The media should not misinform the public and if they do not understand something they should ask, Bikita West Member of Parliament, Munyaradzi Kereke, told Parliament last week.
He said the glamorous headline in one of the daily papers that “US$1 billion (had been) set aside for farmers” was a lie.
“I want it recorded Mr. Speaker Sir, that it is a false statement for the following reason, when we look at the banking sector in Zimbabwe, for the past year, the total loans in the economy grew from US$3.8 billion in the year, twelve months to US$4 billion from June 2014 to June 2015,” Kereke said in his contribution to the presidential speech.
“In other words, because of the under-performance of our exports and the depressed investment inflows, the capacity of our banks to accommodate new loans is very limited. Someone along the chain misinterpreted it to take the outstanding debt in the economy to mean new money and our people are being misled into thinking we have made preparations for the season.
“Mr. Speaker, we would be shooting ourselves in the foot if we were to allow this to pass without correction. The current loans to banks dating as far back as 2009 are at around US$700 million. In other words, farmers who borrowed in 2008/09 and 2010 cumulative to date owe banks and they are struggling – some of us included to pay that past debt. That outstanding debt stock is around US$750 million. Someone and we urge the media, please ask where you do not understand. You are publicly announcing that banks have set aside fresh money, US$1 billion, to go to farmers. It is incorrect and risks lulling the Treasury into complacency thinking the required gap has been sorted.”
Kereke, a former banker and former advisor to central bank governor Gideon Gono, said only a few weeks ago the nation had been told that the country needs US$1.7 billion to fund both animal husbandry and cropping activities.
The government had set aside only US$28 million for the input scheme for rural communities.
“I want it recorded that the gap of about US$1.6 billion, perhaps if the money is there, then the banks need to articulate through the various portfolio committees so that the august House can be assured that the money exists,” he said.
DR. KEREKE: Thank you for according me the opportunity to also debate the important motion where we look at the presentation by His Excellency, the President, to this august House. Firstly, I want to urge the House to contextualise the role of agenda setting as it relates to the functionality of Parliament in the discourse of our mandate. When you look at the First Session, we were given a legislative mandate that had intentions for 24 Bills to come before the House but a mere fraction of those Bills came. We went on to close the First Session and opened the Second Session and out of the expected 19 Bills, yet again a fraction of the Bills came. This time around we have been mandated by His Excellency to look at 21 Bills that need to come through Parliament. If history was to be allowed to repeat itself, then out of the 21 Bills, a fraction would pass through.
So, the call is for a closer working relationship between Parliament and the Executive branch of Government, particularly the individual ministries. Perhaps, as an idea, the administrative side of Parliament could summarize the 21 Bills and then communicate formally with the appropriate offices for the individual hon. Ministers to then start their systems working on the various Bills. It is sad that from the First Session, we have not been able to articulate and look at a lot of Bills because they simply did not come to Parliament. Unfortunately, quite a significant number of those Bills were meant to correct porous areas in our laws. If we look at the current mandate as given by His Excellency, there are at least 5 to 7 Bills that are meant to adjust existing legislation, to look at closing leakages that are in our statutes and to close inefficiencies that are inherent in our legislation. So, to the extent that we do not deliberate and go through the mandate as would have been set by His Excellency, it must mean that we are allowing the existing leakages to continue pillaging our institutions and to continue pillaging the economy. I therefore urge that through Committees, particularly the Legal Committee and the Administrative side of Parliament that close synergy be established with the Executive branch of Government.
My next point is that unless we realise that there are urgent policy decisions that are needed to realign our economy and the performance of our institutions, then the intended goals of the legislative agenda may be missed and this would be to the detriment of the population. The first area which His Excellency pointed out is that of adjusting our laws to close the hemorrhage that exists in our institutions through ineffective opaque procurement systems. If you look at the budgets that we approve year in, year out and then analyse what we set as resource targets to individual ministries for certain functions, you would find that we miss a lot of our budgetary plans and we allow that to happen year after year. Parliament, for instance as an institution created by the Constitution, our capacity to exercise our mandate is severely constrained because of budgetary under-provisions, even within the context of budgets we would have approved in this Parliament. In other words, if in a particular fiscal year, hypothetically Parliament is allocated say US$25 million, looking at the reality on the ground is that money coming to Parliament? We want to say that based on experience the answer is no, not entirely. The result is that we are a representative democracy where Members of Parliament are elected to come and represent the majority of the people. We come here and deliberate but the financial provisions that should come to Parliament are not coming through. You then see an agitated and apprehensive populace who do not see the expected feedback, rapport and community developments they would have expected from the Legislature as we play our role. It creates negative expectations and opportunities for strife in our community, which is avoidable.
The next thing is on how we can build positive expectations in the economy? There are two schools of thought; one school of thought, which in my view is myopic and a bit retrogressive is one which says; misinform for as long as possible and for as long as you can do that, policies can then be credible. I want to advocate Mr. Speaker Sir, a case where we look at the performance of the economy in earnest. We look at the hard policies that need to be taken particularly in the financial and fiscal sectors of our economy and we do take those promises for good order and for the welfare of our society. Just to give as an example, this morning we were greeted with a very glamorous headline in The Herald which said,’US$1 billion set aside for farmers’.
I want it recorded Mr. Speaker Sir, that it is a false statement for the following reason, when we look at the banking sector in Zimbabwe, for the past year, the total loans in the economy grew from US$3.8 billion in the year, twelve months to US$4 billion from June 2014 to June 2015. In other words, because of the under-performance of our exports and the depressed investment inflows, the capacity of our banks to accommodate new loans is very limited. Someone along the chain misinterpreted it to take the outstanding debt in the economy to mean new money and our people are being misled into thinking we have made preparations for the season.
Mr. Speaker, we would be shooting ourselves in the foot if we were to allow this to pass without correction. The current loans to banks dating as far back as 2009 are at around US$700 million. In other words, farmers who borrowed in 2008/09 and 2010 cumulative to date owe banks and they are struggling – some of us included to pay that past debt. That outstanding debt stock is around US$750 million. Someone and we urge the media, please ask where you do not understand. You are publicly announcing that banks have set aside fresh money, US$1 billion, to go to farmers. It is incorrect and risks lulling the Treasury into complacency thinking the required gap has been sorted.
The presentation that was done a few weeks back was that for the 2015/16 agricultural season, we need US$1.7 billion to fund both animal husbandry and cropping activities. Government due to limited revenue of only US$28 million has been set to do the input scheme for rural communities. I want it recorded that the gap of about US$1.6 billion, perhaps if the money is there, then the banks need to articulate through the various portfolio committees so that the august House can be assured that the money exists.
His Excellency, the President touched on the need to enhance mining sector productivity and I want to say it is an area which as a country we have long lacked in terms of increasing productivity. We had a good story emerging in the diamond sector but to date diamond is slowly fizzling out of sight in terms of performance. We urge that the realignments that Government is undertaking in the sector are done and concluded so that the sector can once again play a meaningful role in the economy.
Export of chrome has been reopened and is a welcome development but again, we need to take stock on the capacity of the economy to have the logistical muscle to actualize expected value. Chrome in its raw form by nature has a very low weight to value ratio. In other words, it is bulky. You need to move so many tonnes across the borders to get a certain monetary value.
When you look at the situation at the National Railways of Zimbabwe (NRZ) and the road haulage capacity of the country, you can only anticipate a binding constraint which is likely to frustrate our efforts to export chrome. So through the relevant ministries and the oversight role of Parliament, we would urge that urgent attention be placed to restoring some modicum of viability on NRZ to be able to support the intended projects in mining. NRZ at the moment, we were briefed yesterday, does not have adequate wagons, locomotive heads to pull the rolling stock and the mere signaling equipment where now the train drivers have to use cellphones to say, where are you now, do I slow down -so that they avoid collision. We cannot allow our institutions to be run the way they are being run at the moment if we are to recover as an economy.
The subject of corruption has almost become more like an anthem which everybody sings about but without analyzing the nitty-gritties of what needs to be done. His Excellency, the President has spoken ample a time that let us fight and uproot corruption.
Mr. Speaker Sir, we have very robust legislative frameworks that ought to deal with corruption. We have institutions that are there, created by our laws that we enacted through the august House and are supported by the Constitution to deal with the vice of corruption. Why is it that the institutions are not functioning as they should to eradicate or at least fight corruption? It is a question that through this august House we need to ask and call for accountability from the relevant institutions.
When we look at the effect of corruption in relation to institutions, we estimate that between 30-40% of the cost overhead in what we call, costs in ministries/companies is accounted for by corruption. When you look at someone who wants a passport paying someone to get the passport form and then to short-circuit the queues; if you work backwards and say, so effectively what is the cost of that service? You will find that the cost has gone up.
Procurement, a machine that costs US$100 000.00 for instance, through sidekicks, you will find someone accepting an invoice of a million dollars for a piece of equipment which costs US$200 000.00 for the country. So the issue of corruption is an area which we really want to urge the august House through the various portfolio committees that we speak with one voice and firmly in calling for accountability.
Mr. Speaker sir, it is also a reality that if we are to recover and revive our economy as a country, we need to have political maturity as a nation. To some, the political equation has become superior even to the welfare of society from whom we expect votes. We emerged from harmonious elections in 2013 and 2018 is still far off the horizon. It is time that we engage in productive activities.
It is a sad reality that there is growing institutional sterility due to political infighting across the board where institutions delay to implement certain decisions that are productive in nature depending on which faction the Chief Executive or the Board Chairman belongs to. As a country, we need to separate, agree and groom ourselves to align the political electoral calendar in its perspective arising from the Constitution and not to be in a constant state of trance of political infighting. So we urge that across the board, all political players, as hon. members we are creatures of political processes. Let us urge our constituents that let us focus on production and stop political infighting.
In terms of investment promotion, we welcome His Excellency’s emphasis that we need flexibility in our investment laws. Flexibility allows us to tailor make certain peculiarities that would come by way of inward investments, depending on what sector that investment is going. If someone wants to invest in bread making, the planning horizon could range from weeks to months. If it is mining, the planning horizon spans from five to ten years. So there is need for that flexibility to say as we attract investment, let us listen to the peculiarities and special circumstance requirements of our prospecting investors.
Mr. Speaker Sir, His Excellency, talked about the need to enhance our corporate governance systems as well as overhauling the Companies Act. That is a welcome agenda item which we want to urge the Executive who are responsible for bringing up these Bills to quickly get on with the job. As the august House, we need to agree as a House for certain Bills where there is general convergence. When such Bills come, we synthesise and expedite their passage without compromising on the need for due diligence and maintenance of the high quality that this august House is renowned for. We need to look at the policy framework that we adopt as a country.
I strongly do not agree that at this stage, continued austerity is the right policy mindset; cutting of jobs, cutting of expenditure even on critical areas in the hope that we will create fiscal space. Fiscal austerity is only beneficial to the extent that it save resources to be directed towards productive areas of the economy. Where fiscal austerity degrades the productive capacity such as laying off of nurses, teachers or cutting expenditure in capital projects like road construction and so forth, that fiscal austerity creates what in economics are called the negative hysteresis factor. It creates a shadow upon future potential of the economy.
In ending, I want to say delayed action can only create victims and the victims of our delayed action in policy realignments will be the majority of Zimbabweans, whose suffering and toil can only go on up to a certain point in time. We want to avoid avoidable tipping points in our community where out of desperation; our people will lose trust in us as the elected officials and Government of the people. Thank you.