DAILY PARLIAMENTARY DEBATES FOR THE FIRST SESSION OF THE TENTH ASSEMBLY

Thursday, 22nd March, 2007

The House met at 1430 hours

[MR SPEAKER in the Chair]

NATIONAL ANTHEM

PRAYER

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QUESTIONS

PAN AFRICAN INSTITUTE FOR DEVELOPMENT-EAST AND SOUTHERN AFRICAN REGION

373. Mr Kakusa (Kabwe Central) asked the Minister of Foreign Affairs:

(a) why the Pan African Institute for Development East and Southern African Region (PAIDESA) situated in Kabwe had been closed; and

(b) whether any arrangements were made to pay the affected workers, some of whom had worked for the organisation for thirty years, their dues.

The Minister of Information and Broadcasting Services (Mr Mwaanga): Mr Speaker, I wish to inform this august House that in 1998 the major financiers of the Pan African Institute for Development East and Southern Africa Region (PAIDESA) the Netherlands, Switzerland and Canada withdrew financial assistance because the management of PAIDESA failed to account for funds amounting to US$952,000. Consequently, all the lecturers resigned. Since then, the institution has undergone serious financial difficulties making it impossible to sustain its operations. As of now, employees are owed back pay due to the difficulties I have outlined above.

Mr Speaker, I further wish to inform this august House that no arrangements have been made to pay the affected workers because PAIDESA has no funds. However, my ministry is consulting with the Ministry of Justice to determine the legal status of PAIDESA in order to find a lasting solution. The ministry sympathises with the affected workers and is looking forward to a quick settlement of this matter which is currently in the courts of law.

I thank you, Mr Speaker.

LOCAL COURTS IN LUAMPA PARLIAMENTARY CONSTITUENCY

374. Ms Limata (Luampa) asked the Minister of Justice:

(a) when the following local courts in the Luampa Parliamentary Constituency would be rehabilitated:

(i) Kahumbu Local Court; and
(ii) Mulwa Local Court; and

(b) when new local courts would be built at Liyoni and Likupekepe in the Luampa Parliamentary Constituency.

The Minister of Justice (Mr Kunda): Mr Speaker, due to budgetary constraints, the Government is not in a position to embark on the rehabilitation of Kahumbu and Mulwa Local Courts in Luampa Parliamentary Constituency this year.

Given our limited budget, the trend the Judiciary has adopted is to rehabilitate a few court buildings in selected provinces in a given year. The House may wish to know that in 2006 Western Province was given K547, 948,000 for the rehabilitation of Lukandawanyau, Mulonga, Mwandi, Kalabo, Kaoma and Sesheke local courts.

Mr Speaker, the Judiciary is ready to embark on building new local and subordinate courts throughout the country within the confines of available resources. Consideration will be given to the construction of the two local courts in future budgets. I must also say that I have taken note of the issues raised in this particular question.

I thank you, Mr Speaker.

Ms Limata: Mr Speaker, is the hon. Minister aware that up to now the Likupekupe and Liyoni are still operating under trees?

Mr Kunda: Mr Speaker, I am aware that new courts are needed in the constituency, particularly those local courts.

I thank you, Mr Spekaer.

Mr Mwangala (Nalolo): Mr Speaker, what degree of damage has been caused to the two local courts which have invited rehabilitation?

Mr Kunda: Mr Speaker, all I can say is that the local courts require rehabilitation and that assessments have been done on the kind of rehabilitation required.

I thank you, Mr Speaker.

Mr Ngoma (Sinda): Mr Speaker, could the Government be kind enough to prioritise the giving of resources to these two areas in Western Province where justice is being dispensed under trees.

Mr Kunda: Mr Speaker, I said that I have taken note of the issues raised in this particular question.

I thank you, Sir.

Mr Muntanga (Kalomo): Mr Speaker, I would like the hon. Minister to be categorical on the steps he is going to take to ensure that there are actual buildings being constructed in the Luampa Constituency where justice is being dispensed under trees.

Mr Kunda: I have already explained that we will give consideration in the future budget. If you recall, Mr Speaker, this year we were making some amendments and we have already started addressing these problems seriously.

I thank you, Sir.

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BILLS

SECOND READING

VALUE ADDED TAX (AMENDMENT) BILL

The Minister of Finance and National Planning (Mr Magande): Mr Speaker, I beg to move that the Bill be now read a second time.

Mr Speaker, as all my hon. Members are aware, I came with the budget speech here in which I made proposals to introduce measures to raise revenue and, at the moment, this Bill is precisely to help us raise revenue to support the estimates of expenditure. I beg to move that it be supported.

I thank you, Sir.

Mr Beene (Itezhi-tezhi): Mr Speaker, allow me to brief the House on some of the issues that came to your Committee’s attention during deliberations on the Value Added Tax (VAT) Bill.

Firstly, Mr Speaker, it is notable that the exemption of interest components of a finance lease from VAT is a welcome move in the business community. A lease is a contract whereby a real or personal property or asset is provided by a lessor or owner of the asset to a lessee or debtor for a period of time in exchange for compensation in the form of rent or interest. Leases are usually entered into by primarily to acquire the right to use or control in assets. Leasing is popular because it can conserve cash, give protection against obsolescence and interest changes. There are two types of leases:

(i) Non-capitalised lease (no sale or purchase of assets is assumed). This is called an operating lease; and

(ii) Capitalised (sale or purchase of an asset). This is called a capital or finance lease.

Thus, the removal of VAT on the interest component on finance leases will reduce the cost of lease finance and this should enable Zambians to access useful form of asset financing. This measure is long overdue in this country.

Mr Speaker, your Committee also welcomed the introduction of voluntary VAT registration for small businesses. The measure is expected to broaden the tax base and thereby generate additional revenue. However, the belief that small business people are keen to enhance the growth of their enterprise, and therefore, ready to voluntarily register for VAT, as this will make it easier for them to do business with registered suppliers seems too optimistic.

Mr Speaker, the amendment of the Value Added Tax Act as it applies to maximum taxable values is an attempt to improve the administration of the tax on those products, whose distribution is extremely fragmented so that trade in these items involves a heterogeneous group of informal traders. The marginal revenue of an extra K1 billion will only result from the addition of cellular phones, talk time and mineral water to the tax schedule, while enforcement will be difficult. The measure should help broaden the tax base.

Sir, the standard rating of magazines at 17.5 per cent is in fact, an introduction of VAT on these publications. This brings magazines in line with similar reading materials. Some of the magazines on the margin may face considerable reduced leadership.

Mr Speaker, your Committee received an earnest appeal that the Zambia Agency for Persons with Disabilities be exempted from paying VAT to enable it to provide services to more disabled persons.

There was also a concern from the business world that the rate of VAT in Zambia was too high and coupled with other costs of doing business in the country, contributed to making Zambian products uncompetitive on local, regional and international markets.

Mr Speaker, your Committee implores the Government to give favourable consideration to the pleas of the people with disabilities and to address them in a holistic manner. In addition, serious consideration should also be given to reducing the rate of VAT in the next budget.

Finally, may I thank you for your invaluable advice throughout our deliberations. I also thank all members of your Committee on Estimates, without whose commitment and dedication, my job would have been impossible to perform. In addition, I wish to thank the Office of the Clerk of the National Assembly for their unfailing assistance and services to your Committee throughout their deliberations.

Lastly, Mr Speaker, I wish to note and convey your Committee’s appreciation of the role played by the consultant to the National Assembly in assisting with analysis of the 2007 Budget and consideration of the Bills.

I thank you, Sir.

Mr Magande: Mr Speaker, I wish to thank the Committee and the Chairperson for having gone through thoroughly in our presentations. From the statement by the Chairperson, it is obvious that there was a lot of understanding of what the ministry and the Government is trying to do. We do appreciate the issues of the disabled and perhaps, in one of our recommendations which we have made, not necessarily on VAT, but on some other taxes we might give consideration before the committee stage. Otherwise, I am most grateful and I beg to move.

Mr Speaker: Order!

Question put and agreed to and the Bill read a second time.

Committed to a committee of the whole House.

Committee on Tuesday, 27th March, 2007.

INCOME TAX (AMENDMENT) BILL

Mr Magande: Mr Speaker, I beg to move that the Bill be now read a second time.

Mr Speaker again this is a bill intended to support the Budget which the august House has been discussing so efficiently and I seek the support of the House with measures that are in the Bill.

I thank you, Mr Speaker.

 Mr Beene: Mr Speaker, I thank you for this opportunity to brief the august House as regards the deliberations of your Committee in relation to the Income Tax (Amendment) Bill 2007.

Allow me, Sir, to prefix my brief with a general comment on the incentives being offered under the Zambia Development Agency (ZDA) Act. Generous incentives have been offered to investors in the Multi-Facility Economic Zones (MFEZ) and priority sectors. The MFEZ is an idea that has been translated from Malaysia in the expectation that Zambia will emulate the Asian tigers in economic development. Already the Japanese Government has engaged a Malaysian company to develop an MFEZ in Lusaka.

Mr Speaker, experience teaches that where there is a justified and quantifiable development need, there may be a cause to use tax instruments to promote such development or to promote efficiency of production. Special incentives include exemptions, tax allowances, tax credits or special tax relief designed to assist particular groups or activities in specified industries or priority sectors as under the ZDA Act or locations such as the Multi-Facility Economic Zones. 

Again, experience shows that these incentives serve either to reduce or defer tax liability and that there must be careful planning because tax incentives for special purposes often tend to be ad hoc and not properly integrated into the overall tax structure.

In general, the effectiveness of a tax is inversely related to the number of goals it is meant to achieve.  Tax incentives on the scale defined in the ZDA Act may override tax instruments with multiple objectives. They may almost certainly complicate compliance and lead to unproductive efforts to obtain their benefits.

Mr Speaker, the experience of Indonesia in the early 1980s is a good example of the dangers of extending too many incentives across the board.  Prior to 1983, the country had a massive allay of investment incentives designed to favour specific industries, promote exports, promote regions, promote technology transfers, strengthen the stock exchange and other objectives.

The numerous and often contradictory tax incentives created an excessively complicated system unable to fulfill its revenue function or serve the special purpose originally intended. In 1983 Indonesia simply eliminated the incentives altogether. 

Questions still remain as to whether Zambians will be able to meet the qualifications for the MFEZ under the ZDA Act. It is hoped that the requirements will not be prohibitive as to disqualify Zambians even before the zones are established. Already the Lusaka MFEZ is to be in the hands of the Malaysian company. Clearly Zambians are not qualified. Another is to be developed by the Chinese on the Copperbelt. 

Mr Speaker, the danger exists that the MFEZ may turn out to be trading or manufacturing export enclaves in Zambia, textile manufacturing, personal computer assembly and toy manufacturing etc. In such cases foreign investors often pay low rents for the rights to use land. They bring in their own foreign capital, skilled labour, hire local skilled workers at subsistent wages and have a minimal impact on the rest of the economy even though they may generate significant export revenues.

The distinction  between our Gross Domestic Product (GDP) and the measure of the value of output generated within the defined geographic boundaries of Zambia and Gross National Product (GNP) which measures the income actually earned by nationals becomes extremely important to the extent that the export sectors in the MFEZ, the mining industry etc in Zambia or for that matter any sector of the economy is foreign owned and operated, GDP will be much higher than GNP and few of the befits of export trade will actually accrue to Zambian nationals and may even be possible for the value of exports to be greater than GNP. For example, foreign export earnings may exceed the total value of domestically accrued income.  With increasing foreign ownership of companies in a wide range of economic activities, export earnings may not benefit those in the lower income brackets.

Mr Speaker, the major gains from export trade will instead accrue to non-nationals who often repatriate larger proportions of these earnings. Such recent exports include manufacturing, mining or plantation activities in poor countries like Zambia tend to mask the fact that a large proportion of the benefits are still being reaped by foreign enterprises.

What this implies is that export performance by poor countries can be deceptive unless we analyse the character and structure of the export earnings by ascertaining who owns or controls the factors of production that are rewarded as a result of export expansion.

Finally, Mr Speaker, the Government should ensure that the foreign companies which will be operating in the MFEZ under the umbrella of the ZDA do not suppress domestic enterprises and using their superior capital, knowledge, worldwide contact, advertising skills and range of essential support services to drive out competitors and inhibit the emergence of small scale local enterprise.

With that general comment, Sir, allow me to make mention very briefly of the specific issues raised by the stakeholders with regard to the Bill in question. As regards the provision for various incentives for a business operating in the priority sectors declared under the Zambia Development Agency Act, it was stated that the Zambian Development Act provided for two types of investors in respect of the Multi-Facility Economic Zones.

An investor who would operate a business in a Multi-Facility Economic Zone and an investor who would develop the infrastructure and facility in the MFEZ in which business enterprise would then operate.

It was argued that the investor who would develop the infrastructure and facilities of an MFEZ needed to access the same incentives as the investor who would operate business enterprise in the MFEZ as that would be the only way that the Government could encourage the private sector to participate in the development of the MFEZs.  It was therefore proposed that this be reflected in the provision.

Your Committee was informed that there were three types of investors that could be registered under the ZDA Act. There were those investors who invested in the non-priority sectors, those investors in the priority sectors as per second schedule to the ZDA Act and those investing in the MFEZs. It was proposed, therefore, that there should be two sets of incentives provided for.

One set of incentives would be applicable to investors who will invest in the priority sectors that were provided for in the second schedule to the Zambia Development Agency Act and another set of incentives should apply to investors who would invest in the Multi-Facility Economic Zone (MFEZ) priority sectors. While the incentives for investors in the priority sectors were provided for in the 2006 Budget presented to Parliament, they were not affected by way of amendments made to the Income Tax Act in 2006.

As regards the proposal to increase the tax credit taxable to persons with disabilities from K36,000 to K72,000 per annum, concern was expressed that this increase would not able persons with disabilities to access their basic needs basket as currently the total needs basket was pegged at K1,436,400 before. An earnest appeal was made that the tax credit be raised from K36,000 to K1,436,400 per annum. It was proposed that all the incentives offered under the Zambia Development Agency Act should take into account issues of persons with disabilities.

Mr Speaker, it was also stated that while the increase in the tax exempt threshold was commendable the Government needed to further increase minimum threshold to an income of K9.6 million per year and limit the maximum rate to 30 per cent. The top rate of 30 per cent was achievable and desirable for two important reasons.

(i) Increased disposable incomes of employees would increase the level of direct consumption based tax, mainly in a form of VAT.

(ii) It would stimulate local business growth through increased consumer spending on locally sourced goods and services. A prominent tax base would more than compensate any revenue loss arising from a lower to top rate of Pay-As-You-Earn.

Mr Speaker, further, the minimum food basket cost above K1 million per month. Any monthly wage of K800, 000 and below should ideally, therefore not be subjected to tax under Pay-As-You-Earn. Stakeholders were concerned that the incentives under the Zambia Development Agency Act may remain illusive to local enterprises as the amount of investment capital pegged at US$500,000 was out of reach for most of them.

Sir, your Committee welcomed the proposed increase in the tax credit for persons with disabilities. They, however, agreed that the amount of tax credit is too small to make any meaningful impact on the lives of persons with disabilities. Many of them live in abject poverty. Accordingly, your Committee strongly recommended that tax credit for persons with disabilities be further increased to K144, 000 instead of the proposed K72, 000. Your Committee also strongly retaliates that issues affecting the participation economy life of persons with disabilities must be taken seriously and given due consideration.

Mr Speaker, your Committee also welcomed the increase in the tax allowable pension contribution from K15, 000 to K60, 000 per month. However, they recommended that these be raised even further to K120, 000 per month. This will strengthen the pension benefits and will enhance resources for institutional investment.

Sir, with regard to the proposals on the incentives under the Zambia Development Agency Act, your Committee are of the view that this proposal should be given due consideration, but care must be exercised to ensure that only genuine investors enjoy the incentives. Further, your Committee is deeply concerned that the amount of US$500,000 set as minimum capital requirements for one to enjoy the incentives under the Zambia Development Agency Act is prohibitive, especially for Zambian businesses. They strongly recommend that the Government consider this matter with a view of setting up a lower threshold, especially for local Zambian investors. Infact, your Committee is of the view that the threshold for foreign investors to access these incentives should be set at a higher level such as US$ 1 million so as to attract quality investment.

Mr Speaker, finally, I pay tribute for your guidance through out your Committee’s deliberations. I also thank all my colleagues serving on the Committee for their commitment and dedication to the Committee’s work. In addition, I wish to thank the Office of the Clerk of the National Assembly for their unfailing assistance and services to the Committee throughout the deliberations.

Lastly, I wish to note and convey your Committee’s appreciation of the role played by the consultant to the National Assembly in assisting with the analysis of the 2000 Budget and consideration of the Bills.

I thank you, Sir.{mospagebreak}

Dr Scott (Lusaka Central): Mr Speaker, I thank you for giving me this chance to debate the Bill on the Floor of the House. I am a member of the Committee on Estimates, and of course, I support everything my Chairman said.

However, I want to add two things which the Committee started to consider, but never really concluded. The first is the vexed matter of the exception of mining companies in the existing development agreements. Mining companies with existing development agreements are protected from the new measures which the hon. Minister is bringing in this Act, that is the increase in company tax. In addition, they need to pay withholding tax. The other is in the new Mining Act. We asked our expert witnesses how much revenue the Government was getting relative to the copper sales at the moment and the figures given are that last year, an estimated US$70 million in tax was raised from the mining companies against the sales of copper worth US$3 billion. This means that, at the moment, we are keeping about 2.5 per cent of the total value of sales of the mining companies in direct taxes in Zambia. Of course, the Chamber of Mines will tell you differently because they will exclude the Pay-As-You-Earn (PAYE) paid by workers, the Value Added Tax (VAT) and so on. In terms of straight company taxation, we are taxing our mining investor partners at 2.5 per cent of the turn over. Something like 80 per cent to 70 per cent of that turn over is profit. Therefore, it is equivalent to something like 5 per cent company tax.

Sir, I wish to give my own feelings on the matter and we have a very good analogy here. Recently, there has been a lot of talk of the vulture funds; for example, people or organisations who buy up Zambian debt cheaply from countries like Romania and then manage to go to court and get an order for the full value of that debt to be paid out to them. Of course, our bones have been picked up by vulture funds for many decades. It is interesting that we have only recently become aware of this threat to us. Although these vulture funds are perfectly legal, everybody is agreed that they are immoral except, maybe, themselves.

The fact that what they have done is supported in a court of law does not mean that what they are doing is moral. I think we have an analogy here that the dilly-dallying or shilly-shallying to renegotiate the development agreements because they were not drawn up in the light of what has since come to happen, is getting to a vulture fund type of situation. This is because they may have the law on their side, but they do not have God and natural justice on their side. This is a very poor country and those are very rich investors. I would urge the Government to be more aggressive and nationalistic and more prepared to use words like vulture when they do not get the co-operation of foreign investors.

They were saying that we must have a reputation as the most law abiding country in the world, but that does not mean we can not put political pressure, it does not mean we can not get the CCJP and all those other people behind us to give Zambia her share.

The hon. Minister was happily saying that some of these companies are making no profits because they re-invest in them. If I re-invest my profits, it does not mean that I am getting rid of my profits, but it is just changing the shape of my assets. Re-investing profits is not spending or losing profits, but it is creating wealth even in another none cash form. These people are making huge profits and they should be paying this country more tax and I think that it is a moral issue even if it is not the one to which we have a simple legal solution. I have or will have no hesitation calling them vulture companies should we not make some progress because this much talked about renegotiation has been going on for a year. We have heard about it, but we have not seen the actual benefits from this. That is my one contribution.

The other one is the matter which came up which did not make very much progress because it was a new idea and I think I will put it on record in the House and allow people to know it a little bit. One of the difficulties we have with income tax or Pay-As-You-Earn (PAYE) is that it is just one of a number of charges that are associated with formal employment. Whether it is the employer or employee who pays, it is paid for in the end. It does not really matter how you allocate it. There is income tax. On top of income tax, there is the famous National Pensions Scheme (NAPSA) which is a state pension and on top of that state pension, there is a at least a company pension fund which will finally pay the terminal benefits though ineffective even if it is not there on paper or in the bank account if you add up the leaf, such as, entitlements and so forth. To employ somebody say I or the hon. Minister of Finance and National Planning or any hon. Member here formally costs about two and half times what that person goes home with. One of the reasons is that person or that person’s employer is paying over and over again for the same thing. In many countries, you pay your tax when you retire. They will look after you and even give you a heart transplant. They will do everything for you and for your children. Here, you pay tax and it disappears down the famous sink hole somewhere and we do not see it much.

Laughter

Dr. Scott: You pay NAPSA instead to make sure that you have a pension, but nobody has any faith in NAPSA given the history of the Zambia National Provident Fund (ZNPF) and the way in which you put one bicycle into ZNPF and 20 years later, you take out one wheel instead of the other way round to how it should be.

What we started to discuss with the Ministry of Finance and National Planning was something which I think interested them and I certainly urged them not to forget it that may be we can unify all these display of charges and do something equivalent instead of taxing somebody in one year with his or her money. Taking money away from somebody and giving them Government bonds of 20 or 30 years maturity, document that is going to return its value unlike a sinking bicycle and which will be available when that person will come to you when that person leaves employment to retire at whatever age we agree the retirement age is, that gives the Government its funding. The Government has the resources on which to conduct its operations, by basically borrowing from employees, but at the end of the day, the employee gets the social pension if you like it that way. You will have unified NAPSA with tax and with terminal benefits and you can do a much more efficient job. I think the other way of putting it is that the Government borrows from the pension funds in order to prop up the value of the pension funds and at the same time to revise social services at the end of the day.

I hope hon. Members have understood this or at least the outlines of that idea because I think we shall bringing it again in various forms to see if we can rationalise because these evils of casualisation are caused by an ill thought out structure of benefits and obligations in the formal employment sector. These are just the two things I wanted to add to my colleague’s speech.

Thank you, Sir.

Mr Kakoma (Zambezi West): Thank you, Mr Speaker, for giving me this opportunity to contribute to the Income Tax (Amendment) Bill, 2007.

Mr Speaker, amendments have been made generally in good faith except one. I think the one amendment which Hon. Scott has even alluded to is the one which I wish to talk about. However, before I do that, I want to say something on the taxation policy in Zambia. The purpose of taxation is to help in the development of this country. Tax must be in such a way that it gives incentives for the development of the country. The tax should be fair too to everyone in the country, but this is not the case at present. Everyone is complaining about high taxes and in many cases, the people where the incidence of tax is heaviest are those that are poor. Tax must help the poor people rather than impoverishing them more. Tax, Mr Speaker, also must take into account the ability to pay by all those that are supposed to pay tax. This is not the case in Zambia because those that have the ability to pay, like the big mining companies, are being exempted from paying tax while the poor people who are struggling to live and eat are being taxed heavily.

Mr Speaker, let me quote what the hon. Minister of Finance and National Planning told us in the budget speech. The hon. Minister of Finance and National Planning came to this House and said on page 23, paragraph 123 and, I quote:

‘Mr Speaker, the mining sector continued to be the anchor of our economy. At the time when copper prices on the international market were low, mining companies were offered tax concessions in order to make their projects viable. Now that the prices are high, there is need to review these concessions so that the nation can benefit from increased earnings from the mining companies. In this regard, the Government proposes a revision with tax regime as follows:

(a) increase company income tax for the mining sector from 25 to 30 percent;
(b) increase mineral royalty from 0.6 percent to 3 percent of gross value for base metals and from 2 per cent to 3 percent for precious metals; and
(c) re-introduce withholding tax on dividends, interest, royalties, management fees and payments to affiliates or subcontractors in the mining sector at the standard rate of 15 percent.

Sir, the Government will engage mining companies with development agreements into negotiations so that there is mutual consent by contracting parties to revise the tax regime to the new rates’.

Mr Speaker, this was a well reasoned argument and everybody in the nation agreed with the hon. Minister of Finance and National Planning that it was necessary to subject the mining companies to paying tax. However, a week after the budget was presented, other people advised this Government to do away with this provision in the budget. As a result, the hon. Minister has been forced to bring an amendment to the Income Tax Act that completely reverses the provisions in this speech. Allow me to quote what is provided in the Income Tax (Amendment) Bill.

Mr Speaker, clause 11, on page 6, of the Income Tax (Amendment) Bill, which is an Amendment of Charging Schedule, states that,

‘The charging Schedule to the principal Act is amended-

(e)    on the income of any mining company holding a large scale mining 
Provided that a mining company holding a large scale mining license issued under section twenty-five of the Mines and Minerals Act and carrying on the mining of the base metals and is a party to a development agreement signed prior to 1st April, 2007, pursuant to section nine of the Mines and Minerals Act, shall pay tax at the rate specified in the development agreement.’

Mr Speaker, the implication of exemption from this provision, is that the current mining companies, Konkola, Mopani, Lumwana and all existing big mining companies, have been excluded from paying the thirty percent income tax. This is totally the reverse of what was expected. After the Government said it was going to increase the income tax from twenty-five to thirty percent, it should have applied to all the mining companies in the mining sector. What has happened now is that the Income Tax (Amendment) Bill will only apply to mining companies that will come after 1st April, 2007. The current ones are being exempted. This is the most dangerous amendment bill to come this House.

Hon. Opposition Member: Hear, hear!

Mr Kakoma: In essence, Parliament is being asked to legislate for the future impoverishment of this country. The taxation of the mining sector is supposed to generate income from the mining activities to help in the development of this country. With this exemption, the country will forever remain poor because we can not get any income tax from the existing mining companies.

Hon. Opposition Member: Hear, hear!

Mr Kakoma: For example, in North Western Province, Equinox, the ones running Lumwana, have the biggest copper mine that we will ever have in that province. We should not expect Lumwana to pay income tax at thirty percent, but wait for other companies in future. Where will they come from? In any case, the current mining companies have been given tax holidays in the current development agreements. It is in the development agreements, even though they deny it. They claim to be off-setting against loses for twenty years. After twenty years, there will be no more copper in Lumwana, Chingola, Kitwe, Mufulira or Chililabombwe.

Hon. Opposition Member: Hear, hear!

Mr Kakoma: How will it help us to start taxing these companies twenty years from now? The copper will be finished by then. It will be too late.

 Mr Speaker, this exemption and provision in the Income Tax (Amendment) Bill should be opposed and removed from the Bill so that the mining companies contribute to the economic development of this country.

I thank you, Sir.

Hon. Opposition Member: Hear, hear!

Mr Shakafuswa: I want to thank the hon. Members who have spoken before me expressing concern on what they perceive to be some of the short comings in the Budget. I commend them because they have the interest of the country and if we all had it, maybe we could have done better. I will start with the concerns, which are genuine, but I want to use the hon. Minister of Defense’s choice of words, that someone is using defective analysis. Let me say that maybe we do not understand. To start with, I agree hon. Member of Lusaka Central that it is criminal, indeed, that the mines have made huge profits and what we get for our people is almost nothing. That is the concern of the Government as well.

Hon. Government Member: Hear, hear!

Mr Shakafuswa: The concern of everyone here. I agree with Hon. Kakoma that at a later day, we may just end-up with holes. The Minister of Finance is on record that we would rather, looking at the rate we are going, the foreign investors take their investment out, we remain with our copper so that our children will know what to do with it. What you have to understand is why we have got ourselves in this situation. How did we get here and how do we get out? These are the questions.

I also want to implore hon. Members of Parliament that as we speak through this House to nation, let us see what solutions we have got on the table. This is a national problem and we should not just talk about it without finding a solution. This will only show that we have not really thought about it. As a Government, we are open. Some of the issues are legal and you need to consult with lawyers and come up with simple ideas on how to address the situation.

Mr Speaker, the issue that we have to look at is that the situation in the mines is not as good as it looks. What had led to the initial collapse of the industry is that other reputable mining companies had said the future of the copper industry in Zambia and the world over had no prospects. This resulted in them withdrawing their investments from this country. The Government then remained with the liability of trying to sustain the industry. We were looking at the workers in the mines. What could we do with the workers? We could not just abandon more than 200,000 employs because the investors had withdrawn.

To sustain the mines, it was costing us US$1 million a day. Then someone came with the money we needed for other social sectors. There were other competing demands, like keeping people on the Copperbelt and other places. Other sectors had started suffering. So, when these other investors came, we had to negotiate the development agreements on our knees. Even when the Government of the day came to this House to change the Mines and Minerals Act, it was not out of selfishness. It was at gunpoint.        

If you just put money where there is no prospect and then impose on the tax base that this has to be done, it will not help us.

Mr Speaker, I do not blame those who put a stability clause on the Mines and Minerals Act in 2000 in this House because we are seeing a good picture today. However, we will take into consideration the pain our friends had when the prospects of this country and the whole Budget went to areas that were not budgeted.

Mr Speaker, I do agree that we have to be aggressive and it is the Government’s position to ensure that when we go back, we have to agree on everything on moral grounds that these people had to agree that the windfall gain trickled down to the people of Zambia.

Dr Machungwa: Now, you are talking.

Mr Shakafuswa: Mr Speaker, now they have realised that the nation is renowned and agree that something has to come back to the people of Zambia.

Dr. Machungwa: But the Bill!

Mr Speaker: Order!

Mr Shakafuswa: Mr Speaker, we agree on what the Bill has. All what the hon. Minister is saying is that the law states that everyone should come on board at 8 per cent. However, I would implore the hon. Members of Parliament to go and research before they come to this House. If you see the implications of the development agreements, you will notice that there is a stability clause that binds in the Mines and Mineral (amendment) Act of 2000. However, we can remove the clause today for as long as there are no negotiations with those that were left for arbitration.

Mr Speaker, if any change is to be effected in the development agreements, it has to go for arbitration. Therefore, it is prudent for us to negotiate because arbitration is another thing.

Mr Speaker, whatever is contained in the development agreements, and I challenge the lawyers that are here that if they made an implication to the stability clause, tell us that today, you can repeal the law the way it has come in this House. You will find that, that development agreement has got whole authority over this Bill in this House.

Hon. PF Members: No!

Mr Shakafuswa: I am telling you. Do not say no. If you do not understand…

Mr Speaker: Order! Address the Chair!

Mr Shakafuswa: Mr Speaker, it will be proper for those who argue to argue from my position of facts of knowledge because there are many people who enjoy talking. This is not a matter of talking, but life and death. Where does our nation go from here? If we have to take the nation where it is supposed to be, it will be either this side or that side putting our heads together and finding a lasting solution. However, if we want to find simple political solutions, we will not get out of these things.

Therefore, before people talk passionately, I would implore you to accept the 2000 amendment on the Mines and Minerals Act that we are trying to reverse. By so doing, you will understand what the hon. Minister meant when he said that only the Minister of Finance and National Planning will have fiscal authority to put in some measures that are revenue related. However, if every minister can have access to negotiations, you will come back to this position.

Mr Speaker, we do not want to forget what happened as the situation may be dictated so. About 159 people who sat in this House at that particular time found it fit to put that clause in legislation. Now, we have come here looking at it and put our heads together. If we support the amendment for the future, anyone who will come here is going to be in this trap. Therefore, let us see how we can go about it.

The other issue that we should talk about is what we have done to give relief to our workers. We are not taxing the poor to become poorer, that is a wrong notion especially coming from an economist.

Mr Speaker, when we tax, the money that is going to pay for education is going to the pockets of those who are poor. People had complained about free education. The Government pays the teacher and uses the facilities out of the money we are taxing.

Mr Speaker, for those who understand economics, it is not just giving money directly into hands. There is also money that can come indirectly into your hands. When we tax medical service, we want the money to go and pay for other medical services. This is how we reduce poverty.

When we tax the same money go towards fertiliser subsidies. We are trying to put money in the hands of those who are poor so that they can reduce poverty and hunger by being able to produce food for their consumption and then sale the surplus.

Therefore, when we talk, let us ask ourselves what we are doing. The bottom line is that what we are doing on this side, other people might want to do it better not knowing that they might even be worse. You have got five years to administer this country on behalf of others. Therefore, there should be no enemies, but brotherhood. Unless we recognise that together we can change this. Those who want to politic we are ready to do so and for those who want to develop this country we are ready to work with them. So, if we talk as nationals, we will turn the economy around.

Mr Speaker, I thank you.

Mr Lubinda (Kabwata): Mr Speaker, I would like to borrow the debate by Hon. Kakoma as my very own. I also agree with Hon. Jonas Shakafuswa that time is here for us to revisit the development of the mining conglomerate in Zambia.

Mr Speaker, I agree with Hon. Shakafuswa that at the time that we were entering into those development agreements, our hands were stuck on the table, our feet were stuck in mad. We could not manoeuvre, but time has come for us to start thinking about the effects of those development agreements on the sovereignty of Zambia. Should we agree to continue having development agreements that demean the stature and importance of this august House because that is the effect of those development agreements?

Mr Speaker, I do not think that it is only a matter of persuasion. Hon. Deputy Minister of Finance and National Planning, it is also a matter of legislative functions of this House and power bestowed upon this House by the Zambian people irrespective of who those laws affect.

Mr Mtonga: Zoona!

Mr Lubinda: Would we not stand as a proud sovereign state for us to say, ‘Look, we were forced to go into these development agreements that surround our necks’. The World Bank and International Monetary Fund kept telling us that we are losing US $1 billion per day. No one to date has come up with any empirical evidence that we are losing US $1 billion per day.

As a result of that, we were pulled like horses to go and drink and that is what we did. However, things have changed because of the emerging economies in the Far East, copper prices have skyrocketed. Should we surely standby and wait for 25 years before we can benefit from that which was bestowed upon us by God Almighty? No, if need be, I would like to propose to the hon. Members of this House to empower the hon. Minister of Justice to go for international arbitration on this matter.

Hon. PF Members: Hear, hear!

Mr Lubinda: The sovereignty of our country is being eroded by those development agreements. The future will judge us harshly when our children go out on the copper mines and find big holes in the ground, but nothing to show for what came out of it. We shall be judged harshly. Equinox will not be there to defend us when our grand children say, ‘We were a lost and desperate generation that did not think about the future of this country’. We are even better off closing the mines and reserving the copper there until those who are wiser than us come to take over and run this country Hon. PF Members: Hear, hear!

Mr Lubinda: Rather than allow foreigners to dig our copper-ore and leave nothing for Zambia.

I want to remind this House that in 2004, one of those 24 per cent returning Members of Parliament proposed to this Government, at that stage, to amend the law. It was not going to be a matter of discussion between the Government and mine owners. It could have been this House, and this House’s own initiative to amend the law. How easy it could have been for the Minister of Finance and National Planning to go and argue with the investors. Then he would have said it was a directive by the legislators of the land …

Hon. PF Members: Hear, hear!

Mr Lubinda: … but, then Hon. Magande said, it was not time and he would not do it. Now, it is time, let us do it. If we go for international arbitration and lose the matter, at least, we will be setting ourselves for a fair judgment by our future generations. I want to be amongst those who would be judged fairly by the children of this country. I do not want to be among those who will be looked upon with scorn and shame by the future generation. Time is here and we can do it.

Sir, let me move on to another matter and by so doing, I would like to commend your Committee for the excellent report which is well thought-through and well presented. Some of the issues that your Committee raised are matters that I would like to focus on. Yet, I would like to appreciate that your Committee made their calculation when they came to the conclusion that the result of the tax concession that has been given by the Government in relation to the tax gains that they are going to be making, there is total revenue loss of K121 billion. How I wish that was the truth, but I want to confirm that it is not true. There are no K121 billion net losses to Mr Magande. I would like to illustrate what I mean.

By so doing, I would like to start by talking about the Disability Credit. The reason why governments give credit to disabled people is because they recognise that the disabled people require extra effort for them to compete with others in society.

When a disabled person has to jump on public transport, they have to ask someone to lift the wheelchair for them. In a country like ours where there is no compassion and solace in people, they are always asked to pay for that service.

Mr Mtonga: Zoona!

Mr Lubinda: That is the reason why we give them a Tax Credit. Here we are saying that we are giving our disabled citizen a K3, 000 Tax Credit per month. God in Heaven! K3, 000 to buy one loaf of bread a month? Surely, can you brag and say, we the people of Zambia assembled here as representatives of the disabled people, shall give them Tax Credit to afford one loaf of bread a month? K3, 000 to buy one tablet of Chick Soap a month. I would not stand with pride and say I am representing vulnerable Zambians under these conditions.

I agree with the Committee that the disabled deserve much more than what we are offering. I agree that the K144, 000 we are suggesting, my brothers and sisters in the Committee, is actually a small amount. If we went higher, I would say we are thinking positively of those disadvantaged amongst us.

Mr Speaker, before I conclude this matter, I would like to say that each one of us, gathered in here, is a potential disabled person. A day shall come when we shall say ‘how I wish, when I had the power I voted for increasing the Credit Tax for the disabled people.’ Time shall come! Each of us is a potential disabled person and we aught to think of those persons with compassion. If there is any one in here who does not have a friend or a relative who is disabled, God has smiled on you for a long time. Time shall come when you will be disabled.

Interruptions

Mr Lubinda: I am not cursing anyone at all. In this day and age of so many accidents, each one of us is a potential disabled person. Let us think about those people not as others, but as ourselves.

Sir, the other matter with regard to this Tax Credit- I hope the hon. Minister is going to clarify this when he comes to respond- is how he calculated that there is going to be a K1 billion tax revenue loss as a result of increasing the Tax Credit by K36,000. My calculation, tells me that Hon. Magande and his colleagues who came up with the budget are telling this country that there are 27,777 disabled employees in Zambia. My foot, where are they? Where are those 27,000 disabled people on whom we should give only K3, 000 per month? Government loses K1 billion! Where are they?

I would like to ask the Minister of Labour and Social Security if there are 27,000 disabled employees in Zambia. I doubt it very much. How did we even arrive at the K1 billion loss? Where is it coming from? Are we playing with figures just to gain sympathy? If it is, then we are playing around with this House. We are not disclosing full information to this House for it to be able to make informed decisions.

If, indeed, there are 27,000 employees in this country, I challenge the Minister of Labour and Social Security to present to this House a breakdown of where those people are employed in the formal sector. Where? Nowhere at all! Therefore, the K1 billion revenue loss as far as I am concerned is just a figure without any support at all. I would like to appeal to the hon. Minister of Finance and National Planning to reconsider that. I heard him say that he would adjust the tax paid to the disabled people higher when he was responding to the Value Added Tax. I hope that this is what he was referring to.

Mr Speaker, I would also like to refer to the matter that the Lusaka Central Member of Parliament (Dr Scott) and Hon. Charles Kakoma spoke about. It is a matter of allowable pension contribution. Again, I would like to ask Hon. Magande because in his contribution to the Vote of Thursday, 1st March, 2007, notice of Motion, Ways and Means, he said and I quote:

“(d) increase the allowable pension contribution from K15,000 per month to K60,000 per month or 15 per cent of ones’ salary whichever is less.”

Sir, that is the allowable pension contribution meaning that is the pension that a person will pay without attracting tax. From K15, 000 to K60, 000 per month or 15 per cent of one’s salary whichever is less. The catch here is the 15 per cent of one’s salary and a comparison to the higher figure of K60,000 per month whichever is less.

Mr Speaker, I would like to put it before this House that this is not giving any relief to the worker. None whatsoever! The reason is that the K60, 000 is only 15 per cent of K400, 000. The Tax Free threshold is K500, 000. What does that mean? It means that a person who earns K500, 000, if they were to pay 15 per cent of their salary to their pension, would be paying K75,000 against a salary which is already tax free. What relief is there? Zero relief my friend!

There is no relief whatsoever because this allowable pension contribution is not above the salary tax free threshold. It is within the threshold, yet Hon. Magande is saying he will lose K17 billion. Where is the revenue loss coming from? Any person who pays 
K75, 000 of their salary, is paying from a salary which is already tax-free.

Therefore, a person who is paying K60, 000, is paying fifteen per cent of K400, 000 which Hon. Magande already said, is K400, 000 of K500, 000, which is the tax-free threshold. If the hon. Minister wants to amend this to say, in addition of the threshold of 500,000, then I will agree. On the other hand, as along as it remains as it is proposed in the Bill, it is not having any revenue implications.

I am sure that tax experts might have advised hon. Magande by now. I spoke with people in his ministry and they agree with me. There is no revenue implication in this at all. It is just being used, again, to try and win the support of the people. There is no K17 billion loss. This is meant for tourism and I would like to quote your Committee, who raised it very well, if I can find the page, ‘ this allowable pension contribution is a welcome idea because it is going to increase the amount of savings that the Pension Fund will have, which will then be ejected into the economy’. This is very good. However, the effect is not what is being reported.

The second thing is that this should be money that people are saving to prepare for retirement so that they do not end up destitute. This is why the Minster of Finance must give that tax relief, but has not done so.

Mr Speaker, the other matter which worries me is the advance tax of three per cent. Like the Committee observed, this is going to be a very difficult tax to administer. In addition, it is contrary to the spirit of the Citizenship Economic Empowerment Act. This is because it is targeting the small, the weak and the poor people, who are struggling to earn a living.

Mr Speaker, we will not encourage people to come and register by administering this advance tax. Please, take note that in the Bill, the Minister is giving himself discretion to exempt other people from paying that advance tax. On what basis is he going to excuse them?

Mr Speaker, I am proposing this year what I proposed last year. Increase Excise Duty on cigarettes. When I proposed that last year, the Minister said he could not do it because he was protecting jobs at British American Tobacco (BAT). He protected them for one year, but where is BAT now? Which industry are you protecting now?

Your Committee observed very well that there is a huge pricing elasticity with cigarettes. Why are we bothered about increasing tax by another five per cent? Once this is done he will earn K19 billion, which will be substituting what he is hoping to earn by taxing the poor people who are struggling to earn a living. He will come up with a tax that he can administer easily than trying to run after those poor people who carry merchandise in their suitcases.

Mr Speaker, I would like to ask the hon. Minister to respond to these matters. He must explain to the Zambian people why it is that instead of giving incentives to small-scale business people as provided for in the Citizenship Economic Empowerment Act, he is making it difficult for them to survive and run businesses. What is the reason?

If we are so keen on protecting the huge mine conglomerates, how come we are so quick to over-tax the poor and the weak?  Are those not the ones we should be encouraging and supporting so that one day, if we do not harness our copper ore, they will exploit it for the sake of this country?

Mr Speaker, why do we have the tendency of over-taxing the poor? Like the Committee observed, the individuals are contributing much more than the investors to run this Government. Hon. Magande wants to get K19 billion from those women who struggle to go to Nakonde and come back with ten shirts. Worse still, he wants to empower the tax man to determine how much value your imports will generate. On what basis will a trader be able be to say after selling these shirts in Chipata, Lusaka or Western Province, I will obtain this value.

If that value is not attracted, who will compensate those poor people?  What about in the case of a loss? You know that the poor have extremely vulnerable and unstable businesses.

For instance, if their merchandise is destroyed at the boarder will you give them back their three per cent advance tax?  Are you not making it difficult for these people to compete with the Chinese who are bringing goods in huge quantities? They are the ones you are not even asking for the three per cent advance tax.

Hon Member of Parliament: Second hand.

Mr Lubinda: They are bringing in second hand cheap materials and you are not charging them the three per cent.

When Hon. Shakafuswa, poor businessman wants to bring ten suits and you want to charge him three per cent advance tax. When I get his suits on credit and fail to pay back, he will still have paid three per cent on a suit that I never paid for. Furthermore, the poor man can not even take me to court because he knows he will pay much more. This is a person you want to paste K19 billion to the economy. That is not fair. I would like to propose that the Minster considers this matter…

Mr Shakafuswa: Point of order, sir.

Mr Speaker: A point of Order is raised.

Mr Shakafuswa: Mr Speaker, I rise on a very serious point of order. I am a poor businessman. Is the hon. Member in order to suggest that I do not want to contribute to the widening of a tax base by paying something from my informal earnings so that I supplement those who are being heavily taxed to pay for bills and services which go to the poor in this country who are in formal employment?  Is he in order to suggest that I do not want to contribute towards the well being of Zambians?  I need your serious ruling.

Mr Speaker: The hon. Deputy Minister of Finance and National Planning and the category of business people like him would like to contribute to the tax assets in Zambia. Is the hon. Member for Kabwata able to debate that? You may go ahead.

Mr Lubinda: I thank you, Sir. Small businessmen like hon. Shakafuswa are supposed to pay Customs Duty and they will pay it even after paying the advance tax. That is where the problem lies.

I thank you, Sir.

Laughter

The Deputy Minister of Works and Supply (Mr Tetamashimba): I thank you, sir…

Interruptions{mospagebreak}

Mr Tetamashimba: Thank you, Mr Speaker for the opportunity that you have given me to contribute to this debate. I have been listening attentively to the speakers, especially to our colleagues on the left. The last speaker spoke at length about the mining companies in North Western Province where I come from.

Mr Speaker, first and foremost, it is a fact that all the presidents of political parties who contested last year’s elections, came up with one thing; that the few workers were being over taxed and they wanted a government that was going to broaden the tax base. Mr Hakainde, Mr Sata and Mr N’gondo said the same; that we are hearing what the people are saying.

This time, we have broadened the tax base. Our colleagues including the marketeers were saying that those in informal sector are making more money and therefore, they should be taxed. This listening Government, through its hard working hon. Minister of Finance and National Planning has heard what the people said and what those from the Opposition stated in their campaigns. We have therefore, gone ahead to try and broaden the tax base.

Mr Speaker, I am grateful to my colleague, Hon. Shakafuswa who has spoken very well today. In his point of order, he was trying to justify what this Government is doing and who are supposed to give us chance, especially for this year so that we see what we are going to tell the Zambian people next year after broadening the tax base. Surely, you must give us some credit. When we try to broaden the tax base on our people, you should not turn round because these are the people who might have voted for us. You should not be champions of the people that you were saying they should be taxed.

Mr Speaker, all of us in this House are part of the Government. It does not matter whether you are on the right or left. The laws that we make in this House should be for the benefit of Zambians or any Government that is going to be given a chance by the Zambian people to govern this country in 2011.

Mr Speaker, I heard what my colleague now known as Misheck Kakoma debated on the Floor visa-a-vis the mines in North Western Province. He specifically tried to justify that on 1st April, we should start charging 30 per cent to all mining companies. He was implying that what is in the report means that we have exempted these mining companies from paying. 

Mr Speaker, let us go back to when this country was on its knees. Fortunately, I happened to be in this same House with some of the colleagues here. The Government in which Hon. Machungwa served had nothing do apart from giving in to what these investors wanted. You cannot blame them for what they did during that time. You are aware that there were even accusations that some leaders had enticed Anglo American Corporation to leave this country.

Mr Speaker, at that time, the MMD Government, led by the Second Republican President found itself in a crisis over the billions that the Government was losing. Hon. Members of Parliament in this House said that these mines should have been given for free. I am sure Hon. Machungwa will agree with me. That is what we told the Government then and it is not their fault. It was because we were losing a lot of money from the treasury to supplement or put in the mining companies. Our friends made this decision which we must agree was the best at the time.

Mr Speaker, unfortunately, I think most of the hon. Members of Parliament may not have had access to the Development Agreement. In this Development Agreement, there are clauses which were put in to advantage the people who were putting in the money. At that time, they would have said that that mine was going down and therefore, would want to put in their money in and have this and that clause. That is why as Government, we should say what we must put in this law and after that the hon. Minister of Finance and National Planning and this Government should not go for arbitration but to engage the mining companies with discussions. In this regard, our professionals at the Ministry of Finance and National Planning would prove to the mining owners that actually, they are making more money and have recovered their money.

Sir, these discussions should be put on the table. We should not wait for a deadlock for us to start asking for other people to come and arbitrate. The hon. Minister is saying that we do not want to be seen as people who can make promises through this Government and when another Government comes in, it should just throw them away.

Sir, I agree with what Hon. Lubinda had stated about North Western Province in connection with the Lumwana Mine. I agree that for so many years, there will be holes in the ground. It would be aterrible thing if a company like Lumwana which is going to be the biggest mine in Africa, before they can even sell a tonne of copper and after they have agreed under the Development Agreement in which I think they were given about ten or so years should now be left by this law. It will not be fair. As a person who comes from that province, we know that the Kantanshi and Lumwana Mines are doing a good thing. If we were to choose in terms of those who own the mines, I can assure hon. Members of Parliament that people from my province would say give these people the incentives until they start making profits.

Interruptions

Mr Tetamashimba: Sir, I am saying that because I have always been elected for what I say. I am not saying that for people who lose and then come back. I am saying that because that is what I stood for. I stood for the same things in National Party, UPND and MMD and I won.

Therefore, I can claim that what I say on behalf of North-Western Province, nobody especially, those that have just come in including, Hon. Kakoma cannot refute what I am saying here.

Laughter

Mr Tetamashimba: Mr Speaker, as people from North-Western Province, what we are saying is that the hon. Minister of Finance and National Planning and this Government should go ahead with discussing and engaging the people who put in money. Then, later on, when we discover that they have gotten what they put in, that is when you can start thinking of Lumwana and Kansanshi paying something.

Of course, you cannot compare these two mines to KCM where many people are contractors because they found the mines already there. They were just checking and started doing everything. As for North-Western Province, please, do not give examples of North-Western Province because the mines have not started producing any copper.

Apart from that, Lumwana Mine has gotten a loan from the African Development Bank of over U S $700 million. In my view, if we start suffocating them, it will not be the best thing. I would therefore, like to appeal to my hon. Colleagues on the left to let the hon. Minister of Finance and National Planning move forward and engage our colleagues in discussions. Obviously, when those discussions fall through, you, as people who were elected to govern Zambia, the 159 of us, will be able to decide on the way forward.

Mr L. Ngoma: On a point of order, Sir.

Mr Speaker: A point of order is raised.

Mr L. Ngoma: Mr Speaker, I rise on a very serious point of order. Is the hon. Member of Parliament fro Solwezi Central in order to debate in the manner he is debating and threatening that hon. Members of Parliament should not use North-Western Province as an example as if he owns North-Western Province. I need your serious ruling.

Hon. Opposition Members: Hear, hear!

Mr Speaker: Order! Could the hon. Deputy Minister of Works and Supply please, continue.

Hon. Government Members: Hear, hear!

Mr Tetamashimba: Mr Speaker, I never claim to be a representative of the Southern Province people because they have their own people that they elected to come and speak for them. It is as simple as that!

Mr Speaker, some people have never been to Solwezi and were only there during the CRC. Therefore, they should not try to think that when I speak, I am speaking for myself, no! I am the representative and elected three times.

Hon. Member: Landslide!

Mr Tetamashimba: Yes, landslide. Thank you very much my sister.

Laughter

Mr Tetamashimba: Therefore, when I speak, I know what I am talking about. Hence, I had to zero in on the mines in North-Western Province.

Mr Speaker, what I am saying is that as leaders in this House, let us give the Government some time and see the way they feel they can help us do what is good for our country because all of us are part of it. If our arguments will be to satisfy certain individuals or political parties, it is not right because we are elected and we are the people who are governing this country, the 156 of us.

Hon. Government Members: Hear, hear!

Mr Tetamashimba: Therefore, only when we are in one direction, are we going to be considered as the best Parliament that ever existed in our country.

Mr Muntanga interjected

Mr Tetamashimba: Hon. Muntanga, I have not stopped. I am still talking.

Mr Muntanga laughed.

Business was suspended from 1615 hours until 1630 hours.

Mr Tetamashimba: Mr Speaker, just before the House broke for tea, I was about to start talking bout the bone of contention, which is the Development Agreement.

Mr Speaker, I know that many Zambians both outside and inside this House are very suspicious about the way those agreements were entered into and the way they were framed.

Sir, when you compare with our neighbouring countries, the DR Congo has a lot of copper deposits and so, is Zambia.  The percentage in terms of copper contents in the Zambian minerals, the highest can only be 2 per cent. Yet, our neighbour and DR Congo in particular, is 10 per cent.

Sir, what I am trying to say is that we have countries around us and now, there is peace in DR Congo. All investors are now running to DRC. This simply means that we are fighting for investors. Therefore, we should not take advantage of that.

Mr Speaker, when you know that you colleague out there has beautiful daughters and yours are not as beautiful as those daughters in the neighbouring house. Then, there is one man who comes to your house wanting to marry your daughter, then, upon seeing this, you start for a lot of money for your daughter when you know that the neighbour’s daughter who is more qualified and educated has interests in the same man that is coming to you, you have to be careful. Countries like the DR Congo and ourselves, all want investors.

Therefore, let us not try to push these investors to the far end. We should consider that our products, the product of our neighbouring country and our friends, many people will be running into those countries. Let us not try to make these investors who have given themselves to invest in our country to start thinking twice.

I would therefore, like to appeal to my colleagues on the left to consider that and ask ourselves if we are the best destination with the peace in DR Congo? The answer is no. I am sure those who are miners will agree with me that the copper content in DRC is more than in Zambia.

Mr Speaker, in case you do not know, the copper content at Lumwana Mine, which you are talking about, is not even 1 per cent. Yet, these investors are putting in US $700 million borrowed from African Development Bank (ADB). I agree with your feeling and I also agree that what we are saying is the best thing, but it is not the best thing to go and make a decision.

Let us allow our Government, through the Minister of Finance and National Planning, to go and discuss and see what their response will be. Only when we are seen to the people who are involved in dialogue, are we going to be trusted, not only this time, but even for the future generation.

Hon. Government Members: Hear, hear!

Mr Tetamashimba: Anything that we do now which is going to be against these investors, hundred years from now, another investor will look at us as a very bad destination. Therefore, I appeal to my colleagues that as it may be, let us allow this Bill to go through.

I thank you, Sir.

Hon. Government Members: Hear, hear!

Mr Nkombo (Mazabuka): Mr Speaker, I am very thankful for allowing me a chance to debate issues surrounding this amendment proposal.

In starting my debate, I would like to say that there should be no paranoia for attacking the truth as it truly is.

 Sir, I will start by giving an example of someone married to a disadvantaged person or a prostitute. They marry them and there is normally a way in which these types of people are dealt with. Once you agree that you are going to go into a matrimonial home with this prostitute, you normally change your attitude towards them because now they become your wife.

 Sir, in my view, I do agree that at the time these development agreements were signed according to the Deputy Minister of Finance and National Planning who said that the development agreement were signed whilst we were on our knees, that may be true but we are no longer on our knees I believe. We are now standing.

Hon. UPND Members: Hear, hear!

Mr Nkombo: Therefore, it is not sinister to sit with those we call our development partners and say we have circumstantial changes. These circumstantial changes dictate that our development partners are reaping a lot of profits.

Despite the fact that the development agreement were made from a point of weakness, I would like to challenge all of us to understand the fact that this may have been tailor made in order to further disadvantage us. It may have been tailor made by somebody I cannot pin point. Obviously, the circumstantial changes in the price of copper and its demand in the far east, is not something that we can just sit back and leave the things to remain as the Executive is proposing we do.

Currently, in Mazabuka where I come from, we all have been singing about this nickel mine. This mine in my view, Hon. Magande knows more than I do, that it is quite deceptive for the ministry to include on the back page of our budget the so-called cart box. It is just a nineteen metre hole like this Chamber and start counting eggs before they are hatched and say, ‘We have a big mine in Mazabuka.’ These are the things that cause excitement for nothing.

In my view and agreeing with Hon. Tetamashimba these new mines like the nickel mine, Lumwana and Kansanshi must be given time to operate and nobody is asking them to pay taxes because they have not started producing.

Mr Mwiimbu: Hear, hear!

Mr Nkombo: Nobody should ask them to pay taxes, but those that are operating and we know what they are earning at the moment, must not be exempted from the tax that is due to the Zambian people.

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

Mr Nkombo: Let us not fear our partners. Let us tell them that we are no longer prostitutes. We are now your house wives in your matrimonial homes and there are bouncy babies being born from our womb. And therefore, you cannot continue molesting us, because now we have changed our status.

This land where we sit is our land and there is no doubt about it and this is the only thing that we have. I keep preaching about this story of having only this one nation. As Hon. Tetamashimba, Member of Parliament for Solwezi Central was saying that money is just one side of the bargain. What about the commodity? The commodity is squarely ours.

Mr Speaker, in preparation of these development agreements, I would like to take particular interest on the development agreement for the Albidon Mine that was signed just last year. I would like to challenge the people who drafted this agreement. They never took the interest of the Zambian people at all.

Hon. UPND Members: Hear, hear!

Mr Nkombo: What is contained there does not serve the interests of the people and the generations to come. It serves the interest of the investor only.

Major Chizhyuka: Even the one who signed it!

Mr Nkombo: By translation it amounts to nationalism. It amounts to imperialism. There is so much that our people can benefit from these development agreements.

Mr Speaker, it is in this House, and I think all that were present remember me standing up to ask the Minister of Mines and Minerals Development if I could have sight of the development agreement and the response from the Minister was that, ‘Look, we cannot give you this agreement for you to see, a Member of Parliament. We cannot give you this development agreement for you to see.’

I believe, according to the Constitution of this land which is supreme law, the President of the Republic of Zambia is the custodian of this land, on behalf of the people of Zambia and not on his own behalf. So, why not give the people of Zambia a chance to have a say in what goes on in matters that affect them?

Mr Speaker, it was in this House where Hon. Shakafuswa and his boss, Hon. Magande said, ‘Mazabuka has been sitting on platinum for many years.’ I asked a question that, ‘Can you please help me find the cheapest financing so that I can equal the investor and I will go and compete with him?’ Hon. Shakafuswa said, ‘Come to my office and I will show you where to find cheap money.’ It has not happened up to this moment.

Over and above that, let us accept the fact that we are disadvantaged but this is our land and we have no other. We do not have any other country to go to. We do not have any other way to benefit from these developments that investors are bringing other than taxation. By definition, that is the only credible source of how we can improve our livelihood.

If the Executive sat and agreed that they are going to support this amendment, I simply want to challenge them to say, before you actually do that, make a second consultation to your conscious. Let your conscious be the one to guide you on this matter.

We, in the UPND and UDA, have never argued with you sporadically. We have supported a lot of good intentions that you had, but on this one alone, we stand to say we would like this matter to be on record in this Chamber that we, the UPND said no, with a capital letter ‘N’ and ‘O’.

Hon. UPND Members: Hear, hear!

Mr Nkombo: As we go into the vote, please, remember that you are not the last generation of this country.

Hon. UPND Members: Hear, hear!

Mr Nkombo: You may have just a few years to live and I may also just have a few years to live, but please, put it at the back of your mind that you are not the far most end generation.

I still intend to have many more children and my children shall have children. Going by what Hon. Lubinda said, it will be a shame for my children and I feel disadvantaged for them to tell their children that your grandfather was a Member of Parliament and he is the one who endorsed this. Hon. Members, I am making an earnest appeal to emulate people, some of whom did not even want to get academic qualifications.

Mr Speaker, I will give an example of the Basawa people in Botswana. These are the ones we commonly know as bush men. These bush men treasure their land and resources much more than we do here. Mr Speaker, with their leader at one point they took the Government of Botswana to task that they were not going to shift from the game reserve because some people went and said they were investors and they wanted to evacuate all the people from the game reserve so that it could be exclusively for animals and tourism.

Mr Speaker, the benefits to this Basawa people was zero and they went to Survivor International, an organisation based in London and sought help. They went to courts of law and won that case. I will give you another example of the law of the Afocain people of Rustenburg in South Africa. In accordance to the tailoring of the development agreement and I can challenge you all, those who are well travelled that in the village of Rustenburg there are universities because of how smart they were in designing these development agreements.

Mr Speaker, the De Beers if I am not mistaken were compelled to build a university there. If we can include those in the development agreement, fair and square, but for as long as we are going to continue leading the template of the development agreements by just changing the names of investors without thinking through, ladies and gentlemen you are sending this country to a dead end. We do not want that.

Mr Speaker, in my constituency, there is a US$65 million investment by an Australian company called Albidon. The development agreement is silent on issues that will benefit the people of Mugoto there. They have displaced a few families and they have built them houses and promised them a school outside the development agreement up to Grade 4. Is that not a shame? How many of you ended up in Grade 4 if I may ask? Not even one. All of you have a certain amount of educational qualification that is notable. We need to be fair to ourselves.

Mr Speaker, I think I cannot over emphasise my feelings towards this matter but simply want to say that despite what your collective agreement had, as we go to determine what will happen here, please consult your conscience. You should walk out of this Chamber proud people and say we are proud to have developed a future for our children.

Mr Speaker, Mazabuka is the only town I can tell you today, because of the decisions that were made a long time ago, maybe sixty years ago when many of us were not born, Mazabuka has a critical shortage of land. There is no land there and today an investor who has full mining rights must come and say they want surface rights to the tune of 2000 hectares, what do they take us for? Surface rights of up to 2000 hectares and promise the locals a school up to Grade 4 and buy a few panadols is simply a mockery. It is also an insult to our existence. We should never fall prey of such machinations and if there is anyone of you fellows on the right side…

Interruptions

Mr Speaker: Order! There are no fellows in this august House.

Mr Nkombo: Mr Speaker, I withdraw the word ‘fellows’. If there is any of you, ladies and gentlemen …

Mr Speaker: Order! There is no such a thing. These are all hon. Members of Parliament and you may refer to them as such.

Mr Nkombo: Mr Speaker, I withdraw once again. If there are any of you hon. Members on the right side of the House, please walk out of this Chamber with honour because it does not come easily. We are not luck, people but representatives of many people. I was voted in by 16,000 souls or people put me into this seat in order to make the right decisions and not for self aggrandisement and so I implore this House to consult the conscience of each individual hon. Member as you deliberate this Bill.

I thank you, Mr Speaker.

The Minister of Justice (Mr Kunda): Mr Speaker, I just want to explain the genesis of these development agreements especially the clauses relating to the stability period. The development agreements were being negotiated in the year 2000 and the bargaining power of the Government negotiating team was very weak at that time.

Mr Speaker, the mines were losing according to the records about a US$1 million per day and this is documented. In addition we were more or less desperate and we had to sell the mines otherwise the mines were going to collapse. This entailed that the investors could dictate certain terms because they were the people coming up with money to invest in the mines. What happened is that a law was brought to this august House whereby development agreements were more or less placed above the law. This meant that provisions of development agreements would override the law and unfortunately, this is what we found.

Mr Speaker, I was also surprised when I saw this type of agreement and the law which we passed in this august House but that was allowed to pass. Now what does that mean? It means that if we have this kind of law and, of course, we are a sovereign state and we are free to entice investors to come here by passing certain types of laws and the type of law which we passed here is that if there are fiscal terms, incentives or taxes in the development agreement, those had to be honoured and we agreed to a stability period.

A stability period is the period prescribed in the development agreement, during which the tax regime will remain the same for a certain period, may be 15 or 20 years. Now, it is suggested here that we should impose and make a law. Of course, we are a sovereign state we can make laws in this House. For example, those clauses are null and void. What is the implication of that? It is a clear breach of the development agreement. What will happen is that, we can be taken to arbitration in London where we are going to pay a lot of money to British lawyers. The British judges will sit in an arbitral tribunal. Then, what will come out of that should we be found to have breached the agreement. It is possible that we can pay substantial damages. We have precedents where previous Governments made certain agreements where we said we were going to pass certain laws in an agreement. If we renegade on that and we do not pass those laws, we are going to be taken to arbitration and we are going to be ordered to pay substantial damages. As New Deal Government, our interest is to protect the public property. What we are saying is that let us go by what the development agreements provides.

Hon. Opposition Members: Awe.

Mr Kunda: What do the development agreements provide? I have not finished. There provisions for negotiating amendments. This is how far we can go and this is what we are presenting to the people of Zambia. Otherwise, if we go the other route which one of the hon. Members suggested that because we are a sovereign state, we should just breach this agreement and go to arbitration. I submit that it is a very dangerous path which I would not recommend to this august House. I would, therefore, urge, because the consequences of a breach are too ghastily to contemplate, this august House to support this particular Bill. In any case, the only clause which appears to be contentious is the one relating to development agreement. We are going to think of crafting some amendments that if, and it is under consideration, but the bottom line is that we must respect the sanctity of agreements. We can either negotiate within the agreement, but otherwise, for me to stand here and prescribe to the people of Zambia that we should breach the development agreement. I am sorry I cannot do that, Mr Speaker.

I thank you, Sir.

Mr Speaker: Is there any hon. Member here who will say something apart or outside the agreements, something new?

Mr Mwiimbu (Monze): Thank you, Mr Speaker, for according me this opportunity to debate the motion on the Income Tax Amendment.

Mr Speaker, from the phraseology that is in this Bill, it will make it impossible for that Government to negotiate with the mining houses. What there now trying to do, is to exempt them by operation of law. In my view, if I were in their shoes, I would have made it mandatory under the law to renegotiate the development agreements.

Hon. Opposition Members: Hear, hear!

Mr Mwiimbu: But, they are now exempting them by operation of law. How do you go back to somebody whom you have exempted by operation of law to negotiate with? You cannot do that. As responsible Members of Parliament, we are saying amend or withdraw that clause so that as he has said, if they really intend to do that, they draft the clause which they are recommending. We are also aware that this clause was nowhere near the amendments which were proposed by the Government. It was introduced at the last minute because some people who have interest in that Government protested. We should not allow this country to be used by other organisations. We have the interest of the people who brought us here. We have been all lamenting that we have no resources to develop this country. At the same time, we want to throw away in the sea the resources which we were supposed to have.

Mr Kambwili: Shame!

Mr Mwiimbu: Those who are going to support the amendment will sink like the Titanic.

Hon. Opposition Members: Hear, hear!

Mr Mwiimbu: Mr Speaker, I plead earnestly to our colleagues to withdraw the Bill, make amicable amendments if they are discussing in the interest of the nation. There are so many colleagues here who can assist to come up with an amicable amendment. We are also aware that there are some people who have interest in this matter. If you have an interest please, do not debate. Keep quiet. This matter is a national matter which will determine the destiny of this country.

I thank you, Sir.

Hon. Opposition Members: Hear, hear!

Mr Magande: Thank you, Mr Speaker, for giving me the opportunity to wind up the debate on the proposed Income Tax Amendment Bill, which I had introduced earlier this afternoon. I want to say that I am most indebted to the Committee, again, for having gone into detail in terms of what we are trying to do in this particular Act.

Let me say, Mr Speaker, that the major issue which I heard from the Chairperson of the committee is that they were discussing the fears of the incentives that we are giving for inviting or to make the environment conducive for investment under the Multi Facility Community Zone.

Mr Speaker, these are going to be zones with special facilities and infrastructure. That infrastructure has to be put up by somebody. Once that is done, we believe anybody who wants to go there to enjoy these facilities must be somebody with a viable project, not like Hon. Lubinda says, poor Hon. Shakafuswa. If he is poor, he will not be able to go and operate from this special zone. Even now, we are aware that in some of our markets in Lusaka marketeers have refused to let the Government rehabilitate or refurbish the markets

because they have said once the Government has spent money to put better infrastructure it becomes expensive for them to operate in those markets. They prefer that we do not spend this money and this is documented. 

Therefore, to believe that anybody should be allowed to go to the MFEZ where there will be special infrastructure, even when they do not have the capacity to run a viable project, means that we might as well not put those infrastructures. We can continue to operate as we are operating at the moment.

We appreciate the Committee’s concern that the incentives we are giving could erode the revenue of the Government. We are aware of that and that is why, Mr Speaker, while we have taken a lot of effort during the last year to get a lot of studies on the operations of our tax system, we hope by the end of this year we will have come up with tax reforms that are going to give us enough space to raise revenue and at the same time make sure that our tax systems and rates are in synergy and are not up hazard as they have been in the past.

Export earnings according to the Committee do not normally benefit locals. Of course they do not benefit locals if it is not the locals who are exporting. Let us be aware that the opportunity for anybody in Zambia to export is available. What we keep on saying is that we all must become productive in whatever area or sphere of the economy that we are operating in. That way we are going to see ourselves raising revenue. In any case, if you want to be a good business person, you do not have to engage in export business.

 You can actually earn as much money running a business in Zambia by operating and selling to Zambians in the country. I think it is a myth of the value of currency which has continued amongst us that you can only be a billionaire if you export and earn foreign currency. You can be a rich person by selling food stuffs within the country. It is not the issue of Zambians being stopped from exporting and therefore will continue to be poor. That does not arise at all.

Mr Speaker, I heard the Chairman of the Committee and quiet a number of my Hon. Colleagues saying that although the Government has proposed this levy they should raise it even further. For the first time in this Parliament, I am hearing words like raise it further. In the past we asked why we did not consider providing this and that. 

This means that most of the colleagues here appreciate the effort that has gone into trying to balance the Budget by giving tax relief to the workers and clearly, as Hon. Tetamashimba said we have been told to broaden the tax base and not to rely on the 500,000 employees in formal employment.

We have been told to go to those people in the markets.  One of the markets is the cross boarder market, the COMESA market where people are making money by importing these goods.  They do not pay tax. In other words they are not tax compliant. 

The only way we could get at them is when they are crossing at Tunduma like one hon. Lubinda said to ask them about their tax detail and tax pin number. If they tell us they do not have one, we will assess what they are carrying and these days one can be carrying a thousand computer chips in their coat or handbag worth K1 billion. One can carry them in one’s suit case or jacket. After assessing we then take three percent of that as advance tax.

That advance tax can be refunded later during the year when one becomes tax compliant by going to the ZRA and filling the necessary forms showing that in spite of bringing these thousand computer chips they made a loss. If it is indicated that one continued to make money, but is not interested to become a registered tax payer, then one would have paid what we are already charging as three per cent of presumptive tax for people who do not fill in any kind of accounts. So we are moving from those that we were already taxing to the other people that are making money.

And now we are being told not to rely on the 500,000 formal employees in Zambia, but increase their tax threshold from the K500,000 which we have increased from K320,000 to K1 million to give more relief, but do not go where you want to get more money in your quest to broaden the tax base. How do you balance the Budget?

I know that the issue of mining sometimes has become emotive. But in Zambia quiet a lot of issues become emotive. I remember as a growing young man, we had an issue of mini skirts. It became so emotive that even Parliament spent time talking about mini skirts for girls. Why girls wore short dresses became an issue. We nearly had a Parliament passing a law against wearing short skirts. And it became an issue. What were we going to do in the streets? Policemen would have been moving with measuring tapes to measure if girl’s skirt.

Laughter

The mining issue, Mr Speaker, is becoming emotive, but a lot of us do not want to understand what exactly is happening. I wish to repeat what we have explained here. The Minister of Mines and Minerals Development issued a Ministerial Statement less than a month ago. These miners are not, I repeat Hon. Kakoma and Hon. Nkombo, are not exempt from paying tax, please.

Even the Amendment which you have before you says we want to increase the corporate tax for mining operations from 25 per cent to 30 per cent. 25 per cent is what they are now supposed to pay. That is not exemption.

The Corporate Tax for farmers like hon. Hachipuka who is a successful farmer, in this country is 15 per cent. That is not an exemption. It is the rate that a farmer or a farming company should pay. The current mining operators are supposed to pay Corporate Tax at 25 per cent. Those miners who are making a profit are paying 25 per cent Corporate Tax. So please, hon. Kakoma go back to the dictionary, they are not exempt. They are not paying because they have not yet started making profits. You only pay Corporate Tax when you make a profit and not a loss. Even Hon. Muntanga does not pay 15 per cent tax when he makes a loss on his farm like he is doing now.

Laughter

Mr Speaker: Order! A point of order is raised.

Mr Muntanga: Thank you, Mr Speaker, I was trying hard to restrain myself.

Laughter

Mr Muntanga: Is this minister in order to drag me into his debate when he has actually said in the law that he is exempting those that signed before 1st April. Those that signed before this date will not be bound by this law we are making. Are you in order?

Mr Speaker: Order! Address the chair.

Laughter

Mr Muntanga: Is he in order to try and drag me into his debate

 

as though I am a miner when all I do is pay tax? His people harassed me last week and I paid my tax. I seek your serious ruling.

Laughter

Mr Speaker: Order! The hon. Member for Kalomo, in denying the hon. Minister of Finance and National Planning’s assertions, he in fact said that he is paying his taxes. He is not as bankrupt as the hon. Minister is implying.

Laughter

Mr Speaker: He is protected by the Chair.

May the hon. Minister of Finance and National Planning continue, please.

Mr Magande: I thank you, Mr Speaker.

I just wanted to make sure that Hon. Muntanga supports me by paying tax after making a profit. That is what the miners are supposed to do. They pay tax after making a profit. If your books of account show that you made a loss, the taxman would not tax you anything. Ask the accountant, Hon. Hachipuka. I thought he would agree with me.

Mr Hachipuka: I agree.

Laughter

Mr Magande: This will assist me …

Mr Speaker: Order! No dialogue in here.

Laughter

Mr Magande: Mr Speaker, the miners or those with large scale mining licences are by the Income Tax law, expected to pay copper rate tax at 25 per cent of their income after losses. That is what we are now trying to change because 25 per cent is bit on the low side. We want to raise it to 30 per cent. That is what we are bringing before this august House.

Mr Speaker, let me just make a clarification on the stability period. The hon. learned Minister of Justice tried to make this clear. The stability period is a period during negotiations where it is agreed on the basis of the cash flow of an investor that before he makes any profit, the tax rate would be kept at the same level. In other words, the Development Agreement says, before any mining company makes any profit, which is enough for them to pay back their loans, the rate of tax will remain at 25 per cent.

Like we heard, when we started negotiating these agreements, unfortunately, it was during a time of difficulties. The copper price was 61 Cents per Pound. Now, the price is US$3.5 per Pound. However, at that time, some of the mining operations like Konkola Deep led us into these difficulties. Anglo American was prepared to invest over US$600 million. They said for them to invest that money in putting up the infrastructure and getting the subsidy ready, it would take four to five years. During that period, they would not have any more for us to tax them. They asked that within that period, we should not amend our income tax law to increase the tax rate from 25 per cent. We are agreed to that. They also asked that beyond the five years when establishing the mine, they needed another fifteen years so that we would not change the tax rate from 25 per cent. We agreed that for next twenty years, the tax rate of 25 per cent would not change. Therefore, the twenty years become the stability period.

With regard to the other mining investors who came later, it was decided that we looked at their financial statements. We looked at the financial statement for Albidon. Hon. Nkombo is very conversant with the information. I think he knows the agreement. Being in Mazabuka, he must have been listening when we were negotiating. He knows the details.

When we looked at their financial statements, they were not entitled to get ten years because from their own statistics, they would make money within a shorter period of time. Therefore, it was agreed that we kept the 25 per cent Corporate Tax for a maximum of five years. I would like to assure Hon. Nkombo that the stability period for Albidon is only five years. However, you know because you are the one who said that we had put a picture of a hole even before they made money. They will make any money until October, next year.

Therefore, already, for two years, out of the five years, they have lost the benefit and privilege of keeping the rate at 25 per cent. They are only left with three years. After three years, the stability period will go off. Then they will fall into the category of the new tax resume of 30 per cent. That is what we are saying.

Like Hon. Tetamashimba said, if you went to Lumwana now, you will not see any copper. You will only see heaps of rubble where they are building workers’ houses and the rest of it is bush. They have already spent all the US$200 million in trying to put this infrastructure. This time when they are developing the mine, we cannot tax them even at 25 per cent, which is the current rate. Therefore, what we are saying is that we entered into agreement with them. As the hon. Minister of Justice said, the Development Agreement, Anglo American Agreement came to this House, and Konkola Copper Mines appears in our principle legislation in this country. It is the only corporate company which appears in our sovereign legislation. Because of that, we have to be careful how to deal with that agreement.

This is the reason why we are saying that we should amend the Income Tax Act, but for those with development agreements, we will look at the provisions of that agreement. Where it says there is a provision to negotiate, we will negotiate.

Mr Speaker, we have said that we are a listening Government. Hon. Mwiimbu, who is learned, said that we could come up with a phrase to amend the last part where it says, they will come to pay the same. Between now and committee stage, we would like to get the best brains of lawyers to come up with a phrase that will admit that in March 2000, we came up into this House and made a law, which says development agreement provisions are above anybody in Zambia, including the law. However, we want to get rid of this by not going to them, but by bringing a new law.

Sir, we are trying to amend Section 9 of the Mines and Minerals Act so that the future development agreements are not above the law. Right now, we have investors waiting to negotiate with us. We are holding on in the hope that we can pass these amendments so that if I were to sign this by next month, they will not also be covered by the law which we passed in March, 2000. They will be covered by these amendments, which were brought before this House.

When I hear, Hon. Nkombo saying he is opposed and does not want this, I am not sure what he does not want. What does he not want? Is it that we amend the law now so that future development agreements are not above this law, the Government or the republic? Is that what you are saying? You are saying that you know the development agreement with Albidon, and it is not good for the local people, but at the same time you are saying that nobody has given you a development agreement to look at. How do you know that it does not cover the local people? You have it and in that agreement, it says the company is going to build a clinic and houses for the people to benefit. (Pointing to hon. Members)

Laughter

Mr Magande: Sorry, Mr Speaker.

Laughter

Mr Magande: In that agreement, because there is no accommodation at Munali Hills, it says that local people are going to be engaged as workers from the nearest towns of Kafue and Mazabuka. The local people are being invited to go and sign agreements to work and be paid. The development agreement for Mazabuka says that there will be a training programme for local contractors. I can recite the agreement for Lumwana, but Hon. Tetamashimba has helped me. I do not need to go into those details. We have provided for the involvement of the local people.

The hon. Members from the Copperbelt, Mr Speaker, should help us. Many of them are contractors to the mines and belong to the Association of Contractors.

Hon. Opposition Members: No.

Mr Magande: Yes, they do and we know because it provides so in the development agreement.

Hon. Opposition Members: No.

Mr Magande: Yes, it does. As I am speaking, one of the mining companies has already offered scholarships for students at the University of Zambia to do mining engineering. This is part of the development agreement.

Hon. Opposition Members: Ah.

Mr Magande: Yes, and this is being done by Lumwana which has not even produced one ounce of copper. Where do you think they are getting their money from? They are getting their money from their operations in Australia or Canada to pay for students at the University of Zambia which is earning income from Lumwana operations in Canada and you say no.

Interruptions

Mr Magande: Mr Speaker, like I said, we have really dealt with mining issues and what we need to do is perhaps to look at the future.

Mr Shawa: Zowona!

Mr Magande: I met someone the other day and he was saying, ‘Mr Minister, you have not come to our place as our Member of Parliament to repair the water system’. I asked, how long has this not been working? He answered, ‘for something like 3 years’. I said, I have only been a Member of Parliament for about 5 months now and you want me to repair this. He said, ‘yes, because we have no water’. However, I asked him, what were you drinking for the last 3 years?

Laughter

Mr Magande: He said, ‘well, we had no water. Now that you are there, we think you can give us the water’.

Laughter

Mr Magande: I said to him, Mr Speaker, although I am Peter, the rog, which is in the Bible, I have no miracles to suddenly bring development.

Laughter

Mr Magande: Since this gentleman, probably a voter of mine, had a small child of about 5 years, I said to him that I am thinking of developing his area for the benefit of the child when he is 25 years old. He said, ‘I will be dead by then’. I said, thank God!

Laughter

Mr Magande: When you are born, you die. Do not debate to have money now in the pockets for ourselves. That is not what we should do and, therefore, we should set systems that are going to be there permanently.

Mr Speaker, on the issue of mineral royalties, we need a future for this country. We must look to the future that these mining investors are risking their money in the hope that in future, we are going to earn more money.

Mr Speaker, having appeared before the Committee, I want to say that the arrangement where all the chairmen of the committees are in one place gives an opportunity, I think, to those who go before them to really have a very beneficial conversation. I thought that was very effective. I also want to say that in view of the support that the budget is getting where everybody is asking for more money to be given to ministries, it is important also to support anticipated tax measures that are bringing money. I hope my colleagues here are going to support me so that we have a balanced budget.

I thank you, Sir.

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

Question put and agreed to and the Bill read a second time.

Committed to the committee of the whole House.

Committee on Thursday, 29th March, 2007.

HOUSE IN COMMITTEE

[MADAM CHAIRPERSON OF COMMITTEES in the Chair]

THE MARKETS AND BUS STATIONS BILL, 2007

Clauses 1 and 2 ordered to stand part of the Bill.

CLAUSE 3 – (Interpretation)

The Minister of Local Government and Housing (Mrs Masebo): Madam Chairperson, I beg to move an amendment:

(a) on page 5, in lines 14 to 15, by the deletion of the words “transport to the inhabitants of an area” and the substitution therefor of the words “passenger transport to the public”; and

(b) on page 6, in line 19, by the deletion of the words “and includes a bus station situated at that market”.

Amendment agreed to. Clause amended accordingly.

Clause 3, as amended, ordered to stand part of the Bill.

CLAUSE 4 – (Establishment of markets and bus stations)

Mrs Masebo: Madam Chairperson, I beg to move an amendment:

(a) on page 7, line 4 by the deletion of the word “seven” and the substitution therefor of the word “fourteen” and;

(b) and line 6  by the deletion of the words “and the Environmental Protection and Pollution Control Act” and the substitution therefor of the following,” and any other relevant written law”

Amendment agreed to. Clause amended accordingly.

Clause 4, as amended, ordered to stand part of the Bill.

Clause 5, ordered to stand part of the bill.

CLAUSE 6 – (Unauthorised markets and bus stations)

Mrs Masebo: Madam Chairperson, I beg to move that clause 6, on page 7, in lines 18 to 19 by the deletion of the words “A person shall not, without the consent of a local authority and the approval of the Minister” and the substitution therefore of the words “A person shall not, except in partnership with a local authority and with the approval of the Minister”.

Amendment agreed to. Clause amended accordingly.

Clause 6, as amended, ordered to stand part of the Bill.

Clauses 7 and 8, ordered to stand part of the Bill.

CLAUSE 9 – (Fees, stallage and levy) 
Mrs Masebo: Madam Chairperson, I beg to move that clause 9, on page 8, in line 24 by the insertion of the words “a local authority or management board with the approval of” after the words “prescribed by”.

Amendment agreed to. Clause amended accordingly.

Clause 9, as amended, ordered to stand part of the Bill.

Clauses 10, 11, 12, and 13 ordered to stand part of the Bill.

CLAUSE 14 – (Composition of management board)

Mrs Masebo: Madam Chairperson, I beg to move that clause 14, on page 10, in lines 29 to 31 by the deletion of paragraph (f) and the substitution therefor of the following paragraph:

(f)  one person from the community in the area in the which the market or bus             station is situated.

Amendment agreed to. Clause amended accordingly.

Clause 14, as amended, ordered to stand part of the Bill.

CLAUSE 15 – (Business plan and management lease)

Mrs Masebo: Madam Chairperson, I beg to move that clause 15, on page 11, in lines 16 to 23 by the deletion of Subclauses (1) and (2) and the substitution therefor of the following subclauses:

(1) A management board established under subsection (1) of Section thirteen, shall submit to the local authority in whose area the market or bus station is situated its business plan for the market or bus station covering an initial period of five years and the local authority shall, before submitting the business plan to the Minister for the Minister’s approval, consider the business plan and make recommendations on the plan to the Minister.

(2) The Minister shall consider the proposed business plan and the recommendations made by the local authority on the business plan and if the Minister is satisfied with the proposed business plan the Minister shall approve it.

Amendment agreed to. Clause amended accordingly.

Clause 15, as amended, ordered to stand part of the Bill.

Clauses 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27 28 and 29 ordered to stand part of the Bill.

CLAUSE 30 – (Accounts)

Mrs Masebo: Madam Chair, I beg to move that Clause 30, on page 19, in lines 18 to 20 by the deletion of sub-clause (2) and the substitution therefor of the following sub-clause:

(2) The accounts of a management board shall be audited –

(a) by auditors from the local authority in whose area the market or bus station is situated; or

(b) by auditors from the Ministry responsible for local government where for any reason the auditors of a local authority are unable to conduct the audit; or

(c) by independent auditors appointed by the board, with the approval of the Auditor-General.

Amendment agreed to. Clause amended accordingly.

Clause 30, as amended, ordered to stand part of the Bill

CLAUSE 31 – (Annual Report)

Mrs Masebo: Madam Chair, I beg to move that clause 31, on page 19, in lines 23 to 37 by the deletion of clause 31 and the substitution therefor of the following new clauses:

Quarterly and annual reports 31. (1) As soon as practicable but not later than fifteen days after the end of each quarter of the year, a management board shall submit to the local authority in whose area the market or bus station is situated a report concerning its business activities in the market or bus station during the quarter.

 (2) As soon as practicable, but not later than ninety days after the end of the financial year, a management board shall submit to the Minister and the local authority a report concerning its business activities in the market or bus station during the financial year.

(3) The report, referred to in subsection (2), shall include information on the financial affairs of the management board and there shall be appended to the report –

(a) an audited balance sheet;
(b) an audited statement of the income and expenditure; and
(c) such other information as the Minister may require.

(4) The Minister shall, not later than seven days after the first sitting of the National Assembly next after receipt of the report referred to in subsection (2), lay the report before the National Assembly.

Amendment agreed to. Clause 31 amended accordingly.

Clause 31, as amended, ordered to stand part of the Bill.

Clause 32 ordered to stand part of the Bill.
CLAUSE 33 – (Regulation and by-laws)

Mrs Masebo: Madam Chair, I beg to move an amendment:

(a) on page 21, lines 1 to 3 by the deletion of paragraph (h)

(b) on page 21, lines 4 to 38 and on page 22, in line 1 by the renumbering of paragraphs (i) to (x) as paragraphs (h) to (w), respectively.

Amendment agreed to. Clause 33 amended accordingly.

Clause 33, as amended, ordered to stand part of the Bill.

Clause 34 ordered to stand part of the Bill.

Schedule agreed to.

Title agreed to.

Hon. Members: Hear, hear!
__________

COMMITTEE OF SUPPLY

[THE DEPUTY CHAIRPERSON OF COMMITTEES in the
Chair]

VOTE 46/01 – (Ministry of Health – K1,218,289,707,432).

(consideration resumed)

Ms Kapata (Mandevu): I thank you, Mr Chairperson, for giving me this opportunity to contribute to the Vote for the Ministry of Health.

Sir, I concur with the previous speakers who said that the money that has been allocated to the Ministry of Health is not adequate. I am sure that Hon. Peter Magande will agree that there is need to substantially improve upon the budget implementation if we are to realise the Millennium Development Goals (MDGs) as outlined by the Fifth National Development Plan (FNDP).

I would also like to state that it is not lack of resources that has affected development outcome, but lack of efficiency and effectiveness in the implementation of programmes.

Mr Chairperson, I would like to comment on the human resource in the Ministry of Health. Retention of medical personnel is very cardinal. Right now, there is a shortage of health care providers like nurses, midwives, theatre nurses, anaesthetic staff and doctors in these Government hospitals.

Hon. Members: Hear, hear!

Ms Kapata: The Government is busy recruiting doctors from outside the country, as expatriates, who are being paid a lot of money at the expense of doctors that we have trained in this country.

Hon. PF Members: Hammer!

Ms Kapata: The medical personnel are not asking for too much money. They are only asking for better conditions service.

Hon. PF Members: Hear, hear!

Ms Kapata: Improved conditions of service can be given to these people through uniform allowances. The Zambian nurses have to buy their own uniforms while their counterparts in the Zambia Army and Police Service are given uniforms. The allowance that is given to them cannot buy a uniform.

Hon. PF Members: Shame!

Mrs Kapata: In this HIV/AIDS era, the nurses and doctors need risk allowance. I know that they are given a risk allowance, but it is a mockery. Some of these nurses and doctors have died because they contracted HIV/AIDS through nursing patients in the wards.

Hon. Members: Hear, hear!

Ms Kapata: On Call Allowance for doctors should also be doubled. The nurses are asking this Government to increase their nightshift allowance because they leave their families at night and go to nurse patients in the hospitals. This nightshift allowance should be increased in order to entice them.

Mr Chairperson, the 744 medical personnel which have been recruited is a drop in the ocean. When you go to the University Teaching Hospital today, you find that the theatres and labour wards have been deserted. In the past, we used to have about ten theatres in a theatre that we call Phase III. Those theatres used to have thirty nurses per shift, but now we only have three nurses manning those theatres.

Hon. PF Members: Shame!

Mr Kapata: As a result, the operation list has to be done once per month. In the past, we used to operate almost on a weekly basis because the nurses were available.

Sir, let me take this opportunity to commend the Government for training and putting in place the machinery in the Cancer Unit.

Hon. Government Members: Hear, hear!

Ms Kapata: I am aware that a Memorandum of Understanding was signed between the Ministry of Health and the University Teaching Hospital, but to date, the unit that was supposed to be opened in May has not been opened. Can the Government tell us why the unity has not been opened?

At the moment, we have a long list of cancer patients who are unable to go to South Africa for treatment because the Government has no money. The money that has been allocated per person is US$13,000, which is a lot of money. If that money is put together, whatever the problem that the Cancer Unit is facing, I am sure that the unit could be operational.

There are cases of cervical cancer which do not need chemotherapy, but radio therapy. It is sad to note that some patients are dieing before being attended to. Therefore, I am appealing to the Government to take that into consideration. There is no way you can put all these things in place and train manpower, but at the end of the day, fail to open the unit. What is going on?

Mr Chairperson, I would also like to talk about gender and health. Zambia still shows some major gender dispaties in the health sector, particularity, in morbidity, mortality under five and nutrition. Participation, of men and I emphasise that participation of men in the reproductive and family health is very low. We need to sensitise our men to participate in the reproductive and family health.

Hon. Members: Hear, hear!

Ms Kapata: I would also like to mention that there are few women in management positions in the Ministry of Health because they are not being gender sensitive.

Sir, I let me comment on HIV/AIDS. The prevalence of HIV/AIDS in Zambia is at 16 per cent and affects the most productive age between 15 and 49. In this regard, I commend the Government for making Antiretroviral Drugs accessible to most of these people.

Hon. Members: Hear, hear!

Ms Kapata: I would like to caution and ask them to open up more Voluntary Counseling and Testing Centers (VCT), if we are to reach everyone. Zambia has a prevalence of sixteen per cent and the Minster of Health stood in this House and said that HIV/AIDS has been declared a national disaster. Therefore, if it has been declared a disaster, let us expand the VCT centers. Mother to child transmission must also be prevented.

Home Based Care Givers:

Mr Chairperson, I would like to appeal to the Government to start training home based care givers in local languages. This is because most of them nurse these patients, out of compassion. They do not know what HIV/AIDS is. I appeal to the Government to open a section of counseling that will be conducted in vernacular.

Hon members of Parliament: Hear, hear!

Roll Back Malaria

Mr Chairperson, I would like to recommend the Government for the work that they have done in the prevention of malaria. There has been door to door spraying of houses, mosquito nets are being sold in Government clinics at only K3, 000. For that, I would like to commend the Government. However, can these mosquito nets be given free of charge because some families can not afford buy these mosquito nets due to poverty

Cholera

The Ministry must put in place, long term measures in combating cholera. Every year, with the coming of the rainy season, we know that cholera is likely to break out. The makeshift structures put up at Matero reference center are not good for the patients, taking into consideration, the fact that cholera comes with rains. You can not expect a nurse to move from the main building to the tents, to check on a patient when it is raining. Such structures are not good for patients that are in critical condition because of the cold. Can we put up permanent structures at Matero Reference Center because, whether we want it or not, we will still have outbreaks of cholera and as long as we do not address the issue of water and shallow wells, this problem will continue.

Mr Chairperson, I am appealing to this Government, to put up a permanent structure in Matero.

Hon Member of Parliament: And elsewhere.

Ms Kapata: and elsewhere in Zambia.

Clinic Infrastructure

Mr Chairperson, I would like to appeal to the Government to build more hospitals at district level and to complete building the 28 health posts, which were not finished according to Hon. Magande’s speech, if we are to achieve the millennium goals.

 In their book, called ‘The National Health Strategic Plan 2006-2011’, many good things have been written about health, but are not being implemented.  I would like to call on the Ministry of Health, to make sure that what is written in that book is implemented. They should not just be writing and go for endless seminars, but go by what is in that book and implement, for the good health of our people.

Hon Members of Parliament: Hear, hear!

Mr Chairperson, I would also like to make a comment on drugs. Can we please make sure that drugs are available to Zambians? Even now, if you go the University Teaching Hospital, UTH, you will see people coming out with prescriptions because there are no drugs at the hospital.

Transport for pregnant women is still available. We do not have enough ambulances.  Some women die because they are not able to reach the delivery centers in time, due to non availability of transport. Even where there is transport, the road infrastructure is so bad, bringing in more complications.

I thank you, Sir.

Mr Mwale (Chipangali): I thank you, Sir, for this opportunity to contribute to this Vote.

 I would like to draw the attention of the Minister and the Minister of Health to the fight against HIV/AIDS. I would like to, firstly, thank this Government for putting 175,000 people on Anti retroviral drugs, ARVs. This is a job well done.

Many countries in Africa are struggling to put people on ARVs; so many countries in Southern Africa can not match what our Government has done so far. I would also like to thank the Government for the good political will they have to fight this pandemic. The president has always talked about the fight against HIV/AIDS in his speeches. The first lady has her awards for the contribution that she is making towards the fight against HIV/AIDS. This is a good example that is coming from our top leaders.

However, I would like to talk about what is happening in terms of the policies that we have in this country and the implementation. We seem to have very good policies but on the implementation part, there is something that we really need to strengthen.  The Minister of Health was telling this House yesterday that we have condoms in the streets being used like balloons. There is something that needs to be done…

Mr Chairperson: Order!

Business was suspended from 18:15 hours until 18:30 hours.

Mr V. Mwale: Mr Chairperson, before business was suspended, I was trying to explain that there is a lot of political will from this Government to fight the HIV/AIDS pandemic. This is very evident from the systems that have been put in place such as the National Aids Council and the District HIV/AIDS Coordinating Committees. In Zambia, we have very good systems and policies. 

Sir, looking at what is happening right now, even if we have good policies, structures and systems in place, we have also allowed programmes that contradict this good effort that this good Government is putting. There is a President’s Emergency Plan For AIDS Relief (PEPFAR) which is the President Bush fund. President George Bush has put a lot of money in the fight against HIV/AIDS in certain countries in Africa. The conditions that the President has put do not support our programmes in Zambia. They contradict the programmes that our own Government has put. Our Government has put very good programmes, but we are implementing the PEPFAR programmes which cannot work with our programmes. 

Sir, in Zambia, we are saying that we are going to promote the ABC approach, but, at the same time, we have allowed PEPFAR to come in with a lot of money and implement the anti-condom programme. The PEPFAR programmes say that condoms are just for people that have the HIV virus and for what they describe as high-risk population. According to them, the high-risk population is people living with HIV/AIDS, the truck drivers and the commercial sex workers or prostitutes. These are the people they are saying should use condoms and not an ordinary person like myself and so many others out there.

Laughter

Hon. Member: Bauze, bauze.

Mr V. Mwale: Mr Chairman, if we have allowed a programme like that, then where do we put our strategy of ABC which stands for Abstinence, Be Faithful and Condom Use. Where do we put our own beautiful strategy?

Sir, I would like to give a time line of the fight against HIV/AIDS in Zambia. When we just knew about this disease, it was very difficult for people to teach others about condoms and for people to accept the use of condoms in their lives. We had to use people like Kalusha Bwalya in advertisements on television. You will remember the, ‘I am protected, are you?’ advert. There was another one done by people like Shalamwana and finally we penetrated.

Laughter

Mr V. Mwale: Sir, we managed to convince people that condoms were very useful in the prevention of HIV/AIDS. Even when we faced a lot of cultural, traditional and religious resistance, we managed to convince the people. People knew what HIV/AIDS was and how it was transmitted and prevented. That time passed and we turned to introducing what we call the Youth Friendly Services. They were everywhere and we encouraged the distribution of condoms through these Youth Friendly Services. The rural health centre staff was trained to do that. That programme was well implemented in the whole country. What has happened is that the same people that brought the use of condoms to us, the Americans, have come to tell us not to promote the use of condoms. President George Bush has launched a programme called the PEPFAR, which states that condoms should not be promoted and that people should abstain.

Mr Chairperson, in Zambia, we are talking about a prevalence rate of about 16 per. In a country with such a prevalence rate, we need to give people options.

Interruptions

Mr V. Mwale: Sir, as I am talking, I can hear the response from some hon. Members. Maybe, they can take care of themselves in a certain way, but we should not assume that everyone can do that. If we care for this country, we need to provide all the three options in our HIV/AIDS Policy, which is ABC. We should not allow other people to come and disturb our programmes. The practical result of the PEPFAR programmes is that young people delay their sexual desire by one year. That is the only achievement that we can see. If in the past, people used to begin to indulge in sexual practices at fourteen, this time, it is at fifteen. Above that, they will engage in sexual practices. What we are saying is that all the three options should be given to people.

Mr Chairperson, right now, in America, there are a lot of senators and international organisations that are opposed to these programmes. This is a programme that has come to turn the condoms that the Government is spending a lot of money buying into balloons. Since this Government is spending a lot of money on something that is not being used, we should either reject the programmes that are going against the use of condoms or change our policy rather than go against it.

Sir, I know that PEPFAR may have some good elements. We know that it is helping the vulnerable that do not have money, sponsoring people to school and teaching young people survival skills, which is very good. Those are the issues that are making our people vulnerable to HIV/AIDS, and that is what we need to address. We need to concentrate on addressing those issues, but still make the choices of prevention very open. Right now, the international community and those who come from outside to observe how we are fighting HIV/AIDS laugh at us because we are implementing two policies that contradict each other.

Mr Chairperson, I thank you.{mospagebreak}

Major Chizhyuka (Namwala): Mr Chairperson, I am very grateful, especially that some of the Votes on which I burnt the midnight candle to debate have passed me. All the same, I am so grateful that I am able to debate the issue of health.

Mr Chairperson, I would like to take hon. Kasongo’s lamentations as my own. Because of that, I will not dwell on the things that he has said. I will, therefore, concentrate on discussing health in as far as it concerns the people of Namwala who gave me the largest landslide in the political history of that district.

Mr Chairperson, I have always wondered whether to give birth to men of valour, substance and character has turned out to be a curse for the people for Namwala. Why am I saying so? I am saying this because if today, Harry Mwaanga Nkumbula was to rise from his grave and go and see the Namwala Hospital in the state it is now, he would not believe it and would die the second time.

Mr Chairperson, I was born on the 14th December, 1954 in Namwala Hospital. Two and half weeks ago, I went back to Namwala when I was touring my constituency. I found that the hospital was exactly in the same state if not worse. Even when you want to push your mind to start thinking about how else this thing can be solved, you will start realising that you have a situation where you have a complex conjugate.

Laughter

Major Chzhyuka: Mr Chairperson, all solutions are spurious. What is Namwala Hospital? Namwala Hospital has one doctor serving close to 200,000 people.

Dr Chituwo: On a point of order, Sir.

The Deputy Chairperson: A point of order is raised.

Dr Chituwo: Mr Chairperson, I am compelled to stand on this point order. Is the hon. Member of Parliament, who is my young brother, in order to state that Namwala District Hospital is the same as it was when he was born when it is very clear that Namwala District Hospital has got a brand new theatre and a mortuary, just to mention the two. Is he in order? I need your serious ruling.

The Deputy Chairperson: Order! I believe that the hon. Minister of Science, Technology and Vocation Training is challenging Hon. Major Chizhyuka for stating that Namwala District Hospital is as it was when he was born. As you debate, please take that point of order into account.

Major Chzhyuka: Mr Chairperson, I am the area Member of Parliament of Namwala elected by a landslide victory.

Mr Chairperson, I do understand that the former hon. Minister of Health might have made arrangements for certain facilities. Therefore, in his mind, he might think that those facilities are now completed. The truth of the matter is that, that is not the position.

If he can listen a little, I am going to give him a total recount of what the hospital is like and he will benefit from that. It will even be very good for him to now go back and say, ‘I had told you to do this, why did you not do it?’ He would even be able to advise the current hon. Minister of Health that these were some of the things that he had wanted to do, but not so much had been done. Anyway, I belong to the same growth triangle as the hon. Minister.

Mr Chairperson, I was talking about one doctor. Although the population of Namwala is about 120,000, the majority of the people that we are serving come from Itezhi-Tezhi District. As a result, Namwala District Hospital, which only has one doctor, attends to 230,000 people. The man has to be a genius to be able to find the time to attend to so many sick people.

The male ward which is serving about 200,000 people has twelve beds. As you are aware, the Ila people keep cattle and are also polygamists. Therefore, you can always assume that there is a very high preponderance of children. What is it that we have in the children’s ward?  There are six beds against a population of 200,000.

Mr Chairperson, the maternity ward has four beds. I am talking about a district hospital and I have just come from there. The female ward has eight beds for 200,000 people.

Sir, Namwala District Hospital is where Harry Mwaanga Nkumbula, the founding father of African Nationalism in Zambia was born. Those men rose on the surface of this earth in order to improve the lot of their people, in order that we may see light, have hope for this country and sit in this Parliament today. In the home of their beds, Namwala, there is total dilapidation, degradation, squalor and absolute misery.

Mr Chairperson, how many times have we talked about the road to Namwala? There is not a single ambulance to cater for 200,000 people. Are we, the Ila people, in Zambia? In any case, given the prosperity of Botswana on the basis of cattle rearing and development which is 41 per cent of their Gross Domestic Product (GDP), we can do better as our own country without this country. This is because how are we benefiting? How can we have six beds for 200,000 people; six beds for our sons and daughters?

Hon. Minister, I am giving the number zero six. Do you understand what that means? As a minister, do you understand the implication of those figures on Namwala District Hospital which is in such a dilapidated state?

Your fellow women sit in the mother’s shelter grumbling. Can you imagine yourself, hon. Minister of Health, sleeping in the open? Thank God you are a woman! When it rains they gather together like little poultry that do not have enough heat. Those of you who keep poultry will understand what I am talking about. When there is no heat in the brooder they gather around together. There is no mother’s shelter to talk about. Even the nursing staff lack morale. You wonder how those men and women can serve the medical profession in a hospital of that nature.

A certain donor who came to Namwala and saw the state of dilapidation of the hospital could not believe that he was in Zambia. Therefore, he prepared plans to provide funds for the theatre that the hon. Minister talked about.

Sir, they then knocked a building in between to try and see if they could construct a laboratory. This was a makeshift arrangement.

Laughter

Major Chizhyuka: Do you understand a makeshift arrangement? Somebody came along and built a structure which was going to be a female ward. The roof, walls and the floor are cracked. I then begin to wonder what is happening. The only reason we are in this state of dilapidation, as a people, is because we have allowed you to rule us.

Laughter

Hon. UPND Members: Hear, hear!

Major Chizhyuka: That is all. We can do better on our own if we are able to rule ourselves. We have the capacity. Just as we were able to introduce the freedom struggle for this country, we have the capacity to look after ourselves.

The first president of the Zambia African National Congress (ZANC) Mbikusita was elected by four Ila men on 25th December, 1948, Christmas Day. Their names were Nabulyato, Enock Kavu and Mubitana. We have the capacity. We can deal with our own situation, but we cannot do that because we are ruled by a government in which Ms Cifire is a minister.

Ms Mulasikwanda: On a point of order, Sir.

The Deputy Chairperson: A appoint of order is raised.

Ms Mulasikwanda: Mr Chairperson, I rise to make a point of order on the speech of the hon. Member of Parliament on the Floor. Is he in order to talk about history instead of discussing the budget for the Ministry of Health that is on the Floor? Is he in order to begin talking about the history of Zambia now?

Laughter

The Deputy Chairperson: Order!

We are here to debate and if somebody finds it useful to refer to history in this context, he is free to do so.

Can the hon. Member continue?

Hon. UPND Members: Hear, hear!

Major Chizhuyuka: I am very grateful, Sir.

I was saying that some of the men and women who stood their political ground to better our lot in every sector were from Namwala and they had hopes and aspirations for their people. They had hopes and aspirations for even you who raised that point of order.

Mr Chairperson, these are my lamentations about Namwala. I support the hon. Minister’s budget, but it must be increased so that the lamentations I have raised, today, can be addressed.

The Deputy Chairperson: Can the hon. Minister of Health wind up debate.

Hon. PF Members: Aah! Awe!

Interruptions

The Deputy Chairperson: Order!

Hon. Members, I know how you feel. I would have loved every one of you to speak, but do not forget that we did not start this debate today. On my list, the person who just sat down was the eighth to speak on this Head. So, really, that is as far as we can go.

The Minister of Health (Ms Cifire): Thank you, Mr Chairperson. I love you all.

Laughter

Ms Cifire: Mr Chairperson, I would like to thank all the hon. Members of this House who have debated on the Vote for my ministry. Their debate has been taken as counsel for my ministry to improve its performance in service delivery.

Hon. Government Members: Hear, hear!

Ms Cifire: Sir, I will comment on the specific important issues raised on the Floor by various hon. Members of this House and address some general issues raised in this House which can be grouped as follows:

(i) monitoring and evaluation;

(ii) developmental issues;

(iii) administrative issues;

(iv) challenges; and

(v) opportunities.

Monitoring and Evaluation

Some of the issues raised centre on the need by the Ministry of Health to strengthen its monitoring and evaluation capacity. This is considered as a very important activity as the process generates information to improve programme implementation and use in future decision making. The ministry has in place several systems and tools to assess sector performance and track resource utilisation, including Health Management Information System (HMIS), Financial and Administrative Measurement System (FAMS) and the National Health Accounts (NHA).

Developmental Issues

Hon. Members of Parliament have also taken note of concerns over the number, state and distribution of health facilities in the country. My ministry is making positive strides aimed at increasing the number of health facilities in the country as a way of improving access to the needed health services for the people. Using information generated by the health facility census conducted in 2006, an elaborate and prioritised investment plan is underway to guide sector development in line with the Fifth National Development Plan.

Administrative Issues

Other issues raised by the House are housekeeping issues focussing mainly on strengthening health systems management. My ministry promises to look at this as a way of improving service delivery.

Challenges

The ministry continues to face several challenges which impact negatively on service delivery. These include:

(a) the human resource crisis; we have a shortage of skilled personnel such as doctors, nurses, pharmacists, clinical officers and laboratory staff; and

(b) insufficient resources in the face of an exalting disease burden. Despite the sustained increase in the allocation of financial resources by the Government to the health sector, in real terms, health sector resources are declining.

Opportunities

Mr Chairperson, in spite of the above, the ministry has opportunities to improve on service delivery. There are several global initiatives willing to help the country improve health service delivery. These include the GAVI Fund which is supporting the country’s immunisation programme and the Global Fund for Malaria, TB and HIV/AIDS.

It is my hope that with support from these partners and others not mentioned, the country will be able to reduce the burden driven by infectious diseases. I also need to mention that positive health outcomes do not only depend on programmes implemented by the Ministry of Health, they also depend on programmes in other sectors such as environment, food security, education, water and sanitation. My ministry will need to work with these sectors in order to bring about meaningful improvement in the health circles of the population.

Mr Chairperson, let me take this opportunity to respond to specific questions raised by hon. Members of Parliament. The first are the concerns raised by Hon. Hamir who wanted to know whether we were going to look at Chitambo Mission Hospital, in particular the training centre, because I did not mention it in my policy speech. I was giving examples of the training centres we were going to open. I did not touch on all, but be rest assured that Chitambo is part of the rehabilitation works that we are going to carry out and a provision of K7 billion has been put aside for infrastructure development.

Mr Chairperson, I would like to thank the hon. Member for Chasefu for the support. His concerns on the Lundazi Hospital will be looked at because about K13 billion has been set aside for the rehabilitation and extension of health facilities countrywide.

Hon. Kasongo, I thank you for your support. I wish to assure you that we want to change the face of the ministry. That is one of the challenges before us as a ministry. I do admit that we certainly do not carry a good name as at now, but we wish to rise to the challenge that we can change the way health delivery service is perceived now.

Mr Chairperson, on the issue of transport, there is a provision of K19 billion in our budget that should go towards utility vehicles as well as ambulances. This is an increase from the K1.5 billion that was catered for in 2006. With the support of our co-operating partners, the Global Fund and the World Bank we should start the procurement of vehicles for all the districts and hospitals. This will include radio communications and solar power for some of the facilities that may not have those now.

I would like to thank Hon. Shawa for his support and also for giving appropriate advice to our relatives that side on the need for them to exercise. I also take note of your advice for us to embrace traditional medicines.

I would like to thank Hon. Kapata for her support. With regard to cholera centres, I think we should get into preventive arrangements so that cholera does not become part of us. Since the hon. Member is a councillor in Lusaka which has had less prevalence of cholera, my hope is that in the coming season, more work will be done by the council to see that we do not have cholera. We should be talking about making improvements to our health facilities instead of focusing on the number of people that should suffer from cholera for us to build a facility specifically for cholera.

Mr Chairperson, with regard to the cancer unit, I stated in my policy statement that we are only waiting for a license for us to open the facility because it will go a long way towards reducing the medical bills that we now have to incur on treatment abroad.

Sir, the statement that we pay expatriate doctors more than local doctors is misleading because they are on local conditions. In some cases, they come here to complement what we have. We may take care of their air tickets and other things, but they come here on an allowance and are here as a useful resource for us.

Mr Chairperson, on the mosquito nets, we are distributing these free of charge. The ones that are being sold are just part of the programme. However, in most cases, there are a lot that are being distributed for free. We have a programme in the coming week where we will receive some nets so that they can be distributed.

Mr Chairperson, Hon. V. Mwale raised some concerns on PEPFAR. He may have some different views, but we have said, as a Government, that we are going to allow all our partners to get on board so that we are able to deliver health service. Even though PEPFAR may not be in favour of condoms, it is still within the ABC programme in that it promotes abstinence which is the surest way of not contracting HIV/AIDS. The programme also supports the use of condoms for high risk people as a way of preventing STIs. Therefore, the PEPFAR programme is still within the strategies that we use and part of the National Health Strategic Plan for 2006 to 2010.

Mr Chairperson, I would like to inform Hon. Major Chizhyuka that I was also born on the 14th December and so I share your emotions and hear your concerns on the Namwala Hospital. As we approve the Budget, we will see how we can work together.

I thank you, Sir.

Hon. Members: Hear, hear!

VOTE 46/01 − (Ministry of Health − Human Resource and Administration − K174,820,074,349).

Mr Mukanga: Mr Chairperson, on Sub-head 1, Programme 1, Activity 05 − Other Emoluments − K24,109,251, I would like clarification from the hon. Minister why the amount has reduced from K15,279,101,796 last year. On the same Sub-head, Programme 2, Activity 3 − On Call Allowance − K36,683,000,000, I would like to know the rationale behind this because last year, the amount was K14,490,566,043. Again, on the same Sub-head, Programme 2, Activity 6 − Maintenance − K1,245,332,257, I would like to know why the amount has reduced because last year, it was K10,468,545,602 and we need to continue maintaining our buildings.

The Deputy Chairperson: Hon. Minister of Health.

Hon. Minister of Health, it is on page 381, Subhead 1, Programme 1, Activity 05 – Other Emoluments – K24,109,251, Programme 2, Activity 03 – On Call Allowance – K1,183,073,955 and Activity 06 – Maintenance – K1,245,332,257.

Ms Cifire: Mr Chairperson, this provision is required to meet payments of allowances such as long service bonuses and leave travel benefits for employees at Head Office and seven units located in Lusaka such as, the Cancer Diseases Hospital and Chest Clinic. The reduction is due to inadequate funds allocated to the sector for personal emoluments for the year 2007.

With regard to on-call allowances, these funds will be used to pay on-call allowances for doctors serving in all health institutions in the country. The increment is as a result of the 100 per cent upward adjustment of the on call allowance awarded to doctors mid last year and in addition to cater for the 109 doctors recruited.

With regard to maintenance, the funds are required to carry out various maintenance works within the ministry. The reduction is as a result of the completion of some of the works in Chipata and Mongu provincial offices and also the reduction in donor funding this year.

I thank you, Sir.

Vote 46/01 ordered to stand part of the Estimates.

Vote 46/02 ordered to stand part of the Estimates.

Vote 46/06 ordered to stand part of the Estimates.

Vote 46/07 ordered to stand part of the Estimates.

Vote 46/08 ordered to stand part of the Estimates.

Vote 46/10 ordered to stand part of the Estimates.

Vote 46/11 ordered to stand part of the Estimates.

Vote 46/12 ordered to stand part of the Estimates.

Vote 46/13 ordered to stand part of the Estimates.

Vote 46/14 ordered to stand part of the Estimates.

Vote 46/15 ordered to stand part of the Estimates.

Vote 46/16 ordered to stand part of the Estimates.

Vote 46/17 ordered to stand part of the Estimates.

Vote 46/18 ordered to stand part of the Estimates.

VOTE 65 – (Ministry of Science, Technology and Vocational Training – K130, 858, 901, 651.00).

The Deputy Chairperson: Before you start, hon. Minister, I wish to make a reminder. We are starting a new Vote and as we appreciate, hon. Members, we can only go up to a certain point. We cannot go beyond a certain number because we have a number of Votes to consider. If you want to debate, please, indicate. Do not wait until we are about to come to a close because it becomes a bit difficult.

The Minister of Science, Technology and Vocational Training (Dr Chituwo): Mr Chairperson, I thank you for affording me the opportunity to present my statement on the estimates of expenditure for the Ministry of Science, Technology and Vocational Training to this august House.

Firstly, I wish to congratulate the hon. Minister of Finance and National Planning for presenting the 2007 Budget, which I am sure will help steer this country to higher heights for socio-economic development as we continue to strive towards alleviating poverty amongst the majority of the Zambian people.

Sir, I will present my statement in two major parts. Firstly, I will look at the ministry budget performance during 2006. Secondly, I will present the key issues contained in the 2007 Budget and then end with concluding remarks.

Mr Chairperson, the year 2006 was challenging for my ministry and the nation as a whole in terms of resource availability. In spite of this, my ministry did its best to ensure that major programmes planned were undertaken. Parliament approved a total budget K94.31 billion of which K57.18 billion was a contribution by our co-operating partners mainly through the Technical Education and Vocational and Entrepreneurship Training Development Programme (TEVET). My ministry received 95 per cent of the approved estimates which enabled us to undertake most of the programmes in 2006.

Sir, in 2006, my ministry continued to implement the TEVET development programme. The programme had four developmental objects namely:

(i) ensuring quality in TEVET delivery;

(ii) ensuring equal access to TEVET;

(iii) ensuring equity to TEVET; and

(iv) providing demand led TEVET delivery system.

Mr Chairperson, allow me to elaborate on each of these objectives. In order to ensure quality in TEVET, my ministry continues to address issues of infrastructure, re-equipping training workshops and skills upgrading of instructors in our colleges. I am, therefore, glad to report to the House that using the available resources, my ministry undertook and completed critical rehabilitation works and re-equipped training workshops in the following institutions:

(i) Kitwe Vocational Training Centre at the cost of K375 million.

(ii) Mwinilunga and Luanshya Trades Training Institute at a cost of K1.82 billion.

(iii) Technical Vocational Teachers Training College (TVTC) in Luanshya at the cost of K7.31 billion.

(iv) Northern Technical College (NORTEC) in Ndola at the cost of K8.8 billion.

(v) Livingstone Institute of Business and Engineering Studies at a cost of K11.73 billion.

Mr Chairperson, I also wish to report that rehabilitation works have reached an advanced level at Mansa Trades Training Institute and Nkumbi International College.

Sir, my ministry has continued with the construction of permanent infrastructure for our provincial institutions in Mongu, Chipata and Solwezi. I wish to report that a training workshop has been constructed and a second training workshop is under construction in Solwezi Trades Training Institute.

I am also pleased to report to the House that two training workshops and a classroom block have been constructed at Mongu Trades Training Institute. In Kaoma, one workshop was completed and construction of a classroom block was started. At Ukwimi Trades Training Institute, construction of a classroom block was started and reached advanced stages at the end of last year, 2006.

Mr Chairperson, in order to safeguard infrastructure and equipment in our training institutions, my ministry developed and launched an Asset Development and Maintenance Policy. Through this policy, my ministry will ensure that each institution includes a planned maintenance activity in their annual work plan and budget. This will be part of the major performance of the management boards of our institutions.

Sir, the quality TEVET delivery is not only enshrined in good infrastructure, but competent instructors are also essential. I am, therefore, proud to report that in 2006, thirty eight instructors were sponsored to the Copperbelt University, NORTEC and TVTC for skills upgrading to degree or diploma level. I would also like to inform the House that my ministry sent thirty instructors from our training institutions, of men and women, to the Peoples Republic of China to pursue five-year degree programmes in mechanical and electrical engineering. Thanks to the Chinese Government which has sponsored these instructors.

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

Dr Chituwo: I am confident that when these instructors return to their respective institutions, they will greatly improve TEVET delivery in these critical technical programmes.

Mr Chairperson, in order to ensure equity in our TEVET delivery system, my ministry began to seriously address issues of gender, HIV/AIDS and disability. In this regard, I am happy to report to the House that my ministry developed the following policies:

(i) Gender Policy;

(ii) Disability Policy; and

(iii) HIV/AIDS Policy.

Training institutions will have to take into consideration the issues that are articulated in the above policy documents during their implementation of the TEVET programmes.

Mr Chairperson, in order to ensure access to TEVET by vulnerable students, my ministry successfully disbursed a total of K3.8 billion bursary to 1,640 students. This represents a 100 per cent increase in the number of students on bursaries from 2005. Thirty-one per cent of these were female recipients. The bursary is facilitating training opportunities to many people to attain skills they would not otherwise afford due to their social economic condition. I am, therefore, proud that my ministry, through this very important intervention, is directly alleviating poverty amongst our people.

Mr Chairperson, hon. Members of the House are aware that the economic landscape of Zambia has changed significantly since 1992. The private sector has been driving the economy, 80 per cent being the informal sector. During the last five years, the mining has been industry has been revitalised significantly and thereby increasing demand for key relevant professionals. Consequently, my ministry has also changed the strategy in TEVET delivery by promoting demand led training.

Therefore, I am happy to report further to the House that during 2006, my ministry started developing a national skills development plan. The plan seeks to identify training needs in Zambia in the next five years in line with the Fifth National Development Plan. My ministry, so far, has established a TEVET Fund in order to facilitate demand led training amongst others. This fund is being managed by the Technical Educational Vocational and Entrepreneurship Training Authority (TEVETA). The fund is accessible by all training institutions registered with TEVETA which meet the necessary criteria under the fund. A total of K3.4 billion was disbursed from the fund in 2006. More than 50 per cent of these funds were used to finance pre-employment training while K1.1 billion was used to facilitate training of small and medium enterprises and the informal sector. The Government is cognisant of the need for us to equip employees, particularly in the informal sector, with skills in order for them to be able to produce quality goods and services.

Mr Chairperson, the world has realised that science and technology is a motor engine for socio-economic development. I am glad that the New Deal Administration under the able leadership of President Levy Patrick Mwanawasa, SC, started addressing critical issues in science and technology, such as, infrastructure…

Mr Ntundu: Ah.

Dr. Chituwo: … equipment and human resource development. Hon. Ntundu, please listen.

I am also glad to mention that the preamble in the Vision 2030 has clearly acknowledged that science and technology play a key role in developmental programmes in our country. It will have a significant role to play in the four key sectors of priority, namely; agriculture, tourism, mining and manufacturing. My ministry has been working closely with the University of Zambia in undertaking agriculture related research aimed at assisting small-scale farmers improve productivity. At the National Institute for Scientific and Industrial Research (NISIR) we are researching in bio-fuel production. It is gratifying, therefore, to note that a chapter on science and technology has been included in the Fifth National Development Plan. The chapter draws its contents from the long-term Science and Technology Development Plan.

With the above initiatives, I am pleased to inform the House that my ministry successfully completed the Genetically Modified Organisms Laboratory at Chilanga Unit of the National Institute for Scientific and Industrial Research at a total cost of K2.3 billion. The laboratory has since been provided with modern equipment at a total cost of K1.9 billion.

Rehabilitation works at other laboratories has continued and works are expected to be completed in the second quarter of this year. The GMO laboratory will serve as a national referral centre for detection of GMO in seeds and foodstuffs.

The House may wish to know that three scientists received training in GMO detection in Norway, two of whom, both female, went back for their masters programme. The laboratory is fully operation and due for commissioning at an appropriate date within this year.

Mr Chairman, as I indicated earlier, 2006 was a challenging year and we faced several constraints, which I may also refer to as challenges. I want to inform hon. Members of this House that the needs of the two sectors under my charge are enormous and forever increasing.

The institutions have huge outstanding debts for both statutory and personal emoluments amounting to K30.9 billion, 10 per cent of which is in science and technology institutions. These debts have accumulated over the many years due to limited resources.

However, my ministry has been trying to service the debts and will continue to find ways and means of addressing the problem. As a starting point, we are encouraging these institutions to set aside funds from their monthly grants to pay off some of these arrears.

Another major constraint was in the area of staff retention. This remained a serious challenge for the ministry and its institutions mainly as a result of the conditions of service.

Mr Chairman, I would like to laud institutions under my ministry for the hard work they continue to put into raising funds from other initiatives such as user fees and other products and services. I must mention that even this additional income is not enough to enable the institutions meet the full cost of training, service their debts and improve conditions of service for lecturers, researchers and support staff.

Mr Chairman, the science and technology sector does not attract donations. This is understandable for no country will deliberately facilitate the development of a competitive advantage of another country in this highly competitive world. My ministry, therefore, desires to improve funding to the sector, hence, the inclusion of the sector in the Fifth National Development Plan.

Mr Chairman, let me now address the issues in 2007. In 2007, my ministry will be implementing important programmes aimed at facilitating better training delivery and improved access to skills training as well as scaling up support to research and development.

I am glad to inform the House that this year, the Government has allocated a total of K130.85 billion. This is broken down as follows: From the Government K80.5 billion representing 61.5 per cent and from the co-operating partners K50.35 billion representing 38.5 per cent

In implementing programmes in 2007, my ministry is mindful of the many challenges the two sectors are facing such as I have indicated above. However, I would like to highlight the main challenge which the country is facing.

Mr Chairman, the House may recall that this year, my colleague, the hon. Minister of Education presented to this House the results of Grades 7, 9 and 12 examinations. At each of these levels, there is a number that is unable to proceed to the next level.

The Ministry of Science, Technology and Vocational Training is well positioned to absorb quite a number of these youths into various skills training institutes and centres.

In addition, there are over 300 privately run, Non-Governmental Organisations and Church owned TEVET institutions providing skills training. Many of these institutions have benefited and will continue to benefit from the TEVET Fund under my ministry in their provision of training.

Mr Chairperson, currently, there are about 25,000 students in all technical education and vocational training institutions, that is, public, trust, private, church and Non-Governmental Organisations owned in the country. With increased resources, we shall substantially increase the capacity of the institutions to take in more of the school leavers. With this picture, I call upon the House to fully support my budget.

Mr Chairperson, in 2007 some of the critical programmes my ministry will be implementing include continued construction of permanent infrastructure at provincial training institutions at Chipata, Solwezi and Mongu and K11.8 billion has been allocated for this programme. I would like to mention here that the Solwezi Trades Training Institute will be developed into a college that will be offering diploma and crafts courses that are relevant to the expanding mining industry in the province;

Hon. Members: Hear, hear!

Dr Chituwo: Secondly, continued rehabilitation works for existing facilities in research and development and training institutions. My ministry will also continue to finance the re-equipping of laboratories and workshops in our research institutions and training institutions K11.4 billion has been budgeted.

Thirdly, my ministry intends to double the number of beneficiaries to the bursary scheme. This will provide more vulnerable young Zambians with the opportunity to obtain lifelong skills and K11.2 billion has been budgeted for this programme;
We intend to continue implementing the TEVET Fund. We expect to considerably scale-up the disbursement of the funds to all that qualify;

Lastly, in the apprenticeship training; to address the issues of quality, my ministry is working on ways of involving employers more closely in the transfer of skills to trainees. Classrooms alone cannot guarantee quality in the provision of skills development. Students need to acquire some skills of their trades from employers. To this end, my ministry, together with the Ministry of Labour and Social Security, is working on the legal framework needed to support the reintroduction of apprenticeship training;

My ministry will begin supporting and developing local scientific innovations that will contribute to improving the living standards of our people. Our target will be innovations that foster employment creation and the efficient utilisation of our natural resources, especially in the area of value addition;

I am glad to state that, this year, the Gemstone Processing Training Centre in Ndola has started operating from its own campus that my ministry has acquired for them. Training of small-scale miners will scale-up significantly and will contribute to poverty alleviation among the Zambians in the gemstone mining areas. This year, we expect to train, at least, sixty persons in gemstone identification, processing, polishing and cutting.

There is also need for financing priority research so that we develop technologies that are relevant to the current economic landscape. In this regard, research in biotechnology will be enhanced in order to improve food production, produce various types of medicines from the abundant medicinal plants in our forests, produce bio-oils and fuels from various plants species and manage and protect our environment.

Mr Chairperson, as I conclude, I should remind hon. Members of this august House that the cake we have to share is limited. The funds in my ministry’s budget, generally, fall short of what we would have needed to effectively and efficiently deliver services to our people. We shall strive to be more efficient in the utilisation of these funds and resources.

We shall insist on monitoring our skills training institutes by holding them accountable to the performance contracts signed between the ministry and the institutes.

I, therefore, request hon. Members of this House to support my ministry’s budget.

I thank you, Sir.

Hon. Members: Hear, hear!

Mr Hamududu (Bweengwa): Mr Chairman, science and technology is key to economic development in this modern era and I agree with what the hon. Minister is saying. I think we have a good hon. Minister.

Hon. Government Members: Hear, hear!

Mr Hamududu: Sir, if what he has said can be put into practice, we should be able to move a little step further.

Sir, training in science and technology must focus on the resources that we have so that we add value to our products. There is very little, at the moment, happening in this country in the area of value addition. Historically, I think we had a break somewhere. There was a period in which we did not take care of vocational training. If you go around the country, most vocational training institutions are dilapidated. I want to register to this House that I visited one of the colleges this morning. People are growing maize and cassava in the college compound. I think we have enough land in Zambia. Next year, we must slash all that maize so that these colleges are cleaned.

Laughter

Mr Hamududu: Sir, I know Chainama College is not under science and vocational training, but you operate in the same environment. What I saw there is unacceptable. You do not need even K1 million to clean these colleges. If these people want land, they can get it in Chongwe or Bweengwa. 

Laughter

Mr Hamududu: You should leave the colleges for that purpose. They must be clean and presentable. I would like to urge the hon. Minister to make sure that these colleges are cleaned. The children at the colleges must also work. They must not just go to class. In the afternoons, they must go and slash so that these places must look very clean. They must instead plant trees around. Why do we enjoy having such dilapidated infrastructure in Zambia? The landscaping is very bad. I know the hon. Minister is new in this field and I would like him to go and change the face of these colleges so that we can also attract foreign students. I will come to that issue later.

Mr Chairman, technicians play a vital role in any economy. If you go to economies like Germany, the technicians are the ones who drive the economy. Some of the doctors are just theorists. The technicians are the drivers of the economy and we must take care of them. Let us give them the right training, recognition and pay.

Sir, secondly, there is the export of training services issue. In this country, we have had a lot of opportunities and it is not too late for us to do that. Basically, Zambia is advanced in training. We have enough resources to train many people in the sub-region. That way, we are going to earn a lot of foreign exchange to plough back into these colleges. We are complaining of money in this country and we can raise a lot of money by attracting a particular percentage of students from neighbouring countries.

Sir, under the SADC Protocol, there is a provision of 30 per cent for foreign students. It is very surprising that many Zambian youngsters are going to neighbouring where there is a low quality of education countries to study and yet, in Zambia, we have more qualified people because we have the advantage of experience. We got independence a little earlier, we had a very good education system and we have scientists in all areas. This shortage of scientists is fake. When you go to these countries, you will find oil engineers and all sorts of engineers. They have gone away because we do not take care of them. As far as I am concerned, this country can earn a lot of foreign exchange in this area to plough back into colleges, train more Zambians and buy more machinery.

Sir, Angolans are going to Namibia and are not able to find places, and yet, we have better facilities in Zambia. People are flying all the way from the Democratic Republic of Congo to Namibia or Botswana to look for opportunities, and yet, in Zambia, we have a better capacity. Instead we are growing maize in colleges.
Laughter

Mr Hamududu: Mr Chairperson, the other issue I want to raise is that of productivity.

Generally, in Africa, we have low productivity. I will not use all my time allocated to me because I believe in productivity, which is to do more with little time. That is my training. You may wish to know that I formed a company called Southern African Institute for Productivity. It is somewhere.

Laughter

Mr Hamududu: Sir, we need a centre for productivity in this country. After training these children in various fields, we need to give them productivity skills so that they can produce more with little resources. We come to this House to ask for a lot of money because we are unproductive.

Laughter

Mr Hamududu: For example, I have seen a lot of money going to the Ministry of Health. For example, there is K79 billion going to Southern Province, but I cannot see anything happening. There is low productivity and wastage of resources. Our children must be trained in productivity so that they can do more in a shorter time with lesser resources. It is possible.

Hon. Minister, you should give us an opportunity to visit Mauritius and Botswana. They have very beautiful centres for productivity. Our children should go through this. It is not a question of knowing how to repair something, but of knowing how to do more with little time and money. That is critical. Productivity in this country is very low.

Mr Chairperson, I am very happy that this Government has introduced a Youth Fund. If it is not useful to you, as for me in Bweengwa, it is very useful.

Mr Malwa: On a point of order, Sir.

The Deputy Chairperson: A point of order is raised.

Mr Malwa: Mr Chairperson, is the hon. Member on the Floor in order to state that a lot of money has been allocated to the Ministry of Health, but he has not seen any activities taking place in his constituency, and yet health centres have been built there by the Government through the Ministry of Health? I need your very serious ruling.

The Deputy Chairperson: Could the hon. Member on the Floor take that point of order into account as he debates.

Laughter

Mr Hamududu: Mr Chairperson, I would like to advise my brother, the hon. Deputy Minister of Energy and Water Development that I am speaking the truth.

Sir, there is a lot of money being disbursed in the budget year in year out. In my constituency and the hon. Deputy Minister’s constituency, which I am very familiar with, there is a part that has no school or clinic. I am familiar with his constituency because my in-laws come from there. His constituency is in an even worse situation than Bweengwa.

Laughter

Mr Hamududu: Sir, we are saying that this money is a lot.

Mr Malwa: On a point of order, Sir.

Hon. Members: Aah!

The Deputy Chairperson: Order!

I wish to guide the hon. Deputy Minister that he cannot raise a second point of order.
Interruptions

The Deputy Chairperson: Order!

You are not allowed to raise a second point of order on the same person debating. Unfortunately, the rules bar you from doing that.

Laughter

The Deputy Chairperson: Could the hon. Member debating continue.

Mr Hamududu: Mr Chairperson, the hon. Deputy Minister is my good friend.

Mr Malwa: Address the Chair.

The Deputy Chairperson: He is addressing the Chair.

Mr Hamududu: Sir, K75 billion is lot of money. There is no efficiency in the disbursement of this money down there. We have been talking about these things. The money is not reaching the ground because of low productivity.

For example, in my constituency, due to strong winds, the roof of one of the schools was blown off. Some Government officials travelled all the way from Livingstone to come and inspect it and then went back. For what? There is a District Education Board Secretary (DEBS) office in Monze which could have done that. The K5 million which they used could have been used for something else. How can you travel all the way from Livingstone to Malundu to inspect a school? That is unacceptable. There is a District DEBS office in Monze.

Professor Lungwangwa smiled.

Mr Hamududu: The professor is smiling and I know he will make changes in this area.

Laughter

Mr Hamududu: The Hon. Minister of Science, Technology Vocational Training must address all the ministries to send their workers to this centre of productivity so that they become productive. This money is too much.

Laughter

Mr Hamududu: I want to link the youth fund to science and technology. This is a wind of opportunity. In my constituency, we wish to link the youth fund to science and technology. For example, if the Ministry of Education wants to procure desks, we will give money to a youth club to make the desks and we will buy from there. We want to localise the money. We will not allow someone to buy desks from Lusaka for Bweengwa. No! All the money that you are funding must be localised. We want to empower the youths to do things like maintaining buildings and clinics. That is how you grow the economy. You attract money.

Interruptions

Mr Hamududu: On employment creation, this ministry is at the heart of employment creation. There are many examples I can give such as Japan and South Korea. Basically, for an economy to grow, there are four factors.  You may discover new resources like Botswana, or invest in science and technology and have a highly trained labour force so that you can exploit your natural resources. Mining copper and building 17,000 buildings in small area should not happen, but the little money that we are getting from mining revenue must be ploughed in sustainable economic sectors. As you all know, minerals are wasting assets.

For this reason, I wish to advise my cousins from North-Western Province to build a mining camp and not a big town because it will become a ghost town one day once copper finishes. Get revenue and invest it in sustainable economic sectors such as agriculture.

Major Chizhyuka: Hear, hear!

Mr Hamududu: Therefore, we need to support this ministry and train our children in science and technology so that we can follow the example of Japan. Japan is a small island with little resources and people are crammed together. Today, Japan is the second largest economy in the world.

Major Chizhyuka: A little island!

Mr Hamududu: They just use their brains. In Zambia, we are blessed with brains, land and minerals, but there are a lot of poor people.

Laughter

Mr Hamududu: Your ministry, hon. Minister of Science, Technology and Vocational Training should give us a sustainable solution.

Hon. UPND Members: Hear, hear!

Mr Hamududu: The time is now.

I wish to advise my brother in the Ministry of Sport, Youth and Child Development not to give money to youth clubs. In Bweengwa we do not do that. Up to now the K40 million Youth Development Fund is still intact because we do not want to release it for useless things.

I urge the youth to organise themselves and come up with viable business plans. You can make desks using the Constituency Development Fund (CDF) and we will buy them from you. We will invest the money back in those youth clubs. That is how you grow the economy.

Hon. Minister, in Monze …

The Deputy Chairperson: Address the Chair.

Mr Hamududu: Mr Chairperson, we do not have serious vocational training in Monze. Therefore, we need to look at Monze Agriculture Training Centre and put a lot of components there so that everything can be in house. Monze services a number of areas. My brother from Namwala is deprived. That area is highly economically active. Therefore, we need a lot of training there in all the areas where we have competitive advantage.

Major Chizhyuka: Hear, hear!

Mr Hamududu: Therefore, I support your ministry and this Vote. Mr Chairperson, in the name of productivity, I will stop here to save some minutes.

Laughter

Hon. UPND Members: Hear, hear!

Mr Mabenga (Mulobezi): Mr Chairperson, thank you for affording me an opportunity to contribute to the debate on the estimates for …

The Deputy Chairperson: Order!

Laughter

(Debate adjourned)

_____

HOUSE RESUMED

[MR SPEAKER in the Chair]

(Progress reported)

_____

The House adjourned at 1956 hours until 0900 hours on Friday, 23rd March, 2007.