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Parliamentary Roundup Bulletin No. 4 – 2012
Southern African Parliamentary Support Trust
February 27, 2012

Introduction

Below is a summary of the proceedings of Portfolio Committees that received oral evidence on various policy issues from the ministries and government departments they shadow.

Plenary sittings of both Houses resume on Tuesday 28 February 2012.

Highlights of Committees Activities

Budget Finance and Investment Promotion

The Minister of Finance Hon. Tendai Biti appeared before the Budget, Finance and Investment Promotion Portfolio Committee to explain the current liquidity challenges in the economy. He argued that Zimbabwe was not facing liquidity problems per se but rather lack of capital due to political discord among the governing partners. He said there were no lines of credit for industry capitalization and for the distressed marginalized industries. Lines of credit were difficult to source from the banking sector; hence the industry was now relying on the fiscus. He elaborated that the budget was only 30% of GDP, which was estimated at $11 billion by the end of 2011. This indicated that the populace was over-taxed to fund fiscal obligations. He also noted that the vote of credit was nil, as donor funds were not channeled through the national budget.

The Minister told the Committee that banks’ capital and assets were wiped out when the country dollarized. The RBZ minimum capital requirements of $12.5 million led banks to borrow funds to finance the shortfalls at high interest rates in order to reach the stipulated requirement. This resulted in liquidity problems, especially for small banks. He informed the committee that RTGs balances, which show the day-to-day balances of banks, did not reflect a liquidity challenge. The volumes of trade shown by the RTGs transactions indicated a GDP of more than $11 billion. He said for instance, on 25 January 2012, FBC Bank had a bank balance of $32 million and another bank (name not mentioned) had a balance of $4 826. These daily balances showed that bank balances were disproportionally distributed in the banking sector, a sign of liquidity challenges. Minister Biti informed the Committee that to curb the liquidity challenges some measures were being implemented which include;

• A special purpose vehicle
• Monetarisation of the Statutory Reserve,
• Banks with Nostro accounts have been encouraged to repatriate 75% of their accounts to help ease the liquidity challenges in the country.
• Banks were urged to address their capitalization challenges through mergers.

The Minister informed the committee that the issue of Special Withdrawal Rights (SDRs) was highly politicized. When the $503 million for the SDR was availed, IMF was immediately paid $146 million for the debts the country was accruing. About $100 million was spent on Public Sector Investment Programme (PSIP) expenditure and $50 million on agriculture. The Minister said that SDR fund was a loan not a grant, repaid with interest.

He indicated that $110 million from the SDR will be availed and used as follows; $40 million for infrastructure development, $30 million to provide lines of credit, $20 million for agriculture, and $20 million to RBZ to provide lender of last resort facility.

The Minister said a lot was done to make sure good corporate governance was practiced at the RBZ. Various amendments were made to the Banking Act to strengthen corporate governance framework at the banks. The RBZ board was properly constituted and quasi-fiscal assets will be disposed of. More measures will be put in place to ensure corporate governance is adhered to whenever necessary. In order to bring Zimbabwe Stock Exchange into proper practice, the Securities Commission (SEC) and Insurance and Pensions Commission (IPEC) will be scrutinized and amended.

Hon. Biti expressed scathing remarks in the manner the State Procurement Board (SPB) was awarding tenders. He accused the SPB for awarding tenders to un-deserving companies, seriously affecting government programmes. He said some of the companies awarded tenders were so incompetent to the extent that after being paid in advance and some given materials, they still failed to deliver because they did not have capacity.

Speaking on the RBZ debt, Hon Biti said a special purpose vehicle will be created, with an administrator appointed to receive claims from creditors and critically evaluate the authenticity of those claims. The disposal of quasi-fiscal assets will be channeled towards this special purpose vehicle.

The Minister also expressed the need to channel all funds through the Consolidated Revenue Fund. Government Departments that include Police, Registrar General’s Office and others that collect fees and retain them for their own use, will now be required to remit the funds to the Treasury as the country is no longer in crisis.

The committee was informed that the consolidation of comments on the draft Public Finance Management Act were at an advanced stage. Of major highlight was the incorporation of the setting up of the Parliamentary Budget Office and the synchronization of the budget timelines. The timelines for the Medium Term Fiscal Policy Review, Budget Strategy Paper, and National budget are indicated in the regulations.

Health and Child Welfare

The Committee toured the Beatrice Infectious Diseases Hospital in Harare to assess the recent outbreak of the typhoid disease in the western suburbs of Harare. The Committee was briefed by Dr Duri (Beatrice Infectious Hospital Superintendent) and Dr Chonzi (Director of Health Services City of Harare) on the scale of the outbreak and measures being taken to bring the outbreak under control.

The Committee was informed that the disease started in Dzivarasekwa high density suburb and later spread to other suburbs. The disease was instigated by the absence of running tap water for two weeks in Dzivarasekwa. This led to residents relying on shallow unprotected wells for their water needs.

The two medical officials expressed the need to ensure consistent provision of clean running tap water to all the city’s suburbs and especially the affected areas. Dr. Duri and Dr. Chonzi also said that there was an urgent need to address the sanitation crisis in the city. They observed that refuse was not being collected and this was compounded by unattended burst sewer pipes.

Dr. Duri and Dr. Chonzi expressed concern at the uncontrolled vending in the city, especially that of raw meat and fish as this was a major contributor in the spread of the disease.

Mines, Energy and Power Development

Representatives of the Chamber of Mines and the Zimbabwe Miners Federation appeared before the Committee to lobby Members to push for the scrapping of the recently hiked mining fees. Both organizations argued that the newly gazetted fees were too exorbitant as the mining sector was already saddled with other statutory levies paid to Rural District Councils, Environmental Management Agency, Minerals Marketing Corporation of Zimbabwe, royalties to government etc. They argued that if the new fees were not revised downwards, the net effect would be reduction in exploration activities, reduced level of production leading to massive loss of employment in the mining sector.

Natural Resources, Environment and Tourism

Officials from the Environment and Natural Resources Management Ministry were scheduled to testify before the Committee on the challenge posed by new farmers who resettled themselves in conservancies and plantations.

However, the oral evidence session failed to take place after some Committee Members objected to the presence of three white conservancy owners. Even after the Parliament’s Deputy Clerk had clarified that members of the public were allowed to sit in and follow proceedings during oral evidence sessions, the Committee failed to agree on whether to hold the meeting behind closed doors or to allow the public, particularly the conservancy owners, into the meeting. It was not clear why some committee members objected to the presence of these white conservancy owners.

Public Service Labour and Social Welfare

The Committee was briefed by the Zimbabwe Energy Workers’ Union (ZEWU) and the Communication Allied Services Workers’ Union (CASWU) on their activities. The representative of ZEWU, Ms Chitambo informed the Committee that Workers in the energy sector were facing health and safety challenges as the employer did not abide by statutory requirements, which seek to protect the welfare and wellbeing of employees at their work places. In particular, she cited the case where the Zimbabwe Electricity Supply Authority (ZESA) was in the habit of breaching regulations by hiring private vehicles to ferry its line workers thereby exposing these workers to accidents since these private vehicles were not designed to ferry workers. The Committee also heard that many companies in the energy sector did not adhere to regulations requiring the provision of protective clothing to their employees. Ms. Chitambo also alleged that nepotism was rife in the energy sector companies.

The CASWU representative Mr. Matombo informed the Committee that there was a blatant disregard of the Labour Relations Act by most companies in the telecommunications sector. He said some corporate companies like Net One and Tel One were shunning the Communications National Employment Council. As a result, workers in the companies suffered “modern slavery”. Some grades were not commensurate with workers’ skills. For instance technicians were classified as “general hands”. Mr. Matombo therefore called for social dialogue and observation of labour standards in order to improve the pathetic working conditions.

Women Youth Gender and Community Development

• The Minister of Youth Development, Indigenization and Empowerment, Hon. Saviour Kasukuwere briefed the Committee on the indigenization policy and the status of vocational training centres for the youth. He highlighted the following issues to the Committee;
• The Indigenization Act requires 51% of shares in all public companies and any other businesses to be owned by Zimbabweans.
• Committees have been set up to ensure that all sectors comply with these requirements.
• Community Trusts have been set up in mining areas to coordinate the utilization of contributions to the communities by respective mining concerns, these trusts will be extended to all sectors.
• The ministry and the country at large is striving towards economic justice for the citizens of Zimbabwe and effectively empowering youth and women.
• The Indigenization Trust whose mandate is to oversee indigenization activities is underfunded by treasury thereby failing to discharge its mandate.
• Treasury is also refusing to support the levying of an Indigenization Tax on companies which would generate revenue for the Trust.
• High levels of youth unemployment pose a threat to national peace and stability as youths end up being mercenaries for political parties in a bid to make money for their upkeep.
• Youth loan funds are equitably distributed to all the provinces but the funds are inadequate for all the youths in need to access the facility.
• Banks have to plough back to the country as they have benefited immensely from deposits.
• Land disputes between Vocational Training Centres and politicians were being addressed with the help of the Ministry of Lands which would see more land being availed to the institutions.
• Youth Vocational Centres were closed down due to lack of funding and also that they had become politicized.
• Allegations of sexual abuses at Youth Vocational Training Centres were not sustained and therefore remained allegations.

Resumption of Parliament Sittings

Both Houses will resume their sitting on Tuesday 28 February 2012 after a long Christmas break.

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