President Robert Mugabe’s trip to China last month, which was written off with claims that he had returned empty handed, paid off yesterday when the first deal for a US$220 million loan was approved by Parliament.
Finance Minister Patrick Chinamasa asked Parliament, as required by the Constitution, to approve a loan for US$218 954 843 for NetOne, one of the three mobile phone operators in the country.
NetOne is 100 percent owned by the government.
The loan carries an interest rate of 2% per year and is payable over a period of 20 years with a five-year grace period.
It is to assist NetOne to expand its network so that it covers every corner of the country. NetOne will put up an additional 500 towers to the current 500 it has.
Although all the legislators that spoke supported the loan, some queried the management capacity of NetOne and why it had been overtaken by Econet and Telecel when it was the first to operate.
Chinamasa said the biggest problem was that NetOne was undercapitalised. It was also easier for Econet and Telecel to get loans than for NetOne to do so.
“I honestly do not believe that management at NetOne is a problem. I will need to be proved otherwise but I do not think it is a problem. The problem has solely been undercapitalisation. We have not given any money to NetOne to make it compete alongside Econet and Telecel,” he said.
“It is easier for Econet to secure a loan because you only need one board meeting. This is not the case if you are negotiating State loans. They have their board meeting, they go to the line Ministry which must also take time, they come to the Ministry of Finance and Economic Development, I have to go to Cabinet and I have to come to this Parliament. All these processes, Econet or Telecel do not need to go through. So, there lies sometimes the advantage that commercial entities have over State enterprises. We hope that we can help to take decisions quicker than we have been doing in the past.”
RATIFICATION OF THE LOAN AGREEMENT BETWEEN THE GOVERNMENT OF ZIMBABWE AND THE EXPORT IMPORT BANK OF CHINA RELATING TO NET-ONE NETWORK EXPANSION PHASE II PROJECT
THE MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (MR. CHINAMASA): I move the motion standing in my name that:
THAT WHEREAS, Section 327 (3) of the Constitution of Zimbabwe provides that an Agreement which is not an international treaty but which has been concluded or executed by the President or under the President’s authority with one or more foreign organisations or entities and imposes fiscal obligations on Zimbabwe does not bind Zimbabwe until it has been approved by Parliament;
AND WHEREAS, the Loan Agreement between Government of Zimbabwe and Export-Import Bank of China relating to Net*One Network Expansion Phase II Project being implemented by Net*One Cellular Pvt. Ltd was concluded on the 25th of August 2014 in Beijing, the People’s Republic of China; and
NOW, THEREFORE, in terms of Section 327 (3) of the Constitution, this House resolves that the aforesaid Agreement be and is hereby approved.
MRS. CHIMENE: I second.
MR. CHINAMASA: I rise to seek approval of this august House to a loan agreement that the Government of Zimbabwe entered into with Export-Import Bank of China which we signed on the 25th of August 2014 in Beijing, the People’s Republic of China.
The loan is for US$218 954 843.00. It carries an interest rate of 2% per year and it is payable over a period of 240 months which includes 60 months grace period.
The purpose of the loan is to assist Net*One to expand their network so that it has coverage of in excess at the end of the implementation of this project. It will have tower coverage in excess of 1000 towers from the current 500 towers. It is going to seek to cover every other corner of the country.
The commitment fee is 0.25% and the management fee is 0.25% as well. I want to commend this loan to the hon. House because it is one of the infrastructural foundations that we are putting in place, which is necessary for communication. It is my hope that after this infrastructure is put in place, NetOne along with other networks will make the necessary contribution to the fiscus by way of taxes. Mr. Speaker Sir, I thank hon. members for their attention and I ask for their approval of this loan. I thank you.
MR. CHIMANIKIRE: Thank you Mr. Speaker. Indeed, the idea of giving a loan to NetOne in order to improve the provisions of its services is noble. However, the House must take note that NetOne was the first mobile company to operate in this country. Through the years, NetOne has been overtaken by Econet. It has been overtaken by Telecel. We are not very sure, we have kept the same manager from the founding of NetOne up to now, yet it has a proven record that NetOne has not been competitive as compared to other service providers on mobile phones.
Mr. Speaker, we take note that NetOne has been sponsoring football. When we discussed the issue of football being sponsored in Parliament, I think the papers took us to the dust bin, to say Parliamentarians were discussing about sponsorship of football, but we have NetOne here sponsoring football, but going for a loan from China.
At the same time, let us take note of the fact that some of the projects that NetOne has implemented have been implemented by the Chinese.
So, when we talk about management fees and so on, are we having a project again whereby the Chinese bring the shovels and the picks so that they also implement this project with NetOne? I think the House has to take note that we need more efficiency in NetOne. There should be an audit in terms of management efficiency in view of the fact that the number one provider of these services is now number three. In terms of customer base, it is very low and in terms of service efficiency again, it is still questionable. Their competitiveness is to catch the tail end of the whole process.
Let us look at Ecocash for example. They have just recently started on netcash. What were they waiting for? That is a Government owned entity and we expect it to be more efficient, provide more jobs and ensure that we get equitable services that are comparable with other companies. However, with that Mr. Speaker, I support that NetOne gets the loan they applied for. I thank you.
DR. KEREKE: Thank you Mr. Speaker Sir. Firstly, I would want to applaud the Hon. Minister of Finance and Economic Development and the Executive authorities, who made sure that the country secures this loan which is very significant in terms of amount and in terms of intended use in the following ways; we know that in our country, it has been difficult for various reasons, one of which is our infrastructure to include the wider populace in financial services. We also know that the advancement in the telecoms sector has become so versatile. Once the installations have been done, it is very easy to transmit financial services to the rural areas and other outlying areas of the economy. I think when we analyse the purpose of the loan and the clear need for this august House to approve the loan; we need to look at the broader issues that go beyond NetOne as a legal persona.
We will benefit through jobs and improved communication systems. The overall effect will also be to reduce the cost of communication in our country. I would want to urge the House to applaud this noble result and also to realise that when you look at the terms in the loan, both the cost, the turner, the grace period, it falls within the parameters that the laws of the country have set through the external loans coordination regulations which set the general levels of interest rates, which our country should tolerate and approve when borrowing externally. It is a brilliant job done by the Treasury. I want to close by saying, I support and I urge hon. members that we approve the loan. Thank you.
*MR. CHINOTIMBA: Thank you Mr. Speaker Sir. I would like to thank the Minister of Finance and Economic Development for the loan that he secured and wants us to approve. NetOne was the first mobile company and people get surprised as to why it was going backwards. It is because companies like Econet would go and look for loans as and when they wished because they were not sanctioned. So a company like NetOne lagged behind because of sanctions. They would not go anywhere in search of finances. It was not a failure as such, and this is why we started looking “East” when things had gone so bad. Had we not looked “East,” we would not be having NetOne by now because all its infrastructures would have collapsed. Now that we have looked “East,” this is why we have been able to get this loan. Let us thank our President, R. G. Mugabe and the Minister of Finance and Economic Development who went there in search of finances so that our country goes ahead, what is needed for now is not to waste time debating but to approve what has been brought by the Minister to enable the Minister of Finance to proceed with his work. NetOne is all over the news because it has introduced one of the packages’ “OneWallet”. Those who do not want NetOne is their problem but, we say we want it in our constituencies.
*MR. MUKWENA: I stand up to support the motion that has been brought up by the Minister of Finance and Economic Development Hon. P. Chinamasa. We would like to thank Hon.Chinamasa and his delegation which went to the far East. I would also like to thank His Excellency, the Head of State who came up with the Look East Policy. He has actually analysed and saw that there was this Commonwealth which was indirectly oppressing us and wanted to colonise us indirectly.
We thank His Excellency for his wisdom and knowledge in coming up with the Look East Policy because of the Commonwealth creature. He realised where we came from and that China is our mother country because it provided us with support during the liberation struggle.
MR. MUTSEYAMI: On a point of order. Thank you for according me this opportunity to raise my point of order. The hon. member has mentioned that China is our mother country, if he can expatiate in what sense China becomes a mother country to Zimbabwe? – [Laughter]-.
*MR. SPEAKER: Order! Order! Thank you Hon. Mutseyami. Hon member the mother country is Zimbabwe you have made a slip of the tongue there.
*MR. MUKWENA: Thank you Mr. Speaker. I had made a slip of the tongue there. I want to say that China helped us to attain our independence and it cannot leave us whilst we are being oppressed and this is why the President went with his delegation to China. It is the only country which can help us bypass the sanctions. The Minister of Finance and his delegation was part of that delegation which laid a foundation to bust sanctions. NetOne is a Government parastatal and I would like to encourage the Hon. Minister to be resilient together with his team look for all the countries that can help us bust these sanctions. As an august House we should all agree that is the only way of busting these sanctions. – [HON. MEMBERS: Hear, hear.] –
MS. MAJOME: Mr. Speaker Sir, I thank you for according me this opportunity to also lend my voice to this debate on the financial arrangement that has been made in order to support the operations of NetOne which is a state controlled enterprise. I want to debate in relation to the Constitution. NetOne is a state controlled enterprise as there are many others. I am concerned about the free-fall, more or less the laissez-faire attitude that we have exhibited in running State controlled enterprises. I am saying this in particular because Chapter 9 of the Constitution is devoted to the whole issue of principles of public administration and leadership. As the august House debates this issue as to whether or not NetOne should indeed be allowed to obtain this assistance, I also submit that it should, because it is in the interests of every Zimbabwean for there to be as much –[HON. MEMBERS: Hear, hear.] – communication as possible and as many avenues of communication and as much access to information communication technology as possible so that we also become part of this global community.
But, as we do so Mr. Speaker Sir, I want to believe that this august House must make sure that any finances or any resources that are entrusted to a state controlled enterprise must be used responsibly and must be handled responsibly and with great care because any loan is a heavy burden to each and every Zimbabwean. I particularly want to draw attention to Section 194 of the Constitution on the basic values and principles of governing public administration. If the hon. minister is to have his way, which it looks like he may, because there seems to be more or less agreement in the House. I want to believe that it will be incumbent upon him to ensure that in particular, Chapter 9 of the Constitution is implemented because it provides that including Government controlled entities and other public enterprises must be governed according to the following principles. There are about ten of them but Mr. Speaker Sir, I will not belabour the point. I am just going to pick two of them “that there must be high standard of professionalism and ethics” and that in particular in paragraph (b), “efficient and economical use of resources must be promoted”.
I want to believe Mr. Speaker Sir, that this amount that is likely to be disbursed to NetOne, that the Hon. Minister must make sure that indeed it is appropriated and expended in the manner that the Constitution specifically provides – that is, it must be used efficiently and economically. If this is to happen, Mr. Speaker Sir, we will see that NetOne should indeed become the leading provider of mobile telephony, because it enjoys so many advantages that the other private players do not enjoy. To borrow the last speaker’s words, Government is the ‘mother’ of NetOne and NetOne enjoys the protection and succour of Government. So, there is no reason why it should be allowed to supply mediocre services or inefficient services. It must indeed be leading if this loan is going to be used properly. We should actually be able to see NetOne doing that.
Mr. Speaker Sir, another principle is that transparency must be fostered by providing the public with timely, accessible and accurate information and indeed these principles must be afforded. But, I also just want to speak in terms of Section 195 of the Constitution which is part of Chapter 9 which specifically deals with State controlled enterprises. I want to urge the Hon. Minister as he facilitates this facility to ensure that those specific provisions are also upheld, that is NetOne in particular, because they are possibly going to receive this loan. They must conduct their operations so as to maintain commercial viability and abide by generally accepted standards of good corporate governance so that this august House might not need to consider granting them a loan again. They must be able to generate money in future and be in a position to lend other institutions and enterprises.
Mr. Speaker Sir, I would also want to urge the Hon. Minister to pay particular attention to Section 197 of the Constitution. A previous speaker alluded to the fact that the Chief Executive of NetOne has been in office ever since NetOne was conceived. Section 197 of the Constitution requires that an Act of Parliament may limit the terms of office of Chief Executive officers or heads of Government-controlled entities and other commercial and public enterprises owned and wholly controlled by the State.
Mr. Speaker Sir, I believe there is a responsibility here that while this is about quid pro quo, if the hon. Minister does have his way and have this loan approved, he must in turn ensure, together with his colleagues in Cabinet, that steps are taken to have a Bill that comes before the august House seeking to limit the terms of office of State-controlled enterprises as provided by the Constitution. The other legislation that is required in order to align the Constitution with the law requires public officers, in terms of Section 198; this one is mandatory and provides that an Act of Parliament must provide measures to enforce the provisions of this Chapter.
Mr. Speaker Sir, it has been more than a year since the Constitution was adopted, and up to now, there has not been any Bill that has come before the august House in order to deal with what the Constitution says Parliament must do. The Constitution says Parliament must, we have no choice in the matter. We must provide measures by an Act of Parliament, including requiring public officers to make regular disclosure of their assets through establishing codes of conduct to be observed by public officers. This includes even heads of State-controlled enterprises and also specifying the standards of good corporate governance to be observed by Government-controlled entities such as NetOne which is likely to receive this loan and other commercial enterprises.
There is also need to provide for the disciplining of persons who contravene provisions of this Chapter or any code of conduct. Mr. Speaker, I want to believe that it is time that we implement our Constitution and in particular, in the area of corporate governance because failure to do so bleeds the nation in dollars and cents and it costs lives. I hope the hon. Minister will be moved and impress his colleagues in Cabinet who are responsible for bringing these Acts. This is the time to do so. If Parliament does accord the indulgence that the hon. Minister craves, then in return, the Minister and his colleagues in Cabinet must also do their part to ensure that Parliament is enabled to do its part because we are failing. In terms of the Constitution, we are required and we have to pass these laws but it is in the control of Cabinet. I believe the hon. Minister must return the courtesy and ensure that the Bills are brought to Parliament, the Bills that will make sure that Parliament does that which it must do, to regulate the use, control and administration of public funds. I thank you Mr. Speaker Sir.
MR. MARIDADI: Thank you Mr. Speaker. The structure of the loan, management fees, commitment fee, grace period and repayment period are all very sweet and I have no problem with that. I think what we must do before we approve this loan is to look at the structure of NetOne. Structurally, I think NetOne has a problem and it was not given a clean bill of health by the Auditor…Hon. Maridadi having been speaking too softly.
MR. SPEAKER: Order, hon. member, your colleagues are really straining their ears, they cannot follow you, especially at the back, that side.
MR. MARIDADI: Alright, thank you Mr. Speaker. I will raise my voice. I said that the way the loan is structured in terms of grace period, repayment, commitment fee, management fee – it is all very sweet, but I think we must also then look at NetOne itself and ask the question Hon. Minister: If NetOne were not supported by Government and if they were going to borrow money from the local market, would they have been able to borrow that money? The answer that I would give the hon. Minister is no, because of the structural problems at NetOne.
NetOne did not get a clean bill of health from the Auditor and Comptroller and Auditor General because of a number of things, one of which is corporate governance and the second one being failure by management. For us to then approve US$218 million and put it into NetOne, with all those problems, I think we might be making a mistake.
There is the issue of the infrastructure that NetOne is trying to embark on. Mr. Speaker Sir, technology is fast moving and the reason why NetOne was overtaken by Econet and Telecel is that NetOne has not moved along with technology. They are talking of putting up 1000 towers from the 500 that they have, which I think needs an arrangement which should be made by all the three networks. What used to happen is that NetOne will put up a tower in a particular site and just 20 metres down, there is an Econet tower and then there is also a Telecel tower. I am wondering, why should the three network companies not utilise one tower because it is not the tower that they want, it is the summit they want so that they put a gadget which is able to capture waves? Why is it that we have 3 towers in one location when one tower can be able to serve all of us? I think this is something that could be done by these 3 companies by simply getting into a negotiation.
The other issue Mr. Speaker Sir, as has been alluded by previous speakers is that we are worried that NetOne embarks on other projects which are not income generating like the sponsorship of soccer. They have put a lot of money into soccer and yet they are not viable. Why is NetOne not viable? Another speaker spoke about the issue of sanctions, but the environment that NetOne operates in is the same environment that Econet operates in as well as Telecel.
Actually, Econet and Telecel got their licences more than 12 months after NetOne has got their licence and yet they have not been able to penetrate the market which Econet is enjoying at the moment. People that are running Econet and NetOne are Zimbabweans, born, bred and educated in Zimbabwe. Why is it that Econet is doing well and NetOne is not performing well? It is a question of management and corporate governance structures, that is why TelOne is not doing well.
Another issue that worries me Mr. Speaker Sir is that, the last time that the Hon. Minister came to this august House seeking approval for a similar loan for Zimbabwe Electricity Supply Authority (ZESA), it was for US$350 million, which was also a very well structured loan facility. However, when this project was eventually launched three weeks ago, we heard that the loan had gone up to US$533 million. You then wonder where the other money is coming from, from US$350 million to US$533 million. What I can almost guarantee this august House Mr. Speaker Sir, is that when this project is eventually launched, it will not be surprising to note that the media will be quoting that the Minister had said the loan is for upward of US$300 million. These are some of the issues that I would want the hon. Minister of Finance and Economic Development to enlighten us on.
Hon. Speaker, NetOne is a Government Company that is set up in terms of Acts of Parliament to undertake business and at the end of the day, the company must be able to declare a dividend to the shareholder, which is Government. Ever since NetOne was formed, it has not declared a dividend to Government, not once and I do not know what miracle this money is going to bring into NetOne so that they are able to be profitable and declare a dividend. I realise that of all the more than 80 parastatals that we have in Zimbabwe, it appears that they have become a drain on the fiscus because every now and again, they go back to Treasury for bail out. I know that after putting in US$218 million into NetOne and getting these one thousand towers that NetOne is looking for. NetOne will be the first parastatal to run back to the shareholder, the Government to ask for bail out because they are looking for money for operations and other expenses. Even before we put this money into NetOne, it must come clean on their issue of labour relations. They have issues with employees, the former PTC employees that went to NetOne and got retrenched. Those employees have not yet received their retrenchment packages and I do not think we want to put US$218 million into a company which has problems with its labour relations.
Mr. Speaker with those few words, I would like to say Minister, the loan is well structured, it sounds very sweet but I doubt that we want to rush and approve this loan to get into NetOne with its structural and management problems . I thank you Mr. Speaker.
MR. GABBUZA: Thank you Mr. Speaker, for affording me time to speak on this issue. I think no reasonable Zimbabwean would deny NetOne to get a loan Mr. Speaker. Every one of us would want NetOne to grow because it is a Government company. Just to advise those who think that it has anything to do with sanctions that NetOne was not growing. Econet is actually growing on the bedrock of a Chinese State Enterprise. They are not in partnership with Siemens of Germany or any other company; they are in partnership with some Chinese companies and they started to look East way before NetOne. I think it must be taken seriously that there must be something a bit more.
I do not want to talk about issues of corporate governance but certainly, US$200 something million, these are big monies. I think the Minister would have to ensure that corporate governance is adhered to because we cannot just dump money of this magnitude and latter on tomorrow, NetOne tells us that they have not been able to put any booster.
Mr. Speaker, I think one thing Parliament must be able to do is, unfortunately we are not able to see this loan, the scope of works. I think it is important that a Committee of Parliament be able to follow up and see exactly what NetOne intends to do because US$240m – all this money is quite a lot of money. I think the Committee of Parliament must be able to report to this House that this is what NetOne intends to do and after how many years so that we have consistent and continuous evaluation of the activities they are doing.
The other thing Mr. Speaker, is this loan – in 1982/3, the British Government gave us almost a similar loan; very attractive, they built telephone exchanges for Tel One, and it was PTC by then. I think every district centre in the country has got these brown buildings with very old antiquated analogue equipment for communication. We are still paying the loan for that equipment even up to now but the equipment was only relevant in this country for almost five years and it was obsolete.
What am I trying to drive at? In telecommunications, the technology is fast changing and Hon. Maridadi indicated that. We are going to pay this loan over 20 years, when I was calculating 240 months. What would have happened in 240 months, 20 years paying? In five years time, that equipment definitely will no longer be relevant to this country. I hope and trust in that loan, they are not just going to supply equipment but definitely they will not give us cash, it will be equipment.
I wish to see in that agreement Hon. Minister, that whoever is going to be supplying us with this equipment, we must be in partnership for that repayment period so that if there is equipment change, we are able to fall back on them and say “ok, this is no longer working, can we upgrade but in line with the loan amount that we will have agreed”. Otherwise, we are going to see ourselves with a lot of equipment and five years down the line, it is obsolete or it is no longer working or relevant to the communication technology prevailing in the country.
I think these are some of the issues that I hope our technical people in the Ministry are able to look at because there is a tendency in the developed world to try and offload a lot of what they do not need to the Third World countries. We will then find ourselves in 20 years paying for things that are no longer there and we will be in partnership with another company that will be providing modern equipment, at the same time paying for the equipment that was loaned 20 years ago but will no longer be working. So these are the issues that I thought perhaps the Minister must take into account if there are further engagements or agreements to be made in line with this loan, I think these are some of the areas that we need to take into account.
MR. NDUNA: Thank you Mr. Speaker. I will digress a bit so that I show the bigger picture of all this investment that is now unfolding. There is no good thing other than going into a fight knowing that you have got a giant on your side. The people that are now going into bed with us are people that were with us since time immemorial. They were with us during the time of the liberation struggle, before that time and they are with us now. These are true friends of Zimbabwe.
Why do I say so Mr. Speaker? We saw just before now four billion worth of deals that were clinched by a high powered delegation in Beijing which was led by His Excellency, the President. Immediately after that, we saw the Russians jet in with a high powered delegation Mr. Speaker Sir, for US$3.8m deals in particular, platinum. What it shows to the global community is that now the chickens are coming home to roost. We have a bigger picture in the sanctions busting matrix. What I need for the Minister to note is this; there is a ZIM ASSET workshop that we attended, which you chaired yourself and which all parliamentarians attended. This is where I want to start. Then we had a ministerial delegation that was taken to China to acclimatise on Special Economic Zones. I need for now, the Minister to see in all this, the bigger picture of where we are coming from, where we are and where we are going – [HON. MEMBERS: Inaudible interjections] –
*MR. MADZIMURE: On a point of order Mr. Speaker Sir. What the hon. member is debating is irrelevant and not in line because he wants now to teach the Minister who went and presented his case of NetOne which is not in line with what Hon. Nduna is saying. I am appealing that he debate the motion as it is.
*MR. SPEAKER: Order. Mr. Nduna, the big picture has grown too big – [HON MEMBERS: Inaudible interjections] – I have not finished yet, I urge you to get back to the motion.
MR. NDUNA: Thank you for protecting me – [Laughter]-. I will narrow the bigger picture. The question of whether this loan is going to be approved by this august House or not does not arise Mr. Speaker Sir, they can have their say – [HON. MEMBERS: Who?]. We want Mr. Speaker to show that …
MR. SPEAKER: Oder, order. Honourable Nduna, please do not spoil the stew, so far both sides have agreed and there is not division here.
MR. NDUNA: Yesterday, we had the Minister of Media, Information and Broadcasting Services talking about the frequencies when it comes to migrating from analogue to digital. He said in his own words ‘the bigger beneficiaries of this expansion of frequencies coming about because of migrating from analogue to digital, are going to be the cellular networks’. So, NetOne in this matrix definitely is not going to be left out. What I need for the hon. members – [HON. MEMBERS: Inaudible interjections] – to know is if we get this loan, it is also aiding in the expansion of NetOne. However I want the Hon. Minister to give this House a snippet of how this money or this loan is going to benefit the urban to rural migration. You find that in a lot of enclaves in the rural set up, there is no network yet.
Mr. Speaker Sir, we have population migration that has gone from the urban set up to the rural set up Mr. Speaker Sir. I need the Minister to give a snippet to this House on how we can benefit our population that has gone to the rural set up. Hon. Maridadi touched on issues to do with amalgamation of base stations which I think is very clear. The long term is not going to bring down the loan amount but it is going to bring the amalgamation convergence in this digital age.
As a nation, we are going to benefit from this loan when all the investors start coming into this nation, in the special economic zones we will now be in a global community, in the digital age using the same technology. We have gained from those brothers that we always had from time immemorial Mr. Speaker, in particular China and Russia. I want to end by saying, by starting on the digital front we are opening up our economy to the global community. Today Australia is not happy that Russia is coming in to invest in platinum. Today America is not happy that in all their deals with Africa where they isolated Zimbabwe, they only managed to give the whole of Africa US$4 billion and yesterday Zimbabwe on its own went and structured more than US$4 billion worth of deals. It is not an issue which ruffles feathers in this House only but it is an issue that ruffles feathers globally. I thank you.
*MR. NYANHONGO: On a point of order Mr. Speaker. I see as if we want to talk about the motion that has been moved by the Minister of Finance. I believe that we are now straying off the motion. We are getting lost; we should stick to the motion.
THE TEMPORARY SPEAKER: If you had finished then the point of order does not arise.
DR. GUMBO: I rise to thank hon. members across the House. The motion that has been presented by the Minister has been well received but there are pertinent issues that have been raised by hon. members which I think I want to emphasise to the Minister to look at them.
When Hon. Gabbuza made his contribution, he mentioned the period of repayment and also the changes that will be realised in the industry that the money is being provided for. I think it is important for the comments that he has made that the Ministry can take them on board and consider them. Generally speaking, we might not want to belabour the matter and start pointing fingers at each other because this is one of the motions that surprised me because of the support that has come from both sides. As a House, we must really be proud of ourselves today that at least we came up to support something that we think is in the national interest. I want to believe there is need to encourage this kind of a spirit rather than to spoil it – [HON. MEMBERS: Hear, hear] – I thank you.
*MR. MADZIMURE: On the agreement that the Minister wants to bring, there are things that we should be wary about as Zimbabweans. You have brought this loan to the House so that we can ratify it and we plead that can the progress of that loan also be known by this House. It is from experience that you have heard that loans are granted for roads construction but for a five year period, nothing happens, even after 10 years, the road is not constructed. No one comes back to inform Parliament the difficulties they are facing. We request that there be reports that are periodically given, showing the developments by the loan.
Evaluation and monitoring of that loan will be important because it helps us in planning. Furthermore, the other problem that we are seeing is that the loan amount and what we intend to gain is that at times most of these loans are overpriced. The end result or the consequence of that is that the funds will be misused. For example, on the issue of water as regards the $144 million loan for City of Harare, people were thinking that this was excessive. Before the water was provided to the people, people in Borrowdale buy water in bowsers, the council bought motor vehicles. You will observe that certain amounts from the loan are going to be misused, instead of the money being used for the construction of boosters. This is why we are urging that there should be reports that are tabled before this House so that we can know what is taking place.
There is also the issue of technology, the longer the period, the more the danger of technology change. We should not go into deals with emergent companies before the loan has been serviced. When we want to upgrade, we no longer have a point of call because there is no relationship between our own company and the current companies that are in place. We should share some of the infrastructure that we have as a country. When TelOne was still PTC, during the advent of boosters, it had buildings that could be used by such players as Econet. Initially, it thought it had a monopoly and refused to share. They were forced to come up with better technology, which was more advanced than TelOne. It is important to know that no man is an island and that we live in a competitive world and one should not be afraid of it.
Lastly, we would want NetOne to declare dividends. NetOne is not different from Econet, neither is it different from Telecel. Why should we be continuously giving loans from the Government to an organisation that is capable of making profits? They should declare dividends. In terms of corporate governance Mr. Speaker, if the head has been sitting there for a long time, one may not appreciate that the rubbish that is surrounding them is not flowers. There is need for continuous change at the helm of the ship. Those that are at NetOne at the moment should promise that after they have received this loan, what profits are they envisaging and what is in it for the Government. That is why the Chief Executive Officer’s contract should be performance based so that once they fail to deliver, someone new can be appointed. I thank you.
MR. HOLDER: Thank you Mr. Speaker for allowing me to contribute to this motion. First of all, I would like to thank the Hon. Minister of Finance for bringing this motion forward and for doing such a splendid job by securing a loan to improve our network situation. Mr. Speaker Sir, looking back at NetOne, it started before Econet but Econet overtook NetOne. Mr. Speaker Sir, I think this has to do a lot with the Inclusive Government, they interfered and this is why NetOne never went forward. By us upgrading the NetOne facility Mr. Speaker Sir, I think it is a noble idea – [HON. MEMBERS: Hear, hear.] – However, I would just want to ask the hon. Minister to remember that Section 300 of the Constitution says, ‘an Act of Parliament must set limits on borrowings by the State, be it public debts and obligations on those payments and repayments guaranteed by the State’. Mr. Speaker Sir, on the same Section on Subsection 4, the Minister of Finance and Economic Development is responsible to at least twice a year, report to Parliament on the performance of the loans raised by the State and guaranteed by the State.
As this project goes forward, we would like to ask the Minister of Finance and Economic Development to keep on appraising this House on the developments that are happening. It is important – [AN HON. MEMBER: Zvange zvataurwa kare.] – Hazvina kutaurwa muSection 300, wataura Section 195. Mr. Speaker Sir, I am sorry. It is just that they are distracting me when I am trying to prove a point here that at least if we can have that report twice a year, there should not be a problem. I think it is one of the best things that have happened. I am supporting that NetOne’s charges are low, have more airtime and our people who are suffering in the rural areas can afford NetOne. So, I think this House should really support this. Continue with the good job Minister. I thank you.
THE MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (MR. CHINAMASA): Mr. Speaker Sir, I want to thank all hon. members who have contributed to this motion for their unanimous support in favour of the motion. In particular, let me thank those who have contributed, Hon. Chimanikire, Hon. Kereke, Hon. Chinotimba, Hon. Mukwena, Hon. Majome, Hon. Maridadi, Hon. Gabbuza, Hon. Nduna, Hon. Nyanhongo, Hon. J. Gumbo, Hon. Madzimure and Hon. Holder. I thank you all.
I want to take this opportunity to respond to some of the concerns which have been raised by hon. members. I must say that until I got into the negotiation of this loan, some of the sentiments which have been expressed here by colleagues, I was sharing those sentiments. They include why there has been no dividend to the Government? Is it to do with management and so forth? When I ask the question, why has there been no dividend, the quick answer was what have you given us to grow as the State because we are the sole shareholder, 100%. We have not given any meaningful capital to NetOne right from its inception and for that reason, Cde. Kangayi who has been at the helm of this institution needs to be credited for growing this company from nothing and it is for this reason that he needs to be commended.
One of the reasons why it lagged behind although it was first in the business is precisely that it was under capitalised. In my current capacity, I have committed myself to propping up TelOne and NetOne because we have 100% control over these companies. They serve not only a commercial purpose but they also serve a social responsibility.
When Econet and Telecel do their tower coverage, they are looking only in areas where there is viability and profitability. TelOne and NetOne must not only look for viability and profitability but they must meet the social responsibility to outlying populations.
When commercial entities are going for areas where there is human concentration, NetOne and TelOne must do more than what commercial entities do. It is for this reason that I am very pleased by the unanimity of support for this loan. It will go a long way to help and enhance the competitiveness of NetOne in the telecommunication business. On that, I want to thank you.
A legitimate concern has been raised which I also have been asking and it was raised by Hon. Maridadi about infrastructure sharing. It is not just with respect to towers, it is also with respect to fibre-optic cables. You basically have three or four companies digging side by side to the same destination when just one cable has a capacity to serve everybody. This is an exercise that I have also started to talk about so that there is infrastructure sharing.
As you know, after all the digging that has taken place, it is a mammoth task to bring order and sanity into this sector; whether we are talking about towers or cable network but I believe we have to embark on resolving that issue so that we have one company that owns the fixed network, the backbone, whether cable or tower. This will then rent out leases to all the other participants.
At the moment, the problem is that if we allow the situation to remain as it is, we reduce the opportunity of interconnectivity to the remotest village. This is so because when we are connecting to the remotest village, you are doing so at a cost which may not be recoverable. So, it is important that the areas which are more profitable should be able to carry interconnecting the remotest part of our country. With that, I completely agree with you.
I honestly do not believe that management at NetOne is a problem. I will need to be proved otherwise but I do not think it is a problem. The problem has solely been undercapitalisation. We have not given any money to NetOne to make it compete alongside Econet and Telecel.
As you know, it was one time number one but when you are doing it, it is easier for Econet – as Hon. Gabbuza pointed out, Econet is riding on Chinese technology and funding just like we are also seeking to do. It is easier for Econet to secure a loan because you only need one board meeting. This is not the case if you are negotiating State loans. They have their board meeting, they go to the line Ministry which must also take time, they come to the Ministry of Finance and Economic Development, I have to go to Cabinet and I have to come to this Parliament. All these processes, Econet or Telecel do not need to go through. So, there lies sometimes the advantage that commercial entities have over State enterprises. We hope that we can help to take decisions quicker than we have been doing in the past.
With respect to technological advancements, there is no equipment that is supplied today which will be valid for the next 10 to 15 years for any company. It is imperative that as soon as they do this, they are going to install 4G but already some companies are already talking about 5G. It is a race against time but I take comfort in the partnership between NetOne and Huawei who are going to be the supplier of the equipment.
Huawei is a private sector Chinese company based in Chengcheng People’s Republic of China. It has now overtaken Ericcson as number one internationally. In terms of technology it is now way ahead and when I visited their headquarters in Beijing, I was amazed that they devote 70% of their revenue to research and development. Their workforce is not madhala, it is under 35. People who are very skilled and have important positions there, especially on technology, their employees are in their 20s and early 30s.
With these few remarks, I want to once again thank all of you for supporting the motion and I move that the motion be adopted.
Motion put and agreed to.