatal to source for the correct spares and parts required for the power station. Such an approach will not help to stabilise the generation capacity of HPS.
  • Kariba South Expansion Project: The Committee is concerned about government's approach in terms of securing a financier and contractor for the Kariba South Expansion Project. A MOU was signed between the Ministry of Finance and Sino-hydro and is due to expire at the end of this year but at the same time ZESA has called for tenders for the project. There seems to be no clear vision by government on how to handle this project and yet industry and the rest of the country is in serious need of electricity.
  • New Generation Projects: The Committee is concerned that the country is most likely not going to see any additional electricity being generated in the country in 2012. Most of the new projects such as Kariba South Expansion Project will take about 4 years to complete. And the same applies for HPS Expansion project and Gokwe Sengwa.
  • Demand Side Management: During the first quarter of 2012, ZESA will start a programme of replacing incandescent lamps with energy saving CFLs. This programme is expected to cost US$12 million and is expected to save about 180MW. To improve revenue collection, the utility has plans to introduce prepaid/smart meters to all customers. However, the Committee noted with concern that all the projects that were put to tender in 2011 by the Ministry for the purchase of incandescent bulbs and for smart meters was a failure. This will not help to solve the challenges facing the country in terms of electricity shortages. The Ministry needs to carry out due diligence on any prospective companies before going to tender.
  • Green Fuels and ZESA: The Committee noted with concern that Green Fuels in Chisumbanje is producing 18MW of electricity and this electricity is going to waste because it has not been connected to the grid. However, ZESA and Green fuels are failing to finalize on the modalities of connecting the electricity to the national grid and yet industry and the rest of the country is in desperate need of electricity.
  • Coal Bed Methane: Government should be encouraged to create a conducive environment which would encourage private players to participate in the exploration and extraction of methane.
  • Strategic Fuel Reserves: Government needs to find a mechanism through which it can begin stocking strategic fuel reserves for the country. This will also require funding from the fiscus.
  • Debt Redemption Fund: The Committee would like to encourage government to draft a program on the liquidation of this debt which should have a specific timeline. It seems like there is no program of action on how to liquidate this debt and future generations are most like going to inherit and be affected by this debt.
  • Recommendations:

10.1 Tender System: ZESA should be encouraged to improve its performance on the tendering system because none of its tenders for 2011 were successful hence delaying the process of improving the generation and distribution of electricity in the country.

10.2 Refurbishment of Hwange Power Station (HPS): Government should be encouraged to take the refurbishment of HPS seriously because the generators at HPS experience frequent breakdowns.

10.3 Importation of Electricity: The Ministry should put in place a system that will enable private players to import electricity for private consumption, using ZESA infrastructure, taking into account the fact that ZESA has been unable to effectively service its obligations to foreign electricity suppliers.

10.4 Coal Bed Methane (CBM): Government should be encouraged to allow more new companies to participate in the exploration and production of CBM.

10.5 Debt Redemption Levy: the Ministry should be encouraged to lay out a policy on how the debt redemption levy will be liquidated. Fuel consumers should not continue to be burdened by this levy.

10.6 Green Fuels: ZESA and Green Fuels in Chisumbanje should resolve the dispute on 18MW which has not yet be connected to the main grid, at a time when the country is experiencing severe load shedding.

10.7 Strategic Fuel Reserves: Government through Ministry of Energy should be encouraged to find modalities for the implementation of strategic fuel reserves at Mabvuku. This is critical especially in time of a national crisis.

 

Conclusion

Zimbabwe faces crucial decisions regarding its mining sector, which ultimately will affect its long-term development and progress and for the Ministry to continue to increase its revenue generation capacity and to be able to carry out its priority projects and programmes in line with the MTP. In addition, the lack of new investment in power generation is a cause for serious concern. The biggest challenge is to create a conducive environment in order to attract new investment. Without this new investment it would be rather difficult for ZESA to satisfy demand, which presently far outstrips supply.

MRS ZINYEMBA: Thank you Madam Speaker. This is a Post Budget Analysis Report of the Public Service, Labour and Social Welfare Committee for the Ministries of Public Service, Labour and Social Services budget allocation for 2012.

Introduction

The Ministry of Public Service is responsible for the recruitment, training and retention of public service personnel, critical for the delivery of public services. The ministry is made up of five departments, namely Administration and General, Public Service Commission, Pensions Office, Salary Service Bureau and Training Centres. The ministry is key in the discharge of Government business and is one of the priority ministry of Government.

Public Service Allocation in relation to total budget

The expenditure allocated to the Ministry of Public Service increased by 66.4% from US$75 921 005 in 2011 to US$126 360 000 in 2012. This increase is more than the overall increase in the budget of 44.7%. In the previous budget, the increase was less than the overall increase of the national budget. As a proportion of the total budget, there is a marginal increase of 0.4% in resources allocated to this portfolio; 3.16% in 2012 against 2.3% in 2011. It was 2.5% in the 2010 budget. The increase confirms the greater role played by the ministry in the discharge of Government business. It is also important to note that the ministry is among the top 10 expenditure priorities of Government occupying position 9.

Current vs Capital Expenditure

The bulk of expenditure in the public service goes toward current expenditure, which takes 97.9% of the vote allocation, leaving 2.1% for capital expenditure. This can be explained by the nature of the ministry as a service provision ministry. Employment costs take up the bulk of the resources allocated to the ministry, taking 89.6% of the allocated budget which is 92.2% of the current expenditure, leaving only 7.8% as operations budget.

Ministry of Public Service Submissions

· The Ministry is worried about the lack of the budget's indication on increased wages for civil servants. The nominal increase in the budget may only indicate the need to fill vacant posts in the ministry. The least paid civil servant is currently earning US$253 inclusive of allowances when the Poverty Datum Line stands at US$502. They indicated that this impinges on service delivery.

· The Ministry also does not have a global picture of overall Government employment costs.

· There are delays by the Ministry of Finance in disbursing allocated funds to the ministry, a situation that affects service delivery.

CONCLUSION

· The committee noted that expenditure allocated to the Ministry of Public Service increased by 66.4% in 2012. This increase is more than the overall increase in the budget of 44.7%. As a proportion of the total budget, there is a marginal increase of 0.4% in resources allocated to this portfolio. The increase confirms the greater role played by the ministry in the discharge of Government business.

· The committee found out that the ministry is among the top 10 expenditure priorities of Government occupying position 9.

· The committee discovered that the bulk of expenditure in the public service goes toward current expenditure of which employment costs take up the bulk of the resources allocated. However this is against the fact that the public service is still understaffed.

RECOMMENDATIONS

The committee came up with the following recommendations;

· There is need to increase expenditure on priority areas that help the ministry to discharge its duties efficiently. These areas include employment costs, physical infrastructure, rentals, fuels, communication technology, education training facilities, office equipment and funding of important reform programmes.

· The Ministry of Finance should disburse funds on time to the ministry. This will assist the ministry in carrying out its duties efficiently.

· The Ministry should also put realistic bids that reflect exactly what they want to achieve. This will avoid the problem of overestimating or underestimating their expenditures.

· There is need to increase the overall operations budgets as most funds of the Ministry are absorbed by employment costs.

· The findings of the Public Service Audit Report should be made public and implemented urgently to address the concerns of public service workers who are still underpaid, yet the budget is consumed by employment costs.

THE MINISTRY OF LABOUR AND SOCIAL SERVICES

Introduction

The ministry is responsible for the promotion of fair labour practice and enhancing labour productivity and provides social services. It delivers its mandate through labour inspections and resolves labour disputes through conciliations and arbitration. In addition to providing social services, the Ministry provides basic safety nets to vulnerable groups and transitory poor by cash transfers. The ministry has three departments namely, Administration and General, Labour Administration and Social Services.

MINISTRY OF LABOUR AND SOCIAL SERVICES BUDGET ANALYSIS

On the overall, more resources of the ministry are allocated towards current expenditure (97.7% in 2012) of which more funds go to Social Services( 86.5% of the total budget) and programmes taking the bulk of resources within social services (74.24% in 2012). Looking at expenditure to these categories as a percentage of total expenditure to the ministry, we can see that funds to current expenditure decreased marginally by 1.24% in 2012. On the other hand, capital expenditure increased marginally from 1.3% in 2012. This shows that fewer resources have been allocated to current expenditure in the current budget as compared to the previous budget of the ministry. The amount allocated to programmes decreased by 2.74% in 2012. Funds to maintenance decreased marginally by 0.23% in 2012 while funds to goods and services decreased by 0.57% in 2012.

The expenditure allocated to the ministry increased by 25.4% in 2012 from US$36 333 000 in 201 to US$45 556 000 in 2012. Between 2010 and 2011 the vote allocation increased by 26.3%. This also falls below the overall increase of the total budget of 45.7%. As a percentage of the total budget, the proportion of funds allocated to this ministry decreased from 1.32% to 1.14%. This development is a reflection of a decrease in priority accorded to the ministry despite its importance in poverty reduction, a crucial millennium development goal by 2015.

Programs budget under social services

The Basic Education Assistance Module budget increased by 23.1% in 2012 after it had decreased to 14.6% in 2011, Children in difficult circumstances budget decreased by14.4% in 2012. Government Social Protection Institutions budget increased by 12.5% in 2012 compared to a decrease of 20% in 2011, Maintenance of Elderly persons Budget decreased by 13.3% in 2012 after a decrease of 57.1% in 2011, National Heroes' Dependence Assistance decreased by 14.9% in 2012 after another decrease in 2011 of 24.1%, Paupers Burial Fund decreased by 14% in 2012 following another decrease of 16.7% in 2011. In the 2012 budget, some resources were allocated for the Poverty Assessment Study Survey III. These developments are in line with the attainment of millennium development goals by 2015. A budget item was also created for E-Government in the 2012 budget. This is in line with Global Technological Development.

SUBMISSIONS BY THE MINISTRY OF LABOUR AND SOCIAL SERVICES

· The ministry noted that the budget was inadequate to address their key deliverables of promoting fair labour practice and the provision of social services especially to vulnerable citizens.

· On Labour Administration, the ministry decried the lack of funding of HIV and AIDS budget item.

· The ministry is also under-employed with 129 in posts against 188 staff compliment. Also, most of their staff is in acting positions.

· They also mentioned the need for the release of allocated funds in time by the treasury.

· The ministry also submitted that some budget items critical to the ministry are underfunded. These include rentals and hire, fuel, electricity, water charges and food deficit mitigation.

· They also submitted that their ministry is becoming over depended on donor funds which are at times too erratic.

· They also highlighted that some of their programmes look good on paper but due to poor funding, they become unsuccessful.

· They also submitted that small items are often forgotten upon releasing the funds by the treasury.

The ministry appreciated a new budget item, E-Government under programmes but the feel it should be extended to all the sub-categories as indicated in their bids

Conclusions

The committee came up with the following conclusions;

· There is a marginal increase of 0.4% in resources allocated to the Ministry of Labour and Social Welfare portfolio; 3.16% in 2012 against 2.3% in 2011. It was 2.5% in the 2010 budget.

· The bulk of resources for the ministry go toward Social Services, Programmes in particular.

· There have been allocations to Poverty Assessment Survey III and E-Government in the 2012 Budget as well as increased resources for acquisition of fixes capital assets.

· The Budget has increased allocations to BEAM as suggested in the previous budget submissions.

· The majority of expenditure items that are crucial in reducing poverty have been given little attention such as Children in Difficult Circumstances, Children in the Streets Fund, Food Deficit Mitigation Strategy, Community Recovery Programmes, Maintenance of Elderly Persons and Millennium Development Goals. This defeats the envisaged pro-poor budget initiative.

· We are pleased to note that resources have been allocated towards the Poverty Assessment Study survey III as we highlighted in the previous report. These funds will be definitely useful for policy to address the most critical issues on poverty levels in the country as the poverty dimensions will become known with certainty.

· The ministry's budget requirements need to have items that emphasise on capital expenditure projects that are developmental in nature as opposed to direct hand outs. This will ensure the sustainability of the budget to vulnerable citizens of the society and help in reducing poverty levels. This will also reduce the burden of the ministry on the fiscus particularly in the long term period as the proceeds from capital expenditure start to revolve.

Recommendations

The committee recommended the following:

12. There is need to increase funding to key deliverables of the ministry which are programmes under social services. This will reduce over dependence on donor funding and significantly reduce poverty in the economy and thus making the budget pro-poor as outlined in the theme of the budget.

13. E-Government should be extended to all key areas of the ministry.

14. The budget is recurrent in nature and need to be capital based to make it developmental.

15. The ministry of finance should disburse funds in time for the ministry to operate efficiently. At this point small budget items should be remembered.

MR. MUPUKUTA: Thank you Madam Speaker. I would like to present the report of the budget analysis by the Parliamentary Portfolio Committee on Public Works and National Housing. Public Works programmes accord rural communities the opportunity to improve livelihoods through participating in income earning programmes. These programmes also promote food security, maintenance of infrastructure; improve access to basic services and capacity building in the management of local natural resources.

The Committee noted that the budget as presented by the Minister of Finance was well balanced and fair in most sub-heads of the Ministry. However, some areas were grossly underfunded to an extent that the Ministry will find it difficult to deliver all its mandates.

The Ministry's Key Result Areas are:

· Designing, constructing and maintaining Government buildings

  • Valuation and estates management

· Provision of technical services in designs and construction in local authorities and parastatals.

 

OVERALL BUDGET PERFORMANCE 2011-2012

The total National Budget increased by about 23% from US$3.246 billion in 2011 to USD2.250 billion. Total budget as a percentage of GDP is set to increase from 31.7% in 2011, to 33.6% in 2012. Table 1 below shows the Ministry's budget expenditure allocation relative to the national budget and GDP.

Table 1: The size of the MoPW's budget Expenditure

Item

2011

2012

Ministry's vote allocation (US$)

36 613 000

51 266 000

National budget (USD)

3.2bn

4bn

Nominal GDP (US$

10.1bn

11.9bn

Total National Budget as % of GDP

31.68

33.61

Ministry's vote allocation as a % of National Budget

1.12

1.28

Ministry's vote allocation as a % of GDP

0

0

Vote Analysis

The MoPW received a vote allocation of US$51 266 000 for 2012, up from US$36 535 000 in April 2011. This represents a 40.3% increase in vote allocation. Overall Vote Appropriation for all ministries increased by 47.8% in 2012, from US$2 467 600 in allocation moved in line with the budget. Comparing with other ministries, the allocation to Education, Sport and Culture increased by 50.7%, Health and Child Welfare (34,9), Energy and Power Development (-25.6%), Agriculture, Mechanisation and Irrigation Development (8 2.6%). Table 2 shows the Ministry vote allocation against the bids submitted from 2009 to 2012.

Ministry's vote allocation against the bid amount

YEAR

BID(USD)

ALLOCATION BY TREASURY

VARIANCE %

2009

13 000 000

1 344 300

89.7

2010

8 038 859

1 200 000

85.1

2011

9 038 859

2 500 000

72.3

2012

10 500 000

3 500 000

66.7

Table 2 shows a positive bid-allocation trend from 2009 to 2012. Although there still exist a huge variance between the bid figure and the allocated amount, the Ministry noted with welcome the effort by Treasury to increase the Ministry's vote.

Table 3: Changes in Expenditure allocation by economic classification

 

2011 (USD)

2012 (USD)

% Change

Vote allocation

36 535 000

51 266 000

40.3

Current expenditures

22 585 000

32 999 000

46.1

Employment costs

6 137 000

9 910 000

61.6

Goods and services

12 364 000

17 980 000

45.4

Maintenance

4 084 000

5 000 000

22.4

Programmes

-

100 000

100

Capital Expenditure

13 950 000

18 267 000

30.9

Maintenance

A look at table 3 which shows the changes in expenditure allocation by economic classification reveals that current expenditures have increased the most by 46% with capital expenditures increasing by about 40%. Current expenditures will consume 64% of the budget in 2012 with the remainder going to capital expenditures. The committee noted that since independence, the Government of Zimbabwe invested billions of dollars in the construction of infrastructure such as hospitals, schools, clinics, composite office blocks, army and police barracks, courts, prisons, etc. Very minimal refurbishment and redecoration of the need for regular maintenance, repairs and rehabilitation at least once in every 5 years. Unfortunately, the ministry received a merger increase of 22% in maintenance from US$4 084 000 in 2011 to US$5 000 000 in 2012.

For the year 2012, the ministry of Public Works had estimated that US$33 099 077 is required for the maintenance of physical infrastructure. However, in light of the financial challenges facing the country, the Ministry submitted a bid of US$10 500 000 and was allocated US$5 000 000, translating to 30% of the bid amount.

Given the 2012 allocation, the Ministry advised that it shall only focus on infrastructure which has a social impact, and this include health facilities, Government composite offices and judicial facilities such as courts.

PROCUREMENTS OF VEHICLES

The Ministry noted that, of the US$350 000.00 allocated for vehicles, only 13 pick-up trucks from Willow-vale Motor Industries can be bought. The Ministry however manages 79 districts in the country's 10 provinces and intends to have at least one vehicle per district. In 2011, 13 vehicles were purchased and 22 more vehicles are yet to be purchased before year end subject to the release of funds by Treasury. This gives a total of 35 vehicles, leaving a shortfall of 13 vehicles. Given that each district is a stand-alone construction and maintenance unit, a vehicle per district is an absolute necessity.

Bank Chambers and Hard-wick House

The committee advised that RBZ intends to sell Bank Chambers and Hard-wick House which are currently being utilised by the President's Department and the President's Office respectively. The buildings are valued at US$22 million.

The Ministry however, on behalf of Government, is making efforts to ensure that these properties do not fall in private hands. The Ministry advised that either funds must be availed for the purchase of these buildings or a payment plan be established on soft conditions, otherwise these buildings might be lost which will further strain Government in terms of office space.

PROJECTS FOR 2012

The Ministry had requested for ten projects in 2012 but only two projects were funded i.e. Lupane Composite office and the Governor's house at Lupane. The Ministry however, well received these projects on the basis that the Lupane will become a stand alone constituency as its offices are currently located in Matabeleland North.

The Committee was however informed that USD10 million is required to clear the debts incurred by the Ministry this year. The Committee noted that a liability has not been taken care of in the 2012 budget. Asked on whether the Minister of Finance was aware of this debt, the Ministry said it was in constant conduct with the Minister concerning the debt. Public works then proposed to engage Treasury over the issue.

The Ministry had prepared a list of eight-four priority projects which are at various stages of construction. The Committee noted that if adequate funding was to be made available, these projects could be completed for use, thereby reducing the Government's backlog for office accommodation.

Subcontracting, the role of banks and cash flow Mismatch

The Ministry noted that, some time ago, a subcontractor could borrow money from the bank to undertake its project on the understanding that the money will eventually be repaid upon the Ministry's receipt of its disbursements from Treasury. This practise alleviated the problem of the cash flow mismatch between Treasury disbursements and the Ministry's expenditure. However, nowadays, because of liquidity constraints in the financial sector, banks are no longer lending money for such purposes. This is now requiring Treasury to disburse funds on time if needed capital projects are to be executed.

Office Furniture

The Committee noted that Public works is responsible for the repair of office furniture on a cost recovery basis. The allocation for the purchase and repair of furniture is directed straight to the Ministries who should in turn take their furniture to Public Works for repair. This norm is not being practised by most Ministries and in recognition of this Public Works sent a circular to all Ministries asking them to bring forward their old furniture for repair.

State of Affairs in Government Building

Notwithstanding the financial limitations, the Committee is greatly worried about the state of affairs in Government buildings. These include malfunctional toilets, malfunctional elevators, missing door locks, among others. This is a clear reflection of negligence and lack of supervision on the party of the Ministry as some of these problems can be addressed at a minimal reasonable cost.

RECOMMENDATIONS

· The Committee recommends that more be done towards addressing the sorry state of affairs in Government buildings. Financial limitations are not an absolute excuse.

· The Committee pleads with Treasury to disburse capital funds on time. This will enable the Ministry to utilise the funds during the fiscal year as most capital projects undergo tender and procurement procedures which usually take time to conclude.

· The Committee wants Government to intervene upon the proposed sale of Bank Chambers and Hardwick House by RBZ so that the properties remain in Government hands.

· Treasury should disburse more funds for the procurement of vehicles so that the Ministry has at least one vehicle per district.

· No new project should be started before the completion of all on-going projects.

· The Committee recommends that Treasury should continuously review upwards, salaries for civil servants so as to retain critical staff.

· The Ministry of Public Works should follow-up on its circular to Ministries to raise awareness of the need to submit furniture for repair.

NATIONAL HOUSING AND SOCIAL AMENITIES

 

· The Ministry is there to facilitate, promote and provide decent housing and accessible social amenities. Its top priorities for 2012-2014 are as follows:

· Finalisation of the harmonised National Housing Policy

· Finalisation of the evaluation of the 2004-2008 National Housing Delivery Programme

· Presentation for scrutiny and approval of the Land Developers Bill to the Cabinet Committee on Legislation

· Civil Service Housing Development

· Completion of stalled housing projects

· Piloting provision of rural housing

· Improving access to social amenities

· Provision of off-site and on-site amenities

· Carry out Human Settlement Needs assessment survey

· Carry out Urban Land Market study survey

· Consolidation of the Zim-Habitat function

· Review of relevant Legislation

· Resources mobilization of fund housing activities

VOTE ANALYSIS

 

Employment Costs

· Employment costs are set to increase by 67.8%, from US$1 788 000 in 2011 to US$3 000 000 in 2012. The total ministry establishment is 1 061 posts of which 572 are filled and 489 are vacant. The Ministry wants all vacant critical posts filled so as to fulfil its mandate.

Goods and Services

· Goods and services will increase by 27% from US$983 000 in 2011 to US$1 244 000 in 2012. The Ministry is however constrained by delays in the disbursements of funds by Treasury.

The Public Finance Management System

15.1.1.1.1 Ministry is facing challenges and delays with the PFMS in the processing of payments. Ministry however, welcomes computers and printers that were availed at Provincial offices. This will enable the processing of transactions at the provincial level.

Acquisition of Fixed Capital Assets

· The allocation of US$175 000 for vehicle, plant and equipment will beef up the current depreciated fleet of poor vehicles. However, the Ministry appeals for more vehicles as district offices are facing challenges in banking and construction works. The comptroller and Auditor General's office has also observed with concern that the Ministry's districts do not have vehicles to carry out their mandates.

Capital Transfers

· The National Housing Fund was increased to US$27 900 000 in 2012, from US$12 460 000 in 2011, representing a 124% increase. Notably, the Civil Service Housing Loan Scheme received an additional US$2 000 000 to US$12 000 000 in 2012. The Ministry welcomed this development as it will see the beneficiaries receiving funds for the purchase of stands, houses or renovations. This will help retain staff in the public service.

· Joint Ventures projects with the Infrastructure Development Bank of Zimbabwe received an injection of US$9 million towards the completion of on-going projects. funds to complete these on-going projects will be complemented by the Sinking Fund whereas sales of completed flats and stands would be channelled to the completion of other projects.

· The allocation of social amenities projects increased by 212%, from US$160 000 in 2011 to US$500 000 in 2012. The availed envelope will see most projects being completed if funds are released on time in 2012.

Recommendations

· Treasury should disburse capital funds on time. This will enable the Ministry to utilise the funds during the fiscal year as most capital projects undergo tender and procurement procedures which usually take time to conclude.

· The Ministry of National Housing and Social Amenities should be allowed to fill in its 489 vacant posts so as to enable it to effectively deliver its mandate.

MR. R. MOYO:

Introduction

The Ministry of Small and Medium Enterprises Cooperative Development is responsible for promoting growth of micro, small and medium enterprises (MSMEs) and cooperatives in Zimbabwe. It seeks to create and maintain an enabling environment that promotes vibrant MSMEs and cooperatives. The Ministry achieves this through research and development, resource mobilisation and project development as well as provision of technical services.

The Significance of SMES in the Economy

A growing economy is characterised by a flourishing SMEs sector. The SMEs sector has a high propensity to employ more labour-intensive production processes than large enterprises. Consequently, they contribute significantly to the provisions of productive employment opportunities, the generation of income and eventually the reduction of poverty and they are a force behind modern day industrilaisation. SMEs are the major growing force behind the fastest growing economies of China, Turkey and India to mention but a few. SMEs are found in virtually all sectors of the economy ranging from agriculture manufacturing and trade. The sector also houses numerous informal businesses that have great potential to contribute towards revenue generation and thus increasing fiscal space. The sector provides an opportunity to formalise the informal sector which we all believe thrives in this economy. It is against this background that the Committee feels that more attention should be given to this sector.

Overview of the National Budget

The total budget expenditure increases by 45.7% form US$2,746,000,000 in 2011 to US$4,000,000,000 in 2012. The 2011 budget increased by 44.3% from 2010 level. The overall expenditure is constrained by available internally generated revenues.

SMEs Ministry's budget allocations against the national budget

Expenditure allocated to the ministry increased by 60.1% from $5,589,000 in 2011 to US$8.950,000 in 2012 against an increase of the overall budget of 45.7%. In the previous budget, the provision to SMEs increased by 122.4%. However, it is still one Ministry to which the least resources are allocated. It fell on the priority ranking from being the 10th least allocated in 2011 to being the 7th least allocated in the 2012 budget. As a percentage of the total budget, the budget allocation to the SMEs Ministry increased marginally from 0.20% in 2011 to 0.22% in 2012, having increased from 0.1% in 2010. This shows a slight priority given to the Ministry probably because of the major role that it plays in poverty reduction. However, the resources allocated are still inadequate to a Ministry that promotes economic development through employment and industrialisation. Most activities that the people depend on in Zimbabwe are of the Small to Medium scale. At least 1% of the total budget should be given to this Ministry. The Ministry's priority has been decreased from 2011 to 2012 as the Ministry was number 10 least allocated in 2011 but moved to being number 7 least allocated in 2012.

Capital versus current expenditure

The capital expenditure budgets increased by 77.7% while the current expenditure budget increased by 32.6%. This is against an overall increase in the budget to the Ministry of 60.1%. Capital expenditure constitutes the greatest proportion of the SMEs budget, 67.7% capital expenditure against 32.3% current expenditure. This vote is developmental in nature. Lending and equities expenditure takes the largest chunk of the capital budget, taking 82.5% which is also 55.9% of the total vote allocation to the Ministry. The Government prioritised capital expenditure in the Ministry's budget. This is in the form of lending and equity participation as well as capital transfers. Lending and equity is with respect to SEDCO, a parastatal under the ministry responsible for providing loans, infrastructure, development and capacity building to micro, small and medium enterprises and cooperatives. Capital transfers are a budget item that came into the picture in 2011 is a noble development to the Ministry.

Ministry of Small and Medium Enterprises and Cooperatives Development Submissions.

1. The ministry cited inadequate resources allocated despite the importance of the Ministry in economic development.

2. There is inadequate operating space and high rental costs against a low budget given to the Ministry.

3. The Ministry requires an SMEs Centre for its core activities. A bid of US$5 million to this effect received nothing from the budget.

4. The Ministry needs an incubation centre for SMEs. A bid of US$5 million to this area was ignored.

5. SEDCO's allocations of US$5 million for the lending programme and US$1 million for infrastructure are inadequate to cover the whole nation.

6. There were erratic releases of the budget amounts to the Ministry in the previous budget and this affected service delivery.

7. The Ministry also suffers from low critical staff with a staff of 203 as of September 2011 against an authorised staff of 602. The Ministry urgently needs a minimum of 350 staff.

8. There is need to install internet services to all provinces.

Conclusion

The following conclusions came from the budget analysis of the Ministry of SMEs and cooperatives vote allocation:

- The ministry is still among the top ten least allocated despite its greater role in economic development.

- The Government has reduced the priority to the SMEs Ministry in the 2012 budget; moving from position 10 least allocated to 7th position least allocated ministry.

- The budget to the ministry continues to prioritise capital expenditure and specifically lending and equity participation. This promotes employment creation and increase industrial production but only to a very limited extent.

Recommendations

The committee recommended the following:

-The Government should accord the SMEs sector the same priority accorded to large firms. SMEs contribute significantly to the provision of productive employment opportunities, the generation of income and eventually the reduction of poverty.

-There is need to open an SMEs bank as is the case in Kenya.

-The Ministry of finance should disburse funds on time to the Ministry. This will assist the Ministry in carrying out its duties efficiently.

-There is need to allow more time to the analysis of the budget for the committee to fully appreciate the budget and come up with conclusive recommendations.

MR. MUKANDURI:

Introduction

The Parliamentary Portfolio Committee on Foreign Affairs, Regional Integration and International Trade has an oversight responsibility over the Ministries of Foreign Affairs and Regional Integration and International Cooperation. During the Post Budget Committee Analysis meeting, the Committee observed the following:

.1.Overall 2012 National Budget

The overall 2012 budgetary allocation of US$4 billion has risen by 45.67% compared to the 2011 allotment of US$2,746 billion. In the same vein, the allocation to the Ministry of Regional Integration and international Cooperation increased by 43.1% from US$1,662 million in 2011 to US$2,378 million. Ministry of Foreign Affairs; allocation in the 2012 budget decreased by 4.4% from US$77,06 million in 2011 to US$73,672 million. The decrease is contrast to the overall expenditure growth in the 2012 budget of 45.67%.

  • Ministry of Regional Integration and International Co-operation

Ministry of Regional Integration and International Cooperation's allocation for 2012 increased by 43.1% from US$1,662 million in 2011 to US$2,378 million. This is less than the overall expenditure growth of 45.67%. The Ministry's allocation fell short of the bids by $200 000 and the Ministry can rationalise on other expenditures to cover for this shortfall. In terms of prioritization, the Ministry received 0.06% of the total budget and continues to be among the least prioritised Ministries in terms of the total government expenditures. The explanation for this could be that the Ministry was formed 2 years ago and therefore still small as compared to other Ministries and also because some of its roles are complemented by other Ministries such as Foreign Affairs.

Table 1: Bottom 5 Budget Allocation for 2011 and 2012

 

Ministry/department

2011 (US$Millions

% of budget

   

Ministry

2012 (US$ millions)

% of budget

33

Audit

3.79

0.13

 

33

Tourism

6.02

0.15

34

Tourism

3.64

0.12

 

34

Industry & Commerce

5.08

0.13

35

Economic Planning

2.13

0.07

 

35

Economic Planning

2.76

0.07

36

Regional Integration

1.66

0.06

 

36

Regional Integration

2.38

0.06

37

State Enterprises

1.33

0.04

 

37

State Enterprises

1.88

0.05

                 
                 

For the year running, the Ministry continues to be among the bottom 5 in terms of budget allocation

2.1 Sectional allocations of US$2,378

 

The distribution of the total budget to Ministry of Regional Integration and International Cooperation is summarized below.

 

Table 2: Economic classification of the vote

 

 

2011

2012

Percentage change

Proportion of 2012 vote

Current Expenditure

US$

US$

   

Employment costs

285 000

453 000

58.9

19

Goods and services

1 169 000

1 650 000

41.1

69.4

maintenance

145 000

172 000

18.6

7.2

Programmes

3 000

2 278 000

42.2

95.8

         

Capital expenditure

       

Acquisition of fixed capital assets

60 000

100 000

66.7

4.2

         

 

The bulk of expenditure in the Ministry of Regional Integration goes toward current expenditure which takes 95.8% of the vote allocation leaving 4.2% for capital expenditure. This can be explained by the nature of the ministry's operations which are biased towards recurrent expenditure. The allocation for current expenditure increased by 42.2%. Expenditure on goods and services take up the bulk of the resources allocated to the ministry taking 69.4% of the allocated budget whilst employment costs take up 19%. It is important to note that in the past, the Ministry has been getting support from UNDP to cover expenditure on office supplies and computer consumables, now the support is coming to an end and therefore expenditures have to be catered using funds from the Treasury. This resulted in an increase in the allocation for expenditures on goods and services.

Although the allocation for the capital expenditure increased by 66.7%, it falls far short of the expectations of the Ministry. The Ministry had requested funding to procure vehicles to avoid the reliance of vehicles from CMED which are expensive. Rent and Vehicle hire is taking a greater percentage (23.6%) of the allocation to the Ministry. The Ministry is paying an average of $32 000 for the eight vehicles it is hiring from CMED. This expenditure could be reduced if Treasury allocates some funds for the purchase of vehicles for the Ministry as the current situation is not sustainable because these hire charges can procure at least a vehicle per month.

  • Ministry of Regional Integration Submissions

During consultations with the Ministry of Regional Integration and International Co-operation, the following key issues arose.

 

2.2.1 Outstanding Telephone Bills

The Ministry is worried about failure by Treasury to allocate funds for the payment of outstanding telephone bills which currently are at %300 000. The bill was incurred over the year due to cumulative charges and treasury is aware of the matter. Furthermore, Tel One had challenges with its billing system that resulted in the Ministry inheriting bills that were accumulated prior to it taking over the telephone account.

2.2.2 Vacant posts

The Ministry had budgeted for a salary increase based on current staff establishment of 73. The Ministry was allocated more than it had requested for and this is based on a full staff establishment of 100. This means that the Ministry can fill vacant posts in the Ministry that were created by resignations as well as promotional posts that have not been filled since the inception of the Ministry. The Ministry intends to engage Deputy Directors which means more office space is required hence rentals will increase. The increase in rentals and vehicles allocation in the 2012 budget is therefore in tandem with these anticipated changes to staffing levels.

  • Domestic Travel

The Ministry had requested $121 000 and was allocated $221 000. The Ministry's focus on border posts has expanded from Beitbridge and Chirundu to Plumtree, Forbes, Nyamapanda, Kazungula and Victoria Falls Boarder posts with scoping missions having been undertaken at some of the border posts. Neighbouring countries have also been engaged. So, next year's focus will be on implementation of programmes and projects identified this year. Forbes , Chirundu, Beitbridge and Plumtree border posts have been identified under the Spatial Development initiatives Export corridor Nod being prioritized under the 2012 budget.

With the hosting of the WTO Conference in 2013, Victoria Falls needs to be revamped to ensure the country is ready to host the event which means there shall be more programme focus on the area. The allocation will address the Ministry's domestic travel needs.

  • Foreign Travel

The Ministry had requested $452 000 and was allocated $552 000. The trend on foreign travel is that the Ministry's participation and visibility in regional and international fora has increased. There are a number of meetings which the Ministry has to attend; these include SADC, UNECA, COMESA, AU, and COMESA-EAC-SADC FTA Tripartite meetings.

 

  • Late disbursements of funds

Whilsthe Ministry appreciates the budget allocation under the given circumstances, the Ministry has not been receiving the funds on time, This has impacted negatively on the programmes that the ministry undertakes because of failure to attend due to unavailability of funds at a time they are needed.

  • Institutional Provisions

The ministry's fuel expenditure is currently at US$13 000 per month. For the 2011 budget allocation for fuel has since been exhausted and has been covered by the rationalisation of other budget items since October 2011. The request for US$120 000 was done in order to alignthe budget to the given expenditure target. The ministry also anticipates an increase in domestic travel due to the increased programmes related to border posts visits. The allocation is therefore inadequate and will not last for 10 months.

3. Recommendations

In light of the serious mobility challenges faced by the ministry, the committee strongly recommends that the budget allocation for rentals and hire expenses should go towards procurement of the much needed vehicles. The committee is of the view that such a system of hiring vehicles from CMED is ruinous and does not make economic as well as business sense.

· Size of delegations to both domestic and international trips could be reduced as a way of saving funds.

· Treasury should strive to disburse funds in time to avoid disruptions of the ministry's programmes.

· Ministry should engage Treasury for additional funding for the institutional provisions which according to the budget allocations were given an allocation that will only cover 9 months.

4. FOREIGN AFFAIRS BUDGET ANALYSIS

4.1 The ministry was given a global allocation of US$73 672 million for the 2012 financial year. When compared to the 2011 revised budget of US$77 060 000, the ministry's 2012 global allocation of US$$73 672 000 represents a 4.42% decrease on the 2011 budget. In terms of priority, the budget allocation for the ministry as a share of the total budget decreased by 0.96% from 2.8% in 2011 to 1.84% in 2012. In terms of funds allocated as a proportion of the total budget, foreign affairs is now ranked number 13 from position 10 in 2011 as shown in table 3.

Table 3: Top 13 Budget Allocations for 2011 and 2012

   

2011

(US$ millions)

% of Budget

     

2011 (US$ millions)

% of Budget

1

Education

469 367

15.82

 

1

Education

707.33

17.68

2

Health

256 198

8.63

 

2

Health

345.69

8.64

3

Finance

230 740

7.78

 

3

Defence

318.27

7.96

4

Defence

194 677

6.56

 

4

Home Affairs

308.33

7.71

5

Home Affairs

189 446

6.38

 

5

Higher Education

296 172

7.4

6

Higher Education

156 767

5.28

 

6

Finance

284 677

7.12

7

Agriculture

122 159

4.12

 

7

Agriculture

226 791

5.67

8

Office of the President

101 607

3.42

 

8

Office of the President

172 471

4.31

9

Local Govt

93 569

3.15

 

9

Public Services

126 36

3.16

10

Foreign Affairs

77 060

2.8

 

10

Justice

111 168

2.78

11

Justice

80 042

2.7

 

11

Transport and Communications

109 477

2.74

12

Public Services

74.54

2.51

 

12

Local Govt

90 281

2.26

         

13

Foreign Affairs

73 672

1.84

Turning to the budget analysis for the ministry, Table 4 shows the overall ministerial budget allocation and the associated percentage change from 2011 to 2012.

Table 4: Percentage Change in Budgetary Allocations from 2010 to 2011

 

2011 (US$ m)

2012 (US$ m)

Change (%)

CURRENT EXPENDITURE

68 710

63 782

-7.17

Employment costs

31 550

33 382

5.81

Goods and services

35 400

26 827

-24.22

Maintenance

1 760

3 573

103.01

CURRENT TRANSFERS

4 000

2 500

-37.5

CAPITAL EXPENDITURE

4 350

7 390

69.89

Current expenditure decreased by 7.17% from US$68.710 million in 2011 to US$63.782 million. The decrease in the ministry's current expenditure allocation will compromise the smooth running of the ministry. One of the key areas for the ministry in 2012 is promotion of international relations. Key programmes include maintaining continuous dialogue with western countries and the whole international community and promoting cooperation through Joint Commission sessions. Activities lined up towards the attainment of the above objective include; continuation of bilateral and multilateral dialogue with other countries and major financial institutions at home and abroad, holding of several outreach meetings/receptions at home and abroad. These activities will be funded from the Goods and Services sub-head, specifically from the Domestic and Foreign Travel as well as Hospitality items. These activities also place a heavy financial burden on all items under Goods and Services especially communication, office supplies, rental and hire expenses. All these programmes will be affected due to failure by the Treasury to allocate US$3 855 million. The ministry had requested for these activities only. Strengthening existing political, economic, social and cultural relations with the region and international community can be unpredictable and the ministry cannot always budget for such issues with precision. To remedy this decrease in the budget, the ministry will engage Treasury for extra funding during the course of the year in an effort to fulfill its objectives.

Table 5: Economic classification of the Vote

 

2012 (US$ m)

Proportion of 2012 Vote (%)

CURRENT EXPENDITURE

63.78

86.58

Employment costs

3.57

45.31

Goods and services

2.5

36.41

Maintenance

7.39

4.85

CURRENT TRANSFERS

33.38

3.39

It should be noted that 45.31% of the Ministry's 2012 budget was allotted to salaries by Treasury whilst goods and services got 36.41% and capital expenditure got 10.03% of the Ministry's total allocation. Treasury has informed the Ministry that of this figure (US$73 672 million), US$10 million should be set aside for Diplomatic Mission arrears. This deduction effectively reduces the Ministry's 2012 actual budget to US$63 672 000. As at 30th September 2011, the Ministry's Head office and Diplomatic Mission arrears amounted to US$20.127 million. The US$10 million set aside for Diplomatic Mission arrears still leaves a shortfall of US$9 227 million. The Ministry remains determined to get the issue of arrears resolved in the 2012 financial year and in this regard, will work with Treasury for final resolution of the issue.

4.2 Ministry of Foreign Affairs

From the consultations with the Ministry of Foreign Affairs, the following key issues came out:

4.2.1 Failure by Treasury to disburse allocated funds

The Ministry operations are hindered by lack of liquidity from Treasury. For instance, as at 30 October 2011, Treasury had only availed only 50% of the budget. This means that if Treasury fails to provide the Ministry with the other 50% of funds during the month of December 2011, the Ministry will be carrying over the deficit to 2012.

4.2.2 Current Affairs

Zimbabwe has obligations to pay annual subscriptions to several regional and international organisations. In the 2012 budget, Treasury allocated US$2.5 million which is 37.50% less than the US$4 million the Ministry's sub head in 2011. The country's dues are normally assessed using the UN index which looks at the country's economic standing/performance during the previous year. The Ministry paid US$2 063 734.15 towards subscriptions to international organisations in 2011 and it is expected that with the country's economic forecast for 2012 pointing to better results than 2011, our subscriptions to UN, AU, COMESA and SADC are likely to be increased, should this happen, the current allocation may not be enough.

4.2.3 Capital Expenditure

The Ministry received US$635 000.00 for the acquisition of fixed capital assets, this represents quite a substantial increase of 1588% of the 2011 budget of US$40 000. Part of the money (US 135 000) will be devoted to the purchase of vehicles to augment aged pool vehicles at Head Office which are now too costly to maintain. In keeping with one of the Ministry's programmes for the "The improvement of the image of the country', US$400 000 will be used to undertake major repairs of the Ministry's offices at Munhumutapa Building.

4.3 Diplomatic Missions

Of the Ministry's total allocation 89.8% (US$66.155 million) is earmarked for diplomatic missions' expenditure. This includes the recurrent expenditure of US$59.4 million and capital expenditure of US$6 755 million. The US$59.4 million allocated by Treasury is 3.67% less than the ministry's actual requirement of US$61.66 million excluding arrears. As stated above, the issue of arrears continues to impact negatively on the budget.

4.3.1 Goods and Services

The ministry was allocated US$23.832 million under this sub head. This represents a decrease of 25.80% compared to the 2011 budget of US$32.12 million. With this allocation, the ministry will not be able to meet its contractual obligation such as rentals and property rates.

4.3.2 Maintenance

The 2012 allocation of US$3.168 million is 26.29% more than the previous allocation. Due to cash flow challenges of 2011, our diplomatic mission assets were not properly maintained. It is therefore hoped that there will be some improvement this year as regards the general upkeep of the embassy assets.

4.3.3 Capital expenditure

Most of the country's Chanceries and residents abroad are in a terrible state of disrepair and are therefore in need of extensive renovations and refurbishment. The Government has not been able to keep pace with repair schedule. In addition, the missions' vehicle fleet is old as most vehicles were purchased in the late 1990s and early 2000 and therefore need to be replaced. The US$6.755 million under this sub-head for missions though representing a 56.74% increase over 2011 allocation of US$4.31 million falls far short of addressing the challenges our missions are currently facing.

It is unfortunate that the ministry will not be able to buy more properties and cut costs on rental especially in countries such as Angola and Juba where rentals are very high. The amount of US$3 955 million will be used for land purchases and partially financing new construction works and undertaking long overdue renovations.

5. Recommendations

16. Treasury should disburse the allocated budgets for the ministry to carry out its planned activities for 2011.

17. To ease the burden of high rentals in countries like Angola where rentals are very high, the Government should buy land and build houses for its embassy employees. The Ministry of Public Works can actually send youths from Zimbabwe to carry out these construction activities. This measure will create employment while at the same time helping to reduce high rental costs.

6. Conclusion

The major challenge for the Ministry of Foreign Affairs is that of properties abroad and salary arrears. Most of the properties are rented at exorbitant and unsustainable rentals. Thus, there is need for Government to come up with a long term strategy to overcome these challenges. As one of the measures, the Government may need to own properties in countries where there are Missions rather than renting. This may start in countries with the highest rentals.

Madam Speaker, we have a slogan which says, "you eat what we kill" but it will be reversed to say, "you eat what you kill", excluding the 'we'. So, Hon. Minister, we represent the marginalised of the marginalised people, the poor of the poorest people. So I hope that 1% translates to 40 million and 40 million when you are serving your own nationals, it is comparatively a very small figure in view of the fact that a large chunk of our Budget is spent on foreign trips. It is spent by Government officials, I am not saying by any individuals.

Lastly, Madam Speaker, I also support the issue that cotton linen should be given to women free of charge like what we do to condoms. Thank you.

MR. MUDIWA: I rise to give a report of the Portfolio Committee on Media, Information and Communication Technology.

Introduction

Following the National Budget presentation by Hon. Biti, the Minister of Finance on Thursday, 24 November, 2011, the Committee held post budget review meetings with officials from the two ministries. The budget grew by 31% from the 2011 revised estimate of US$2.7 billion to US$4 billion set for 2012 but felt short of the requirements by the ministries. The post budget review meetings therefore mainly focused on the impact of the cuts on the operations of the two ministries. Committees were generally concerned that the untimely disbursements of the already inadequate funds was impacting negatively on progress to the extent of paralysing the operations of the ministries and some parastatals and therefore recommend treasury to revisit their budgetary allocation, tender process and the modalities involved in releasing funds.

Review of the 2012 Budget Allocation for the Ministry of Information, Communication Technology: Vote 34

The ministry was established in 2010 with a mandate to transform Zimbabwe into a knowledge based society so as to enhance the country's competitiveness in the world in order to stimulate and sustain economic growth through the systematic application and innovative use of information communication technology (ICT). Its key result areas include the development of policies, regulatory frameworks and strategies that promote an enabling ICT environment as well as promoting access to and usage of ICTs, capacity building in ICTs and creating a conducive environment for investment through public-private partnerships.

In the national budget the Minister of Finance identifies ICTs as one of the champions of economic development of this country. However, it

is disturbing to note that this realisation did not translate into the allocation of resources commensurate with this important mandate. It is commendable that the Minister of Finance made a provision US$29.5 million for the broadcasting and transmission infrastructure, phase II of the Automated Fingerprint Identification System, ZIMRA computerisation and Home Affairs Command and Control System. The following is a summary of the allocation to various sub-votes and the extent to which they vary from the estimated expenditure targets.

Analysis of estimated Target Expenditure Versus Actual Allocation

Line Item

Budget 2011

Budget 2012

Bid 2012

2012 Budget variance

Admin & General

       

Current Expenditure

       

1. Employment Costs

139 000

267 000

267 000

nil

2. Goods & Services

939 000

901 000

2 012 496

(1 111 496)

3. Maintenance

168 000

228 000

500 000

(272 000)

4. Current Transfers

164 000

318 000

332 0036

(14 036)

5. Acquisition of Capital Assets/Projects

4 360 000

60 000

1 071 290

(1 011 290)

6. Capital Transfers (Zarnet)

70 000

60 000

231 000

(171 900)

Total

5 840 000

1 834 000

4 414 722

(2 580 722)

Central Computing Services

       

a)Employment costs

201 000

752 000

671 051

80 949

b)Goods & Services

1 049 000

1 618 000

2 898 264

(1 280 264)

c)Maintenance

434 000

752 000

671 051

80 949

d)Acquisition of Fixed Capital Assets

100 000

4 900 000

3 288 435

1 611 565

Total

1 784 000

7 589 000

7 058 750

530 250

Grand Total

7 624 000

9 423 000

11 473 472

(2 050 472)

The Ministry recorded an overall growth of 23.6% in budgetary terms between 2011 and 2012. The requirements for 2012 were not provided for by US$2 050 472, representing a budget deficit of 17.9%. However, treasury only availed $2.5 million out of the US$7.6 million provided for in the 2011 budget as a result of bureaucratic delays in the release of funds and tender process.

COMMENTS ON ALLOCATIONS TO THE VARIOUS SUBHEADS

Goods and Services

There was a significant decrease (11%) from a budget of US$ 939 000 in 2011 to US$901 000 in 2012, while current budget allocation falls short of the required by 55%. Of particular concern in this category are the following items:-

a) Communication Information and Supplies

The budget allocation decreased by 11% from that in 2011 and also falls short of the ministry's requirements. The allocation of US$150 000 is not enough to cover basic requirements for road shows, events, advertising and all other communications.

b) Office Supply services

This area is very critical in the provision of software for processing civil service salaries and Government pensions. The ministry is already in arrears following the licensing of the computer software. The allocation was increased by 60% and would go a long way in capacitating the department's procurement. It is recommended that the Minister of Finance reviews the budget allocation upwards with regards the above to ensure that areas are cleared and payments are up to date.

Training and development

There has been a decrease by 25% from US$80 000 to US$60 000 an amount which is not adequate to fully equip its recently recruited staff with the required skills. The minister should be persuaded to avail more resources to this cause.

Rental and Car Hire

The amount allocated has been reduced by 14% from US$257 000 to US$220 000. This will negatively impact on the ministry's activities. However, if the ministry were allowed to use this money to purchase own vehicles, there could be a significant saving. It is recommended that competitive rates be sought when hiring and consider purchasing own vehicles.

Projects and Programmes

The ministry submitted a number of PSIP projects requiring funding to the tune of US$ 60 236 million, but was allocated only $4.9 million, indicating a deficit of 92%.

 

Project Title

Allocation 2011

Allocation 2012

Bid 2012

2012 Budget Variance

1

National Fibre Backbone

15m

nil

25m

100%.

2

Modernization of National Systems

1.2m

0.9m

10m

91%.

3

E-Government

2m

1.4m

2m

25%.

4

Community Information Centers

1m

0.5

2m

75%.

5

PC per Class room

2m

2m

5.586m

64%.

6

Capacity Building

nil

nil

0.150m

100%.

7

Cyber Security

nil

nil

5m

100%.

8

ICT Awareness

nil

nil

1m

100%.

9

Last Mile Connectivity

nil

nil

2.5m

100%.

10

Digital Cities

nil

nil

5m

100%.

11

National

nil

nil

2m

100%.

National Optic Fibre

The ministry was not allocated anything for this project. However, the committee notes that the $15mln allocated in the previous year has not been fully drawn down and should be sufficient enough to allow significant work to be carried out. The unpredictable time of release of these funds makes planning and scheduling of projects difficult. In addition, there is need to speed up the enactment of the ICT Bill which presents a legislative framework that will guide the harmonisation of networks in the face of various private sector initiatives in setting up required infrastructure. The committee would like to encourage treasury to expedite on the release of funds and to allocate more resources to this project in the next budget.

Modernisation of National systems

The budgetary allocation represents a 91% shortfall. The amount allocated should allow for significant work to continue in the acquisition of the latest versions of system and application software. The minister should consider improving the budget allocation for this project in the next budget.

E-Government

The committee acknowledges the minister's recognition of the importance of e-Government in popularising and sensitising the civil servants on the use and benefits of ICTS. This project was allocated US$1.5 million against a bid of US$2million, which allows for significant amount of work to be done. The committee recognises the long term benefits arising from e-Government as improved operational efficiency will resulting a reduction in the civil service head count.

Community Information Centres

The ministry had applied for US$ 2mln but received an allocation of US$0.5m. The budget allocation fell short by 75%. However, the amount is enough to pave way for significant amount of work to be done. In addition there are areas of duplication such as the information huts and information platforms in other ministries. Collaboration with other ministries such as tourism and media would ensure optimal use of resources.

PC per Classroom

The budget allocation only provided 35% of the requirements as only US$2m was allocated against a bid of US$5.586m similar to the allocation in 2011. This amount will allow for some inroads to be made on this crucial project.

Capacity Building

Although the ministry requested for US$0.150m, there was no budget allocation for this project. Since information technologies play an important role across all the Government ministries capacity building should fall under the respective line ministries, while the ministry plays a supportive role.

Cyber Security

There was no budget allocation towards this project even though the ministry submitted a bid of US$5m. The committee felt that this area is critical as cyber crime increases as people increasingly use information communication technologies and require attention in the next budget.

ICT Awareness

The ministry submitted a bid for US1m but there was no budget allocation towards this project. It is important to popularise and sensitise the public including the civil servants on the use, development and benefits of ICTs. However, there are players within the industry that already play this role. The committee calls for integration among keys players in the industry to effectively carry out this role.

Last Mile Connectivity

Community Information Centres may be developed but without connectivity they will not serve the intended purpose. Connectivity is also important to schools in order to enable them to have access to internet. The Minister of Finance allocated US$0.5m against a bid of US$2m. It is recommended that the next budget allocates moreso resources to this crucial project which enables ICT and e-services to be brought closer to the rural and remote areas.

Digital Cities

No budget allocation was made against a bid of US$5m. The committee feels that this is a long term project which in the long run will generate income. It is recommended that there be a budget allocation towards this noble cause in the next budget. This project replaced techno parks in the 2011 budget.

National Digital Archives

No resources were allocated although a bid of US$2m was made. The current advancement in technology calls for an urgent need to automate all records.

Conclusion and Recommendations

· The Committee is concerned about bureaucratic delays in the release of funds and tender board processes that are stalling progress.

· The Committee concluded that the Ministry's allocation fell short of meeting its requirements and thereby compromising service delivery, provision of efficient network for the PFMS, maintenance of hardware, networks and applications systems.

· There is need to review the allocation of funds for the purposes of clearing computer software licenses arrears for application systems.

· Interaction with ministries such as education, tourism and media is important to avoid duplication notably the community information centres vs. information huts/platforms, ICT school project and Public Service Training School to ensure treasury is not unnecessarily put under pressure given the scarcity of resources at its disposal.

· The ICT ministry should provide a support function while training and development falls under the responsible line ministries. This should reduce the amount required under capacity building, leaving resources dedicated to the ICT school.

· Cyber security should be prioritised given the inherent risks that come with increased use of information technology

· There is need to speed up the enactment of the ICT Bill so that we will ensure harmonisation of all works being done be key players in the industry to set up the required infrastructure and avoid duplication of networks.

· Although the Committee noted that the budget is inadequate it calls upon treasury to allow the ministry to be allowed to retain and use the US$5m that was allocated in the 2011 budget but released to the ministry.

Review of 2012 Budget Allocation for the Ministry of Media, Information and Publicity: Vote 22

Introduction

The ministry's key result areas are promoting public communication, dissemination of information and image building. Major achievements in 2011 include rehabilitation of 21 existing radio transmission sites, construction of three new broadcasting transmission sites, film school operating fully and 35 district information offices manned by mobile officers. Priorities for the 2012-2014 period include reducing the information gap between the rural and urban areas, propagating the Zimbabwean viewpoint internationally, building local content national and international communication and liaison between the public sector and media industry.

4.1 Analysis of the Ministry's Bids vs the Actual Allocation

Subvotes

Budget 2011

Budget 2012

2012 Bids

Variance

Recurrent Expenditure

3 320 000

4 063 00

4 806 880

(743 880)

B. Goods and Services

1 478 000

1 445 000

2 241 497

(796 497)

C. Maintenance

271 000

310 000

624 300

(314 300)

D. Current Transfers

1 071 000

1 708 000

1 264 443

443 557

E. Programmes

500 000

600 000

676 640

(76 640)

Capital Expenditure

1 765 000

6 078 000

5 154 021

923 988

F. Acquisition of Capital Assets

1 150 000

180 000

1 150 000

(970 000)

G. Capital Transfers

615 000

5 898 000

4 004 012

1 893 988

Summary of Capital

Broadcasting Authority of Zimbabwe (BAZ)

50 000

100 000

130 000

(30 000)

New Ziana

Nil

198 000

98 000

100 000

Transmedia

465 000

5 100 000

3 271 800

1 828 200

Zimbabwe Film Training School

80 000

400 000

404 000

(4 212)

Zimbabwe Media Commission

20 000

100 000

100 000

0

Grand Total

5 585 000

11 070 000

9 960 892

1 109 108

Recurrent Expenditure was underfunded by 15% but grew by 22% up from last year. Meanwhile, under capital expenditure, transmedia received an overwhelming US$5.1 million against a bid of US$3.2 million.

Treasury provided all the required resources under current transfers since parastatal funds are augmented by the income they generate.

4.2 Recurrent Expenditure

4.2.1 Maintenance

Treasury provided $310 000 against the ministry's requirements of US$624 000, showing a deficit of 50.3%. Main areas affected include vehicle and mobile equipment which received US$100 000 against a bid of US$280 000. Meanwhile, fuel, oils and lubricants received US$ 167 000 against a bid of US$300 000. Thus the ministry will fail to repair vehicles which have been grounded for more than three years, let alone service current fleet. The minister of Finance is encouraged to allocate more resources in the next budget.

4.2.2. Current Transfers

This subhead received in excess of required as US$1. 7 million was allocated against bids of US$1.2 million. All the parastatals namely, Broadcasting Authority of Zimbabwe, Zimbabwe Media Commission, New Ziana, Transmedia and the Film School received in excess of submissions since parastatal funds are augmented by the income they generate.

4.2.3. Commemorations

Although the ministry requires US$676 640, allocation stood at US$600 000, representing a shortfall of US$76 640 (11%). The ministry will not be able to adequately dress events and occasions such as the National Independence Anniversary, Heroes Day, Unity Day, Africa Day and May Day. The committee hopes that more funds will be availed in the next Budget.

4.3. Capital Expenditure

4.3.1. Acquisition of Capital Assets

Treasury failed to provide sufficient resources to cater for the acquisition of furniture, equipment, photographic equipment, mobile video vans, Press Unit Vehicle and equipping information huts. The ministry was allocated US$180 000 for the acquisition of fixed assets yet it had submitted bids for US$1.5 million, representing a budget deficit of 84.3%. Treasury should consider allocating additional resources in the next Budget.

4.3.2. Capital Transfers

The Budget allocation for capital expenditure improved significantly from last year's US$615 thousand to this year's US$5 898 million. Most of the parastatals' requirements were et except for the Broadcasting Authority of Zimbabwe which got US$100 000 against a bid of US$130 000 and the film School which was allocated US$400 000 out of a bid of US$404 212. However, it is commendable that Transmedia was allocated a staggering US$5.1 million for the digitalisation programme which will pave way for considerable progress on the digitalisation programme. The Committee established that the ministry requires US$30 million for the digitalisation programme and there is still need for further allocation towards this cause to enable the ministry to meet the 2013 deadline.

Conclusion and Recommendations

· The Committee recommends that the ministry be allowed to immediately access the funds allocated to it so that it carries out its mandate well.

· The Committee recommends that treasury continues to improve the funds allocation with regards to the digitilisation programme, to enable the ministry to meet the 2013 digitilisation deadline for SADC. Being digitally non-compliant attracts huge costs to the country.

· The Committee noted areas of duplication with other ministries and therefore recommends the need for collaboration with ministries such as education, and tourism, carrying out similar projects like the information platforms in rural areas so as to reduce the burden on Treasury.

MR. MADZORE: 2012 Budget analysis for the ministries of defence and home affairs.Ministry of Defence Vote 5 - US$318 272 000 and Ministry of Home Affairs Vote 20 - US$308 330 000.

1.0 Introduction

1.1 Your Committee examined the 2012 Budget allocations for the Ministries of Defence and Home Affairs and also received oral submissions from the officials of the respective Ministries on their observations and analysis.

1.2 The two Ministries had expected to get adequate funding for their programmes on recurrent and capital expenditures. However, their votes were grossly underfunded in the 2012 budget as evidenced by the Ministries' requirements and funding history.

2.0.Ministry of Defence - Vote 5 (US$318 272 000)

2.1. Overview of the Ministry of Defence

The Ministry of Defence's mandate is to ensure the country's territorial integrity and sovereignty of the land space and air space against both internal and external aggression. The forces provide rescue assistance to civilians in times of disasters and promoted peace through participation in peace-keeping missions. The Ministry further provides assistance to War Veterans through the Administration of the War Veterans' Fund.

2.2. Key Objectives

The Ministry's major policy priorities for the period 2012-2014 included the following:

· Meeting the constitutional and statutory obligations.

· Maintaining, upgrading and refurbishing existing Defence Forces equipment and facilities.

  • Training of military personnel
  • Research and Development.

3.0. Overview of the Ministry of Defence Budget

3.1. The Ministry was allocated US$318 272 000 which translated to 7.7% of the amount requested for the 2012 budget. This allocation was an increase of 55.1% when compared to that of 2011. The breakdown covered Administration and General which received US$33 202 000, the Zimbabwe National Army whose share was US$243 357 000 and the Air Force of Zimbabwe which received US$41 713 000. The allocation was for employment costs, goods and services, maintenance, current transfers, programs and capital expenditure.

3.2 The analysis showed that there was an increase in the share of allocation on Administration and General. The observation from the figures given was that there was a significant increase in the allocation to goods and services and current transfers. However, there was no change in the allocation to acquisition of fixed capital assets which received US$810 000 in last year's budget. Your Committee noted that the allocation for the previous year was not fully disbursed by the Treasury. It was also noted that the share of ZNA decreased from 77.7% in 2011 to 76.5% in the 2012 Budget. Similarly the share of Air Force of Zimbabwe fell by 1.9% from the 2011 budget to 13.1%. This showed that less priority was given to Zimbabwe National Army and the Air Force of Zimbabwe. Although it was clear that the Defence departments received increases in their allocations, major concern was on the adequacy of the allocation as illustrated by the table below.

Department

2011 Allocation (US$)

% Share

2012 Allocation US$

% Share

% Charge 2011-2012

Administration and General

14 414 586

7.3

33 202 000

10.4

130.3

Zimbabwe National Army

181 036 558

77.7

243 357 000

76.5

57.9

Air Force of Zimbabwe

29 863 000

15

41 713 000

13.1

39.7

  • Observations

4.1. Major areas of priority were goods and services, programs, maintenance, and acquisition of capital assets within the Air Force and the Zimbabwe National Army.

4.2. The Ministry had undertaken a number of major programs such as:

a). The Zimbabwe Defence College

b). Upgrading of land sites

c). Payment of contractual obligations

d). Acquisition of furniture, vehicles, equipment and aircraft spares

e). Housing projects

f). Completion of ongoing projects

g). New projects that had been earmarked for the 2012 financial year.

h). Upgrading of existing infrastructure for the training of personnel.

I). Furthermore, the Ministry had other statutory obligations that it needed to fulfill and these included rations and kitting for Army, the acquisition and provision of medical supplies and services.

j) The Ministry also had unpaid bills for ZESA, TelOne, ZINWA, and various local authorities' utilities. In addition, the Ministry had huge debt on foreign contractual obligations dating as far back as 2009.

k). The Ministry had also requested US$356 million but only got US$49.6 million which was 14% of the requirement.

I) That Foreign contractual obligations could not be deferred and for the Ministry's credibility and credit worthiness such issues had to be honored. Zimbabwe did not have domestic substitutes for imported military equipment hence this would ground the operations and other core business of the Ministry of Defence.

m). That vehicles had outlived their life span hence it was no longer economic to maintain them.

  • Recommendations

Your Committee made the following recommendations:

· That additional funds be sourced for programmes, goods and services, maintenance and acquisition of fixed capital assets. These were critical items in the operations of the Ministry since many activities were revolving around them. The Treasury can widen its taxable base and collect more revenue from diversified sources and increase funding to these items.

· That the Ministry of Finance comes up with sound fiscal policies and mechanisms for efficient revenue collection. It further recommends that the allocated funds must be released to the Ministry timeously upon request.

· That all incomplete projects and other outstanding programmes be prioritized so that their completion is brought to a logical end. The Ministry can also embark on private-public partnerships for the completion of these projects.

· That funds allocated for a specific annual budget be released within that fiscal year so that programmes and activities of the Ministry are not compromised. Your Committee observed that US$993 000 which was allocated for the purchase of Air Force buses in 2011 had not been released. At the same time, that item could not be provided for during the 2012 Budget as it was deemed to have been taken care of in 2011.

· That the Ministry can source its own funds through projects or programmes that generate revenue. More so, it can enter into partnership agreements and have payment plans for the accumulated debts.

  • Conclusion

It is imperative that there are a number of key issues that need to be addressed in 2012. Most importantly the budget allocation for the Ministry must be fully met. All outstanding programs from the previous year must be prioritized and funded adequately.

 

Ministry of Home Affairs Vote 20 - US$308 330 000

Introduction

The Ministry of Home Affairs' mandate is to make the country a safe and secure place to live through maintenance of public order and security, control entry and exit of people across Zimbabwe's borders, issuance of personal documents and preservation of cultural heritage.

Key Objectives

The Ministry's major policy priorities for the period 2012 - 2014 were:

· installation of ICT Repository and air conditioning.

  • Processing of e-passport.
  • Ensure peace throughout the country.

Overview of the Ministry of Home Affairs' 2012 Budget

The Ministry of Home Affairs was allocated US$308 330 000 which is 7.7% of the 2012 budget allocation. Despite the act that the Ministry was in the top four in the order of priority ministries, its allocation was below what had been requested for. The total allocation was allocated to various departments as follows:-

Administration and General

US$8 823 000

National Archives

US$2 337 000

Immigration and Control

US$4 956 000

Registrar General

US$17 839 000

Zimbabwe Republic Police

US$274 375 000

Goods and services were allocated US$25 641 000 in 2012's budget which is lower than the US$26 665 000 allocated for 2011. Similarly, programmes were given US$844 000 in 2012 which is lower than the 2011 budget allocation of US$1 910 000. Your Committee noted that these items were inadequately funded hence the Ministry cannot achieve its 2012 - 2014 objectives.

In analyzing the budget, your Committee noted that there was inadequate funding in the Administration and General. It was observed that of the US$33 850 938 it required from the Ministry of Finance, only US$1 976 000 was allocated to the Anti-Corruption Commission. Similarly, the Commission would not have adequate funding for maintenance, current transfers and capital expenditures. Your committee observed that there were high travel expenses for the Anti-Corruption Commission (both domestic and foreign). Moreso, your Committee raised critical concerns on the staffing of the Anti-Corruption Commission which had only 28 personnel to carry out all the duties.

Additional funding of US$31 874 938 was therefore needed for recurrent and capital expenditures to operationalise this important section. The Committee also noted that the Commission had more than 1 500 cases that needed to be investigated. Thus your Committee was very concerned about the difficult operating conditions in which the Commission was working in, hence the need for additional funding.

Your Committee also observed that in cases where vacant posts arise after death/registration, they are subsequently frozen but the allocation could have already been made.

The Committees noted that the Ministry had in previous financial year(s) used the Retention Fund for recurrent expenditures. A comparison with last financial year's allocation had shown no or insignificant changes in allocation of recurrent expenditure. The allocations for Registrar General were not different from 2011 allocations and this prompted your Committee to request for a review of them.

The Ministry was decentralising some of its activities to Bulawayo, Mutare, Masvingo, Beitbridge but office problems continue to haunt. The Committee was disturbed that almost half of the budget allocation may be used as rent. This implied that the documents would be insecure in the absence of offices. The Home Affairs officials alerted the committee that Chipinge, Chiredzi and Harare required US$350 000/year alone for rentals.

It was also noted that rentals consumed nearly half of the budget allocation and had accumulated debts since 2009.

What was critical was to timeously release the allocated funds to allow timely planning for this had remained as a major challenge. It was made clear that if the allocated funds are not released in time, a lot of operational activities will not be executed in time.

Recommendations

Your Committee recommended:

18. That the Ministry finds its own revenue-generating programmes to fund its own projects.

19. That arrangements for lease agreements be made to ensure that maintenance is done while payments are staggered.

20. That there was great concern to develop and maintain the Retention Fund scheme. It was expected to accommodate some inadequately funded items and cover some recurrent expenditures in times of delayed releases of allocated funds. The Committee thus encouraged Treasury to retain the Retention Fund for at least ten years so that it could assist the Ministry to buy more vehicles.

21. That the Ministry develop its own fund-raising programmes that generate revenue to supplement its allocated funds. Moreso, partnerships with the corporate world could improve funding of the Ministry.

22. The Committee further encouraged that the Anti-Corruption Commission should be detached from the Ministry and funded separately as a parastatal and be allowed to generate its own revenue.

23. In addition, your Committee recommended that the Ministry had to be prioritized and benefit from the computerisation programme

Conclusion

Overally, the budget seemed to have fairly covered some critical issues in the Ministry of Home Affairs. However, there was need to timeously release the allocated funds so that routine operations will not be compromised.

MR. SITHOLE: I rise to present a report on the Portfolio Committee on Industry and Commerce 2012 Post Budget Analysis.

1. Introduction

The major mandate of the Ministry of Industry and Commerce is to implement the national industrial development policy, trade policies, trade promotion and consumer protection. In this mandate, the ministry has three public enterprises (Industrial Development Corporation, Zimbabwe Iron and Steel Company, Zimbabwe International Trade Fair) and four grant aided bodies: Consumer Council of Zimbabwe, Competition and Tariff Commission, National Incomes and Pricing Commission, and Zimtrade. The challenges of the ministry include: underutilisation of capacity in industry, weak exports performance due to semi-processed goods and influx of poor quality goods on the market.

1.1 Objectives of the ministry - 2012 - 2015

· to facilitate increased manufacturing capacity utilisation from 57% to 80% by 2015.

· to facilitate increase in country's exports by 50% by December 2015

· to facilitate increased production of value added products from 40% to 80% by 2015.

· attain 80% conformity to international measurement standards by 2015

· promote stabilisation of prices of goods and services

· facilitate full protection of consumer rights by 2015.

The 2012 budget was aimed at facilitating capacity utilisation in industries and trade promotion.

2. Overview of the budget

The total 2012 budget is US$4 billion, of which US$3.2 billion is recurrent expenditures (80%), while US$800 million is capital expenditure (20%). This shows that the budget increased by 45.7% from $2.746 billion in 2011.

2.1 Expenditure performance in 2011

The cash budgeting adopted by the treasury has really constrained the ministry to stick to the targeted expenditures, except few budget items that were allowed to overshoot the target. Thus, the expenditure control reflects constraints. The overshooting of this expenditure shows the unavoidability of expenditures such as, domestic travel expenses which overshot by US$9,600 by September 2011, so as fuels, oil and lubricants from US$100,000 to US$122,639, furniture and equipment from 80,000 to US$154,074. However, those overshooting came at the expense of other budget items, as 70-75% of allocations are expected to be used by the end of third quarter; some only consumed 30-35%.

2.2 Expropriation of 2012 budget expenditure: the bottom 10

The ministry's total bid was US$182,000,000 that was to be appropriated as follows:

   

Bid

actual

variance ($)

current expenditure

wages and salaries

771,000

1,283,000

512,000

 

goods and services

foreign travel (sub item)

1,953,000

700,000

1,934,000

800,000

(19,000)

100,000

 

Maintenance

306,000

356,000

50,000

 

current transfer

trade insurance (sub item)

10,421,800

7,500,000

2,474,000

0

(7,947,800)

(7,500,000)

 

Programmes

5,440,000

2,890,000

(5,400,000)

 

new programmes

     
 

distressed companies fund

100,020,000

0

(100,020,000)

 

export credit insurance

200,000

0

(200,000)

total

 

119,111,800

8,937,000

(110,174,800)

         

capital expenditures

     
 

furniture and equip

120,000

150,000

30,000

 

capital transfer

     
 

IDC

63,960,000

0

(63,960,000)

 

Com and tariff com

25,000

0

(25,000)

 

CCZ

45,000

0

(45,000)

 

NIPC

40,000

0

(40,000)

 

Vehicles

370,000

0

(370,000)

total

 

64,560,000

150,000

(64,410,000)

         

The large proportion of the proposed budget were to finance new industrial development programmes

a) the ministry wanted to create a Distressed Companies Fund which it would manage US$100,020,000. This is parallel to the one

managed by Treasury.

b) to recapitalise IDC and sister companies to the tune of $63,960,000.

c) subscribe to African Insurance Trade Agency, initial payment

US$7,500,000 that is 30% of membership fee totalling

US$25,000,000.

These proposed expenditures were rejected by Treasury (as it is regarded as a policy ministry) resulting in these huge variance between bid and actual allocations. However excluding these new budget items, the variance on the budget is reasonable.

The Treasury allocated only US$9,087,000, implying a deficit of about 95%. The ministry is still in the bottom ten receiving 0.23% of the budget allocation. In 2012 it was prioritised as it has moved up in the bottom 10. The table below summarises the bottom ten allocations.

 

Ministry

2011

Share of budget (%)

 

Ministry

2012

share of budget (%)

1

SMEs

5,589,000.00

0.19%

1

Science and Techno

9,450,000.00

0.24%

2

Media

5,585,000.00

0.19%

2

ICT

9,423,000.00

0.24%

3

Mines

5,175,000.00

0.17%

3

Industry and Comm

9,087,000.00

0.23%

4

Science and Tech

5,000,000.00

0.17%

4

SMEs

8,950,000.00

0.22%

5

Industry and Comm

4,198,000.00

0.14%

5

Mines

6,921,000.00

0.17%

6

Audit

3,787,000.00

0.13%

6

Tourism

6,015,000.00

0.15%

7

Tourism

3,637,000.00

0.12%

7

Audit

5,075,000.00

0.13%

8

Economic Plan

2,129,000.00

0.07%

8

Economic Planning

2,762,000.00

0.07%

9

Regional Integration

1,662,000.00

0.06%

9

Regional Integration

2,378,000.00

0.06%

10

State Enterprises

1,331,000.00

0.04%

10

State Enterprises

1,875,000.00

0.05%

3. Expenditure analysis for 2012:

From the SU$9,087,000 allocated, US$8,937,000 is current expenditure, of which US$2,474,000 is current transfer to grand aided bodies and US$150,000 is capital expenditure. This is because it is a policy ministry thus, current expenditures must far exceed capital expenditures.

Expenditure

2011

2012

% change

% of allocation

Current expenditures

2,605,000.00

6,463,000.00

148.1

68.4

Employment costs

771,000.00

1,283,000.00

66.4

13.6

Goods and services

1,364,000.00

1,934,000.00

41.8

20.5

domestic travel expenses (sub item)

95,000.00

300,000.00

215.8

3.2

foreign travel expenses (sub item)

510,000.00

800,000.00

56.9

8.5

other goods and services

   

9.9

8.8

Maintanance

220,000.00

356,000.00

61.8

3.8

Programmes

250,000

2,890,000.00

1,056.0

30.6

common market for East and Southern Africa

50,000

40,000.00

(20.0)

0.4

trade promotion

200,000

2,850,000.00

1,325.0

30.2

Current transfers

1,553,000.00

2,474,000.00

59.3

26.2

competition and tarrif commission

181,000.00

319,000.00

76.2

3.4

consumer council of Zimbabwe

168,000.00

321,000.00

91.1

3.4

national incomes and pricing commission

154,000.00

263,000.00

70.8

2.8

Zimtrade

50,000

80,000.00

60.0

0.8

subscriptions to various organisation

1,000,000.00

1,491,000.00

49.1

15.8

Capital expenditures

140,000

150,000.00

7.1

1.6

furniture and equipment

60,000.00

150,000.00

150.0

 

construction work

80,000.00

 

(100.0)

 

Total

4,298,000.00

9,087,000.00

111.4

96.2

3.1. Analysis of current expenditures

· Most expenditure items increased from 2011 levels.

· Employment costs increased by 66.4% from US$771,000 in 2011 to US$1,283,000 in 2012. This is greatly appreciated as it will increase workers welfare, even though the salary increment will still be small.

· Goods and services: the most notable was increase in allocation to domestic and foreign travels. This is most welcome as it will enable the ministry to embark on trade promotion. Foreign travel expenses overshot the target by September in 2011. This could be the reason behind the increment as it is one of the unavoidable cost.

· Maintenance increased by 61.8% from US$220,000 to US$356,000. Of interest is that this figure is US$50,000 above what the ministry bided for. Again the committee greatly appreciates it.

· The allocation for programmes also increased. This is one of the ways the ministry can coordinate and facilitate trade and industrial policies. The allocation to trade promotion increased from US$200,000 to US$2,850,000, which represents 30.2% of the total budget. This is a positive development given that one of the key objectives of the Ministry of Industry and Commerce is trade development. The amount shall enable the ministry to travel and create trade for the country.

· Capital expenditures: only US$150,000 was allocated for furniture and equipment. This amount increased by 150% from US$60,000 in 2011. Again, this is appreciated as the budget allocations are continually equipping the ministry.

  • 3.2 The current transfers to grant aided bodies were distributed as follows:
 

2011

2012

% change

% of allocation

Current transfers

1,553,000.00

2,474,000.00

59.3

 

competition and tariff commission

181,000.00

319,000.00

76.2

12.9

consumer council of Zimbabwe

168,000.00

321,000.00

91.1

13.0

national incomes and pricing commission

154,000.00

263,000.00

70.8

10.6

Zimtrade

50,000.00

80,000.00

60.0

3.2

subscriptions to various organisation

1,000,000.00

1,491,000.00

49.1

60.3

· The large proportion was allocated to subscriptions to various organisations. The ministry benefits from services provided by various trade organisations, hence it has to subscribe to obtain these services. The amount increased by 49.1% from US$1,000,000 in 2011 to US$1,491,000 in 2012.

· For the grant aided bodies, more was allocated to the Consumer Council of Zimbabwe (13%), followed by the Competition and Tariff Commission (12.9%), National Incomes and Pricing Commission (10.6%) and lastly Zimtrade (3.2%). Although there was an increase in the allocation, this amount falls short of what was bided by other bodies except for the Competition and Tariff Commission which bided for US$250,000 but received $319,000. Consumer Council of Zimbabwe bided for US$493,000 and was allocated US$321,000; National Incomes and Pricing Commission bided for US$374,000 and was allocated US$263,000; Zimtrade bided for US$154,000 but actually received US$80,000. These allocations, although they fall short of the proposed bids, the committee noted that the amount will help to run these bodies. Zimtrade received a less amount because it also receive income from surcharges levied on imports/exports. Given the poor export performance, the underfunding will further constrain it from visiting other countries to undertake market research. Nonetheless, the committee appreciates these increments in current transfers.

4. Fiscal policy intervention to address capacity utilisation in

industries

· The committee noted and appreciated the fiscal policy intervention towards capacitating productive sector: notably, the Zimbabwe Economic Trade Revival Facility (ZETREF) and Distressed and Marginalised Areas Fund (DiMAF) with seed capital of US$70 million and US$40 million respectively. However these funds were not accessed due to stringent terms attached to them. The funds were managed by Treasury.

· Duty suspension of raw materials and increase in import duties of finished goods is a positive development.

5. Observations

24. There was no provision for vehicles, the ministry is facing shortages of vehicles which is hampering mobility.

25. Acquisition of fixed capital assets was under funded, the US$150,000 is not enough for new equipment and furniture.

26. There were no capital transfers to grand aided bodies even though they have shortages of equipment and furniture, and vehicles.

27. Treasury is taking long in releasing funds that in most cases activities are delayed, evidence by some budget items that only used 20-30% of their allocation in the third quarter.

28. No provisions for programmes aimed at promoting value addition and promoting quality goods (standards) which is key in export development.

6. Conclusion and Recommendations

· Generally the budget allocations increased by 96.2% from US$4,298,000 in 2011 to US$9,087,000 in 2012. This is greatly appreciable and allocation will fairly cover most operational expenditure enabling the institution to achieve its deliverables even though the ministry is in the bottom ten. The increase in current expenditures is also benefiting workers as they will receive salary increment, although marginally.

· The committee noted that the success depends on the availability of funds; Treasury is taking time to avail these funds. Therefore, recommends that the Treasury must timeously release funds as per request for successful execution of programmes.

· The committee appreciates the increment on trade promotion from US$200,000 to US$2,850,000. However, value added and quality promotion programmes must also be provisioned as they complement in solving problems of export and industrial development. Zimbabwe currently is facing problems of poor quality products that are disadvantaging local industries and at the same time failing to penetrate foreign markets due to poor quality goods.

· The grand aided institutions did not receive capital transfers to acquire equipment and furniture; this is saddening because it will hamper efforts to execute their mandate. Therefore, the Committee recommends that acquisition of assets to these institutions be partially allocated funds.

· On the proposed new programmes

· The creation of distressed companies fund within the ministry (US$100,020,000). The committee noted that it is not proper for the ministry to act as a financier but to concentrate on policy. However, it is recommended that the ministry must manage industrial revival fund through involvement in vetting of applicants. Thus, a fund must be provided for the management of the programme.

· Recapitalising Industrial Development company (IDC) ($63,960,000). The committee noted that IDC has sister companies with assets and recommends that IDC uses these assets as collateral for bank loans.

· Subscription to African Trade Insurance Agency (AITA) (US$7,500,000 initial down payment out of US$25,000,000), the committee appreciates this new programme as it is in line with Government goal of export promotion. However, the committee recommends that cost benefit analysis be done for it to be compared to the existing trade insurances in Zimbabwe. Treasury must be advised that some Zimbabwean companies have lost export earnings in DR Congo and South Sudan, because either they are not insured or their insurance does not cover other risks. Therefore, a national trade insurance such as AITA would be ideal. At the moment, export performance is low, the country can subscribe but without commensurate benefit in increased exports volumes. Nonetheless, Treasury must allocate funds to promote export development which is a tool of correcting balance of payment imbalances.

· The committee also noted that foreign travel bided for US$700,000 but allocated US$800,000. The committee recommends that this extra US$100,000 be allocated to the procurement of vehicles to facilitate domestic travel.

· On fiscal policy direct intervention to industry, the committee greatly welcomed these developments but it is deeply concerned that no companies accessed the industrial revival funds due to stringent terms. The committee therefore recommends that restrictions be removed and demand to know these restrictions to give a fair evaluation of these funds. The use of financial institutions is questionable as they may deliberately delay processing while investing the funds, thus benefiting at the expense of the ministry and local industry. The committee therefore recommends the active involvement of the ministry in the selection of beneficiaries and coordinating disbursement of funds.

*MR. NDAVA: Thank you for giving me this opportunity to make my contribution on the National Budget announced by the Minister of Finance. I would like to remind him of bullet 578 of his speech in which he discussed the Constituency Development Fund. The electorate was very much elated by the introduction of this fund because it has a direct impact on their livelihood. Thank you for this project but when I look at its implementation, I notice that we are nearing the end of the year. We had hoped to complete our projects this year and the electorate was really expecting results, but the future is gloomy. I plead with the Minister to note that the people he met on his visit to Masvingo, encouraged us to come and beg for more assistance on the CDF because this has a direct bearing on their livelihood as has been stated before.

May I also remind the Minister that the rural electorate has a feeling that the budget is structured with the urban population in mind. The rural folk only benefit from the CDF. Taking cognisance of the fact that the pace is small as compared to the beneficiaries, may you please distribute the little you have equitably. When I discuss this, I take into account the vendor shelters which had started to beconstructed for the rural traders and which are incomplete. We had hoped that come December 2011, these would have been completed and would make our role as people's representatives very rosy.

In July 2011when the Minister presented his Mid-Term Fiscal Policy, I reminded you of the sugar-cane farmers in Chiredzi who are a special breed with outstanding needs, which are different from other crop farmers. Unfortunately, the budget presented has shown me that when we were discussing in July, we were on a different wave length. The Minister introduced the coupon system of accessing farming inputs. This has very little assistance to the sugar-cane farmers. Sugar-cane needs different types of fertilisers as compared to other crops and this may be a challenge to AGRITEX officials in respective areas.

Compoud D fertiliser which is an essential component to other crops is very necessary to the sugar-cane farmer except AN, SSP, MOP and other fertilisers. These are very scarce in the sugar cane farming areas and yet they are very essential. I will give a breakdown of these fertilisers per hectare for the sugar cane farmer. He needs 8 bags of Compound D, AN, six bags of SSP and four bags of MOP. Unfortunately, this has not been taken into account in the current budget. The sugar-cane farmer has just been treated as any other farmer which is not correct. May I plead with you Minister as per our discussion in July 2011. May you please make a special dispensation for the sugar cane farmer in your budget?

In conclusion, Madam Speaker, the budget discussed horticulture whereby there was some insinuation that importation of produce may be discouraged. May you please hold some discussions with the Ministry of Agriculture on the implementation of the ban because they may be aiming at banning exports of the horticulture which will be a negation of the farmers' intentions. We are saying let us improve on our agriculture because if consultations are not done on time, we may find local farmers being discouraged to export their horticultural produce and yet we want to improve on our US$4 billion allocation. My colleagues are driving me to stop debating. I thank you.

*MR. TACHIONA: Thank you Madam Speaker for affording me this opportunity to make my contribution on the fiscus debate. I would like to discuss the Mushandike Irrigation Scheme which has 467 farmers. As we are debating now, their source of water, the Mushandike Dam is dry. During the previous dry season, the Mushandike Irrigation Scheme was a source of livelihood for the area. Plans have been made with the Ministry of Water whereby these irrigation farmers would access water from the Tokwe River which is flowing to the Triangle Sugar Estates. The farmers would like to be given money to dig an 8 meter gradient trench which will draw water from the Tokwe River to the Irrigation Scheme. May you please make the plight of the Mushandike Irrigation Farmers in your budget and allocate them some funds for the success of their projects. Mushandike Irrigation Scheme is the backbone of the Masvingo area. Thank you very much.

THE MINISTER OF FINANCE: Thank you very much Madam Speaker. I want to thank all the honourable members who have made contributions to the 2012 budget. I would like to thank Hon. Chininga, Hon. Ndava, Hon. Madzore, Hon. Mudiwa, Hon. Mkanduri of Zibhowa, Hon. R. Moyo, Hon. Mpukuta, Hon. Zinyemba, Hon. Mangami, Hon. Matienga, Hon. L. Mavima, Hon. Chebundo, Hon. Jiri, Hon. Matshalaga, Hon. Ncube, Hon. D. Sibanda, Hon. Mwonzora, Hon. Kanzama and Hon. Zhanda, the Chairperson of the Budget Committee. Madam Speaker, I think most of the issues, other than the individual budget allocations, I think they were consistent. The first one is clear that the resources are not enough. The cake is very small and trying to cut a cake that is so small to many ministries, the resources are just not enough. Our biggest challenge Madam Speaker is how to expand the cake. How do we attempt the supply side reform of our economy so that we can adequately attend to all the demands of the ministries. That this is the real key issue. The economy is small, the cake is small and also we are one of the few countries in the world that use cash budgeting - a normal country operates on the basis of money that is printed by the Federal Reserve/Central bank. Money that is actually physically located in vaults at the Central Bank; money that you physically transfer consistent with the budget - we do not have that luxury so that creates a problem.

The third issue which is a problem is that there is a skewed allocation matrix in our budgetary process that much of our resources are going to recurrent and that recurrent expenditure, much of the resources are going to wages - 63% of the wages, that leaves very little, 37% to non-recurrent expenditure. So, wages are having a crowding out effect on the performance of the budget. All the reports by Chairpersons complained of late disbursement of money - this is inevitable Madam Speaker, given that we have to deal with the issue of non-discretionary expenditure, the issue of wages before we start making payments on disbursements. So, again the challenge goes to the central issue of expanding the cake through creating more jobs, through Foreign Direct Investment which was the theme of our 2012 Budget. I want to thank also the tone of the contributions of the Chairs this year, it was very different from 2011. I think, there was a more appreciative paradigm of the problems that we are facing - it is a money problem, we are dealing with hard currencies, this money does not grow and we do not have a printing press at the Ministry of Finance. So, I think, it was a more constructive conversation as opposed to the more adversarial conversation which we saw last year.

The fourth thing which I think is self-evident from all the reports is the importance of infrastructure. I think, Hon. Paddy Zhanda's report made it very clear that for instance, if we do not have electricity, we do not have an economy and I think that is an incontestable fact. We have done what we could in the Budget but clearly, the Budget alone cannot sustain the serious generational problems of electricity that this country has to attend. Hwange 7 and 8 alone require a billion dollars; Batoka alone requires $2.5 billion; Kariba South alone requires at least US$400 million. Therefore, we have to have triple Ps; and Foreign Direct Investment and I am pleased to say Madam Speaker that the Minister of Energy is in advanced talks with partners that can help us with Hwange 7 and 8; the Zambians are coming on board in terms of allowing us to look for money - jointly with regards to Batoka which is really the long term solution to energy in this country but we agree that without energy you do not have an economy - you have a primitive feudal economy.

The issue too of water is important and I am glad to say that there has been some progress on Tokwe-Mukorsi. Only yesterday a Memorandum of Understanding was signed vis-a-vis Kunzvi Dam and Kunzvi is very important, we do not have the capacity; Manyame Dam does not have the capacity of supplying the 2 000 mega litres that are required for Harare and Harare is expanding - even Marondera is part of Harare, never mind Ruwa, Broomley, Norton, Bora and Chitungwiza. So, we have to have Kunzvi Dam to come on board.

We have tried to do what we have done in the Budget in respect of dams like Gwayi-Shangani, dams like Mtshabezi but I think, the private sector must also come on board. I can mention a few dams that we think the private sector should come on board. One of them is the Kondwe dam on the confluence of Odzi and Save river - we do not have the capacity, the private sector should come on board. Madam Speaker, without water it means that we do not have irrigation schemes and agriculture, without irrigation, is not 365 days agriculture - it becomes subsistence agriculture. Agriculture is a year exercise but it will not be a year exercise if we do not have water.

The issue of roads is also important and I need to say that we did not allocate a lot of money to roads because the bulk of roads sustainance comes from the Road Act administered by ZINARA (The Zimbabwe National Roads Agency) and I take cognisance of the concerns that there should be even and equal distribution of ZINARA funds to all the sectors.

Another important issue that hon. colleagues raised concern and I want to appreciate very much the report of the Mining Committee and I would wish all Chairs to follow the template used by the Mining Committee. I think, on the issue of royalties - we have to increase those Royalties. In fact we actually want to increase them more but we want them to breathe a bit. The reason is very simple, the resources underground belong to the people of Zimbabwe, so it is very unfair that the bulk of the income is going outside - so, that is why we increased the royalties. The issue of taxation needs to be revisited in the mining sector. Also two, the issue of ownership structures in the mining sector - countries like the DRC and Angola are tearing up their old contracts because they forgot to recognise that the resources belong to the people.

I think, it was the Herald yesterday that spoke of resource nationalism - it is a worldwide trend from Australia to Gibraltar; from Gibraltar to Angola; from Angola to Norway - resource nationalism is the order of the day.

Then another cross-cutting issue was the issue of procurement. I think this is a problem, things are not well in the State of Rome as far as the State Procurement Board is concerned. We have to amend the Act; we have to simplify procedures and we have to stop the arbitrage - there is a lot of corruption associated with our procurement. We have to deal with that.

The issue of agriculture, we take note of the comments but I want to say to Hon. Jiri and the technical staff in that particular Committee that when you look at the 10% compliance with the Maputo Declaration, you actually include everything that is connected with agriculture. So, the money you put to land, the money you put to water - you do not just look at the allocation to the Ministry of Agriculture. If you add water, land and what we gave to Minister Made, we over comply with the Maputo Declaration but I think, the more important thing about agriculture is the three-year plan that we intend to come up with in January or February. That is going to be very important. It will deal with the question of subsidies. Where do you give the subsidies? Do you give the subsidies at marketing level or you give the subsidies at input level which most people might prefer? To deal with the issue of marketing, we cannot continue abusing the GMB making it the buyer of first resort when it should be a buyer of last resort. We need to create commodity exchanges. In fact, we should actually have a commodity market for each of our major crops, maize for instance. We already have one for tobacco, let us have one for cotton. Let us have one for grain, beef and soya beans and you will be shocked by the value that will be unlocked if you will allow the market to play its role.

The GMB is housing a lot of inefficiencies. So, we need to liberate the GMB from a lot of inefficiencies that are arising out of the fact that when we are liberalising environment, we are creating one forced market. I am glad to say that we have concluded the issue securities of leases that are going to unleash private capital to go to agriculture because part of the reason why there is under performance of the financial sector in finance and agriculture is because of the absence of security. So, I hope that by next year, those leases will be there and people will sign them so that agriculture can be financed by the private sector.

The CDF, we appreciate the importance of the CDF but they are gaps. But the first gap is that we do not have a statute that is dealing with the issue of CDF. This creates a problem in that it becomes a discretionary issue that is in the budget. I think we need an Act of Parliament that creates the CDF fund so that Government does have a discretion about it. It is that Act that must define the percentage of resources that must go in that CDF. It is also in that CDF that we must define the kind of projects that must be funded by that CDF.

When we formulated this, in the 2009 budget, our formulation was that it must go as far as possible, go to hardware projects, clinic, boreholes and so forth and not to recurrent projects because, one, I think as an MP you want to leave physical fingerprints to say icho chikoro chakavakwa navaMushonga kana navaMatonga, it is a physical fingerprint and makes accounting easier. If you buy petrol, petrol disappears and we do not know whether you are telling the truth or you are a thief. The roof or mortuary that you put in Chiendambuya, nobody can quarrel with that. So, the Act of Parliament will resolve that.

I want to say to honourable members that we have heard what you said and will see what we can do even in respect of the amounts that we could not actualise this year. We could not actualise this year because of the wage increases in July, the crowding out effect, it is still three weeks to the end of the year so we will see and also because of bonus. Bonus was US$300 million and even today, we have not found the money.

I want to go to the next issue, the issue of rationalising travel expenditure from Government. I think it is criminal for a small country like ours to spend over US$50 million on travel; two - the civil service audit and three - a consistent diamond revenue .

With those few words, I want to thank the spirit that is in the House which is more of a dialogue than conversation than a de-faceorial approach. I want to assure hon. members that we have heard their concerns on the CDF. I think next year, together with Minister of Constitutional and Parliamentary Affairs, we will try to come up with an Act of Parliament that makes sure that the CDF is a permanent feature of our economic discourse. The issues that I have not touched upon, it is not because I have not heard them but I am respecting the fact that members want to go and watch football tonight.

Motion put and agreed to.

FIRST READING

FINANCE (NO.2) BILL [H.B. 7, 2011]

THE MINISTER OF FINANCE presented the Finance (No. 2) Bill [H.B. 7, 2011].

Bill read the first time.

Bill referred to the Parliamentary Legal Committee.

MOTION

BUSINESS OF THE HOUSE

THE MINISTER OF FINANCE: I move that Orders of the Day, Numbers.2 to 11 be stood over until Order of the Day, No. 12 has been disposed of.

Motion put and agreed to.

COMMITTEE OF SUPPLY

MAIN ESTIMATES OF EXPENDITURE

House in Committee.

Vote 1: Office of the President and Cabinet: US$172,471,000.00, put and agreed to.

Vote 2: Office of the Prime Minister: US$18,901,000.00, put and agreed to.

Vote 3: Parliament of Zimbabwe: US$18,177,000.00, put and agreed to.

Vote 4: Public Service: US$126,360,000.00, put and agreed to.

Vote 5: Defence: US$318,272,000.00, put and agreed to.

Vote 6: Finance: US$284,677,000.00, put and agreed to.

Vote 8: Audit: US$5,075,000.00, put and agreed to.

Vote 9: Industry and Commerce: US$9,087,000.00, put and agreed to.

Vote 10: Agriculture, Mechanisation and Irrigation Development: US$226,791,000.00, put and agreed to.

Vote 11: Mines and Mining Development: US$6,921,000.00, put and agreed to.

Vote 12: Environment and Natural Resources: US$10,535,000.00, put and agreed to.

Vote 13: Transport and Infrastructure Development: US$109,477,000.00, put and agreed to.

Vote 14: Foreign Affairs: US$73,672,000.00, put and agreed to.

Vote 15: Local Government, Urban and Rural Development: US$90,281,000.00, put and agreed to.

Vote 16: Health and Child Welfare: US$345,688,000.00, put and agreed to.

Vote 17: Education: US$707,325,000.00, put and agreed to.

Vote 18: Higher and Tertiary Education: US$296,171,000.00, put and agreed to.

Vote 19: Youth Development, Indigenisation and Empowerment: US$48,280,000.00, put and agreed to.

Vote 20: Home Affairs: US$308,330,000.00, put and agreed to.

Vote 21: Justice and Legal Affairs: US$111,168,000.00, put and agreed to.

Vote 22: Media, Information and Publicity: US$11,070,000.00, put and agreed to.

Vote 23: Small and Medium Enterprises and Cooperative Development: US$8,950,000.00, put and agreed to.

Vote 24: Energy and Power Development: US$49,742,000.00, put and agreed to.

Vote 25: Economic Planning and Investment Promotion: US$2,762,000.00, put and agreed to.

Vote 26: Science and Technology Development: US$9,450,000.00, put and agreed to.

Vote 27: Women's Affairs, Gender and Community Development: US$10,063,000.00, put and agreed to.

Vote 28: National Housing and Social Amenities US$33,655,000.00, put and agreed to.

Vote 29: Water Resources Development and Management US$71,125,000.00, put and agreed to.

Vote 30: Constitutional and Parliamentary Affairs: US$10,040,000.00, put and agreed to.

Vote 31: Tourism and Hospitality Industry: US$6,015,000.00, put and agreed to.

Vote 32: Labour and Social Services: US$45,556,000.00, put and agreed to.

Vote 33: State Enterprises and Parastatals: US$1,875,000.00, put and agreed to.

Vote 34: Information, Communication and Technology: US$9,423,000.00, put and agreed to.

Vote 35: Public Works: US$51,266,000.00, put and agreed to.

Vote 36: Regional Integration and International Cooperation: US$2,378,000.00, put and agreed to.

Vote 37: Lands and Rural Development: US$14,124,000.00, put and agreed to.

Vote 38: Judicial Services Commission: US$22,815,000.00, put and agreed to.

House resumed.

Main Estimates of Expenditure reported without amendments.

Report Adopted.

Bill ordered to be brought in by the Minister of Finance, in accordance with the Main Estimates of Expenditure adopted by the House.

FIRST READING

APPROPRIATION (2012) BILL [HB 6, 2011]

THE MINISTER OF FINANCE presented the Appropriation (2012) Bill [H.B. 6, 2011].

Bill read the first time.

Bill referred to the Parliamentary Legal Committee.

COMMITTEE OF SUPPLY

 

AMENDED (MAIN) ESTIMATES OF EXPENDITURE FOR THE YEAR ENDED 31ST DECEMBER, 2011

House in Committee.

Vote 1: Office of the President and Cabinet: US$133 386 272, put and agreed to.

Vote 2: Office of the Prime Minister: US$13 271 000, put and agreed to.

Vote 3: Parliament of Zimbabwe: US$14 739 200, put and agreed to.

Vote 4: Public Service: US$88 154 005, put and agreed to.

Vote 5: Defence: US$241 472 586, put and agreed to.

Vote 6: Finance: US$311 539 737, put and agreed to.

Vote 8: Audit: US$3 587 000, put and agreed to.

Vote 9: Industry and Commerce: US$4 463 000, put and agreed to.

Vote 10: Agriculture, Mechanisation and Irrigation Development: US$109 550 800, put and agreed to.

Vote 11: Mines and Mining Development: US$5 379 000, put and agreed to.

Vote 12: Environment and Natural Resources Management: US$6 823 000, put and agreed to.

Vote 13: Transport and Infrastructural Development: US$63 365 500, put and agreed to.

Vote 14: Foreign Affairs: US$68 573 000, put and agreed to.

Vote 15: Local Government, Urban and Rural Development: US$48 790 000, put and agreed to.

Vote 16: Health and Child Welfare: US$232 398 000, put and agreed to.

Vote 17: Education, Sports, Arts and Culture: US$523 905 000, put and agreed to.

Vote 18: Higher and Tertiary Education: US$208 122 400, put and agreed to.

Vote 19: Youth, Indigenisation and Empowerment: US$33 535 000, put and agreed to.

Vote 20: Home Affairs: US$236 752 000, put and agreed to.

Vote 21: Justice and Legal Affairs: US$84 098 500, put and agreed to.

Vote 22: Media, Information and Publicity: US$5 122 000, put and agreed to.

Vote 23: Small and Medium Enterprises and Cooperative Development: US$4 794 000, put and agreed to.

Vote24: Energy and Power Development: US$37 743 000, put and agreed to.

Vote 25: Economic Planning and Investment promotion: US$2 181 000, put and agreed to.

Vote 26: Science and Technology Development: US$6 035 000, put and agreed to.

Vote 27: Women's Affairs, Gender and Community Development: US$ 7 267 000, put and agreed to.

Vote 28: National Housing and Social Amenities: US$25 777 000, put and agreed to.

Vote 29: Water Resources Development and Management: US$27 986 000, put and agreed to.

Vote 30: Constitutional and Parliamentary Affairs: US$12 207 000, put and agreed to.

Vote 31: Tourism and Hospitality Industry: US$3 737 000, put and agreed to.

Vote 32: Labour and Social Services: US$31 333 000, put and agreed to.

Vote 33: State Enterprises and Parastatals: US$1 470 000, put and agreed to.

Vote 34: Information Communication and Technology: US$4 369 000, put and agreed to.

Vote 35: Public Works: US$33 813 000, put and agreed to.

Vote 36: Regional Integration and International Cooperation: US$1 662 000, put and agreed to.

Vote 37: Lands and Rural Resettlement: US$8 292 000, put and agreed to.

Vote 38: Judicial Services Commission: US$15 515 000, put and agreed to.

Amended Estimates of Expenditure reported without amendment.

Report adopted.

Bill ordered to be brought in by the Minister of Finance, in accordance with the Amended Estimates of Expenditure adopted by the House.

FIRST READING

APPROPRIATION BILL (2011) AMENDMENT BILL [H.B. 8, 2011]

THE MINISTER OF FINANCE presented the Appropriation (2011) Bill.

Bill read the first time.

Bill referred to the Parliamentary Legal Committee.

FIRST READING

APPROPRIATION (2011) AMENDMENT BILL [H.B. 8, 2011]

THE MINISTER OF FINANCE presented the Appropriation (2011) Bill, [H.B. 8, 2011].

Bill read the first time.

Bill referred to the Parliamentary Legal Committee.

ANNOUNCEMENT BY THE DEPUTY SPEAKER

NON-ADVERSE REPORT RECEIVED FROM THE

PARLIAMENTARY LEGAL COMMITTEE

THE DEPUTY SPEAKER: I have to inform the House that I have received a Non-Adverse Report from the Parliamentary Legal Committee on the Finance (No.2) Bill [H.B. 7, 2011].

SECOND READING

FINANCE BILL 2011 [H.B. 7, 2011]

THE MINISTER OF FINANCE: Mr. Speaker Sir, the purpose of this Bill is to give effect to the 2012 Budget tax measures, which I presented to this august House on 24th November, 2011.

The tax measures are consistent with Government's policy thrust to support the productive sectors, enhance revenue collection, redirect resources towards the productive sectors, as well as give relief to individual taxpayers.

Hon. members will recall that in 2011, in the 2011 Mid-Term Fiscal Policy Statement and the 2012 Pre-Budget Strategy Paper, I invited stakeholders to submit proposals for the reduction of customs duty on inputs into production, for consideration in the 2012 Budget.

Support to the Productive Sector

In response to submissions made by stakeholders, I proposed suspension and reduction of customs duty on selected inputs used in production, reviewed upwards customs duty on selected fresh vegetables and introduced customs duty on pre-packed rice, salt and wheat flour.

Furthermore, in order to revive the clothing sector, I proposed to introduce a rebate of duty on imported raw materials for use in the manufacture of clothing, review upwards the rate of duty on clothing and remove clothing from traveller's rebate, in order to curtail incidences of undervaluation.

I also proposed appropriation to Government institutions or donation to charitable organisations goods due for disposal through rummage sales which are in direct competition with locally manufactured products.

In order to level the playing field between imported and locally manufactured products, I proposed to VAT zero rate raw materials used in the production of VAT zero related goods. I also proposed to extend the VAT remittance period from 20th to 25th of the following month, so as to stimulate production through credit creation.

Mr. Speaker Sir, in order to redirect resources from consumption to productive sectors, I proposed to introduce a surtax on selected imported finished products as a way of redirecting resources of such goods towards production.

Income Tax Relief Measures

Mr. Speaker Sir, in line with international best practice, whereby a progressive income tax system is underpinned by a tax principle of equity and fairness, I have proposed to adjust the tax-free threshold and bands to begin at US$250 per month and end at US$10,000, above which income is taxed at the highest marginal tax rate of 45%.

Furthermore, in order to uphold the spirit of celebration and also stimulate the aggregate demand for goods and services, I have also proposed to increase the exempt portion of bonus and performance related awards from the current US$500 to US$700 with effect from 1 November 2011.

Revenue Enhancing Measures

Mr. Speaker Sir, in order to maximise the contribution of mineral resources to the funds, I have proposed upward the review of royalty on gold and platinum and also proposed to extend presumptive tax to operators of fish rigs, houseboats and speedboats in order to widen the tax base.

Furthermore, IN order to ensure compliance by VAT registered operators in Category "C", I have proposed a penalty of a maximum of US$25 per point of sale, for each day the taxpayer remains in default and that operators who fail to comply by 1 October 2011, or such extended period granted by the Commissioner General should not be issued with a Tax Clearance Certificate (ITF 263).

Mr. Speaker Sir, 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.

COMMITTEE STAGE

FINANCE (NO. 2) BILL [H.B. 7, 2011]

House in Committee.

Clauses 1 to 16 put and agreed to.

House resumed.

Bill reported without amendments.

Third Reading: With leave; forthwith.

THIRD READING

FINANCE (NO. 2) BILL [H.B. 7, 2011]

THE MINISTER OF FINANCE: I move that the Bill be now read the third time.

Motion put and agreed to.

Bill read the third time.

ANNOUNCEMENT BY THE DEPUTY SPEAKER

NON-ADVERSE REPORT RECEIVED FROM THE PARLIAMENTARY LEGAL COMMITTEE

THE DEPUTY SPEAKER: I have to inform the House that I have received a non-adverse report from the Parliamentary Legal Committee on the Appropriation (2012) Bill [H.B. 6, 2011].

SECOND READING

APPROPRIATION (2012) BILL [H.B. 6, 2011]

THE MINISTER OF FINANCE: The Appropriation Bill (2012) gives into effect the monetary estimates as demanded by Section 113 of the Constitution of Zimbabwe. I move that the Bill be read the second time.

Motion put and agreed to.

Bill read the second time.

Third reading: with leave forthwith.

THIRD READING

APPROPRIATION (2012) BILL, (H.B. 6, 2011)

THE MINISTER OF FINANCE: I move that the Bill be now read the third time.

Motion put and agreed to.

Bill read the third time.

ANNOUNCEMENT BY THE DEPUTY SPEAKER

NON-ADVERSE REPORT RECEIVED FROM THE PARLIAMENTARY LEGAL COMMITTEE

THE DEPUTY SPEAKER: I have to inform the House that I have received a non-adverse report from the Parliamentary Legal Committee on the Appropriation (2011) Amendment Bill [H.B. 8, 2011]

SECOND READING

APPROPRIATION (2011) AMENDMENT BILL [H.B. 8, 2011]

THE MINISTER OF FINANCE: The essence of this Bill is to adjust the Votes given the wage increase that was unbudgeted for that took place in July 2011. It meant that we had to shift in the Votes and retrench certain allocations to certain Votes. That is the reason why we are adjusting the figures. With those few remarks, I move that the amended Appropriation Bill (2011) be read the second time.

Motion put and agreed to.

Bill read a second time.

Third Reading: With leave, forthwith.

THIRD READING

APPROPRIATION (2011) AMENDMENT BILL [H.B. 8, 2011]

THE MINISTER OF FINANCE: Madam Speaker, I move that the Bill be read the third time.

Motion put and agreed to.

Bill read the third time.

MOTION

ADJOURNMENT OF THE HOUSE

THE MINISTER OF CONSTITUTIONAL AND PARLIAMENTARY AFFAIRS: Madam Speaker, I notice some sleeping faces, so I move that the House do now adjourn.

Motion put and agreed to.

The House adjourned at Twenty Six Minutes past Eight o'clock p.m. until Tuesday, 13th December, 2011.

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National Assembly Hansard Vol. 38 NATIONAL ASSEMBLY HANSARD - 6 DECEMBER 2011 VOL. 38 NO. 19