Kereke says the government cannot rely on the private sector to feed the nation


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Bikita West legislator Munyaradzi Kereke says the government cannot abdicate its duty to feed the nation. It is not only unfair but impractical and unconstitutional to expect the private sector to do that.

In his contribution to the debate on Finance Minister Patrick Chinamasa’s mid-term fiscal policy review, Kereke said the government only had funds to purchase two percent of the 700 000 tonnes that are required to save the nation from starvation.

“We have a food deficit of 700 000 metric tonnes and the budget is only attending to 2% and hope that the private sector will bring food to our grandmothers in the rural areas. It is not only unfair, it is impractical and unconstitutional,” he said.

He said the government was also not ready for the next farming season. It could not rely on the banking sector either because it did not have the funds.

“The hon. Minister indicated in the budget that we will need a total US$1.7 billion to finance our agriculture. It is prudent that as a nation, we ask how this money can be raised. First of all, will the private sector be able to meet this requirement when we look at the status of our banking sector?

“The budget indicated that total loans to the economy in the banking sector rose from US$3.8 billion in June 2014 to US$4 billion in June 2015, which is an increase over the year of only US$200 million. So, for our economy’s banking sector – the total lending only rose by US$200 million in the year. It is therefore next to impossible to hope that within this season alone, the banking sector can solely raise the US$1.7 billion that we require for our agriculture. Mr. Speaker Sir, this means that we need to look elsewhere for strategic partners that can fund our agriculture either in cash or kind,” Kereke said.

 

Full contribution:

DR. KEREKE: Thank you Mr. Speaker Sir. I rise to debate the motion at hand, which is a motion on the proposed amendments to the Finance Bill, 2015. Before I come to the substantives of the Budget Mr. Speaker Sir, I need to underscore that the Finance Bill and amendments thereto is a critical piece of legislation which the august House is rightfully discussing.

Mr. Speaker Sir, we have noted the current turmoil that is characterising the labour market whereupon workers and civil servants are being thrown on to the streets like literal garbage. This is against a background of legal processes that are following the law. What this  means is that as Parliament, we need to learn from errors of past parliaments in passing laws that have ‘teeth’ that bite innocent citizens.

Mr. Speaker Sir, I want to advocate that, as we analyse these Proposed amendments to the Finance Bill, we look at the extent to which the provisions protect the welfare of the people. The issue of food security lies at the centre of the welfare of our nation. It is a critical point, which we urge the Treasury to listen to with a heart for the people.

We have a food deficit of 700 000 metric tonnes and the budget is only attending to 2% and hope that the private sector will bring food to our grandmothers in the rural areas. It is not only unfair, it is impractical and unconstitutional. It is our hope that the right amendments arising from the discussions of this House would be looked at to ensure that we promote food availability to the disadvantaged communities.

Mr. Speaker Sir, when we look at the Constitution, Chapter 4 has a pronounced bearing in the laws that we create. The Bill of Rights pronounced in Chapter 4, at all times, these are principles that must be observed without any reservation. Other areas of the Constitution would  require compliance over time as resources permit. However, on matters of food security, which is protected under Section 77(b) of the Constitution, it is important that this budget attends to it.

Mr. Speaker Sir, I move on to the adequacy of how we are prepared as a country to deal with the coming agricultural season. The hon. Minister indicated in the budget that we will need a total US$1.7 billion to finance our agriculture. It is prudent that as a nation, we ask how this money can be raised. First of all, will the private sector be able to meet this requirement when we look at the status of our banking sector? The budget indicated that total loans to the economy in the banking sector rose from US$3.8 billion in June 2014 to US$4 billion in June 2015, which is an increase over the year of only US$200 million.

So, for our economy’s banking sector – the total lending only rose by US$200 million in the year. It is therefore next to impossible to hope that within this season alone, the banking sector can solely raise the US$1.7 billion that we require for our agriculture. Mr. Speaker Sir, this means that we need to look elsewhere for strategic partners that can fund our agriculture either in cash or kind.

Facilities could be negotiated whereupon suppliers of fertilizer can supply into the economy on the basis that on harvesting, the inputs can be paid for. There is a worrying constraint Mr. Speaker Sir, where the International Monetary Fund (IMF) has placed a ceiling on Government’s capacity to borrow and this is serious.

For those hon. members who have a copy of the full text of the budget, I refer to pages 246 and 247. Mr. Speaker Sir, those show in explicit terms, the targets and limits that have been imposed on the country by the IMF who say Government’s non-concessional borrowing must not go beyond US$400m on a cumulative basis. Given that, as at December 2014, we were at US$369m, the IMF is saying to the economy do not borrow US$31m, yet we want US$1.7m to sustain our economy. So it means our hands as a country, have literally been tied and it is time that we need to introspect and assess the virtues and constraints that comes with the policies we get.

Mr. Speaker Sir, another area which I think needs to be looked at is debate on whether adopting the stance of austerity measures is the right policy mix, given where we are as a country. Austerity means cut your expenditure, retrench, stop projects, reduce spending and this in our case would include reduction of expenditure on the social sectors of the economy. Again Mr. Speaker, when we look at the IMF staff monitored targets which are in the budget, we are being given floor ceilings of US$35m spending on social sectors, what is that? Even a village would not sustain itself, if we really talk of serious infrastructure but as a country, we are being given that as a target and we must comply. For what purpose, it is not clear. So, the point is that we need to introspect and realize that the IMF at this point will not give us money unless ZIDERA is removed – but to the extent it is there, I think we need to take some of their policy measures with a pinch of salt.

Mr. Speaker Sir, when we look at the proposed land tax, the draft Bill proposes that the Ministry of Lands and Rural Resettlement collects and puts the money in the Consolidated Revenue Fund as the Chair of  the Committee has clearly stated. We would want that that principle be spread to all other agents of Government so that we pool our resources together as opposed to a case where individual departments and ministries claim to collect and retain revenue whilst the sender does not have money.

Mr. Speaker Sir, on the issue of the mining sector, the budget does not articulate fully the silence and the invisibility of the diamond sector in our balance of payments statistics. We would want that as a country we implement all measures as possible to re-ignite activity in this critical sector which had become one of the flagships in terms of promoting economic performance and employment creation.

The proposed measures are that let us increase import duties to protect local industries. Whilst theoretically, this is a plausible argument, it is an argument which is losing traction in contemporary economics. We want to say, when we see our citizens importing bails of used clothes, some of them are not really used. They come in bails because it reduces packaging costs.

The issue is when we define the people’s welfare, what exactly do we mean? In my view Mr. Speaker and I speak for the constituencies as well – when a household is getting t-shirts, dresses, decent clothing at a dollar, it is not necessarily a bad thing given our circumstances and the hardships that the communities are facing. Imposing duty on second hand clothes in terms of revenue raised, it will not raise much,rather we need to say how can Government fund local industry to retool using new technologies that reduce costs not to go and build a high tariff road. It will only work to build apprehensions internally and social stresses that divert attention from productive focus into needless conflict and fighting.

Mr. Speaker Sir, with regard to the financial services sector, I need to amplify the point that until they realize that the charges that banks are imposing on the economy are one of the largest impairments in our systems, we continue on the downward spiral. GDP growth of 1.5% this year, we need to debate, we need to recommend policies to the Hon. Minister to say Zimbabwe, we need a higher growth for this year, let us  find the solutions and it is doable. Thank you Sir. 

(846 VIEWS)

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Charles Rukuni
The Insider is a political and business bulletin about Zimbabwe, edited by Charles Rukuni. Founded in 1990, it was a printed 12-page subscription only newsletter until 2003 when Zimbabwe's hyper-inflation made it impossible to continue printing.

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