Parliamentary Round Up: Bulletin No. 16 – 2019

First Session Ninth Parliament

The National Assembly resumed sitting on Tuesday after a two-week long break. The main agenda of the House was the debate on the Zimbabwe Investment and Development Agency Bill report tabled by Hon Joshua Sacco (ZANU PF Chimanimani East) on behalf of the Industry and Commerce Committee. The ZIDA Bill seeks to establish the Zimbabwe Investment and Development Agency, a one-stop shop for investors. Realising that investment and foreign trade are inextricably interlinked, the Committee on Industry and Commerce and Committee on Foreign Affairs and International Trade resolved to carry out joint public consultations. The hearings were held across the country from 2 to 7 June 2019 in line with section 141 of the Constitution which states that Parliament must ensure that interested parties are consulted about Bills being considered by Parliament, unless such consultation is inappropriate or impracticable. The public hearings were attended by youth, pensioners, business people, and representatives from tertiary institutions, Government officials, resident associations, civil society groups, officials from Zimbabwe Investment Authority, Zimbabwe Special Economic Zones Authority, ZimTrade and Ministry of Foreign Affairs and International Trade as well as the general public.

Some of the proposals submitted by the public are as follows:

Timeframes: the public made a proposal for the Bill to incorporate a Clause that provides timeframes for operationalisation of the one-stop investment service centre. They said the Clause should clearly specify the real timeframe for the completion of registration of investments, issuance of renewal of licences and permits. Therefore, the Committee recommended that the Clause states that in Zimbabwe, licensing and registration of investments take at most five working days.

Investment Fees: The public proposed that investment fees and licenses should be low, reasonable and competitive enough to outdo regional and international competitors. This will propel Zimbabwe to greater heights in fostering a friendly investment climate. Therefore, the Committee recommended that the Bill should encompass a Clause which provides for the maximum value required for investments that could be administered at a provincial level. The Committee thus comprehensively pegged investments at US$1m as adequate for provincial administration.

Decentralisation: Clause 4 (b) seeks to promote decentralisation of investment activities. Major stakeholders and the public pointed out the need for the Bill to openly outline the manner in which the activities of the agency should be decentralised as well as investment related issues. The observation made was that the mere mentioning of decentralisation of investment activities of the agency found in Clause 4 (b) was inadequate to address matters of deprivation and under-development associated with centralisation. It was envisaged that the ambiguity surrounding decentralisation and devolution of the agency’s activities and powers could be problematic in the operationalisation and implementation of the one-stop investment service centre hence the Committee recommended that the Bill should enshrine a specific Clause that outlines decentralisation principles as follows:

  1. The Zimbabwe Investment and Development Agency shall be decentralised to expedite investment application and approval processes in the provinces.
  2. The agencies’ offices shall be established in the ten provinces of Zimbabwe.
  3. The agency shall deal, allow or provide for registration of investments and provisions of business licences at provincial and district levels.
  4. The agencies’ provincial and district offices shall perform the same functions as the central agencies.
  5. Local authorities shall take part and have a say in the agencies’ activities at provincial and district level.
  6. The central agency shall complement investment activities at provincial and district levels unless they contravene the mandate of the agencies.

Devolution: The public proposed that there should be devolution of power to lower tiers of Government that is provincial and district level. The Committee supported this proposition by qualifying and quantifying the concept of devolution to be incorporated in the Bill as follows:

  1. There shall be devolution of power from the central agency to provincial and district agencies or offices.
  2. Provincial and district agencies shall be autonomous to administer or manage investments which fall under their own jurisdiction.
  3. Registration, licensing and issuance of permits of up to an investment limit of one million ($1 000 000.00) shall be devolved to provincial and district offices of the agency.
  4. Provinces and districts shall be autonomous to determine the use of funds that emanate from investments located in their jurisdictions.

Clause 4 Functions of the Agency: Key stakeholders observed that the Bill should focus on the developmental roles that should be played by the agency, hence recommended the addition of the following functions:

  1. To offer capacity building and support services to local authorities and provincial structures on developmental issues such as investment.
  2. To support the devolution exercise by having provincial and district offices reflective of all provinces in Zimbabwe.
  3. To promote investment across the country especially for marginalised groups such as women and youth and providing cross-linkages with mainstream investors.

The Committee supported the input from stakeholders and adopted the recommendation made in this clause.

Clause 5, One Stop Investment Services Centre: the public noted that Section 5 (1) (o) generally covers other ministries sidelining the Ministry of Health and Child Care. However, the proposal is that Section 5 (1) should include a desk responsible for the health sector for the following reasons:

  1. Investments in the health sector such as hospitals, clinics, pharmacies, pharmaceutical manufacturing plants and medical laboratories are subject to other key regulatory provisions such as the Public Health Act, the Medicines and Allied Substances Control Act and the Health Professions Act, which need to be closely synchronised with the ZIDA requirements.
  2. Some investments might increase public health risks such as toxicology, bio-technology and infectious diseases. Therefore, to complement environmental management agencies, public health expertise will be essentially needed within the one-stop service centre. All local and international investments must ensure that public health and safety measures are observed to the highest standard possible.

Clause 6 (2) Terms and Conditions of Office Members in the Second Schedule: On this section, the House recommended that a board member should hold office for a maximum of two terms totalling eight years and become ineligible thereafter. Recycling of members who have a track record of failure somewhere else should not be tolerated with ZIDA. Appointment to the board must be performance based. However, it should also reflect gender and geographical representation.

Clause 7, Composition of the ZIDA Board: Observations made by stakeholders in relation to the appointment and composition of the agency’s board members were that: the section provides for a seven-member board of which five members shall be from the public sector, a position which contravenes Section 11 (5) (1) of the Public Entities Corporate Governance Act. Therefore, the Committee recommended that:

  1. Section 7 (1) The Board shall consist of eight members, three from the public and five from the private sector.
  2. Section 7 (3) should also be re-articulated as follows: in appointing board members, the Minister shall have regards for the provisions of Sections 17 & 18 of the Constitution.
  3. The board shall appoint the CEO who shall be an ex-officio member of the said board.

Clause 14, Employment of Expatriate Staff: There was a public outcry for the Bill to ease unnecessary restrictions on senior personnel to be employed by investors. It was proposed by some stakeholders that investors should be allowed to bring management of their own choice subject to national immigration laws. The Committee supported this position and recommends the following:

  1. The clause should be devoid of the following statement: provided that there is no person domiciled within Zimbabwe with the same qualifications and skills.

Clause 20, Corporate Social Responsibility: The Committee recommended that the clause read as Corporate Social Responsibility. Another proposal made under this clause was to add item (e) which would clearly state that corporate social responsibility should not be a basic obligation but a standard obligation, meaning that there should be a standard measure within this section for social responsibility activities or projects to be implemented by investors subject to a specific cluster. This would ensure uniformity of development in areas or places where one of these industries is established; being agriculture, mining, manufacturing or processing industries.

Pursuant to Parliament’s oversight role, the Committee on Defence, Home Affairs and Security Services took field visits to Beitbridge Border Post and Forbes Border Post between 5 and 6 July 2019. The first post is in Matabeleland South, while the second is just outside Mutare in Manicaland. The visits were meant for the Committee to engage with the Zimbabwe Police Service and the Department of Immigration which fall under the Committee’s oversight purview. The Committee observed that the departments under their purview appear to be facing serious operational problems that include understaffing, in relation to the Immigration Department, as well as equipment and technological shortfalls that hamper their capacity to discharge their functions. These problems are compounded by budgetary constraints that appear to promote rent-seeking activities.

In an unrelated matter, SAPST facilitated a training workshop for the Budget Committee and Public Accounts Committee Members on the budget analysis and statutory reporting on 12 to 13 July. The main objective of the workshop was to enhance Members capacity in budget analysis so that they are able to effectively monitor public expenditure by government institutions and agencies as required by section 299 of the Constitution and the Public Finance Management Act. The workshop brought together Ministry of Finance officials and the two Parliamentary Committees. The Ministry of Finance officials indicated that since 2014, government has been piloting a programme based budgeting (PBB) system. So far 11 Votes have been put on the PBB system and the target is that all the 34 Votes will be on PBB by 2020. The Ministry of Finance officials said the Programme Based Budgeting will make it easy to track public expenditure against actual outputs and outcomes. Hence this will make it easier for Parliament and the public in general to monitor budget performance of various ministries, departments and agencies of government. Members welcomed the PBB system and urged the Ministry of Finance to ensure that all Votes are on the system without any further delays.

Following the Quarterly Budget Performance Guidelines that SAPST assisted Parliament to develop, the Parliament Budget Office has further developed a budget performance reporting template for Ministries, to ensure that the ministries capture all the relevant information required by Portfolio Committees to effectively monitor budget expenditure by government. Members discussed the Budget Performance Reporting Template and suggested areas for improvement. The template will be submitted to Parliament Administration for formal adoption.

Source: Southern Africa Parliamentary Support Trust (SAPST)