Debates- Tuesday, 29th November, 2011

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Tuesday, 29th November, 2011

The House met at 1430 hours

[Mr Speaker in the Chair]






39. Mr Chishimba (Kamfinsa) asked the Minister of Transport, Works, Supply and Communication whether the Government had any plans for the abandoned Presidential Lodge in Ndeke Township in Kitwe, and if so, what the plans were.

The Deputy Minister of Transport, Works, Supply and Communication (Mr Mwenya): Mr Speaker, the Government will not abandon the Presidential Lodge in Ndeke. The Government had, in the past, rehabilitated the Presidential Guest House in Kitwe, but it was later vandalised. The Government will, however, continue to maintain this facility.

Mr Speaker, in April, 2011, the Government signed a contract with Mercury Lines Limited at a contract sum of K4.2 billion. The contract period for the works was eighteen months, but not much progress has been made due to the challenges of funding to the project being faced. The completion period has been revised to the second quarter of 2012.

Mr Speaker, I thank you.

Mr Chishimba: Mr Speaker, I would like to find out from the hon. Minister how much was budgeted for the lodge in question.

The Minister of Transport, Works, Supply and Communication (Mr Mukanga): Mr Speaker, it was stated that a contract sum of K4.2 billion was awarded. This is the full contract sum that will enable us to complete all the works. Therefore, there was no further budget for it.

I thank you, Sir.

Mr Mooya (Moomba): Mr Speaker, may I know how often the lodge is used. Is it worth having?

Mr Mukanga: Mr Speaker, the usage of the guest house is the prerogative of the State House staff. It is important to have the facility because when the President is on the Copperbelt and in the vicinity, he may use it.

Mr Speaker, I thank you.

Mr Kampyongo (Shiwang’andu): Mr Speaker, I would like to find out from the hon. Minister of Transport, Works, Supply and Communication what happened to the funds that were allocated to this project. As far as I know, when this project was awarded to the contractor, money thereto was allocated. May I, therefore, know what happened to the allocated funds?

Mr Mukanga: Mr Speaker, we are trying to use the allocation provided earlier. As earlier stated, the place was previously vandalised. However, I wish to say that we will ensure the presence of the Zambia Police Force in the precincts of the lodge so that after the completion of the project, there is no more vandalism. 

Mr Speaker, I thank you.




40. Mr Chisala (Chilubi) asked the Vice-President:

(a) how many political parties and civil society organisations were represented in South Africa during the printing of the ballot papers for the 2011 General Elections; and

(b) how much money was spent on the following:

(i) printing of ballot papers;

(ii) transportation of ballot papers from South Africa to Zambia; and

(iii) the upkeep of the representatives at (a) above.

The Deputy Minister in the Vice-President’s Office (Mr E. C. Lungu): Mr Speaker, the ten political parties that fielded candidates for the Presidential Elections had one representative each to witness the printing of the ballot papers. One person from the Forum for Democratic Process (FODEP) represented the civil society organisations. One person from the Council of Churches in Zambia (CCZ) represented the Church mother bodies and one person from the Islamic Supreme Council of Zambia represented the faith-based organisations.

The other representatives are as follows:

Organisation No of Representatives 
 Media 5

 Anti-Corruption Commission (ACC) 1

 Drug Enforcement Commission (DEC) 1

 Zambia Police Force 1

Mr Speaker, the cost of printing the ballot papers was US$1,965,681.20 which was equivalent to K10,221,542,240. The cost of transporting the ballot papers by Air Charter from Durban, South Africa, to Zambia was US$50,000.00, which is equivalent to K255,000,000.

The total cost of the upkeep of the representatives who went to witness the printing of the ballot papers for the 2011 General Elections is US$248,252, which is equivalent to 1,216,434,800.

Mr Speaker, I thank you.

Mr Chisala: Mr Speaker, may I know when the Government of the Republic of Zambia will decentralise the printing of ballot papers so as to cut down on the cost.

The Vice-President (Dr Scott): Mr Speaker, the major step in making the printing of ballot papers less costly is to localise it. I do not quite know what is meant by the word “decentralise” that the hon. Member used. That is the best answer I can give to him.

I thank you, Sir.




Mr Mwiimbu (Monze Central): Mr Speaker, I beg to move that this House do adopt the Report of the Parliamentary Select Committee appointed to scrutinise the Presidential appointments of Mr Chalwe Farai Ralph Mchenga, SC.; Mr Mubanga Mweniweingwe Kondolo, SC.; Mr Dominic Luther Yeta Sichinga, SC.; and Mrs Nicola Ann Sharpe-Phiri to serve as Puisne Judges, for the First Session of the Eleventh National Assembly, laid on the Table of the House on 25th November, 2011.

Mr Speaker: Is the Motion seconded?

Mr Mpundu (Nchelenge): Mr Speaker, I beg to second the Motion.

Mr Mwiimbu: Sir, the appointments of Mr Chalwe Farai Ralph Mchenga, SC; Mr Mubanga Mweniweingwe Kondolo, SC; Mr Dominic Luther Yeta Sichinga, SC.; and Mrs Nicola Ann Sharpe-Phiri to serve as Puisne Judges are made pursuant to the provisions of Article 95(1) of the Constitution of Zambia, Cap 1 of the Laws of Zambia which states:

“The Puisne Judges shall, subject to ratification by the National Assembly, be appointed by the President on the advice of the Judicial Service Commission.”

The Constitution further provides under Article 97(1) that:

“Subject to Clause (2), a person shall not be qualified for appointment as a Judge of the Supreme Court, a Puisne Judge, or Chairperson or Deputy Chairperson of the Industrial Relations Court unless:

(a) he holds or has held high judicial office; or

(b) he holds one of the specified qualifications and has held one or other of the following qualifications:

(i) in the case of a Supreme Court Judge, for a total period of not less than fifteen years; or

(ii) in the case of a Puisne Judge, the Chairperson and Deputy Chairperson of the Industrial Relations Court, for a total period of not less than ten years.”

Mr Speaker, allow me to begin by stating that in view of the critical role that the High Court plays in the delivery of justice in the Republic of Zambia, your Committee undertook to ensure that only individuals who have integrity, and sound character, are  qualified, competent, diligent, eminent, and committed to the promotion of justice should serve on the High Court Bench.

To this effect, your Committee carefully selected and scrutinised the witnesses to assist it assess the suitability of the nominees. Your Committee requested written memoranda from the relevant State security agencies, professional bodies and other stakeholders, as well as the appointing authority that was represented by the Minister of Justice, Hon. Sebastian. S. Zulu, SC.

Sir, the witnesses also appeared before your Committee to make oral submissions and this enabled them to make clarifications on matters that arose from their written memoranda. Further, your Committee interacted with the nominees and carefully scrutinised their curricula vitae.

Mr Speaker, your Committee’s findings and recommendations in respect of the nominees are as set out hereunder:

Sir, all the witnesses who appeared before your Committee except two, namely Transparency International Zambia (TIZ) and the Law Association of Zambia (LAZ), supported the proposed appointment of Mr Chalwe Farai Ralph Mchenga, SC, as Puisne Judge. While appreciating the fact that the nominee was eminently qualified to be appointed to the position of Puisne Judge, the two witnesses believed that the nominee had been compromised on the Chiluba Case vis-à-vis the manner he handled it. They believed that the nominee’s decision not to appeal against the magistrate’s court judgement that acquitted the late Dr F. T. J. Chiluba had been influenced by other considerations other than those of the law.

Mr Speaker, the Human Rights Commission on the other hand, while acknowledging that the nominee was an experienced prosecutor and criminal lawyer as he had, among other qualifications, worked in the Office of the Director of Public Prosecutions (DPP) for a long time, could not state its position on whether or not your Committee should recommend to the House that the nominee’s appointment be ratified. This was in view of the public perception that surrounded the Chiluba Case that the DPP had been compromised by the Executive, and hence his refusal to appeal the magistrate’s court decision that acquitted the late Dr F. J. J. Chiluba. The commission, however, strongly indicated that it is against the settled principles of natural justice and human rights to judge a person based on public perception without according the person an opportunity to be heard. The commission is of the view that the nominee was unfairly judged as no such opportunity was availed to him. The commission, thus, urged your Committee to seriously query the nominee on the matter so as to objectively determine whether, indeed, he had not acted independently as required of the holder of the Office of DPP.

Mr Speaker, I can confidently state that, during its interaction with the nominee, your Committee came to the realisation that none of the organisations, including LAZ or the individuals who had criticised the DDP’s decision not to appeal the magistrate’s decision had challenged his reasons from a legal perspective. The nominee contended that among all those who condemned him, he had expected, at least, LAZ to not only criticise his stance, but also point out the grounds of appeal. He pointed out that LAZ, being an association of lawyers, is well aware that one can only appeal on a point of law and the nominee had given his reasons for not appealing. It is also interesting to note that LAZ still considers Mr Mchenga, SC, to be in good standing with the association.
Mr Speaker, your Committee observes that all the witnesses who are against the ratification of the nominee have based their stance on the public perception that he had been compromised without providing any substantial evidence to prove their allegation. In view of the foregoing, and on the basis of its interaction with the nominee, as set out in the report, your Committee is unanimous in resolving that, in the absence of substantial evidence to prove the allegations against him, the nominee was unfairly judged. It is also of the view that in the interest of the rules of natural justice and human rights, your Committee will not hold the allegation against him. Your Committee, therefore, recommends that his nomination be ratified.

Hon. Government Members: Hear, hear!

Mr Mwiimbu: Mr Speaker, on Mr Mubanga Mweniweingwe Kondolo, SC., I would like to report that all the stakeholders who appeared before your Committee were unanimous in supporting his ratification for appointment as Puisne Judge.

Sir, your Committee learnt that Mr Kondolo, SC., is  an eminent lawyer who has been at the Bar for twenty years, ten of which he spent in the public sector and ten in quasi-public and private sectors.  He has, as such, acquired the necessary competence and experience to handle the demands of the job for which he is being considered. Your Committee, therefore, recommends that the nominee’s appointment be ratified.                          

Mr Speaker, with regard to Mr Dominic Luther Yeta Sichinga, SC., your Committee observes that the nominee has held various legal positions, both locally and internationally and was, therefore, suitably qualified to be appointed to the position of Puisne Judge. In view of this, your Committee holds no reservations in recommending that the nominee’s appointment be ratified.
 Sir, as for Mrs Nicola Ann Sharpe-Phiri, your Committee observes that none of the witnesses who appeared before it had any adverse comments on the nominee. Among other factors that favour the nominee’s appointment as Puisne Judge is that your Committee learnt that the nominee is an eminent lawyer who has stood firm on matters of integrity.

Mr Speaker, further, your Committee is satisfied that, although Mrs Nicola Ann Sharpe-Phiri has not served in high Government positions, she has, for the last twenty years, been involved in the practice of law. This makes her suitably qualified to serve as Puisne Judge. In view of the above, your Committee recommends that Mrs Nicola Ann Sharpe-Phiri’s appointment as Puisne Judge be ratified.

Mr Speaker, this House should be pleased to hear that all the State security wings that appeared before your Committee indicated that as regards the nominees, their records did not reflect any adverse reports that would prevent the nominees from being appointed as Puisne Judges.

Your Committee, in view of the foregoing, recommends that the House do ratify the Presidential appointments of Mr Chalwe Farai Ralph Mchenga, SC.; Mr Mubanga Mweniweingwe Kondolo, SC.; Mr Dominic Luther Yeta Sichinga, SC.; and Mrs Nicola Ann Sharpe-Phiri to serve as Puisne Judges.

Mr Speaker, in conclusion, allow me to place on record the Committee’s gratitude to you for appointing it to undertake the important task of scrutinising the nominees. Your Committee is also grateful to the Office of the Clerk of the National Assembly for the service and advice rendered to it during its deliberations. Your Committee would also like to thank the State security and investigative agencies, professional bodies, other stakeholder institutions and the nominees for the oral and written submissions that assisted it in its work.

Mr Speaker, I thank you.{mospagebreak}

Mr Mpundu: Mr Speaker, I note that the mover of the Motion has sufficiently addressed the important issues in your Committee’s report. I also would like to believe that hon. Members have read the report of your Committee. I shall, therefore, be brief in seconding the Motion on the Floor of the House.

Sir, from the outset, your Committee had to be satisfied that all the nominees met the qualifications for the position of High Court Judge as provided for in our Republication Constitution. I am pleased to inform the House that all the nominees meet the minimum qualifications set in the Constitution for a person to be appointed puisne judge. In addition, your Committee is also of the view that persons holding that position should possess other attributes such as integrity, fearlessness and strong interpersonal skills.

Mr Speaker, as the report of your Committee will show, the majority of the witnesses were satisfied that all the nominees meet these two conditions. Among other reasons attributed to this is the fact that three of the nominees hold the status of State Counsel, which signifies their eminence in the legal fraternity.

Mr Speaker, let me also point out that, while two witnesses outrightly opposed the appointment of Mr C. F. R. Mchenga, SC., who is the current Director of Public Prosecutions (DPP), your Committee found that this was based on the public perception that surrounded the case involving the former President, the late Dr F. T. J. Chiluba. The perception was that Mr Mchenga, SC., had been compromised by the Executive and that this resulted in his decision not to appeal the magistrate’s court decision to acquit the late Dr Chiluba. Hon. Members will agree with me that, without evidence to that effect, the issue of compromise amounts to a mere allegation. In this regard, Your Committee could not, therefore, hold the allegation against the nominee.

I echo the sentiments made by the mover of the Motion in supporting the recommendation that all the nominees be ratified for appointment as High Court Judges. The appointments of the nominees are in the best interest of the nation.

Sir, before I conclude, allow me to thank the Chairperson of your Committee for the efficient manner in which he presided over your Committee’s meetings. I also wish to thank all the Members of your Committee for their unity and hard work during the deliberations.

Mr Speaker, may I end my speech by urging this august House to support the Motion on the Floor.

With these few remarks, I thank you, Sir.

The Minister of Foreign Affairs (Mr Kambwili): Mr Speaker, thank you for according me this opportunity to debate the Motion on the Floor. In doing so, I want to say, from the outset, that I support the ratification of all the five nominees.

Mr Speaker, all the nominees are eminent persons who have the requisite qualifications in the field of law. I would like to say that this House approved a law that increased the establishment of Judges of the High Court and the Supreme Court last year. However, we have not seen any change in as far as speedy dispensation of justice is concerned. Having gone to prison on flimsy charges trumped up by the previous regime, I met many prisoners who had been there for a long time without trial. I hope and trust that the Judges we are ratifying today will definitely help in speeding up the process of the law so that people who are remanded in custody without trial can be tried and decisions on their cases made. It is extremely painful to spend days, months and years in detention when you have not been proved guilty.

Mr Speaker, I thought that, in increasing the establishment, the purpose was to speed up trials. Even in civil matters, cases take up to five years to be concluded, yet …


Mr Speaker: Order!

The hon. Minister is debating. He does not need to answer any questions.

Mr Kambwili: … the number of Judges has been increased. I would like to urge all the Judges, including the ones we are ratifying to, please, have mercy on the people in detention, more especially for those who are waiting for trial, so that decisions are made for them to know their fate other than keeping them in detention for a long time without trial.

Mr Speaker, it surprises me when people say that I should ask the hon. Minister of Justice. I think that we have been in the Government for fifty-four days only and I have the right to talk about the ills …


Mr Kambwili: … that we have to correct. We are not going to pretend that all is rosy just because we are now in the Government. We have to speak out against the wrongs.

With these few words, I support the ratification of the nominees.

I thank you, Sir.

Hon. Government Members: Hear, hear! Boma!

The Minister of Justice (Mr Zulu, SC.): Mr Speaker, in supporting this Motion that all the four nominees be appointed and this House approves their appointments, I wish to speak on the appointment of Mr Mchenga, SC., since some organisations and people had misgivings about his nomination.

Mr Speaker, the late Dr Chiluba was charged with the offence of theft of Government money by public servant. This relates to the monies that were deposited in the ZAMTROP Account at the Zambia National Commercial Bank (ZANACO) operated by the Zambia Security Intelligence Service to which the Director-General, Mr Xavier Chungu, was the signatory. The claim by Dr Chiluba was that he deposited moneys he had received from well-wishers and friends in this Government account. In other words, the Government’s money was mixed up with the money he claimed was his personal money.

Mr Speaker, at the trial, Mr Chungu was not available as he had fled the country. The issue before the court was whether it was the Government’s money that the late Chiluba expended after he had regularly deposited in this account. There was no evidence that, in fact, the money …

Mr Speaker: Order!

The Chair is rather anxious about that line of debate. There is a Motion here and it appears that the hon. Minister of Justice, instead of debating the proposed nominees, is now discussing a court case.

Mr Zulu, SC.: Mr Speaker, I am much obliged.

Mr Speaker: Please, focus on the Motion.

Mr Zulu, SC.: Mr Speaker, I will and I thank you for the guidance.

As I said, I am supporting Mr Mchenga, SC., who is my learned and honourable friend because there was no evidence to support the conviction.

I thank you, Sir. 

Mr Mwiimbu: Mr Speaker, I would like to thank all my colleagues who have unanimously supported your Committee’s recommendation for the appointment of the four nominees as Puisne Judges by the appointing authority, who is the President of the Republic of Zambia.

With those remarks, I would like to thank all my colleagues most sincerely for their overwhelming support for this Motion.

Hon. Members: Hear, hear!

Question put and agreed to.


(Debate resumed)

The Minister of Agriculture and Livestock (Mr Chenda): Mr Speaker, I thank you for giving me this opportunity to render my support to the Motion on the Floor of the House.

Mr Speaker, let me begin by congratulating the hon. Minister of Finance and National Planning, Mr Alexander Bwalya Chikwanda, on this excellent piece of work, which was prepared against a backdrop of great expectations from the people of Zambia. He has balanced the limited resource envelope with the infinite demand for services arising from the campaign promises which we made. This is simply magic. It is no wonder that our colleagues on the left have found it befitting to knight the hon. Minister of Finance and National Planning, Mr Chikwanda.

Mr Speaker, this Budget is inspiring. It is anchored on the four sectors that were prioritised in His Excellency the President, Mr Michael Chilufya Sata’s Address to the First Session of the Eleventh National Assembly, namely agriculture, education and skills development, health services, local government and housing. Coincidentally, the hon. Minister of Finance and National Planning, Mr Alexander Bwalya Chikwanda, in his illustrious career, has been an hon. Minister of Agriculture, Health and Local Government and Housing. Hon. Chikwanda has brought a vast reservoir of knowledge to the budget preparation process which he acquired during the time he worked at various ministries.

Mr Speaker, before I proceed any further, allow me to acknowledge the macro-economic achievements which this country attained under the stewardship of Hon. Dr Situmbeko Musokotwane and former hon. Ministers of Finance and National Planning under the former administration. They have no doubt laid a very strong foundation on which we shall build, and build on we shall.

Mr Speaker, the hon. Member of Parliament for Liuwa, Dr Situmbeko Musokotwane, in his maiden speech, schooled us on the fact that there is no finishing line when it comes to economic development.

Hon. Government Members: Hear, hear!

Mr Chenda: Indeed, there is no such line. This Budget will not take Zambia to any finishing line. However, it is the first step on an infinite journey without a final destination or a finishing line. After all, is it not said that even the longest journey starts with one step? This Budget is that one step. Therefore, it needs the support of everyone in this august House.

Mr Speaker, the lowering of the reserve ratio has released more money to the banks for lending to business houses. This, coupled with a reduction of the corporate tax rate for banks from 40 per cent to 35 per cent, will compel the banks to further reduce the interest rates, which hitherto were very high and thus a major stumbling block to borrowing.

The 2012 macro-economic objectives include, amongst others, to achieve real gross domestic product (GDP) growth of above 7 per cent; attain end-year inflation of more than 7 per cent and maintain gross international reserves of, at least, four months import cover. Such plans should put to rest the concerns of Hon. Dr Musokotwane, the former hon. Minister of Finance and National Planning, who, like a responsible caring mother who is forced to leave her baby with a stranger, is expected to express safety concerns. Your baby, Hon. Dr Musokotwane is safe and sound under the stewardship of Mr Alexander Bwalya Chikwanda. The 2012 Budget just needs the support of hon. Members such as Dr. Musokotwane so that it can maintain the growth trend that was set in motion under the Movement for Multi-party Democracy (MMD).

Mr Speaker, I wish to adopt the debate of my colleagues here on your right about windfall tax as my own.

Hon. UPND Members: Kambwili!

Mr Chenda: It does not exist in the Patriotic Front (PF) Manifesto. Therefore, there is no intention, whatsoever, to introduce it, irrespective of what may have been said in the past. “It is better to be right than to be consistent,” so said Sir Winston Churchill, the former Prime Minister of Great Britain. That is how we shall deal with the windfall tax issue.

Mr Speaker, the doubling of the tax exemption threshold for Pay-As-You-Earn (PAYE) from the current K12 to K24 million per annum will put more money in the pockets of the lowly paid employees. Granted, it may not mean much to the high income earners, but it certainly does to low-income earners.

Mr Speaker, it is pleasing to note that the budgetary allocations for agriculture, health and local government and housing have been significantly increased as compared to the 2011 ones. The importance of education cannot be overemphasised. Indeed, as stated by the hon. Minister of Finance and National Planning, educating our children is an important prerequisite for long-term growth and reduction of inequalities.

Mr Speaker, in my travels during the election campaigns, I often met parents whose children had been accepted either at the University of Zambia (UNZA) or Copperbelt University, but could not proceed with their tertiary education because they had failed to secure bursaries. The future of these intelligent children from a humble background with little or no means is bleak. It hurts me to hear of such stories. What hurt me the most was the fact that there are children from well-to-do families who have been given Government bursaries. Despite it being every Zambian child’s right to be awarded a bursary, I believe that because of limited resources, priority should be given to the underprivileged.

There is an urgent need to review and streamline the bursaries allocation system so that priority is given to the poor. It is clear that those who have more, more is being given to them. Is it because of the connections they have? Whatever the case, time has come to disconnect the connected and connect the unconnected poor people. Once we do this, we will enhance opportunities for further education for the poor. We will then put them on equal standing with others.

Mr Speaker, on the health sector, the removal of user fees is most welcome, as it will enable our people to access health care without worrying about the cost implications. This move will certainly save many lives.

I am also particularly pleased with the provision of K77.9 billion for the net recruitment of 2,500 frontline medical personnel. In my constituency, Bwana Mkubwa, all the clinics operate only up to 1600 hours. This deprives the people who live in that area of health care after 1600 hrs.

Mr Speaker, I still have fresh memories of a poor young lady I met during the election campaigns. She was in tears in front of a closed gate of a clinic with a sick baby on her back. She requested for help to take her sick child to the hospital because the clinic was closed since it was after 1600 hours. It left us with no choice, but to help her because she was so distraught and time was flying. The recruitment of additional personnel, therefore, will offer us an opportunity to consider running the clinics on a twenty-four hour basis so as to handle experiences such as the one I encountered during the campaign period. 

Mr Speaker, being a thorough-bred child of the local government system, I am pleased to see a significant budget allocation to the sector. One can tell that the allocation is unprecedented when compared to what the sector has been receiving the last twenty years. The allocation will go a long way in improving the capacity of the local authorities to deliver quality services. It will make them responsive to the developmental needs of the people once again.

Mr Speaker, the demand for a substantial increase of the CDF allocation is a burning issue on the Floor of this august House, especially for our colleagues on your left. We should trade cautiously with regard to this issue. Increases in the CDF if left unchecked, may lead to it displacing the councils as a source of infrastructure development. It is the duty of councils to develop infrastructure through the normal budgeting process.

Sir, the CDF was introduced to fill the void created by the local authorities’ failure to fully perform its role. With the strengthening of the capacity of local authorities through decentralisation and additional funding, the councils should, perhaps, be gradually weaned off the CDF as is the case in Uganda according to what we learnt during our orientation seminar.

Hon. Opposition Members:  Question!

Mr Chenda: Mr Speakers, the levels to which hon. Members are demanding the CDF to be increased are, therefore, unjustified and unaffordable, considering the limitations of our resource envelope.

In the minds of most of the electorates, the core role of an hon. Member of Parliament, which is to legislate, consider and approve the National Budget, amongst others, is slowly being overshadowed by the perception that it is the responsibility of a Member of Parliament to develop infrastructure in a constituency because of the CDF. Should this be the case, if I may ask?

Whilst still on the local government system, the issue of poor water supply and its siamese twin, poor sanitation, is a matter of greatest concern, especially in my constituency, Bwana Mkubwa. I can safely say that the people of Bwana Mkubwa voted the MMD out of power because of its failure to provide adequate water and good sanitation services. Is it not said that water is life? All hon. Members from the urban constituencies have spoken passionately on the need to urgently invest in water and sanitation infrastructure. It is regrettable, but still a statement of fact that this matter of greatest necessity was given little attention by the previous administration. It could be the reason the hon. MMD Members are seated on your left today.

Mr Speaker, in my home town, Ndola, there has not been any new investment in the water supply and sanitation area in the last twenty years in spite of the increased demand resulting from population growth. The United National Independence Party (UNIP) Government, during the twenty-seven years of its reign, constructed four additional water treatment plants plus two additional sewerage treatment plants for Ndola. This is as it should be. It is for this reason that it is most encouraging that the hon. Minister of Finance and National Planning has made substantial provisions in the Budget for the improvement of water supply and sanitation infrastructure. We should commend him for this.

Mr Speaker, the hon. Minister of Finance and National Planning said it all on agriculture in paragraph 42 of his speech. He said:

“Sir, in the agriculture sector, we will extend support to crops beyond maize, strengthen research and extension services, invest in irrigation, develop and rehabilitate livestock infrastructure and promote disease-free zones. In addition, the Government will reform the agricultural marketing system, promote agro-processing and forward linkages, including through the development of farming blocks. Other strategies will include technological transfer and land development.”

The proposed reduction of corporate income tax that is applicable to the agriculture sector from 15 to 10 per cent is most pleasing to the farmers. It will increase investment and thereby raise productivity in the agriculture sector. Even though the proposed budget allocation to agriculture has increased significantly, it still falls short of the Maputo Declaration of allocating 10 per cent of the National Budget to agriculture. However, this Budget should be seen as the first step in the march to achieving the Maputo Declaration. We should, therefore, support it and march forward together. Indeed, there is no finishing line when it comes to economic development. This Budget, like its subsequent budgets, will not make Zambia cross any finishing line. This Budget is a good beginning to our efforts to build on the successes of the past. Therefore, this Budget needs everyone’s support in this august House.

I thank you, Sir.

The Minister of Information, Broadcasting and Tourism (Mr Lubinda): Mr Speaker, thank you for allowing me to contribute to the general debate on the 2012 National Budget.

From the outset, Sir, let me congratulate the United Party for National Development (UPND)/MMD Electoral Pact for winning the Magoye seat which, as a matter of fact, has been a UPND seat since 2001. In the same vein, let me commend the PF for winning the Chongwe and Nakonde seats ...

Hon. PF Members: Hear, hear!

Mr Lubinda: ... which it has won for the very first time, and without a pact.

Hon. PF Members: Hear, hear!

Mr Lubinda: In addition, I wish to commend the people of the Eastern Province for having given the PF five ward seats in Chama, Chadiza and Lundazi.

Hon. PF Members: Hear, hear!

Mr Lubinda: This, Sir, goes to show that the PF is a party on the move. It is a party that is holding firm to its traditional strongholds while opening up new horizons. To the MMD party, whose ticket the UPND/MMD Electoral Pact used to contest the Nakonde seat without any success, I can only wish it better luck in future.

Hon. PF Members: Hear, hear!

Mr Lubinda:  The MMD party might have to undergo a serious metamorphosis for it to prove His Honour the Vice-President, Dr Guy Scott, wrong that those who shall vote for MMD are not yet born.

Hon. PF Members: Hear, hear!

Mr Lubinda:  Sir, allow me now to join others in commending the hon. Minister of Finance and National Planning for delivering his Budget Speech in such an eloquent and flamboyant manner. No doubt, the flair with which he outlined the monetary and sector policies for 2012 left many mesmerised. The well-thought-out policies that inform the Budget will certainly foster development for the whole country starting from individual level through to home level, institutional level, community and national level.

Sir, some hon. Members debated the PAYE tax threshold and showed a gross misunderstanding of the impact of its being doubled. Let me assist the hon. Minister of Finance and National Planning to clarify this issue. The doubling of the PAYE tax threshold from K1 million to K2 million will not only result in moving more than 80,000 lowly paid workers out of the tax brackets, but will also result in increasing the disposable income of every person who earns between more than K1 million and K2 million per month by 25 per cent.

Mr Ngonga: Hear, hear!

Mr Lubinda: Sir, for the sake of clarity, particularly, for one hon. Member who said that the figures had not changed and that we had not done anything to improve the welfare of the people, let me say that those who earn more than K2 million will have a tax relief. For instance, under the current tax regime, a person earning K5 million will be paying K1,153,250.00 per month as PAYE. In the proposed tax regime, such a person will only pay K896,750.00 per month thereby putting K3,078,000.00 into their pockets at the end of the year.

Hon. Government Members: Hear, hear!

Mr Lubinda: In a similar vein, those earning up to K10 million per month will have K3,939,000.00 put into their pockets per year. This is what is meant by putting more money in the pockets of Zambians.

Hon. Government Members: Hear, hear!

Mr Lubinda: Mr Speaker, at this point, let me agree with those who have argued about improving the gini coefficient. The PF Government is concerned about the disparities in the income levels obtaining in the country. In future, these disparities shall be addressed using both salary and tax policies. It is our desire to pursue the attainment of an egalitarian society with a massive middle class, a small high class and an even smaller low class. That is what this Government aspires to achieve in the next five years.

Hon. Government Members: Hear, hear!{mospagebreak}

Mr Lubinda: Mr Speaker, having dispensed with the matter of personal tax, which affects all of our workers at individual and family level, let me move to the sectors that affect all of us up to national level.

Sir, enlightened and well-informed commentators on the 2012 Budget have commended the hon. Minister of Finance and National Planning and the PF Government for selecting agriculture, education and skills development, health services and local government and housing as the four core development areas for 2012.

Mr Speaker, agriculture is one of the surest ways of fostering growth at individual level, given the abundant water and arable land available to us. In recognition of the fact that agriculture is not necessarily maize production, the Budget has proposed an investment in different crops for varying regions. With an improvement in the extension services and provision of the right inputs, our farmers are expected to produce a bumper harvest of an assortment of crops for both domestic and export markets.

Mr Speaker, the challenge associated with mono-cropping, particularly of maize, is that Zambia does not possess a comparative advantage over her neighbours who are all maize producers. We have recognised that Zambia needs the production of other types of cash crops, particularly legumes and grains such as wheat and rice that have a larger market than maize.

Over the years, my colleagues in the UPND and the PF have lamented the failure by our formal sector to absorb the many youths who are roaming the streets. The answer to this problem has now been pronounced by Hon. Chikwanda who, in his Budget Address, prioritised not only education, but also skills training.

Mr Speaker, as many of us will know, Zambia lacks skilled manpower in many fields. The construction of nine and the rehabilitation of twelve skills training centres is by no means the end of the strategy. However, it is a noble start and it shall be followed up by the construction of more such centres as well as the re-engineering of the entire school curriculum to suit the skills needs of the ever-changing labour market.

Sir, decentralisation has been the cornerstone of the PF Manifesto and it is certain to be the driving force behind all our policies. The increase in grants allocations to councils to K257 billion in addition to the provision of an additional K150 billion for water and sanitation programmes can only be commended. This did not happen over the last twenty years of the MMD misrule.

Hon. MMD Member: Question!

Mr Lubinda: Added to this, and to that “question”, is the commitment to rehabilitate 850 and construct 3,000 boreholes in rural areas.

Hon. MMD Member: Only?

Mr Lubinda: Mr Speaker, I hear somebody shouting “only,” and yet during the time that their party was in the Government, they did not even manage to construct 500 boreholes.

Hon. Government Members: They were burying money.

Mr Lubinda: Instead of opening up boreholes, they were busy burying money in boreholes.

Hon. Government Members: Hear, hear!

Mr Lubinda: The only thing that can be asked for is that all Government departments remain current with their water bills to water utilities. I would like to appeal to my colleagues in the Government, on behalf of the hon. Minister of Finance and National Planning, that all our ministries remain current with payments.

Mr Speaker: Order!

Please, maintain silence. The hon. Member is debating.

Mr Lubinda:  Mr Speaker, I was appealing to my colleagues in the Government, on behalf of the Minister of Finance and National Planning, to remain current with the payments of bills to water utility companies because we cannot on one hand give them K150 billion to support their work and on the other, fail to pay the water bills. I would like to also encourage my fellow hon. Ministers to be current with their water bills, particularly to the Lusaka Water and Sewerage Company, so that there is a departure from the misconduct of former hon. Ministers …

Lieutenant-General Shikapwasha: No, no, no!

Mr Lubinda: I hear somebody shouting “No, no, no.” Mr Speaker, by 20th September, 2011, former hon. Ministers were collectively owing Lusaka Water and Sewerage Company a colossal sum of K175 million for bills that had accumulated in their private homes and I call upon them to own up. I am willing to lay on the Table a debtor’s list which also has the name of Hon. Lieutenant-General Ronnie Shikapwasha.

Hon. Government Members: Hear, hear!

Mr Lubinda: In addition to this, I would like to appeal to my colleagues to, please, take good care of the Government houses that they have been allocated, courtesy of the Zambian people. Let them not remain appearing as though they are pigsties. Maintain them, my friends. Let them not be deserts. With the money that you are being paid by the taxpayers, you can, at least, grow a decent lawn. Change them from the way you found them.

Hon. Government Members: Hear, hear!

Mr Lubinda: Sir, while it is gratifying to note that the hon. Minister of Finance and National Planning has allocated K4.481 trillion to the road sector, it is saddening that the bulk of this money will go towards financing the on-going projects. It is saddening not because continuing with projects started by the MMD is bad, but because most of the construction commenced by the MMD regime has already started to prove to be of poor standard. Many roads that were constructed in a hurry towards the tripartite elections of 20th September, 2011 have already started developing potholes, and yet the hon. Minister of Finance and National Planning has been compelled to allocate a large amount of money to the completion of the construction of the  roads.

Sir, many roads commenced under the so-called Formula One Project on the Copperbelt and Lusaka do not look like they were reconstructed a few months ago. This is all because they were done in a hurry  and with no other consideration, but cheap political gain.

Mr Ngonga: Hear, hear!

Mr Lubinda: Mr Speaker, it will be remembered that, during the run-up to the elections, the MMD Government, through Mr Rupiah Bwezani Banda and Hon. Dr Musokotwane, informed the country that it had sourced more than K1.2 trillion from investors and the local financial market to complete their hurried projects. Probably, Hon. Dr Musokotwane or their spokesperson will be honourable enough to tell us where the balance of this money is, given the fact that their hurried infrastructure projects were not completed. Where is the money? Where is it buried?


Mr Lubinda: It is rather sad that a large amount of the K4 trillion will go towards finalising projects that were selected purely on political and not socio-economic considerations.

That notwithstanding though, we can be glad that the very first PF Budget has committed to work on the Lusaka Ring Roads. It will be recalled that these are the roads that we, while in the Opposition, advocated for ever since 2002. It is our determination to open up the City of Lusaka so as to increase the flow of traffic and efficiency and reduce the cost of doing business. This is how progressive government’s and knowledgeable ministers of finance plan. They put the meagre resources where they expect highest dividends.

Mr Speaker, the synergy between the policy direction covered in the President’s Speech to this House and strategies concerned in the Budget Speech is very remarkable, to say the least.

Bravo to the hon. Minister of Finance and National Planning for having included K30 billion to realise the directives of turning Muchinga into a province and transferring the Southern Province Capital from Livingstone to Choma.

Hon. Government Members: Hear, hear!

Mr Lubinda: I am, particularly, delighted by the initiative of making Livingstone a tourist capital. I am excited because the declaration alone has already attracted numerous inquiries from both local and foreign investors who have indicated their willingness to invest in meetings, incentives, conferences and exhibition facilities in Livingstone.

Sir, with the continued goodwill of the Government and the support of the private sector, Livingstone will never be the same again.

Hon. Government Members: Hear, hear!

Mr Lubinda: We are determined to catapult Livingstone to be among the most sought-after tourist conference capitals in the world.

Mr Speaker, the opening of the Bottom Road, which has been questioned by my colleagues in the UPND, is an added incentive.


Mr Speaker: Order!

Mr Lubinda: Soon, the Government will announce the detailed tourism plan for Livingstone.

Sir, I am not given to speaking with a forked tongue nor to economising the truth. I, obviously, would have been happier with a large allocation to tourism marketing, especially given the tourist events that lie ahead of us, including the hosting of the 21st General Assembly of the United Nations World Trade Organisation (UNWTO) in 2013.

However, Mr Speaker, I am comforted by the knowledge that we have started allocating funds for this event two years before the due date. With the involvement of the private sector, including tour operators, hoteliers and airline companies, among others, we shall get there with relative ease.

Sir, much has been spoken about concerning Zambia’s wildlife, and yet, until the PF Budget was announced, nothing significant had been invested in the development of this important sub-sector. It, is therefore, pleasing to note that there is a phenomenal allocation of K15 billion to recapitalise the operations of the Zambia Wildlife Authority (ZAWA). This is the first Government injection into the wildlife sub-sector ever since ZAWA was established more than a decade ago. All this while, it has been dependent on donor support.

Mr Speaker, as my colleagues will appreciate, this kind of financial injection into ZAWA will enhance its ability to minimise the human-animal conflict. It will be used to reduce poaching by engaging community resource boards in game management areas (GMAs).

Sir, I should not leave out the area of information and communication technology (ICT). Zambia can now be sure that it shall not lag behind on the digital divide as has been the case over the years and I want to be emphatic on that. We shall not go travelling the world, looking for who gives us the largest share in our private pockets.


Mr Lubinda: Mr Speaker, under the PF Government, people can be confident that we shall migrate from analogue to digital without too much hullaballoo and thinking of how many holes we should dig to burry ill-gotten money.


Mr Lubinda: Sir, to demonstrate our commitment, the 2012 Budget has an allocation of K39 billion for communication and K29 billion for digital migration. Within the next few months, we shall announce the commencement of the programme for rolling out the migration exercise. It is our hope that all hon. Members of Parliament, including Hon. Request Muntanga who does not know how to use a computer, will make themselves available to create awareness on this important matter.



Mr Muntanga: On a point of order, Mr Speaker.


Mr Speaker:  A point of order is raised.

Mr Muntanga: Mr Speaker, is the hon. Minister of Information, Broadcasting and Tourism in order to mention my name in his debate and doubt my ability to use the computer, and leave out the fact that Lozis, like him, do not bank money, but burry it in  the sand?


Mr Speaker: Order!

I hope the hon. Member will not raise a second point of order.


Mr Speaker: May the hon. Member continue, please.

Mr Lubinda: Mr Speaker, I thank my friend for taking my joke in the manner that he did.

Sir, I have always spoken about the important role that artists play in disseminating messages to the people. I would like to say that we are satisfied with the provision of money by the hon. Minister of Finance and National Planning in the Budget.

Mr Speaker, on the part of the ministry for which I am responsible, I wish to be very categorical that we shall use these resources availed to us to crack down on piracy. My appeal to all hon. Members gathered in this House is to desist from buying pirated materials so that we put money in the pockets of our hardworking artists.

I thank you, Sir.

Hon. Government Members: Hear, hear!

The Vice-President (Dr Scott): Mr Speaker, on behalf of the Government, I would like to thank all those who have contributed to the debate on this Motion, including the Executive. By my calculation, when the hon. Minister of Finance and National Planning finally stands to wind up debate on this Motion, he will be the seventieth speaker. Therefore, almost half the House has contributed to the debate on this Motion.

Sir, some people took to our budgetary approach very well, rather a few, I fear to say. However, I would like to single out the name of Hon. Felix Mutati who, after a few attacking remarks, switched to positive, constructive suggestions on how we can employ more young people with tax breaks of various sorts. It was a very constructive approach and positive change of attitude.

Mr Speaker, at the same time, I must say I was quite shocked by a few of the assertions made, especially by the Opposition side of the House. It is difficult to know what to say when an hon. Member stands up and says, “According to my Nigerian friends, Zambians are supposed to make money while they are in power so that you do not cry when you lose your job.” I find that a reflection of bad ethos. I will not mention the lady’s name.

Sir, apart from this, we got several repeated or emphasised criticisms which, I think, are rather unfair.

However, firstly, let me take both budgets and briefly compare them. I always like to compare the outside. Hon. Mr Chikwanda’s 2012 Budget, on the front cover, has pictures depicting agriculture, education and medicine. The cover page of last year’s Budget Speech, has a huge machine into which many Japanese man hours have gone, replacing an estimated, according to the hon. Minister of Mines and Natural Resources, 100 or seventy Zambian workers.


The Vice-President: Mr Speaker, the back of this year’s speech emphasises the human focus whereas last year’s emphasises industrialisation. It also has a very interesting picture of a white man walking in between the former President, the Vice-President and hon. Minister of Finance and National Planning. On close inspection, it turns out to be Dominic Strauss Kahn, …


The Vice-President: … the former Managing Director of the International Monetary Fund (IMF), …

Mr Kambwili: Roaming!

The Vice-President: … now very well known throughout the world but, maybe, not so well known, but known, of course, to the people who printed this document. The inclusion of Dominic Strauss Kahn in this picture display points to something that I think hon. Members will not immediately catch, which is that, this is a banker’s Budget. This is what happens when bankers take over from economists in trying to run economies. Bankers think or forget that economics is not a subject about money. It is a subject that deals with food, education, shelter, transport and many other things. It is the preservation of what is precious to us. That is what economics is. Money is just some kind of coupon system or ticketing credit system that we employ for convenience. Therefore, placing emphasis on, for example, bankers’ fundamentals such as interest rates or inflation rates among others, leads very quickly off track.

Mr Speaker, Zambia is not the only country in the world to have been virtually destroyed by bankers making up payment schemes, trying to turn money into a real commodity which it is not. The entire world, with the exception of China, has been brought down by bankers. The answer to our problems is to return to real economics. Real economics is precisely about what you see in the United Nation’s Human Development Index (UNHDI) which is precisely an index of feeding, nutrition, education, health and general well-being. This is the sea change between the one budget and the other. The fact that some figures are the same is a reflection of the timing of this Budget and the way things were done.

Mr Speaker, when the PF won the elections in September, already, nearly four months of work had gone into the preparation of this year’s Budget and each ministry and parastatal organisation had been consulted and asked to put forward their requirements for 2012. We were faced with two possibilities. It was either we modify the Budget as we found it, in short order and swing it around in the right sort of direction with adjustments in the larger variables or use the constitutional provision that we could take ninety days to produce a Budget. This would have possibly been more satisfactory from the point of view of the actual figures. However, it would have gone against the political imperatives that we were hitting the ground running. How much more mockery we would have got from the people on your left had we failed to produce a Budget up to now or next month. We were also looking forward to warrants to spend to manage the first quarter of 2012 among other variables. Therefore, the decision was made to take the fast route. I think we have no apologies to make for that.

Mr Kambwili: Hear, hear!

The Vice-President: Mr Speaker, if you had said you were to bring radical changes within ninety days, you would look very weak if you did not produce an approximation of a Budget within ninety days or only produced it at the end of ninety days. I looked up the origin of the ninety-day notion. It originates in a hundred days. At one stage, Napoleon Bonaparte regained the Government of France for about three months and a week and did a lot in that very short period. It became known as Les cent jours or hundred days. The concept was reintroduced into contemporary politics by Roosevelt in 1953 when he unfolded his new deal in the recession hit, depressed United States of America where he said, “Watch me for a hundred days.”  Ever since then, it has been a staple of American political campaigning and political reporting. All the journalists wait for a hundred days and then say, “How has Carter done in his first hundred days? Of course, they asked, “How has Obama done in his first hundred days?” and “How has Nixon done in his first hundred days?” That is where it comes from. We chopped it down because we thought three digits must be a lot for some of our friends …


The Vice-President: … and that ninety would be an easier number to handle. Also, it happened to coincide with bringing it to Christmas so that we would report on it then. You can never assess anything within ninety days after a long political process. It takes much longer and history has to judge. Chairman Mao was asked, “What is the long-term impact of the French Revolution on the politics of this planet?” He said, “I am afraid, that was only 200 years ago and it is too early to tell.”


The Vice-President: Therefore, we have to accept that some things will become known only after a lot of retrospective consideration.

Mr Speaker, the other point, incidentally, while we are still comparing these two Budgets is on the purchase of maize. In the actual Budget table, the amount of money that was allocated last year for the purchase of strategic reserves of maize this year, which is the money which ostensibly is being used to buy all this maize was only a K150 billion. When we came into the Government, we found that we had already, as a Government, disbursed nearly ten times that amount in buying maize. We actually paid about K1.4 trillion for it and have since had to commit ourselves to a further K700 billion. Therefore, the Budget of last year is no guide at all to what has been budgeted this year for maize marketing. We have, at least, done the decent thing and doubled it although, perhaps, we should have increased it by more than that. However, when you have not yet reconsidered what your marketing policies are because you are busy producing a Budget in seven weeks from hitting the ground, I think it is more reasonable we leave it as it is. Therefore, the criticism that we have reduced the allocation to the Food Reserve Agency (FRA) is simply not true. Comparing Budget for Budget, it is totally untrue.

On the issue of tax confusions, I agree with Hon. Lubinda, but I think he did the sums wrongly. Essentially, if you are earning K2 million, you will save a quarter of a million which is K250,000 which is 25 per cent. If you earn sufficiently high above that, you save K300,000 a month which is 30 per cent. If you earn sufficiently high above that, you save 35 per cent, which is K350,000. That is the maximum saving afforded in this Budget. It is for everybody, except if they are earning less than K2 million, then they will save less than K250,000.

I agree with some speakers that you can argue that the value added tax (VAT) ought to come down and it could be more equitable. There is an argument you can make to that effect. It is a question of the administration and other things have to be considered. If the hon. Minister of Finance and National Planning were to put it to me that the next step is to reduce VAT, I would be the first to agree with him because it also affects the people who are not earning formally. Incidentally, even the 2,600 people of Magoye who voted for the PF, at least, got the point that if you put an extra trillion kwacha into circulation, which is what this tax cut does, it will impact positively on everybody.

Hon. Government Members: Hear, hear!

The Vice-President: It means that more people will want to buy their milk, meat, roast maize and pumpkins and so on and so forth. It is, therefore, a stimulus and not just a humanitarian measure.

Hon. Government Members: Hear, hear!

The Vice-President: Mr Speaker, the four key sectors of health, education and skills development, local government and housing and agriculture that have been a bitterly neglected part of this country’s governance structure are receiving the lion’s share of the increases in this Budget. This is very clear in the Budget when one compares last year’s figures to this year’s. Some of the figures are not justifiable due to the fact that they have been inherited. However, they will turn out to be more justifiable when we examine and meet with the ministries in question. In this case, they will be adjusted, either upwards or downwards with supplementary estimates.

Mr Speaker, a budget is not cast in stone and no MMD Government Budget has ever been cast in stone that it was not modified as we went on. I doubt very much if, in the PF, we will attain the brilliant foresight needed to govern minus supplementary estimates.

Mr Kambwili: Ichishinka chisuma!

The Vice-President: Mr Speaker, I just want to come back to the issue of maize.

It has been very clear that this enormous expansion in the quantity of maize being handled by the FRA has been the result of farmers of any size, including emerging farmers with 2 to 5 hectares or 5 to 10 hectares or commercial farmers, accessing this huge subsidy on the price of maize and the cost of inputs. It has been accessed by people who are already rich and not by the poor people, the so-called million poor, who are allegedly the ones being targeted.

Mr Speaker, from the research that has been carried out, it is simply not true that poor people have beneficiated from this programme. This programme is killing the National Treasury. Let us not make any mistake about that. We are struggling to actually match it with what we have inherited. Unless ways are found of focusing the benefit of this programme on the small peoples’ pockets, then it will have to count as a failure.

Mr Speaker, speaking of maize policies and votes, why did the entire population of the Southern Province reject the MMD if it had such wonderful programmes …


The Vice-President: … such as the Farmer Input Support Programme (FISP) and FRA? The entire population of Central and Copperbelt provinces rejected the MMD. The rural Copperbelt might have accepted it simply because they do not depend on fertiliser and maize growing for their livelihood.

In the Eastern Province, the MMD got votes, but there is no systematic evidence to show that this particular programme for the redistribution of wealth has had any beneficial effect, let alone political. Given how much it has cost in terms of functioning hospitals, schools and wages for people who are earners, I think that it needs to be seriously reconsidered and this is exactly what we shall do.

Mr Speaker, with these few words, I, again, would like to thank you and the House and pass the buck.

Hon. Government Members: Hear, hear!{mospagebreak}


Mr Hamududu (Bweengwa): Mr Speaker, your Committee considered the Estimates of Revenue and Expenditure for the Financial Year, 1st January to 31st December, 2012. In doing so, various stakeholders were invited to appear before it to make written and oral submissions. I now highlight some of the findings and recommendations of your Committee.

Sir, your Committee notes the substantial increase in the total Budget from K20.5 trillion in 2011 to K27.7 trillion in 2012. However, it is concerned that there are no strong measures put in place to increase domestic resource mobilisation. To meet the proposed increase in expenditure, the Government will obviously resort to borrowing from both domestic and external sources. Your Committee notes that gross external borrowing in the 2012 Budget is estimated at K4.5 trillion. Your Committee is not necessarily against borrowing, particularly if loans will be channelled to capital projects that boost the long-term capacity of the economy. In this regard, it urges the Government to ensure that due care is given to avoid unsustainable borrowing that may lead the country into yet another debt trap.

It further urges the Government to ensure that the law governing debt contraction and management is brought to Parliament for enactment. Your Committee also recommends that the Government continues to explore measures to increase domestic resource mobilisation to sustain the Budget in the long run. Your Committee notes the increase of the income tax threshold from K1 million per month in the 2011 Budget to K2 million per month in the 2012 Budget in order to give relief to the workers. However, it still urges the Government to continue …


Mr Speaker: Order!

I would like the hon. Member to report while the House is silent.

The hon. Member may proceed.

Mr Hamududu: … exploring further measures to reduce the tax burden on workers.

Sir, your Committee notes that with the reduction of the statutory reserve ratio from 8 per cent to 5 per cent, commercial banks responded favourably by reducing the interest rates. Your Committee also notes that the Government has proposed a reduction in corporate tax for the banking sector from 40 per cent to 35 per cent in the 2012 Budget. It is hoped that a combination of these measures will contribute to the reduction of lending rates which will make credit affordable for entrepreneurship in the country.

Sir, your Committee notes the 37.9 per cent increase in the allocation to the agriculture sector. However, when measured against the total Budget, this allocation is only 6.1 per cent. This does not measure favourably with the Maputo Declaration that commits governments to allocate a minimum of 10 per cent of their national budgets to the agriculture sector.

Further, your Committee notes that the Government has allocated a significant portion to the FISP and strategic food reserves, while a limited allocation has been provided for other aspects of agriculture such as livestock development, fisheries, crop diversification, irrigation development, research and extension services. In the light of this, your Committee urges the Government to improve the allocation to this sector in order to adequately cater for the above-mentioned aspects of agriculture. 
Mr Speaker, your Committee notes that the 2012 budgetary allocation to the education sector has been increased by 26.7 per cent. While this is appreciated, your Committee is disappointed that when measured against the total Budget, this allocation has reduced from 18.6 per cent in the 2011 Budget to 17.5 per cent in the 2012 Budget. Your Committee is aware of the Cairo Declaration that encourages countries to commit, at least, 20 per cent of their national budgets to the education sector. The proposed reduction is, therefore, not in line with this declaration.

Further, while your Committee appreciates the building of new public universities across the country, it notes with sadness that the current state of the existing universities leaves much to be desired. In this respect, your Committee implores the Government, in addition to the proposed construction of new universities, to immediately attend to the challenges affecting the existing public universities such as the huge debt stock; brain drain; dilapidated infrastructure; and inadequate capacity of hostels and lecture rooms.

Sir, your Committee notes the Government‘s plan to build a university at Lubwa Mission. It was also informed that another university is under construction at Mulakupikwa, in addition to the one being proposed at Lubwa Mission. This means that there will be two universities in Chinsali District. Further, both universities are in Muchinga Province. This multiplicity of universities in one province also applies to Lusaka Province where Palabana Dairy Training Institute and Chalimbana College of Education are to be turned into universities.

In this regard, your Committee urges the Government to revisit the above decisions and instead extend the construction of public universities to other provinces that have no universities such as Luapula.

Mr Speaker, on the health sector, your Committee notes the 45.5 per cent increase to this sector. In relation to the total Budget, the allocation stands at 9.3 per cent. This allocation is inadequate, considering the challenges facing the health sector such as poor supply of medicines, inadequate medical personnel, and dilapidated infrastructure. Further, this allocation is not in keeping with the Abuja Declaration which encourages governments to allocate, at least, 15 per cent of their national budgets to the health sector.

With regard to the abolition of user fees for both urban and rural areas meant to increase access to health care services, your Committee recommends that the Government increases the allocation to the health sector. This will cover the funding gaps that will be created by the removal of user fees so that it does not compromise the provision of health care services.

Sir, your Committee is concerned about the marked reduction in the budgetary allocation to the water and sanitation sector from K555 billion in 2011 to K150.3 billion in 2012. Inevitably, inadequate investment in this sector has a corresponding effect on poverty and the disease burden. This is given credence in the Millennium Development Goals (MDGs) Progress Report which estimates that 80 per cent of the preventable diseases in Zambia are related to poor sanitation.

Clearly, the allocation to this very important sector is insignificant. Your Committee, therefore, recommends that the Government reviews the proposed budgetary allocation.

Mr Speaker, on local government and housing development, your Committee notices the 100 per cent increase in the budgetary allocation of grants to local authorities. It notes the Government’s plan to decentralise appropriate functions to councils in the medium term and the focus to build capacity at local level in preparation for the phased devolution of the powers and functions.

However, your Committee is concerned that grants to councils and constituency development funds are only 1 per cent of the total Budget. Grants allocation to councils is clearly insignificant to meet the huge challenges facing councils in Zambia such as non-payment of pension arrears and terminal benefits.

Your Committee, therefore, recommends that an inventory of the total debt stock by the councils be conducted so as to come up with an appropriate figure to provide to councils for them to be viable. Further, the Government should increase the allocation to the local authorities for them to meet the challenges they are currently facing.

Sir, with regard to the Constituency Development Fund (CDF), your Committee notes the proposed marginal increase. The importance of the CDF to the development of the constituencies, as attested by various stakeholders, cannot be overemphasised. Your Committee notes that the proposed allocation is not adequate and, therefore, recommends that the Government considerably increases the CDF allocation.

Hon. Opposition Members: Hear, hear!

Mr Hamududu: Please, note that ‘considerably’ is the word.

Mr Speaker, as regards mining taxation, your Committee notes a proposed increase in the mineral royalty tax from 3 per cent to 6 per cent. However, …

Mr Speaker: Order!

Business was suspended from 1615 hours until 1630 hours.

[MR SPEAKER in the Chair]

Mr Hamududu: Mr Speaker, when business was suspended, I was saying that your Committee notes the proposed increase in the mineral royalty tax from 3 per cent to 6 per cent. However, most of the witnesses who appeared before your Committee argued that the country is still not getting the full benefits from the rich mineral resources in this period of high metal prices.

Sir, it is also important to report that the Chamber of Mines did not object to the proposed mineral royalty tax when it appeared before your Committee.

In this regard, your Committee urges the Government to continue to explore ways of ensuring that the country benefits from its mineral wealth, especially in the period of high mineral prices such as the one we are in.

In conclusion, Sir, I wish to record your Committee’s indebtedness and gratitude to you for according it the opportunity to serve on this important Committee. I also thank all the stakeholders who appeared before your Committee and contributed to its work. Gratitude also goes to the Clerk of the National Assembly and her staff for the services rendered to your Committee.

I thank you, Mr Speaker.

Hon. Opposition Members: Hear, hear!

The Minister of Finance and National Planning (Mr Chikwanda): Mr Speaker, my primary task and inescapable duty and responsibility is to express my profound thanks to the hon. Members for the outstanding contributions made in the course of the debate on the Motion on the estimates of revenue and expenditure for the fiscal year 2012. It is a matter of profound regret that a lot of these brilliant ideas could not be embodied in the 2012 Budget. We will do our utmost to take them on board in the subsequent fiscal years.

Mr Speaker, many statements that have been made in this august House have major significance, relevance and bearing. Statements always have, at least, two dimensions. The statements that are normative, that is to say, opinions or value judgments, can only be acknowledged and respected. The other statements that relate to facts and can be empirically ascertained are the ones I will attempt to respond to as briefly and explicitly as possible.

Mr Speaker, I will begin with one issue that appears not to have been understood by the both sides of House. This is the way the PAYE has been restructured. The figure of 80,000, which I discussed in my speech, relates to workers who earn between K12 million and K24 million per year and will, therefore, not be liable to PAYE tax. This figure is also in addition to the approximately 112,000 workers who are already not paying PAYE because they earn K12 million per year or less.

This means that if you add 80,000 employees to the 112,000 employees who are already off the PAYE tax roll, then more than 192,000 workers who are in the formal sector employment will be off the PAYE tax roll. The balance of 500,000 formal sector employees who are in higher income brackets will also benefit because they will actually not be subjected to PAYE for up to the first K24 million of their total annual earnings. The way the tax bands have been realigned will entail more benefits for taxpayers. This is true empowerment and more money in the pockets of the citizens.

Hon. Government Members: Hear, hear!

Mr Chikwanda: Mr Speaker, the explanation above has demonstrated how the tax package concessions will yield K1 trillion extra disposable income for all workers who earn taxable incomes.

Mr Speaker, the thrust of the PF Government is to continue revisiting the taxation parameters to ensure that the tax levels are neither punitive nor a disincentive. The PF Government will not criminalise genuine enterprise, but decidedly subject incomes that have their origins in fraudulence and dishonesty to rigorous scrutiny and correctional action by law enforcement agencies. In this Government’s scheme of things, irresponsibility, dishonesty and all forms of fraudulence will always be absolutely tolerance zero-rated.

Mr Lubinda: Hear, hear!

Mr Chikwanda: These evils are not only morally repulsive and unacceptable, but also distort rewards from effort and are a repugnant disincentive to diligence, civic duty and social responsibility. I wish to emphasise the fact that the PF Government is very responsible, dignified and has the full mandate of the people of Zambia. Responsible as we are, we will not play to the gallery and act impulsively just because someone says we should reintroduce windfall tax.

Sir, it is extremely important to understand that the measures I announced in the 2012 Budget Address will ensure that the Government gets some revenue while the cow that produces the milk also survives. It would, therefore, be unwise for the Government to reintroduce windfall tax when the metal prices are unstable and are now visibly going downwards.

Hon. Government Members: Hear, hear!

Mr Chikwanda: It is for this reason that I am disappointed and not angry with our colleagues who were in Government yesterday, abolished the windfall tax, but are now calling for its reintroduction.

Mr Lubinda: They are hypocrites.


Mr Chikwanda: Are they really being genuine, constructive and patriotic?

Hon. Government Members: No. They are hypocrites.


Mr Speaker: Order!

Mr Chikwanda: Yes, this includes some hon. Members on the Government side. Our colleagues have not only been unobjective, but are also being unpatriotic because their debates on windfall tax are not bordering on fostering stability of investment, ensuring workers’ security of tenure and facilitating sustainable mobilisation of resources.

Mr Speaker, allow me to talk about our extremely limited fiscal space or the resource envelope. Against overwhelming legitimate demands all over the country, our Budget of K27 trillion or US$5.5 billion is just a tiny drop in the ocean. In the developed countries, our National Budget cannot even cover the annual expenditures of a single big university. Our economy was left by the previous Government at an exceedingly low ebb. The shanty compounds, in which the majority of our citizens in the urban areas live, have inadequate necessities such as water and sanitation, and electricity. Zambian villages in the far-flung areas have barely seen any development. Our brothers and sisters in the villages were condemned to perpetual neglect and abandonment with rural poverty at over 77 per cent.

Mr Speaker, in the midst of all this, the previous Government maintained a Budget that largely targeted consumption in the Public Service at the expense of poverty reduction and infrastructure development nationwide. This sums up the immensity of the challenge we, as leaders, face collectively. In the forty-seven years of our independence, our pace of development has not been robust enough to get us to the respectable development league.


Mr Chikwanda: May I, please, have the ears of the Backbench.

Mr Speaker, in 1964, our economy was the second largest in the Southern Africa sub-continent. We were at 35 per cent of South Africa’s gross domestic product (GDP). Currently, we are at a dismal 10 per cent or less of that country’s GDP. Our stagnation and decline are deeply rooted in the misdirected policies and lack of appropriate political direction. Evidently, the poor policies led to the country’s inability to fully develop the agriculture and livestock sector to its optimum potential. This is despite having rich and arable land, abundant waters and good climatic conditions.

In the recent years, we have injected huge amounts of money into maize to finance its production, purchase and storage. Most of the resources in this sector have been misused, thereby depriving other agricultural sub-sectors of critical funds and negatively affecting accelerated progress and diversification in both crop and livestock agriculture.

Mr Speaker, a serious rethink is needed by all of us. In this regard, I wish to request the support of all hon. Members in this august House to ensure that there is stability of investment, job creation, security of tenure for workers and sustainable mobilisation of resources. I take this opportunity to reiterate that my ministry will be very strict and will invoke stern scrutiny when releasing funds in 2012.

Mr Speaker, there has been demand for the inclusion of more roads countrywide that requires feasibility studies in the 2012 fiscal year. These demands are not beyond the capacity of the Government to accommodate. The roads mentioned in the President’s Address to this august House and those in my Budget Speech do not entail a caveat on other roads. If resource mobilisation efforts, even as an off-balance sheet item, so permit, it will be expedient to carry out feasibility studies on as many roads as possible so that as, funds become available, we could undertake construction with minimal delays.


Mr Speaker: Order!

Mr Chikwanda: What kind of a Backbench is this that does not listen to what is being said?


Mr Chikwanda: Mr Speaker, I believe that this will curtail possible regional feuds that are morally plausible, but could spill into cleavages that have the potential to imperil national unity and the much-needed sustainable development.

Mr Speaker, I share the view that the CDF, when properly used and accounted for, is a fast track in the delivery of community-based development to the people.

Hon. Members: Hear, hear!

Mr Chikwanda: The seemingly inadequate allocation is merely a reflection and a function of the glaring huge resource gap that we have. It is also a reflection of the disconnection between consumption expenditure and infrastructure programmes in the structure of the Budget that was, for many years, presented to this august House by the previous Government. However, as a listening Government, we have heard the suggestions from various hon. Members and, in the spirit of give and take, I intend to make a modest adjustment within the 2012 Budget so as to accommodate the suggestions put forward.

Hon. Members: Hear, hear! Minister!

Mr Chikwanda: Mr Speaker, this also means shifting resources from some budget line to the CDF spending line, …

Hon. Members: Hear, hear!

Mr Chikwanda: … which is something I have reluctantly considered, but will do.

Hon. Members: Hear, hear!

Mr Chikwanda: Mr Speaker, lastly, I wish to thank, once more, many hon. Colleagues for their contribution in debating the Motion I laid before the House on Friday 11th November, 2011, and for their support. I am also grateful to your Committee for its thorough report and for bringing out a number of issues that we have taken note of. This Government will consider a number of these issues in future budgets.

Mr Muntanga: Hear, hear!

Mr Chikwanda: Mr Speaker, let me just make a very brief comment on external borrowing, a concern that was genuinely brought to our attention by the hon. Member for Bweengwa. I would like to assure the House that external borrowing will exclusively be used to finance growth-promoting projects, particularly in agriculture.

Hon. Members: Hear, hear!

Mr Chikwanda: This is the only way we can ensure long-term loan repayment sustainability.

Mr Speaker, as regards the increase in internal revenue mobilisation, it is only possible with a growing economy. Chasing people in the informal sector has cost implications beyond realisable benefits and has the added future complication of quantification of those earnings. I do not want to send an army of tax collectors who will cost me immensely more than they will bring in at the end the day.

Hon. Members: Hear, hear!

Mr Chikwanda: Mr Speaker, again, I thank the House for the very responsible debates. I urge them not to wait until they come to the House to bring forth those progressive ideas. They should make it a habit to also visit ministries, which are public institutions, for more detailed discussions.

Hon. Members: Hear, hear!

Mr Chikwanda: Mr Speaker, I thank you.

Hon. Members: Hear, hear!

Question put and agreed to.


The Vice-President: Mr Speaker, I beg to move that the House do now adjourn.

Question put and agreed to.


The House adjourned at 1652 hours until 1430 hours on Wednesday, 30th November, 2011.