DAILY PARLIAMENTARY DEBATES FOR THE FOURTH SESSION OF THE ELEVENTH ASSEMBLY

Thursday, 13th November, 2014

The House met at 1430 hours

[MR SPEAKER in the Chair]

NATIONAL ANTHEM

PRAYER

________

QUESTIONS FOR ORAL ANSWER

    RURAL ROADS CONSTRUCTION

218. Mr Mucheleka (Lubansenshi) asked the Minister of Transport, Works, Supply and Communication:

(a)    when the Government would come up with a comprehensive plan for the construction of feeder and access roads in rural areas; and

(b)    whether the Government had ever carried out an analysis of the Link Zambia 8,000 km Road Programme and the construction of rural roads in order to appreciate the social and economic linkages.

The Deputy Minister of Transport, Works, Supply and Communication (Mr Mwiimba H. Malama): Mr Speaker, the Government of the Republic of Zambia, through the Road Development Agency (RDA), has formulated a strategy for the years 2015 to 2024 to ensure that all roads are maintained. This includes the maintenance of feeder and access roads.

Mr Speaker, the RDA carries out feasibility studies and makes detailed engineering designs before the rehabilitating or upgrading a road that is part of the Link Zambia 8,000 km Road Programme. This includes social and economic assessments.

Further, the RDA shall review the Link Zambia 8,000 km Road Programme in the second quarter of 2015 to assess its performance.

Mr Speaker, I thank you.

Mr Mucheleka: Mr Speaker, can the hon. Minister show me a document which clearly outlines the strategy that links feeder roads to trunk roads so that I can to see how the two correlate in helping to drive economic development between the rural and urban sectors?

The Minister of Transport, Works, Supply and Communication (Mr Mukanga): Mr Speaker, what the hon. Member is talking about is clearly outlined in the Revised Sixth National Development Plan (SNDP). As a ministry, we have a document which we shall present to the House by the end of the month.

Mr Speaker, I thank you.

Mr Mbewe (Chadiza): Mr Speaker, I would like to find out from the hon. Minister why the Government takes long to pay contractors for completed work.

Mr Mukanga: Mr Speaker, whenever an interim payment certificate is submitted, we have to inspect the works to ensure that they are of the right standard. The payment process begins once the inspection has been carried out. 

Mr Speaker, I thank you.

NEW BURIAL SITES IN LUSAKA

219. Mr Ng’onga (Kaputa) asked the Minister of Local Government and Housing:

(a)    whether the Government had any plans to open new burial sites in Lusaka in view of the shortage of burial space at the existing cemeteries;

(b)    if so, where the new sites would be located; and

(c)    what had caused the delay in opening new sites.

The Deputy Minister of Local Government and Housing (Mr N. Banda): Mr Speaker, the Government, through the Lusaka City Council, is negotiating with Kafue and Chibombo district councils to secure land for new burial sites for Lusaka. 

Currently, there is no land available in Lusaka where a cemetery can be located, considering that we need about fifty hectares of land for a cemetery which can cater for the population in Lusaka.

Mr Speaker, negotiations and consultations with chiefs in Chibombo District are at an advanced stage. The new sites for cemeteries are likely to be located in Chibombo near Ngwerere Cemetery, which will be an extension to the existing cemetery, and the other site will be located in Kafue District. The process of negotiating with the chiefs in the two districts is ongoing.

Mr Speaker, I thank you.

Mr Ng’onga: Mr Speaker, since some of the existing grave sites like Chingwere and Leopards Hill are completely full, what is the Government doing as it awaits the conclusion of negotiations to avoid people paying a lot of money at the privately-owned cemeteries?

Mr N. Banda: Mr Speaker, the existing cemeteries are full, but there are still some spaces which can be availed to the public. We shall expedite the negotiations with Their Royal Highnesses.

Mr Speaker, I thank you.

Ms Namugala (Mafinga): Mr Speaker, I would like to find out what the Government’s policy is on privately-owned grave sites and what the procedure is for one to open a grave site as a business venture.

Mr N. Banda: Mr Speaker, the process is similar to that of acquiring land and registering the use of the land with the local authority. Anyone who would like to get into cemetery business should apply to the local authority.

Mr Speaker, I thank you.

Ms Imenda (Luena): Mr Speaker, our forefathers who designed the land law had a reason for deciding that there should be a ninety-nine-year lease on a piece of land. However, successive governments have allowed people holding ninety-nine-year leases to demarcate the land and sell it towards the end of the leases. As an alternative plan,  would it not be prudent for the Ministry of Local Government and Housing, as it discusses with the chiefs in the districts, to look at which leases within Lusaka are about to expire because the Government has the right to redesign the leases for purposes which will be beneficial to the Government?

Mr N. Banda: Mr Speaker, the hon. Member has correctly described the situation. To some extent, it has been difficult to manage the law on the ninety-nine lease on land because it does not provide for interventions within the ninety-nine years. In view of this, the Government is reviewing the Act so that it can be more in compliance with the current situation. I am sure that the Act will be brought to Parliament as soon as the process of reviewing is completed.

I thank you, Sir.

Mr Katambo (Masaiti): Mr Speaker, what will the Government do in an event that the local chiefs refuse to release the land?

Mr N. Banda: Mr Speaker, it is not anticipated that Their Royal Highnesses will refuse to give the land because it is as important to them to make the land available for this noble use as it is important to any citizen. Should that arise, the Government will explore other options.

I thank you, Sir.

Mr Chipungu (Rufunsa): Mr Speaker, it is evident that there is a shortage of land to turn into burial sites. Is it not possible for the hon. Minister to introduce other avenues of disposing of bodies like cremation? Is that the right word? I mean burning them.

Hon. Members: Aah!

Mr Chipungu: Mr Speaker, I am sure that if Hon. Lubinda died, there would be no harm in …

Mr Speaker: Order!

I do not think that you should bring Hon. Lubinda into the picture.

Laughter

Mr Speaker: Order!

I believe it is not something he is foreseeing in the immediate future.

You may continue.

Mr Chipungu: Mr Speaker, I would like to find out from the hon. Minister whether we can introduce and encourage cremation.

Mr N. Banda: Mr Speaker, cremation is an emotive issue because it is not part of the Zambian culture. That is one way of reducing on the demand for land. However, this would call for serious debate. As the Government, we think that we have not yet reached that stage.

I thank you, Sir.

Hon. Government Members: Hear, hear!

Mr Mutale (Kwacha): Mr Speaker, in urban areas like Lusaka, finding land for cemeteries is a problem. What plan is the Ministry of Local Government and Housing putting in place to ensure that other areas do not experience a similar problem in future?

Mr N. Banda: Mr Speaker, there was an oversight in the planning in the early years of Independence when the population of Zambia was still very low. Facilities such as cemeteries were not considered as a priority in terms of planning. However, currently, in the newly-created districts, we have emphasised proper planning and have enough staff to look into the intricacies of making land available for facilities such as cemeteries and dump sites.

I thank you, Sir.

Prof. Lungwangwa (Nalikwanda): Mr Speaker, within the cultural diversity of our society, there are certain groups of people that bury the dead in their places of birth. For instance, I know that when Hon. Muntanga passes on, he will be buried in Kalomo.

Hon. Opposition Members: Yes!

Prof. Lungwangwa: Mr Speaker, is the Ministry of Local Government and Housing encouraging such cultural practices so as to decongest the urban burial sites?

Mr N. Banda: Mr Speaker, that is the practice in the rural parts of the country. So, the Government cannot intervene in family decisions on where to bury their dead. As decentralisation takes place, …

Interruptions

Mr Speaker: Order!

May I have order in the rear!

Mr N. Banda: … the local authorities will convert some traditional land into cemeteries in conjunction with Their Royal Highnesses. The Government is aware of the situation.

I thank you, Sir. 

Brig-Gen. Dr Chituwo (Mumbwa): Mr Speaker, I would like to find out from the hon.  Minister of Local Government and Housing whether there is a minimum size for a privately- owned burial site?

Mr N. Banda: Mr Speaker, I must be honest and say that I am not sure if there is a minimum size for a privately-owned burial site. This morning, when I looked into the details of this question, I learnt that the volume of land given to a place will be determined by the population in a particular area. For instance, the 50 hectares that we are talking about will cater for the population of Lusaka for a reasonable period.

I thank you, Sir.

Mr Lubinda (Kabwata): Mr Speaker, let me take advantage of this question to inquire on a matter relating to the management of cemeteries. Yesterday, we were entertained to a very interesting debate on our forebears and products of colonial masters. 

Mr Speaker, there are two cemeteries in Lusaka. There is one in Rhodespark called Alymer May for our colonial masters and another in Chilenje for our forbears, the indigenous Zambians. 

Sir, Alymer May Cemetery where the colonial masters are buried, is a beautiful park, while the one in Chilenje where the indigenous people are buried is a sorry sight. I would like to find out when the Ministry of Local Government and Housing, which is responsible for the management of cemeteries, will release sufficient resources to the Lusaka City Council so that the Chilenje Cemetery is upgraded to the standard of Alymer May Cemetery. 

Hon. Members: Hear, Hear!

Mr N. Banda: Mr Speaker, the Ministry of Local Government and Housing, in conjunction with the local authorities, is responsible for the maintenance of cemeteries. I am glad that the hon. Member of Parliament, who has a heart for the cemetery in Chilenje, is a member of the council. 

My ministry will liaise with the local authority to see how the maintenance of the cemetery in Chilenje can be included in the Budget. 

I thank you, Sir. 

Hon. Government Members: Hear, hear!

BED SPACE IN THE HOSPITALITY INDUSTRY

220. Mr Mucheleka (Lubansenshi) asked the Minister of Tourism and Art: 

(a)    how much bed space was in the hospitality industry as of 31st December, 2013;

(b)    what steps had been taken to increase the bed space; and

(c)    what the room occupancy rates were as of 31st December, 2013.

The Deputy Minister of Tourism and Art (Mr Evans): Mr Speaker, in 2013, there were 73,991 bed spaces in the hospitality industry. These included hotels, lodges, guest houses, camp sites and bed and breakfast. 

Mr Speaker, in an effort to increase the bed space in the accommodation industry, the Ministry of Tourism and Art and the relevant stakeholders have taken the following measures:

(i)    developed programmes that attract investment in the accommodation sub-sector in priority areas such as the Kasaba Bay in the Northern Circuit, the Greater Livingstone and the Kafue National Park, to mention but a few;

(ii)    the ministry has developed an investment guide with information on the available sites and specific details pertaining to the sites that enable potential investors to make informed decisions; and

(iii)    the ministry has collaborated with other relevant Government institutions and agencies such as the Zambia Development Agency (ZDA) and the Citizens Economic Empowerment Commission (CEEC), among others, to promote investment in the tourism sector.

Mr Speaker, all these measures are aimed at facilitating the development of requisite infrastructure that will stimulate investment in the accommodation industry. 

Lastly, the annual room occupancy rate in the accommodation industry as at 31st December, 2013 was 60 per cent. 

Mr Speaker, I thank you.

Mr Mucheleka: Mr Speaker, the hon. Minister said that the room occupancy rate was 60 per cent. Would he care to explain why the rate was only 60 per cent which, in my opinion, is quite low. Could he also explain what steps will be taken to increase the rate. 

Mr Evans: Mr Speaker, the answer I gave shows that there has been an increase in the room occupancy rate. In 2012, the bed space was 51,662 compared to 73,991 in 2013, indicating an increase of 30.2 per cent. 

I thank you, Sir. 

Mr Pande (Kasempa): Mr Speaker, some years back, there was an exercise to grade hotels and other facilities. How far has this gone because, currently, we do not know which hotel is one, two, three, four or five stars? 

Additionally, hon. Minister, what is the difference between lodges, inns, guest houses and others? 

Mr Evans: Mr Speaker, during the United Nations World Tourism Organisation (UNWTO) General Assembly, hotels were graded so as to meet international standards. 

I thank you, Sir. 

Mr Lubinda: Mr Speaker, with the room occupancy rate of 60 per cent, surely, there cannot be sufficient incentive for any additional investment. Is the Government thinking about coming up with a deliberate policy to encourage regional and international conferencing in Zambia so as to enhance the room occupancy rate and increase the need for investment in this area?

Mr Evans: Mr Speaker, in my earlier response, I mentioned that we have partners like the Zambia Development Agency (ZDA) and the Citizens Economic Empowerment Commission (CEEC). There are spots that have been identified for investment development. At the moment, an area has been identified in Livingstone and we are looking for an investor who can put up a three or five-star shopping mall to boost the room occupancy rate. 

I thank you, Sir. 

Mr Speaker: Next Question. 

Interruptions

Mr Speaker: Order!

The conference in the rear is rather animated. You have an option to continue outside. 

The hon. Member for Mwinilunga may proceed. 

KASANJIKU RIVER BRIDGE CONSTRUCTION IN MWINILUNGA

221. Mr Katuka (Mwinilunga) asked the Minister of Transport, Works, Supply and Communication when a bridge across Kasanjiku River in Chief Ntambu’s area in Mwinilunga Parliamentary Constituency would be rehabilitated. 

Mr Mwimba H. Malama: Mr Speaker, the rehabilitation of the Kasanjiku River Bridge in the North-Western Province is part of the Acrow Bridge Programme which is a comprehensive Bridge Development Programme for the repair/construction of various bridges throughout the country. 

The tender for consultancy services for the design and supervision of construction of Acrow Bridges in the North-Western Province closed on 20th June, 2014, and is currently under evaluation. It is expected that the contract for consultancy services will be signed in the fourth quarter of 2014. Works are expected to commence in the third quarter of 2015, upon completion of the designs and tender processes for the engagement of contractors. 

Mr Speaker, I thank you. 

Mr Katuka: Mr Speaker, is Kasanjiku Bridge one of the bridges on the hon. Miniater’s list?

Mr Mwimba H. Malama: Mr Speaker, yes, it is one of them.

I thank you, Sir.

Mr Antonio (Kaoma Central): Mr Speaker, how much money has the Government set aside for this bridge?

Mr Mwimba H. Malama: Mr Speaker, the designs have not yet been submitted. So, we cannot tell the amounts involved. 

I thank you, Sir.

AMBULANCE PROCUREMENT FOR MUKOBEKO AND OTHER PRISONS 

222.    Mr Mushanga (Bwacha) asked the Minister of Home Affairs when ambulances would be procured for Mukobeko Maximum Prison and other prisons countrywide.

The Deputy Minister of Home Affairs (Mr Kampyongo): Mr Speaker, Mukobeko Maximum Prison has one ambulance at the clinic facility which is servicing the prison population. Mwembeshi Maximum Security Prison was recently given an ambulance by the Ministry of Health. 

Sir, it is also important to note that the following prisons have ambulances:

(a)    Livingstone;
(b)    Kansenshi;
(c)    Lusaka Central;
(d)    Chipata;
(e)    Milima;
(f)    Kamfinsa;
(g)    Mpima; and 
(h)    Katombora.

Mr Speaker, the Ministry of Health provides ambulance services to the prisons that do not have ambulances.

I thank you, Sir.

Mr Mushanga: Mr Speaker, the ambulance currently servicing Mukobeko Maximum Prison, which is the biggest prison in the country, is not adequate. Is there any chance that your ministry, through the Ministry of Health, can procure an additional ambulance to ease the movement of sick inmates?

The Minister of Home Affairs (Dr Simbyakula): Mr Speaker, we normally liaise with the Ministry of Health. As the population grows, we will definitely provide more ambulances because the clinic does not only cater for the prison population, but also the population around the prison.

I thank you, Sir.

Mr Mwila (Chipili): Mr Speaker, the hon. Minister of Home Affairs has not answered the question adequately. What are the future plans to procure ambulances, considering that the population of prisoners is growing?

Dr Simbyakula: Mr Speaker, as the population of prisoners grows, we will procure adequate equipment to service it. The equipment will be procured progressively.

I thank you, Sir. 

__________

MOTIONS

(Debate resumed)

The Deputy Minister of Mines, Energy and Water Development (Mr Musukwa): Mr Speaker, let me join the Zambians across the Republic, and Wusakile residents in particular, in passing my heartfelt condolences to the First Lady, Dr Christine Kaseba, her children and family on the demise of His Excellency the President of the Republic of Zambia, Mr Michael Chilufya Sata. He was the hero of our time; a leader of distinguished disposition; and an advocate for the common Zambian, whose philosophy was to uplift the plight of the poor.

Sir, the footprint of his life will never be forgotten by the poor people of Wusakile. President Sata was a man with a golden heart who embraced the old, young, rich and poor. He had a high affinity for the poor. 

Mr Speaker, I thank you for allowing me to contribute to the debate on the Motion of Supply moved by the hon. Minister of Finance on 10th October, 2014. I am indebted to all the hon. Members of the House who have debated the Motion in relation to the mining industry before me. 

Sir, let me begin by congratulating the hon. Minister of Finance on a well-articulated Budget Address whose theme is “Celebrating our Golden Jubilee as One Zambia One Nation by Making Economic Independence a Reality for all”.

Mr Speaker, as the mainstay of Zambia’s economy, mining plays a key role in ensuring economic independence for all, hence the bold fiscal measures aimed at increasing revenue from the mining sector enumerated by the hon. Minister of Finance in the Budget are highly applauded.

Sir, Zambia is endowed with a variety of mineral resources and has a history of mining that spans over 100 years. As you all know, since the commencement of commercial production, mining has been the engine of economic growth in Zambia. This is evident by the fact that the performance of Zambia’s economy corresponds with that of the mining industry. Therefore, the Government will not implement measures that will adversely affect the sector.

Mr Speaker, the fiscal measures in the 2015 Budget are an attempt to achieve equitable distribution of mineral wealth between the Government, the industry and the people of Zambia. The fiscal regime for the mining industry is not intended to hurt the industry, but to increase revenue while, at the same time, increasing transparency in the sector.

Sir, the Patriotic Front Government has an agenda of improving the living standards of Zambians. This can only be done by promoting the development of the various economic sectors in a manner that benefits the country. In this regard, the 2015 Budget must be interpreted within a broader national development plan.

Mr Speaker, this year’s Budget includes a number of bold measures aimed at encouraging revenue collection, stimulation of growth, local value addition and diversification of the economy amongst others.  

Mr Speaker, the 2015 Budget was drawn up in the interest of both the Zambian people and key industries such as mining. The fiscal regime for the mining sector announced in the 2015 Budget addresses two specific imbalances that have existed for a long time in the past. The first one is in relation with the national income which is derived from the mining sector and the structure of those sources of income.

Sir, the House may be aware that despite high levels of copper production and revenue in excess of US$6 billion per annum, only two mines pay corporate tax. This situation is unsustainable and unfair to the mines that are paying corporate tax. The proposal for the hon. Minister of Finance to address this imbalance is in the right direction. It is regrettable that we have several mining companies that are in production, and yet only two of them are paying corporate tax. This is an imbalance that my Government would like to address. 

Mr Speaker, in connection with the structure of sources of income, the Zambian employee has shouldered a heavy burden of financing national programmes through Pay-As-You-Earn (PAYE). By expanding the tax base, we hope to alleviate this pressure and continue with national development projects, and deliver on the promises of more money in people’s pockets. In short, the burden that we have placed on the Zambian people in terms of high taxation will only be streamlined by ensuring that we increase tax on the mineral resources. This is where people can generate their income and ensure that they have more money in their pockets.

Sir, the 2015 Budget goes beyond mining and includes key custom measures which are intended to promote local manufacturing. The Budget has greater emphasis on supporting tourism, agriculture, transport, communication and infrastructure development. Mining has a role to play in support of the growth of all the other sectors that I have enumerated. M         ining as a source of raw materials and a consumer of finished manufactured engineering products can play a key role in the development of the manufacturing sector in Zambia which has been limping in the past. We hope that these measures will ensure that we grow our manufacturing industry in order to support our economy. 

Sir, according to a study undertaken by the International Council of Mining and Metals (ICMM), the majority of goods procured by mining companies are not manufactured in Zambia. This kind of scenario is very counterproductive in that it does not support the local industries. To that effect, the 2015 Budget promotes the increase in local products by manufacturing companies.

Mr Speaker, let me urge the hon. Members of this House to work with the Government in ensuring that the mining industry supports the development of the manufacturing industry in Zambia. This will not only help in the creation of employment, but also reduce production costs for the benefit of the industry and the nation at large. As the Patriotic Front Government, we will remain open and transparent to our core values of ensuring that we provide a fair and balanced platform to our investors. What we hate most is blackmail and unfair business practices. When the commodity price of minerals such as copper is high, we do not receive calls from our colleagues, asking if we can discuss and see how best we can share the high profit margins.

Mr Mpundu: Hear, hear!

Mr Musukwa: Mr Speaker, our colleagues have continued to recover the lost margins. As the Government, we have a duty to drive the agenda of this country by ensuring that our fiscal policy is predictable, stable, reliable and competitive. In fact, we have not engaged in draconian measures that we have seen in other countries. Our sobriety in ensuring that we manage our country and taxes in a fair and transparent manner that is rewarding to the investors and the people of Zambia must not be patronised by our colleagues. Bad business practices such as transfer pricing, hedging and under declaration of production that investors and some of our colleagues on the left are engaged in do not exist in their countries of origin. They are serious criminal offences which cannot be tolerated in most of these host countries where these mining houses come from. We are committed to ensuring that we govern according to the law. We will also ensure that we manage our country based on the agreements that we have signed with several stakeholders. 

Mr Speaker, we will continue to abide by the rule of law, but will not tolerate any attempt to abuse the justice system to the detriment of the poor people of Zambia. You are aware that the mineral resources that are mined in this country are sold in places and institutions which are far from Zambia, such as the London Stock of Exchange (LuSE). Most Zambians, especially the miners, have never been to London. The mining products are what makes and dictates the economies of developed countries while our people have continued to wallow in poverty with poor working conditions. They are deprived in many ways. We have the means to deliver a policy or framework in terms of taxes that must open the gates to equal opportunities for the Zambian people. We will ensure that the men and women who are working in this industry benefit from the mineral wealth.

Mr Speaker, in conclusion, I wish to state that the objective of the Patriotic Front Government in developing this Budget is to use the resources that are at our disposal to provide a platform for sustainable national development. We cannot continue to be ranked among the top ten copper producers of the world, and yet have very high levels of poverty. In ensuring that we keep the legacy of the late President of the Republic of Zambia, Mr Michael Chilufya Sata, the Patriotic Front Government is determined to ensure that this Budget supports the poor and uplifts the living standards of the people.

I thank you, Mr Speaker.

The Deputy Minister for Southern Province (Mr Munkombwe): Mr Speaker, may I thank you for affording me the opportunity to join the hundreds of Zambians who have passed their condolences to the First Lady and the entire family of the late President Michael Chilufya Sata. We have lost a President who gave the people of the Southern Province, particularly the people of the Gwembe Valley, the Bottom Road which is an endearing gift. However, it is infamous among the hon. Members of Parliament from the plateau. 

Sir, it is a taboo to demean a development project in a particular constituency. If anything, we should add value to the demands of other hon. Members of Parliament who lead projects in certain areas.

Hon. Government Members: Hear, hear!

Mr Munkombwe: Mr Speaker, the twenty-eight years that I have spent in this House enable me to make demands on behalf of other hon. Members of Parliament because they are here to demand for projects in their constituencies.

Sir, the Southern Province has embarked on developmental programmes on road infrastructure, health, agriculture and other areas. For instance, the Government has embarked on the construction of a modern bus terminus in Livingstone and 65 per cent of the works have been completed. The Government has equally embarked on the construction of an ultra modern market which will be the best in the whole of Zambia. That is accredited to the late President Michael Sata. This cannot be erased from history.

Mr Speaker, in the health sector, the Government has embarked on improving the hostels at Livingstone General Hospital and intends to bring modern equipment to the hospital. In Kalomo, construction works for Kalomo District Hospital are underway. Construction works for Moyo and Kanchomba clinics have gone three-quarter way. I am grateful to the hon. Member of Parliament for Pemba because she has been monitoring the progress of these projects. Hon. Members of Parliament are supposed to play a role in monitoring the projects. Sometimes, there are instances where a transformer is needed in a certain constituency and hon. Members of Parliament do not have to come to Parliament to complain about it, but are merely supposed to build relationships with Zambia Electricity Supply Corporation (ZESCO) regional managers in their constituencies and they will be assisted. Some hon. Members are reluctant to go through the offices of District Commissioners (DCs) because they regard them as inferior, and yet they are congruent to development. Therefore, hon. Members are not supposed to ignore them.

Sir, in terms of housing projects in the province, in Choma, for instance, which is the new provincial capital, the Government has embarked on the construction of a six-storey provincial administration. So far, two storeys have been completed and four more are yet to be completed. The Government has also embarked on building thirty low cost houses at a cost of K12,136.66. Twenty medium cost houses have been completed and await electrification.

Mr Speaker, in Mazabuka, road works are underway on the Magoye/Chivuna Road where 18 km of the road have been worked on. I would like to inform this House that Hon. Mulomba has been constantly pushing the Rural Roads Unit (RRU) to complete that segment of the road. The Namaila/Konkola Road, which was impassable for many years, has been worked on. Unfortunately, some of the contractors who were awarded road contracts for some roads in Kalomo have damaged the roads by ploughing through them. When the rains come, the whole road infrastructure in that area will be affected. We are also grateful because road works on the famous Niko/Monze Road have started and are progressing well. I do not know whether the hon. Members of Parliament for Gwembe area will also say that they are tired of hearing about the Niko/Monze Road. There are some areas in Choma, Mbabala and Namwala districts where the tarred road has been graded from Choma right up to Namwala. Some maintenance works will also need to be undertaken on that road.

Sir, the Government has raised money to continue with the programme of cattle restocking. Further, money has been set aside for the construction of dip tanks and livestock service centres. The Southern Province has, so far, received about 17,684 50 kg bags of D Compound fertiliser under the Farmer Input Support Programme (FISP), and the top dressing fertiliser is yet to be delivered.

Mr Speaker, with regard to education infrastructure, several schools such as the Batoka High School which is almost complete and will be commissioned shortly have been built. I am also aware that the Government has built the Gwembe District Hospital and we intend to invite the hon. Minister of Health to commission it. There are numerous projects yet to be completed in the Southern Province because it had the largest share of the 2014 Budget allocation. I know that the ordinary people are grateful for this although there are a few people who may not be grateful.

Laughter

Hon. Government Members: Hear, hear!

Mr Munkombwe: Sir, Hon. Muntanga once rode a grader in order to show the voters his appreciation for the good road network that the Government is providing. If there is any development in a constituency, the Member of Parliament takes the credit. The Government will not have a face there. So, please, can we, as Members of Parliament, be active. If you are a Minister, you must work with your Members of Parliament. However, the Members of Parliament must also reciprocate. It is a double-edged sword. If Members of Parliament ignore the Minister, the sword will chop them, but it will also chop the Minister if he ignores the Members of Parliament.

Mr Speaker, to save time, I am saying we should work together for the progress of the country. I have served in this Parliament for twenty-nine years and have never been sent out of the Assembly Chamber. It is a disgrace to be sent out.

I thank you, Sir.

Laughter

Mr Speaker: Quite some note to end.

Laughter

Mr Hamududu (Bweengwa): Mr Speaker, your Expanded Committee on Estimates considered the Estimates of Revenue and Expenditure for the Financial Year 1st January to 31st December, 2015. In undertaking this task, various stakeholders were invited to make both written and oral submissions.

Sir, allow me to highlight some of the findings and recommendations of your Committee. Firstly, the theme of the 2015 Budget, which is: “Celebrating our Golden Jubilee as One Zambia One Nation by Making Economic Independence a Reality for all”, was highly appreciated by all stakeholders as most befitting. Zambians can be justly proud that they have had fifty years of political Independence in an environment of peace and stability, characterised by smooth transitions of political regimes. It is a model for the rest of Africa and the world. However, the flip side of the achievement is that even after fifty years of political Independence, we have not managed to ensure economic independence for all our citizens.

Mr Speaker, for the common man, political independence cannot be meaningful unless it is accompanied by economic independence. By coming up with the stated theme, the Budget Address is, in a way, making a candid admission of our failure, so far, to provide economic independence for all Zambians.

Sir, Zambia’s macroeconomic performance indicators are fairly satisfactory as of now. However, trends such as the fiscal deficit reported at 3.4 per cent of the Gross Domestic Product (GDP) in 2011, rising to 6.6 per cent in 2012, 6.5 per cent in 2013 and expected to be higher at the end of 2014 are a cause of concern. These ratios are very high. Therefore, concerted efforts must be put in place to bring the fiscal deficit to a desirable figure below 2 per cent of the GDP, which is essential for long-term macroeconomic stability. The other issue of concern has been the rising external debt over the past few years which has risen from US$1.56 billion in 2011 to US$2.47 billion in 2012, US$3.13 billion in 2013 and US$4.7 billion in 2014.

Sir, the annual domestic debt figures from 2011 to 2014 are K12.7 billion, K13.7 billion, K18.5 billion and K19.7 billion. It is important that domestic borrowing is kept to the barest minimum in order to create the fiscal space for private sector borrowing that is needed to enhance further economic growth and employment creation.

Mr Speaker, much as economic growth has been reasonable over the past few years, the stakeholders agreed with the hon. Minister of Finance that it is high time we aspired for a higher annual economic growth rate, possibly above 10 per cent to increase the fiscal space to deal with the huge poverty burden experienced by our people that is standing at 60 per cent.

Sir, on agriculture, most of the witnesses were concerned that the allocation to the agriculture sector was skewed towards the Farmer Input Support Programme (FISP) and the Food Reserve Agency (FRA), accounting for 32.57 per cent and 24.34 per cent of the Budget to the Ministry of Agriculture and Livestock respectively. They further contended that available evidence shows that the FRA purchased crops beyond the budgeted quantities. They noted that in 2014, for example, the FRA budgeted to purchase 500,000 metric tonnes of maize, but this was revised to 1 million metric tonnes of maize. Similarly, in 2013, releases to the FRA were 339 per cent above the budgeted amount. The stakeholders were of the view that while maize is important for our country, there is a need to take a holistic approach in financing the total agriculture package, that is, crop diversification, extension services, research, water harvesting, irrigation, livestock and fisheries development and other areas to ensure food and nutritional security in our country and awaken our diversified agricultural potential.

Mr Speaker, the stakeholders also raised the need for the Government to create an enabling environment for private sector participation in input supply and agricultural marketing for sustainable and robust agriculture business in the country.

Sir, on education, most of the witnesses noted that although the 2015 allocation to the Ministry of Education, Science, Vocational Training and Early Education is consistent with the agreed African Union (AU) Cairo Protocol of allocating, at least, 20 per cent of the Budget to education, about 68 per cent of the allocation will go towards personal emoluments, leaving 18 per cent for infrastructure development and only 14 per cent for direct service delivery. Considering that the ministry also has a component of science and technology, the allocation to the education sector may actually be below the 20 per cent benchmark.

Mr Speaker, in this regard, your Committee recommends that the Government not only sustains the 20 per cent allocation to the sector, but also raises the proportion to adequately cover the education, science and technology component as well as the existing backlog. While appreciating the allocations in the 2015 Budget towards the construction of hostels at our major universities and colleges, namely University of Zambia (UNZA), Copperbelt University (CBU), Mulungushi University and Evelyn Hone College, there is a need for the Government to truly double its efforts to resolve the huge shortage in hostel accommodation that has made students, especially female students, vulnerable to all sorts of abuse in their quest to find accommodation, and you know what I mean.

Mr Speaker, in this vein, students at UNZA submitted that the controversy surrounding the Commonwealth Youth Centre be resolved as a matter of urgency. They want it for accommodation and not any other issues that are being raised. Your Committee agrees with the hon. Minister that Zambia’s young population and growing labour force, with over 53 per cent of the population below the age of eighteen and 90 per cent below forty-five, poses both an opportunity and challenge. 

Investing in young people by equipping them with education and skills, and keeping them longer in school, especially the girl child, would be the right thing to do to yield demographic dividends. Failure to doing the above will result in a demographic disaster which, somehow, is beginning to show in the form of increasing teenage pregnancies, early marriages and alcohol and other substance abuse among young people. Something must be done urgently to ensure that every child is in school and acquires skills or else we shall pay the price. 

Mr Speaker, on health, your Committee observes that although the allocation to the health sector has been marginally increased, it falls short of meeting the Abuja Declaration target of allocating, at least, 15 per cent of a country’s National Budget to the health sector. Your Committee, therefore, recommends that the allocation to this sector be increased in line with this declaration, especially that we have a youthful population that is prone to a lot of illnesses.

Sir, the recently released results of the Health and Demographic Survey reveals that 40 per cent stunting rate in Under Five children, 6 per cent acute malnutrition, 15 per cent underweight and 52 per cent of Under-Five deaths are due to under-nutrition. There is, therefore, a need for the Government to be accountable to its programme called the First 1,000 Most Critical Days to address the issue of malnutrition among children and mothers as a guarantee for a healthy population for increased productivity.

Mr Speaker, in the 2015 National Budget, the allocation for social protection has increased by approximately 9 per cent from the previous year. While the allocations for social protection have been increasing, the percentage has remained below 3 per cent of the total Budget, which is worrisome, taking into account that 42 per cent of the population is living in extreme poverty. Hence, the allocation is not enough to cushion the 42 per cent of the population living in extreme poverty.

Sir, 75.2 per cent of the 2015 Budget will be financed from domestic revenue collection, which is 18.5 per cent of the GDP. There is clearly room for improved domestic revenue collection to meet the developmental needs of our country. In this regard, your Committee urges the Government to come up with measures of broadening the tax and non-tax revenue base. This could include capturing the informal sector and modernising it and addressing deficiencies in the collection of fees and fines by the responsible institutions such as the Zambia Police, Immigration Department and Road Transport and Safety Agency (RTSA), among others.

Mr Speaker, the 2015 Budget seeks to increase mineral royalty from 6 to 8 per cent for underground mines and 20 per cent for open pit mines as a final tax. While recognising the importance of reforming the current mining tax regime in order to enhance the sector’s contribution to the National Treasury, most witnesses who appeared before your Committee proposed that the Government maintains a two-tier mining-tax structure; that is a combination of an appropriate mineral royalty tax rate and corporate income tax to address the mining cost variability.

Mr Speaker, while appreciating the challenges on the huge wage bill the country is experiencing that has clouded development financing in our Budget, the Committee urges the Government to seriously interrogate the pay structure in the Civil Service, quasi-Government institutions and State-owned enterprises. The solution does not necessarily lie in a mere wage freeze. The problem is big and cannot simply be solved by freezing wages. There is definitely something wrong with the pay structure in the country and we need to unbundle it.

Sir, the proposal to establish the Sovereign Fund in the 2015 Budget is a commendable move. As a matter of fact, this should have been done right from the birth of our nation in 1964. This is welcome, especially as a way of putting aside the proceeds from our non-renewable extractives for the future generation.

Mr Speaker, in conclusion, I wish to record your Committee’s indebtedness and gratitude to you for according it the opportunity to undertake this task. I also thank all the stakeholders who appeared before your Committee and contributed to its work, especially those who were required to work after hours. 

Sir, you will be interested to know that because of the brevity of time and, because of the increase in requests from witnesses to make presentations before your Committee, your Committee resolved to interact with some witnesses after hours. Gratitude also goes to the Office of the Clerk of the National Assembly and her staff for the services rendered to your Committee, especially after working hours.

Mr Speaker, I thank you.

The Minister of Commerce, Trade and Industry (Mr Sichinga): Mr Speaker, let me begin my debate by contributing to the condolences paid on the demise of our President, Mr Michael Chilufya Sata. I would like to address myself to the First Lady who had to bear the brunt of nursing her husband. 

I am also thankful for the spirit of the Zambian people who have shown beyond any measure the need to mourn others as the Bible says, “Mourn with those that are in mourning.” I want to thank them for their spirit of oneness and encouragement provided to the First Family. On the other hand, I would like to appreciate the President’s commitment to this country. I would like to mention that on the last trip to New York, the President pushed himself even when he was afflicted. That showed how committed he was towards working for this nation. We should always remember that commitment. Let it be an example to each one of us on how to serve our nation. I thank him for his service and ask God to grant him a rightful place on His right hand side.

Sir, having said that, allow me also to thank the hon. Minister of Finance for presenting the 2015 National Budget. I am also thankful for the Budget Theme of celebrating our Independence Golden Jubilee as one Zambia one Nation by making economic independence a reality. May I add that we are not only one Zambia one nation, but also one people. This theme is not only courting all Zambians to celebrate, but also calling upon us to unite as a people, especially at this time of our loss. More importantly, we need to ensure that unity is attained if we apply ourselves. It will not come by accident.

Therefore, the question and challenge that is before us is how we can make economic prosperity and independence a reality for all under the motto of “One Zambia, One Nation”. In short, how do we get everyone to eat an equitable, and not equal portion of the national cake. 

Sir, for us, the assignment that has been given to our ministry and, more importantly, on behalf of the nation, is for us to implement the Industrialisation and Job Creation Strategy Paper. 

Sir, for the benefit of those that might not have it, I have brought with me a copy, which presents the policy for the Government, and I will lay it on the Table of the House. This document is a creation of the Patriotic Front Government, drawing from the aspirations of our people and our intentions as to what we wanted to do practically. It is easy to say how we shall do this and do that next but, when it comes to the actual implementation of policies, you need to identify and deal with the how. This is what we have spelled out in this document. 

Sir, I also want to say that we are complementing that with the Strategic Plan for the Ministry of Commerce, Trade and Industry, a copy of which I have and will lay on the Table of the House to show that we are not talking from without. We are dealing with a practical situation. Let me also say that from the point of view of what the hon. Minister of Finance has done, he has basically designed a roadmap for higher growth, employment and prosperity for all Zambians to make that independence a reality. I have said, and I will say it again, that this will not happen on its own. We have to make it happen. 

Sir, let me, therefore, make reference to paragraph 44 of the Budget Address that makes reference to the allocation of resources to the Citizens Economic Empowerment Commission (CEEC) to support the district value-chains and industrial development of clusters. Let me emphasise that the importance of taking development to the grassroots has to be done through methodologies that recognise what contribution the people are making and how we can turn that into value-added commodities. So far, the practical side is as follows; 1,072 out of the 1,526 approved projects in 2014, valued at K48 million, have since been funded and rolled out. 

I, as Minister of Commerce, Trade and Industry, have physically gone out and will continue to go out, to ensure that thevalue chains are implemented. I have been to Mumbwa, Mongu, Siavonga, Kasama, Mpulungu, Mungwi, and Petauke. Had it not been for the interruptions we have had, would have been in the North-Western and Luapula provinces by now. Every single province and district will have industrial clusters. We have already completed the analysis of what is needed in each district under the Citizens Economic Empowerment. Now, we are rolling that out. That is the legacy of President Michael Chilufya Sata. That is what he wanted to see for the people on the ground. Talk to that twenty-four-year old young woman of Petauke who is producing 1,500 litres of cooking oil every day, and ask her how she is making K60,000 every month, with a profit of K30,000. She can tell you what it means to her and the difference it has made in her life.

Sir, let me now talk about what we are doing. How do we ensure that we have a shed, a cluster in which, our people can operate? My office has just approved the design of the industrial clusters. They need resources. The increase in the Gross Domestic Product (GDP) that the Chairperson of the Expanded Committee on Estimates has just talked about is not something that we are going to pluck from the air. It is something we must practically do on the ground using the resources that we have in our hands. This is what the PF Government is doing. This is what President Michael Sata wanted to see. This, I can assure you that ensuring that this is implemented, will be our legacy to him too. That way, the people he wanted to help and sacrificed for, will receive this benefit.

However, to do this requires resources. How is the hon. Minister of Finance not expected to have a deficit if we have to have this kind of development? You cannot have this level of development in any part of the country anywhere in the world; in any economy; any Government you care to think of, without having to rely on the savings and borrowings of your people. This is because we have also reduced the borrowing from the international community and co-operating partners. We cannot put the responsibility of developing our nation in the hands of others. We have to do it ourselves. That is what the hon. Minister of Finance is doing. 

Mr Speaker, for a while, we shall have these high levels of deficit against the GDP in order to raise our capacity. When we have raised the capacity, then, we shall be in a position to talk about an increased GDP, which is in double digits. You have to have the road infrastructure on which the produce is carried. The dividends from the Link Zambia 8,000 km Road Programme that the Patriotic Front Government is pursuing, “will come tomorrow”. It is said that, trouble may endure the night, but joy comes in the morning”. Then, you will see the dividends. You cannot see them before that. The hon. Minister of Finance is trying to achieve this by ensuring that we spend these kind of resources. In the Budget, more than K5 billion is going towards roads. We need this infrastructure. As I said, you will see the benefits accruing later.

Furthermore, Sir, every Member of Parliament has talked about what he/she wants more in his/her constituency. Members of Parliament want an increase in the Constituency Development Fund (CDF); and in the number of schools, hospitals, clinics and health posts. It is good for us to call for this. However, it needs to be funded. How are you going to do that? You need to balance between your expenditure and revenue. Your revenue comes from your production and taxation which you cannot do without having to increase the levels of tax. If you do not, you must increase your deficit. That is the way it works. That is how finance works. The hon. Minister on the Floor can assure you that, that is what is done in accounting. There is a debt and there is credit, but the two must always balance. If you do not balance, you will have a deficit. This is what is happening.

Sir, the demand for agriculture to be financed to 15 per cent is a legitimate requirement. It requires money. The demand to increase our allocation to the education sector to 20 per cent according to the Abuja Declaration is legitimate, but it requires money. The question is: Where will the money come from before we achieve that? Let me, therefore, make reference to the fact that we have designed a roadmap for higher growth, employment and prosperity for all Zambians. This is what the Patriotic Front Government said it would do when it came into power in 2011. Not only did we declare this, but are also physically doing that now.

Sir, what does a roadmap entail; what are the critical pre-requisites for success on the economic road? Let me just mention that the important lesson and experience for Zambia’s economic history and independence is that Zambia, today, does not have sufficient capacity to tolerate erratic market conditions which are characterised by volatile exchange rates, high inflation, high interests rate as well as slow and negative economic growth. These are called impacts that come onto the economy. If that comes onto the economy, you do not have the capacity to absorb them because you do not have enough reserves. You need to build capacity that creates these reserves. This is exactly what our ministry, in conjunction with our colleagues in infrastructure development and the Ministry of Finance, is trying to do. In short, the fiscal policy that the Government adopts is of necessity. 

Firstly, Sir, the fiscal policy must be aligned to creating stable economic conditions that will foster higher economic growth aimed at creating more jobs in the economy. Now, we are not obsessed with talking about it at macro level. We are now reducing it to the micro level, that is, the individuals on the ground. They are the ones that are going to create that. I can say that some of the previous governments were obsessed with stability for the sake of it. We have decided we will go down to the people, and that is the benefit we are talking about.

Sir, there are women in Mongu who are running eight companies that produce mango juice. there are women in Mpulungu who are engaged in fish farming and there are women in Mungwi who are growing groundnuts for producing cooking oil. 

Sir, this has to be coupled with increasing our exports. How do we do that? This is why the ministry has already designed Intra-Africa Trade Centres, starting with Kasumbalesa going onto Nakonde and Kazungula. These are the places where we can increase exports to our neighbours. However, we must produce the commodity first. This is what the Ministry of Finance is doing at the moment to resolve the challenges of our nation. That is the roadmap that the Ministry of Finance has provided to us.

Mr Speaker, let me refer to paragraphs 53 right through to 61 of the Budget Speech that address the rehabilitation and construction of new roads, bridges and railway systems. It is particularly talking  about the Zambia Railways Ltd and Tanzania-Zambia Railways (TAZARA). Unless you have these railway lines running, you can neither export your copper to Dar-es-Salaam nor ensure that the inputs that you require come into the country.

Sir, paragraphs 62 to 67 of the Budget Speech will ensure that the energy infrastructure that my colleague, Hon. Yaluma, is working on grows and continues to contribute positively by generating power for domestic and industrial production that will avoid the fluctuations in power supply that we are seeing at the moment. Our country has the capacity to produce around 10,000 mW of power but, at the moment, it is only producing 2000 mW which is a fifth of our capacity. As a country that is endowed with 40 per cent of the water resource in Central and Southern Africa, we should be producing more hydro power.

Mr Speaker, it is not possible under any Government you can name, past, present or future, to expect to increase economic activity and achieve economic development without these facilities. It is just not possible. After all, the clusters will need more power just as the mining and processing in Kalumbila. This is why we must put more resources in Hon. Yaluma’s operations so that the Itezhi-tezhi Dam and Kafue Lower increase the production of the energy that we require and raise more for export. This is going to create capacity for future generations to come.

Sir, let me also make reference to agriculture. The commodities that we are talking about include groundnuts, soya beans, cashew and fish farming. There is a need for us to build capacity at Mununshi Banana Scheme to be able to produce 340 tonnes of bananas every month which is the deficit we are importing from outside this country.

Let me also mention to this House the skewed situation of trade in our region. Of the 100 per cent trade in the Southern African Development Community (SADC), 72 per cent comes from South Africa alone. The other countries contribute very little. This is followed by Namibia at 8 per cent, Botswana at 5 per cent, Zimbabwe at 4 per cent and, on a positive side, Zambia is at 2 or 4 per cent, take your pick, depending on what you are looking at. 

Mr Speaker, it is not sustainable enough to ensure that our country achieves, hon. Chairman of the Expanded Committee on Estimates, double digits if you have that kind of situation. We must export to our neighbours. This is the biggest market for us at the moment, but you cannot export unless you produce. You cannot produce unless you have capacity. You cannot have capacity unless you make the investment. This is how economics works. Therefore, agriculture is key to providing the inputs we need for the industries.

Sir, one may ask where the benefits will flow to as regards the sharing of the national cake. The efforts that have been made by our chiefs as regards the products that they want in their chiefdoms will only be meaningful if we can provide more resources. This is the competition that the hon. Minister of Finance has to deal with. In other words, he has to balance between his expenditure, which all of us are asking for, and the source of that revenue. Revenue only comes from taxes.

Mr Speaker, let me take the debate by Hon. Musukwa as mine. You are balancing the need for contribution from the extractive industries to help you finance the investment that you need in those industries. So, I am asking the hon. Minister of Finance for more money for the industrial clusters. We know that, at the moment, 64 per cent of the allocations under the CEEC in our ministry is for women. Furthermore, 27 per cent is for the youth and 92 per cent of this is in the rural areas.

Hon. Members: Hear, hear!

Mr Sichinga: Why are we spending time on this now? Had other governments in the past dealt with it, we would not be spending those levels at the moment.

Hon. Members: Hear, hear!

Mr Sichinga: This is what the Patriotic Front Government stands for. This is President Michael Chilufya Sata’s legacy. This is what he said we should do.
 
Mr Speaker, I would like to conclude by …

Mr Mbewe: On a point of order, Sir.

Mr Sichinga: … talking about the issue of where the economic prosperity and independence of our country and for all will come from.

Mr Mbewe:  On a point order, Sir.

Hon. Government Member: Ikala panshi!

Interruptions

Mr Sichinga: Mr Speaker, many people have referred to the issue of the wage freeze. Let me mention that if you cared to read what is contained in the various documents, including the Budget, you will see that there is a continued drive to modernise and improve Zambia’s health system. Over 2,000 health personnel will be recruited in 2015. Six hundred and fifty health posts and thirty district hospitals will be constructed.

Sir, others include investing in our youth; laying a foundation for a prosperous Zambia; recruiting 5,000 teachers for the Ministry of Education, Science, Vocational Training and Early Education in addition to sustaining the current establishment across the whole of Zambia; constructing seven new universities in 2015; constructing nine trade schools across the country; increasing the allocation to the Bursaries Committee to improve access to tertiary education and developing the home ownership scheme. That is the legacy of the Patriotic Front Government. That is what President Michael Chilufya Sata has left behind.

Mr Speaker, lastly, I would like to say that it is worth reminding ourselves that in the 2013 Budget, the Government expanded the tax band, thereby giving significant tax relief to precisely the kind of people that fall in the lower and middle-income brackets. The Government could have easily opted to give small increments annually, but decided to provide more. We decided not to spread this over a number of years because the Government recognised that the public sector wages were historically low. This was not caused by this Government, but other governments before it. 

We are trying to correct the errors and omissions of the past to ensure that we bring equilibrium in the manner in which this is being done. Therefore, in the 2013 Budget, the Government took the bold step of relaxing the tax band to increase the effective net pay that the people could take home in their pockets. The net result of this was that employees at the lower income end got increases to their net pay of as high as 160 per cent. This is a fact that you cannot ignore. A typical wage freeze would go otherwise. It would go with a freeze in recruitment. 

Mr Speaker, hon. Ministers and hon. Members of Parliament on this side of the House are ready to dialogue with our colleagues in the Opposition. We are ready to debate with them. Hon. Dr Kalila, Hon. Mutati and Hon. Hamududu raised very important issues which we are prepared to consider. The issue is not in seeking to outdo the other. We are in Government at the moment. You need to talk to us so that we can understand what you are seeking and ensure that the benefits that accrue to our country are equitably, and not equally distributed.

Mr Speaker, the flagship of the Patriotic Front Government programmes for economic development is industrialisation and job creation, …

Hon. Opposition Member: Fyafula!

Mr Sichinga: … as contained in what I have just said. It is not fyafula. I would like to tell you what this Government is doing. I want us to get away from this debate with a very clear understanding …

Mr Livune: Question!

Interruptions

Mr Sichinga: … that this Government knows exactly what it wants to do.

Mr Speaker, I thank you.

Hon. Government Members: Hear, hear!

The Minister of Finance (Mr Chikwanda): Mr Speaker, I wish to thank you for this opportunity to wind up debate on the Motion of Supply on the 2015 Budget which I presented to the House on Friday, 11th October, 2014. 

Sir, the general debate on the Floor of this august House and the legitimate public comments on the proposed policies and strategies for the Fiscal Year 2015 are a clear statement of the candid aspirations of our people.

Mr Speaker, allow me to tender my unfettered compliments to the Expanded Committee on Estimates for the meticulous observations and recommendations which are well articulated in its report. Let me also thank all hon. Members of this august House for their sincere and wise counsel on the proposed 2015 Budget Policies.

Mr Speaker, we, in the Government, are duty-bound to heed the recommendations from the representatives of the people so that the policies we make are congruent with the hopes, desires and aspirations of our long-suffering people.

Mr Speaker, allow me to extend my profound thanks to the several stakeholders who made very constructive critique and passed compliments on the various aspects of the proposed Budget.

Mr Speaker, all this would not have been possible without your unwavering leadership and wisdom. I remain enormously beholden to you. It remains for me to say that the proposed 2015 Budget is a continuation of the Government’s relentless efforts to bring about economic independence. We are on course in entrenching fiscal responsibility in the management of our scarce resources. The 2015 Budget is inspired by the imperative to get our beleaguered people out of the unacceptable and shameful shackles of poverty. The Patriotic Front Government has made an undertaking to get all the basics right so as to positively and practically change the lives of the majority of our people that are trapped in perpetual drudgery and despondency.

Mr Speaker, it is clear, from the debate, that this is what our people want. The pertinent observations that have been made will go a long way in helping to remedy some of our omissions. Let me now respond to some of the comments on the Budget.

The New Fiscal Regime for the Mining Sector

Mr Speaker, I have listened attentively to the debate on the Tax Policy and the revenue measures that are proposed in the Budget. It is evident, from the …

Interruptions

Mr Chikwanda: Excuse me, Sir, give me your ears comrade …

Mr Speaker: Order!

Let us have some order, please, both on the left and the right.

Mr Chikwanda: Mr Speaker, I am just seeking the indulgence of my colleague, the hon. Minister of Education, Science, Vocational Training and Early Education, to bear with me. I will not be very long with my speech. 

Laugher

Dr Phiri: Go ahead.

Mr Chikwanda: Thank you, Sir.

Mr Speaker, it is evident, from the comments, that the nation is supportive of the Patriotic Front Government’s direction on the tax regime. We are focused on an inclusive development strategy where our people will practically benefit from the investments in the economy.

Mr Speaker, as indicated by various speakers on this Motion, the proposed tax regime for the mining sector is meant to ensure that the Government gets a fair share of revenues from the exploitation of our non-replenishable mineral resources. The mining tax regime is susceptible to all forms of tax planning schemes such as transfer pricing and hedging, which our revenue administration cannot easily detect. The current tax structure is illusory with only two mining companies paying company income tax. as most of them claim that they are not in tax-paying positions. The current law allows companies to claim deductions of all the costs that are incurred wholly and exclusively for the furtherance of their businesses. As a result, mining companies have, in the past, been entitled to claim capital allowances and carry forward losses for long periods, thereby eroding the potential taxable profits.

Hon. Government Members: Hear, hear!

Mr Chikwanda: Mr Speaker, the proposed mining tax regime which will be royalty based will be easy to administer by the revenue authority as it will focus on production levels and content of the minerals. This will leave us with the challenge of ensuring that we concentrate on monitoring and tracking the production volumes and content of what is being exported out of our country. The Mining Value Chain Project being spearheaded by my ministry and the Zambia Revenue Authority (ZRA) and the modernisation of the Department of Mines currently underway will mitigate the challenge of ascertaining mineral volumes and values as is now the case.

Value Added Tax

Mr Speaker, there are still some concerns regarding the non-refund of the Value Added Tax (VAT) to some exporters due to non-compliance with the VAT General Administrative Rule No. 18 on proof of exports. As I assured this August House during my Budget Address, it is the Government’s desire and intention to see these concerns …

Mr Speaker: Order!

Business was suspended from 1615 until 1630 hours.

[MR SPEAKER in the Chair]

Mr Chikwanda: Mr Speaker, I was on the Value Added Tax (VAT) issue when business was suspended. 

Mr Speaker, there are still some concerns regarding the non-refund of VAT to some exporters due to non-compliance with VAT General Administrative Rule No. 18 on proof of exports. As I assured this august House during the Budget Address, it is the Government’s desire to see these concerns resolved expeditiously and amicably. However, the Government is constrained to take any quick affirmative action on this matter because of the legal proceedings that have been commenced in the courts of law against the Government by some mining companies which are calling for expedition in the resolution of this issue at the same time.

Expenditure Allocations

Mr Speaker, as hon. Members of this House know too well, allocations to various expenditure programmes are a direct function of the resource availability. Our ability to allocate sufficient resources …

Interruptions

Mr Speaker: Order!

Let us have order on the left and right. The hon. Minister is winding up.

Mr Chikwanda: Mr Speaker, our ability to allocate sufficient resources to all expenditure programmes is constrained by the limited size of Zambia’s resource envelope.  If we are to make more allocations to expenditure programmes above what is available, it means that we will have to expand our borrowing or increase taxes for our people. However, our borrowing is limited by our ability to service the debt, while our taxes are already choking the taxpayers.

The Agriculture Sector

Mr Speaker, your Committee has recommended that the Government progressively reduces its participation in maize marketing and redesigns the Farmer Input Support Programme (FISP) so that farmers are not perpetually dependent on it. I could not agree more with the Committee’s recommendation. Despite significant investments in agriculture, Zambia has not experienced consistent and sustainable productivity growth in the sector. The major reason for this is that most of the investment has been spent on maize, which has not been efficiently managed. Other reasons include low agricultural mechanisation, poor access to markets, low access to financing and modern farm inputs, poor infrastructure in rural areas, and under-funded research and extension services.

In this regard, Sir, the Government’s overarching principles are to promote, diversify and increase agricultural production and value addition of major crops, and livestock and fish, taking into account the comparative advantages that exist in different agro-ecological regions in the country. To achieve this policy objective, the sector will facilitate the enactment of the Agricultural Marketing Bill to enable the restructuring of the Food Reserve Agency (FRA) and FISP. In addition, institutional and organisational restructuring will be undertaken to ensure effective and efficient service delivery in the sector. 

The Education Sector

Mr Speaker, your Committee further recommends that more resources are channelled to technical and vocational training. The Government acknowledges that there are many challenges facing the vocational schools which are not limited to statutory and contractual obligations, but include dilapidated infrastructure and obsolete equipment. 

In order to address the challenges holistically, the Government shall review the status of all grant-aided institutions, including public universities over the medium term. The review will, among other related issues, assess viability and propose ways to make such institutions sustainable. The review will propose new financing mechanisms for grant-aided institutions. 

In the interim, the Government will continue to scale-up the allocation to institutions that offer technical and vocational training. 

Increased Allocations to the other Sectors

Mr Speaker, the pressures being exerted on the Treasury to provide funds far beyond the available resources can have an adverse impact on macro-economic stability. In this regard, resource allocation has been premised on meeting the most urgent and pressing needs of our people, while maintaining a conducive and stable macro-economic environment. 

Constituency Development Fund (CDF)

Mr Speaker, there has been a lot of apprehension in the House with regard to the proposed allocation to the Constituency Development Fund (CDF).

Hon. Members of this House are calling for increased allocations to the CDF …

Hon. Opposition Members: Hear, hear!

Mr Chikwanda: … which are unsustainable, given our severely limited fiscal space. 

The CDF is a useful fund as a mechanism for taking development to the people. While we agree with our colleagues that the allocation may not be adequate, especially for large constituencies, we are also concerned about the utilisation of these resources. 

Sir, let me assure this House that we are already looking into plausible scenarios of restructuring the CDF allocation and disbursement criteria. The allocation of this fund will take into account the population size, geographical vastness, poverty levels …
 
Hon. Opposition Members: Hear, hear!

Mr Chikwanda: … and other deprivation indices in each constituency. 

The Government will also ensure timely disbursement of these funds so that most community projects can be undertaken in time. 

Sir, to ensure that what is disbursed is properly utilised, the Government, through the Ministry of Local Government and Housing, is currently drafting legislation which will regulate the utilisation of the CDF. 

In conclusion, Mr Speaker, I wish to recognise a valuable suggestion from the Expanded Committee on Estimates that there should be more engagement with the hon. Members prior to the finalisation of the Budget. As such, this is one of the issues being considered for possible inclusion in the forthcoming legislation on planning and budgeting. The Government will engage with hon. Members of this august House more often on Budget matters as per the suggestion of the Committee.

Finally, let me make it clear, Mr Speaker, that our Budget is very small, indicating glaringly that we are at a low ebb of development. Given the vast needs of our people throughout Zambia, there is a compelling need to marshal immensely more resources to get the development of our country to higher levels. This Budget is a modest effort in that direction. I am persuaded beyond doubt that the House will unanimously support the Budget. Once again, I reiterate my profound thanks to all my colleagues and, indeed, the nation for the support.

Mr Speaker, I thank you. 

Hon. Members: Hear, hear!

Question put and agreed to. 

Mr Speaker: The House will now resolve into Committee and Committee work will commence tomorrow, Friday, 14th November, 2014.

ADJOURNMENT 

The Minister of Home Affairs (Dr Simbyakula): Mr Speaker, I beg to move that the House do now adjourn. 

Question put and agreed to. 

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The House adjourned at 1642 hours until 0900 hours on Friday, 14th November, 2014.