Wednesday, 12^th July, 2017

 

The House met at 1430 hours

 

[MADAM FIRST DEPUTY SPEAKER in the Chair]

 

NATIONAL ANTHEM

 

PRAYER

 

_________

 

MOTION

 

SUSPENSION OF STANDING ORDERS 21, 22(1) AND 100

 

The Vice-President (Mrs Wina): Madam Speaker, I beg to move that Standing Orders 21 and 22(1), if necessary, and 100 be suspended to enable the House to complete all the business on the Order Paper and all matters arising therefrom, and that, on such completion, the House do adjourn sine die.

 

Madam, this meeting of the House started on Tuesday, 13^th June, 2017, and, as of today, has been meeting for seventeen days. During that period, 100 questions for oral and written answer, eighteen Motions to adopt reports of Sessional Committees and one Motion to approve His Excellency the President’s Declaration of a State of Threatened Public Emergency were considered by the House. Further, twenty-nine annual reports on Government and quasi-Government departments, and twenty-seven ministerial statements on Government policies on various issues were also presented to the House. By the time we adjourn today, the House will have considered Supplementary Estimates No. 1 of 2017.

 

Madam, although the House met for a relatively short period, a lot of business has been transacted. In that regard, let me congratulate all hon. Members on a job well done and appeal to them to keep up the spirit of hard work.

 

Hon. Government Members: Hear, hear!

 

The Vice-President: It is only through hard work that we can bring prosperity to our country. In this regard, I wish to pay special tribute to hon. Members of the Back Bench for …

 

Hon. Back-Benchers: Hear, hear!

 

The Vice-President: … executing their oversight function effectively and keeping the members of the Executive on their feet. This was demonstrated by the probing questions put to the Executive and insightful debates during the consideration of the various reports.

 

Madam Speaker, now that the House has accomplished the business for which it was convened, it is time for it to go on a recess so that hon. Members can attend to equally important duties outside the House, especially in the constituencies.

 

Madam, I wish to emphasise that our country has been a beacon of peace from the time it was liberated from colonial rule, and that is attributable to the peaceful nature of all its citizens. However, the national values and principles in the Republican Constitution must inform our conduct if the country is to achieve its goal of prosperity and harmony. I, therefore, urge all hon. Members to urge our citizens to live by those values and principles.

 

Madam Speaker, as we go on recess, I urge all hon. Members to take time to visit their constituencies and inspect the various developmental projects being implemented there. As the House might be aware, the Government is committed to promoting the wellbeing of its people by effectively implementing various poverty reduction and developmental projects. In that regard, on-the-spot inspection of projects by hon. Members and the feedback they will provide on the progress being made in the implementation of various projects will help the Government to achieve its development agenda.

 

Madam Speaker, in conclusion, allow me to express my gratitude to the Hon. Mr Speaker, you and the Hon. Second Deputy Speaker for the efficient and impartial manner in which you presided over the Business of the House. I further commend the Acting Clerk of the National Assembly and her staff for the exemplary manner in which they have continued to render services to the House. In the same vein, let me acknowledge with gratitude the important work done by the staff in the Office of the Vice-President and the entire Public Service in facilitating the work of this House. To them all, I say thank you and keep up the good work.

 

Madam Speaker, I thank you.

 

Hon. Government Members: Hear, hear!

 

The Minister of Home Affairs (Mr Kampyongo): Madam Speaker, as the elected Member of Parliament for Shiwang’andu, I stand to support the Motion ably moved by Her Honour the Vice-President and Leader of Government Business in the House.

 

Madam, from the outset, let me sincerely thank Her Honour the Vice-President and Leader of Government Business in the House for the able manner in which she managed Government Business during this meeting. I further thank your office and that of the Clerk of the National Assembly for the good work you have done. Your office and that of the Leader of Government Business in the House has done us proud by preserving the dignity of this House. There has been mayhem in some jurisdictions where the decorum of Parliament has been lost. So, your resolve to maintain the dignity of this Parliament deserves commendation.

 

Madam, indeed, it is time for us to go and see our electorates and the people of Shiwang’andu, who gave me the mandate to be what I am today, deserve some of my time. To my colleagues: let us find time to reconnect with our electorates so that they understand what this hardworking Government of the Patriotic Front (PF) is doing in various sectors.

 

Madam Speaker, I thank you for giving the opportunity to support this non-controversial Motion.

 

I thank you, Madam.

 

The Vice-President: Madam Speaker, I thank the hon. Minister of Home Affairs for supporting the Motion, and all the other hon. Members, whose silence is an indication of their consent.

 

Hon. Government Members: Hear, hear!

 

The Vice-President: Madam Speaker, I am sure that all hon. Member of Parliament are anxious to go to their constituencies. So, this Motion is non-controversial. Suffice it for me to say that I look forward to hon. Members’ actually leaving Lusaka and going to their constituencies to meet our people and explain issues to them, including the invocation of Article 31 of the Constitution of Zambia by His Excellency the President. We need to help our people understand the implications of the declaration so that the unnecessary apprehensions can be done away with.

 

Madam Speaker, I thank you.

 

Hon. Government Members: Hear, hear!

 

Question put and agreed to.

 

__________

 

STATEMENT BY HER HONOUR THE VICE-PRESIDENT

 

THE FUNCTIONS OF LOCAL AUTHORITIES

 

The Vice-President (Mrs Wina): Madam Speaker, I thank you for according me this opportunity to issue a statement in response to the points of order raised by Hon. Jack Mwiimbu on Tuesday, 9^th February, 2016; Friday, 4^th November, 2016; and Thursday, 23^rd March, 2017, on the exclusive functions of local authorities provided for under Article 147(2) of the Constitution of Zambia (Amendment) Act No.2 of 2016.

 

Madam Speaker, allow me to quote from the latest point of order in part:

 

“Mr Speaker, for ease of reference, I would like to refer to the local authorities’ exclusive functions. According to the new Constitution, the local authorities have exclusive functions of motor vehicle licensing. Unfortunately, this provision has not been conferred on the local authorities and the local authorities in this country have been crying that they have no resources to manage their affairs, hence, the question I raised for Her Honour the Vice-President.”

 

Madam Speaker, Article 147(2) provides that the concurrent and exclusive functions of the central, provincial and local levels are as listed in the Annex to the Constitution, and as prescribed. In the Annex to the Constitution, a number of functions, among them, pollution control, electricity, fire-fighting, district health services, vehicle licensing, and water and sanitation, have been listed as being exclusive to the local authorities. However, all the listed functions will only be decentralised when an appropriate legal framework is instituted by an Act of Parliament.

 

Mr Mwale: Hear, hear!

 

The Vice-President: Madam Speaker, the Government’s intention to decentralise services from the centre to provincial and local authorities is meant to ensure that the people at the grassroots are effectively provided with the necessary communal services required. We realise that the local authorities, being closer to the people in far-flung areas of the country, are better placed to determine the needs of the people in each locality.

 

Mr Mwale: Hear, hear!                                                                                       

 

The Vice-President: Madam, let me take this opportunity to inform this august House and the general public that every local authority in the country is a creation and, indeed, a part of the Central Government, as no local authority has power independently of the Government ministry that formulates the policies and regulations that govern the local authorities. As you may all be aware, our country is a unitary State in which the functions of the Central Government give direction to the functions at local level.

 

Madam Speaker, the Government’s decentralisation agenda and, particularly, its Decentralisation Policy are primarily anchored on an effective supportive base of policies and legislation created by the line ministries and institutions under which various functions of the local authorities fall. The laws are passed by this august House. The core policies and legislation, such as the Planning and Budgetary Policy, the Public Finance Act and the Local Government Act, drive the entire Public Sector. It is, therefore, important to understand that the exclusive functions of the local authorities are not independent of the Central Government because every function issues from and is directly created by the Central Government.

 

Mr Mwale: Hear, hear!

 

The Vice-President: Madam Speaker, I am belabouring this point to help the hon. Members of this House and the nation at large to understand that there is no local authority that creates its own functions. All have functions delegated from the Central Government through line ministries. Those functions are meant to facilitate the provision of services to entire communities in an organised and systematic manner. The responsibility of the local authorities is to create by-laws, which are signed by the hon. Minister responsible, and domesticate the policies at the point of service delivery in their localities.

 

Madam, let me stress that the exclusive functions assigned to local authorities by the Constitution do not give any local authority the ability to plan and execute any function it deems fit if such function is not in line with the supreme law of the land, the Constitution, and the policies of the Central Government.

 

Madam Speaker, the meaning of ‘local authorities’ has now taken a new dimension, as existing utilities can legally be designed as local authorities for purposes of Article 147. It is no longer possible to define the term merely by equating it to councils, as it is also used to refer to agencies and private contractors that are responsible for the execution of certain important functions in the communities, such as waste collection companies, new agencies of the Central Government administering new functions or those that were formerly administered by local authorities, for example, urban development corporations, and public agencies whose functions have been enhanced. For example, water utility companies like Lusaka Water and Sewerage Company (LWSC) have the exclusive function of providing water and sanitation services to the residents of Lusaka City as an agency of the Lusaka City Council (LCC), but its activities are superintended on by the Central Government. So, again, the Government’s reason for decentralising functions like provision of electricity, collection road tolls or licensing of vehicles is to make it easier for the services to reach the people in all the localities.

 

Madam, it is important for the House to note that the decentralisation policy is being implemented in phases that include policy, legislative, institutional, human resource and fiscal decentralisation. We want to put the systems in place first so that by the time the functions are decentralised, they will be executed efficiently. It is in this regard that this hardworking Patriotic Front (PF) Government, led by His Excellency the President of the great Republic of Zambia, Mr Edgar Chagwa Lungu, has embarked on an ambitious programme …

 

Mr Lusambo: Hear, hear!

 

The Vice-President: … of developing the newly-created districts.

 

Madam Speaker, in conclusion, I wish to emphasise that we should not confused ‘exclusive function’ with ‘totally independent of the Central Government’, as the latter is impracticable in a unitary state like Zambia. I, therefore, encourage all local authorities to work in line with the laws of the land and the policies of the line ministries so as to deliver services to our people in a more efficient manner.

 

Madam Speaker, I thank you.

 

Hon. Members: Hear, hear!

 

Madam First Deputy Speaker: Hon. Members, you are now free to ask questions on points of clarification on the statement issued by Her Honour the Vice-President.     

 

No hon. Member indicated.

 

___________

 

MINISTERIAL STATEMENTS

 

CONSTRUCTION OF 650 HEALTH POSTS

 

The Minister of Health (Dr Chilufya): Madam Speaker, I thank you for granting me this opportunity to update the House and the nation at large on the construction of 650 health posts countrywide.

 

Hon. Members: Hear, hear!

 

Dr Chilufya: Madam, as the House might be aware, the project is being implemented through a US$50 million line of credit from the Government of India. So far, the progress recorded countrywide is as follows:

 

1. 547 of the 650 project sites have been handed over to contractors, representing coverage of 84 per cent;

 

1. 327 super structures have been completed, of which 275 have been handed over to the Ministry of Health, which has fully operationalised them. The distribution of the functional facilities is as follows:

 

Province                      Allocated Clinics                           Functional Clinics

 

Copperbelt                              88                                               30

 

Central                                    52                                               37

 

Eastern                                    68                                               39

 

Western                                   64                                               60

 

Southern                                  99                                               32

 

Lusaka                                     32                                               31

 

Northern                                  69                                               10

 

Luapula                                   64                                               17

 

Muchinga                                40                                               10

 

North-Western                        64                                                 9; and

 

1. approximately 90 per cent of the building materials and equipment for the establishment of the health posts have been imported into the country.

 

Madam Speaker, in spite of the progress noted above, the project has faced unforeseen challenges that have resulted in the derailment of works, as is usually the case in any undertaking of this magnitude. The main challenges that have been encountered in the project have resulted from the following factors:

 

1. the termination of the contract between Angelique International Limited and the Zambian Government for the construction of 247 health posts in the Northern, Luapula, Muchinga and North-Western provinces on the recommendation of the Government of India;

 

1. the non-release of the counterpart funding to support the completion of projects in the Central, Copperbelt, Eastern, Western, Southern and Lusaka provinces, as per the loan agreement, which has resulted in suspension of works by the two contractors implementing the projects in the named provinces; and

 

1. the non-release of funds for the completion of the 201 health posts in the Northern, Luapula, Muchinga and North-Western provinces by the Zambia National Service (ZNS).

 

Madam Speaker, the challenges listed above prompted a renegotiation of the project financing agreement between the Zambian Government and its Indian counterpart, leading to the following outcomes:

 

1. that the Zambian Government engaged the two contractors who were working in other provinces to complete the health posts in Luapula, Muchinga, the Northern and North-Western provinces; and

 

1. that the Government of India refinanced the project through the Export-Import (EXIM) Bank of India by increasing the loan amount by a further US$12 million.

 

Madam Speaker, the resolutions mentioned above were agreed upon in principle and await final administrative approval. The revised completion dates for all uncompleted health posts will only be determined after the refinancing agreement has been concluded, the financial position ascertained and the contractors enabled to start works.

 

Mr Speaker, in conclusion, allow me to assure the House and the nation at large that the Government is firmly committed to completing all the 650 health posts and other infrastructure projects for the benefit of the people of Zambia.

 

Madam Speaker, I thank you.

 

Madam First Deputy Speaker: Hon. Members, you are now free to ask questions on points of clarification on the statement issued by the hon. Minister of Health.

 

Mr Kambwili (Roan): Madam Speaker, from the hon. Minister’s statement, it is clear that the project has not been implemented at the expected rate, ...

 

Mr Ngulube: Hear, hear!

 

Mr Kambwili: … basically because the country that is giving us the loan engaged contractors from that country to execute the works, which has disadvantaged Zambian contractors. In the latest engagement with the Indian Government, why can the Zambian Government not propose the engagement of Zambian contractors to execute the works so that we can move at a faster rate?

 

Dr Chilufya: Madam Speaker, while the main contractors in the initial arrangement were Indian, all the sub-contractors were Zambian, and the same will be the case in the renegotiated agreement.

 

Madam Speaker, I thank you.

 

Ms Miti (Vubwi): Madam Speaker, Vubwi Constituency is one of the beneficiaries of the project and all the six allocated clinics have been completed and handed over, and are operating very well. I thank the Government for that.

 

Hon. Members: Hear, hear!

 

Ms Miti: However, additional services like the delivery of babies and admissions are provided by the health posts, which do not have the necessary facilities like maternity wards, incinerators, disposal pits and admission wards. Does the Government have an expansion programme that will make the health posts more effective?

 

Dr Chilufya: Madam Speaker, the health posts were designed to provide maternal and child health and general out-patient services. They have delivery suites and equipment, and disposal facilities for placentae. The delivery of babies must take place because we are targeting improved maternal and child health. That is why there are incinerators built at the health posts. That said, plans to expand the health posts are there, but they will be informed by service demand and disease statistics. There are places where the population has grown and the services will need to be expanded by way of expanding the infrastructure and providing more housing.

 

Madam Speaker, I thank you.

 

Mr Mbulakulima (Milenge): Madam Speaker, I envy my colleague from Vubwi, where all the promised clinics have been built. In Milenge, which is a very poor district, the people are devastated because only seventeen of the sixty-four health posts allocated to Luapula Province, which has eleven districts, have been constructed. In line with the principle of equitable distribution of public resources, can the hon. Minister tell me the districts whose allocated health posts have been built.

 

Dr Chilufya: Madam Speaker, I thank the hon. Member of Parliament for Vubwi for supporting the Patriotic Front (PF) Government by confirming that we have fulfilled our promise to the people of Vubwi. We appreciate her kind comments. 

 

Madam Speaker, getting back to the question, like I have said several times on the Floor of this House, the project in Luapula Province stalled because of the termination of the contract between the Government and Angelique International Limited. For the information of the House, in all the provinces, the project began in the provincial capitals. So, in Luapula, it began in Mansa. However, at the time the contract was terminated, even the facilities in Mansa had not been completed, although the contractor had also mobilised in Nchelenge, Chipili, Mwense and Chembe. As we speak, there are some districts where works are still at sub-structure level and others in which the project has been completed. In Mwense District, for instance, the six allocated health posts have been completed while in Mansa District, six health posts have been completed out of nine. For the health posts that are still at sub-structure level, the materials are in the province and the projects will be completed as soon as the new contractor mobilises on sites.

 

Madam Speaker, the people of Milenge need to be reassured that their health posts will be completed. A demonstration of this Government’s commitment to improving the delivery of health services to the people of Milenge is our operationalisation of a newly-built fully-functioning first-level hospital in the district. Today, the hospital even conducts surgical services. Apart from that, some facilities in the district have been refurbished while money has been allocated for the refurbishment of more facilities in the Infrastructure Operation Plan (IOP). For the information of the House, the problems in Milenge are the same ones we face in the North-Western and Muchinga provinces, and Kaputa District.

 

I thank you, Madam. 

 

Mr Chisopa (Mkushi South): Madam Speaker, in Luano District, only one health post has been built. The other three, which were allocated to Liteta, Mulembo and Chembe, have not been built, and I have been consoled by the hon. Minister’s statement that the Government will resume the construction of the health posts. However, is the hon. Minister able to share with us the reasons for the Indian Government’s termination of the contract for Angelique International?

 

Dr Chilufya: Madam Speaker, first of all, although it is true that some health centres have not been completed in the Central Province, the province was not affected by the termination of the contract with Angelique International. Suffice it for me to say that we have made progress there, too.

 

Madam Speaker, secondly, the termination of the contract with Angelique International was done on the recommendation of the Indian Government after a misunderstanding arose between the two. It was not because of the contractor’s breaching of any of the terms of our contract. We merely did it because of our desire to maintain good relations with the Indian Government. I must also hasten to say that we are not privy to the nature of the misunderstanding between the two parties. All I can say is that we engaged Angelique International Limited and reached a mutual understanding for the termination of the contract.

 

I thank you, Madam.

 

Mr Ng’onga (Kaputa): Madam Speaker, the people of Kaputa and Chimbamilonga, who were promised nine health posts collectively, of which not even one is at slab level, are extremely saddened by the failure to complete this project, which has been promoted and discussed at several levels from 2011 to date. In addition, some people in Kaputa were contracted to clear the sites using their own resources and some of them borrowed money to do that work. So, they owe people money and have asked me if it is possible for them to be paid for clearing the sites.

 

Dr Chilufya: Madam Speaker, the Indian contractors we engaged sub-contracted local contractors without the involvement of the Government. Therefore, we are not privy to the contracts between Angelique International Limited and the sub-contractors it engaged. However, we have been assured by the former that it will honour all its obligations to Zambian contractors it sub-contractors as soon as it is paid for the work it did before its contract was terminated.

 

I thank you, Madam.

 

Mr Chali (Nchanga): Madam Speaker, the hon. Minister said that 90 per cent of the materials required for the construct of the health posts are in the country. Under the renegotiated conditions, among which is the commitment of an additional amount of US$12 million, is the Government of Zambia still required to pay the counterpart funding? If so, why is there still an open-ended time frame for the completion of this project?

 

Dr Chilufya: Madam Speaker, our initial obligation for counterpart funding was US$5.9 million. Unfortunately, the money was not released, and that is what has delayed the project on the Copperbelt. Luckily, the renegotiated financing agreement includes the counterpart funding we are supposed to have paid. Therefore, we are no longer obliged to provide counterpart funding, as the project will be fully funded by the Indian Government.

 

Madam Speaker, regarding the open-ended time frame, as I said, the approval of the agreement by EXIM was in principle only. The Ministry of External Affairs in India still needs to sign the final agreement with Zambia’s Ministry of Finance, after which we can set the commencement date for the places where we have not begun the project and the completion date for projects that had stalled.

 

I thank you, Madam.

 

Mr Musonda (Kamfinsa): Madam Speaker, at Kamatete in Kamfinsa Constituency, there is one health post that was completed by Jaguar Contractors, but as I speak, it is actually falling apart. In the Government’s renegotiation of the financing mechanism, has Jaguar Contractors been considered for payment so that it can work on the health post again?

 

Dr Chilufya: Madam Speaker, we have taken note of the challenges at that health post, but we are still in the defect liability period and Jaguar Contractors is obliged to rebuild that health post. So, I assure the hon. Member and the people of Kamfinsa that the health post will be repaired at Jaguar Contractors’ cost.

 

Madam Speaker, I thank you.

 

Mr Chibanda (Mufulira): Madam Speaker, I am much obliged.

 

Hon. Government Member: Hear, hear!

 

Mr Chibanda: Madam, I thank the hon. Minister for his elaborate statement to the House. However, I must say that in Mufulira Central, we have one clinic in Mukuba that is not operational to date. Is the hon. Minister in a position to tell us the rates at which the newly-negotiated loan will be by the time the negotiation is concluded?

 

Dr Chilufya: Madam Speaker, after we sign the agreement, we shall set dates as to when the contractors will either commence on new sites or resume stalled works. For now, I am unable to give dates.

 

Madam Speaker, I thank you.

 

Mr Mung’andu (Chama South): Madam Speaker, it is clear from the figures the hon. Minister has given that Muchinga is the province with the least rate of implementation of the project. As we rise today, what message does the hon. Minister want me to carry for tell the people of Chama South on this issue, considering that the Government has publicised it so much that the people know all the sites where the health posts are supposed to be constructed? Should I tell them that they will have the health posts soon or that they should wait indefinitely?

 

Dr Chilufya: Madam Speaker, the hon. Member should tell the people of Chama South that “Ichikwanka bacimwena kumampalanya”.

 

Madam First Deputy Speaker: Meaning?

 

Mrs Simukoko: Hear, hear! Meaning!

 

Dr Chilufya: Meaning that a person should be able to judge …

 

Laughter

 

Dr Chilufya: … the performance of other people or an entity on their or its deeds in the past. Recently, we completed the construction of a hospital in Chama and operationalised it. There are also a number of projects that we have implemented in the district, including the construction of a road through a mountain and making progress in improving access to clean water. The Patriotic Front (PF) Government will similarly deliver in the construction of 650 health posts. So, the people of Chama South must be assured that the PF Government, led by His Excellency the President, Mr Edgar Chagwa Lungu, will deliver on all its promises to them and the people of this country.

 

Madam Speaker, I thank you.

 

Mr Simfukwe: Madam Speaker, let me start by congratulating my colleagues from the Western Province on the enviable fact that sixty out of the sixty-four of their allocated health posts have been constructed. I think they must be grateful to the Patriotic Front (PF) Government for such an achievement.

 

Hon. Government Members: Hear, hear!

                                     

Mr Simfukwe (Mbala): That said, Madam, the hon. Minister has told us that the negotiations for an extra amount of US$12 million have been completed and that we are just awaiting administrative approval for two contractors to continue with the works. Could he fill us in on where the administrative approval is being awaited? Is it in Zambia or India? Further, if it is here, which ministry? Is it from the Ministry of Finance?

 

Dr Chilufya: Madam Speaker, our team of technocrats from the ministries of Foreign Affairs and Health, led by the Permanent Secretary in the Ministry of Finance, travelled to India and concluded the negotiations with Exim Bank of India. That is why I said that the negotiations have been concluded in principle. The dossier has now been passed handed over to the Ministry of External Affairs in India for signing. Thereafter, the contract will be effected. So, if the hon. Member is asking about where the contract it is domiciled today, the answer is that it is at the Ministry of External Affairs in India. However, our ministries of Foreign Affairs and Health are working together to expedite the process.

 

I thank you, Madam Speaker.

 

Mr Zimba (Chasefu): Madam Speaker, Chasefu was allocated three health posts at Boyole, Kulamayembe and Kamuziole and construction started about the same time. The health post at the Boyole was completed and is functioning, the one at Kamuziole is at foundation level while the works on the Kulamayembe facility stalled when only the final touches remained. At both of the last two sites, the contractors have deserted the works. Why are there such inconsistencies when the contractor for the Eastern Province, I believe, is still mobilised? Does the hon. Minister have information on why the contractors deserted the sites?

 

Dr Chilufya: Madam Speaker, like I said earlier, the projects have stalled in all the provinces for various reasons. For the provinces in the north, it was because of the termination of the contract with Angelique International. For the other provinces where there has not been significant progress made, it is because we did not release the counterpart funding, which led to the contractors deserting sites. Now, through the renegotiation of the loan agreement, the contractors will remobilise and the projects will resume. That is when the health post in Chasefu will be completed. However, the hon. Member may draw comfort from the fact that all the projects in Chipangali and many other parts of the Eastern Province have been completed and the facilities are operational.

 

Mr Mwale: hear, hear!

 

Dr Chilufya: As I said earlier, thirty-nine projects have been completed and the facilities are operational. So, we will get to Chasefu as soon as we conclude the refinancing agreement.

 

Thank you, Madam Speaker.

 

Mr Simbao (Senga Hill): Madam Speaker, I am grateful that the hon. Minister has chosen to issue this statement just before the House rises. Like my colleague from Mbala, who congratulated the people of the Western Province, let me congratulate the people of Lusaka Province on having thirty-one of their thirty-two health posts completed. I believe they showed their appreciation by the way they voted. It is a pity that we do not have Parliament Radio in Senga Hill. So, the good statement issued by the hon. Minister has not been heard by anyone, apart from those who may be visiting Lusaka at the moment. In this regard, I wish to inform the hon. Minister that I performed poorly during the last elections in the five areas where he should have built health posts, but did not because the people thought I had broken my promise to them. Since none of the people in Senga Hill are listening, could the hon. Minister send some officers to those areas to explain the problem to the people there, who do not listen to me anymore.

 

Hon. Government Members: Hear, hear!

 

Dr Chilufya: Madam Speaker, I congratulate the hon. Member of Parliament for Senga Hill on winning the election despite having challenges regarding the health posts. That means he was very strong and that the people of Senga Hill saw that he is a performer. I must say, however, that although it is a new district, Senga Hill has a fully-equipped hospital because of the hard work of the hon. Member. So, the people of the constituency should rest assured that their hon. Member of Parliament will fulfil the promises he made to them.

 

Madam Speaker, let me just promise the hon. Member that I will accompany him on his next trip to the constituency, at my cost, to all the five sites and address the people.

 

I thank you, Madam Speaker.

 

Hon. Government Members: Hear, hear!

 

Madam First Deputy Speaker: Hon. Minister, are you able, through the District Health Offices, to convey the statement you have issued today to the constituencies?

 

Dr Chilufya: Madam Speaker, we have already issued a communiqué to all the provinces through the Provincial Ministers and District Commissioners (DCs) to convey this statement and reassure the people in the affected areas.

 

Madam Speaker, in response to the hon. Member of Parliament for Senga Hill’s request for officers accompany him, I propose to accompany him to the five sites.

 

I thank you, Madam Speaker.

 

Mr Simbao: Hear, hear!

 

Mr Kafwaya (Lunte): Madam Speaker, the programme faced challenges involving the non-release of funding, either as counterpart funding or as financial support to the option of engaging the Zambia National Service (ZNS) to complete the projects that have stalled. Clearly, these problems are internal, as they do not concern the funding from the Indian Government. Considering that we are now renegotiating the loan, how will the Government guarantee the release of the counterpart funding once the renegotiated conditions are agreed upon?

 

Dr Chilufya: Madam Speaker, like I said earlier, the US$5.9 million that the Government was supposed to contribute as counterpart funding is part of the extended loan facility. Therefore, there will be no need for the Government to provide counterpart funding.

 

I thank you, Madam Speaker.

 

Mr Kalobo (Wusakile): Madam Speaker, I would like to confirm that Wusakile Constituency is one of the projects in question, as it was allocated two health posts, both of which have been completed. Unfortunately, only one is operational. When will staff be sent to the other facility, which is now being vandalised by some people?

 

Dr Chilufya: Madam Speaker, we had a challenge in staffing the health post. However, I can confirm that 95 per cent of the completed facilities have been staffed and are operational, and that the few unstaffed ones will be staffed soon because we recently received Treasury authority to recruit, which we are currently doing. So, I assure the hon. Member that we will operationalise the health post in Wusakile in the shortest period possible.

 

I thank you, Madam Speaker.

 

Mr Kasandwe (Bangweulu): Madam Speaker, in anticipation of the construction of the 650 health posts, the Government, through the hon. Minister of Community Development and Social Welfare, sent some youths to be trained as health care assistants in Ndola. Have the youths been deployed yet, bearing in mind that the institutions to which they are supposed to be posted have not been completed?

 

Dr Chilufya: Madam Speaker, community health workers are a very important component of our human resource development plan because they execute certain tasks that improve our interventions in malaria and HIV/AIDS prevention and treatment, and maternal and child health services in the communities. They are meant to work in health posts, but the few we have trained are not sufficient to for all the health posts in the country. So, there have been absolutely no problems regarding the absorption of those who were earmarked to work in health posts that have not been completed because they were deployed to other facilities. In fact, we are training more so that we can meet the demand. In that regard, may I use this opportunity to say that, on the one hand, task shifting is an important methodology we are using to alleviate human resource challenges in the health sector and, on the other, community health workers facilitate community participation in resolving community problems. We have demonstrated the importance of that in the Southern Province by using community-based agents in the fight against malaria and are currently replicating the programme elsewhere.

 

Madam Speaker, I assure the House that all the community health assistants we trained have been deployed in health posts and are providing services there.

 

I thank you, Madam Speaker.

 

Dr Malama (Kanchibiya): Madam Speaker, the people of Kanchibiya Constituency, which is half the size of Lusaka Province and a third of Luapula Province, were only allocated three health posts, namely Mwelushu, Mukunta and Mulonga. Further, we have conveyed to the people there the previous assurances of the Executive on the construction of the health posts. As one hon. Member has said, our constituents are fatigued by the assurances we have been giving them. So, is the hon. Minister able to send officers to Mwelushi, Mukunta and Mulonga to assure the people that the promises made to them will be honoured?

 

Dr Chilufya: Madam Speaker, I have already said that the project has encountered some challenges. However, I request my hon. Colleagues to share with their constituents the information I have given them today. They will not be the only ones spreading this message, however, as we have asked our District Directors of Health to engage various stakeholders in informing the people on the status of this project.

 

Madam Speaker, I assure the people of Kanchibiya that their health posts will be built just like many other have been built. We are committed to taking health services to Kanchibiya, as can be seen from our decision to build other health centres there under a new programme. Having introduced new districts in Kanchibiya, we will also introduce services that will match the expansion in infrastructure.

 

Madam Speaker, I thank you.

 

Mr Chansa (Chimbamilonga): Madam Speaker, it seems to me that most of the health posts have been built in urban areas. For example, in Lusaka, thirty-one out of thirty-two health posts have already been built while ten were built in Kasama Central in the Northern Province. Similarly seventeen have been built in Mansa. Will the ministry consider constructing health posts in rural districts as well?

 

Dr Chilufya: Madam Speaker, just to correct the record, the seventeen health posts referred to have been built in Luapula Province, not Mansa Central alone. That said, I appreciate the hon. Member’s suggestion that we prioritise the remote parts of the provinces, and I assure him that the reason the health posts have been constructed in the provincial headquarters like Kasama, Solwezi and Mpika despite the termination of the contract is that the mobilisation was done there and the materials for the other areas, such as Chimbamilonga, are kept there. However, when the contractors remobilise, they will still get to Chimbamilonga. 

 

Madam Speaker, in terms of the allocation of the health posts, we looked at various variables. The infrastructural projects we implement in various places are meant to facilitate the provision of health services that will match the population of those areas. We have heard complaints about the number of hospitals in Lusaka District, for instance, from people who have not taken into account the fact that the district has 2.5 million residents while some smaller districts have populations of about 30,000. The infrastructure will also differ according to levels of care provided. However, we have noted the hon. Member’s call for us to prioritise the remote areas.

 

Madam Speaker, I thank you.

 

FRA ARRANGEMENTS FOR THE 2017 CROP MARKETING SEASON AND THE ROLLING OUT OF THE E-VOUCHER SYSTEM

 

The Minister of Agriculture (Ms Siliya): Madam Speaker, I thank you for giving me this opportunity to issue a statement on the marketing arrangements the Food Reserve Agency (FRA) has put in place for the 2017 Crop Marketing Season and the nationwide rolling out of the Electronic Voucher (e-Voucher) system in 2017 and 2018. This statement arises from a point of order raised by Hon. Charles Zulu, the Member for Luangeni Parliamentary Constituency, on Thursday, 6^th July, 2017. For the sake of clarity, I will present the statement in two parts, beginning with the FRA’s crop marketing arrangements for 2017.

 

FRA Arrangements for the 2017 Crop Marketing Season

 

Madam Speaker, as the House might recall, on Wednesday, 23^rd November, 2016, I issued a statement on the price of mealie-meal in the country, in which I made important policy pronouncements regarding the marketing arrangements for the 2017/2018 Crop Marketing Season. Allow me to reiterate some of the measures that relate to maize marketing:

 

1. starting from the 2017/2018 Marketing Season, farmers will be paid an a price that covers the cost of production and a mark-up;

 

1. the FRA will buy only 500,000 metric tonnes of maize for strategic reserves;

 

1. starting from the 2017/2018 Marketing Season, the FRA selling price of maize to millers, if any, should reflect the full cost of purchase, transport and storage, among other costs; and

 

1. the Government will review the legal framework for the mandate and operations of the FRA.

 

Madam Speaker, in light of these policy measures and the need for financial prudence in the procurement and storage of strategic reserves, the FRA reduced the number of its satellite depots across the country and concentrated its operations in outlying areas, where it has managed to purchase 60 per cent of the crop in the past two seasons. The concentration of the satellite depots will be in the Eastern, Luapula, Muchinga, Northern, North-Western and Western provinces, where private sector participation is minimal due to limited accessibility.

 

Madam Speaker, the agency has, in the past, operated, at least, 1,223 satellite depots. However, it now intends to operate 760 across the country, which implies a reduction of 463 depots or 33 per cent. 

 

Madam Speaker, the number of satellite depots is determined by the Budgetary allocation by this House for purchase and storage of strategic food reserves. The following criterion is used to select the depots:

 

1. an area must produce, at least, 5,000 x 50 kg bags as marketable surplus;

 

1. there must be a radius of 25 km between depots;

 

1. the local community must provide community sheds and security to FRA facilities through neighbourhood watch programmes;

 

1. the satellite depots must be in areas accessible by light trucks and tractors all year round;

 

1. the depots must be easily accessible to the local people;

 

1. depots must be in areas where FRA operations will not disrupt those of the private sector. Where there is active private sector participation, the FRA only supplement the effort of the private sector; and

 

1. the Budgetary allocation to the strategic food reserves.

 

Madam Speaker, the cost of operating the depots consists of administrative ones, such as monitoring of stocks, and expenses on communication and wages for the depot clerks, security guards and loaders. Operating the proposed 760 satellite depots will require K50.9 million.

 

Madam Speaker, it is worth noting that the 760 depots referred to are a tentative proposal and the number is still subject to review. So, additional depots will be opened if necessary. Further, if any of the 760 proposed depots is found to be inactive after a periodic review, its operations will be relocated to another area where the service might be needed more. We have also considered the possibility of operating mobile depots. However, that option has been deemed undesirable and will not be resorted to due to the following reasons:

 

1. mobile depots compromise the quality of the grain storage, as has been learnt in the past when the system was used. When we discontinued the system, we reduced the FRA’s post-harvest crop wastage to less than 1 per cent, compared with the industry average of 3 to 5 per cent;

 

1. mobile depots are likely to increase transportation costs because the crop procured must to be moved immediately. This is particularly significant, considering that the FRA currently still owes transporters money for services rendered last season.

 

Madam Speaker, the FRA has already started preparations for the 2017/2018 Crop Marketing Season and, in due course, will announce the price at which it will buy crops from farmers. However, I wish to emphasise that the price to be announced by the agency is not the floor price, but simply the price at which it will be willing to buy crops. Other buyers on the market will offer their own prices.

 

Madam, the following activities have been undertaken in preparation for the marketing season:

 

(a)        designated commodities for the 2017/2018 marketing season, namely rice, maize and soya beans, have been gazetted. Once the packaging mechanisms and logistics are in place, more crops on the Farmer Input Support Programme (FISP) list will be procured;

 

(b)        1,520 seasonal staff and satellite depot clerks have been trained countrywide, and deployment is expected to be completed by 12^th July, 2017; and

 

(c)        the FRA has been conducting moisture content monitoring countrywide. As on 5^th July, 2017, the average moisture content was 14.24 per cent and projected to fall to the ideal level of 12.5 per cent by the end of July, 2017.

 

Madam Speaker, let me assure the nation that the FRA has 865,000 metric tonnes of secure storage space, which is more than sufficient for the 500,000 metric tonnes it intends to purchase. The current carry-over stocks account for 230,000 metric tonnes of the total capacity, but the Government has since allowed the agency to export some of the maize to create more space.

 

Madam Speaker, let me take this opportunity to encourage private traders to actively participate in maize marketing and fill up the void that the FRA will leave in some areas.

 

Implementation of the 2017/2018 Farmer Input Support Programme

 

Madam Speaker, we have been operating the FISP Electronic Voucher (e-Voucher) system for the past two agricultural seasons. So far, 39 districts have implemented it.

 

Madam Speaker, the Committees on Agriculture and Estimates laid reports on the Table of this House on 27^th June and 5^th July, 2017, respectively, in which it was recommended that the implementation of the e-Voucher system be rolled out to all the districts of the country. I also wish to inform this august House that, on 7^th June, 2017, the Cabinet decided to implement FISP through the e-Voucher system at 100 per cent of the targeted farmers in all the 109 districts in the country.

 

Madam Speaker, in the 2017 Budget, FISP was allocated K2.8 billion. Of that amount, about K1.7 billion will be spent on the e-Voucher system while the balance of K1.1 billion channelled towards the clearing the outstanding debt to input suppliers and service providers, mainly from 2016/2017 season.

 

Madam Speaker, FISP will continue to be run on a cost-sharing basis between the beneficiary farmers and the Government. The targeted small-scale, but commercially-orientated farmers will contribute K400 to the total value of the e-Voucher, which is K2,100, while the Government will contribute K1,700.

 

Madam Speaker, to make the subsidy programme climate-smart, the Cabinet decided to introduce for all FISP beneficiaries the Weather Index Insurance, a form of crop micro insurance designed in such a manner that farmers receive automatic compensation in case of bad weather conditions that affect their crops. The payment to farmers is based on satellite rainfall data captured during the season and is the viable type of crop insurance for smallholder farmers in Zambia. In that regard, K100 from the K400 farmer contribution will go towards paying for the crop insurance premium.

 

Madam Speaker, in the 2017/2018 Agriculture Season, 1 million beneficiaries will be targeted countrywide. This is a reduction from the 1.6 million targeted by both the conventional FISP and e-Voucher systems during the 2016/2017 season. The reduction is an attempt to target the programme more on the commercially-viable small-scale farmers. It is worth noting that an estimated 25,000 famers have been removed from the FISP beneficiary list over the past two seasons in which the e-Voucher has been implemented due to death, or non-collection of cards by their owners or ghost farmers. In the expansion of the programme to all districts, it is expected that more names will fall off the list.

 

Madam Speaker, some of the farmers who will be left out of the e-Voucher programme during the 2017/2018 season will benefit under the Food Security Pack (FSP) while others will be screened out because they are salaried employees either in the Public Service or the private sector, or do not meet the criterion for selection. The screening will be done in collaboration with Smart Zambia Institute.

 

Madam Speaker, the allocations for the initial thirty-nine districts on the e-Voucher system have remained unchanged at 602,521 farmers while, for the rest of the districts, they have been revised downwards to the 2015/2016 season levels. The 2017/2018 provincial allocations are as follows:

 

         Province                                        Number of Beneficiary Farmers

 

         Central                                                            172,149

 

         Copperbelt                                                      102,452

 

Eastern                                                            187,398

 

Luapula                                                             61,804

 

Lusaka                                                              80,431

 

Muchinga                                                          72,298

 

Northern                                                           92,315

 

North-Western                                                  62,276

 

Southern                                                          160,103

 

         Western                                                            27,208

 

         Total                                                             1,024,434

        

Madam Speaker, to facilitate the rolling out of the e-Voucher programme to all the districts, the following activities will be and are being carried out:

 

1. creation of a central register for all beneficiaries to ensure that no farmer benefits from a multiplicity of programmes regardless of whether the programmes are public or private-sector driven;

 

1. creation of a central register for agro dealers, input suppliers and financial institutions, including mobile money service providers. An input catalogue will also be introduced on the platform to facilitate the tracking of the indicative prices, quantity and quality of inputs to which beneficiary farmers will have access;

 

1. harmonisation of all FISP operational data for real-time monitoring and oversight of all transactions under the programme. The monitoring will include the type of inputs purchased by farmers; and

 

1. a hybrid of payment platforms, that is, digital banking, agency banking, mobile and money solutions, will be used to ensure that all parts of the country are covered. Some of these payment platforms are currently being tested by the service providers and the Smart Zambia Institute.

 

Madam Speaker, in addition to the activities mentioned above, the ministry has completed the following preliminaries:

 

1. all Provincial Agricultural Co-ordinators (PACOs) have been apprised of the revised national target of 1 million beneficiary farmers and the revised district beneficiary allocations;

 

1. the ministry has held discussions with agricultural input suppliers on their preparedness for the 2017/ 2018 season and was assured by most of the fertiliser companies that they had fertiliser stocks in the country while more was in transit to Zambia. An estimated 80,000 metric tonnes of Urea and 50,000 metric tonnes of compound D fertiliser were in the country, against the estimated requirement of 100,000 metric tonnes of each for the 1 million targeted beneficiaries. The seed suppliers also indicated that they were ready to supply the estimated 10,000 metric tonnes of assorted seed to the targeted beneficiaries; and

 

1. the ministry has had discussions with banks and mobile money services providers.

 

Madam Speaker, a communication strategy for reaching all the stakeholders, especially the farmers, who are at the centre of FISP eco-system, using all community radio stations is being formulated. There are also plans to engage hon. Members of Parliament before the test period.

 

Madam Speaker, the ministry has also requested authority from the Zambia Public Procurement Authority (ZPPA) to:

 

1. maintain the agro dealers and input suppliers registered in 2016 for the 2017/2018 season while advertising only for new entrants into the programme;

 

1. extend the working contract with the five banks engaged to manage the cards during the 2016/2017 season so that they continue to manage the cards they supplied to the programme, whose expiry will be after three years; and

 

1. engage insurance companies for the weather index insurance.

 

Madam Speaker, we have continued to address the challenges that have adversely affected the implementation of the e-Voucher system. In addition, we are taking a proactive approach to dealing with likely challenges in the 100 per cent rolling out of the programme.

 

Madam Speaker, let me hasten to say that the hon. Minister of Finance has continued to comfort us that the debt to suppliers will be dismantled and the funds for the 2017/2018 e-Voucher programme made available as soon as the farmers make their contribution. Given the foregoing, we expect the farmers to start transactions by 1^st September, 2017, in readiness for the 2017/2018 Agricultural Season.

 

Madam Speaker, I thank you.

 

Hon. Members: Hear, hear!

 

Madam First Deputy Speaker: Hon. Members, you are now free to ask questions on points of clarification on the statements issued by the hon. Minister of Agriculture.

 

Mr Mbulakulima: Madam Speaker, on paper, the quantity of the strategic reserves has been constant at 500,000 metric tonnes over the past few seasons. However, I know that in reality the ministry buys up to 1,000 000 metric tonnes or more, and I think that reducing 1,233 satellite depots to 760 is quite a big drop. Thankfully, the hon. Minister has stated that the decision to purchase 500,000 metric and the reduction in depots is subject to review. Taking into account the outcry from farmers and hon. Members of Parliament, could the hon. Minister consider lifting this sanction immediately so that when we go to our constituencies, we can have some good news to tell our people?

 

Ms Siliya: Madam Speaker, the tonnage to be procured for the strategic reserves and the budgetary allocation to the programme will remain constant. However, in some areas, we have received information that there was not much consultation between the FRA and the relevant stakeholders in determining the locations of the depots. The agency is now ready to discuss those matters and see how we can correct the situation.

 

I thank you, Madam Speaker.

 

Mr C. M. Zulu (Luangeni): Madam Speaker, it is very unfortunate that the number of satellite depots has been reduced because that will cause a lot of suffering for our people back home. What will happen is that poor farmers will transport their produce to satellite depots like the one in Chongwe at their expense just to be told that the Food Reserve Agency (FRA) can only buy a little of their produce, meaning that the farmer will have to transport his produce back home, thereby incurring losses. I understand that when we approved the Budget a couple of months ago, our copper prices were very low and we had problems with electricity generation. Now that the economy is slowly picking up, why can the hon. Minister of Finance not give the FRA more money to buy more produce and forget the issue of reducing the number of depots?

 

Madam First Deputy Speaker: What is your question, hon. Member?

 

Mr C. M. Zulu: Is it possible for the hon. Minister to lobby for more money for this exercise from the hon. Minister of Finance?

 

Ms Siliya: Madam Speaker, I assume that the hon. Minister of Finance is accessible to all of us in this House. However, I think that the limitation of the quantity that the FRA can buy for our strategic reserves to 500,000 metric tonnes is based purely on the mandate of the agency, which is to procure only for the strategic reserves, that is, about four months’ cover in case of a crisis. Given that Zambia’s monthly food consumption is about 120,000 metric tonnes and about 20,000 tonnes more for industrial use, we estimate that four months’ cover is about 500,000 metric tonnes.

 

Madam Speaker, in procuring for the strategic reserves, the FRA prioritises providing a market in areas from which the private sector has no motivation to buy. Currently, although the market is open, the FRA is not active because, unlike the millers, who can buy maize even with high moisture content because they mill it immediately, it has to wait for the moisture content to be at the international standard of 12.5 per cent because it buys maize for storage. Further, the agency limits itself to procuring 500,000 metric tonnes because we do not want to cloud out the private sector. When the Government goes on the market and buys 2 million or 1 million metric tonnes like it did in 2010, 2011, 2013 and 2014, when our consumption levels are very low, it leads to situations, like you heard of, in which the FRA had to export maize cheaper than the market prices. So, let us do what is correct by allowing the private sector the space to participate on the market and let the market forces to determine the prices and purchases.

 

Madam, I am sure that we can all continue to engage the hon. Minister of Finance on the issues the hon. Member has raised.

 

I thank you, Madam Speaker.

 

Mr Chibanda: Madam Speaker, I thank the hon. Minister for her smart statement to the House. That said, I am aware that she and her colleague, the hon. Minister of Finance, were recently in Nairobi to try and secure a market for our grain. Is she in a position to tell the House and the nation how much they intend to realise from the export? Further, what tonnage has the Government allowed Food Reserve Agency (FRA) to export?

 

Ms Siliya: Madam Speaker, the market in East Africa and, in particular, Kenya is quite huge because the country consumes 300,000 metric tonnes of maize every month, translating into 3 million bags. Our Kenyan colleagues indicated to us that they will be procuring a lot of maize for the next twelve months because although they have two farming seasons, both were affected by drought while the second season, which is the longer, was also affected by army worms. Evidently, the army worms are not unique to Zambia. Their first effort was to procure genetically-modified organisms (GMO) maize from South America. However, they heard that we have good grade and GMO-free white maize.

 

Madam, as a Government, we are encouraging the producers and grain traders to export maize. That is why we went to clarity the export position and removed the 10 per cent surcharge on maize exports. The FRA, like any other buyer and seller, wishes to participate in the exports because it has 280,000 metric tonnes of maize carried over from last year, and we have permitted it to export, at least, 100,000 metric tonnes. The agency is now negotiating with East African grain traders. The Government’s role will be to ensure that both the private sector and the FRA are able to export maize, particularly to Kenya where it is needed.

 

I thank you, Madam.

 

Mr Zimba: Madam Speaker, since two statements were presented, are we allowed to ask two questions?

 

Madam First Deputy Speaker: No, you can only ask one.

 

Laughter

 

Madam First Deputy Speaker: Just ask the most important question.

 

Mr Zimba: Madam Speaker, the reduction in the number of depots will surely not go down well with the farmers, especially given that they have produced a bumper harvest this season. So, we are at pains to explain to them why the depots have been reduced.

 

In your statement, you mentioned …

 

Madam First Deputy Speaker: Order, hon. Member!

 

You seem to be addressing the hon. Minister directly. Please, speak through the Chair.

 

Mr Zimba: Madam Speaker, the hon. Minister mentioned that the Food Reserve Agency (FRA) will close depots that will not be active. Will the Government consider increasing depots in areas where there will be more demand for them?

 

Ms Siliya: Madam Speaker, we need to start thinking of agriculture as a business so that once we increase production, the next step must be to find a market. In this regard, access to local, regional, and if possible, international markets will become very important. The size of the harvest does not necessarily determine what the FRA does because the agency’s mandate is very clear: to buy 500,000 metric tonnes of maize and, to do so, it has a budget that dictates the number of satellite depots it can operate. In this case, the number is just over 700,000.

 

Madam, when we have a bumper harvest like we do this year, our challenge is to activate as many industries as possible, such as bio fuel and manufacturing. We can also exports so that the surplus maize is not limited to being consumed as nshima on our tables. Otherwise, our farmers will never get rich because whenever there is a bumper harvest, crop prices will go down even if the FRA procures the crops. If we add value to the bumper harvest, on the other hand, then, it will not only be used for consumption. Unfortunately, those linkages are missing in our commodity trading structures, and I am alive to that fact, as Minister of Agriculture. That is why we are working hard with the Zambia Agriculture Management Information System (ZAMIS), Marketing Agricultural Commodities Trading Agency (MACTA), Grain Traders Association of Zambia (GTAZ) and the Ministry of Commerce, Trade and Industry to create a market within the country and in the region.

 

I thank you, Madam Speaker.

 

Interruptions

 

Madam First Deputy Speaker: Order, on my right!

 

There are too many conversations.

 

Mr Ngulube: Hear, hear!

 

Mr Mung’andu: Madam Speaker, the hon. Minister mentioned that the number of depots has been reduced, as has the number of beneficiaries of the e-Voucher programme. The implication of the former is that a depot located at Chikwa would be 50 km away from Chifunda. Equally, in Mafinga, a depot at Muyombe would be 60 km away from Tendere. Should the farmers in those areas sell their produce to briefcase businessmen or is the Government able to buy more maize than the 500,000 metric tonnes mentioned? We have been told that Kenya needs maize. So, the Government can use the FRA to buy as much maize as possible so that our people can continue loving our able President. The excess maize can, then, be exported, which would earn the Government a profit.

 

Madam, let me congratulate the people of the Southern Province because they have been allocated three or four times more FISP beneficiaries than Muchinga. Is the hon. Minister assuring the people of Chama South and Muchinga in general, who are among the poorest in the country, that they will not be adversely affected by the scaling down of the number of beneficiaries? After all, it is the Patriotic Front (PF) Government that introduced them to fertiliser and, now, they cannot farm without it. We have already received calls from people saying that many people will be negatively affected by this move, and that will not be good.

 

Ms Siliya: Madam Speaker, the hon. Member for Chama South asked two questions, the first of which is on the reduced number of satellite depots while the second is on the reduced number of beneficiaries of the e-Voucher programme.

 

Madam, regarding the depots, the Government cannot continue to crowd out the private sector from commodity trading in Zambia because that will stifle the development of the sector. In the end, the Government will be forced to continue intervening on the market, as has been the case in the past, when it has ended up procuring 2 million metric tonnes against a storage capacity of only 1.5 million metric tonnes. Apart from the challenge of limited storage, buying excess maize also requires the Government’s diversion of resources from schools, boreholes, roads and many other programmes, thus disturbing the Budget we approve. We want to support the farmers more, but we want to do it in a sustainable manner by providing a platform for price discovery for the farmers at lower, provincial and national levels, where there are structures, so that they can make informed choices on what to grow in a given year. If they plant just enough maize, soya beans and other crops, they may get better prices and ensure good household incomes. They may also decide to plant more maize because they know that the price will be right the following year due to demand in the region. Currently, all our farmers are focused on maize production and we have yielded 3.6 million metric tonnes of it, yet we can only store 1.5 million metric tonnes countrywide. Can you imagine the challenges we will face if we fail to export the maize or use it in manufacturing? So, in the future, we have to do things right because our current practices have failed. For example, the Government can promise to buy more maize, but fail to pay the farmers on time, thereby defeating the very purpose of trying to empower them.

 

Madam Speaker, the FRA will do what it was intended to do, that is, buy 500,000 metric tonnes of maize for the strategic reserves and, for that purpose, it cannot spend K100 million on operating over 1,000 depots. By operating only 700 depots, we will cut the budget by half. Otherwise, the FRA will become insolvent because it would keep accumulating debt. We keep asking the agency to buy more maize and, thereby, accumulate debt while failing to pay the transporters and other service providers. That is a vicious cycle that has to stop. 

 

Madam, regarding the e-Voucher targeting 1 million farmers, the Cabinet realised that there were too many farmer registers. There was one register with the Ministry of Agriculture, another with the Food and Agriculture Organisation (FAO) and others with a number of other agencies, and some farmers on those registers had been getting support from various entities, both private and Government. Our intention was to target small farmers who have the capacity to be weaned off the programme, yet some farmers have been on the programme for ten years. However, even children cannot be looked after forever. Farmers who did not get weaned off the list denied others, especially the younger generation, room to be put on the list. So, we had to decide to support 1 million farmers at 100, 75 and 50 per cent for three years, after which they would come off the list and leave space for others to join. Of course, there are farmers who operate below the line and will never go commercial, for example, a 75 year-old grandmother looking after ten orphans, but we need to support them, too. However, there is a question as to whether such should be on the e-Voucher system under the Ministry of Agriculture, the Social Cash Transfer (SCT) scheme under the Ministry of Community Development and Social Welfare or on free food packs. That is why we decided to create a database that will help us identify the 1 million targets. Those who are above the threshold will manage by themselves while those below it will be taken for social service support.

 

Madam Speaker, I thank you.

 

Mr Kopulande (Chembe): Madam Speaker, on 25^th November, 2015, President Edgar Chagwa Lungu held a press conference at State House at which he made the fundamental statement that he wanted to diversify Zambia’s economy from mining to agriculture and, indeed, the Government’s interventions in the agricultural sector has produced results. The people of Chembe, whom I am humbled to represent, have responded to the President’s and Patriotic Front (PF) Government’s clarion call for more production in the agricultural sector so that this country can free itself from the vagaries of price fluctuations that we have experienced with copper mining. As a result, 3.6 million metric tonnes of maize has been produced, which is a phenomenal record. However, my people in Chembe are worried that, at the end of the day, their crop will not be bought because the mandate of the Food Reserve Agency (FRA) is limited, as we have been told, to procuring strategic reserves. In view of that limitation in the mandate of the FRA, has the ministry considered establishing a grain marketing mechanism for both local and export trade? The hon. Minister has just confirmed that there is a massive market for maize in East Africa.  In view of the …

 

Mr Mutale: Te debate fye, iyi?

 

Laughter

 

Mr Kopulande: … low capacity of the private sector to intervene on the market, does the hon. Minister not think that a grain marketing institution would be helpful in encouraging the highly productive farmers who have responded to the Government’s call for more production?

 

Ms Siliya: Madam Speaker, I appreciate the hon. Member of Parliament for Chembe’s question because he acknowledges that while we need to deal with market failures alongside increasing production, and the Government has been working on this matter. For example, in 2005, the Agricultural Credit Act was enacted to provide for a warehouse receipting system under the Zambia Marketing and Agricultural Credit Agency, which has been in existence since then. However, it was not operationalised. So, this year, we met with the agency to ensure that it was fully operationalised so that we can use its platform to procure, at least, 500,000 metric tonnes from the market.

 

Madam Speaker, there are other players on the market besides the FRA. For example, last year, we produced 2.8 million metric tonnes, but the FRA could not procure even 200,000 metric tonnes because the private sector had bought most of the produce. So, to say that the private sector has no capacity is not correct because it does. However, it responds to the right market prices only because it is motivated by profit. This year, we harvested 3.6 million metric tonnes, but the demand in the Democratic Republic of the Congo (DRC) has remained high and we keep issuing export permits for that country. The demand in Kenya has gone through the roof in the last one month and the Eastern Africa Grain Traders Association met with our grain traders association here, in Zambia, and signed deals worth US$100 million. We also know that the Government of Kenya has appointed agents to immediately import 100,000 metric tonnes and we have been told that our colleagues need to import food for the next twelve months. So, the market is there. We just need to connect the seller and the buyer, and provide an aggregator to provide confidence in pricing on both sides. I totally agree with the hon. Member that part is missing. There is a need for the farmers to know where prices are better and refuse to sell their maize at K40. The farmers should also have the capacity to wait a little because, by October, the price starts going up. Unfortunately, most of our farmers do not have that patient. Instead, they would want to sell immediately.

 

Madam Speaker, our farmers also have storage challenges. In that regard, we are working very hard with the Ministry of Finance to provide some basic support to them so that they can store their produce properly and use the warehouse receipt system, which ZAMIS is working on. The farmers can be paid now and, possibly, get the balance on future prices. I believe it has to work like that because that is how it works in other countries.

 

I thank you, Madam, Speaker.

 

Mr Bwalya (Lupososhi): Madam Speaker, the distortions to which the hon. Minister has referred are normal because it is also a responsibility of the Government to protect the peasant farmer. It is also true that it is the responsibility of the Government to make all places in the country accessible. The people in Lupososhi Constituency depend on the Food Reserve Agency (FRA), and the reason is easy to figure out. There are no private sectors grain traders there, yet the area produces a lot of maize. The only buyer they know is the Government. Will the Government reconsider its decision and review the list of depots in the remotest parts of this country so that the people there can sell their grain and make some money, which they are only able today once in twelve months?

 

 Ms Siliya: Madam Speaker, I could not agree more with the hon. Member of Parliament that the Government has a responsibility to its people, and that is why, firstly, it has to ensure food security by instituting an agency that specifically procures maize for food security. Be that as it may, there is a limit to the amount of food the Government can procure at a time. Secondly, the FRA tries to intervene on the market by providing price stabilisation either by announcing its own market purchasing price or offloading stocks on the market, particularly between November and March, when there is high demand. We have seen the FRA do that for the farmers on behalf of the Government.

 

Madam Speaker, the story is not only about the FRA because we also want to the private sector to grow. Yes, there are areas where the private sector is not motivated to go, and I am sure that there are many such places in Lupososhi. In that regard, our message to the FRA has been clearly that it is to be the buyer in remote areas. In fact, one of the issues that we discussed yesterday in a meeting we had with the FRA and the Chairpersons of various Committees was the definition of a rural area because we know that there places that are near cities, like Chongwe up to the Luano Valley, which are, however, very difficult to reach, and far-flung places that are, however, close to the line of rail. So, in our review of the relevant legislation, we have to specify what a rural area is. Although we have some idea of what those areas are, it is the responsibility of the FRA to continue to engage all stakeholders on the issue. If hon. Members feel there are some areas where depots are too close to each and can be move farther apart, they can make suggestions to the FRA, which has already indicated its intentions to relocate its operations from areas where they do not see much activity. As long as the constant parameters remain the same, the agency should allow as many people as possible in the rural areas to access its marketing platform. So, we must continue to engage the agency before it comes up with the final list of depots so that some factors can be taken into consideration.

 

 I thank you, Madam Speaker.

 

Dr Malama: Madam Speaker, the people of Kanchibiya fully appreciate this pro-poor Government. That said, will the Government protect the poorest of the poor by ensuring that the purchasing of crops for the food reserves is done in the remotest areas, such as Mwelushi and many other places in Kanchibiya, Muchinga and the country as a whole, where the backbone infrastructure like feeder roads are lacking, instead of leaving it to the private sector, which might take advantage of the poor people and leave them poorer than they will find them? For instance, the distance between Mwelushi and Mpika town is 186 km, which is like the distance between Lusaka and Kapiri Mposhi or thereabout.

 

 Ms Siliya: Madam Speaker, I would like to commiserate with all the hon. Members who are lamenting the scourge of briefcase buyers. However, that is happening everywhere, including in my constituency.

 

Interruptions

 

 Ms Siliya: Madam Speaker, as I have already stated, the FRA will prioritise the most outlying areas, to which the private sector has no motivation to go, in its procurement of agricultural produce. Be that as it may, farmers will still have the choice of whom to transact with? That said, I believe we have a lot to do to disseminate information to farmers at constituency levels so that they can plan their production in such a way that they can grow other cash crops so that by the maize marketing season, they will have some cash to avoid being under pressure to sell their crop too early, before the price goes up around October. The challenge is that most farmers say that they have no income at all. Therefore, once their harvest is ready, it becomes their only source of income, and that creates a situation in which traders can go into the fields and buy the maize even before it is harvest. That is one thing against which we should educate our farmers. We should teach them that if they want to do good business, they will have to learn to hold on to their produce and sell only when the prices are right. They must also plant other crops that may fetch higher prices.

 

Madam, I totally hear what hon. Members are saying, and the FRA is pro-poor in its operations. So, it has to buy from poor people and sell to the most vulnerable communities to ensure their food security. There are teething problems in doing so, but once the marketing structure is in place and farmers can easily get price information, those who are commercially viable will make commercial decisions so that we can deal with the issues of the vulnerable on different platforms instead of the e-Voucher system, which is a commercial platform.

 

 I thank You, Madam.

 

Business was suspended from 1640 hours until 1700 hours.     

 

 [MADAM FIRST DEPUTY SPEAKER in the Chair]

 

Madam First Deputy Speaker: When business was suspended, the hon. Minister of Agriculture was answering follow-up questions on the statements she has issued to the House. May the hon. Member for Mkushi South ask his follow-up question.

 

Mr Chisopa: Madam Speaker, the Food Reserve Agency (FRA) has reduced the number of satellite depots for buying maize from farmers. For the record, there are many complaints in my constituency because out of sixteen depots there, only five are operational and most of them are over 25 km apart. The hon. Minister also talked about the issue of the Electronic Voucher (e-Voucher).

 

Madam First Deputy Speaker: Order, hon. Member!

 

We need to make progress. So, ask only one question.

 

Mr Chisopa: Madam Speaker, the e-Voucher programme was implemented in thirty-seven districts in the last farming season, and I remember His Excellency the President saying that we did not do very well in implementing the programme although he still expressed his support for it. Can the hon. Minister guarantee the success of the programme when it is rolled out to the whole country? As I speak, agricultural officers are telling farmers that one electronic voucher (e-Voucher) card can be shared by two farmers.

 

Ms Siliya: Madam Speaker, I will continue to emphasise that the FRA is not the only buyer on the market, as was demonstrated last year when we had a bumper harvest, yet the agency was not able to meet its target of procuring 500,000 metric tonnes of maize because the private sector had moved in more quickly. Clearly, those were very unique circumstances. However, we still expect the maize price this year to be quite attractive both locally and in the region and to continue rising until October, 2017. The challenge for our farmers is to hold on until the price is right for them to sell. However, we cannot those farmers who want to sell now. All I can do is urge hon. Members to do what the Ministry of Agriculture and I are doing, that is, advising our farmers to hold out for a better price.

 

Madam Speaker, the decision to roll out the e-Voucher programme 100 per cent was made by the Cabinet, not by the hon. Minister of Agriculture alone, and it is supported by the reports laid on the Table of this House by your Committees on Agriculture and Estimates. During a consultative meeting with all the stakeholders, particularly the District Agricultural Co-ordinators (DACOs) and Provincial Agricultural Co-ordinators (PACOs), on 14^th March, 2017, it was admitted that there had been some challenges in the implementation of the programme last year, especially given the absence of a technological ecosystem that could facilitate Government oversight and pinpoint the bottlenecks. That is why we are now working with Smart Zambia Institute to put the technology in place and allow the Government to interface with suppliers, agro dealers and, most importantly, with the farmers, and monitor the interface between the farmers and the agro dealers. The system will be tested from 1^st August, 2017, and, hopefully, implemented by 1^st September, 2017.

 

Madam Speaker, the e-Voucher programme was implemented in thirty-nine districts and we are now extending it to 109 districts. In terms of beneficiaries, there are already over 50 per cent, as over 600,000 farmers were on the programme last year. So, we have gained the experience necessary to manage the 400,000 farmers who will be added to the list and react to challenges as quickly as possible. So, the only guarantee I can give the hon. Member is that we are considering all the problems that may arise and trying to find ways of mitigating their impacts in real time.

 

I thank you, Madam Speaker.

 

Mr Kasandwe (Bangweulu): Madam Speaker, there are a number of farmers in Bangweulu Constituency whose cards are still not yet activated. So, what is the way forward?

 

Madam First Deputy Speaker: Hon. Minister, maybe, as you answer that question, also respond to the issue of two farmers sharing one electronic voucher (e-Voucher) card.

 

Ms Siliya: Madam Speaker, regarding the issue of one e-Voucher card being shared by two farmers, that should not be possible because the Visa card is tied to a the particulars of specific farmers, including names, area of residence, national registration card (NRC) number and photograph. In fact, as we create the main database, we want to add more variables so that we can easily identify the farmers. Already, the introduction of the card has enabled us to identify and remove from the system 25,000 ghost farmers who had been receiving support for many years. Therefore, I assure the hon. Member who had asked this question, and is behind me, that it is not possible for two people to share the same card unless there is collusion between the owner of the card and the second person. However, in that case, the transactions would appear under the owner of the card. Mind you, the account holder has a personal identification number (PIN) for the card as a security measure. So, how can somebody swipe the card without the owner surrendering the PIN? However, obviously, there are some people who do not appreciate the importance of keeping their PINs secret, and we all have the responsibility to educate our farmers on such issues.

 

Madam Speaker, on the non-activation of some cards, the hon. Member is right. If you recall, in 2016, we only began activating cards in November. So, 40,000 cards were not activated at the end of that year. However, in the last three weeks, the hon. Minister of Finance has been gracious enough to release some funds so that the cards for the accounts to which money had already been allocated to be activated, as the owners of the cards were entitled to the financial support in that farming season.

 

Madam, we will continue to work hard until all the cards have been activated, after which we will reload the money into the accounts for the next farming season. So, we are aware that there have been some instances in which farmers paid their K400 contribution, but the Government did not remit the counterpart funding, so to speak. However, since then, the hon. Minister of Finance has twice released money for us to activate the cards. He has also assured us that we will not experience this problem in the next farming season and that the cards will be activated immediately a farmer pays the K400. We want to dismantle the arrears of cards that were not activated.

 

I thank you, Madam.

 

Mr Mutale (Chitambo): Madam Speaker, from way back, our farmers in the rural areas have always known that they can sell their maize to the Government through the Food Reserve Agency (FRA). So, the current situation is grave to us, who come from rural constituencies, as it will have a very big impact on us. The Government is promoting agriculture ...

 

Madam First Deputy Speaker: Order, hon. Member!

 

Quickly ask your question,

 

Mr Mutale: Yes Madam, I will ask the question in no time.

 

Madam Speaker, the Government is promoting agriculture and wants to wean farmers off the Farmer Input Support Programme (FISP). However, I there is a problem because the farmers have now been exposed to unscrupulous grain traders. So, what is the ministry doing to protect them from being exploited by grain traders who may want to purchase their maize at prices that are not cost-reflective? Mind you, it is the Government, not the grain traders, that subsidises the farmers in growing maize.

 

Ms Siliya: Madam Speaker, nothing is static in life. Initially, we had the National Agriculture Marketing Board (NAMBOARD). Then, there was a time we did not have any State crop marketing institution until the FRA was established. Further, in the past, unlike now, there was no private sector participation in agricultural commodity trading. Now, we have a situation in which the price controls the transactions between buyers and sellers. Our concern, as a Government, is to maintain the strategic food reserve, and influence prices by participating on the market through the FRA, and buying maize from vulnerable communities.

 

Madam Speaker, we also have the collective responsibility to educate our farmers using our community radio stations in collaboration with the district, provincial and national agricultural officers. We, hon. Members of Parliament, have to take the lead in the effort to give the farmers on FISP the chance to be commercially viable and eventually be weaned off the programme. We must also be clear in our mind what kind of farmers we are talking about because the e-Voucher Handbook specifies the eligible farmers as those who have, at least, ten cattle, ten goats or pigs and thirty chickens. That is the farmer targeted by FISP, as such farmers are not as bad as we want to believe because they can make economic decisions and interface with banks. So, let us stop thinking of FISP farmers as very vulnerable seventy-five-year-old women with twenty orphans to look after because such should be beneficiaries of programmes under the Ministry of Community Development and Social Welfare, where they can get free packs and cash transfers because their objective is just to have household food security. If they sell one or two bags of maize, it will be in their locality. Under FISP, we are targeting the kind of farmer who has some economic intelligence and a desire to graduate from small-scale to medium-scale farming. So, we are very clear on what we want to do. However, by trying to mix people with the potential to become commercial farmers with very vulnerable ones, we have misdirected the support and, in the end, achieved nothing. We do not want to do that anymore.

 

Madam, besides, traders do not only buy from small-scale farmers who, admittedly, produce the largest proportion of our maize, but also buy other crops like sorghum, wheat, millet and soya beans from commercial farmers. So, we want to ensure that small-scale farmers can also access the market and have some cash in their houses by encouraging them to grow a variety of crops. They should not sell only maize.

 

I thank you, Madam.

 

Princess Mwape: (Mkushi North): Madam Speaker, I thank the hon. Minister for her statement to the House. However, the ministry still owes money to agro dealers for services rendered during the 2015/2016 Farming Season. Is the hon. Minister assuring the nation that those suppliers will be willing to supply farmers on the electronic voucher (e-Voucher) system during the 2016/2017 Farming Season when the Government has still not paid them?

 

Ms Siliya: Madam Speaker, everything we are doing is meant to ensure that the operations of the e-Voucher system and the FRA, especially the payments to suppliers, are current so that we do not clog the system. Currently, fertiliser suppliers have told us that they have 18,000 and 50,000 metric tonnes of urea and Compound D fertiliser, respectively, in the country, but the need is between 100,000 and 150,000 metric tonnes for both. With the e-Voucher system rolling out countrywide without the Government directly procuring the fertiliser, we are exposed. That is the reason I have had serious discussions with the hon. Minister of Finance aimed at the dismantling of the K2 billion debt, which dates back to 2014, not 2015, and is mostly owed to transporters, some of whom are hon. Members of Parliament, whose operations will ground to a halt if they are not paid. So, the hon. Member who asked this question might wish to declare interest. The other debts are owed to seed and fertiliser suppliers, whose businesses we do not want to frustrate either because we want them to flourish and distribute inputs to our farmers effectively. However, currently, we risk not achieving that goal because of those arrears. Fortunately, I met with the hon. Minister of Finance last Saturday afternoon and I am confident that he is fully committed to resolving this issue because, just yesterday, we got some funding. It was not adequate, obviously, but at least, it is something, and it will enable us to liquidate part of the debt owed to the Nitrogen Chemicals of Zambia (NCZ), transporters under FISP, the FRA and input suppliers. So, we will just sing this song until the fiscal space is created.

 

I thank you, Madam Speaker.

 

Mr Kabanda (Serenje): Madam Speaker, for the comfort of the farmers, can the hon. Minister indicate how much is in the kitty for their maize produce.

 

Ms Siliya: Madam Speaker, as the FRA procures 500,000 metric tonnes of maize, this year, it will also procure about 20,000 metric tonnes of soya beans and just over 2,000 metric tonnes of paddy rice. The agency, as a participant on the market, will determine the prices at which it will offer to buy maize, soya beans and rice after consideration of costs and all other issues. Thereafter, I will announce the prices to this House. However, I must emphasise that the prices to be set by the agency are not floor prices, but merely ones at which the Government will feel comfortable to participate on the market.

 

I thank you, Madam.

 

Mr Kafwaya: Madam Speaker, what exactly does the hon. Minister mean when she says that the Food Reserve Agency (FRA) will buy maize from outlying areas? I ask this question because, in Lunte Constituency, the buying centres at Muyembe and Chibelushi have been closed despite being outlying areas. Is it the wish of the FRA that the people of Muyembe and Chibelushi transport their maize to Chitoshi and Shibwalya Kapila, respectively?

 

Ms Siliya: Madam Speaker, in considering a site for designation as a trading point, especially in the outlying areas, one of the major criteria is that the area produces, at least, 5,000 x 50kg bags of surplus maize. However, if there is a unique situation in Muyembe and Chibelushi, I encourage the hon. Member to urgently engage the FRA on the matter so that the people are not inconvenienced.

 

I thank you, Madam Speaker.

 

Ms Miti (Vubwi): Madam Speaker, I thank the hon. Minister for her statement to this House.

 

Madam, the people of Vubwi are crying, too, because they are expecting a bumper harvest this year. For the information of the hon. Minister, in case she is not aware, Vubwi came out first in the Provincial Agricultural Show for this year, which means that we have done very well in agriculture. Unfortunately, the reduction in the number of satellite depots in the area, from twelve to six, will definitely mean that the few remaining depots will be congested and one expects that there will be attendant problems like corruption. What measures will the Food Reserve Agency (FRA) put in place to prevent the depot clerks from being tempted to engage in corruption?

 

Ms Siliya: Madam Speaker, let me belabour the point that going forward, the agriculture sector should always think increased production for both food security and price stabilisation, and crop diversification. We should think of how our farmers can get rich. Clearly, they have not got rich from producing maize alone. So, we have to ask ourselves what needs to be put in place to make agriculture make sense to our people. If, indeed, 70 per cent of our population are in agriculture, yet the sector accounts for less than 10 per cent of the gross domestic product (GDP), then, clearly, the people in it are just sharing poverty. So, something needs to change. Has what we have been doing all these years worked? We have to admit that it has not worked as it should have. So, we want commercially viable farmers to have information on price and market forecasts for crops before they decide to plant, and we intend to provide that information through the Zambia Agriculture Commodity Exchange (ZAMACE). That is how we want to empower the farmer.

 

Secondly, Madam, we have to understand that the FRA’s mandate is specifically to maintain the strategic food reserves. So, the assumption that the FRA must automatically buy more whenever there is a bumper harvest is wrong. In fact, it is the reason for the budgetary distortions and debt to which an hon. Member who debated earlier referred. We keep going round in circles and subjecting the private sector, especially the transporters and input suppliers to suffering, yet again, we still ask questions on when schools will be built or boreholes sank?

 

Madam, we must share roles. The Government has a role to play, no doubt, which is to buy security stocks and, in times of abundance, participate in export trade through the FRA so that the agency does not accrue any more debt. However, we must also encourage the private sector to grow and do what it did last year, which was to offer prices so competitive that FRA could not purchase its targeted quantities of reserve stocks. The farmer made the right choice of selling to the private sector. Concentrating on the FRA only is like seeing the glass half-empty, which is the narrow view. However, if we produce maize and other crops for export, there will always be a better price somewhere and the farmer will get a better price.

 

Madam Speaker, the FRA has produced a handbook on satellite depots and I will make it available to hon. Members of Parliament by next week so that they know what it takes to operate depots. There are a costs involved, such as huge expenses on salaries, which are met with money from the same Budget from which we ask for money for boreholes.

 

Madam Speaker, we encourage the people working in depots to follow the guidelines in the handbook in order to curb the corruption that has been talked about. Yes, there are teething problems, but we cannot go back to things that have failed in the past. As one famous Albert Einstein once said, it is insanity to do the same thing, but expect a different result. The farmers of the future cannot be solely dependent on the Government.

 

I thank you, Madam Speaker.

 

Madam First Deputy Speaker: Hon. Minister, has the Food Reserve Agency (FRA) put measures in place to ensure that there will be no corruption?

 

Ms Siliya: Madam Speaker, as I said earlier, with your permission, I will circulate a handbook in which the procedures for the management of satellite depots are laid down. We were also concerned that there were many cases of corruption when we had 1,223 satellite depots and we still expect to see some inappropriate behaviour now that the number of depots has been reduced to 740. So, the handbook was written as a means to reducing the scourge.

 

I thank you, Madam Speaker.

 

__________

 

QUESTIONS FOR ORAL ANSWER

 

PURCHASE OF ORANGE MAIZE

 

317.  Mr Mutale (Chitambo) asked the Minister of Agriculture:

 

1. whether the Government had any plans to purchase orange maize from farmers during the 2017 Agricultural Marketing Season; and

 

1. if so, how many tonnes would be purchased.

 

The Minister of Agriculture (Ms Siliya): Madam Speaker, the Food Reserve Agency (FRA) will only buy white maize, rice and soya beans. Although orange maize is one of the crops supported under Farmer Input Support Programme (FISP), this year, we will not buy it due to budgetary and logistical constraints. However, logistics will be put in place for the FRA to procure some quantities of all the ten crops supported by FISP in the future.

 

I thank you, Madam Speaker.

 

MOBILE HOSPITALS

 

318.  Mr C. M. Zulu (Luangeni) asked the Minister of Health:

 

1. whether mobile hospitals were operational;

 

1. if so, how many constituencies benefited from their services from 2011 to 2016; and

 

1. why Luangeni Parliamentary Constituency had not yet benefited from them.

 

The Minister of Health (Dr Chilufya): Madam Speaker, mobile hospitals are operational. However, the outreach programme is not designed based on constituencies, but rather on the needs of each district health office. The mobile hospitals go to places where there is inadequate infrastructure on a rotational basis to ensure that each district in the province benefits from the service.

 

Madam Speaker, Luangeni Parliamentary Constituency in Chipata benefits from mobile health services, at least, annually during the Nc’wala traditional ceremony and as the need arises.

 

I thank you, Madam Speaker.

 

Mr C. M. Zulu: Madam Speaker, are there plans to purchase more mobile hospitals?

 

Dr Chilufya: Madam Speaker, the mobile health facilities we plan to acquire are not the same as the mobile hospitals we have currently. There are seven mobile hospitals mounted on trucks and each has a specific function. For instance, one is an outpatient department (OPD), one is a radiology department and another is a theatre. The one we are planning to procure is a smaller facility that provides all the services and is targeted at providing mainly mobile antiretroviral therapy (ART).

 

I thank you, Madam Speaker.

 

Mr Kunda (Muchinga): Madam Speaker, we have heard that Luangeni Constituency benefits from services offered by mobile hospitals. When will Muchinga Constituency also benefit?

 

Dr Chilufya: Madam Speaker, as I said, mobile health facilities are not routinely taken to every part of every constituency. The facilities are deployed on the basis of need. So, I emphasise that if Muchinga Constituency has places where there is no infrastructure to provide health services at a certain level, but the statistics we get from our disease profile indicates that there is a need for such services, we will certainly deploy the facility there.

 

I thank you, Madam Speaker.

 

__________

 

MOTIONS

 

SUPPLEMENTARY ESTIMATES NO. 1 OF 2017

 

The Minister of Finance (Mr Mutati): Madam Speaker, I beg to move that the House do now resolve into the Committee of Supply to consider Supplementary Estimates No. 1 of 2017.

 

Madam, I am the bearer of a message from His Excellency the President recommending the favourable consideration of the Motion I now place on the Table.

 

Mr Mutati Laid the paper on the Table.

 

Hon. Members: Hear, hear!

 

Mr Mutati: Madam Speaker, I thank you for according me the opportunity to present to this House Supplementary Estimates No. 1 of 2017. Before I get into the details of the Motion, I wish to, yet again, update the nation on the performance of the 2017 Budget. As hon. Members of Parliament will recall, I briefed them on the performance of the Budget for the first five months of 2017. In that statement, I highlighted a number of positive developments that had been realised following the implementation of Zambia Plus, the Government’s economic stabilisation and growth programme. Notable among the achievements were:

 

1. a reduction in the inflation rate from of 22 per cent, in February, 2016, to 6.8 per cent, in June, 2017;

 

1. a stabilisation of the exchange rate between the kwacha and major currencies; and

 

1. higher growth projections for 2017 of 4.3 per cent, compared with the initial forecast of 3.4 per cent.

 

 

Madam Speaker, the firm policy framework on which the stability achieved has been anchored should not be compromised. Further, the developments should give hope to our people, including small businesses, which are worst affected whenever various economic fundamentals slip. We are confident that the reforms the Government is implementing will sustain the stability and positive performance over the medium term.

 

Madam Speaker, on the fiscal front, a few challenges still remain. As hon. Members will recall, I reported underperformance in overall revenues by 10 per cent and expenditure of 12 per cent above projections for the first five months of the 2017. That has negatively affected the pace at which we are executing Government projects. It is, therefore, imperative that we expeditiously take remedial measures to restore fiscal fitness. On the revenue front, the Government will, during the rest of the year, focus on increasing tax compliance, easing tax administration, reducing revenue leakages and broadening the tax base. My hon. Colleagues may recall that I provided details of the specific measures to be taken in revamping our revenue base in my statement to this august House last month. To support the revitalised revenue mobilisation and foster high growth prospects, it is essential that certain expenditure realignments be undertaken. I, therefore, present Supplementary Estimate No. 1 of 2017 and the Budget realignment contained therein for the favourable consideration of this House.

 

Madam Speaker, the Supplementary Estimates I present today have been prepared in accordance with Article 203 of the Constitution of the Republic of Zambia. The supplementary request stands at K2.9 billion, of which K1.9 billion will be supported by reallocations in the 2017 Budget. For example, in the Ministry of Health, slow-moving expenditure lines have been reallocated to the purchase of ambulances. Further, funds amounting to K167.4 million have been carried over from the 2016 Financial Year and are now expected to be spent in 2017, K416.2 million is money received from our co-operating partners over and above the commitments in the 2017 Budget and K360 million are additional funds from domestic sources.

 

Madam Speaker, allow me, now, to highlight some key areas for which additional provision are being sought.

 

Madam, K85 million is proposed under the Ministry of Transport and Communication to facilitate the procurement and installation of the information and communication technology (ICT) equipment, which will effectively monitor the transactions in the communication sector and, consequently, enhance revenue collection. Additionally, K8.5 million is requested under the Zambia Revenue Authority (ZRA) to support enhanced border operations.

 

Madam Speaker, in our continued effort to cushion the vulnerable from the adverse effects of the reforms being implemented under the Economic Stabilisation and Growth Programme, K150 million is proposed under the Local Authority Superannuation Fund (LASF) for payment of retirees while, under the Ministry of General Education, K116.5 million is proposed for the School Feeding Programme, which will support additional pupils, especially in rural areas. A further K64.5 million is proposed under the Social Cash Transfer (SCT) programme while K32 million is requested under the Ministry of Higher Education for preliminary works and feasibility studies on the establishment of a nuclear energy power plant, which is aimed at better meeting the country’s energy needs by reducing the risks associated with power sources that are vulnerable to climate change, and facilitating education, health, research and treatment.

 

Madam Speaker, for any meaningful development to be sustained, it is important that the safety of both people and property is assured. Therefore, I propose that K167 million allocated to the enhancement of security under the Zambia Police Service (ZPS) and the Zambia Security Intelligence Service (ZSIS).

 

Hon. Government Members: Hear, hear!

 

Mr Mutati: Additionally, K100 million is proposed under the Ministry of Local Government for the procurement of fire tenders ...

 

Mr Mwale: Hear, hear!

 

Mr Mutati: … while K210 million is reserved for recapitalisation.

 

Madam, like I indicated in my preamble, the Supplementary Budget is being financed mainly from reallocation of funds already in the Budget. The only amount that is additional to the current Budget, other than the donor and carryover funds, is the K360 million that is being financed from other domestic resources, which represents under 1 per cent of the projected domestic resources in 2017.

 

Madam Speaker, the key objective is of my ministry is to maintain the deficit for 2017 at around 7 per cent of the gross domestic product (GDP), which is consistent with the Government’s policy of maintaining Budget credibility by limiting Budget variations and consolidating the fiscal position to remain within the budgeted deficit. We are further determined to ensure lower deficit as a way of reducing borrowing because we cannot continue to borrow our way out of challenges. We, therefore, need to increasingly confine our needs within our resource-generating capabilities.

 

Madam Speaker, regarding the accumulation of arrears, the Government is enhancing the commitment control system within the Integrated Financial Management Information System (IFMIS) and preparing reforms to regulations, which will be tabled in this House as part of the Budget legislation. Going forward, the following three pillars will govern Budget management:

 

1. spending within the approved Budget;

 

1. limiting borrowing to economic projects and ensuring debt sustainability; and

 

1. maintaining Budget deficits at no more than 4 per cent of GDP by 2019.

 

Madam Speaker, in conclusion, it is my sincere hope that the explanation made above will assist hon. Members of Parliament in understanding the reasons behind the Supplementary Budget. I am also ready to give additional reasons for the requests in Supplementary Budget No. 1 of 2017.

 

Madam Speaker, I beg to move.

 

Hon. Government Members: Hear, hear!

 

Madam First Deputy Speaker: Any further debate?

 

No hon. Member indicated.

 

Mr Mutati: Madam Speaker, I thank the House for the unanimous support to the Motion.

 

I thank you, Madam Speaker.

 

Hon. Government Members: Hear, hear!

 

Question put and agreed to.

 

_________

 

COMMITTEE OF SUPPLY

 

 [THE DEPUTY CHAIRPERSON OF COMMITTEES in the

Chair]

 

SUPPLEMENTARY ESTIMATES NO.1 of 2017

 

The Deputy Chairperson: Government of the Republic of Zambia, Supplementary Estimates No. 1 of 2017. We will go straight into considering individual heads.

 

Votes 02/01, 03/01, 04/03, 05/01, 08/01, 10/01, 11/01, 14/01, 15/06, 17/01, 17/02, 17/03, 17/04, 17/05, 17/06, 17/07, 17/08, 17/09, 17/10, 17/11, 17/12, 17/13, 17/15, 17/18, 17/20, 17/23, 17/24, 17/25, 17/26, 17/27, 17/28, 17/30, 17/31, 17/32, 17/33, 17/35, 17/36, 17/37, 17/43, 17/45, 17/47, 17/48, 17/50, 17/51, 17/52, 17/54, 17/56 and 17/57 ordered to stand part of the Estimates.

 

The Deputy Chairperson: Order!

 

Business was suspended from 1810 hours until 1830 hours.

 

[THE DEPUTY CHAIRPERSON OF COMMITTEES in the

Chair]

 

The Deputy Chairperson: Before business was suspended, the House was considering individual items under Supplementary Estimate No. 1 of 2017. Let us continue.

 

Votes 18/02, 19/01, 20/06, 21/01, 25/01, 26/02, 29/01, 29/05, 31/02, 32/01, 32/02, 32/03, 34/01, 37/01, 37/02, 37/04, 37/07, 37/08, 37/10, 37/11, 38/01, 38/02, 38/04, 38/06, 44/01, 45/02, 46/01, 46/02, 46/08, 46/30, 51/01, 64/07, 64/08, 68/01, 68/05, 76/01, 76/03, 77/01, 77/02, 77/03, 77/04, 77/08, 78/01, 86/01, 86/02, 86/03, 86/21, 88/01, 89/01, 89/03, 89/04, 89/05, 89/09, 89/11, 89/13, 89/17, 89/20, 89/21, 89/23, 89/24, 89/25, 89/26, 89/28, 89/29, 89/30, 89/32, 89/33, 89/34, 91/42, 99/04, 65 and 80 ordered to stand part of the Estimates.

 

­___________

 

HOUSE RESUMED

 

[MADAM FIRST DEPUTY SPEAKER in the Chair]

 

Supplementary Estimates No. 1 of 2017 reported approved.

 

Report adopted.

 

Question put and agreed to and Madam First Deputy Speaker appointed the Minister of Finance to be a committee of one to bring in the necessary Bill to give effect hereto today.

 

___________

 

BILL

 

FIRST READING

 

The following Bill was read the first time:

 

The Supplementary Appropriation Bill, 2017

 

Second Reading, now.

 

SECOND READING

 

THE SUPPLEMENTARY APPROPRIATION BILL, 2017

 

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

 

Madam Speaker, following the approval of Supplementary Estimates No.1 of 2017, which will provide additional funds for the Government to provide essential services during the financial year ending 31^st December, 2017, I now present the necessary legislation to give effect to the resolution of the House.

 

Madam Speaker, the Bill before the House is intended to mandate the Government to spend monies totalling K2,873,659,130 over and above the amount approved by this House in the 2017 Budget. Since the Supplementary Estimates have already been debated by this House, I do not expect the Bill to generate more debate.

 

Madam Speaker, I thank you.

 

Madam First Deputy Speaker: Any further debate?

 

No hon. Member indicated.

 

Mr Mutati: Madam Speaker, I thank the House for unanimously supporting the Bill.

 

I thank you, Madam.

 

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

 

COMMITTEE OF SUPPLY

 

[THE DEPUTY CHAIRPERSON OF COMMITTEES in the

Chair]

 

SUPPLEMENTARY ESTIMATES NO. 1 OF 2017

 

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

 

First and Second Schedules ordered to stand part of the Bill.

 

Title agreed to.

 

HOUSE RESUMED

 

[MADAM FIRST DEPUTY SPEAKER in the Chair]

 

The following Bill was reported to the House as having passed through Committee without amendments:

 

The Supplementary Appropriation Bill, 2017

 

Third Reading, today.

 

THIRD READING

 

The following Bill was read the third time and passed:

 

The Supplementary Appropriation Bill, 2017

 

___________

 

MOTIONS

 

REPORT OF THE PUBLIC ACCOUNTS COMMITTEE ON THE REPORT OF THE AUDITOR-GENERAL ON THE ACCOUNTS OF PARASTATAL BODIES AND OTHER STATUTORY INSTITUTIONS FOR THE FINANCIAL YEAR ENDED 31^ST DECEMBER, 2015

 

Mr Mbulakulima (Milenge): Madam Speaker, I beg to move that the House do adopt the Report of the Public Accounts Committee on the Report of the Auditor-General on the Accounts of Parastatal Bodies and other Statutory Institutions for the Financial Year Ended 31^st December, 2015, laid on the Table of the House on 7^th July, 2017.

 

Madam First Deputy Speaker: Is the Motion seconded?

 

Ms Mwape (Mkushi North): Madam Speaker, I second the Motion.

 

Hon. Government Members: Hear, hear!

 

Mr Mbulakulima: Madam, in line with its terms of reference, as specified in the Standing Orders, your Committee considered the Report of the Auditor-General on the Accounts of Parastatal Bodies and Other Statutory Institutions for the Financial Year Ended 31^st December, 2015. As hon. Members are privy to the contents of your Committee’s report, I will restrict my comments to some key issues with which your Committee dealt.

 

Madam, the House might wish to note that seventeen parastatals bodies and statutory institutions covered on by the audit report were considered by your Committee.

 

Madam, the first matter that caught the attention of your Committee was the continued failure by parastatals bodies and other statutory institutions to produce audited financial statements as required by law. That showed that interventions by the Secretary to the Treasury have, regrettably, consistently not yielded any positive results. It is worth noting that the Government has an obligation to ensure that all parastatals bodies and other statutory institutions in this country operate efficiently and effectively in the execution of their mandates. The extent to which this expectation is met is, by and large, assessed on the basis of the audited financial statements submitted by the relevant institution.

 

Madam, among the prominent institutions that failed to submit audited financial statements during the period under review are the following:

 

1. Nitrogen Chemicals of Zambia (2006-2015);

 

1. National Housing Authority (2011-2015);

 

1. Chambeshi Water and Sewerage Company (2012-2015); and

 

1. the Independent Broadcasting Authority (2013-2015).

 

Madam Speaker, the failure to submit timely audited financial statements not only results in the Auditor-General failing to ascertain the financial position and performance of the institutions concerned, but also makes it difficult for us, Legislators, to assess the effectiveness of the management teams in the institutions. In view of foregoing, your Committee urges the Secretary to the Treasury to seriously address this issue. In addition, your Committee also recommends that the Treasury starts disbursing funds to institutions only after they submit their audited financial statements for the preceding year.

 

Madam Speaker, your Committee’s attention was also drawn to the existence of the Industrial Development Corporation (IDC) and noted, with concern, that the institution had not registered any tangible outcomes since its creation in 2014 despite having specific and specific and multi-faceted objectives. Of particular interest to your Committee was the objective of improving the viability and sustainability of State-owned enterprises so as to mitigate the financial burdens that they had placed on the Treasury. In that regard, your Committee was worried to note that no institution under the IDC had been weaned from Treasury support for its operations. Neither was any company contributing to the Sovereign Wealth Fund. In this vein, your Committee urges the Secretary to the Treasury to engage relevant stakeholders in an assessment of the effectiveness of the corporation and take necessary actions to improve its performance. Your Committee is of the view that the corporation’s relevance will only be seen if is able effectively attain its objectives of reducing the financial burden on the Treasury and contributing to the revenues of the Republic. Your Committee was also filled with consternation over the current …

 

Interruptions

 

Mr Mbulakulima: Ndebatamfya, aba!

 

Madam First Deputy Speaker: Order!

 

Hon. Members, can we have silence. Where is the Chief Whip who should help us to maintain order?

 

Hon. Member of Parliament for Milenge, please, continue.

 

Mr Mbulakulima: Thank you very much, Madam Speaker.

 

Laughter

 

Mr Mbulakulima: Madam, your Committee was filled with consternation over the current composition of the IDC Board, particularly the fact that the President chairs it. It was the strong view of your Committee that the inclusion of the Republican President on the board is not only at variance with good corporate governance practices, but also compromises his strategic advisory role, as Head of State. Your Committee, therefore, strongly recommends that the chairperson of the board be someone nominated by the Republican President and that the President’s membership be discontinued. This will allow the Republican President to provide the much-needed supervision and strategic direction.

 

Madam Speaker, another matter considered by your Committee in relation to the operations of the IDC was the failure to place all parastatals under it. Your Committee was concerned that thirteen companies have not been transferred to the IDC since 2014. In light of the above, your Committee directs the Secretary to the Treasury to transfer the companies without further delay in order to streamline their supervision and improve their performance.

 

Madam, another issue that your Committee dealt with was the non-remittance of statutory contributions by most institutions. During the period under review, unremitted statutory contributions rose from K876,156,916, in 2014, to K1,219,671,599, in 2015, representing an increase of about 33 per cent. Your Committee acknowledged that the failure to remit statutory obligations was a result of financial challenges faced by most parastatals and other statutory institutions. However, statutory contributions are mandatory, not optional, and must be remitted without delay. Your Committee, therefore, urges the Government to develop a payment plan by which the defaulting institutions will reduce the debt to acceptable levels.

 

Madam, allow me, now, to comment on specific issues raised on the institutions cited in the report that caught the attention of your Committee.

 

Madam, all the water utility companies report on had no boards in place to provide strategic direction. In that regard, the Committee was shocked by the laxity exhibited by the ministry responsible for appointing the boards of utility companies. That is unacceptable and should not be allowed to continue. While noting the high attrition rate of Ministers at the ministry, your Committee was also aware that the majority of individuals to sit on the boards are nominated by institutions, thereby making it easy for the ministry to formalise the appointments. Needless to state, the continued non-appointment of the boards for utility companies has far-reaching effects on the general administration of the companies. Your Committee, therefore, urges the ministry responsible to ensure that the dissolution of boards and appointment of new ones are done simultaneously to avoid creating vacuums.

 

Madam Speaker, it was also observed that all the water utility companies queried by your Committee had weak information management systems and a number had not implemented their information technology policies. Your Committee was concerned that the companies exhibited inertia in embracing information technologies (ITs) in their operations. To make matters worse, no time frames had been given for the implementation of their IT policies. Your Committee, therefor, recommends that the Government ensures that the companies implement their IT policies without further delay.

 

Madam Speaker, let me conclude by thanking you and the Office of the Clerk of the National assembly for the guidance and support rendered to your Committee during its deliberations. I further thank all the controlling officers who appeared before your Committee to make submissions on various issues raised in the Auditor-General’s Report for their co-operation. Finally, I acknowledge and appreciate the advice rendered to your Committee by the officers from the Office of the Auditor-General, the Accountant-General and the Controller for Internal Audit.

 

Madam Speaker, I beg to move.

 

Madam First Deputy Speaker: Does the seconder wish to speak no or later?

 

Ms Mwape: Now, Madam Speaker.

 

Madam Speaker, thank you for giving me this opportunity to second the Motion. In doing so, I will restrict my comments to the matters that have not been raised by the mover.

 

Madam Speaker, one of the major problems that caught the attention of your Committee in the parastatal bodies was that of unaccounted for stores. That scourge was alarming and needed urgent interventions to stop it. During the period under review, the value of unaccounted for stores increased from K358,398, in 2014, to K20,245,512, in 2015, representing an increase of over 5,600 per cent. That abnormal increase was a testament to the total collapse of internal controls in the parastatals concerned. Your Committee finds it unacceptable that, when queried, the controlling officers purported that most of the stores documents had been traced, which indicated that most institutions did not give the audit process the attention it deserved and that most erring officers had not been disciplined for that serious omission. Your Committee will not accept the mockery of the audit process to continue with impunity and will, without hesitation, recommend the surcharging of all controlling officers who will be found wanting in this regard. It is the expectation of your Committee that the management of stores documents will improve so that all relevant documentation is availed to auditors during the audit process.

 

Madam Speaker, in agreeing with the mover of the Motion regarding the poor management of parastatals and other statutory institutions, I wish to also bring to light the problem of delayed banking. All the seventeen parastatals that audited operated in areas with several banking facilities, thereby making the vice unacceptable. It is the considered view of your Committee that delayed banking may lead to a clear case of teeming and lading. In this regard, your Committee strongly recommends that penalties for delayed banking be stiffened to discourage the practice.

 

Madam Speaker, your Committee identified the lack of operational audit committees as a contributor to the numerous challenges facing parastatals and other statutory institutions. It is regrettable that despite the Public Finance Act of 2004 spelling out the role of audit committees in strengthening internal controls in ministries, provinces and spending agencies, most parastatal bodies and other statutory institutions had not established them. Your Committee, therefore, strongly recommends that the Secretary to the Treasury ensures that the Public Finance Act is complied with not only on the establishment of audit committees, but also on their operationalisation.

 

Madam Speaker, allow me, now, to comment on specific issues that arose from some queried institutions that caught the attention of your Committee.

 

Madam Speaker, the state and management of public universities is worrying. The case of Kwame Nkrumah University is of particular interest.

 

Madam, your Committee was extremely disturbed to learn that the university has been operating for over three years without filling key positions, ...

 

Interruptions

 

Ms D. Mwape: … which might explain why it has not had much impact following its upgrade. It is inconceivable how the ministry allowed such a situation, which does not only have the potential to negatively affect the general operations of the university due to a lack of strategic direction, but also demoralises the officers, who have been acting in their positions, to go unchecked for more than three years. Your Committee, therefore, recommends that key positions at the university be filled without further delay. Your Committee also regretted that the Ministry of Higher Education upgraded the institution to a fully-fledged university without putting in place the systems to support the change, making the upgrade a mere pronouncement that did not go with modalities on the ground. In this vein, your Committee urges the relevant controlling officer to ensure that the next time a college is upgraded to a university, the requisite modalities are put in place to avoid a recurrence of challenges at Nkrumah University.

 

Madam Speaker, another matter that interested your Committee related to the weakness in managing receivables by the National Housing Authority (NHA).

 

Madam, your Committee was disappointed by the poor management of that once-vibrant parastatal. For example, it was evident that the delay in the collection of payments from customers, which had resulted in a deterioration of receivables, was due to the inefficiencies at the institution. It is inconceivable that an institution grappling severe financial challenges can exhibit such levels of complacence in collecting dues from customers. So, your Committee urges the Government to immediately strengthen the weak enforcement of lease agreements and ensure that the NHA raises the receivable ratio to acceptable levels.

 

Madam Speaker, allow me to also touch on the issue of the rotational methodology used by the Auditor-General in conducting audits on parastatals and other statutory bodies. Your Committee is concerned that the methodology limited the scope of audit with regard to access to the progress in the implementation of the Committee’s recommendations. Therefore, your Committee strongly recommends that the Office of the Auditor-General be adequately funded so that it can conduct 100 per cent audits on all parastatals and other statutory institutions. That will, in turn, enable your Committee to assess the effectiveness of its observations and recommendations on and to the queried parastatals. 

 

Madam Speaker, in conclusion, let me join the mover of the Motion in thanking you for according us the opportunity to serve on this important Committee. I also thank the members of your Committee for according me the opportunity to second this Motion.

 

Madam Speaker, I beg to second.

 

Mr Simfukwe (Mbala): Madam Speaker, I am grateful to my younger brother, the hon. Member for Chipili, for encouraging me to debate this Motion.

 

Mr Chabi: Hear, hear!

 

Mr Simfukwe: He had told me that he was very tired, but when I told him how much money we are losing through the parastatals, he said, “Ba mudala, I think you can go ahead and debate.”

 

Mr Chabi: Hear, hear!

 

Madam First Deputy Speaker: What is the meaning of ‘mudala’?

 

Mr Simfukwe: Madam, ‘ba mudala’ means ‘big man’.

 

Madam Speaker, I want to start by sympathising with the members of the Public Accounts Committee because their report raises almost the same problems that have been raised by the Committee year in and year out on parastatals. It is obvious that despite the observations and recommendations the Committee has been making, there has been no improvement in the performance of the parastatals, and we continue to lose huge sums of money through misuse and see audit queries. It is like we are failing to address the root causes of the problems. 

 

Madam Speaker, I have observed that your Committee raised concerns on every issue considered and on every institution, and the word “concerned” has been used almost 100 times in the report and appears on every topic. The Committee also used words like ‘alarmed’, ‘shocked’, ‘unfortunate’, ‘regret’ and ‘unsatisfied’ on almost all the issues. So, it is obvious that the Committee deeply regretted its findings on every issue it considered. Further, it only made three recommendations on the more than 100 concerns it raised and stated that it would await progress on the concerns raised. The same thing happened last year when about 10 per cent of the recommendations called for disciplinary action and the rest called for the investigations. So, it is obvious that we seem to have a more serious problem with parastatals than we realise. It is like we are treating fever with Panadol, Brufen or Cafenol without treating the actual illness causing the fever. That is what we have been doing with parastatals.

 

Madam Speaker, the report indicates that, like your Committee, the Secretary to the Treasury which, as we all know, represents the shareholder, the Ministry of Finance, has also been struggling to control the parastatals and we continue to lose billions of kwacha annually. Even the boards, which the hon. Minister appoints, have failed to manage the institutions. I read in the report where the Board for the Food Reserve Agency (FRA), I think, stated that it would only sign the audit report if given indemnity. How can a board appointed by the hon. Minister refuse to be accountable for its actions? So, it is obvious that the Public Accounts Committee, the boards of the parastatals, the Secretary to the Treasury and the controlling officers have all failed to manage the parastatals. Of course, the question one would ask is: Why are we so concerned about this issue? The answer is that, in 2010, we lost K7.1 billion in parastatals, in 2011, the audit queries amounted to K4.7 billion while, in 2012, K6.5 billion could not be accounted for. Those are huge sums of money and they are the ones I showed to my young brother, the hon. Member for Chipili, before he told me to go ahead and debate the report because he realised that we can build universities with those amounts of money. 

 

Mr Chabi: Hear, hear!

 

Mr Simfukwe: Madam Speaker, look at the dividends that the parastatals, which are business entities, have declared. There is no difference between private companies and parastatals because they are both commercial enterprises even though parastatals are Government-owned.

 

Madam Speaker, between 2010 and 2012, all the forty parastatals raised K58.9 million only, yet, in 2012 alone, we gave them grants through Parliament worth K7.4 billion. So, we give the forty parastatals K7.4 billion in 2012, alone, but they give us back K58 million over three years. Obviously, something is wrong. We are not using the money appropriated by this House prudently, yet Mbala needs the money that we are throwing at the parastatals, ...

 

Hon. Member: Hear, hear!

 

Mr Simfukwe: … as do Isoka, my brother’s district; Chamboli, where I grew up; Wusakile; and Kasama. I can see that the hon. Minister of Mines and Minerals Development wants me to mention that Mungwi wants needs the money, too.

 

Laughter

 

Mr Simfukwe: Madam Speaker, given what has been happening, we may get the wrong impression that having parastatals is not a good idea. In fact, worldwide, parastatals are important for pushing social and economic policy, and the overall development of a country. For example, we can use parastatals to fund the construction and infrastructure development industry, as it is done in China, and develop the agriculture sector. We can also develop the banking sector to finance our economy. Further, strategic utilities like the Zambia Electricity Supply Corporation (ZESCO) and other institutions that have a bearing on the security and sovereignty of the country issues are best run as parastatals. Even America, the most capitalist country on earth, still has parastatals in the rail and passenger transport sectors, such as Amtrak.

 

Madam, when I was reflecting on our history, I remembered that, in 1980, the Zambia Industrial and Mining Corporation (ZIMCO) had 320 parastatals, which represented 80 per cent of our economy and accounted for 80 per cent of our gross domestic product (GDP). After privatisation, we remained with about forty State-owned enterprises, which account for 10 to 20 per cent of our economy. So, they are still important. However, from what we are getting from the report, something is seriously wrong.

 

Madam Speaker, we have had the equivalent of the Industrial Development Corporation (IDC) before, which the report says has not done well. Most people think that ...

 

Madam First Deputy Speaker: Order!

 

I have an announcement to make.

 

_________

 

ANNOUNCEMENT BY MADAM FIRST DEPUTY SPEAKER

 

Madam First Deputy Speaker: Following the suspension of Standing Orders 21 and 22 (1) and 100, the Business of the House will, as usual, be suspended from 1955 hours and dinner will be served from 2000 hours to 2100 hours. The House will resume sitting at exactly 2115 hours. The sitting of the house will resume at 2115 hours.

 

Hon. Members will have their dinner in the restaurant, here at Parliament Buildings, while members of staff and ministry officials who are here will have their dinner at the Members’ Motel.

 

The dinner will be provided courtesy of the Hon. Madam Speaker ...

 

Hon. Members: Hear, hear!

 

Mr Ngulube: Ema Madam, aba!

 

Madam First Deputy Speaker: … and transport to and from the Members’ Motel will be available at the main entrance to Parliament Buildings.

 

Finally, I advise hon. Members to be punctual in returning to the Debating Chamber and request the hon. Whips, although I do not see the hon. Chief Whip, to ensure that the quorum is formed by 2115 hours.

 

I thank you.

 

Business was suspended from 1955 hours until 2115 hours.

 

__________

 

[MADAM FIRST DEPUTY SPEAKER in the Chair]

 

Madam First Deputy Speaker: The Whips must be commended for we have a quorum.

 

Hon. Members: Hear, hear!

 

Madam First Deputy Speaker: Well done.

 

The hon. Member for Mbala may continue with his debate.

 

Ngulube: In conclusion, ...

 

Hon. Members: Hear, hear!

 

Mr Simfukwe: Madam Speaker, before business was suspended, I was about to conclude my debate. However, before I conclude, I wish to say that we need to reform the way we manage our parastatals. As we do so, we need to recognise one fact that all parastatals that are 100 per cent Government-owned never do well while almost all those that are partly State-owned do well both in our country, Zambia, and the world over.

 

Ms Mwape: Hear, hear!

 

Mr Simfukwe: Madam Speaker, when the Government allows a bit of the discipline of the private sector into a parastatal company, the company always does well.

 

Hon. Members: Hear, hear!

 

Mr Simfukwe: For example, Nanga Farms, Kagem, Zambia National Commercial Bank (ZANACO) , INDO Zambia Bank (IZB) and Afrox, which are 13 per cent, 20 per cent, 20 per cent, 25 per cent, 40 per cent and 30 per cent Government-owned, respectively, declare dividends every year.

 

Dr Hamukale: Data!

 

Hon. Members: Hear, hear!

 

Mr A. B. Malama: Mbala mafia!

 

Laughter

 

Mr Simfukwe: Meanwhile, of the forty parastatals, about twenty-seven that are 100 per cent owned by the Government, include the Zambia Telecommunications Company (ZAMTEL), Zambia National Broadcasting Corporation (ZNBC), do not declare dividends and are loss-making.

 

Hon. Members: Hear, hear!

 

Mr Simfukwe: Madam Speaker, it is clear that we must allow some private equity ownership in parastatals. That private equity ownership does not necessarily have to be of foreign partners.

 

Mrs Fundanga: Hear, hear!

 

Mr Simfukwe: Zambians can buy shares at even K10 per share.

 

Hon. Members: Hear, hear!

 

Mr Simfukwe: Float some of part the ownership on the stock market.

 

Ms Mwape: Hear, hear!

 

Mr Simfukwe: We can buy shares in a company like ZAMTEL at, say, 50 ngwee per share.

 

Ms Mwape: Hear, hear!

 

Mr Simfukwe: Madam, before shares of a company are floated on the stock exchange, there are stringent standards the company should meet. That, in itself, is driver of good performance. Sole ownership by the Government, on the other hand, obviously means that the politicians control the company full-time because the Government is controlled by us, the politicians.

 

Hon. Members: Hear, hear!

 

Mr Simfukwe: How can we not interfere in a company when we are the ones managing it? So, to minimise political interference, let us allow private ownership of part of the companies. In this regard, I implore those involved in managing parastatals, in particular, the shareholder on behalf of Zambians, my brother, the hon. Minister of Finance, who is seated in front of me, to quickly complete the reforms that started with the re-establishment of the IDC, …

 

Hon. Members: Hear, hear!

 

Mr Simfukwe: … which was a good initiative,...

 

Ms Mwape: Hear, hear!

 

Mr Simfukwe: … but not enough because the IDC needs to operate companies that have private equity to minimise losses and wastage.

 

Madam Speaker, in conclusion, …

 

Mr Ngulube: I thank you.

 

Mr Chiteme: Say more.

 

Mr Simfukwe: Parliament needs to grow some teeth.

 

Hon. Members: Hear, hear!

 

Mr Ngulube: And get allowances as well.

 

Mr Simfukwe: We need to enact the Budget and Planning Bill so that we can scrutinise how much money is going to parastatals ...

 

Hon. Members: Hear, hear!

 

Mr Simfukwe: … because there is too much wastage.

 

Hon. Members: Hear, hear!

 

Mr Simfukwe: Further, the Committees should recommend reforms and insist that the reforms are implemented so that we get tangible solutions. It is not enough to say they will wait for progress reports. We must also not rush to sell our companies. In China, they do not use the word privatisation. Rather, they call it corporatisation.

 

Hon. Members: Hear, hear!

 

Mr Simfukwe: They also do not sell, but merely restructure their businesses.

 

Mr Mwale: Mwaona!

 

Mr Simfukwe: The Government still maintains ownership, but invites international and local investors to co-own and bring in the discipline of private sector business management.

 

Madam Speaker, I thank you.

 

Hon. Members: Hear, hear!

 

Mr Ngulube: The Mbala mafia has struck.

 

Mr Kopulande (Chembe): Madam Speaker, I thank you for giving me the opportunity to debate the Motion. I also thank you for the sumptuous dinner that we have just enjoyed.

 

Hon. Members: Hear, hear!

 

Mr Kopulande: I believe I also speak on behalf of other hon. Members when I say that the dinner was good.

 

Hon. Members: Hear, hear!

 

Mr Ngulube: Ine nshilile, ba mudala.

 

Laughter

 

Mr Kopulande: Madam Speaker, the hon. Member who has just finished debating covered a number of issues in the report, whose coverage of issues is quite extensive. I do not intend to repeat what my colleague said except to add my regrets on one section of the report that particularly addressed the issue of unaccounted for stocks, which are of substantial value. This is a grave financial indiscipline on the part of parastatals executives, …

 

Hon. Members: Hear, hear!

 

Mr Kopulande: … and such unfortunate practices need to be stopped.

 

Hon. Members: Hear, hear!

 

Mr Kopulande: Madam Speaker, the people of Chembe, who sent me here, are suffering, growing thinner and do not have access to essential services, such as health, education and decent roads on which to move their produce yet, year in and year out, we put aside substantial amounts of money to fatten a few people. This has to be curtailed.

 

Madam Speaker, one of the reasons for poor performance in parastatals is that many of them exist without boards of directors, and that …

 

Hon. Members: Hear, hear!

 

Mr Kopulande: … has allowed the officers to do anything they want without being accountable to anybody. The supervisory role of the boards has been thrown to the wind and the companies have become free for all.

 

Hon. Members: Hear, hear!

 

Mr Kopulande: So, I request the hon. Members in the Front Bench, who have the responsibility to put the boards in place, to do that so that there is supervision in the parastatal companies. Let me state, however, that in some cases in which boards have been appointed, the first function they have carried out is to fire the Chief Executive Officer (CEO). I do not know how they manage to find faults with the officers in the first meeting and wonder whether they are instructed to do so. Whatever the case, I think it is important that they are given the freedom to decide the future of the CEOs independently.

 

Madam Speaker, although, regrettably, it has been reported by the Committee that not much has changed since the Industrial Development Corporation (IDC) was established, we all hope that there will now be better supervision by the parastatal boards. It is not practicable for the hon. Minister of Finance to directly supervise the companies. Therefore, it is important for the IDC to be given the internal capacity to provide oversight on parastatals. It appears to me that the IDC is becoming more visible and one would hope that one of the roles it will play is that of inviting private investment into the parastatals in order to give the companies additional capital, better management skills and more corporate discipline for their operations. 

                                                                                                                                                                                                 

Mr Chisopa: I thank you.

 

Laughter

 

Mr Kopulande: Madam Speaker, I think that the IDC …

 

Hon. PF Members: Hear, hear!

 

Mr Kopulande: … needs to come up with an aggressive investment promotion programme so that we can get more capital injection into the parastatal companies.

 

Madam Speaker, I thank you.

 

Hon. PF Members: Hear, hear!

 

The Minister of Finance (Mr Mutati): Madam Speaker, from the outset, let me thank the Chairperson of your Committee for the good report that he has presented. I will not restate the problems that he has enumerated and the recommendations outlined.

 

Madam, the Government will take a practical approach to dealing with the issues involving parastatals. Firstly, we will restructure the parastatals, including going into joint ventures, privatising and listing some of them on the stock exchange. Secondly, we are restructuring the boards of some parastatals to give them teeth. To that effect, we will amend the Companies Act …

 

Mr Ngulube: Hear, hear!

 

Mr Mutati: … to give the boards more teeth and streamline the governance structures. Thirdly, we will amend the Public Finance Act and present the Budget and Planning Bill to further strengthen the hand of Government in the management of parastatals.

 

Madam Speaker, it is time to act.

 

I thank you, Madam.

 

Hon. PF Members: Hear, hear!

 

Mr Mbulakulima: Madam Speaker, I realise that this is a very dangerous day. So, my duty, at this point, is merely to thank the two hon. Members who have debated for their robust …

 

Madam First Deputy Speaker: Order, hon. Member!

 

Did you say this is a dangerous day?

 

Hon. PF Members: Question!

 

Mr Mbulakulima: Yes, Madam Speaker. I mean people really want us to be very brief in our presentations.

 

Interruptions

 

Mr Mbulakulima: Madam, my duty is simply to thank the two hon. Members for their robust and insightful debate, and good understanding of parastatals. I also thank all hon. Members of Parliament for debating the Motion silently. I know they would have loved to take the Floor and debate. I am mindful that yesterday’s debate, which went beyond ninety minutes, to extra time and penalty shoot-outs, exhausted them. That is why I appreciate their perseverance with the debate on this topic. Next time, I am convinced that they will debate more.

 

I thank you, Madam Speaker.

 

Question put and agreed to.

 

REPORT OF THE COMMITTEE ON LOCAL GOVERNANCE, HOUSING AND CHIEFS’ AFFAIRS

 

Mr Kabanda (Serenje): Madam Speaker, I beg to move that this House do adopt the Report of the Committee on Local Governance, Housing and Chiefs’ Affairs on the Report of the Auditor-General on the Review of Operations of Local Authorities for the Financial Years Ended 31^st December, 2013, 2014 and 2015 for the First Session of the Twelfth National Assembly, laid on the Table of the House on 11^th July, 2017.

 

Madam First Deputy Speaker: Is the Motion seconded?

 

Mr Chiyalika (Lufubu): Madam Speaker, I beg to second the Motion.

 

Mr Kabanda: Madam Speaker, your Committee, in line with its terms of reference, as specified in the Standing Orders, considered the Report of the Auditor-General on the Review of Operations of Local Authorities for the Financial Years Ended 31^st December, 2013, 2014 and 2015. 

 

Madam Speaker, allow me to remind this august House that local authorities are public institutions established under Section 3 of the Local Government Act, Cap 281 of the Laws of Zambia. The main objective of establishing the councils is for them to provide services to residents in their jurisdictions.

 

Madam Speaker, the impetus towards the creation of councils emanated from the expansion of communities, which got to have needs for some services that could not be taken care of singularly by individual members of the community, but through a community system that could meaningfully cater to all its members. Therefore, councils were meant to provide public goods or services on which one could not easily fix a price. The services include usage of public roads, burial of the destitute or management of cemeteries.

 

Madam Speaker, at the creation of the local government system in Zambia, housing facilities were provided to all council employees. In addition, councils sponsored most of their officers into the best opportunities for professional training. To complement the highly-skilled and motivated staff in the local government system, councils also acquired various equipment and heavy-duty plant and machinery, which were used in repair, maintenance and engineering works. The result was that they became exemplary in their performance and responsiveness to the public’s needs, which gave them a fairly good corporate image.

 

Madam, taking the statement above as my point of departure, it appears that the current Local Government Service Commission (LGSC) is facing the same challenges that its predecessors faced. The inadequacy of its mandate, policy framework and capacity, with only seven members, to cover staff from over 105 councils countrywide, and the indiscriminate transfer of staff has caused major setbacks for it. Some of these weaknesses are a result of the commission’s centralised structure that has caused it to operate like the Public Service Commission (PSC), which has, since Independence, failed to recruit sufficient staff to implement Government projects. Further, the calibre of most staff leaves much to be desired.

 

Madam Speaker, since the recruitment of staff has been centralised, the councillors have been put in an awkward position because they are held responsible for the non-implementation of projects and service delivery, yet they, in most cases, are not able to influence the centralised recruitment and disciplining of staff. If there is a shortage of staff or the staff recruited is of low calibre, there is very little that a councillor can do to improve service delivery. Further, the current arrangement does not motivate councils to invest in the training of their staff because they are not assured of retaining such staff, as exemplified by the on-going massive transfers of staff by the commission. Most transfers are, to say the least, very destructive and strike at the very base of cohesion and institutional memories of the local authorities. 

 

Madam Speaker, there also appears to be no provision for appeal in the LGSC other than recourse in the courts of law, which can be costly and protracted. This matter needs to be addressed urgently by all stakeholders in order to improve the status quo.

 

Madam Speaker, let me now state that the Constitution of Zambia (Amendment) Act No. 2 of 2016 devolves powers to local authorities in a quest to decentralise the operations of the Government, as all Government departments and institutions will now be managed at the local level. This House will agree with me that it goes without mention that there should be great accountability on the part of the local authorities, as they will now be responsible for a lot of Government resources meant for delivery of services to the citizenry. In the same vein, Article 250(1)(i) of the Constitution of Zambia mandates the Office of the Auditor-General to audit the accounts of all local authorities. On this score, I wish to inform this august House that the report that your Committee considered is the first that the Auditor-General has produced under this new mandate.

 

Madam Speaker, in the report, the Auditor-General reviewed operations of forty-three councils. However, the report of your Committee only contains parts that related to seventeen councils that had queries that were not resolved during the audit process. It should also be noted that your Committee’s report also contains the Auditor-General’s report on the management of the Constituency Development Fund (CDF) and grants to local authorities for the financial year ended 31^st December, 2015. With that mind, allow me to highlight a few issues that arose in your Committee’s consideration of the report of the Auditor-General.

 

Madam, one of the key problems observed by your Committee was the failure by councils to produce audited financial statements. According to Section 43(1) of the Local Government Act, Cap 281 of the Laws of Zambia, it is mandatory for councils to compile and balance accounts for each financial year. The summarised statements, which are normally certified by the treasurer of the council, must be presented to the full councils meetings to be held within six months after the end of the financial year of the council or within such longer periods as the responsible hon. Minister might determine.

 

Madam Speaker, it shocked your Committee to learn that all the local authorities audited had not produced audited financial statements for the 2013, 2014 and 2015 financial years, and it is a known fact that the non-production of audited financial statements by any institution is not only a contravention of the various legislations governing such an institution, but is also contrary to good corporate governance. The problem was compounded by the use of inappropriate accounting frameworks. In this regard, your Committee strongly urges the Secretary to the Treasury to ensure that penalties for non-adherence to public financial and local Government regulations, especially on preparation of financial statements, are stiffened. It is also strongly recommended that all local authorities procure the International Public Sector Accounting Standards without any further delay in order to standardise their accounting reporting framework. The Secretary to the Treasury is, particularly, urged to ensure that this is done without fail, as it is in his or her interest to ensure that standards are upheld in local authorities.

 

Madam, linked to the matter I have just raised is another issue that your Committee …

 

Interruptions

 

Madam First Deputy Speaker: Order, on my right!

 

Mr Kabanda: Madam Speaker, I would like to reiterate.

 

Madam First Deputy Speaker: Hon. Ministers, I need your co-operation.

 

Continue, hon. Member.

 

Hon. Back Benchers: Hear, hear!

 

Mr Kabanda: Madam Speaker, tied to the matter I have just raised is that that your Committee observed that there were low levels of education among staff in the local authorities. Let me cite the new Chipata City Council (CCC) as an example.

 

Madam Speaker, contrary to the requirements of the staff establishment and job qualifications, there were fourteen employees at CCC who did not meet the minimum qualifications to hold their respective positions. As if that number was not alarming enough, your Committee learnt, with surprise, that some of the key positions, such as of Senior Accounting Officer, a position that required an officer to be a Zambia Institute of Chartered Accountants (ZICA) Licentiate or its equivalent, was occupied by an officer with a Form III Certificate and a Certificate of Attendance in Shop Management.

 

Laughter

 

Mr Kabanda: Honestly, how can good service delivery be upheld in such a council? Even more worrying is the fact that such officers were duly appointed by the LGSC. Your Committee is worried that this is happening as the Government is implementing fiscal decentralisation, and strongly urges the controlling officer to liaises with the commission and ensure that the hiring and upgrading processes are made in a transparent manner. The case at CCC cries loud for further explanation. 

 

Madam Speaker, another issue that your Committee observed was the failure by public entities to secure their properties with title deeds. The Lands Act No. 29 of 1995 requires institutions or individuals owning land to have title deeds as proof of ownership. It is of great concern, therefore, that all council properties had no title deeds during the period under review, as that serious omission might have resulted in the councils losing the properties. Your Committee, therefore, urges the controlling officer to ensure that all councils get title deeds for all their properties without further delay.

 

Madam, your Committee’s attention was also drawn to the poor financial performance of local authorities, which is sad and alarming.

 

Madam, financial performance, in simple terms, refers to the level of performance of a business over a specified period expressed in terms of overall profits or losses. It, therefore, follows that evaluating the financial performance of a business allows decision makers to judge the results of business strategies implemented and activities undertaken in objective monetary terms. Your Committee was also worried that most local authorities were failing to meet their statutory obligations and other staff-related costs due to their poor financial performance, which results from their failure to fully exploit their potential to generation of the much-needed revenue. The Lusaka City Council (LCC) is one major culprit in this area. For example, your Committee heard that the council restrained itself from collecting outstanding revenues and rates in 2015 and 2016 because the management felt they would be misunderstood if they enforced the provisions of the Rating Act in an election year. That kind of reasoning is worrying and your Committee finds it unacceptable, as it was done without consideration for the financial difficulties that the council was facing during the same period. Your Committee considers that poor management and blames it for the liquidity problems that the council is facing despite having many options for revenue generation. Your Committee feels that the decision to succumb to political pressure at the expense of service delivery and the suffering retirees who had not received their benefits, was misplaced.

 

Madam Speaker, your Committee is of the view that the trend of councils’ poor financial position and performance needs to be reversed, as it poses a great risk of possible loss of public funds in litigation, which might arise from the non-payment of retirees’ terminal benefits and statutory obligations, and non-delivery of services.

 

Madam, the controlling officer is, particularly, urged to impress upon the managements of all councils in the country to be innovative and explore more revenue collection options to improve the status quo. Looking at the performance of local authorities, and judging from the audit reports and submissions by principal officers, it is evident that there is a need for a complete systemic overhaul.

 

Madam Speaker, before I conclude, let me thank you and the Office of the Clerk of the National Assembly for the guidance and support you rendered to your Committee during its deliberations. I also thank the Controlling Officer in the Ministry of Local Government, and all principal officers in the local authorities that were audited for their co-operation. Further, I acknowledge and appreciate the advice given to your Committee by the officers from the offices of the Auditor-General and the Ministry of Local Government.

 

In conclusion, I am confident that the Committee on Local Government Accounts, which is yet to be established, will find this report useful as an entry point to taking the Government to task on financial management in local authorities.

 

Madam Speaker, I beg to move.

 

Hon. Members: Hear, hear!

 

Madam First Deputy Speaker: Does the seconder wish to speak now or later?

 

Hon. Government Members: Tomorrow.

 

Laughter

 

 Mr Chiyalika: Now, Madam Speaker.

 

Madam Speaker, since the mover has touched on almost all the salient issues that arose in your Committee’s deliberations the operations of local authorities, I will only comment on a few issues that relate to the management of the Constituency Development Fund (CDF), and one or two key issues arising from the benchmarking tour your Committee undertook to Uganda.

 

Madam, I totally agree with the mover of the Motion that the increasing devolution of responsibilities and funds to local authorities must be accompanied by the building the capacity of council officials to handle the emerging demands. In relation to that, allow me to highlight some of the tendencies that seemed to indicate malpractices in the management of the CDF.

 

Madam Speaker, in the Report of the Auditor-General on the Management of the Constituency Development Fund and Grants to Local Authorities for the Financial Year Ended 31^st December, 2012, which was considered by the Public Accounts Committee for the Fourth Session of the Eleventh National Assembly, it was stated that there had been irregularities in the procurement of earth-moving equipment by Chibombo District Council. That is still unresolved, to date. The details are that Chibombo District Council signed a contract with a company called Eye Witness Solutions for the supply of a second-hand grader under the CDF projects for 2013. On 18^th March, 2013, the council terminated the contract despite having paid an initial amount of K142,500 and signed a new contract with the same supplier for the supply of a new grader at a sum of K780,000 and a delivery period of five weeks. A day later, on 19^th March, 2013, K247,500 was paid to the supplier as advance payment, taking the total amount spent by the council to K390,000.

 

Madam Speaker, the speed with which the changes to the contracts and payments were made suggest that there was fraud involved, especially given that the new supplier even ended up failing to deliver within time frame in the new contract. Your Committee also learnt that the council’s lawyer entered into a consent agreement with the supplier’s lawyers to refund the whole amount paid with interest. However, your Committee is saddened to learn that only K25,000 has been refunded out of K390,000, leaving a balance of K365,000.

 

Hon. Government Members: Aah! Kubekata, abo! 

 

Mr Chiyalika:  One wonders why it has taken Eye Witness Solutions this long to refund an amount that was not expended on the intended purpose, with interest, despite a court order issued on 22^nd August, 2013, to that effect.

 

Mr Mung’andu: Aah!

 

Mr Chiyalika: Your Committee finds this irregularity unacceptable and recommends serious investigations. It is further worrying to hear that when auditors visited the council, it was not possible for them to ascertain the terms of the contract signed between the council and the legal representatives of the supplier, as the records were not availed. There were also no details on the total payments made to the legal representatives and information on the status of the case was not provided. This tendency of officers at the council to disregard auditors and conceal information is a source of great worry to your Committee. The Controlling Officer in the Ministry of Local Government is, therefore, particularly urged to ensure that the practices are checked without further delay. Your Committee also urges the Controlling Officer to ensure that the erring officers are disciplined accordingly to avert such irregularities. We further urge the ministry to ensure that officers are adequately capacitated in order to handle public funds in accordance with laid down procedures so as to curb such serious irregularities. Allow me to also urge the general citizenry to be on the lookout for acts motivated by greedy so that, together, we can fight the ever-growing trend of fraud in local authorities and the nation as a whole.

 

Madam Speaker, the CDF and grants to local authorities have been growing steadily over the years. I have no doubt in my mind that this will continue to be the case, hence, your Committee’s feeling that there is a growing need to strengthen controls over the use of the funds. Your Committee is also concerned that the Secretary to the Treasury does not have sufficient control over the use of the CDF, as it is administered by the Ministry of Local Government through the Local Government Act. Your Committee is further concerned that the Controlling Officer in the Ministry of Local Government does not have enough disciplinary powers over council administrations. For example, the power to discipline erring officers, including those cited in the audit reports, lies with councils and the Local Government Service Commission (LGSC). As a result of this weakness, disciplinary action has rarely been taken, leading to widespread financial malpractices. It is for this reason that your Committee appeals to the Government to urgently initiate the enactment of an Act for the administration of the CDF that will enhance the role of the Treasury in ensuring that amounts released for the CDF are properly accounted for. The roles played by the ministry, councils and the LGSC should also be harmonised to streamline the disciplinary process in local authorities.

 

Madam, I also wish to inform the House that during its foreign tour, your Committee appreciated the public financial management systems in Uganda. One point your Committee learnt was that all accountants and internal auditors in Uganda’s local authorities were appointed under the Accountant-General’s Office. Your Committee deemed that appropriate because it enhances the enforcement of financial standards and monitoring of staff performance in the local authorities. Further, In Uganda, other members of staff in local authorities are appointed under a decentralised LGSC, which entails that each city, municipality or district council has its own service commission, and your Committee deemed that very progressive, since supervision might be enhanced and the disciplinary process shortened. Your Committee, therefore, strongly urges our Government to seriously and promptly consider that as a means to improving the operations of local authorities.

 

Madam, during the tour, your Committee also learnt that in Uganda, the period for tabling the Auditor-General’s report on local authorities before the Parliament is specified, unlike in Zambia, where the report is tabled as and when the Auditor-General wishes for it to be tabled. Your Committee, therefore, strongly urges the Government to consider making it mandatory for the tabling of the report of the Auditor-General on the accounts of local authorities to be done on the last day of the year, that is, 31^st December, just like the report on accounts of the Republic, which is usually also considered by the Public Accounts Committee.

 

In conclusion, Madam Speaker, allow me to join the mover of the Motion in thanking you for according us the opportunity to serve on this important Committee. I also thank the members of your Committee for according me the opportunity to second the Motion.

 

Madam Speaker, I thank you.

 

Hon. Members: Hear, hear!

 

The Minister of Local Government (Mr Mwale): Madam Speaker, I thank you for giving me this opportunity to make a few remarks on the Motion.

 

Madam, from the outset, let me thank the Office of the Auditor-General for the great work that was done in trying to bring to light some of the things happening in our councils. I also thank the Committee that deliberated on the report of the Auditor-General. Indeed, your Committee has highlighted a number of issues that will be very useful to us, as a ministry, as we work to correct the situation.

 

Madam Speaker, let me, now, very quickly respond to a few things that have been highlighted in the report.

 

Madam, the local government sector has been grappling with liquidity problems for a long time now. Therefore, the ministries of Local Government; Finance; Justice; and Commerce, Trade and Industry, and their co-operating partners are working on the following measures to improve the situation:

 

1. on the need to amend the 1997 Rating Act, a Bill will be presented to Parliament in 2017 to,  among others purposes, address the inherent delays and associated costs in the formulation of new valuation rolls and streamline the process of updating them. We know that there have been challenges in this regard and that it is the reason councils cannot levy rates to all those who are constructing in the country. As a result of the envisaged changes, local authorities will be able to collect property taxes in real time, as developments take place;

 

1. the final draft of the Intergovernmental Fiscal Architecture (IFA), which clearly spells out the modalities of sharing revenues between the Central Government and local authorities in a stable and predictable manner, has been produced and is awaiting validation from stakeholders;

 

1. the Local Authorities Financial Regulations will be revised after the amendment of the Public Finance Act to align them with the amended Act. The current regulations inhibit local authorities in raising capital through external borrowing or issuing of monetary instruments, such as local government bonds. The revision of the regulations will enable local authorities to raise money from the stock markets;

 

1. local authorities have been instructed to come up with commercial ventures to supplement their revenues and liquidate their debts;

 

1. local authorities are also encouraged to implement Local Economic Development (LED) to enhance their revenue generation. The rationale behind LED initiative is to tap into the district productive potential and involve the community in both economic and social investment. The subsequent expansion in the local economy will contribute to taxable income of local businesses; and

 

1. the ministries of Local Government and Finance are developing short, medium and long-term measures to reduce financial leakages. In the short term, the printing of accountable documents with more security features will be centralised at Government Printers to reduce pilfering arising from liberalised printing. In the medium term, the use of technology like point-of-sale (PoS) facilities will be implemented to reduce human-cash contacts.

 

Madam Speaker, the report has correctly observed that some of the audited local authorities did not have strategic plans while others had unapproved ones. However, I am glad to inform the House that, for the local authorities without capacity, the Government, working with its co-operating partners, is piloting the development of strategic plans using a standard template. The rationale is to bring down the cost associated with the development of the plans and ease their implementation throughout the country. 

 

Madam Speaker, the report also correctly observes that local authorities currently work without reporting frameworks. In this regard, the ministries of Local Government and Finance are working to implement the International Public Sector Accounting Standards (IPSAS) in local authorities in 2018.

 

Madam Speaker, some local authorities were also cited by the report as working without risk management policies. On that score, I am glad to report that the Ministry of Local Government and the Office of the Controller of Internal Audit are working on an internal audit manual and the subsequent development of a risk management framework.

 

Madam, since the audit was undertaken, the Local Government Service Commission (LGSC) has employed about 603 people to mitigate the challenges associated with the high vacancy rates reported.

 

Madam Speaker, the matter of title deeds is also being dealt with, as is the issue of low qualifications of accounting staff, as some of the 603 people employed by the commission are accountants. We are also dealing with the issue of information and communication technology (ICT) policies, which are lacking. In this regard, we have partnered with the Smart Zambia Project, which is a Government programme.

 

Madam Speaker, in conclusion, allow me to state that we value this report and will use it to clean up the systems in local authorities so that we can deliver better services to the nation.

 

I thank you, Madam.

 

Mr Kabanda: Madam Speaker, I thank the seconder of the Motion and the hon. Minister of Local Government for adequately responding to the issues raised in the report and proposing measures for addressing the grey areas highlighted.

 

Madam Speaker, local authorities are mirrors through which the Central Government’s performance is judged. Therefore, it is important that the Government ups its game in the supervision of the service.

 

I thank you, Madam.

 

Question put and agreed to.

 

REPORT OF THE PUBLIC ACCOUNTS COMMITTEE ON THE REPORT OF THE AUDITOR-GENERAL ON  ROAD PROJECTS UNDER THE ROAD DEVELOPMENT AGENCY FOR THE PERIOD JANUARY, 2012, TO DECEMBER, 2015

 

Mr Mbulakulima: Madam Speaker, I beg to move that the House do now adopt the Report of the Public Accounts Committee on the Report of the Auditor-General on Road Projects under the Road Development Agency (RDA) for the Period January, 2012, to December, 2015, for the First Session of the Twelfth National Assembly, laid on the Table of the House on 11^th July, 2017.

 

Hon. Member: Mwendesheko, ba mudala.

 

Madam First Deputy Speaker: Is the Motion seconded?

 

Mr Simbao (Senga Hill): Madam Speaker, I beg to second the Motion.

 

Mr Mbulakulima: Madam Speaker, your Committee, in line with its terms of reference, as specified in the Standing Orders, considered the Report of the Auditor-General on the road projects under the RDA for the period January, 2012, to December, 2015.

 

Madam Speaker, the House will recall that the last time a similar report was considered by the Public Accounts Committee was in 2010, implying that it has taken close to seven years for the Committee to get further insight into the operations of this important sector.

 

Madam Speaker, allow me to contextualise your Committee’s conclusions after considering the report by sharing the objectives of the audit on roads and related infrastructure.

 

Madam, the objectives of the audit by the Office of the Auditor-General were to assess whether:

 

1. procurement procedures were followed in the award of contracts;

 

1. the projects were administered in accordance with contract agreements; and

 

1. expenditure was in conformity with the Laws of Zambia.

 

Madam Speaker, before I delve into the details of the salient issues raised in your Committee’s report, allow me to indicate that most of the irregularities captured reported are not new, which clearly shows that the Executive is not paying due attention to your Committee’s observations and recommendations. It is disheartening that most issues remain unresolved due to the business-as-usual attitude being exhibited by the Executive.

 

Madam Speaker, the first matter that caught the attention of your Committee was the lack of detailed engineering designs and drawings before the commencement of road works. Your Committee was alarmed to learn that most of road works were executed without designs and drawings, and your Committee wondered what parameters the contractors followed when constructing the roads. Your Committee was equally shocked by the justification given by the controlling officer for that serious omission, which was that the Government wanted roads to be constructed urgently. That was not only misplaced, but also unacceptable because most of the road projects had not been completed in the stipulated period. In light of the foregoing, your Committee strongly urges the Secretary to the Treasury to ensure that the requirement for approved detailed engineering designs and drawings before commencement of road works is backed by appropriate legislation in order to avoid the recurrence of the omission.

 

Madam Speaker, your Committee also learnt that there were delays ranging from one to twelve months in the engagement of supervising consultants for projects, which led to the implementation of projects without adequate supervision. Unbelievably, not only did most projects lack detailed engineering designs and drawings, but were also unsupervised by consultants, leading to poor quality works by most contractors. In this regard, your Committee strongly recommends that the anticipated amendment of the Zambia Public Procurement Authority Act No. 15 of 2008 includes legislating for the need for supervising consultants to be engaged before the commencement of works to address this serious anomaly. Your Committee also urges the Government to ensure that all contractors who took advantage of the late engagement of supervising consultants by the RDA to not adhere to specifications are made to correct the defect and blacklist all contractors who exhibited poor workmanship during the period under review.

 

Madam Speaker, you may wish to know that your Committee also undertook an inspection tour of selected roads highlighted in the report of the Auditor-General in Lusaka, Central and Eastern provinces. The objectives of the tour were to:

 

1. validate queries raised in the report of the Auditor-General;

 

1. engage relevant stakeholders in the construction of the roads, namely the RDA, consultants and contractors of the named roads; and

 

1. establish the way forward.

 

Madam, one of the roads visited by your Committee is the Landless Corner/Mumbwa Road in Central Province. Following the tour, your Committee established that the irregularities highlighted by the Auditor-General’s report on the road were a true reflection of what obtained on the ground. The verification also led to the following additional findings:

 

1. the contractor found was engaged following the termination of an initial contract;

 

1. the contractor found had little experience in road construction;

 

1. the base core had crumbled, which was evidence of the poor workmanship by the contractor; and

 

1. works had stalled due to poor funding by the Government.

 

In view of the foregoing, Madam, your Committee strongly recommends that the contract be terminated and re-tendered in order for a more experienced contractor to be engaged so that the outstanding works are completed. Your Committee contends that whereas the termination of the contract will attract penalties, continuing with the current contractor will attract immense financial ramifications in correcting the poor works.

                                             

Madam, your Committee also visited the Chipata/Katete/Chadiza Road in the Eastern Province  and, ...

 

Hon. Member: Hear, hear!

 

Mr Mbulakulima: ... yet again, established that the irregularities highlighted by the Auditor-General’s report on the road were real. Your Committee arrived at the following additional findings:

 

1. the contractor had not demobilised, thereby attracting standing time charges amounting to K5 million per month; and

 

1. works had stalled due to the poor funding by the Government.

 

Madam, arising from the findings above, your Committee was alarmed by the huge standing time costs that was being paid to the contractor and felt that immediate action needed to be taken to arrest the situation. Your Committee, therefore, strongly urges the Secretary to the Treasury to urgently mobilise the funds required to complete the project or suspend the contract until funding is made available in order to avoid further losses resulting from the standing time charges.

 

Madam Speaker, allow me to share some of the general observations and recommendations of your Committee the report of the Auditor-General.

 

Madam, your Committee observes that the numerous irregularities highlighted in the report are mainly attributable to a weak monitoring and evaluation framework, weak supervision, weak guidelines on road management, and lapses in the legal framework. Therefore, your Committee recommends an immediate revision and strengthening of the relevant Acts and guidelines to bring them abreast of international engineering standards and practices. The reviews should be done periodically thereafter.

 

Madam, your Committee also regrets the high turnover of chief executive officers (CEOs) at the RDA. It is worrying that during the period under review, the agency had changed CEOs four times. That, coupled with the delay in appointing the board to provide the much needed oversight, was counter-productive. Your Committee, therefore, recommends that the Public Roads Act No. 12 of 2002 be amended to improve the process of recruiting the CEO and avoid the continued changes to that key position. Further, the dissolution of the board and appointment of a new one should be done simultaneously in order to not only uphold good corporate governance by avoiding a vacuum at that level.

 

Madam Speaker, your Committee also noted, with regret, that political interference was exerted on the RDA during the period under review, which immensely contributed to the numerous irregularities observed by the Auditor-General. Therefore, your Committee strongly recommends that the Secretary to the Treasury ensure that RDA strictly adheres to its approved annual work plans (AWPs) and avoids flouting laid-down procurement procedures due to political pressure.

 

Madam Speaker, as I conclude, …

 

Hon. Member: Yes, finally, mwe!

 

Mr Mbulakulima: … allow me to thank you and the Office of the Clerk of the National Assembly for the guidance and support you rendered to your Committee during its deliberations. I further thank the Controlling Officer for the Ministry of Housing and Infrastructure Development, the CEOs for the RDA and the National Roads Fund Agency (NRFA), and the Director-General of the Zambia Public Procurement Agency (ZPPA) for their co-operation and appearing before your Committee to make submissions on the various issues raised in the Auditor-General’s report. Finally, I appreciate the advice rendered to your Committee by officers from the offices of the Auditor-General, the Accountant-General and the Controller for Internal Audit.

 

Madam Speaker, I beg to move.

 

Hon. Members: Hear, hear!

 

Madam First Deputy Speaker: Does the seconder wish to speak now or later?

 

Mr Simbao: Now, Madam Speaker.

 

Mr Ngulube: Hear, hear! Ema former, aba!

 

Mr Simbao: Madam Speaker, considering the able manner in which the mover has highlighted the salient issues in your report, I wish to restrict my comments to a few matters, beginning with the management of road projects during the period under review.

 

Madam Speaker, the preponderance of huge variations in road projects, which ranged from 50 per cent to 400 per cent, against the advisable capping of 25 per cent, is very disheartening. The reason this was possible is the non-stipulation of the 25 per cent cap in the Zambia Public Procurement Act, which has been immensely abused by the Road Development Agency (RDA). Your Committee, therefore, urges the Secretary to the Treasury to ensure that the revision of the Zambia Public Procurement Authority (ZPPA) Act includes the introduction of a provision capping variations at 25 per cent. Further, your Committee directs that the amendments be presented in the 2018 Legislative Meeting of Parliament.

 

Madam Speaker, another disheartening issue that came to the attention of your Committee was that of single sourcing road projects. Your Committee established that, although the RDA obtained authority from the ZPPA to single source, most of the projects single sourced did not meet the criteria for single sourcing. In this regard, your Committee reiterates the call to the Secretary to the Treasury to ensure that the amendment of the ZPPA Act is done in the 2018 Legislative Meeting of Parliament. Further, your Committee directs that the revision of procurement laws be done periodically in order to enable timely interventions in such matters. The Secretary to the Treasury is also directed to censure the management at the ZPPA for the inappropriate application of single sourcing, contrary to provisions of the ZPPA Act No. 15 of 2008.

 

Madam Speaker, your Committee also considered the management of the Pave Zambia 2,000 Kilometre Project (Pave Zambia 2,000) and established that the project stalled due to underfunding by the Treasury. Your Committee is feels strongly that the mistakes made during the implementation of the first phase of the Link Zambia 8,000 Kilometre Road Project must not be repeated in the implementation of Pave Zambia 2,000. The numerous irregularities highlighted during the period under review clearly indicate the discrepancy between procured projects and available resources. Further, the unnecessarily high and outrageous variations, coupled with the huge standing time charges, have greatly contributed to the huge debt owed to contractors and consultants by the Government. In view of the aforementioned, your Committee directs that Pave Zambia 2,000 be implemented in phases until a significant proportion of stalled works under Link Zambia 8,000 are completed.

 

Madam Speaker, during your Committee’s local tours of the Chipata/Mfuwe, and Mambwe Township roads, your Committee established that the irregularities highlighted by the Auditor-General’s report on the roads were commensurate with what obtained on the ground. Further, the following the physical inspections, the following additional observations were made:

 

1. the initial contract was to cover 104 km. However, a variation order was issued to include the construction of 12 km of township roads;

 

1. the project time frame was adjusted from the initial twenty-four months to seventy-seven months;

 

1. there was poor workmanship, as evidenced by bleeding, loss of aggregates, cracking and streaking;

 

1. the sub-base was not done on the Mambwe township roads and no explanation was made;

 

1. the 25 km extension of the project from Mfuwe International Airport to South Luangwa National Park was not re-tendered, but given to the same contractor through a variation, which amounted to direct bidding; and

 

1. a 25 km stretch of the road has no temporary road signs, thereby putting the lives of road users at risk.

 

Madam Speaker, in view of the foregoing, your Committee expresses concern with the quality of works on the roads and it is evident that the consultant did not discharge his duties to expectations. In view of the above, your Committee directs that:

 

1. the contract for the consultant be re-assessed if it is established that specifications in the contract were not complied with;

 

1. an assessment of the cause of the defects be done before the highlighted defects are corrected in order to avoid the recurrence of the defects; and

 

1. the defects on the 25 km extension and any others on the projects be corrected before the contractor commences any new works on the contract.

 

Madam Speaker, allow me to also share some general observations and recommendations of your Committee.

 

Madam Speaker, your Committee expresses concern over the poor co-ordination between the RDA and the National Road Fund Agency (NRFA) in the management of projects in the road sector. It is the considered view of your Committee that had the two institutions been working in sync, the over-procurement of road projects would have been minimised. Your Committee, therefore, recommends that the RDA and the NRFA strive to enhance co-ordination among them to avoid a recurrence of the observed administrative lapses.

 

Madam Speaker, your Committee notes, with concern, the delay by the Attorney-General’s Chambers in giving guidance on the procurement of projects over time which, in most instances, resulted in a breach of contractual obligations by the RDA and the agency had to face numerous penalties. Your Committee, therefore, directs that the Attorney-General’s Chambers be beefed up with adequate legal practitioners to provide timely legal opinions on road contracts under the RDA.

 

Madam Speaker, another matter of interest to your Committee is that consultants submit roads to the RDA for validation before conducting coring tests. Your Committee urges the RDA to ensure that coring tests are conducted for all roads in order to curb poor workmanship.

 

Madam Speaker, in conclusion, let me join the mover of the Motion in thanking you for according us the opportunity to serve on this important Committee. I also thank the members of your Committee for affording me the opportunity to second the Motion.

 

Madam Speaker, I beg to second.

 

Hon. Government Members: Hear, hear!

 

The Minister of Housing and Infrastructure Development (Mr Chitotela): Madam Speaker, I thank you for giving me the opportunity to respond to the concerns raised by your Committee.

 

Madam, the Government takes note of the concerns that have been highlighted in the Auditor-General’s report. We are duty-bound give highlights of what we are doing, as a Government, on the issues raised in the report. 

 

Madam Speaker, regarding the late engagement of consultants, this Government believes that, in the future, all projects will need to be supervised. Further, it has directed the Road Development Agency (RDA) to create a department that will be responsible for monitoring and evaluation (M&E) despite our engagement of private consultants. This measure will facilitate the more effective implementation of projects easier. There is also a department in the RDA that will make sure that consultants do not dupe the Government and that all the interim payment certificates (IPCs) submitted by contractors through their agents and consultants meet the specifications of the contracts.

 

Madam Speaker, the mover of the Motion highlighted the issue of non-adherence to specifications in road construction. Going forward, we will make sure that the designs of new roads meet international standards.

 

Madam, the mover of the Motion specifically mentioned the Chipata/Lundazi/Chadiza and Chipata/Katete/Chadiza road projects. Let me confirm that the projects had stalled, but the contractor is currently on site and works have commenced. Further, the ministries of Housing and Infrastructure Development, and Finance are negotiating the standing time charges that the contractors have demanded from the Government. Additionally, now that the Government is paying contractors on time, the majority of contractors are no longer charging for standing time.

 

Madam Speaker, the Government is determined to liquidate all the outstanding debts it accrued in the implementation of the Link Zambia 8,000 Kilometre Road Project (Link Zambia 8,000). For the information of the House, we launched the project, but because of other contractual obligations and legal requirements, the money for the project was diverted to other areas in the country, leading to delays in its implementation.

 

Madam Speaker, we take note of the issues raised regarding variation orders (VOs). Regarding that, the standard practice is that the RDA or any other contracting agency is allowed to procure from the same contractor as long as the variation does not exceed 25 per cent of the existing contract.

 

Madam Speaker, I also wish to acknowledge the political pressure mentioned by the Committee. However, the pressure is also …

 

Mr Ngulube: Hear, hear!

 

Mr Chitotela: … exerted by hon. Members of Parliament, who want development in the constituencies they represent. On this one, suffice it for me to say that we still need to adhere to the laid-down procedures and processes as we exert this pressure.

 

Madam Speaker, the poor co-ordination between the RDA and National Road Fund Agency (NRFA) is a thing of the past. From the time the Patriotic Front (PF) Government, under the leadership of His Excellency the President, Mr Edgar Lungu, took over the Government, there has been mutual understanding between the two agencies. As we know, to make sure that projects being procured are included in the Road Sector Annual Work Plan (RSAWP) and budgeted for, the RDA cannot procure any works without the consent of the NRFA.

 

Madam Speaker, the ministry does not want to rush the Pave Zambia 2,000 Kilometre Project (Pave Zambia 2,000) and will not procure new projects that are not provided for in the RSAWP for 2017, until all the current projects are completed. Further, the ministry is discussing with the Ministry of Youth, Sport and Child Development the kind of paving equipment to procure for the project in order to engage the youths. We want the project to act as a youth empowerment programme. The paving equipment will be leased to the Ministry of Youth, Sport and Child Development and youths will be engaged to make paving blocks. So, my ministry, through the RDA, will give business to Zambian youths. We will pick youths from one district per province per year. In this year’s Budget, about K100 million has been allocated to the project and we intend to allocate K10 million to each province. In a nutshell, I assure the Committee that we have taken note of its concerns and we will deal with them.

 

Madam Speaker, the ministry has made progress in the revision of the Public Roads Act of 2002. The Act is under review and the amendments will be presented to the hon. Minister of Justice very soon for onward submission to the Cabinet for approval of its presentation to this House for enactment. So, I reiterate that we take note of the Committee’s concerns, many of which are on operational challenges. In our desire to see Zambia become a better place, some project contracts were awarded under the engineering, procurement and construction (EPC) mode, in which the contractor is allowed to both undertake the feasibility study and execute the project.

 

Madam Speaker, we have made sure that all the consultants appointed to supervise projects are held responsible in the event of failure of projects they supervised. We are also increasing the defect liability period in the road sector to one year after the handover.

 

Mr Ngulube: Hear, hear!

 

Mr Chitotela: Further, we have adopted a new strategy in which we will not wait for a road to be damaged before working on it. So, beginning in 2019, we will identify contractors who will be given five-year maintenance contracts for specific roads.

 

Madam Speaker, I thank you.

 

Hon. Government Members: Hear, hear!

 

Mr Mbulakulima: Madam Speaker, I thank the hon. Minister for being magnanimous and taking keen interest in the report of your Committee. From the way he has summarised his responses, you can tell that he has read the report in detail, and the Committee takes pleasure in seeing that kind of attitude. The road sector robs our Treasury a lot of money. Therefore, special attention should be paid to them. The Chipata/Katete/Chadiza Road was a source of concern for the people of the Eastern Province. So, it is gratifying to note that the project is now back on track.

 

Finally, Madam Speaker, I thank all the hon. Members for their support. As Her Honour the Vice-President said, silence means consent.

 

I thank you Madam Speaker.

 

Question put and agreed to.

 

REPORT OF THE PUBLIC ACCOUNTS COMMITTEE ON THE REPORT OF THE AUDITOR-GENERAL ON THE ACCOUNTS OF THE REPUBLIC FOR THE FINANCIAL YEAR ENDED 31^ST DECEMBER, 2015

 

(Debate resumed)

 

Mr Chiteme (Nkana): Madam Speaker, before debate was adjourned yesterday, I was saying that one of the worrying trends exposed by the Auditor-General’s report is the huge increase in over-payments, from K1 million, in 2014, to an alarming K26 million, in 2015. Further, your Committee observes, with concern, ...

 

Hon. Member: Ema accents, aya.

 

Laughter

 

Ms Mulenga: Mwaona manje, ka?

 

Hon. Member: Efisungu, ifi.

 

Mr Chiteme: ... that the major culprits in this vice are the provincial administration officers. The anomalies of over-payments of the rural hardship and housing allowances have become a permanent feature of the Auditor-General’s report, which is a clear testimony of the weak internal controls and poor supervision of the officers responsible for managing the payroll. It is now evident that the officers have become very canning in weakening the systems to their advantage. Surely, this is unacceptable and should not be allowed to continue.

 

Hon. Members: Hear, hear!

 

Mr Chiteme: The Committee, in this regard, strongly urges the controlling officer to take drastic steps to strengthen the internal control systems in payroll management.

 

Madam Speaker, the misapplication of funds in most ministries has also become a permanent feature in the Auditor-General’s report. What your Committee has painfully noted is that, in most cases, funds meant for poverty reduction and capital projects have been varied and applied on recurrent expenditure, which is not only a breach of financial regulations, but also has a negative effect on development efforts in the country. Let me illustrate my point using a few ministries.

 

Madam, in the report, the Ministry of Education, Science, Vocational Training and Early Education, as it was called then, was given K15 million for sponsorship of orphans and vulnerable children in secondary schools. Sadly, the funds were misapplied. Your Committee finds it disturbing and unacceptable that orphans and vulnerable children were deprived of the intended benefit and warns that it will, in the future, not take kindly to such practices. It further strongly urges the controlling officer to ensure that the funds are reimbursed and used for the intended purpose without fail. Another example is that of the Ministry of Transport and Communication, where a company called MCD was contracted to procure and deliver nine dredgers at a cost of more than US$9 million but, two years later, only three dredgers have been delivered, yet contractor was left to go scot-free.

 

Hon. Members: Aah!

 

Mr Chiteme: It is the considered view of your Committee that the contractor should be pursued by the law enforcement agencies to ensure that the equipment is delivered without further delay or a heavy penalty is imposed on the contractor.

 

Mr Malama: Hear, hear!

 

Mr Chiteme: In the same vein, the Secretary to the Cabinet is particularly urged to take stringent measures to curb the practice, as it has been observed that the retrospective seeking of authority by controlling officers has been a trend in most cases of misapplied funds.

 

Madam Speaker, on a good note, I wish to state that the report of the Auditor-General has also recorded some marginal improvements in the amounts queried on some of the irregularities. For example, unaccounted for revenue reduced from K3 million, in 2014, to around K558,000, in 2015, while unaccounted for stocks reduced by 50 per cent, from K26 million, in 2014, to K13 million, in 2015. Further, misapplied funds have drastically reduced to zero from K44 million in 2013. Given that such reductions are rare, your Committee commends the Secretary to the Treasury for the measures that have been put in place, so far, but urges against relenting in the implementation of other measures to ensure that audit queries are completely eliminated.

 

Madam Speaker, your Committee also made the observation that the numerous queries in the report of the Auditor-General are mainly attributable to the lack of understanding and appreciation of the financial legal framework by most controlling officers. Your Committee, therefore, recommends that a comprehensive induction programme on the general provisions of the Public Finance Act, the Financial Regulations, the Public Stores Regulations, the Public Procurement Regulations and other administrative standards be conducted for all controlling officers and the sub-warrant holders at the commencement of every financial year. Your Committee suggests that the induction be conducted by officers from the Zambia Public Procurement Authority (ZPPA), the Auditor-General’s Office, Ministry of Finance and Cabinet Office, among others. In addition, the appointing authority should consider relevant qualifications when appointing Permanent Secretaries, who are normally the controlling officers, to avoid a continued increase in irregularities.

 

Mr Chiteme: Madam Speaker, in conclusion, allow me to …

 

Mr Ngulube: To thank you.

 

Laughter

 

Mr Chiteme: … appreciate your office for devolving the functions of the Public Accounts Committee into three separate Committees, namely the Committee on Parastatal Bodies, the Committee on Local Government Accounts and the incumbent Public Accounts Committee. Your Committee welcomes the move and finds it progressive, as the oversight function on public financial management of all ministries, provinces and other spending agencies by Parliament will be enhanced. Lastly, allow me to also join the mover of the Motion in thanking you for according us the opportunity to serve on this important Committee. I also thank the members of your Committee for affording me the opportunity to second the Motion.

 

Madam Speaker, I beg to second.

 

Hon. Members: Hear, hear!

 

Mrs Mulenga: Ema MP, aba!

 

Mr Chiyalika: Ema friends bamunjomba.

 

Mr Ngulube (Kabwe Central): Madam Speaker, in supporting the Motion, I want to emphasise that it is important for controlling officers to adhere to the recommendations of your Committee.

 

Madam Speaker, I thank you.

 

Hon. Members: Hear, hear!

 

Laughter

 

Mr Sampa: Ema summary, aya!

 

The Minister of Health (Dr Chilufya): Madam Speaker, I thank you for giving me the opportunity to comment on a matter of public interest that has been raised in your Committee’s report, namely the expiry of drugs worth K13 million.

 

Madam Speaker, the World Health Organisation (WHO) changed the treatment regimen for Human Immuno-deficiency Virus and Acquired Immune Deficiency Syndrome HIV/AIDS, rendering the anti-retroviral (ARV) drugs that we had in stock obsolete because we had to stop using them in order to protect patients and let them benefit from the new treatment guidelines. The drugs we stopped using are the ones that expired.

 

Mr Mwale: Mwamvera!

 

Dr Chilufya: Madam Speaker, we have since put in place measures to strengthen the management of laboratory commodities, and placed emphasis on leadership changed the management at Medical Stores Limited.

 

Madam Speaker, I thank you.

 

Hon. Members: Hear, hear!

 

Madam First Deputy Speaker: The hon. Minister of Finance.

 

Mr Chibanda: Wind up.

 

Mr Mutati: Madam Speaker, let me, again, commend the Committee for the substantive recommendations it has made, which include a revision of the various pieces of legislation and regulations, and systems improvement. The ministry has taken the recommendations very seriously, and will study them and take the appropriate measures.

 

I thank you, Madam Speaker.

 

Hon. Members: Hear, hear!

 

Madam First Deputy Speaker: The hon. Member for Milenge, wind up the debate.

 

Mr Mwewa: Ba mudala, pwisheni.

 

Mr Mbulakulima: Madam Speaker, I thank the two hon. Ministers, particularly the hon. Minister of Health, for clarifying the issues raised in the report and the debate, and for being brief and to the point. I believe that the irregularities cited in the Auditor-General’s report year in and year out can be eliminated if we work together and start respecting public resources. I also thank all the hon. Members for fully participating in this debate.

 

I thank you, Madam Speaker.

 

Hon. Members: Hear, hear!

 

Question put and agreed to.

 

ADJOURNMENT SINE DIE

 

The Vice-President (Mrs Wina): Madam Speaker, I beg to move that the House do now adjourn sine die.

 

Question put and agreed to.

 

_________

 

The House accordingly adjourned sine die at 2301 hours on Wednesday, 12^th July, 2017,.