Thursday, 19^th October, 2017

The House met at 1430 hours

[MADAM FIRST DEPUTY SPEAKER in the Chair]

NATIONAL ANTHEM

PRAYER

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ANNOUNCEMENTS BY MADAM FIRST DEPUTY SPEAKER

ACTING LEADER OF GOVERNMENT BUSINESS IN THE HOUSE

Madam First Deputy Speaker: Hon. Members, in the absence of Her Honour the Vice-President, who is attending to other Government business, the Chief Whip, Hon. Richard Musukwa, MP, has been appointed Acting Leader of Government Business in the House from today, Thursday, 19^th October, 2017, until further notice.

Hon. Government Member: Hear, hear!                                                             

EXPUNCTION OF HON. NGULUBE’S SECOND SUPPLEMENTARY QUESTION

Madam First Deputy Speaker: Hon. Members, it has been brought to my attention that on Friday, 13^th October, 2017, when the House was considering Question for Oral Answer No. 60 asked by Mr P. Mecha, the hon. Member of Parliament for Chifunabuli Constituency, Mr T. Ngulube, the hon. Member of Parliament for Kabwe Central Constituency asked more than one supplementary question to Mr Mecha’s question.

Hon. Members, you are aware that the rules of the House only allow the member who asked the principal question to ask two follow-up questions. In this regard, Standing Order No. 30(7) of the National Assembly of Zambia Standing Orders, 2016, expressly provides as follows:

“A member who asks an oral question shall be entitled to ask two supplementary questions.”

The import of this provision is that only the originator of the question appearing on the Order Paper for the day has the right to ask two supplementary questions. All other hon. Members may ask only one follow-up question.

Hon. Members, Hon. Tutwa Ngulube knew or ought to have known about the provision of Standing Order No. 30(7), but went ahead and asked two supplementary questions in total disregard of the rules of the House. In this regard, and after careful consideration of the matter, I have directed the Clerk of the National Assembly to expunge from the Parliamentary Debate for Friday, 13^th October, 2017, both the second supplementary question asked by Hon. Tutwa Ngulube and the hon. Minister’s response to it.

Hon. Members, let me remind you on the need to familiarise yourself with the new rules in the Standing Orders that you developed for yourselves in 2016.

Thank you.

Hon. Members: Hear, hear!

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QUESTIONS FOR ORAL ANSWER

CONSTRUCTION OF ADDITIONAL HOSPITALS AND HEALTH CENTRES IN KANYAMA

64. Mr Daka (Msanzala) (on behalf of Ms Phiri (Kanyama)) asked the Minister of Health:

(a) whether the Government had plans to construct additional hospitals and health centres in Kanyama Parliamentary Constituency;

(b) if so, when the plans would be implemented;

(c) how many hospitals and health centres were earmarked for construction; and 

(d) if there were no such plans, why.

The Minister of Health (Dr Chilufya): Madam Speaker, the Government has planned for the construction of a second-level hospital in Kanyama Parliamentary Constituency and the upgrading of the current health facility there to a first-level hospital.

Madam Speaker, the Government has already commenced the implementation of the plans for the construction of a second-level hospital in Kanyama, whose construction is expected to commence as soon as possible. The only thing being awaited is the conclusion of the financing arrangement.

Madam Speaker, one health facility is earmarked for upgrading to first-level status and one second-level hospital is earmarked for construction in Kanyama.

I thank you, Madam Speaker.

Mr Daka: Madam Speaker, I appreciate the hon. Minister’s answers. However, very soon is infinite. Could the hon. Minister be more specific on the time frame in which under which the health facilities will be constructed and upgraded, respectively.

Dr Chilufya: Madam Speaker, we have already signed the commercial contract for the construction of the second-level hospital in Kanyama. All that remains is the signing of the loan contract by the Ministry of Finance. So, if I have to attach a time frame to the project, I would say that we expect the Ministry of Finance to sign the loan contract in November, 2017. Therefore, we expect construction of the hospital, which is part of the L85 Project, to commence before the end of the year.

Madam Speaker, I thank you.

Mr Jamba (Mwembeshi): Madam Speaker, the hon. Minister said that the Government has plans to build a second-level hospital in Kanyama. He has said that with regards to many other constituencies, including Mwembeshi. Is he able to avail the plan to us, hon. Members of Parliament, so that we know which hospital will be constructed when and in which constituency? That way, we would not have to keep asking him questions on this subject. 

Dr Chilufya: Madam Speaker, we usually release an infrastructural operational plan (IOP) every year and we will release the one for 2018. We also have a capital investment plan that details our plans for the construction of facilities in the next Medium-Term Expenditure Framework (MTEF). So, after I issue a statement on the National Health Strategic Plan, as permission is granted, I will release the IOPs for 2018 and for the strategic period 2017 to 2021.

Madam Speaker, I thank you.

Dr Malama (Kanchibiya): Madam Speaker, what informs the placement of one health centre from the next? Further, what is the distance?

Dr Chilufya: Madam Speaker, the standard we have set in our pursuit to provide universal health coverage is for every citizen of this country to have access to health services within 5 a km radius. Therefore, there should be a maximum of 5 km between health facilities. However, there are other variables that come into play in the placement of health facilities. Important among them are population and disease profile. So, there may be health facilities that are closer to one another than the 5 km standard because the population they serve is large.

I thank you, Madam.

Mr Mwamba (Lubansenshi): Madam Speaker, Kanyama is a one heavily-populated area that needs bigger hospitals, as the hon. Member of Parliament indicated. Further, of late, we have seen the ministry build first-level hospitals in urban areas, particularly in Lusaka. When will that plan be extended to Lubansenshi, a rural constituency?

Madam First Deputy Speaker: Hon. Members are finding ways of sneaking in questions on to their constituencies although the principal question is on Kanyama Constituency. Anyway, hon. Minister, please, answer the question, but be as brief as possible.

Dr Chilufya: Madam Speaker, the Government has just concluded the procurement process for the construction of a general hospital in Lubansenshi to be called Bangweulu Hospital.

Hon. Government Members: Hear, hear!

Dr Chilufya: The hospital will cater for Lubansenshi, Lupososhi and Chilubi. Given there is already a first-level hospital in Chilubi and an old facility in Lupososhi, the addition of Bangweulu Hospital will take the number of higher-level health facilities to three, which should be adequate for the people of the area. In addition, there are health posts under construction of which Lubansenshi will get five.

I thank you, Madam Speaker.

Mr Muchima (Ikeleng’i): Madam Speaker, politics aside, the hon. Minister is an important focal point person for health care in Zambia. When will he bring a detailed plan for the construction of rural health centres and hospitals to this House so that we know where we are and where we are going?

Hon. Government Members: Ah!

 Madam First Deputy Speaker:  The question is very similar to the one asked by the hon. Member for Mwembeshi. Maybe, the hon. Member for Ikeleng’i was not in the House.

Interruptions

Madam First Deputy Speaker:  If he was in the House, we will move on to the next question.

ENFORCEMENT OF THE FISHING BAN IN SAMFYA

65. Mr Mecha (Chifunabuli) asked the Minister of Fisheries and Livestock:

(a) how much money was released for the implementation of the fishing ban in Samfya District from 1^st December, 2016, to 1^st March, 2017;

(b) whether there were people arrested for defying the fishing ban;

(c) if so, how many were:

(i) arrested;

(ii) prosecuted and

(iii) convicted;

(d) whether the Government had plans to promote alternative livelihoods in the district, especially for people who live on islands and in fishing camps, during the fishing ban period; and

(e) if so, what the plans were.

The Minister of Fisheries and Livestock (Mr Katambo): Madam Speaker, from 1^st December, 2016, to 1^st March, 2017, the Government released K13,604 for the implementation of the fishing ban in Samfya District.

Madam, thirty-three people found engaging in illegal fishing activities were arrested in accordance with the Fisheries Act No. 22 of 2011 during the fishing ban in Samfya District. Of the thirty-three, twenty-four were prosecuted and convicted.

Madam Speaker, the Government is already promoting aquaculture, and cassava and rice production as …

Interruptions

Madam First Deputy Speaker: Order, on my right!

Mr Katambo: … alternative means of livelihood during and after the fishing ban. My ministry is working with the Ministry of Agriculture in training the people in the area in aquaculture, and rice and cassava production and productivity through farmer field schools.

Madam, with regard to people living in fishing camps, the Government is promoting rice cultivation during the fishing ban, as the camps are usually waterlogged around the time of the ban. In fact, the camps are the main source of rice in Samfya District, and the Government is promoting improved rice varieties there. The Islands, on the other hand, are established settlements. So, my ministry is promoting aquaculture, animal husbandry, and cassava and rice production as alternative means of livelihoods.

Madam, as outlined in (d), the Government is promoting aquaculture as an alternative means of livelihood in Samfya District. The plans include the setting up twelve cages in Chinweshiba and twelve on Mwense Islands of Lake Bangweulu to enable the residents to engage in aquaculture during the fishing ban. In this regard, the House may wish to note that environmental project briefs (EPBs) have been approved by Zambia Environmental Management Agency (ZEMA) for five sites on Lake Bangweulu. The sites are Chifunabuli, Chishi Island, Mbabala Island, and Lakes Kasongole and Kampolombo. People are free to invest in aquaculture in those sites.

Madam Speaker, I thank you.

Mr Mecha: Madam Speaker, allow me to highlight a few concerns before I ask the hon. Minister a follow-up question.

Madam, the people of Chifunabuli are concerned about three things. Firstly, they are worried by the rate at which people are using mosquito nets to catch fish. Two months ago, I was in my constituency when the Ministry of Health was distributing mosquito nets. As I speak, those mosquito nets have found themselves being used on the lakes. Secondly, in Chifunabuli, people defy the fishing ban with impunity because there are no patrols on the water bodies during the ban. Thirdly, there are a limited number of sources of livelihoods, especially for the people of Chishi and Mbabala islands. Does the ministry have a comprehensive strategy for addressing these tripartite concerns of the people of Chifunabuli?

Madam First Deputy Speaker: The hon. Minister should be very brief in responding to that question because, basically, the hon. Member gave a preamble to his question.

Mr Katambo: Madam Speaker, the Government has put in place measures to support fishers in the areas like in Samfya where fishing is a significant source of livelihoods. In that regard, I thank the hon. Member for highlighting the three concerns of the people of his constituency.

Madam, the Government is promoting aquaculture and engaging fishers to diversify into other economic activities like cassava, rice and livestock production. These activities are also supported by the International Fund for Agricultural Development (IFAD) under the Smallholder Productivity Promotion Programme (S3P) in Luapula Province.

Madam Speaker, on mosquito nets or poisonous substances used to catch fish, fisheries officers confiscate and destroy them through court orders and arrest the people found using them.

I thank you, Madam Speaker.

Mr Ng’onga (Kaputa): Madam Speaker, those found breaking the fishing ban are apprehended and their fish often confiscated. What happens to that fish? Is there a law that provides for its disposal?

Mr Katambo: Madam Speaker, I thank Hon. Ng’onga, the Chairperson for Committee on Agriculture, Lands and Natural Resources, for his question.

Madam, fish is a perishable product. Therefore, it cannot be kept at the police station for a long time. So, when the culprits are caught by enforcement officers, their fish is disposed of by the courts through a disposal order, which directs how the fish should be disposed of. The court order is a document that is issued to convict the accused person or persons.

I thank you, Madam Speaker.

Mr Kufakwandi (Sesheke): Madam Speaker, fishing is an important source of livelihood for many people in Zambia, especially those who live near water bodies. Does the ministry have enough resources to effectively enforce the fishing ban?

Mr Katambo: Madam Speaker, before and during the fishing ban, we adequately sensitise people. Further, the ministry works with the co-management structures, traditional leaders, hon. Members of Parliament, councillors and village headmen and women in the fishing communities to sensitise fishers on approved fishing gear and methods, and the need to conserve fish breeding sites.

I thank you, Madam Speaker.

Mr Kambwili (Roan): Madam Speaker, there has been a problem in the past because the fish ban is effected on the Zambian side, but not on the Congolese. Equally, when there is a ban on the Zambian side on the Zambezi River, there is no ban on the Zimbabwean side. What has been the effect of that? Further, has the Government made efforts to synchronise the bans effected in Zambia with those effected in the Democratic Republic of the Congo (DRC) and Zimbabwe?

Mr Katambo: Madam Speaker, it is true that we effect the ban in December to March while our colleagues in the Democratic Republic of the Congo (DRC) effect theirs sometime in January. The same happens with our Zimbabwean colleagues. In that regard, the Government has been engaging the DRC in bilateral talks to harmonise our fishing bans. We are also considering proposals by the DRC to extend the ban from three to five months. The same applies to Zimbabwe.

I thank you, Madam Speaker.

Mr Mwila (Chimwemwe) Madam Speaker, not too long ago, the ministry announced that Saudi Arabia was ready to buy in excess of 1 million goats from Zambia annually. Is the ministry ready to support the fishermen from Chifunabuli to rear goats as an alternative to fishing?

Mr Katambo: Madam Speaker, in my response to Hon. Mecha’s question, I indicated that the Government is engaging fishers to diversify into other economic activities, such as cassava, rice and livestock production. So, we are engaging smallholder farmers to benefit from livestock production through goat rearing.

I thank you, Madam Speaker.

Mrs Fundanga (Chilubi): Madam Speaker, there some species of fish, such as barbell fish, which are relatively small at the time the ban is lifted. Has his ministry considered giving fishing nets to the fishermen at the time the Ministry of Health is dishing out the fishing nets?

Madam Speaker: The Ministry of Health does not dish out fishing nets.

Laughter

Mrs Fundanga: Madam Speaker, I beg your pardon. I meant mosquito nets.

Mr Katambo: Madam Speaker, as I indicated, the use of wrong fishing gear and poisonous substances is prohibited. Therefore, people are supposed to comply with that prohibition. However, the ministry does not provide the right fishing nets to fishermen. It merely sensitises them on them on the right fishing nets to use.

Madam Speaker, the hon. Member of Parliament can also help us in Chilubi Island. We also need civic and traditional leaders to help us sensitise our people to comply with the fishing ban and use the right fishing gear.

I thank you, Madam Speaker.

Dr Malama: Madam Speaker, the hon. Minister mentioned K13,000 as the amount disbursed for enforcement of the fishing ban. How was that amount used? Was it on one visit in ninety days? Further, were officers stationed in the area? That amount could be enough for just one visit into the area to be monitored.

Mr Katambo: Madam Speaker, there are about eight fisheries officers in Samfya District who are able to deal do the job. The money was used for patrols and sensitisation programmes. It was needed for the purchase of fuel for the marines and other logical components for enforcing the ban in the district. According to the technocrats who allocated the amount, it was sufficient for the purpose.

I thank you, Madam Speaker.

__________

BILLS

SECOND READING

THE CORPORATE INSOLVENCY BILL, 2017

The Minister of Commerce, Trade and Industry (Mrs Mwanakatwe): Madam Speaker, I beg to move that the Bill be now read a second time.

Madam Speaker, I am grateful to your Committee for its wide consultations, and the transparent and effective manner in which it reviewed the Bill.

Madam Speaker, the country’s legal framework on corporate insolvency was enshrined in the Companies Act. However, the Act has not been adequate in tackling corporate insolvency issues. It is for this reason that the Companies Act, Chapter 288 of the Laws of Zambia, was amended in 2011 as the Companies (Amendment) Act No. 24 of 2011.

Madam Speaker, the amendments effected to the Act in 2011 focused on receiverships and liquidations under Part XIII. So, while progressive, the amendments fell short of overhauling the legal and regulatory regime for corporate insolvency in line with international best practices. In particular, no business rescue mechanism for financially-troubled companies was provided for. Consequently, financially-troubled, but viable companies cannot get any relief while in receivership and most end up in liquidation, yet it is the intention of the Government to promote business growth, and liquidation should be the last option.

Madam Speaker, given the complexity of modern insolvency practice, it is necessary to create a robust insolvency regime, hence, the proposal to have a standalone piece of legislation dedicated to it. Insolvency-related provisions, that is, provisions for liquidation and receiverships, are to be separated from the Companies Act and placed in a separate statute called the Corporate Insolvency Bill, 2017.

Madam, the development of the Corporate Insolvency Bill, 2017, started in 2011 and involved countrywide consultations with public-sector institutions, professional and business associations, and experts on insolvency. The consultations and research on corporate insolvency international best practices have informed the drafting of the Bill before the House today.

Madam Speaker, the objectives of the Bill are to:

(a) enhance transparency in receiverships and liquidations;

(b) enhance regulation and accountability of receivers and liquidators;

(c) provide a mechanism for salvaging financially distressed, but viable companies; and

(d) align the corporate insolvency law with international best practice.

Madam Speaker, the following are the salient features of the Bill:

(a) a regulatory regime for insolvency practitioners, including professional qualifications for liquidators and receivers, has been introduced;

(b) receivers and liquidators will now be accredited by the Registrar of Companies. Therefore, the Companies Registry will, henceforth, maintain a pool of individuals qualified to be appointed as receivers, liquidators or business rescue administrators;

(c) a business rescue mechanism has been introduced with the aim of salvaging financially distressed, but viable companies; and

(d) a provision has been made for the administration of cross-border insolvency.

Madam Speaker, my ministry has been keenly following the deliberations of your Committee and taken note of the issues raised by the witnesses who appeared before it. The comments made are very useful and gave us an opportunity to clarify matters. More importantly, they gave us an opportunity to correct some errors reflected and make necessary changes to the Bill before it is adopted by this august House.

Madam, the major issues that the witnesses who appeared before the Committee raised related to the following:

Setting Up of a Board to Regulate Insolvency Practitioners

Madam, some witnesses proposed that a separate body be established to accredit insolvency practitioners, as is the case in the United Kingdom (UK), for example, as opposed to the Registrar of Companies executing that function. However, after the matter was extensively discussed with stakeholders, it was resolved that given the relatively low number of insolvency cases in Zambia, it may not be cost-effective to set up such an institution at this time. This point was especially important because if set up, such an institution would have to be self-sustaining. Hence, the resolution that the function be executed by the Registrar of Companies, who is the custodian of business records, including those relating to receiverships and liquidations. The House might draw comfort from knowing that this practice obtains in other jurisdictions, such as Mauritius.

Madam, the accreditation proposed in the Bill will essentially amount to registration.​ Moreover, the Registrar will liaise with concerned professional bodies in accrediting practitioners. It is worth noting, in this regard, that one of the requirements for one to be accredited will be being in good standing in one’s professional body.

Qualifications for Insolvency Practice

Madam Speaker, concern has been expressed on the requirement for insolvency practitioners to be either lawyers or accountants. However, that was necessary because the functions executed by insolvency practitioners require in-depth knowledge of company law, and lawyers and accountants know the field better than other professionals. In countries where the practice has been opened up to other professions, applicants are required to undergo training in corporate law and take a pre-qualification examination before being licensed. Further, it is a requirement that insolvency practitioners be members of strictly-regulated professions.

Use of the Term “Cross-Border Insolvency”

Madam Speaker, some stakeholders have questioned the appropriateness of the term ‘cross-border insolvency’. In that regard, I assure the House that the term is internationally recognised. In fact, and as noted by some witnesses, the proposed cross-border insolvency regime borrows heavily from the United Nations Commission on International Trade Law (UNCITRAL) model.

Madam Speaker, I am pleased that there were no adverse submissions on the introduction of progressive reforms in the Bill. In this regard, I reiterate that this Government will take the submissions and recommendations of the Committee into consideration in finalising the Bill.

Madam Speaker, in conclusion, the Government is committed to improving corporate governance in Zambia. The Corporate Insolvency Bill will foster transparency and accountability in liquidations and receiverships, allow financially-troubled businesses to be resuscitated or sold as going concerns and, ultimately, lead to the development of viable and internationally-competitive local companies. I, therefore, call upon the House to support this very progressive Bill.

I thank you, Madam. 

Dr Musokotwane (Liuwa): Madam Speaker, in accordance with its terms of reference, as provided for in the 2016 Standing Orders, your Committee was tasked to scrutinise the Corporate Insolvency Bill, National Assembly Bill (NAB) Number 9 of 2017. In order to acquaint itself with the ramifications of the Bill, your Committee sought both written and oral submissions from stakeholders.

Madam Speaker, the Companies Act, Chapter 388 of the Laws of Zambia, provides for, among other matters, the formation, management, administration and winding up of companies. Matters of corporate insolvency relating mainly to liquidation and receivership are largely confined to Part XIII of the Companies Act. The provisions in the Companies Act are, however, inadequate to holistically deal with all aspects of corporate insolvency, such as business rescue, receiverships and liquidations. For example, stakeholders pointed out that there has been mismanagement of corporate insolvency situations in Zambia because of the inadequate legal framework. There was an attempt to strengthen the law through the amendment of the Companies (Amendment) Act No. 24 of 2011. However, the amended Act proved to be inadequate and the statutory instruments (SIs) that were supposed to provide further regulation were not issued. Given the limited scope of the 2011 amendments, therefore, your Committee welcomes the Corporate Insolvency Bill and urges hon. Members of the House to support it. The stakeholders who appeared before your Committee welcomed the Bill as a progressive piece of legislation that will provide a comprehensive code for the regulation of corporate insolvency in Zambia by overhauling the legal and regulatory corporate insolvency regime and aligning it to international best practice.

Madam Speaker, while your Committee supports the Bill, it has made a number of observations and recommendations, which are contained in its report. I will, therefore, only highlight a few of them. I urge my hon. Colleagues to scrutinise those that I will not address.

Madam, your Committee notes that among the new provisions are those on business rescue proceedings provided for in Part III of the Bill. While your Committee supports the progressive inclusion, it is also of the view that liquidation must be the last option and only resorted to under exceptional circumstances. It, therefore, recommends that, in terms of the structure, the part dealing with business rescue proceedings precede the one dealing with receivership.

Madam, another observation made by your Committee relates to the qualifications for appointment as an insolvency practitioner under Clauses 9(1) and 112. Your Committee notes that the qualifications have been extended to the appointment of business rescue administrators in Clause 30 and insolvency practitioners in Clause 39 and holds the opinion that the practice should not be restricted to chartered accountants and legal practitioners. Your Committee is greatly concerned that the Bill, in its current form, will empower only legal practitioners and chartered accountants to hold these positions. It, therefore, recommends that the Bill opens the practice up to other professionals who are experts in the fields of the company under receivership or financial distress.

Madam Speaker, after thorough scrutiny of the Bill, your Committee observed, with great concern, that the provisions of Clause 175 are intended to impute liability on the shareholders when a shareholder is not an agent of a company or corporate body. Your Committee is aware that the liability of a company cannot be imputed on a shareholder or vice-versa unless the company or corporate body acted jointly with the shareholder to commit an offence. Your Committee, therefore, recommends that this provision be made consistent with internationally-accepted principles of company law. It must, therefore, exclude shareholders.

Madam Speaker, in ending my debate, I wish, on behalf of your Committee, to express our gratitude to you for granting us the opportunity to scrutinise the Corporate Insolvency Bill, NAB No. 9 of 2017. Your Committee is also thankful to the Office of the Clerk of the National Assembly for the support rendered to it throughout its deliberations and all the witnesses who appeared before it for their co-operation in providing the necessary briefs.

I thank you, Madam.

Mr Ngulube (Kabwe Central): Madam Speaker, thank you for allowing me to add my professional voice to the debate on the introduction of the Corporate Insolvency Bill.

Madam, we have seen confusion whenever there is insolvency in this country. People do not seem to know the difference between receivership and liquidation. In the process, people who are only supposed to collect resources end up selling all the assets of a company and pocketing all the money while the creditors, workers and other people who are entitled to the money go away with nothing.

Madam Speaker, I support the Bill. However, it is wrong for it to state that insolvencies should be handled by lawyers and accountants because a lawyer is not an accountant and an accountant is not a lawyer.

Madam, when the Livingstone Motor Assembly Company was placed under receivership, its affairs were dealt with as though it had been placed under liquidation. In liquidations, the company’s assets are sold off in order to pay off the people who are owed money by the company. In receiverships, a person is appointed to collect all the debts that the company is owed and put all the money together to offset the liabilities of the company. Further, it is important to note that there is no provision in the Companies Act that expressly compels a receiver or liquidator to account for the resources they administered during the liquidation or receivership. So, we hope that this Bill will bring sanity to the practice. For example, if I, Tutwa Ngulube, am appointed to liquidate a company, at the end of the process, I must be held accountable for the resources that came under my charge. I must provide an account of what I have done.

Madam Speaker, we have also noticed the list of priorities of creditors and debtors. In some instances, people have got judgments from court for them to be paid and the courts have ordered that companies be liquidated. On the other hand, other people came up from nowhere and claimed that they were also owed by the company. We hope the Bill will resolve that. Sometimes, some people have debentures, documents that are registered at the Companies Registry to protect people who are owed money by a particular company. The people owed could be shareholders or banks, among others. Currently, we have no law that protects the workers. In most cases, when a company is liquidated, the shareholders walk away from the company because they have nothing to lose at that point. For example, if the shareholders owe the Development Bank of Zambia (DBZ) K10 million, but their shares in the company are worth less than K1 million, even if the company is liquidated, they will lose nothing. The workers, on the other hand, suffer because no one prioritises their interests during the liquidation. We can cite Roan Antelope Mining Corporation of Zambia (RAMCOZ) and Mosi-oa-Tunya Hotel as two of the companies that were sold in that manner. Therefore, we hope that the Bill will define the order of priority of debts. For example, will the Zambia Revenue Authority (ZRA) be paid before the National Pension Scheme Authority (NAPSA), or the workers …

Mr Mukosa: Shareholders!

Mr Ngulube: … before the shareholders? Otherwise, the absence of a priority list will keep Zambians in the trap in which they found themselves.

Madam Speaker, in most instances, there are problems because two conflicting judgments may are passed on the same company. One judgment might order that Mr A and B be paid while another might order that Mr C and D be paid, yet the resources may only allow for one pair to be paid. So, the Bill must bring back the old golden days when one would simply go to court and be satisfied with the judgment.

Madam, another example I can give is of a newspaper company that was liquidated recently. I will not mention the name.

Hon. Opposition Member: Aah! Just mention.

Mr Ngulube: There are rumours that the money that was realised from the sale of the assets was not enough to liquidate some of those debts, but some people are saying that the assets were valuable enough for the purpose. So, in the absence of a properly defined legal framework, the receivers, as you call them, or receiver managers, will continue getting paid while the people who are supposed to be paid remain poor.

Madam Speaker, as my practice is to speak under five minutes, allow me to end here.

Thank you, Madam Speaker.

Hon. Government Members: Hear, hear!

Mrs Mwanakatwe: Madam Speaker, I thank the Committee under the Chairmanship of Hon. Dr Musokotwane for its counsel. We closely collaborated with it as we developed this Bill.

Madam, this Bill is intended to address the issues that have been raised by Hon. Tutwa Ngulube. Initially, receiverships and liquidations were administered under the Companies Act, but we are now putting them under a separate law. We will also ensure that any company that is failing, but is still viable can be resuscitated. Further, we will do away with the conflicting judgments about which Hon. Tutwa Ngulube talked. That is why I thank the Chairperson and his Committee, and all the people who supported us in coming up with this Bill. My ministry and I believe that it is about time companies stopped going into liquidation for the flimsiest of reasons, especially if they can be resuscitated. So, let us make sure that there can be what I can say …

Interruptions

Mrs Mwanakatwe: Kulya ku University Teaching Hospital (UTH) kwaliba ati Intensive Care Unit (ICU). That is what we are doing now.

Mr Mutale: Meaning?

Mrs Mwanakatwe: Meaning, if a company needs to go in intensive care, like a sick person does, …

Laughter

Mrs Mwanakatwe: … let us take it into intensive care, treat it and take it out, if it can be resuscitated. If it cannot be resuscitated, then, we can take it into liquidation. We are tired of seeing our viable companies taken to the cleaners by unscrupulous businessmen.

Hon. Government Member: Hear, hear!

Mrs Mwanakatwe: Madam Speaker, I am happy that I the Bill has received overwhelming support from the Chairperson, the Committee and the witnesses interviewed. Here, we are looking at a Zambia that is taking a step forward in cleaning up the practice of liquidations to receiverships.

Madam Speaker, I thank you.

Hon. Government Members: Hear, hear!

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

Committed to a committee of the Whole House.

Committee, on Wednesday, 25^th October, 2017.

THE COMPANIES BILL, 2017

Mrs Mwanakatwe: Madam Speaker, I beg to move that the Bill be now read a second time.

Madam Speaker, thank you for giving me this opportunity to deliver my statement on the Companies Bill No. 10 of 2017. I am also grateful to your Committee for transparently reviewing the Bill and facilitating wide consultations on it with stakeholders. I further thank all the stakeholders who contributed to this Bill before and during the Committee’s hearings. My ministry keenly followed the deliberations of the Committee, and I will take some time in the course of my statement to discuss some of the issues raised in the deliberations.

Madam Speaker, the review of the Companies Act has been necessitated by the desire to create a favourable business environment for both local and foreign businesses after we found the Companies Act, Cap 388 of the Laws of Zambia, which was enacted in 1994 to repeal the Companies Act we had inherited from our former colonial masters, can no longer meet our aspirations to develop a competitive business environment.

Madam Speaker, the House might wish to note that the last review of the legislation on companies was in 2011 and resulted in the Companies (Amendment) Act No. 24 of 2011. The amendments were confined to receiverships and liquidations. Given the narrow scope of the 2011 amendments, it is necessary to repeal and replace the Act. The other factors that have necessitated the review of the Companies Act include:

(a) high corporate failures resulting from poor corporate governance;

(b) evolution of corporate law internationally;

(c) the need to provide for a supportive corporate governance framework for small companies; and

(d) the need to modernise and upgrade the Companies Registry.

Madam, the Government began the process of reviewing the Companies Act in 2011. Over this period, stakeholders across the country were consulted, including professional bodies, ministries and other Government agencies, business associations and individual experts in corporate law and practice.

Madam Speaker, the Bill seeks to achieve the following things:

(a) align company laws with other pieces of legislation, international best practices and technical developments;

(b) provide a legal framework for the modernisation of the registry, particularly, the migration to electronic registration services and enhanced use of  information technology (IT) in company transactions;

(c) foster transparency and high standards of corporate governance by providing for the functions and obligations of company secretaries and directors;

(d) strengthen financial reporting, facilitate start-ups, and promote micro, small and medium enterprises;

(e) curb the abuse of corporate bodies for illegal activities; and

(f) provide for matters connected with or incidental to the foregoing.

Madam Speaker, the following are some of the key features of the reforms that the Government seeks to implement through the review of the Companies Bill:

(a) churches and other faith-based organisations (FBOs) are to be precluded from incorporating as companies for purposes of engaging in religious activities. This measure has been taken to ensure effective regulation of the FBOs, which currently have the option of registering under the Companies Act or Societies Act;

(b) provisions have been made for the Companies Registry and companies to transact, for example, to hold meetings and maintain records, electronically, thereby leveraging IT. This measure will lessen the regulatory burden and reduce compliance costs;

(c) companies will be required to disclose the beneficial owners of shares in keeping with international developments. The measure seeks to prevent corporate bodies from being used for illicit purposes, such as money laundering, bribery, insider dealing, tax fraud and terrorism financing and, thereby, make the country complaint with its international obligations to fight the financing of terrorism, money laundering and tax evasion;

(d) in a quest to give preferential treatment to small and medium enterprises (SMEs) and, thereby, facilitate start-ups and the growth of SMEs, the concept of small company has been introduced under this Bill. While, for instance, SMEs will be required to prepare annual accounts, it will be optional for them to have audited financial statements of accounts. The definition of a small company will be prescribed under subsidiary legislation;

(e) company law will be aligned with other statutes, especially with the Movable Property (Security Interests) Act No. 3 of 2016, which provides for the registration of security interests in movable property. This will ensure that there is no dual registration of security interest created over movable company assets used as collateral;

(f) corporate governance has been strengthened by the prescription of the duties of company secretaries and broadening of directors’ powers and duties. The accountability of directors, including over reporting standards, has also been enhanced. The Bill further stipulates the minimum standards for annual reports in order to protect the interests of minority shareholders, who may not be directly represented on the board; and

(g) protection for minority shareholders has also been strengthened by empowering them to take out derivative actions, that is, sue against violation of their rights or on behalf of the company when directors fail to act.

Madam Speaker, as I pointed out earlier, my ministry values the consultative process that has been undertaken by your Committee. It has closely followed the deliberations of your Committee and taken note of the issues raised by witnesses. The submissions will help in refining the Draft Bills and ensuring that we have a law that stands the test of time.

Madam Speaker, I am pleased that while shortcomings in the Bill have been noted, there is unanimity that corporate reform is long overdue and that the Bill is progressive.

Madam Speaker, some of the key issues that have been raised are:

Abandonment of Par Value of Shares

Madam Speaker, concern has been expressed over the proposal to dispense with the par or nominal value of shares. The House might wish to note that this measure is against the background that the par value of shares serves no practical purpose, as it is set arbitrarily. What matters is the market value of the shares. We, therefore, intend to do away with the par value in line with what obtains in some jurisdictions.

Definition of Beneficial Owner

Madam Speaker, it has been proposed that beneficial owners be extended to corporate bodies as opposed to confining them to natural persons. The House might wish to note that the rationale for a beneficial ownership disclosure regime is to ensure that individuals do not hide behind an artificial person, for example, a corporate body. The individuals who ultimately own or control the corporate body should be known, and this is consistent with the standards of the Financial Action Task Force on Money Laundering, an intergovernmental body established under the auspices of the Group of Seven (G7) to develop policies for combating money laundering.

Small Company

Madam Speaker, questions have been raised on the concept of a small private company. Admittedly, companies have traditionally been categorised as local or foreign, public or private linked by shares or by guarantee and limited or unlimited. The concept of a small company, as I earlier indicated, is an innovation meant to facilitate the growth of small enterprises. However, the concept of a small business regime is not entirely new, as the United Kingdom (UK) Companies Act, for instance, provides for a similar regime.

Madam Speaker, other submissions were mainly on aspects that are already internationally accepted and will have no adverse effects if applied in Zambia. Others, however, revealed issues that may necessitate amendments to the Bill.

Madam Speaker, having reviewed the submissions from witnesses, I must state that I am happy that the Bill has been thoroughly scrutinised by stakeholders. It is the Government’s policy to develop a well-informed legislation, and I am satisfied that all pertinent issues can easily be addressed before the Bill is adopted by the House. In this regard, I wish to reiterate my ministry’s assurance to your Committee that it will collaborate with the Ministry of Justice in ensuring that all the necessary comments and recommendations of your Committee are taken into consideration in the finalisation of the Bill.

Madam Speaker, in conclusion, the reforms being introduced in the area of corporate governance through the Companies Bill are meant to contribute to the creation of an enabling environment for business to flourish. It is the intention of the Government to facilitate enterprise development and efficiency, flexibility and simplicity in the formation and management of companies. The Act will further foster transparency and high standards of corporate governance. I, therefore, call upon the House to support the Bill.

Madam Speaker, I thank you.

Hon. Government Members: Hear, hear!

Dr Musokotwane (Liuwa): Madam Speaker, thank you for giving me this opportunity to debate the Companies Bill.

Madam, Standing Order No. 157 sets out the terms of reference of your Committee and provides that the Committee may consider any Bills referred to it by the House. In line with that mandate, your Committee was tasked to scrutinise the Companies Bill (NAB No. 10) of 2017.

Madam Speaker, in order to acquaint itself with the ramifications of the Bill, your Committee sought both written and oral submissions from stakeholders. I will give a brief background to the Bill that is before the House.

Madam, the current Companies Act, Chapter 388 of the Laws of Zambia, was enacted in 1994, during an era in which the country was transitioning to a free market economy and there were changes to the country’s corporate landscape that necessitated a repeal of the 1921 Companies Act that had been inherited from the colonial era. Over the years, there have been a number of developments that have made it necessary to align Zambia’s company law with new trends, both locally and internationally, and ensure good corporate governance in line with international best practices.

Madam, most of the stakeholders who made submissions on the Bill to your Committee supported its enactment as an opportunity to make our corporate laws progressive. Allow me to put it on record that your Committee welcomes the proposed repeal of the Companies Act, Chapter 388 of the Laws of Zambia, and introduction of the new law, and urges the House to do the same.

Madam, your Committee is of the opinion that while the current Companies Act has, to a great extent, performed satisfactorily insofar as its enabling function is concerned, it leaves much to be desired in respect of its regulatory function. Your Committee is confident that the proposed legislation will positively address the shortcomings of the current law, change the company law landscape in the country, enhance transparency, and raise the standards of corporate governance and accountability. That said, it also made a number of observations during the process of scrutinising the Bill, and recommends a number of amendments to improve the proposed law. I urge the House to scrutinise the recommendations as presented in your Committee’s report.

Madam, I wish to point out that your Committee worked closely with the Ministry of Commerce, Trade and Industry, the Patents and Companies Registration Agency (PACRA) and the Ministry of Justice in analysing the Bill. I further wish to point out that your Committee was concerned about the high number of typographical, grammatical and structural errors in the Bill, and the concern was shared by the various stakeholders who appeared before your Committee. Your Committee hopes that they errors will receive the attention they deserve, as they have the potential to distort the intention of the law once enacted.

Madam Speaker, while fully supporting the Bill, your Committee wishes to express concerns on some of its provisions.

Madam, your Committee observes that Clause 145 of the Bill abolishes the par value of shares without clearly demonstrating the effect of that action on the issue of share capital structure. Let me state that the nominal share capital is determined by multiplying the total number of shares by the par value of each share in order to arrive at the amount the company can raise from shares if all the shares were allotted. Your Committee is of the view that the abolition of the par value in this manner, without further elaboration, is likely to complicate matters. Your Committee, therefore, recommends that all the provisions requiring the par value of shares in the Companies Act of 1994 be retain in the Bill in their current form.

Madam Speaker, your Committee is greatly concerned that Clause 82 of the Bill restricts the position of company secretary among legal practitioners, chartered accountants and members of the Chartered Institute of Secretaries and Administrators (CISA). After careful scrutiny of the responsibilities of a company secretary, as provided in Clause 83, your Committee is of the considered view that the position can be held by members of any profession who have the acumen and possess advanced management skills. Leaving the Bill in its current form might lead to a situation in which the stated professions start acting like a cartel in determining fees to charge. Your Committee has in mind small companies that may not have the capacity to appoint a company secretary with the stated qualifications. In this regard, your Committee does not see the need for the restriction and, therefore, recommends that the position of company secretary be left open to any profession like it is in the Companies Act of 1994.

Madam Speaker, your Committee also observes that Clause 253(1) of the Bill restricts the time frame for the appointment of auditors, particularly external auditors, to after three months of incorporation. Your Committee is aware that the date of incorporation might not be the date of commencement of operations of a company, and appointing an auditor before a company commences operations is an unnecessary cost to the company. Your Committee, therefore, recommends that an auditor be only appointed at the end of the first financial year after commencement of operations.

Madam Speaker, once again, I wish, on behalf of the members of your Committee, to express our gratitude to you for granting us the opportunity to scrutinise the Companies Bill No. 10 of 2017. The Committee also thanks the Office of the Clerk of the National Assembly for the support rendered to it throughout its deliberations. It is further indebted to all the witnesses who appeared before it for their co-operation in providing the necessary briefs.

Madam Speaker, I thank you.

Mr Kabanda (Serenje): Madam Speaker, I thank you for according me this opportunity to contribute to debate on the Companies Bill.

Madam Speaker, the hon. Minister mentioned that the definition of small businesses will be made by her. It is my considered opinion that the Act should make that definition for clarity’s sake.

Madam Speaker, it is pleasing to note that insolvency has been separated from the Companies Act. I think that most laws on our statue books are outdated and need to be revisited in line with contemporary corporate governance.

Madam Speaker, I thank you.

Mr Ngulube: Madam Speaker, I stand to support the Bill. In so doing, I wish to state that the Companies Act has many deficiencies. Therefore, it is only fair that the Bill is quickly passed into law.

Madam Speaker, when you go to the Patents and Companies Registration Authority (PACRA), you will notice that people are often asked to provide certain things that whose provision is not supported by law and you will start arguing with the people at the registry or the registrars. Sometimes, the law provides one thing while the registrars want you to do something else. So, if the Bill is enacted, many such disputes will vanish.

Madam Speaker, there are also situations in which two shareholders gang up against one shareholder and throw him or her out of the company. Such cases have become rampant. When people start a company, they agree to run it in a certain way. However, when the business begins to grow, one shareholder might discover that PACRA threw him out of the company, sometimes suing him or her without his or her knowledge. So, there is a need for this Bill to provide protection for shareholders against such vices.

Madam Speaker, I note that the Bill also addresses the issue of shareholding certificates and ownership of shares. In most cases, the only document that shows that one is a shareholder in a company is the company incorporation form that one signs when forming a company. By some fortune, there might be a printout of the document. However, some unscrupulous people may tell you that they cannot print a copy for you because the system is not working and, then, go behind your back to omit you from the shareholding. If you went to court, you would not be able to show that you own the shares in the company. As you may be aware, shares are personal property. No wonder, when you go to the Zambia Revenue Authority (ZRA) to transfer shares, you will be asked to prove your ownership of the shares, and the only proof you produce is a print out or Forms 1, 2 or 3, depending on the kind of company. Therefore, I think it is important that the hon. Minister considers educating our colleagues at PACRA. Sometimes, the people of Zambia live with mistakes.

Madam, people who administer companies should have some legal knowledge of some sort. They should either be trained or be subject to some form of authority that will be a body between the courts and PACRA. We have situations in which one might want to incorporate a company in a given name, but PACRA says that the name you have chosen is unsuitable. That is one of the hindrances to incorporating a company in Zambia, and we need a mechanism for resolving it outside court. Currently, the only option available to any person who is not satisfied with a decision of the Registrar is litigation, which might take five years, meaning that by the time the case is disposed of, the business idea might have been used by other people.

Madam Speaker, it is also important that we do not just review the Companies Act in isolation because a business is required to submit documents not only at PACRA, but also at the Ministry of Lands and Natural Resources, for example.

Madam, the hon. Minister spoke about churches. Nowadays, churches have come up with a way of incorporating themselves as limited companies, yet registering under the Perpetual Succession Act under the Ministry of Lands and Natural Resources, which means that they may end up being subject to regulation by about five pieces of legislation, which is a problem. So, I propose that PACRA takes up the responsibility of registering churches. The portfolio that is under the Ministry of Lands and Natural Resources through the Perpetual Succession Act should move to PACRA so that the agency is the only institution in the country that registers both profit-making organisations and companies under guarantee. As we all know, some companies are not made for purposes of making profit. So, they are registered under guarantee.

Madam, we all understand that churches must not operate as profit-making organisations, but some pastors have taken one another to court over the sharing of the monies collected through tithe and the offering. So, one wonders whether such churches are businesses or non-profit-making organisations.

Madam, when the Bill is passed, we hope that it will resolve most of the problems that people are now lumping onto the courts. Sometimes, the courts do not pass judgments on some cases, but merely advise the litigants to settle cases out of court. Meanwhile, by the time you go to PACRA, you will find files missing. In that regard, I want to stress to the hon. Minister that there are too many documents missing at PACRA. So, I suggest that the agency considers computerising its information management system. At the High Court, no information is lost because the records are stored both in hard copy and electronically. So, even if someone hides the hard copy file, the electronic records will still be available. At PACRA, one is required to produce original documents. However, it might be difficult for a person who incorporated a company twenty years ago to produce original copies of the application form or certificate of incorporation. So, we must start keeping secure electronic backups of the documents at PACRA. I know that the officers there claim that they scan the documents and keep them electronically. However, when one asks for the documents, one will be shocked to discover that they do not exist.

Madam Speaker, I support the Motion and pray that the Bill be passed into law.

I thank you.

Hon. Members: Hear, hear!

Mr Mukosa (Chinsali): Madam Speaker, in supporting the Companies Bill, I will discuss the deficiencies of the Companies Act with regard to corporate governance.

Madam, the Companies Bill should adequately address the issues of corporate governance. For example, companies should be compelled to adopt codes of corporate governance. Many companies end up being liquidated because of poor corporate governance. I can cite the example of Intermarket Banking Corporation, where people have difficulties accessing the money. That is what happens when there is no good corporate governance in a company.

Madam, there are companies where the Managing Director is also the Board Chairperson, meaning that there is no proper separation of duties. There are also financial institutions that have effective management systems in place and weak governance systems, such as audit or risk management committees. So, I just want to urge the hon. Minister to ensure that this Bill adequately covers such issues.

Madam Speaker, I support the Bill.

Madam, I thank you.

Mrs Mwanakatwe: Madam Speaker, I thank the Committee and its Chairperson, the hon. Member of Parliament for Liuwa, Dr Musokotwane.

Mr Ngulube: Hear, hear!

Mrs Mwanakatwe: Madam Speaker, the errors identified in the Bill are curable. So, we will ensure that the final version of the Bill is error-free.

Mr Ngulube: Hear, hear!

Mrs Mwanakatwe: Madam Speaker, for us, it is important that company secretaries be people who have a good understand of the law and the corporate governance about which the hon. Member for Chinsali talked. That is what this Act is meant to ensure. Whether only lawyers and accountants can fit that cast is debatable. So, suffice it for me to say that the provision can be reviewed. All we want is to make corporate governance better than it is today.

Madam Speaker, PACRA was created to register businesses. So, we are taking the registration of churches from there to the Ministry of Religious Affairs and National Guidance, which is more competent to handle church issues. We are not good at it.

Madam Speaker, there was a comment on the definition of a small businesses. I think we should leave that to be provided for in subsidiary legislation and that is what we will do so that we can come up with a definition that will work for everybody. That is why we have not imposed the definition in this Bill. I also believe that the issues around small businesses that have been referred to by the hon. Members for Serenje, Kabwe Central and Chinsali can be revisited as we finalise the Bill.

Madam Speaker, I thank you.

Hon. Members: Hear, hear!

Question put and agreed to and Bill read a second time

Committed to a committee of the Whole House.

Committee on Friday, 27^th October, 2017.

__________

MOTIONS

BUDGET 2018

(Debate resumed)

Madam First Deputy Speaker: Before the hon. Ministers continue responding to issues raised by hon. Members in their debates, I would like to guide them this is the last day for them to do so, as we need to wind up the debate on this Motion.

I have a list of twelve hon. Ministers who wish to debate. However, looking at time, unless those who will speak first are considerate enough to keep their debates short, not all twelve will be able to debate. 

The Minister of Commerce, Trade and Industry (Mrs Mwanakatwe): Madam Speaker, I thank you …

Laughter

Hon. PF Members: Hear, hear!

Mrs Mwanakatwe: … for according me the opportunity to contribute to the debate on the Motion of Supply.

Madam, the 2018 Budget was presented under the theme “Accelerating Fiscal Fitness for Sustained Inclusive Growth without Leaving Anyone Behind”. Muleumfwa? Are you listening?

Hon. PF Members: Hear, hear! Ema Finance Minister aba.

Madam First Deputy Speaker: The hon. Minister is in a very good mood today.

Hon. PF Members: Hear, hear!

Mrs Mwanakatwe: Madam, I am not leaving anyone behind.

Madam, the theme of the 2018 Budget and the focus of the policy and resource allocation reverberate the call by His Excellency the President of the Republic of Zambia, Mr Edgar Chagwa Lungu’s …

Hon. PF Members: Hear, hear!

Mrs Mwanakatwe: … call for us to not leave anyone behind in Government’s efforts to attain sustainable development in line with the Seventh National Development Plan (7NDP).

Hon. PF Members: Hear, hear!

Mrs Mwanakatwe: We are not ba chimbwi. We have a plan anchored on the 7NDP, yaisa ingilamo mu chani? Mu Budget, ayi?

Hon. PF Members: Hear, hear!

Interruptions

Mrs Mwanakatwe: Madam Speaker, the plan, which is drawn from the 7NDP, feeds into the Budget.

Madam First Deputy Speaker: Order, hon. Minister!

Please, use the Official Language. You can only use other languages if the concept you want to express has no English equivalent in your vocabulary. You used the word “chimbwi”. Could you translate that into English, the Official Language.

Mrs Mwanakatwe: Madam, ‘chimbwi’ is a hyena.

Interruptions

Hon. PF Members: Hammer, hammer!

Mrs Mwanakatwe: Madam Speaker, I recognise the useful and interesting debates by hon. Members from both sides since the Motion was moved. A number of pertinent issues have been raised on the very positive outlook for 2018.

Madam, the 2018 Budget takes into account the development objectives of the Medium Term Expenditure Framework (MTEF) and the size of our resource envelope, which is small.

Madam, it could not have been an easy task to prepare the 2018 Budget, and I know that the Cabinet reviewed the Budget repeatedly and made, at least, eight alterations to it before adopting it. It is a well-thought-out and well-articulated Budget that shares with the country the plans of the Patriotic Front (PF) Government in the medium and long term. I, therefore, commend the hon. Minister of Finance for the able manner in which the 2018 Budget has been prepared and laid before the House, and for the focus and outlook for the medium term.

Madam Speaker, the Budget has taken into account the need to consolidate and fund the key growth key sectors while maintaining a stable macro-economic environment. Stability exists now, we will maintain it.

Hon. PF Members: Hear, hear!

Mrs Mwanakatwe: Madam, the kwacha is strong and inflation is stable. We have seen how the three months reserves …

Hon. PF Members: Hear, hear!

Mrs Mwanakatwe: … have been maintained, and we intend to improve on that. Also, the price of mealie-meal has fallen.

Hon. UPND Members: Fuel!

Mrs Mwanakatwe: Madam Speaker, above all, the Budget seeks to lay a foundation for the economic diversification agenda of the country by building on the strides made since the implementation of the Economic Stabilisation and Growth Programme dubbed ‘Zambia Plus’ started. Nifwebo ba Plus, teifwe … Teifyo? Zambia Plus.

Laughter

Mrs Mwanakatwe: Madam, my ministry is responsible for formulating and administering policies and programmes aimed at promoting growth and competitiveness in industry and commerce. In that regard, the Budget recognises the role manufacturing and industrialisation will continue to play in economic diversification. Particularly, small and medium enterprises (SMEs) have not been omitted in the measures that will be implemented next year.

Madam, the measures that have been proposed to support the manufacturing sector include the removal of customs duty on various inputs used in the manufacturing of stock feed to increase production which, in turn, will support the growth of the fisheries and livestock sub-sectors, thereby contributing to enterprise growth, job creation and income generation, particularly for SMEs in the sub-sector and those willing to join it. The PF Government further intends to reduce customs duty on bricks used in the building of furnaces to reduce the cost of manufacturing.

Madam, to facilitate the expansion of the industrial base, the PF Government will continue with the development of Multi-Facility Economic Zones (MFEZs) and industrial parks. In the spirit of continuous improvement, we will, at the same time, take a critical look at the performance of the existing economic zones to address challenges affecting their operations. That will help us come up with an MFEZ and industrial park model that will be supportive of Zambia’s industrialisation agenda.

Madam, the focus of the Government’s policy on industrialisation is to promote local content through local value addition and participation of local enterprises in economic activities. We will, therefore, continue implementing programmes aimed at enhancing business linkages between small enterprises, including co-operatives, and large ones in the economic zones, industrial parks and other value chains so that we further accelerate job creation.

Madam Speaker, this Government seeks to create an enabling environment for business to flourish. In this regard, a number of fiscal policy measures have been used to attract both local investment and foreign direct investment (FDI) in key sectors. That should contribute to industrialisation and job creation. The 2018 Budget and other policy interventions during the MTEF will provide us with an opportunity to review progress and continue developing policies supportive of investment, with special attention paid to SMEs, among other businesses.

Madam, the discontinuation of the five-year income tax holiday for investors meeting certain investment thresholds in priority sectors is intended to provide the much-needed revenue support to development in economic and other sectors. Other fiscal and non-fiscal incentives for investment will still exist. This, coupled with other reforms underway and a conducive macro-economic environment, will enable Zambia to continue to be a favourable investment destination.

Madam Speaker, a lack of access to affordable finance continues to be a challenge to enterprise growth, yet it is Government policy to increase citizens’ participation in the industrialisation agenda of the country. It is for this reason that we continue to pay particular attention to enhancing access to finance, particularly for SMEs. I, therefore, welcome the operationalisation of the Agriculture and Industrial Credit Guarantee Scheme (AICGS) promised by the hon. Minister of Finance, as it will give businesses greater access to loans from financial institutions. The intention is to ensure that local SMEs are not left behind. The Collateral Registry provided for under the Movable Property Securities Interest Act No. 3 of 2014 is also operational and we continue to see more and more registrations under this facility, which has only been operational since the beginning of this year. The Citizens Economic Empowerment Fund (CEEF) is also still operational, and the 2018 Budget proposes to increase its allocation from K35.1 million to K42.7 million. That will buttress efforts to promote enterprise financing focused on value addition. Cooperatives and SMEs, whether in urban or rural areas, will benefit from this and programmes being implemented to steer them more into value addition in various sectors.

Madam Speaker, my ministry will continue programmes meant to secure market access for local products. The domestic market will be the foundation on which the competitiveness of products will be developed so that we are equally competitive on foreign markets. We will, therefore, continue engaging domestic and foreign investors and trading partners to promote industrialisation and market access. I will explain in more detail the focus of my ministry when I make my policy statement in support of the allocation to Head 33.

Madam Speaker, industrialisation and SME development cannot be attained in isolation of developments in other economic and social sectors. That is why the integrated development approach will be emphasised in the period of the 7NDP, starting from this MTEF. I, therefore, welcome the allocations to infrastructure development in the energy and transportation sectors, and the focus and priorities for the agriculture, livestock and fisheries sub-sectors. It is the development in these sub-sectors that will enable the value addition and trade being promoted by my ministry. The ambitious, but necessary infrastructure development programmes are necessary for our economic diversification.

Madam Speaker, I also welcome the emphasis on maintaining the allocations to the health and education sectors, as these sectors play a key role in ensuring the availability of the healthy and qualified work force required for the attainment of the industrialisation and diversification agenda.

Madam, let me share the three key phrases that I picked and reconstructed from the Budget Speech which, if we keep to them, we will be on the right course to shifting our country from where it is to where we want it to be. The key phrases are:

(a) defining priorities;

(b) walking collectively; and

(c) being steadfast.

Madam Speaker, the 2018 Budget is a depiction of clear thought in defining priorities because one cannot do everything at any given time. The priorities have been emphasised through the manner in which resources have been mobilised and allocated. The Budget strikes a balance between revenue mobilisation and expenditure management, and emphasises what should be done now so that when we do what we should next, we will have better chances of success. For instance, it emphasises current transport infrastructure development with far-reaching results and efficient access to markets for our rural-based small agro processors. Secondly, in keeping with the integrated development approach, the Budget emphasises the need for us to work as a collective. So, to achieve results in 2018, we will have to work collaboratively and end the business-as-usual attitude. The Government will do its part, as will the private sector and our other partners. That is what it will take for us to deliver development to our people.

Madam Speaker, lastly, the quest for inclusive growth will require that we are steadfast in collectively implementing the bold decisions required for development. The 2018 Budget is a demonstration of the Government’s unwavering determination to keep on track with an economic stabilisation programme that will produce positive and inclusive economic growth. I, therefore, urge the hon. Members of this august House to join me in supporting the 2018 Budget.

Madam Speaker, I thank you.

Hon. Government Members: Hear, hear!

The Minister of Tourism and Arts (Mr C. R. Banda): Madam Speaker, thank you for according me this opportunity to also support the 2018 Budget presented to this House by the hon. Minister of Finance, Mr Felix Mutati. However, let me preface my debate with an acknowledgement and deep appreciation of His Excellency the President of the Republic of Zambia, Mr Edgar Chagwa Lungu, who addressed this august House on 15^th March, 2017, and gave the direction that our country must take to achieve socio-economic development without leaving anyone behind. In his speech, President Lungu emphasised key aspects of development, such as wealth and job creation, and infrastructure development through economic drivers like mining, agriculture and tourism.

Madam Speaker, on 29^th September, 2017, this august House hosted the hon. Minister of Finance, Mr Felix Mutati, as a bearer of a message from His Excellency the President recommending the favourable consideration of the 2018 Budget. I read the Budget Speech and now wish to give my ministry’s total support to the pronouncements by the hon. Minister of Finance.

Madam Speaker, tourism is one of the fastest-growing and most important economic sectors in the world. The growth is forecast to continue, especially for emerging destinations like Zambia. The global statistics for 2016 reveal that more than 1 billion people toured the globe and contributed 9.8 per cent to the global gross domestic product (GDP) of US$7.2 trillion through direct, indirect and induced impact. The sector also provides employment to 284 million people. That is, one in eleven employed people in the world works in the tourism sector. Beside the positive contribution to economic growth, tourism also plays a crucial role in enhancing conservation and financing the preservation of natural and cultural heritage, and contributing to social inclusion and decent work in destinations.

Madam Speaker, allow me to briefly remind this august House that Zambia’s tourism is mainly nature-based and the majority of the country’s biodiversity is contained within the extensive wildlife estate that accounts for about 80 percent of the country’s tourism activities. Twenty national parks and thirty-six game management areas (GMAs) cover 31.4 per cent of the country’s territory. The major attractions are wildlife and the mighty Victoria Falls, a United Nations Educational, Scientific and Cultural Organisation (UNESCO) World Heritage Site and one of the Seven Wonders of the World. The country is also endowed with vast untouched wilderness areas like the rift valley of the Luangwa River, the Zambezi River system and its escarpments, mountains and highlands like the Nyika and Mafinga, vast wetlands like the Bangweulu, Kafue and Zambezi flood plains, and the magnificent waterfalls in the northern part of Zambia.

Madam Speaker, I am pleased to state that in the 2018 Budget, the allocation to the Ministry of Tourism and Arts is K303 million, representing a 24 per cent increase on the K245 million allocated in 2017. The allocation to tourism marketing and promotion has been increased from K6.7 million in 2017 to K15.7 million in 2018, and the Zambia Tourism Agency will work hard to direct the resources to programmes and activities that will yield more results as we continue marketing the country to source markets using various platforms that include print, electronic and social media.

Madam Speaker, allow me to respond to some of the concerns raised by the hon. Member for Solwezi West, who debated very well, I must confess, and the hon. Members for Chama South, Feira and Livingstone, including Hon. Miyutu, who cried for an airstrip.

Laughter

Mr C. R. Banda: Madam Speaker, the ministry is in the process of finalising the Domestic Tour Strategy and will, in 2018, roll out special tour packages a family of four to its staff to be paid for through voluntary monthly deductions as a pilot project. Other strategies will include the introduction of city tour buses, a tourism channel on the Zambia National Broadcasting Corporation Television (ZNBC TV), the ‘Crazy about Zambia’ reality show, cruise tourism on our lakes and continued school debates on tourism topics. Working with the private sector, the ministry will also facilitate a two-tier pricing system to enable Zambians to pay lower rates at tourism facilities. We will also promote the meetings, incentives, conferences and events (MICE) or meetings industry. The strategy will develop appropriate tools for lobbying for international meetings to be held in Zambia during the Medium Term Expenditure Framework (MTEF) period.

Madam Speaker, the Ministry of Tourism and Arts will, through the support of the 2018 Budget, recruit 300 of the 600 wildlife police officers required in 2018 and procure patrol equipment, including, at least, fifteen of the ninety required vehicles, firearms and uniforms to reinforce wildlife management and conservation. In addition, the ministry will enhance park management and community involvement through public-private partnership (PPPs). In an effort to enhance security, monitoring and surveillance in national parks, the ministry will work with the Ministry of Transport and Communication, and the Smart Zambia Institute to establish command centres using information and communication technologies (ICTs). Further, the ministry will continue with programmes on wildlife conservation and management, such as restocking of depleted national parks and aerial animal surveys. The ministry will also continue promoting private game ranching so that the high demand for game meat does not encourage poaching.

Madam Speaker, in response to concerns raised by hon. Members of this august House, I would like to inform you that the Government will continue to rehabilitate access roads, airstrips and bridges in protected areas in order to enhance accessibility, lengthen the tourism season and attract more investment to the sector.

Madam Speaker, some complaints by selected private sector operators on the number of licences required to operate a tourism enterprise were expressed in the Budget Speech. In that regard, my ministry and the Business Regulatory Review Authority (BRRA) are considering ways of addressing the challenge of the multiplicity of licences an operator needs to obtain. For example, we want to end the duplicity of registration across Government institutions and local authorities. This exercise will also reduce the cost of doing business.

Madam Speaker, in conclusion, I urge my hon. Colleagues to support the budget for my ministry.

I thank you, Madam.

Hon. Government Members: Hear, hear!

Madam First Deputy Speaker: Before I call upon the next hon. Minister to debate, let me offer some guidance.

Hon. Ministers, you will have an opportunity to present your ministries’ policy statements. For now, simply comment on the Budget Speech generally to avoid being repetitive in your policy statements.

With that guidance, I call upon the hon. Minister of Home Affairs to take the Floor.

Hon. Members: Hear, hear!

Mr Ngulube: Wapya baisa!

The Minister of Home Affairs (Mr Kampyongo): Madam Speaker, I thank you for giving me this opportunity to also support the Motion on the Floor. Before I do that, however, let me seize this opportunity to thank the beloved people of Zambia, the Christians, who turned up in large numbers yesterday …

Hon. Government Members: Hear, hear!

Mr Kampyongo: … to thank God, our Creator, for all that we have enjoyed as a people.

Interruptions

Mr Kampyongo: That is how it should be.

Madam, I must add that Zambians, as Christians, buried their past yesterday. For us, it was also good to meet those of our friends we had lost in the wilderness of politics. We buried our past and were able to meet …

Hon. Opposition Members: Budget Speech!

Mr Kampyongo: … and share …

Madam Speaker, I need your protection from bachongololo at the back …

Laughter

Hon. Government Members: Hear, hear!

Madam First Deputy Speaker: Order, hon. Members on my left!

Mr Ngulube: Lumpens!

Madam First Deputy Speaker: Some of the running commentaries you are making are extremely offensive and will, of course, elicit a reaction. 

Hon. Government Members: Hear, hear!

Madam First Deputy Speaker: That said, I will not justify the hon. Minister’s reaction.

Hon. Minister, withdraw your reference to hon. Members of this House as “bachongololo”.

Mr Kampyongo: Madam Speaker, most obliged.

Madam, I was referring to the non-Christians. As you know, when one talks about non-Christians ...

Interruptions

Madam First Deputy Speaker: Order, hon. Minister!

Withdraw the word.

Mr Kampyongo: Madam Speaker, the word is withdrawn…

Mr Ngulube: Childish!

Mr Kampyongo: … and replaced with ‘childish non-Christians’.

Laughter

Mr Kampyongo:  Madam Speaker, I thank the people because all the gatherings were peaceful, and that is how Christians should conduct their business.

Hon. Government Members: Hear, hear!

Mr Kampyongo: Madam Speaker, anyone who claims to own people is not a Christian.

Hon. Government Members: Hear, hear!

Mr Kampyongo: Madam, a human being has two days, namely the day of birth and the day of death. How an individual chooses to use the days in between with regard to his or her relationship with the Creator is an individual decision. So, when people try to assume ownership of people they did not create, it should be a source of concern.

Hon. Government Members: Hear, hear!

Mr Kampyongo: Madam Speaker, …

Madam First Deputy Speaker: Order!

Business was suspended from 1640 hours until 1700 hours.

[MR SECOND DEPUTY SPEAKER in the Chair]

ANNOUNCEMENT BY MR SECOND DEPUTY SPEAKER

FOOTBALL AND NETBALL GAMES BETWEEN HON. MEMBERS OF PARLIAMENT AND MEMBERS OF THE DIPLOMATIC CORPS

Mr Second Deputy Speaker: Hon. Members, I have an announcement to make.

As earlier announced, the games between diplomats accredited to Zambia and hon. Members Parliament will take place tomorrow, Friday, 20^th October, 2017, at the Olympic Youth Development Centre (OYDC). Members of both the football and netball teams are urged to be at the National Assembly Motel at 1300 hours, from which transport to and from the OYDC will be provided.

Thank you.

_______

Mr Kampyongo rose.

Mr Ngulube: Hear, hear!

Mr Kampyongo: Mr Speaker, before business was suspended, I was thanking the people of Zambia for turning up in large numbers to observe what has become one of the most of important days on our calendar, namely the National Day of Prayer, Fasting and Reconciliation. Let me also commend the hon. Minister of Religious Affairs and National Guidance, and the entire organising committee for the work they did. I also thank all the hon. Members of Parliament who participated in the event. It is important for us, as a people, to continue praying to God and thanking him for giving us a God-fearing President.

Hon. Government Members: Hear, hear!

Mr Kampyongo: Mr Speaker, the 2018 Budget was ably presented by my dear brother, the hon. Minister of Finance, Mr Felix Mutati, on the 29^th September, 2017. Congratulations are in due to him for ably presenting a balanced Budget for 2018, which sent clear positive signals for the future. Those of us entrusted with responsibilities in the security and governance sectors also found his address inspiring, especially in the long term.

Mr Speaker, although the hon. Minister spared only a paragraph and half of a paragraph for security matters, the mere recognition of security as an anchor of socio-economic development raised the morale of the men and women in uniform, who directly carry the heavy responsibility of securing lives and property in our country. Obviously, they face various difficulties in discharging this responsibility.

Sir, security is a cornerstone of sustainable socio-economic development because investments can only be made when people are confident that their investments will not be disrupted by public disorder or go up in the flames due to social strife. Therefore, any country that seeks development has to invest in its security first.

Mr Speaker, providing a secure and peaceful environment in which people can go about their businesses without fear requires adequate public investment in the security architecture and infrastructure. Like other countries, our security architecture consists of more than the law enforcement institutions like the Zambia Police Service (ZPS), the Immigration Department and the Drug Enforcement Commission (DEC), which people generally associate with management of internal security. I know that, sometimes, people look at the Ministry of Home Affairs as the ministry for the police, but the ministry has a much broader portfolio of functions. Some of the functions through which internal security is maintained are:

(a) a secure and reliable civil and national registration mechanism, which is administered by the Department of National Registration, Passport and Citizenship;

(b) the preservation of records, starting from those that were accrued before Independence to those we started accruing after Independence, through the Department of National Archives;

(c) the management of the movement of people across borders and of refugees, people who seek sanctuary in our country after they are uprooted from their homes in their country;

(d) the management, registration and regulation of societies; and

(e) the prevention of trans-border crimes, such as human trafficking and terrorism.

Sir, given the number of portfolio functions the Ministry of Home Affairs has, the allocation of 2.9 per cent of the Budget to public security might seem adequate, but actually falls short of the requirements of the ministry, especially given the geopolitical situation of the region. Being surrounded by eight countries poses serious security challenges that require our security institutions to be alert at all times. Furthermore, as our economy grows and gets more deeply integrated into the global economy, the number of security threats is bound to multiply. We, therefore, have a duty to upgrade our security institutions at all times.

Sir, the upgrading and modernising of our institutions to so that they meet the security challenges of today and tomorrow requires a collective effort. Given the low security officers/population ratio, we must recruit and train new officers and upgrade officers through in-service training.

Sir, the ministry runs a modernisation programme that revolves around the increased use of information and communication technologies (ICTs) and modern security equipment. Accordingly, we intend to digitalise the national identity cards and records, and upgrade our passports to more secure electronic ones to meet the international standards. The modernisation programme will result in better-dressed and equipped security personnel. The need to focus on the ICTs cannot be overemphasised, as some citizens have now joined the trend of abusing other citizens using social networks that are meant to improve communication. So, we have to protect innocent citizens from those who want to use social platforms to abuse them.

Sir, to retain our security officers, we have, since 2011, been reviewing their conditions of service, including working to meet their housing needs. In that regard, the ministry is currently implementing Phase I of a housing programme for security officers. We are providing high-quality housing comparable to any on the modern housing market, and it is my sincere hope that the hon. Minister of Finance will continue to support us in that regard until we fully meet the needs of our officers.

Sir, the ministry has many other outstanding problems that require the attention of all of us, including hon. Members of this august House. In that regard, it should be noted that most of the infrastructure for security institutions countrywide were built between the 1950s and early 1970s and require either extensive rehabilitation or rebuilding. That and the need to meet the demand for high-quality new offices will a massive investment of resources. In this regard, I appeal to hon. Members of this august House to support our modernisation efforts by supporting the Budget and helping in the construction of new police posts, where possible, using the Constituency Development Fund (CDF), like I have appealed on several occasions on the Floor of this House. We will, then, ensure that officers are deployed to their areas. However, it is essential that standard plans be used whenever we decide to support the development of infrastructure so that we meet the high standards required for security infrastructure. The ministry will not accept sub-standard structures that undermine the confidence of our security officers. We will help communities with such initiatives to build better structures.

Like I said, Sir, as our economy develops, we must raise the standards for security institutions so that no security gaps exist as we move towards a middle income Zambia by 2030.

Mr Speaker, let me appeal to Zambians not to be swayed and deceived by, for example, some groupings that are ganging up into coalitions to devise measures for destabilising my Government.

Ms Lubezhi laughed.

Mr Kampyongo: I assure such people that, just like they have failed before, they are still bound to fail.

Mr Mutale: Bebe mudala!

Mr Kampyongo: We, on the other hand keep thanking God for raising us from the lowest levels to where we are today. As long as the responsibility to secure this country remains with us, we shall not abdicate our duties. Those who plan to start using concoctions and maligning people …

Hon. Opposition Members: Question!

Mr Kampyongo: You can question, but I assure you that you will not question when we pounce on you. That I can guarantee to you.

Ms Subulwa: Hammer, Hammer!

Mr Kampyongo: Mr Speaker, we know that there are some coalitions whose agenda is to deceive the public.

Hon. Government Members: Hear, hear!

Tell them!

Mr Kampyongo: Mr Speaker, corruption must be fought through the institutions established and recognised by this House. We will not allow lawlessness in the guise of fighting corruption. So, those who want to start concocting falsehoods and think that they can get the people of Zambia to rise against their legitimately-elected Government are making a mistake.

Mr Kufakwandi: Why are you worried?

Mr Kampyongo: We know that it will be very difficult for such people to have something on which to condemn us after all the development programmes have been implemented by this Government. We will certainly not allow people to use falsehoods to make the people of Zambia turn against their Government. All of us are accountable to the people of Zambia. None of us here is above the law. So, where there are credible allegations, they must be channelled through the established institutions. Those who want to use propaganda to malign others will not be allowed.

Mr Mukumbuta: Debate the Budget.

Mr Kampyongo: We are responding to what has been said by others. So, do not tell me to debate the Budget. You cannot teach me, you new hon. Members of Parliament.

Laughter

Mr Second Deputy Speaker: Order!

Mr Kampyongo: Mr Speaker, I need your protection from the hecklers.

Mr Second Deputy Speaker: You are very much protected.

Mr Kampyongo: I have been here for six years only, yet I am a Cabinet Minister.

Interruptions

Mr Second Deputy Speaker: Order!

Mr Kampyongo: I am thankful to God for that because some people have been here longer than I have. I do not want to draw the Chair into my debate, but you can see where he is. All I am saying is that commitment to serving the people has brought us where we are today. So, when we are serving the people, we will not be the first ones to steal from them.

Ms Lubezhi: You will steal from Zambians?

Mr Kampyongo: However, we know that the resources that have been allocated for the development of the country can also be abused. All of us who are given the responsibility to fight vices among members of the public know how certain forces can fight us. Those of us in law enforcement know that those we pursue spend their days and nights trying to smear us with the same filth that they carry as we pursue them.

Mr Speaker, I urge the people of Zambia to continue having confidence in the leadership they have chosen for themselves.

Hon. Government Members: Hear, hear!

Mr Kampyongo: We did not fall down from nowhere, but were chosen by the people and, through the people, we are here to ensure that this country remains peaceful. We have been receiving people who have run away from instability in their countries, and we would not want the people of Zambia to take to their heels because of reckless and greedy leaders who think they can impose themselves on the people of Zambia. We shall continue to ensure that the people of Zambia are given the chance to choose their leaders and, when they do so, it is always wise for everyone to accept their choice because that is how development comes to a nation.

Mr Ngulube: You are right.

Mr Kampyongo: Mr Speaker, we are on a tour of duty and want to ensure that when our tour of duty comes to an end, it will be Sonta Reloaded. “Sonta Reloaded” means that we shall continue to point at our achievements. Hon. Members of this House have been crying for police posts and for other things to be done in their constituencies, and that is what we want to do. However, we cannot develop all the infrastructures in all the areas simultaneously. In that regard, I urge my dear colleagues to remember that this money is for the nation and that the Ministry of Home Affairs is for the entire nation, not for one section of the nation. Our responsibility is to look after our people and their property wherever and whoever they are.

Mr Speaker, I plead with the hon. Members of this House to support this well-thought-out Budget presented to the august House by the hon. Minister of Finance, and to support the budget for the Ministry of Home Affairs when it is presented.

I thank you, Sir.

Hon. Government Members: Hear, hear!

The Minister of Fisheries and Livestock (Mr Katambo): Mr Speaker, I thank you for according me the opportunity to make my contribution to the debate on the 2018 Budget Address by the hon. Minister of Finance, Mr Felix Mutati, to the Second Session of the Twelfth National Assembly on Friday, 29^th September, 2017, under the theme “Accelerating Fiscal Fitness for Sustained Inclusive Growth without Leaving Anyone Behind”.

Sir, the theme of the Budget is very appropriate, particularly for the fisheries and livestock industry, as meaningful growth in those sub-sectors can only be achieved by ensuring that all the stakeholders on the value chain are brought on board in our development agenda. The two sub-sectors, if properly harnessed, can lead to the creation of employment, food security, poverty alleviation and increased income for more than 2.5 million farmers, especially in rural areas. Indeed, the growth in these sub-sectors will not leave anyone behind.

Mr Speaker, it is encouraging to note that the Zambian economy is expected to register more than 4 per cent growth in 2017, from 3.8 per cent in 2016, with mining, agriculture and manufacturing being the key drivers of the growth. The growth level is above the projected global economic growth of 3.5 per cent and the Sub-Saharan Africa growth, which is projected at 2.7 per cent. Indeed, the sound economic policies put in place by the Government of His Excellency the President of the Republic of Zambia, Mr Edgar Chagwa Lungu, are bearing fruits.

Mr Speaker, with regard to the fisheries and livestock sub-sectors, the key points in the Budget Address are that production in the fisheries sub-sector for both capture fisheries and aquaculture grew to 77,029 metric tonnes between January and June, 2017, from 56,241 metric tonnes in the same period in 2016. Further, the total production for 2016 was 86,000 metric tonnes for capture fisheries and 30,000 metric tonnes for aquaculture. Further, the hon. Minister indicated that the livestock population increased to 4.9 million during the period January to June, 2017, from 4.3 million in the same period in 2016. The total livestock production was about 4.5 million. That answers the concerns raised by Hon. Malanji on growth in the livestock sector. The improvement in the two sub-sectors demonstrates the sound economic policies and reforms that are being spearheaded by my ministry, including livestock stocking and restocking, disease control, aquaculture and fisheries development, enhanced enforcement of fisheries regulations in capture fisheries and encouragement of private sector participation in aquaculture development. Without any doubt, Mr Edgar Chagwa Lungu’s Government is delivering on its promises to citizens.

Mr Speaker, the main concerns raised by your hon. Members on the performance of fisheries and livestock sub-sectors in 2017 included the following:

(a) the need for a livestock census;

(b) dip tank construction and rehabilitation;

(c) the cordon line and manufacturing of veterinary drugs and chemicals;

(d) export of goats and sheep to Saudi Arabia; and

(e) importation of powdered milk.

Mr Speaker, the Member of Parliament for Mapatizya, Hon. Miyanda, raised concerns on the K50 million allocated for the conduct of a livestock census in the 2017 Budget. Let me take this opportunity to assure the House that the census is progressing very well and that my ministry is working closely with the Central Statistical Office (CSO) to design the pre-test instrument for the census, train master trainers and procure equipment for conducting the census in Phase I. Phase II of the project will involve the training of enumerators, and data collection, which is expected to commence soon. Phase III will involve data clearing and finalisation, and dissemination of the report. The hon. Member also raised concerns on the K30 million allocated for the construction and rehabilitation of dip tanks. Let me take this opportunity to inform the House that my ministry did not award any new contracts in 2017. Instead, it focused on completing on-going projects as directed by the President.

Mr Speaker, the ministry continued the rehabilitation and construction of dip tanks in all the provinces, except in the Western Province. So far, 201 dip tanks have been completed while 200 are at various levels of construction in different places, including Mapatizya Constituency. President Lungu’s Government, the Patriotic Front (PF) Government, has constructed two dip tanks at Kaswaya and Kalungu in Mapatizya Constituency. Further, seven dip tanks, namely Chidi, Kabanga, Misika, Luyaba, Siamafumba, Namadula and Siluwayile, have been rehabilitated in Mapatizya Constituency. Is this not working? We care about the citizens in Mapatizya and it is very important to debate truthfully and factually. That is why when the hon. Member for Mapatizya debated, I wanted to rise on a point of order.

Mr Speaker, with regard to the cordon line, my ministry has held consultations with various stakeholders, including traditional leaders in the Western and Northern provinces. The stakeholders are in support of the ministry’s strategy for eradicating Contagious Bovine Pleuropneumonia (CBPP) in the provinces. Further, it was agreed that there be no physical fence, but rather that the cordon line be manned by cordon guards. Unfortunately, cordon guards have not been employed yet, as the ministry is still in the process of drafting its strategic plan following the approval of the Seventh National Development Plan (7NDP). This plan is meant to create a number of jobs, especially for our youths in the various areas from Jimbe to Shangombo.

Mr Speaker, Hon. Miyanda also raised concern about the fact that the country does not manufacture any antibiotics or chemicals for livestock. However, my ministry, through the Central Veterinary Research Institute (CVRI), manufactures vaccines for Newcastle disease in poultry; rabies in dogs; and black quarter, anthrax, brucellosis and haemorrhagic septicaemia for cattle. In addition, my ministry produces the stabilates used to immunise calves against East Cost Fever in the Eastern and Southern provinces, including in Mapatizya Constituency.  It is true that some vaccines like the one for Foot and Mouth disease, CBPP, lumpy skin disease, and many antibiotics and dip chemicals are still imported. In that regard, the ministry is engaging the private sector on the possibility of manufacturing the drugs and chemicals in Zambia.

Mr Speaker, it is important to give credit where it is due. So, I thank Hon. Kasune, the Member of Parliament for Keembe, who did not only raise concerns on the programme to export goats, but also appreciated the project on piggery, which is doing very well in her constituency.

Mr Speaker, there were concerns that opportunities have not been created for the participation of the local people in the export of goats to Saudi Arabia. My response is that a task force on goats has been formed and is making advances in preparations for the exports. Currently, we are awaiting an inspection from Saudi Arabia to approve the facilities that we will use to export the goats. The task force has also been sensitising small-scale farmers on this matter. Hon. Member may wish to visit my ministry and get information from the task force.

Mr Speaker, the Member for Bweengwa, Hon. Michelo, raised concerns on the porosity of the daily industry and the continued importation of powdered milk from Kenya. My ministry is in consultations with the Ministry of Commerce, Trade and Industry on the matter of the importation of the powdered milk that is used in the production of long life milk, and the House will be updated on the resolution after the consultations have been completed.

Sir, I emphasise that the PF Government, under the able leadership of His Excellency the President of the Republic of Zambia, Mr Edgar Chagwa Lungu, is on course in promoting the fisheries and livestock sub-sectors. The efforts of this Government are bearing fruits, as evidenced by the benefits that fish and livestock farmers are deriving from various initiatives.

Once again, Mr Speaker, the 2018 budget for the fisheries and livestock sub-sectors deserves the support of everyone in your House, including members of the Opposition.

Mr Speaker, I thank you.

Hon. Government Members: Hear, hear!

Mr Mutale: Hear, hear! Bika yaya!

The Minister of National Development and Planning (Mr L. Mulusa): Mr Speaker, I thank you for giving me this opportunity to respond to the various debaters who commented on the hon. Minister of Finance’s message of good will from His Excellency the President, Mr Lungu, by way of the 2018 Budget. In the interest of saving time, I will not respond to the debaters individually. Rather, I will summarise my responses to their contributions by grouping their observations into ten key areas of concerns. I attentively listened to their contributions and did not miss any Sitting of the House.

Sir, many of the debaters assessed the Budget Speech, which was very eloquently delivered by Hon. Mutati, on the extent to which the Budget would grow and develop the economy. To ensure that the economy continued to remain resilient against both domestic and external forces, the hon. Minister highlighted the Government’s objectives, in the medium term, to:

(a) achieve gross domestic product (GDP) growth of, at least, 5 per cent;

(b) accelerate the diversification of the economy;

(c) maintain inflation at single-digit levels in the range of 6 to 8 per cent;

(d) maintain international reserves at a minimum of three months of import cover; and

(e) narrow the overall fiscal deficit and limit domestic debt to less than 4 per cent of the GDP.

Mr Speaker, the limitation of domestic debt to less than 4 per cent of the GDP will increase access to credit by the private sector, which will enable the sector to grow, as adequately explained in paragraph 32 of the 2018 Budget Address.

Mr Speaker, the hon. Minister of Finance referred to climate change and disaster risk reduction in paragraph 78 of his speech, and I am happy to announce that the Government is implementing a number of mitigation and adaptation programmes in the Western, Central and Southern provinces under the Pilot Project for Climate Change Resilience (PPCR) with the financial support of our development partners. In this regard, I invite my colleagues in the House to get involved in this matter in their constituencies and partner my ministry to develop some mitigation and adaptation programmes specifically for their constituencies. The World Bank is financing Barotse Sub-Basin in the Western Province while the African Development Bank (AfDB) is financing intervention in the Kafue Sub-Basin in Central, Lusaka and the Southern provinces. The projects aim at improving adaptive capacity to climate change following implementation of the pilot programme. Other interventions include the Integrated Forestry Landscape Project (IFLP) in the Eastern Province, which is financed by a consortium that includes the Global Environment Facility and International Development Assistance (IDA) of the World Bank.

Mr Speaker, the second category of concerns raised bordered on the extent to which the Budget Speech promotes the creation of business enterprises to anchor job creation as envisaged in the first pillar of the Seventh National Development Plan (7NDP), which is on economic diversification and job creation. In paragraphs 36 to 70 of his speech, the hon. Minister ably explained the interventions being implemented in agriculture, livestock and fisheries, industrialisation, tourism, mining, energy, transport, and information and communication technology (ICT), just to mention a few.

Mr Speaker, we have managed to bring down inflation from the highs of double digits to an impressive single-digit level through fiscal discipline. Since the third concern I noted bordered around our ability to keep inflation in check, I assure the nation that one of the outcomes of our strategic and well-thought-through response to the economic downturn we faced during the period prior to the 2017 Budget, led to the reduction of the inflation rate from 21 per cent to below 7 per cent today, achievement of a relatively stable exchange rate, improvement of the trade balance surplus to US$388.3 million, compared with US$45.8 million in 2016, and increase in electricity generation. Staying on this path, we will continue to sustain the growth that is necessary for the creation of employment opportunities and reduction of poverty.

Mr Speaker, hon. Members also wondered to what extent the Budget Speech would promote the maintenance of a favourable business environment. As I already stated, lower and stable inflation rates, combined with falling lending interest rates, create and sustain a favourable business environment. High interest rates are not good for business because their double-edged sword causes the escalation of the cost of borrowed operational capital and reduces the purchasing power of consumers. We are currently witnessing a downward trend in interest rates resulting not from coercion or manipulation, but from a myriad of good policy interventions by this caring Government.

Mr Speaker, many among the debaters questioned our ability to maintain fiscal discipline. In response to the challenges we faced as a result of the economic downturn in 2015 and 2016, which were underwritten by the overheating and subsequent slowing down of the Chinese economy which, in turn, culminated in lower-than-projected demand for and price of our copper, and abandonment of expansion projects by our mines; and lower-than-expected domestic revenue mobilisation, which resulted in unexpected high volumes of contractor and other arrears, particularly the consumption-based ones,  we came up with fiscal measures that have resulted in credit rating agencies raising our ratings at a time when advanced countries like South Africa were dropped to junk status.

Mr Speaker, other debaters raised concerns about our ability, through the Budget Speech, to make our economy a favourable destination for foreign direct investment (FDI). My response is that low and stable inflation rates, falling borrowing costs, a stable and skilled labour force, improving credit ratings, a stable and flourishing democracy, peace and stability, and respect for property rights, which are the unifying themes of our identity, are at the core of increased competitiveness for an investment destination.

Mr Speaker, on the built environment side, Hon. Chitotela spoke passionately about the many infrastructure projects that are being implemented to greatly improve the efficiency of doing business in Zambia and deal with issues related to the competitiveness of the goods and services produced in our country, and the maintenance of a reasonable and stable exchange rate.

Mr Speaker, the Budget Speech has many assurances that will result in the maintenance of a reasonable, stable and predictable exchange rate, which will enhance predictability in doing business and budgeting for the private sector. This was covered in paragraph 32 of the speech.

Sir, the maintenance of a stable balance of trade remains one of the key challenges that underpin one of the flaws in the structure of our economy which, for many years, has been integrated into the global economy as a mere supplier of one main commodity, namely copper. The levels of Zambians’ participation in economic activities that feed the nation’s consumption base is a worry that informed our desire to see economic diversification and job creation as the first of the five pillars of the 7NDP.

Mr Speaker, last among the concerns raised by the debaters is the need to achieve shared economic development, which is of paramount importance to us. We admit that we need to migrate from spectacular economic growth trajectories to economic development, and we are doing that in more ways than one. During the course of this Meeting, we will see the hon. Minister of Commerce, Trade and Industry present to this House proposed pieces of legislation meant to promote Zambia’s participation not only in the production of goods and services that feed our consumption potential, but also in the ownership of the means of production. We will only achieve local wealth retention through local wealth ownership.

Sir, on 13^th October, 2017, the Economic Commission for Africa (ECA) announced that Zambia had distinguished itself in best practices by instituting a co-ordinated mechanism exemplified by the industrial cluster approach adopted under the 7NDP.

Hon. Government Members: Hear, hear!

Mr L. Mulusa: We need to celebrate that achievement together. In that regard, we expect debates from the other side of the House to enhance the refinement of our policies. The hon. Members on the other side of the House should not just specialise in raising points of order.

Hon. Opposition Members: Question!

Hon. Government Members: Hear, hear!

Mr L. Mulusa: They should move Private Member’s Motions to help us move our country forward.

Sir, in conclusion, I congratulate the hon. Members who have created the all-party Parliamentary Caucus on Sustainable Development Goals. That is very important to those of us on this side of the divide who are propagating policies that we believe have productive and measurable outcomes, as we will use the caucus as a gauge for our performance. In that regard, I wish to be part of the caucus. I also implore hon. Members of Parliament, especially those on your left, to read the 7NDP, Vision 2030 and the Budget Speech together with the African Union Agenda 2063. Most importantly, they should read the Patriotic Front (PF) Manifesto so that ...

Hon. Opposition Members: Aah!

Hon. Government Members: Hear, hear!

Mr L. Mulusa: ... they can know the unifying themes of our efforts as they respond to our policy pronouncements.

Mr Speaker, I thank hon. Members for their discipline in listening to me.

I thank you, Sir.

Hon. Opposition Members: Aah!

Hon. Government Members: Hear, hear!

The Minister of Lands and Natural Resources (Ms Kapata): Mr Speaker, ...

Hon. Members: Jean the Baptist!

Ms Kapata: ... I am very grateful for being accorded this opportunity to contribute to the debate on the Motion moved by Hon. Felix Mutati, the Minister of Finance, on the Estimates of Revenue and Expenditure for 2018.

Sir, the Motion moved by the hon. Minister is visionary and in tandem with the Patriotic Front (PF) Party’s agenda of championing development and uplifting the lives of all Zambians.

Mr Speaker, all the hon. Members of this august House can agree with me that since the PF Government came into power in 2011, Zambia has witnessed unprecedented levels of development under the leadership of the late President, Mr Michael Chilufya Sata, may his soul rest in peace, and His Excellency the President of the Republic of Zambia, Mr Edgar Chagwa Lungu. This development is incomparable to the achievements of any previous Government since the re-introduction of multi-party politics in our country.

Sir, the PF Government has created an enabling environment in which individuals and the private sector have flourished, thereby improving the welfare of Zambians and reducing the country’s poverty levels.

Mr Speaker, I assure this august House that the PF Government will continue to channel resources to needy areas of the economy in order to continue uplifting the standards of living of our people through job and wealth creation. The PF will continue to be pro-poor.

Sir, the hon. Minister of Finance’s speech highlighted a number of sectors on which the PF Government will focus in 2018 in its quest to continue moving the country forward, not the United Party for National Development (UPND) ‘Forward’, but the PF one.

Hon. Opposition Members: Aah!

Hon. Government Members: Hear, hear!

Ms Kapata: Mr Speaker, the lands sector is one of those the hon. Minister of Finance recognised as key to economic development and enhanced revenue collection. One of the key programmes that have been identified under the lands sector is the National Titling Programme (NTP). In this regard, I am grateful for the support that my ministry has continued to receive from the hon. Minister of Finance in the implementation of the (NTP). Significant progress has been made in the implementation of the programme in the two pilot areas of Madido in Chongwe District and Kamwala South in Lusaka District. An audit of all properties has already been conducted and survey diagrams processed. The property inventory indicates that there are approximately 4,500 properties in the two areas and the ministry is currently issuing certificates of title there. The impact of the initiative is empowerment and enhanced security of tenure for the property owners. With the resources that have been provided towards the implementation of this programme in 2018, the ministry will roll it out progressively to other parts of the country so as that Zambians can be issued with certificates of title. The initiative will also ensure security of tenure on land and enable people to use their properties as collateral to access credit from financial institutions. This will, in turn, enable them to engage in other productive ventures. The implementation of the NTP will also contribute to enhanced revenue collection, as more properties will be formalised and captured by the Government for billing purposes. That will enable the Government to have sufficient resources for the implementation of various development programmes and contribute to the realisation of the goal of increasing domestic resource mobilisation. In addition, the ministry will work closely with the Ministry of Finance to make it easier for members of the public to make payments for the various charges under my ministry.

Mr Speaker, as observed by the hon. Minister of Finance, climate change has emerged as one of the most pressing issues that affect socio-economic development in Zambia. Its widespread and unprecedented impact is affecting the poorest and the most vulnerable. As a response to that, the Patriotic Front (PF) Government has established a Department of Climate Change and Natural Resources to spearhead the implementation of various climate change-related programmes and activities across the country for whose implementation funds have been provided in the 2018 Budget. We will respond to climate change in a comprehensive manner. The ministry will also enhance measures to address the unsustainable harvesting of our forests, which is contributing to deforestation and, subsequently, leading to climate change.

Mr Speaker, I urge all my fellow hon. Members to sensitise their communities on the implementation of the NTP, a programme aimed at benefiting them by securing their livelihoods. The programme is also contributing significantly to the protection of people’s interests, promotion of sustainable land use and revenue collection.

Sir, I, once again, thank the hon. Minister of Finance for the continued support to the implementation of the NTP and for presenting a pro-poor, non-partisan, progressive and inclusive National Budget. I also urge all hon. Members of this august House to support the Motion on the Floor.

I thank you, Sir.

Hon. Government Members: Hear, hear!

Mr Second Deputy Speaker: Before I call upon the hon. Minister of Local Government, I wish to state that we need to observe time because the business before the House has to be concluded today.

The Minister of Local Government (Mr Mwale): Mr Speaker, allow me to commend the hon. Minister of Finance, Mr Mutati, for delivering a comprehensive and focused 2018 Budget to this august House and the nation at large under the theme, “Accelerating Fiscal Fitness for Sustained Inclusive Growth without Leaving Anyone Behind”, which reiterates the Government’s endeavour to foster development for all.

Mr Speaker, to echo the words of my colleague, the people of Zambia deserve peace and stability, descent employment, quality public services and a conducive environment in which they can thrive and create wealth.

Mr Speaker, the Budget Speech speaks to my ministry’s mandate, to which everyone in the ministry will remain committed, namely to promote a decentralised and democratic local government system, and facilitate the efficient and effective delivery of quality infrastructure and social services for long-term sustainable development. In line with that mandate, the ministry endeavours to facilitate equitable and sustainable development through the management of human settlements and the delivery of municipal infrastructure services.

Mr Speaker, it is gratifying that the 2018 Budget Speech recognises the importance of feeder roads to connectivity and investment in rural areas, as the upgrading and rehabilitation of feeder roads is one of the core mandates of my ministry. The programme is a key element in the reduction of developmental inequalities because it addresses prioritised areas as identified by our people at grassroots level through the local authorities. The ministry is, therefore, thankful to the Government for its commitment to developing feeder roads in collaboration with the World Bank under the Rural Connectivity Project. I am confident that the project will enable us to make greater strides in developing the rural road infrastructure.

Mr Speaker, the 2018 Budget Speech also makes reference to the Lusaka Decongestion Project, another major project under my ministry. The project will be a major milestone in our effort to reduce the traffic congestion being experienced in Lusaka City. It will be implemented with the collaboration of our co-operating partners in 2018 at a cost of US$240 million and its scope will include the upgrading of 350 km of roads in Lusaka City and the creation of dedicated bus lanes. The project will ensure safe and efficient transportation in Lusaka.

Mr Speaker, as outlined in the Budget Speech, decentralisation is key to the attainment of equitable national development, as it empowers implementers at grassroots level to effectively utilise resources and make decisions. In this light, my ministry is fostering the implementation of the decentralisation policy and devolution of functions to provincial and district levels. Under the provisions of the Urban and Regional Planning Act No. 3 of 2015, my ministry has started empowering councils to become planning authorities, which is expected to facilitate efficient delivery of services in the management of settlements and development control. This is an on-going process that is dependent on particular local authorities meeting the criteria for being declared planning authorities.

Mr Speaker, my ministry is in the process of instituting management boards in municipalities. For example, in Lusaka, there will be a management board and civic centre in each constituency to enable people have easy access to municipal services. This will happen in the first quarter of 2017. So, we will stop seeing long queues at the Lusaka Civic Centre.

Mr Speaker, my ministry takes note of the 21.5 per cent increase in the allocation to the Local Government Equalisation Fund (LGEF) in the 2018 Budget. This is commendable because it will augment the Government’s efforts to improve the operations of and service delivery in municipal services. I further acknowledge the Government’s continued support to the local authorities through the provision of the Constituency Development Fund (CDF), which is an important programme that allows our local authorities to implement development projects in their communities.

Mr Speaker, I have heard many hon. Member s debate the CDF, and I agree with you that the fund does a lot for our constituencies. I also agree that it should be increased. However, doing that is dependent on the hon. Minister of Finance’s ability to raise needed money. What my ministry does not agree with is the suggestion that we take money from the LGEF and add it to the CDF, which is like getting food from the pot and putting it back again. Both funds go to the local governments to enable them to improve the services they provide in the districts. If we want to see improved service delivery, we should take money from elsewhere and pump it into the local governments, and my fellow hon. Members can make suggestions to the Ministry of Finance on that score.

Mr Speaker, well-planned and developed markets and bus stations are important in our localities because they market facilities not only provide convenient access to goods and services in our communities, but also contribute to economic growth and development, and facilitate safe and efficient transportation of people, goods and services. My ministry takes note of and welcomes the prioritisation of the development and management of markets and bus stations in the country in the 2018 Budget because it will greatly enhance the ministry’s efforts to develop infrastructure. In order to improve the management of investments in bus stations and markets, my ministry has introduced a Market and Bus Station Fund to which all marketeers will contribute. We intend to collect, at least, K1 from each of the approximately 3 million marketeers a day. So, we can raise K3 million a day or K90 million a month. The money will be ploughed back into the building of new markets and bus stations in our country. By 2021, we will all be happy in this country because the whole country will have new markets and bus stations.

Mrs Simukoko: Hear, hear! Excellent!

Mr Mwale: Mr Speaker, in line with the Government’s emphasis on enhancing revenue collection, my ministry will streamline revenue collection measures through local authorities. These measures are segmented into short, medium and long terms. We want to avoid all the leakages in the collection of levies in markets, bus stations and parking lots using information and communication technology (ICT) as a means of avoiding people handling cash because we believe that not everything that is collected gets into the councils’ coffers. Our local authorities should get the money they need to develop our localities.

Mr Speaker, I commend the Ministry of Finance for presenting an inclusive Budget for 2018. I have no doubt that it will enable us to make great strides in our development agenda. We have been charged with the responsibility to deliver meaningful development to our country and improve the lives of our people. This Budget is key to the discharge of that mandate. I believe that we can deliver if we all work together.

Mr Speaker, I thank you.

Hon. PF Members: Hear, hear!

The Minister of Chiefs and traditional Affairs (Mr Sichalwe): Mr Speaker, I thank you for granting me this opportunity to declare my support for the 2018 Budget, which was presented to this august House on 29^th September, 2017, by the hon. Minister of Finance, Mr Felix Mutati.

Mr Speaker, the hon. Minister presented the 2018 Budget under the theme, “Accelerating Fiscal Fitness for Sustained Inclusive Growth without Leaving Anyone Behind”. This theme is well-timed and appropriate, as it is in line with the social and economic transformation envisaged in the Seventh National Development Fund (7NDP), which aims at accelerating development efforts towards the attainment of Vision 2030 without leaving anyone behind.

Sir, the Budget will not only contribute to the actualisation of the structural objectives in the economic stabilisation and growth programme dubbed “Zambia Plus”, but also actualise the developmental outcomes.

Mr Speaker, the micro-economic objectives and policies for 2018 include, among others:

(a) the attainment of real gross domestic product (GDP) of, at least, 5 per cent;

(b) the maintenance of single-digit inflation in the range of 6 to 8 per cent;

(c) the maintenance of international reserves of, at least, three months of import cover;

(d) the attainment of domestic revenue mobilisation of, at least, 17.7 per cent of GDP; and

(e) the limitation of the fiscal deficit on a cash basis to 6.1 per cent of GDP.

Mr Speaker, the set micro-economic objectives and policies are not only achievable, but also realistic, as they are premised on the projected global and domestic economic developments in 2018. Further, the Budget is structured to improve the livelihoods of our rural communities, as it aims to facilitate their meaningful participation in economic development. That is demonstrated by the allocation of adequate resources to key socio-economic functions like health, education, economic affairs and social protection. The allocations of K6,781,558,820 to health and K11, 561,643,204 to education, which represent 9.5 per cent and 16.1 per cent of the Budget, respectively, will enhance human development because a healthy and educated population is a prerequisite for development. It will also culminate in a reduction in cases of child marriages in our chiefdoms, improvement in maternal health and increase in literacy levels. A literate society is necessary for the attainment of a smart Zambia. Further, the allocation of K2,301,259,752, representing 3.2 per cent of the Budget, to social protection will create adequate safety nets, thereby reducing poverty and vulnerability among the vulnerable groups of our society, which will not only restore dignity and confidence to vulnerable groups, but also facilitate their active participation in productive economic activities, thereby contributing to national development.

Mr Speaker, the Budget has been drawn to consolidate and fund key sectors identified by the Government. The successful implementation of the Budget is, therefore, dependent on the Government’s meeting of its revenue targets, and that calls for every Zambian to be patriotic enough to meet their tax obligations. Tax evasion and avoidance robs the Government of the revenue required for service delivery. In addition, the drive to promote the buying of Zambian goods and services has a positive bearing on the Government’s ability to meet its domestic revenue targets and promotes job creation through the multiplier effect on the local economy. I, therefore, urge all Zambians to be patriotic enough to prefer Zambian goods and services to foreign ones.

Mr Speaker, in conclusion, allow me to recognise the efforts of His Excellency ...     

Mr Second Deputy Speaker: Order!

Business was suspended from 1810 hours until 1830 hours.    

 [MR SECOND DEPUTY SPEAKER in the Chair]

Mr Second Deputy Speaker: Hon. Members, before the hon. Minister for Chiefs and Traditional Affairs continues his debate, I remind him to make his debate brief because we have to make progress. In fact, he will be the last hon. Minister to debate.

May the hon. Minister continue with his debate.

Mr Sichalwe: Mr Speaker, before business was suspended, I was about to conclude my debate. In doing so, allow me to recognise His Excellency President of the Republic of Zambia, Mr Edgar Chagwa Lungu, for focusing his efforts on the development agenda for this country, which is anchored on the reduction of developmental inequalities and increase of rural areas’ access to social services, including access to traditional land which, as you know, is a preserve of traditional leaders who have recently shown a willingness to release land to both men and women willing to develop chiefdoms. This entails that our rural communities will equally benefit from the positive developmental transformation that the country is currently undergoing.

Mr Speaker, I thank you.

Hon. Members: Hear, hear!

Mr Second Deputy Speaker: We will allow the hon. Minister of Youth, Sport and Child Development to debate while the Chairperson of the Budget Committee and hon. Member of Parliament for Mbala organises his papers.

Mr Ngulube: Ema Algeria aya!

The Minister of Youth, Sport and Child Development (Mawere): Mr Speaker, I thank you for giving me the opportunity to support the 2018 National Budget presented to this august House on Friday, 29^th September, 2017, by the hon. Minister of Finance, Mr Felix Mutati.

Mr Speaker, the 2018 National Budget can be simply described as developmental, progressive and inspiring, as it has provided for continuous expansion of the country’s industrial base by, among other measures, supporting the development of Multi-Facility Economic Zones (MFEZs) and industrial parks. That is commendable because it is expected to create more jobs for our people, especially the youths, and is in line with the National Youth Policy, and the Action Plan for Youth Empowerment and Employment, which advocate for the boosting of opportunities for the young people, who constitute the majority of our population.

Mr Speaker, the 2018 Budget addresses the strategic issues of the up-scaling of information communication technology (ICT) skills in both the public and private sectors in order to accelerate the mainstreaming of an ICT culture in the country. That is in line with the National Youth Policy, which seeks to promote the use of ICT for improved productivity, creativity and innovation. To that effect, the ministry is currently implementing the Youth ICT Business Centre Empowerment Scheme in which youths across the country are being empowered with ICT equipment in order for them to set up business centres.

Mr Speaker, the 2018 Budget will also support the continuation of the Home-Grown School Feeding Programme for Vulnerable Children, which is proving to be a very effective way of supporting our children. The programme has given a lot of hope to vulnerable children and contributed to the improvement of learners’ outputs. The Ministry of Youth, Sport and Child Development is implementing other programmes targeted at vulnerable children. For example, we are removing street children from our streets and integrating them with their families. The 2018 Budget will enable us to continue these programmes and reach out to more street children.

Mr Speaker, the 2018 Budget has also provided for continuous human development in the areas of health, education and skills development. That is as it should be. In this regard, my ministry’s Department of Sports is implementing the Community Sports Programme, which advocates for people’s participation in sports for health and wellbeing. In addition, the ministry is implementing education and skills training programmes for athletes, coaches and youths. Further, the ministry is engaged in vocational skills development through its Youth Resource Centres (YRCs) located in various parts of the country. Through the centres, over 2,000 young people graduate with qualifications in various trades, such as agriculture, power electrical and metal fabrication, annually. Currently, eight YRCs are being constructed in Lusaka, the Copperbelt, the Western, the Eastern and the North-Western provinces.

Mr Speaker, allow me to address specific issues raised by hon. Members of Parliament during their contributions to the Motion before the House.

Sir, in his debate, Hon. Prof. Lungwangwa encouraged the Government to harness the demographic dividend. The House might wish to note that the Government is very determined to turn the youth badge into a youth dividend by making optional investments in the youths so as to mainstream them in the socio-economic development of the country. The Ministry of Youth, Sports and Child Development will continue investing in the youths through a number of programmes that include the following:

(a) Youth Street Vendors Empowerment Scheme;

(b) Youth Development Fund;

(c) Youth Development Centres;

(d) Youth Bus Drivers Empowerment Scheme; and

(e) Motorised Cargo Tricycles.

Mr Speaker, the ministry is working closely with other stakeholders, such as other Government institutions, civil society organisations (CSOs) and co-operating partners in the implementation of youth empowerment programmes. This is in with the Seventh National Development Plan
(7NDP), which emphasises the cluster approach to programme implementation. In this regard, the ministry is working with the:

(a) Ministry of Health in implementing the Health and Sports Programme;

(b) Ministry of General Education in implementing the Sport, Physical Education and the Grassroots Soccer Programme sponsored by the Federation of International Football Associations (FIFA);

(c) Disaster Management and Mitigation Unit (DMMU);

(d) provincial administrations and other Government institutions, including the Constituency Offices (COs);

(e) Zambia Development Agency (ZDA), Zambia Postal Services Corporation (ZAMPOST) Limited and various associations in implementing various youth empowerment schemes.

Sir, in conclusion, I fully endorse the 2018 National Budget, as it fully captures our development aspirations outlined in the 7NDP.

I thank you, Mr Speaker.

Mr Simfukwe (Mbala): Mr Speaker, your Committee considered the Estimates of Revenue and Expenditure for the Financial Year 1^st January to 31^st December, 2018. In so doing, it invited various stakeholders to appear before it to make written and oral submissions. Allow me to highlight the key findings and recommendations of your Committee.

Increasing Debt Stock

Sir, your Committee is concerned that the national debt levels will remain high in 2018. Your Committee is of the view that, at 47 per cent of the gross domestic product (GDP), the country’s debt stock has reached distress levels which, if not properly managed, will have adverse effects on the economy and the implementation of the 2018 Budget. Already, the country spends almost 30 per cent of the Budget on debt servicing.

Hon. UPND Members: Hear, hear!

Mr Simfukwe: With almost 90 per cent of the Budget tied up for non-discretionary expenditure, there is limited room for the Government to implement programmes that will have a meaningful impact on poverty reduction.

Hon. UPND Members: Hear, hear! Shame!

Mr Simfukwe: Mr Speaker, in light of this worrying picture, your Committee recommends that the Government immediately slows down in the contraction of new loans.

Hon. UPND Members: Hear, hear!

Mr Simfukwe: It should further immediately come up with robust measures to reverse the trend.

Mr Livune: Hear, hear!

Mr Simfukwe: Therefore, it should not commit itself to new projects. Instead, it should concentrate on completing existing ones. It should further cut down on unplanned expenditure, such as the creation of new districts.

Mr Mwale: Question!

Hon. UPND Members: Hear, hear!

Mr Simfukwe: In this way, the country will begin to see a decline in the accumulation of debt.

High Fiscal Deficit

Mr Speaker, there is a very strong correlation between the accumulation of debt and fiscal deficits. The 2018 Budget has set out to spend 25.9 per cent of GDP, against the expected domestic revenue of 17.7 per cent of GDP. The gap between revenue and expenditure, which is the fiscal deficit for 2018, is projected at 6.1 per cent of GDP on a cash basis and is much higher if presented on an accrual basis.

Mr Livune: Shame!

Mr Simfukwe: This is clearly too high and unsustainable for a country that already has serious debt challenges. Your Committee, therefore, recommends that the Government institutes measures to reduce the fiscal deficit to appropriate levels. Your Committee is aware that the fiscal deficit target in the Economic Stabilisation and Growth Programme is 5.1 per cent of GDP. In this regard, it recommends that the Government presents its targets for the fiscal deficit on both a cash and accrual basis so as to paint a clearer picture of the country’s financial position.

Mr Michelo: Hear, hear!

The Loans and Guarantees (Authorisation) Act

Mr Simfukwe: Mr Speaker, one of the long-term measures for curtailing the build-up of the debt stock is to ensure transparency and accountability in the process of debt contraction.

Hon. UPND Members: Hear, hear!

Mr Simfukwe: The Republican Constitution provides for Parliamentary approval to be given prior to contraction of any debt. However, in the absence of an enabling legislation, the contraction of debt has not been subject to Parliamentary approval even after the enactment of the new Constitution.

Hon. UPND Members: Hear, hear!

Mr Simfukwe: Your Committee recommends that the Government urgently presents the Loans and Guarantees (Authorisation) Bill for enactment so as to provide for legislative approval before the contraction of debt. This law will enhance transparency in the debt contraction process and, therefore, be an important tool for providing checks and balances in the process.

Domestic Borrowing

Mr Speaker, your Committee is aware that under the recently-published Medium Term Debt Strategy (MTDS), the Government intends to shift from borrowing mainly on the external market to borrowing mainly on the domestic market. While your Committee appreciates that the move will mitigate the exchange rate risks associated with foreign currency-denominated loans, it is concerned that increasing domestic borrowing to 4 per cent of GDP might be damaging to the economy.

Hon. UPND Members: Hear, hear!

Mr Simfukwe: Recently, the Government published the Economic Stabilisation and Growth Programme (ESGP) in which it prudently committed itself to capping domestic borrowing at 2 per cent of GDP. Apart from the Budget deviating substantially from that commitment, your Committee is greatly concerned that increasing domestic borrowing to such levels will not only increase the cost of borrowing, but also ultimately crowd out the private sector. Your Committee, therefore, recommends that the Government seeks to achieve fiscal consolidation by limiting expenditure to the resource envelope instead of increasing domestic borrowing. This will require the down-scaling of unplanned expenditure and resistance to the temptation to commence new projects. Instead, the Government should confine itself to activities that have been provided for in the Budget and institute measures to increase domestic resource mobilisation, including broadening the tax base.

Domestic Resource Mobilisation

Sir, in addition to cutting expenditure, fiscal consolidation also requires increased domestic resource mobilisation. Your Committee is, however, concerned that the Government is projecting to limit domestic resource mobilisation to 17.7 per cent of GDP, which is very low, considering that the country has in the past attained higher targets even in times of GDP growth lower than the 5 per cent projected for 2018. In this regard, your Committee recommends that the projected domestic resource mobilisation target be adjusted upwards. The Government should also institute various reforms to ensure optimum resource mobilisation.

The International Monetary Fund Programme

Mr Speaker, your Committee is concerned about the seemingly slow pace at which negotiations for the country to get onto the International Monetary Fund (IMF) Programme are moving, as it is aware that the IMF Programme is critical to the restoration of investor and business confidence in the wake of perceived risks associated with the increasing debt levels. In this regard, your Committee recommends that the Government expeditiously concludes the negotiation process.

Budget Credibility

Sir, your Committee appreciates the fact that the Government has published various policy documents on the management of the economy. However, it is concerned about the striking disparities between the Budget and key medium-term planning documents like the Medium Term Expenditure Framework (MTEF) and the ESGP. Your Committee is aware that the time frames for the implementation of the policy documents overlap, as the period in which they were published is more or less the same. It is, therefore, worrying that some targets in the documents differ, thereby giving the impression that the documents are produced only for the purpose of meeting some benchmarks agreed on with co-operating partners. This is not right and it might lead to the erosion of the integrity and credibility of the Budget.

Mr Speaker, the credibility and integrity of the Budget has also been put to the test in terms of efficiency in the disbursement of resources. The ministries that appeared before the Committee complained about untimely, inconsistent or, at times, non-release of Budget resources. In this regard, your Committee recommends that the Government synchronises the various policy documents to ensure credibility of the Budgets and planning. Your Committee also recommends that the Government ensures efficiency in the disbursement of funds.

Public Finance Management Legislative Reforms

Sir, your Committee observes that successive Governments have promised to present to Parliament legislation to enhance public finance management and accountability. Regrettably, that has not yet been done. Your Committee notes the Ministry of Finance’s undertaking to present the relevant Bills to the current Meeting of the House. The Bills include the Public Finance (Amendment) Bill, the Public Procurement (Amendment) Bill and the Loans and Guarantees Authorisation Bill, which I have already discussed. The ministry has also undertaken to present the Budget and Planning Bill to the current Session of Parliament. Your Committee urges the Government to honour these assurances.

Diversification

Mr Speaker, your Committee is deeply concerned that the diversification of the economy has failed at various levels. At the national level, the country is dependent on mining to the exclusion of other sectors, such as agriculture, tourism and manufacturing. Even in the mining sector, there has been too much emphasis on copper mining compared to the mining of other minerals. Equally, in agriculture the emphasis has been on maize growing. Even more saddening is the fact that the country has continued to export most of these products in raw form or with limited value addition. In this regard, your Committee strongly recommends that effective measures be put in place to promote diversification at all levels of the economy, especially the diversification away from over-dependence on mining and export of unprocessed goods to other sectors like agriculture and value addition.

Mr Ng’onga: Hear, hear!

Agriculture

Mr Simfukwe: Mr Speaker, your Committee observes that the overall allocation to the agricultural sector as a proportion of the Budget has gone down. It observes further that most of the resources provided will go to the Food Reserve Agency (FRA) and the Farmer Input Support Programme (FISP) at the expense of broad-based expenditure on key drivers of agricultural growth, such as rural infrastructure, agricultural research, market information, irrigation, agricultural extension and credit. Your Committee, therefore, urges the Government to progressively reduce its participation in maize marketing and redesign FISP so that farmers are not perpetually dependent on it. It further recommends that the Government begins to direct resources towards the key drivers of agricultural growth.

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

I thank you, Sir.

Hon. Members: Hear, hear!

The Minister of Finance (Mr Mutati): Mr Speaker, let me start by thanking the Committee for the robust presentation that it has made and for its recommendations. I assure this august House that the Government has taken note of the key recommendations. Allow me to also thank the hon. Members of Parliament who have debated the Budget for doing so in the manner they did and for the contributions they have made, which have greatly helped to not only enlighten us, but also enrich the process.

Mr Speaker, Hon. Dr Musokotwane said that fiscal imbalances cannot be corrected in one year. Indeed, the challenges that this Government had in 2015/2016 could not be corrected exhaustively in the 2017 Budget. Further, I agree with him that we planted a seed for the future and, in so doing, secured stability in 2017. The economy is on a rebound. What we are still grappling with is what Hon. Prof. Lungwangwa mentioned, namely how to come up with an index for measuring the gross national happiness. I think that we need to do a bit more work in that regard.

Sir, the report cast doubt on the country’s chances of achieving 5 per cent gross domestic product (GDP) growth. However, we are confident of reaching that target because we will be able to achieve more than 4 per cent growth by the end of 2017. The growth will be driven mainly by mining, agriculture and industry. However, we are also aware of the associated risks, which include climate change, falling copper prices and a tightening of the global monetary position.

Mr Speaker, the Chairperson of the Committee raised many issues. Let me respond to the issue of the country’s debt stock first.

Sir, in my presentation of the 2018 Budget, I stated quite clearly that our debt levels are high. I also said that the solution was to enhance the country’s domestic resource mobilisation. In that regard, we will modernise the Zambia Revenue Authority (ZRA) and improve its tax collection methods. This will be achieved by system automation, enhanced use of information and communications technology (ICT) and benchmarking the institution against the very best. I also said that the Government would focus on growing non-tax revenue from institutions like the Zambia Environmental Management Agency (ZEMA) and Road Transport and Safety Agency (RTSA), land titling, and changing the mechanism of funding these institutions from appropriation to deduction at the source. I think that will create the efficiency necessary to boost domestic revenue mobilisation. We are also taking some specific actions. For example, we are using a single-window system for processing transactions, and that will minimise not only revenue leakages, but also the time that it takes for goods and people to be processed at borders.

Mr Livune: Hear, hear!

Mr Mutati: Mr Speaker, in the Budget Address, I indicated that we would abolish the tax exemptions that have narrowed the tax base and that we would carry on with the appointment of tax agents, particularly for the collection of value-added tax (VAT), withholding tax and market fees. We think that these actions very important to the boosting of domestic revenue, which will be the answer, in part, to the issue of debt.

Mr Livune: Question!

Mr Mutati:  Sir, with regard to fiscal consolidation, we have committed ourselves to supporting measures with legislation. In particular, we are committed to passing the Public Finance, Loans and Guarantees, and Budget Acts by the end of 2017.

Mr Muchima: Question!

Mr Mutati: That is how determined we are to support fiscal consolidation, which is important in dealing with the national debt. There are other measures we have put in place to tackle the debt problem. For example, we published The Medium Term Debt Strategy, which basically focuses on the whole debt framework. In that regard, we will focus on completing on-going projects before embarking on new ones; reduce our appetite for contracting debt; look at other innovative ways of raising finances; commence the process of creating a sinking fund that will assist in dealing, in part, with the servicing of the Eurobond when it matures. The Ministry of Finance has continued to increase the capacity of personnel, particularly in the Debt Department, to, among other things, produce high-quality data, which is very important for our debt sustainability analyses.

Mr Speaker, our future borrowing will be tied to debt sustainability because we do not want to lumber future generations with debt. These are some of the measures we will use to address the critical issue of the national debt and, as we do so, we will address the fiscal deficit, as it goes hand-in-hand with debt.

Mr Speaker, an issue was raised about the 17.7 per cent of the gross domestic product (GDP).

Mr Ngulube: Ema wheels ayo!

Mr Mutati: Yes, that is lower than the 18.1 per cent we had in 2017.

Hon. Opposition Members: Hear, hear!

Mr Mutati: However, for 2018, we have excluded what I will refer to as exceptional income that we realised in 2017, mainly on account of the tax amnesty that we ran.

Mr Speaker, there was also reference to Budget credibility, about which the Government remains concerned. That is why we want to enact pieces of legislation in 2018 to minimise the misappropriation and diversion of funds. We will make laws that will tighten controls in the use of public funds.

Hon. Members: Hear, hear!

Mr Mutati: The legislative measures will include the amendment of the Public Procurement Act. As you know, the current Act is a compliance-based law, meaning all one has to do is tick the boxes. For instance, you are asked whether you advertised the tender and your answer will be either “Yes” or “No”. Then, you may be asked whether people responded to the advertisement and whether people sat down to make a decision. Again, you tick “Yes” or “No”. 

Mr Ngulube: Are there fire tender requests?

Laughter

Hon. Opposition Members: Hear, hear!

Mr Mutati: For the sake of clarity, so that we do not beat about the bush, you would be asked: Have you advertised for the fire tenders? So, you tick either “Yes” or “No”.

Interruptions

Mr Mutati: The law we want to enact will focus on value for money, meaning that it will involve the benchmarking of prices for similar items.

Mr Muchima: Very good!

Mr Mutati: For example, if I buy a ream of paper in the Ministry of Finance, it should cost within 10 per cent of what it cost the Ministry of Community Development and Social Welfare. Otherwise, the system will reject. Further, we are putting in place an e-Procurement system to enhance transparency and accountability. So, some of the things that have taken us back will be answered, in part, by the revision of the Public Procurement Act.

Mr Speaker, my colleagues, the hon. Ministers of Agriculture, Tourism and Arts, and Mines and Minerals Development must have already made reference to the various measures that they will take in order to contribute to the diversification drive. Indeed, in the Seventh National Development Plan (7NDP) about which the hon. Minister of National Development and Planning spoke, …

Hon. Government Members: Hear, hear!

Mr Mutati: … we have migrated from using resources in a silo fashion to cluster employment to ensure optimal utilisation of resources. In addition, to underpin the diversification effort, there are a number of measures we have put in the 2018 Budget. For example, we will continue to anchor business confidence and macro-economic stability by ensuring that the variables are in check. That is very important to the success of the diversification process. It is for this reason that we put US$200 million in this Budget to support rural connectivity, which is key to diversification.

Hon. Government Members: Hear, hear!

Mr Mutati: Further, we have given the Ministry of Energy K251.3 million for rural electrification, which underpins diversification. We are also reforming the energy sector to allow the private sector to participate a lot more in the diversification drive in the sector. We will also conclude the cost of service study in the sector. These measures will be important in facilitating the diversification that we seek.

Mr Speaker, let me now talk about the International Monitory Fund (IMF).

Mr Ngulube: Hear, hear!

Mr Mutati drank some water.

Hon. Members: Hear, hear!

Mr Mutati: Sir, let me just borrow the common phrase, that is, ‘bailout’, and make it clear to this august House that the IMF bailout has not failed. Our programme has not yet been taken to the IMF Board.

Hon. Opposition Members: Question!

Mr Mutati: What was taken to the board is Article 4 Surveillance, which is when staff from the IMF carry out an assessment of the economy’s performance and the financial policies, and engages the Government and Parliamentarians, among other activities. It is a routine exercise that is typically made every year.

Mr Speaker, the outcomes of Article 4 were very clearly that the economic outlook for Zambia was positive and the Government of the Republic of Zambia was commended for having concluded and published the 7NDP and the Economic Stabilisation and Growth Programme. The Government was also commended for taking decisive and bold policy reform decisions, particularly in agriculture and energy. Further, it commended the elevation of social protection in 2017. The sticking point was that debt had elevated. Therefore, when we held discussions, the IMF team said we needed to determine a new path for the debt. For that, they need information and we are working with them on that. They will be back in a few weeks so that we can have a debt profile based on future debt sustainability. We can have a debt profile that not only supports growth, but also ensures that we do not shock the economy. Once we have accomplished that, we will be able to move forward on this issue. We are determined to do this because, at the end of the day, the dividends for stability and growth will accrue to the people of Zambia. It is our responsibility to point the economy in the right direction and ensure not only stability, but also inclusive growth.

Sir, in the 2018 Budget, we have emphasised the theme, which is “Accelerating Fiscal Fitness for Sustained Inclusive Growth without Leaving Anyone Behind”, meaning that we will focus on domestic revenue collection, fiscal consolidation, keeping our fiscal deficit in check and achieving debt sustainability. We are on that path, as we owe it to the people of Zambia to make the economy perform for them.

Hon. Government Members: Hear, hear!

Mr Mutati: Mr Speaker, in conclusion, I thank all hon. Members for their support. In doing so, I am reminded about a critical component of the theme, about which the Ministry of National Development and Planning is passionate, namely a commitment to ensure that in whatever we do, migrates from focusing on pure growth to focusing on development, and that we do not leave the people of Solwezi behind.

Hon. Government Members: Hear, hear!   

Mr Mutati: That is why we have allocated resources for the construction of the Chingola/Solwezi Road. We want almost 80 per cent of the works on that road to be completed by the end of this year. We have also secured funding for the Chingola/Kitwe Road and we will move on to Mazabuka.

Mr Miyanda: When?

Mr Mutati: We will not leave the people of Mazabuka behind because they are crucial to the development agenda.

Interruptions

Mr Mutati: Mr Speaker, the hon. Minister of National Development and Planning emphasised the need for us to be careful because there will always be a gap between the needs and the reality, and the only way we can minimise that gap is by prioritising. We need to take development to Msanzala, Chipata and every other place in this country, but where are the resources? So, we have to decide on which things must be done first in order to grow the economy, create jobs and ensure that we do not leave anyone behind.

Mr Speaker, I thank you.

Hon. Government Members: Hear, hear!

Question put and agreed to.

ADJOURNMENT

The Chief Whip and acting Leader of Government Business in the House (Mr Musukwa): Mr Speaker, I beg to move that the House do now adjourn.

Question put and agreed to.

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The House adjourned at 1918 hours until 0900 hours on Friday, 20^th October, 2017.

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