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Roundup Bulletin No. 4 – 2012
Southern African Parliamentary Support Trust
February 27, 2012
Below is a summary
of the proceedings of Portfolio Committees that received oral evidence
on various policy issues from the ministries and government departments
sittings of both Houses resume on Tuesday 28 February 2012.
of Committees Activities
Finance and Investment Promotion
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.
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
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.
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.
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.
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.
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
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.
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.
and Child Welfare
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
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
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.
Energy and Power Development
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.
Resources, Environment and Tourism
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.
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.
Service Labour and Social Welfare
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.
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.
have been set up to ensure that all sectors comply with these
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
- The Indigenization
Trust whose mandate is to oversee indigenization activities is
underfunded by treasury thereby failing to discharge its mandate.
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
- 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.
of sexual abuses at Youth Vocational Training Centres were not
sustained and therefore remained allegations.
of Parliament Sittings
will resume their sitting on Tuesday 28 February 2012 after a long
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