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Parliamentary Roundup Bulletin No. 6 – 2012
Southern African Parliamentary Support Trust
March 09, 2012

Introduction

Both Houses did not meet this week as they adjourned last week to Tuesday 13 March 2012. However, Portfolio Committees continued meeting. 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.

Highlights of Committees Activities

Budget Finance and Investment Promotion

The Budget Committee received oral evidence from the Reserve Bank of Zimbabwe (RBZ) Board Sub Committee on Asset Disposal. The Board Sub Committee was represented by Mr. J. Smith. The RBZ is in the process of disposing of assets it acquired during the Zimbabwe Dollar era under its quasi-fiscal activities. Proceeds to be realized from this process will be used to settle debts that RBZ incurred as a result of its quasi-fiscal activities. It is understood that the debt is hovering above US$1.2 billion.

Mr. Smith indicated to the Committee that RBZ has so far disposed of 9 properties out of a total of 21 that were earmarked for disposal and a total of US$901 000 was realized.

Natural Resources, Environment and Tourism

The Permanent Secretary of the Environment and Natural Resources Management Ministry, Mrs. Nhekairo testified before the Committee on the implementation of the Wildlife-based and Forest Based land reform policies. She was accompanied by the Director General of Parks and Wildlife and the Director of the Forestry Commission.

She informed the Committee that the Ministry administers non-agricultural land: forests and wildlife land. This is because of the unique land use option on the land in question.

Wildlife-based land reform policy

The Parks and Wildlife Director General, Mr. Chatenga explained to the Committee the policy behind the Wildlife-based Land Reform. He informed the Committee that the broad objectives of the policy were to ensure the broader participation of Zimbabweans in this sector and also to ensure the conservation of wildlife. The policy became operational in 2007. However, this was preceded by the general land reform where bias was towards crop farming.

The Committee heard that since the inception of the policy in 2007 more than 20 meetings and outreach programs have been conducted as part of the implementation strategy. However, the Director General testified that not much progress had been made on the implementation of the policy. The lack of progress was due to lack of cooperation from those already involved in wildlife conservancy. Those ignoring the policy were arguing that the process was unconstitutional while others objected to the imposition of business partners on them.

This standoff has created hostility in the communities surrounding conservancies making the business unviable due to an upsurge in poaching as well as human-wildlife conflict.

To date 77 leases have been issued, expected to benefit about 400 households. When quizzed on why the Ministry had decided on 25 year leases, the Director General indicated that if managed properly, wildlife was capable of providing a good return in 25 years, which would allow current beneficiaries time to benefit (e.g. from trophy hunting) and move on and leave the resource for other interested beneficiaries. He further stated that 99 year leases were not ideal as they would perpetuate the current scenario where only a few people benefit from the wildlife-based land reform.

Forestry-based land reform policy

The General Manager of the Forestry Commission informed the Committee that there were two categories of forests that were recognized and protected; Forestry plantations in Manicaland Province and Indigenous gazetted forests in Matabeleland North Province. The Forest-based Land Reform policy was currently being crafted. The thrust of this policy was to ensure that there was enough timber in Zimbabwe for local consumption and export and to also ensure that more people benefited from the industry. The second category of forests was meant to protect water catchment areas for rivers like Gwai that flow from this protected area.

The Committee heard that settlers were posing challenges to forest management. In 2008, the industry lost about 12 000 hectares to forest fires in addition to poaching. A lot of the land that was affected by the forest fires remains unplanted. The Forestry Commission recommended either the removal of settlers, demarcation of settled areas from forests or the incorporation of settlers into the forestry business. A total of 21 000 hectares have been occupied in the Matabeleland region by about 32 000 settlers. The Forestry Commission Director indicated that if the settlers were allowed to settle, the very reason for the gazetting of this area would be defeated. Already there was a lot of poaching of trees and animals, land degradation and siltation of rivers.

The Forestry Commission Director also mentioned the setting up of a social fund to benefit communities surrounding forestry areas. Some companies have contributed to the fund, but there was no legal instrument available to persuade the companies to contribute.

Public Service Labour and Social Welfare

The committee received oral evidence on the performance of social security schemes under the ambit of National Social Security Authority (NSSA) from Mr. James Matiza, the NSSA General Manager. He informed the Committee NSSA was established through a piece of legislation; National Social Security Act (17:04). Its general mandate is to administer the social security scheme as well as advising the Minister of Labour and Social Welfare on all matters concerning the operation of social security schemes.

The Authority currently manages the National Pensions Scheme and the Accident Prevention and Workers Compensation Scheme. Mr. Matiza informed the Committee that the National Pensions Scheme was financed through contributions made by employers and employees in formal employment. The committee was also told that the Authority invested in housing, land, banking and real estate as a way of ensuring that the contributions yielded interest.

When quizzed by the Committee if NSSA beneficiaries were aware how their contributions were invested, Mr. Matiza said that NSSA had liaison officers who went around educating employers and employees on how their contributions were invested. The Committee was also worried by what it called “paltry” pay outs to beneficiaries given the huge interests that NSSA was realizing from its investments. In response, Mr. Matiza informed the Committee that NSSA acted on the advice of its actuaries who gave guidelines on the viable rates.

The Committee also sought clarity on how NSSA secured the funds it loaned to banks taking into consideration that these were workers’ contributions. Mr. Matiza informed the committee that NSSA held title deeds from banks as collateral security. However, Mr. Matiza informed the Committee that NSSA had since stopped giving out loans to private organizations such as banks. Regarding the loan to Renaissance Bank, Mr. Matiza informed the committee that the decision was taken after the Minister of Finance had approached them following a Cabinet resolution directing NSSA to invest into the bank so as to mitigate the downstream effects that would have arisen due to the imminent collapse of the bank.

Small and Medium Enterprises (SMEs)

The Committee received oral evidence from the President of the Bankers Association of Zimbabwe (BAZ), Mr. John Mushayavanhu, who was accompanied by Mr. S. Biyam, BAZ Chief Executive Officer. The Committee had invited BAZ to be apprised on the level of funding available to SMEs and the challenges that small to medium scale businesses were facing in the country.

Mr. Mushayavanhu informed the Committee that there was about US$3.5 billion circulating in the banking system, which the SMEs had to compete for with big businesses and other sectors of the economy.

He said SMEs faced a number of constraints, which included low and short-term bank deposits. Mr. Mushayavanhu revealed to the Committee that 80% to 90% deposits were transitory in nature and therefore unsuitable for lending. This was compounded by lack of mid to long term lines of credit (3 V 4 years). Zimbabwe was failing to attract lines of credit because of its country risk image. The available lines of credit were of trade nature and therefore not suitable for SMEs.

Collateral security was another factor which has been a stumbling block for many SMEs. However, Mr. Mushayavanhu informed the Committee that it was not clear whether the SMEs were genuinely not able to raise collateral security or they just did not want to do it. The Committee was also informed that most SMEs did not have bank accounts yet they wanted loans from the banks, a situation which made it very difficult for banks to lend them money.

BAZ representatives also informed the Committee that banks were generally reluctant to lend out big sums of money because of government policy inconsistencies. They were afraid that government may change the currency at short notice thereby exposing banks to huge risks.

Thematic Committee on Indigenization and Empowerment Promotion

On Thursday 8 March 2012, the Thematic Committee on Indigenization and Empowerment Promotion conducted a familiarization tour at Zimplats Mine and also conducted a public hearing in the surrounding community to gather views of the community on the recently launched Community Share Ownership Trust.

Zimplats Mine representatives informed the Committee that Zimplats submitted its indigenization plan to government in 2011. The plan proposed an equity of 10% to Mhondoro-Ngezi Community share ownership scheme, 5% shares to employees, 6.5% shares either as equity to the Sovereign Wealth Fund or as Release of Additional Ground as per 2006 Release of Ground Agreement and 29.5 shares as empowerment credit.

The Committee heard that the release of equity of 6.5 % via the 2006 Release of Ground Agreement between the government and the company as part of the indigenization plan was rejected by government. In order to resolve this deadlock, management was currently engaging the shareholders to come up with a new plan.

Zimplats Mine representatives informed the Committee that their company had done a lot for the community as part of its corporate social responsibility; construction of schools and clinics etc. However, the community expressed concern to the Committee on the following issues;

• The community was not aware of the Community Share Ownership Trust Scheme, they only hear about it as news on radio and in newspapers.
• Operations of Zimplats were affecting the populace through destruction of dip-tanks, grazing lands and relocations.
• The company was neglecting the community road, Battle Fields Road, and only concentrated on roads that directly benefited it.
• Zimplats was channeling sewage into the river which the community was using as its source of drinking water.
• Zimplats community clinic in a state of neglect.
• Community Livestock often run over by heavy mine trucks
• Social responsibility programmes were done without the consultation of the community.

Resumption of Parliament Sitting

Both Houses will resume their sittings on Tuesday 13 March 2012.

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