The government should reduce charges levied on mobile money transfers and should put a window to say up to $10, people are not going to be charged.
This was said by Kuwadzana East Member of Parliament Nelson Chamisa is his capacity as chairman of the Information Communication Technology, Postal and Courier Services committee when he presented the committee’s recommendations on the 2016 budget.
Chamisa also said there was need to regularize over the top transactions, including whats app, to enhance revenue for the government.
He said the committee was disappointed by the fact that although the Ministry of ICT had requested a budget for $50 million for 2016, it was only allocated $6.3 million.
This was a 3.03 percent drop from the 2015 budget when it was allocated $6.4 million. Sadly, despite this paltry allocation, only $2.3 million was disbursed.
Chamisa said this showed that the government was not serious about ICTs yet they were driving economies around the world.
HON. CHAMISA: Thank you very much Madam Speaker. I rise to politely present a report on the post budget analysis for the Ministry of Information Communication Technology, Postal and Courier Services, specifically focusing on Vote 25.
Madam Speaker, it is very sad that, it appears that with a lot of positive indicators showing the importance and value of ICTs to Governments and citizens, we are witnessing a reduction in the commitment of funds and resources to our sector which is a very important sector.
You may be aware Madam Speaker that ICTs are basically driving the economies of the world. The society is moving to be an information society. Economies are moving into being knowledge economies, whilst our Government has emphasized the importance of ICTs, acknowledging the importance of agriculture and mining, ICT development is a key enabler and equalizer, game changer that will, if focused upon, give birth to the realisation of low hanging fruits that will also enable our collectivity to make sure that we move our society to the internet of things. The internet of things is very important particularly in this budget because it will enhance productivity. It will also enhance consumption because of that e-platform.
As I indicated, when one looks at the whole analysis of the bid that was given by the Ministry, they requested US$50 million but were only appropriated or given 12.5% which is just US$6.2 million. From their request of US$50 million they got an allocation of US$6.257, which is just but a paltry figure or a drop in the ocean.
In fact, this allocation represents a marginal decrease of 3.03% from the 2015 allocation of about US$6.4 million. In the 2015 budget, the Ministry was allocated US$5.4 million of which only US$2.3 million was disbursed which is 36.81%. This continues to be a big problem.
Even the paltry or drop in the ocean that is given to the Ministry meagre resources are then allocated or disbursed in actual fact, meaning to say that the allocation disbursement ratio is still in the negative. This is an issue we hope is going to be addressed. I suppose it is a problem that is affecting all the other sectors that even if you have received meagre or paltry resources, the disbursement itself is also meagre. So you are getting the meagre of the meagre or you are getting the paltry of the paltry. Nothing stands on nothing, meaning to say that it will be nothing in the end.
Madam Speaker, Hon. Members, I also want to just highlight the fact that, if you are to look at the ranking of the Ministries and their allocations, the Ministry of ICTs dropped from the 26th position in 2015, to the 27th position in 2016. Even in terms of Vote allocations, the figure remains the same. You will realise that across the world, ICT based services are on the increase but in Zimbabwe we are shrinking. You will realise that allocations by Government, Rwanda, South Africa and Botswana are the cases in point, allocations to the ICT ministries and sectors is actually on the increase but in this country it is stagnant. It explains why you will have, because when you have this approach where you have an analogue mind set to a digital dispensation, you will always have problems in now increase economic contribution. I am glad that the Minister is a digital man himself so that should not be a problem. I hope he will be able to pull the entire Ministry and Government to realise the importance of ICTs in our Government in terms of operations functions and also interoperability.
I am not to do an analysis of the budget by Vote because I will take too much of your time but suffice to say that nothing was given to issues of alignment of legislation particularly in ICT. This is very important because our country has a policy lacuna. It has a legislative vacuum when it comes to the legislation that is required for ICT. We do not have an ICT policy that has been adopted or an ICT Act that is supposed to deal with the convergence that is in the country. We also have not dealt with data protection loss or e-transaction loss and that gap leaves the country very exposed from a cyber security point of view. This is a very sad reading especially in the context of our situation.
Like I indicated, we also have realised that there is an amount that has been given which is close to US$60 million, which is for purposes of e-Government. But when you look at the allocations that are in the Ministry, nothing has been allocated. One wonders where this has been allocated. Perhaps it has been put under the Office of the President and Cabinet. It is something that we are still trying to interrogate in the context of the Blue Book, to see where exactly the commitment that was given by the Minister in his statement has been realised.
In terms of parastatals, we have some that are under ICT. Tel One is one of them but they are still grappling with a debt of over US$350 million from the PTC era. This debt has definitely affected the balance sheet of Tel One in a negative way. It has made it unattractive and ugly for investors. We need to make it more beautiful so it is attractive to investors. In addition, Tel One has total debtors to the tune of about US$85 million. What makes sad reading is that US$40 million is actually from State owned enterprises that are not paying. So, Government departments are simply using services from Tel One without necessarily paying for those services. This is an issue which is very important and I hope the Minister will also take note of this. Yes, they have tried to work on some arrangements to offset the debt but they have not been quite effective.
We have US$98 million from China-Exim bank which has been sourced at an interest rate of 2% for a 20 year tenure. This is going to be used to expand the fibre optic footprint and also to rehabilitate and modernize our core network. Tel One is trying to come up with a prepaid service as opposed to a post paid service, which in fact has affected their debt collection capacity. We also have Zimpost under the sector, dealing mainly with courier services. They indicated to us that in terms of the budgetary implications, there is little because they did not get any support from Government.
On the issue of Net One – they recently got a haircut of about US$12 million on the legacy loan that they received, out of the US$32 million that they had, leaving a balance of about US$20 million. In terms of their expansion, may it please the Hon. Members that there is a US$280 million loan facility from China. In terms of the debtors, they are also complaining about Ministries and Government departments that are not paying up their bills. A case in point is a total amount of US$9 million being owed to Net One by Government departments. I am also told that Ministers have a fair chunk because they are using cellphones without paying for them. I hope this will be investigated since it is a huge problem which needs to be corrected.
ZAR NET – you may recall that it is the one being used by Government to acquire Telecel but surprisingly, in terms of the Budget, nothing is reflecting to show the transactions that we understand have taken place in the context of the acquisition of Telecel. It is also an area that requires further interrogation by the Ministry and the Minister. We also have PORTRAZ under the Ministry and we noted that for a long time, POTRAZ has not submitted and we hope that the Minister will also help on the issue of annual reports that are audited and their financials to this august House. We just felt we needed to mention this as a Committee in passing.
The Committee noted some challenges and observations. There are challenges in terms of the policy vacuum within the context of Government. We are not giving direction in terms of the direction that Government has to give to the country. This is so important in the context of the Budget because the budgetary allocation is needed to activate and render kinetic the issue of policy making to cure the lacunae that we have. The Ministry also raised the issue of delayed and zero disbursement. In terms of capital expenditure, there is literally nothing and this disbursement issue, particularly in the perspective of the Finance and Economic Development Ministry is a big issue. There is disbursement inertia as what is allocated is not what is disbursed. There remains a gap which has to be cured.
There is also duplication of infrastructure, particularly by ICT companies that are owned by Government. I am told that Government has already resolved to say that there is going to be a consolidation of ICT infrastructure companies but this is being delayed. We have a commitment on paper, but in practice nothing has materialized. We hope that something is going to be done to make sure that we do not have all companies under Government competing amongst themselves. We need to streamline and focus on making sure that we develop a competitive comparative advantage of each.
It is also a worrying development in that there is a serious decline of ICT companies, in terms of them retrenching whereas elsewhere others are actually developing. This is an observation and it is our considered view that there is need to make sure that companies like Power Tel are actually taken to be under the ICT Ministry, for purposes of coordination. We realise that from the Budget, a lot of other ICT related facilities are located in the various Ministries. There is need for a One-Stop-Shop approach to take all those facilities and put them under the ICT Ministry in order to drive the ICT initiative within Government. We hope that the Minister will also take on board, for purposes of streamlining resources and resource allocation and efficiencies within Government.
After our careful consideration, we are of the dispassionate view that Treasury has to emphasise the role of ICTs, moving ICTs from the bottom eight of the allocation to the top eight of the allocation of resources. ICTs are the lubricants for all the various sectors. This is a very important element because you cannot talk about other Ministries without ICT. The debt that was incurred previously by the Ministry, of about US$2.8 million is also due to late disbursements. So, due to delayed disbursements, we recommend that it be expunged through mechanisms designed by the Ministry of Finance and Economic Development. This Ministry of ICT is also supposed to investigate the declining fortunes of ICT firms in Government and also in Zimbabwe.
We also recommend that duplication has to be stopped forthwith. The Ministry should be responsible for ICT related services instead of putting some in the OPC and some in the other Ministries. You end up having too many drivers for one vehicle. That is the problem because we have too many hands on the steering wheel and the direction is a bit confusing.
There is also need for the downward revision of monies that are levied on mobile money transfers. In fact, it is our view Hon. Minister, that instead of levying those taxes on the mobile money transfers, we need to put a window to say up to ten dollars, you are not going to be charged so that people are also preserved in terms of what they do. There is also need to regularise what are called over the top transactions, OTTs, WhatsApp and others so that through the networks, they enhance the revenue of Government as is the case in other jurisdictions. Having said this in an abridged way Madam Speaker, I think this is what suffices in terms of our analysis but just to say, year in, year out, we say the same thing, there seems to be no change of attitude by the Minister. We are really worried because whereas growing old is not voluntary, growing up is. We hope that the Ministry will be able to at least entertain our ideas and migrate from their mindset of not being sensitive to issues related to ICTs. I hope the Minister will lead charge because I know at a personal level that he is a man who is very competent in those areas. Thank you Madam Speaker, May God bless you.