Wednesday, 18^th November, 2020

 

The House met at 1430 hours

 

[MR SPEAKER in the Chair]

 

NATIONAL ANTHEM

 

PRAYER

 

_______

 

MINISTERIAL STATEMENT

 

RECENT DEVELOPMENTS REGARDING THE GOVERNMENT’S ENGAGEMENT WITH EUROBOND HOLDERS

 

The Minister of Finance (Dr Ng’andu): Mr Speaker, I wish to thank you for giving me this opportunity to provide an update to the hon. Members of this House and the public on recent developments regarding the Government’s engagement with Eurobond holders.

 

Sir, as hon. Members of this House may recall, the Cabinet made a decision in 2019 to re-profile Zambia’s public debt in order to bring the country’s debt to a sustainable path. Subsequently, the Ministry of Finance embarked on a liability management exercise that included the cancellation of some pipeline projects and engagement with all external creditors. While implementing these measures, the country’s fiscal situation worsened during the first quarter of 2020 on account of the negative impact of the Coronavirus Disease 2019 (COVID-19) pandemic. This notably led to the slowing down of economic activities and reduction in revenue collection amidst elevated expenditure on COVID-19 response interventions. Ultimately, the country’s growth prospects for 2020 have been substantially reduced.

 

Mr Speaker, given the challenging macro fiscal situation faced by many countries, the members of the Group of Twenty (G20) and the Paris Club announced the Debt Service Suspension Initiative (DSSI) in April 2020. The initiative offered a co-ordinated global response to the payment difficulties experienced by indebted developing countries as a result of the COVID-19 pandemic. It provided for the suspension of debt service payment initially for the period 1^st May to 31^st December, 2020, for countries that requested forbearance with the aim of supporting them in overcoming the intertwined health and economic effects of the COVID-19 pandemic.

 

Sir, Zambia formally applied to its creditors for debt service suspension or debt service standstill under the DSSI and signed a Memorandum of Understanding (MoU) in August 2020. The debt service standstill applied for relates to official bilateral debt and provided for the debt service payment scheduled under the agreement to be repaid over three years after a grace period of one year.

 

Mr Speaker, the MoU that Zambia signed encouraged the country to seek similar treatment on its debt from other creditors, including commercial creditors. As a result of this provision, Zambia wrote to all its creditors requesting them to participate in the debt relief assistance framework and proceeded to engage them individually with a view to obtaining their consent to a debt service standstill. Currently, discussions are ongoing with all the respective creditors.

 

Sir, in the case of bondholders, our engagement took a slightly different approach since it required a consent solicitation. This is a formal process for seeking approval from bondholders to amend the terms of notes either by way of written resolution or bondholders’ meeting. It must be appreciated that unlike private credit arrangements where creditors can be approached and bilateral agreements negotiated in order to amend the terms of a loan, the bondholders process is more complicated because there is a large number of creditors whose identity is not always known. In addition, the relationship with bondholders is governed by strict market rules, such as the market abuse regulation, which precludes an issuer of a bond from requesting a temporary suspension of payments to a few bondholders without providing the same information to all bondholders at the same time.

 

Accordingly, Zambia launched the consent solicitation process on 22^nd September, 2020, requesting Eurobond holders to grant Zambia debt service standstill on the coupon payment in respect of our 2022, 2024 and 2027 Eurobond notes for a period of six months from 14^th October, 2020 to 14^th April, 2021.

 

Sir, on 29^th September, 2020, I issued the actual Consent Solicitation Memorandum and gave a presentation to creditors, including the Eurobond holders, in which I explained the current economic situation in Zambia and the reasons debt service suspension from all commercial creditors was necessary to put Zambia back on the path to debt sustainability. The investor presentation sent a strong signal to investors on Zambia’s inability to service debt during the requested standstill period. It also gave a detailed account of Zambia’s liquidity challenges which had been exacerbated by the COVID-19 pandemic.

 

Mr Speaker, my presentation was followed by engagements in the form of questions and answers. Further communication was expected to be provided to the bondholders following the signing of the confidentially agreements with them. In my subsequent statement, on 13^th October, 2020, the day before the coupon payment was due, I stressed Zambia’s willingness to work with bondholders to reach consensus on the standstill.

 

Mr Speaker, I further indicated that failure to reach a commercial agreement on a debt service standstill, including on the notes, left the Government with no other alternative but to accumulate arrears. The US$42.5 million coupon payment, which was due on 14^th September, 2020, was not made in anticipation of a favourable outcome to our request for a standstill and given that, no default would immediately materialise because of the ninety-day grace period provided for under the rules. More importantly, it was felt that honouring the coupon payment with bondholders while bondholders were still considering a request for a standstill would undermine our negotiation position and basically render the entire consent solicitation process futile.

 

Mr Speaker, bondholders were initially scheduled to vote on Zambia’s consent solicitation on 20^th October, 2020. However, the meeting failed to quorate and, therefore, a resolution could not be passed. It was, subsequently, adjourned to 13^th November, 2020, which coincidentally happened to be the end of the payment grace period.

 

Mr Speaker, I must report that during our engagement with the bondholders committee, they raised concerns regarding the application of savings that would be made by the Government if a standstill was granted. It was suggested that Zambia would use the Eurobond coupon payment savings to repay its other commercial debt.

 

Sir, coincidently, commercial creditors also questioned why the Government had excluded Eurobond debts in the debt service relief request as they too feared that savings from a debt service standstill granted by them would be used to meet Eurobond coupon payments. These concerns underscore the reason the Government needed to apply debt service suspension equitably to all creditors.

 

Sir, the outcome of the voting of the bondholders, which was announced in the afternoon of Friday, 13^th November, 2020, voted to reject our request for a standstill. This essentially meant that non-payment of the coupon on this date would constitute a default as a grace period would have lapsed.

 

Mr Speaker, however, I wish to confirm to the House that the Government has not paid the coupon that was due to the Eurobond holders on 13^th November, 2020 for a number of reasons. Firstly, paying would send a message to the market that contradicts our earlier message of incapacity to pay the debt service, which was at the core of the request for a debt service standstill. This inconsistency regarding our lack of capacity to pay, going forward, would send a signal to bondholders and other creditors that Zambia lacked a credible and orderly approach to the debt restructuring process.

 

Mr Speaker, this decision would further weaken our negotiation position beyond the solicitation process, in particular, with regard to other commercial creditors who would interpret our decision as lacking in transparency and equal treatment of creditors, especially for those with whom debt service arrears might have accumulated.

 

Sir, as a consequence, Zambia would be unlikely to access debt service suspension from these creditors. Our assessment was that all future engagements with non-bondholder commercial creditors would be made difficult, if not impossible, in the aftermath of such a decision.

 

Sir, our decision to uphold the principle of pari-passu with regard to the treatment of all creditors, seems to have already been vindicated by the communication from the Government of the People’s Republic of China on Monday, this week, advising suspension by Export-Import (EXIM) Bank of China principal and interest on sovereign loans falling due between May and December 2020.

 

Mr Speaker, the effect of giving equal treatment to creditors appears to be an improvement in the atmosphere for negotiating with creditors who previously have shown no indication to do so due to what is considered as favourable treatment of Eurobond holders.

 

Mr Speaker, there are some risks associated with the decision not to pay. These include bondholders taking legal action to enforce their rights under financing arrangements. The ministry will work closely with our legal advisors to respond to this possible eventuality. Others include bad publicity, which we are getting, negative investor perception of Zambia and adverse rating actions.

 

Sir, in responding to these implications, we are fully committed to engaging the bondholders committee meaningfully and transparently to reach a common and orderly approach to the process. In this regard, we will continue to provide the bondholders with the necessary information regarding our debt economic and fiscal position and our plans to restore growth and attain fiscal and debt sustainability.

 

Mr Speaker, the Government is looking forward to continued and deeper engagement with the Eurobond holders through their committee representatives once we have signed a confidentiality agreement that has already been presented to bondholders in order to facilitate information sharing. Further, I wish to state that for creditor information that falls under the ambit of confidentiality, we will seek waivers from creditors that have not already granted it so that information can be shared.

 

Sir, regarding the involvement of the International Monetary Fund (IMF) in the liability management of our public debt, I wish to inform the House that the Government is in discussion with the fund on the appropriate policy instrument that could be used in this regard. The IMF involvement is important in giving credibility and impetus to an orderly restructuring process. This makes the institution a key player in this undertaking.

 

Mr Speaker, I would like to reiterate the Government’s commitment to finding a consensual and collaborative solution to the debt sustainability problems the country is currently facing. I am pleased to advise that bondholders have, in their post decision statement, also indicated their willingness to continue with discussions in a consensual and collaborative way. This, we believe, offers a window of opportunity for reaching a mutually acceptable solution, notwithstanding their decision to decline the debt standstill request.

 

Sir, the Government will continue engagements with all creditors in order to reach consensus on the much-needed debt service standstills. The hon. Members of this House may also wish to know that the Extra Ordinary G20 Finance Ministers’ and Central Bank Governors Meeting agreed, on Friday last week, on a common framework for debt treatments beyond the DSSI. This framework stipulates that countries that sign an MoU with participating creditors will be required to seek, from all its official bilateral creditors and private creditors, a treatment of, at least, as favourable as one agreed in the MoU. Apart from reinforcing the principle of pari-passu in the treatment of creditors, the meeting extended debt treatment to cover the period May 2020 to end June 2021, with a repayment period of five years and a grace period of one year. This framework is available to us and we will seek recourse to it as we address the current debt challenges.

 

Sir, these developments, coupled with our commitment to engage in-good-faith negotiations with all our creditors, will be critical in working towards achieving the necessary fiscal space to restructure the public external debt portfolio whose outcomes are an important component of the Medium Term Debt Management Strategy (MTDMS).

 

Mr. Speaker, as I conclude, let me make reference to the statement made by Her Honour the Vice President in response to a question during Her Honour the Vice-President’s Question Time on Friday 13^th November, 2020. In her statement, she indicated that Zambia will not default with respect to her Eurobond coupon payment obligations.

 

Sir, this has been interpreted as contradictory in view of our decision not to make the coupon payment subsequent to the decision by bondholders to decline our debt service standstill request. Up until the decision was actually made to decline our request, we were confident that the bondholders would accept our request because we did not see any strategic advantage that would accrue for them by declining our request.

 

Sir, based on this confidence, we briefed Her Honour the Vice-President that we did not envisage the possibility of a default as we expected the vote to be in our favour and this is the position that she communicated. Unfortunately, the events that followed turned out to be different from what we had earlier anticipated. The compelling reasons for not paying have, however, already been amply presented in this brief to this august House

 

I thank you, Sir.

 

Mr Speaker: Hon. Members are now free to ask questions on points of clarification on the statement given by the hon. Minister of Finance.

 

Dr Musokotwane (Liuwa): Mr Speaker, I wish to thank the hon. Minister of Finance for that statement. My question is on the statement that he has just made in contrast it with the one that Her Honour the Vice-President made on Friday, 13^th November, 2020, that Zambia was not going to default on her debt repayment. The hon. Minister says up to that point, the Government was confident that the bondholders were going to accept its request. However, from Friday going back to the preceding week, it was all over the international media that bondholders were going to reject the proposal. Bloomberg, Reuters and all other media reported so. What made the hon. Minister feel so confident that bondholders would accept his request when, in fact, it was clear for anyone reading the international media that the contrary was to be expected?

 

Dr Ng’andu: Mr Speaker, the position that we took was based on our direct engagement with the Committee of Bondholders. We had direct communication and contact with them and, based on that relationship, we were fairly confident that we would swing a positive response.

 

Sir, the hon. Member refers to the press. Speculation from the press is always abound in situations like this. You cannot substitute speculation from the press with what you are getting from direct involvement with the parties that are involved. So, really, it was based on our direct involvement with the bondholders and also on the assessment that the strategic advantage they had that would accrue from declining was not clear. We did not see any reason they would go that route. However, it is also important to understand that when we undertook this exercise, we did so with the full confidence that we would get a positive response. There is no point in starting a journey when you already feel or believe that you will lose. We were very confident that we had presented adequate information to the bondholders and, based on that information, we thought they would give us a positive response. It is unfortunate that what turned out is different, but as I said, we had given information that they could have used to make a positive decision had they wanted to.

 

I thank you, Sir.

 

Mr Mwiimbu (Monze Central): Mr Speaker, I am aware that the hon. Minister of Finance is a professional and, in his statement, has indicated the financial position of the country. In his statement he has been very diplomatic without being very categorical as to what has happened.

 

Mr Speaker, members of the public are expectant to get a very clear statement from the hon. Minister of Finance pertaining to the position of the Government vis-a-vis the issue of bondholders. I want him to be very clear because the situation we are in is dire. Have we defaulted, considering the events that have transpired in the last one week?

 

Dr Ng’andu: Mr Speaker, I was very clear in my statement.

 

Mr Lubinda: Yes!

 

Dr Ng’andu: I said that on 13^th November, 2020, at the end of the grace period for payment, we did not make payment. That act of not making payment on the last day of the grace period constituted a default, if you like, but I proceeded to indicate the reasons we made that decision. I clearly explained that we made the decision because in our assessments, not making that decision would complicate our engagement with other creditors. In fact, our assessment was, and still is, that engagement with most of the other creditors would basically collapse as they would feel that we do not take them seriously and prefer to deal with only one set of creditors.

 

Mr Speaker, it is important to indicate, at this stage, that we already had started building arrears with some of the commercial creditors that we are talking about which were, in fact, in excess of the arrears on the Eurobond. So, in the spirit of pari passu, the spirit of treating everybody equally, and reinforcing the atmosphere that will allow us to negotiate more meaningfully, it was necessary for us to decline. Again, for avoidance of doubt, not making the payment on the last date of the grace period, yes, does constitute, if you like, a default.

 

I thank you, Sir.

 

Mr Mbangweta (Nkeyema): Mr Speaker, I want to appreciate the statement by the hon. Minister and empathise with him for finding himself in this position. So, in that vein, I will go back to 2016 when I became a Member of Parliament. From that time, to date, there has appeared to be an issue that this country has been in need of an International Monetary Fund (IMF) package. Maybe, the hon. Minister could tell us what the constraints have been.

 

Dr Ng’andu: Mr Speaker, I would like to thank the hon. Member for Nkeyema for having sympathised with me. He is a good friend of mine. I am sure he does understand that my skin is thick enough and I can pretty well manage without sympathy.

 

Laughter

 

Dr Ng’andu: Mr Speaker, the engagement with the IMF has been continuous for the last three months. The stage we have reached, at the moment, as I explained in my statement, is that of agreeing on the specific instrument that we can use, that is, the precise instrument that will be available to us. As you know, the IMF has a series of instruments that it can recourse to in dealing with a country based on the specific circumstances that a country finds itself in. There is a possibility that we could approach this issue through a Debt Sustainability Analysis Approach (DSAA) based on what they call the Article for Framework. It is also possible that we could recourse to, maybe, a Staff Monetary Programme. We are still having this discussion with the IMF and I think that soon enough, we will be able to announce to this House exactly which particular instrument the IMF is willing to engage with us.

 

I thank you, Sir.

 

Mr Ng’onga (Kaputa): Mr Speaker, I thank you for the opportunity to debate and may I thank the hon. Minister for his statement. When the people of Kaputa listen, especially to our colleagues in the Opposition and those who feel they are well learned on this subject of economics and national economy, they are given worries. It is like our economy will come to a standstill because of the failure to pay this coupon. In his simplest terms, could the hon. Minister assure the people of Kaputa that life still continues despite this failure to pay this debt, as he reorganises himself.

 

Mr Speaker: Hon. Minister, resume your seat first.

 

I have a very long list before me. As I speak, I have twenty interventions. The function of this session is to clarify the statement. It is simply that. Where you are not clear, you pose a question. If there is something you did not understand, pose a question. I will be very strict about that.

 

Mr Kambita (Zambezi East): Mr Speaker, now that reality has dawned and we have defaulted to pay just a coupon towards the Eurobond, does the Government realise that it should have taken advice given sometime back concerning the challenges of this commercial loan? In that vein, the hon. Minister did not categorically explain in his statement the measures that will be taken, in financial terms, to enable us to come out of this default status, if you like. In order to give hope to the people of Zambia, could the hon. Minister categorically mention the measures that the Government will undertake, starting from this month going forward, so that we are not found in a situation where the bondholders start grabbing our national assets.   

 

Dr Ng’andu: Mr Speaker, the position on the ground is that we will continue, and are still continuing to engage the bondholders, through the Committee of Bondholders. In my statement, I indicated that the process continues and that the decision not to grant us the request does not end the discussions that are going on between us and the bondholders. Therefore, we will continue to engage the bondholders.

 

Sir, in terms of our own approach, we have a three-staged process. Stage one is to get a debt service suspension given because that creates the space for us to be able to now sit and restructure the debt. The idea of restructuring is to look at each specific debt and offer specific proposals to the creditor on what the treatment for that debt should be. Whether the treatment is extending the tenure for the loan or negotiating the interest rate that applies is the detail that has to be discussed. Once that is agreed, we will, then, be ready to roll out the entire programme of debt restructuring. So, it is a stage by stage process, but at this point, the most important thing is for us to continue the engagement with the Committee of Bondholders as well as other creditors and continue to seek agreement on how we can progress.

 

I thank you, Sir.

 

Mr Lufuma (Kabompo): Mr Speaker, I thank you for this opportunity. I would also like to thank the hon. Minister for coming to this House to give us an update on our default. We are unable to pay what we owe. It is said, and it is always very interesting, that we, their kids, who have their eyes bigger than the stomach –

 

Mr Speaker: Hon. Member for Kabompo resume your seat.

 

Hon. Members, we have very limited time. Owing to the Coronavirus Disease 2019 (COVID-19), we only seat for two and half hours. This is not the only issue we have to deal with. Even our Budget meeting is still in a shaky position, overall. I will not entertain unnecessary prefaces. Go straight to the question.

 

Mr Lufuma: Mr Speaker, bullet point. This Government agreed to put forward what is called a Sinking Fund under Statutory Instrument (SI) No. 75. It was supposed to be putting aside money in order to pay towards these bonds, which are due in 2022, 2024 and 2026. May I know why the Government did not adhere to SI No.75 and, consequently, made us find ourselves in this situation we are in? Is there any money in this Sinking Fund as at now?

 

Dr Ng’andu: Mr Speaker, yes, there is some money in the Sinking Fund, but I am not exactly sure where the balance stands. However, I need to say that when a statement is given, it is helpful to listen to all of it and not just a bit of it. What I did indicate, from the outset, is that the problem of meeting our debt service obligation was exacerbated by COVID-19 and the impact that it had on the economy. We were servicing our obligations before. We may have had difficulties in terms of meeting other obligations to ministries and so on, but the fact of the matter is that we were servicing our obligations. When COVID-19 came along, the whole world recognised it. The G20 Group of Countries recognised it and the Paris Club members all acknowledged that this is a huge challenge which requires everybody to come together and assist. That is the position we are in. It is not a position that is unique to us. It is a position that is right across the whole globe and countries which were already in a position that we are in, in terms of owing money to others, obviously, found themselves in a more difficult situation than before. That is the context within which our inability to pay has been created and we need to understand that.

 

I thank you, Sir.

 

Mr Chaatila (Moomba): Mr Speaker, from the hon. Minister’s statement, it is very clear that he has the money to pay for the default which happened on Friday. However, the only reason holding him is the fear that bondholders will see that as capacity or ability to pay going forward. Why did the hon. Minister not indicate to them in his presentation that, currently, he is able to pay up to a certain point of time so that their consideration could have started at that point when he would fail to pay unlike holding on to the US$42 million that he has not paid? Can he kindly confirm to me whether that money is available or he is totally broke and does not have the money to even start the payments.

 

Dr Ng’andu: Mr Speaker, I do hope that the hon. Member asking the question understands that money is fungible. So, is it there or not there? I do not know.

 

Laughter

 

Dr Ng’andu: What I said is that the framework we are working under took into account our total indebtedness to the various creditors. I belaboured the point that in the environment we are, in which we are trying to seek collaboration from all the creditors, it becomes complicated when you decide that you will pick on one creditor and pay and ignore everybody else, but at the same time go to the others and say to them, “look, we are trying to agree with you some kind of debt service stand still.”

 

Sir, let it be told that we need a debt service stand still for now until we get out of the challenge that we are in. The only way we can get a debt service stand still that makes sense is by engaging all the creditors, collaboratively, and making a decision that isolates one creditor and ignores the other is just not prudent

 

I thank you, Sir.

 

Mr Speaker: Hon. Members, I understand the seeming frustration for the hon. Minister in reiterating some of these responses. If we reflect on his statement which he has made, we will find that some of these questions are totally unnecessary to the extent that an explanation has already been provided. One of the key points he has been making where he used the Latin term, pari passu, which means equality of treatment, suggests that the money is available, but he would like to treat all the creditors equally. So, if we go back again and say, “Is the money there?”

 

Laughter

 

Mr Speaker: Yes, the money is there, but there should be equal treatment of creditors. I hope we will not be going over this question, “Is the money there?” again.

 

Mr Mung’andu (Chama South): Mr Speaker, are we the only country that has gone through what has just happened or are there other countries? If there are, can the hon. Minister give us examples so that we, as Zambians, are comforted that we are not the only ones who are going through such a situation?

 

Mr Speaker: I am afraid that question is not related to the statement.

 

Mr Jere (Livingstone): Sir, my question has been overtaken by events.

 

Mr Speaker: Thank you.

 

Mr Michelo (Bweengwa): Mr Speaker, will the situation which we are in today not affect the 2021 Budget?

 

Dr Ng’andu: Mr Speaker, the question is not as bad as it sounds. One of the things that will be accomplished with the debt service standstill, if we manage to get it from the majority or all the creditors, is that it will free up resources. In situations where we might struggle with the possibility of a financing gap, that problem will be taken care of, if you like. So, to that extent, yes, there is a relationship that it could free up some resources that we otherwise would not have if we did not have a standstill. It is a possibility.

 

I thank you, Sir.

 

Mr Mwila (Chimwemwe): Mr Speaker, Lazard Freres, a French company, was awarded US$5 million contract primarily to help Zambia reschedule the Eurobond debt. Now that we are in this situation, the people of Chimwemwe would like to find out whether the Government will consider cancelling the contract with that French company since it has failed to help us get out of the Eurobond situation.

 

Dr Ng’andu: Mr Speaker, I do not know where the idea has come from that Lazard Frères Gestion has failed in carrying out its duty. Lazard Frères Gestion is our adviser, and it is working with us every day in terms of working out the strategies that we require. It is part of the communication channel between ourselves and the Committee of Bondholders’, and we continue to work with it as we concretise our strategy for debt restructuring. Going forward, it will be active partners. So, the question that relates to it having failed in its assignment is misplaced.

 

I thank you, Sir.

 

Mr Kabanda (Serenje): Mr Speaker, the Coronavirus Disease 2019 (COVID-19) pandemic is an act of God. No one expected that this would come about. One wonders what earthly reason the Eurobond holders have to refuse to understand the circumstances under which we have failed to honour this obligation. It is a fact that the whole world is affected by this pandemic.

 

Mr Speaker: I did not get the question.

 

Mr Kabanda: Mr Speaker, COVID-19 is an act of God, which means that whatever agreement that was entered into between the Government of the Republic of Zambia and the Eurobond holders has been frustrated. So, what earthly reason do the Eurobond holders have to refuse to understand the circumstances under which Zambia has defaulted?

 

Mr Speaker: That is a statement.

 

Mr Kakubo (Kapiri Mposhi): Mr Speaker, in his response to the hon. Member for Moomba, the hon. Minister of Finance mentioned that he was not sure whether the Government had funds to pay or not. With regards to the sentiments that he is sending to the markets, does making the negative statement that he does not know whether the Government has the money or not concern him, as the Chancellor of the Exchequer, especially that we are in the midst of negotiations with those we owe?

 

Mr Speaker: I have just counselled the House on this issue. It is important that we follow the rules. I am tempted to think that there is now nothing more to clarify here. However, for avoidance of doubt, the hon. Minister of Finance may answer the question.

 

Dr Ng’andu: Mr Speaker, I will oblige the hon. Member of Parliament for Kapiri Mposhi and answer the question by saying that what he has basically done is put words in my mouth. I did not say what he said I said. What I have been saying is that our concern at the time of making the decision whether or not to pay was affected by the consideration that we had more than one set of creditors.

 

Mr Speaker, by the way, I need to mention that all along, we have been meeting all the coupon payments relating to bondholders. We have been doing that all along. At the same time, we have been accumulating arrears with some creditors. As I mentioned before, there are other creditors we owe bigger arrears than we have with the bondholders. There is one specific bank, whose name I shall not mention, that we owe much higher arrears than the grouping of bondholders. If you want to have a meaningful discussion with people that have only one relationship with you, which is that you owe them money, you have to get to the point where you agree that you will treat them equally, otherwise, you cannot have a reasonable conversation with any of the others.

 

I thank you, Sir.

 

Ms Tambatamba (Kasempa): Mr Speaker, the people in Kasempa, and I am sure in many other places, are concerned that Zambia has failed to honour its payments because it means every individual citizen is carrying that debt on their head. Could the hon. Minister clarify what impact or immediate repercussion is expected on public service delivery, especially the most essential services? What has the Government put in place to ensure that we do not get to a point where this situation impacts people negatively?

 

Mr Speaker: That question is outside the remit of the statement.

 

Mr Kamboni (Kalomo Central): Mr Speaker, now that we have defaulted, are we now ranked in a junk status?

 

Mr Speaker: I did not get the last part of your question, hon. Member for Kalomo Central.

 

Kamboni: Sir, I said that now that we have defaulted, have we now been ranked under the junk status?

 

Mr Speaker: What is the junk status?

 

Mr Kamboni: It is an economic term that is given to a country. I am asking this because there have been a lot of writings on Zambia now being in a junk status. When you have defaulted, you are brought down to what they call in economics as a junk status. So, I wanted him to confirm whether that is true or not.

 

Dr Ng’andu: Mr Speaker, I will clean up the question a little bit so that it is well understood. I think what the hon. Member is referring to is whether this situation is going to affect our sovereign credit rating. We have not had any results come out yet from the raters, the major three different rating agencies, whether or not our rating is going to be affected.

 

Sir, however, the point is that many of these decisions are not based on current information alone. Many of the decisions that are made are based on anticipation of what will happen and not what is happening now. So, our view is on the impact of non-payment on other factors. For example, somebody might ask what the impact on the exchange rate, government securities’ market to the portfolio investors, and foreign direct investment (FDI) will be. It is difficult to ascertain since the market sentiments are involved here.

 

Sir, what is important is that the behaviour of market players is often heavily influenced by their expectations of what will happen. We think that the market has already reacted to Zambia’s current debt situation. This is reflected in the current ratings of our own Eurobonds at this point in time. So, we think that most of the risks have already been factored in and we do not anticipate that there is going to be much change in the rating that we have. That is just my own assessment.

 

I thank you, Sir.

 

Mr Speaker: We will wind down as follows, and these are the last interventions I am permitting: hon. Members for Kalabo Central, Nchanga, Chifubu, Mongu Central, Mazabuka Central and the last intervention will be from the hon. Member for Chinsali. Thereafter, we will close this segment.

 

Mr Miyutu (Kalabo Central): Mr Speaker, I would like to seek further clarification from the hon. Minister of Finance relating to the utterances or response of Her Honour the Vice-President to a question over the defaults –

 

Mr Speaker: Order!

 

Hon. Member for Kalabo Central, please withdraw the word ‘utterances’.

 

Mr Miyutu: Sir, I thank you for your guidance. I withdraw the word ‘utterances’ and replace it with ‘response’. I would like to get a categorical answer from the hon. Minister. It is known that Zambia has defaulted on loan repayments. I have not really gotten a clear cut answer from the hon. Minister. Now that we have defaulted, how will this country be handled by the creditors?

 

Dr Ng’andu: Mr Speaker, I am trying to find a point at which I should start answering the question, but let me just clarify the reference to what Her Honour the Vice-President said. I have mentioned that based on our own assessment that we would get a positive response, I did indicate in my briefing to her that my view was that there would be no defaulting because we would get a positive answer. However, that, obviously, changed with the decision that came along and it was on Friday, 13^th November. As you know, Friday the 13^th is a problem and certain things happen.

 

Sir, however, the point here is that it is possible to make an assessment of what you think will happen, yet the outcome turns out differently and this is what happened here. We made an assessment based on the information that we had and based on the interaction and relationship that we had built with the Committee of Bondholders. We thought that we were sitting on comfortable ground albeit that the press had its own view on this matter. It is based on that that I advised Her Honour the Vice-President.

 

Sir, for the other part of the question, I am not sure I understood what the hon. Member was trying to drive at, but I hope I have done justice to his concern by clearing that bit of the question.

 

I thank you, Mr Speaker.

 

Mr Chali: Mr Speaker, my question has been overtaken by events.

 

Mr Speaker: Thank you.

 

Dr Ng’ambi was inaudible.

 

Mr Speaker: Well, I have sufficient witnesses.

 

Laughter

 

Dr Imakando was inaudible.

 

Mr Nkombo (Mazabuka Central): Mr Speaker, I am thankful to the hon. Minister for continuing to exhibit bravery on this matter of loans and default. I want to follow up on the hon. Minister’s response to the question from the hon. Member of Parliament for Chimwemwe, who was concerned about the Government’s interaction with Lazard Frères Gestion, with whom we have a contract and we believe the contract does have some deliverables. One of our expectations was that these partners were going to manage the debt liability of the portfolio. Now that the hon. Minister has indicated that the bondholders have refused to restructure the debt, could he tell me the justification of continuing with the debt portfolio managers and give me an example of the deliverables that compel the Government to continue with this US$5 million contract in three years despite the current situation?

 

Dr Ng’andu: Mr Speaker, the statement that the bond holders have refused to continue with the engagement is a wrong one. The bondholders have not refused, but have simply voted not to give us a debt service standstill at this point. One of the reasons they advanced is that they did not feel that they had sufficient information.

 

Sir, I need to explain that earlier on, we had provided to the bondholders a confidentiality agreement which we needed them to sign so that it would open us up to giving them information that related to the nature of the transactions with other creditors, who insisted that they would not want us to release that information before an agreement of that nature had been signed.

 

Mr Speaker, this does not bring to an end the process, but simply provides another stage for engagement. In fact, like I said in my statement, there is still a window of opportunity for us to continue with the restructuring of the debt. We will continue to give them the information and engage our creditors. Lazard Frères Gestion remains part of the process of coming up with a viable debt management strategy, which we have not produced yet, but we will produce it and we will bring it to the House for review. So, our partners are still part of the team and we still continue to work with them. I think up to this point, they have basically justified the engagement that we have given them.

 

I thank you, Sir.

 

Mr Speaker: The last question will be from the hon. Member for Chinsali.

 

Mr Mukosa (Chinsali): Mr Speaker, in his statement, the hon. Minister indicated that one of the weaknesses of our decision not to make a coupon payment on the Euro Bonds in a bid to treat all the creditors pari passu is that the bondholders can exercise their right to enforce legal action against us. What measures has the ministry put in place to mitigate the effects of that risk should it materialise?

 

Dr Ng’andu: Mr Speaker, the nature of our response will clearly depend on the route the bondholders take. In all probability, if they decide to take that path, they will have to go to court and we will engage in a protracted legal battle using our legal resources while they will use theirs. It is difficult for me to say at this stage what the outcome of that engagement will be. However, our assessment is that given the fact that the bondholders have indicated that they would like us to continue engaging in a constructive way, we think that is the window of opportunity. In all probability, we think we will not go the route of litigation. However, if we do, we will take measures so that, at the right time, we respond to exactly what they will throw at us. It is difficult for me to tell the hon. Member what our response will be because we do not know what the bondholders are going to throw at us at this point.

 

I thank you, Sir.

 

_______

 

QUESTION FOR ORAL ANSWER

 

CLOSURE OF STANDARD CHARTERED BANK BRANCHES

 

65. Mr C. Zulu (Luangeni) asked the Minister of Finance:

 

1. whether the Government is aware that Standard Chartered Bank is closing its branches, countrywide; and
2. if so, why the Bank of Zambia has allowed the closure.

 

The Minister of Finance (Dr Ng’andu): Mr Speaker, Zambia Standard Chartered Bank Plc informed the Bank of Zambia (BoZ) of its intention to close a number of selected branches, as required under Section 19(3) of the Banking and Financial Services Act of 2017. The Banking and Financial Services Act requires that a bank which intends to close a branch notifies the BoZ within sixty days of carrying out its intention.

 

Sir, the House may further wish to note that the decision to open or close a branch by any bank is a business decision which the BoZ cannot interfere with without reasonable justification. In other words, the BoZ questions the basis of the decision that is taken by the bank and if it falls short of making commercial sense, then, it takes a different view on that decision. However, the Standard Chartered Bank’s decision to close selected branches is part of its retail strategy to go digital through platforms such as online banking, mobile banking and deposit taking Automated Teller Machines (ATMs) in which the bank has made substantial investments.

 

Mr Speaker, the role of the BoZ is simply to facilitate that in line with its mandate of ensuring financial stability. In this regard, in the case of a new branch, the role of BoZ is to determine whether the branch meets the minimum operating standards required before it opens to the public. In the case of the closure of a branch, the BOZ must be satisfied that the bank’s customers have been well-informed and that alternative banking channels have been put in place. In addition, the BoZ is also interested to see to it that all labour related issues have been properly dealt with as this has the potential to impact on the bank’s reputation and the legal provisions under the Employment Code. Hence, the BoZ allowed Standard Chartered Bank to proceed as requested and will continue to monitor this transition.

 

Sir, Standard Chartered Bank indicated that it will continue to increase its capabilities through the digital platform. The bank informed the BoZ that over 70 per cent of the service requests were already being fulfilled digitally as opposed to being fulfilled in the branch. The bank also highlighted that digital transactions accounted for more than 80 per cent of the total transactions while the remaining ones are done through the branch network.

 

Mr Speaker, in terms of the financial sector, the payment landscape in Zambia is fast changing towards the increased deployment and usage of electronic bulk payments and retail Digital Financial Systems (DFS). The DFS includes point of sale machines, ATMs, mobile banking, mobile money and internet payment transactions. This has been brought about by innovations such as the development and subsequent launch of the National Financial Switch, the payment systems infrastructure and the interoperability among payment system providers and retail systems.

 

Sir, in view of the aforementioned, the House may wish to note that the Government, through the BoZ is, therefore, promoting DFS as they have the potential of accelerating the financial inclusion agenda while offering benefits including safety, the availability of audit trail, reduced fraud, the building up of credit history, the ability to conduct remote payments, low-cost business models and increased innovations.

 

I thank you, Mr Speaker.

 

Mr Chaatila (Moomba): Mr Speaker, after some branches are closed, how many will remain open and when will the exercise start?

 

Dr Ng’andu: Mr Speaker, I am not sure what the extent of the Standard Chartered Bank branch network is at this point in time. So, I cannot give a definitive response to that question. However, the fact of the matter is that what Standard Chartered Bank is doing is probably a pointer to what is likely to happen within the banking system. The digital platform is going to drastically alter the way we do banking. I would like to inform the House that we should be ready to see more of this.

 

Sir, if 80 per cent of a bank’s total transactions are done through the digital platform, the justification for maintaining a brick and mortar branch becomes less and less of a priority. So, this is the way things are going to be done and we will see more of this. What is important is that in the process of implementing these innovations, the banks are mindful of not creating gaps which deny members of the public access to banking services.

 

I thank you, Mr Speaker.

 

Mr Michelo (Bweengwa): Mr Speaker, from the time the bank started closing some of its branches in this country, has the number of its clients remained the same or has it reduced?

 

Mr Speaker: That is a new question.

 

Mr A. C. Mumba (Kantanshi): Mr Speaker, the hon. Minister mentioned that we are moving towards digital banking, but he agrees with me that the banks in Zambia have skewed their business towards dealing more with Treasury bills and Government bonds. Has the Bank of Zambia (BoZ) been assessing, beyond the digital platforms, why some banks are closing their branches? Could it be that the banks are trying to reduce their costs and are probably moving to where they are making money? It is clear in the Budget that K18 billion is going to the banks.

 

I thank you, Sir.

Dr Ng’andu: Mr Speaker, the banks are making a rational business decision of responding to an opportunity which has been provided by the digital platform and the innovations taking place on that platform. It makes no sense for the banks to continue carrying out banking exactly the same way as before these innovations came into being. For example, there is really no point of keeping the same number of staff on the counters when most people get their money from ATMs. So, the banks are responding to such innovations.

 

Sir, as regards the banks skewing their business to Treasury bills, that is totally different from what they are doing, but they are making a rational business decision. Ultimately, it should result in the cost of transactions going down, which will benefit the customers. We will be able to access banking services much cheaper than is currently the case.

 

I thank you, Mr Speaker.

 

Mr C. Zulu: Mr Speaker, I thank the hon. Minister for that very educative response. As a country, we are looking at job creation but on the other side we are saying that we should start using machines. Technology is good but how about job creation? I am aware that many members of staff at the Standard Chartered Bank will be on the street since the bank has decided to close some of its branches. I am also aware that the economy is liberalised. Does the Government have any plans to encourage the setting up of indigenous banks to avoid a development like the one at Standard Chartered Bank?

 

Sir, I know one country –

 

Mr Speaker: Hon. Member, you have already asked the question. You are now narrating an experience, and that is a new question.

 

Hon. Minister, you do not have to answer it. It is unrelated to the main question.

 

Dr Ng’andu: Mr Speaker, the hon. Member took the trouble to ask the question. So, I am obliged to him.

 

Mr Speaker: Hon. Minister of Finance, I am afraid I will not allow it because it is a new question. The hon. Member can engage you or can file in a question. Certainly, it is a new question. It is totally unrelated to what he asked earlier on. I am dealing with supplementary questions. The opening of indigenous banks or new banks to mitigate the situation is new territory. Our rules will not allow us and I do not want to breach them.

 

_______

 

BILLS

 

HOUSE IN COMMITTEE

 

[THE DEPUTY CHAIRPERSON OF COMMITTEES in the

Chair]

 

THE COMPANIES (Amendment) BILL, 2020

 

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

 

Title agreed to.

_______

 

HOUSE RESUMED

 

[MR SPEAKER in the Chair]

 

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

 

The Companies (Amendment) Bill, 2020

 

Third Reading on Thursday, 19^th November, 2020.

 

THIRD READING

 

The following Bill was read the third time and passed:

 

The National Council for Construction Bill, 2020

_______

 

COMMITTEE OF SUPPLY

 

[THE DEPUTY CHAIRPERSON OF COMMITTEES in the

Chair]

 

ESTIMATES OF REVENUE AND EXPENDITURE (INCLUDING CAPITAL AND CONSTITUTIONAL AND STATUTORY EXPENDITURE) FOR THE YEAR 1^ST JANUARY, 2021 TO 31^ST DECEMBER, 2021

 

VOTE 85 – (The Ministry of Lands and Natural Resources – K217,893,293)

 

The Ministry of Lands and Natural Resources (Ms Kapata): Mr Chairperson, I thank you for according me this opportunity to present the policy statement in support of the 2021 Budget Estimates for the Ministry of Lands and Natural Resources.

 

Sir, the programmes for which I am seeking consideration and approval of the budget estimates are aligned to Zambia’s Vision 2030, the Patriotic Front (PF) Manifesto of 2016-2021, the newly developed Medium Term Economic Recovery Programme and the Seventh National Development Plan (7NDP).

 

Mr Chairperson, the mandate of the Ministry of Lands and Natural Resources is to administer land and manage natural resources for sustainable land use and climate resilient low emission systems. The ministry strives to embrace innovativeness in achieving its mandate through the use of Information Communication Technology (ICT) solutions to ensure efficient and effective service delivery.

 

Sir, my address to this august House shall focus on the performance of the 2020 Budget and the outlook for 2021.

 

Review of Performance in 2020

 

Mr Chairperson, the ceiling for the ministry in 2020 was K173,590,171. With the funds released, my ministry was able to achieve the following:

 

1. Revenue Collection

 

Sir, revenue collection as at 30^th September, 2020, was K189,849,365 against a revenue projection of K505,147,421, representing 37.6 per cent collection;

 

       b. National Land Titling Programme

 

Mr Chairperson, the programme has captured 53,000 properties in thirty-three demarcation areas in Lusaka. 5916 offer letters were issued, out of which, 3,680 clients paid the required 20 per cent minimum fee and have been given certificates of title;

 

     c. National Land Policy

 

Mr Chairperson, I wish to report that my ministry has concluded consultation and validation of the Draft National Land Policy which has since been submitted for consideration by the Cabinet;

 

d. Legislation

 

Mr Chairperson, the land related legislation in the ministry is outdated and not responsive to the current developments. The ministry is, currently, reviewing the said legislation. In addition, I would like to report that a Draft Climate Change Bill has been developed, and is undergoing consultations;

 

  e. Sustainable Forest Management

 

Mr Chairperson, in 2020, 1,370,935 hectares cumulatively have been brought under community forest management;

 

f. Land Development Fund

 

Mr Chairperson, in January 2020, the ministry released K2,628,719.67;

 

g) International Boundaries

 

Mr Chairperson, the ministry has completed the mapping exercise of the land boundary between Zambia and Mozambique. In addition, the physical demarcation and mapping of the Zambia/Democratic Republic of Congo (DRC) border is currently under way; and

 

h) Natural Resources Management

 

Mr Chairperson, the ministry has made tremendous strides in raising awareness on issues related to natural resources management and climate change.

 

Outlook for 2021

 

Mr Chairperson, in 2021, programmes and activities shall continue to be aligned to the priorities and the targets outlined in the 7NDP. The ministry shall focus on three major programmes namely:

 

1. land administration and regulation;
2. natural resource and management; and
3. management and support services.

 

Mr Chairperson, the budget ceiling for 2021 is K217.9 million compared to K173,590,171 representing 25.5 per cent increment. My ministry is fully committed to the need to achieve more, with less. From this allocation, my ministry shall undertake the following activities:

 

1. Revenue Collection

 

Mr Chairperson, the ministry has projected a total of K553 million in 2021. In order to achieve this, my ministry shall put in place electronic systems, which will commence with ground rate collections.

 

  b. The National Land Titling Programme

 

Mr Chairperson, the programme will be rolled out countrywide and will target 250,000 properties along the line of rail.

 

c. Natural Resources and Management

 

Mr Chairperson, in 2021, my ministry shall scale up programmes targeting natural resources management and climate change. Further, the ministry will focus on the declaration of community forest management areas.

 

d. Legislation and Policy Formulation

 

Mr Chairperson, my ministry will endeavour to review land related legislation and ensure legislation on climate change is in place. When the Cabinet approves the Draft National Land Policy, the ministry shall co-ordinate its implementation.

 

1. Land Development Fund

 

Sir, the ministry shall continue to administer the Land Development Fund.

 

Mr Chairperson, with these few remarks, I urge all hon. Members of this august House to support the estimates for the programmes in the 2021 Budget for my ministry.

 

I thank you, Sir.

 

Mr M. Jere (Livingstone): Mr Chairperson, I thank you for according me this opportunity to add my voice to the debate on this Vote which, from the outset, I support.

 

Mr Chairperson, land is an essential natural resource for both the survival and prosperity of humanity. That being the case, you may wish to know that since time immemorial, land in Zambia has been held under the customary tenure system until 1960 when the leasehold tenure was introduced. What we are seeing with the introduction of the leasehold tenure is demand for land. As a result, our people living in the countryside have been deprived of the right to land, which is their inheritance.

 

Mr Chairperson, we have seen investors coming into our country and acquiring huge chunks of land, thereby displacing indigenous people. At the end of the day, people do not gain much from this land.

 

Mr Chairperson, when we talk about mineral deposits, the forests and fish stocks, you realise that our people have not benefited much from land. For instance, when it comes to mineral deposits, land has been repossessed from those in the North-Western Province on account that it is now on title. However, since time immemorial, the people there have been using it. Now, even their burial sites have been taken over by investors.

 

Mr Chairperson, let me now talk about forests. We had the precious mukula in this country, which our people in the countryside would have benefitted from. By now, we should have seen development taking place in these areas. The people in rural areas are the ones that look after these forests, but at the end of the day, they have not benefitted from them. We see the mukula tree being exported to China in its raw form, and the Chinese are benefiting twice by creating jobs through adding value to the mukula tree. Therefore, it is high time we started adding value to these natural resources.

 

Mr Chairperson, the Land Development Fund is, indeed, a move in the right direction. We have seen unserviced areas being opened up. In other countries, before land is given out, the authorities ensure that roads and drainages are built and that electricity and water supply is available. Further, plots are well serviced before being given out to members of the public unlike a situation where an unserviced area is opened up, which has brought about health related issues. When people have no proper sanitary facilities, the stagnated waters cause them to suffer from cholera. This time around, I hope that the hon. Minister will, indeed, release this Land Development Fund so that it can help the many new districts that were created. These districts really need to open up so that our people can acquire titles.

 

Mr Chairperson, on the issue of title deeds, when you look around the compounds in Lusaka, the majority of our people have failed to sell their properties or acquire loans on account that their properties do not have titles. It is high time the hon. Minister sped up the process of issuing title deeds to all those who do not have in our compounds. That is the only way that our people can be empowered.

 

Mr Chairperson, with these few words, I support the budget for the Ministry of Lands and Natural Resources.

 

I thank you, Sir.

 

Mr Lihefu (Manyinga): Mr Chairperson, thank you for giving the people of Manyinga an opportunity to say one or two words on the debate of this important Vote for the Ministry of Lands and Natural Resources. Before I highlight my points, the people of Manyinga instructed me to support the budget for this ministry because it is very important.

 

Mr Chairperson, land is our heritage and it must be economically quantified through registration. If land is economically quantified, it will be easier ...

 

The Deputy Chairperson: Order!

 

Hon. Member, could you switch off your television (TV) or radio.

 

Mr Lihefu: ... for our people to be economically empowered.

 

Mr Chairperson, what is happening is that since the Government has not quantified land in this country, most of our people, especially the youths, are not empowered with land. In Manyinga, we have seen most forests being harvested by those who own Government licenses, but nothing has been done. The road infrastructure used by truckers that go to collect timber is in a very bad state and nothing has been done about it. I am referring to the Manyinga/Kashinakashi/Lusongwa/Mwinilunga Road. Therefore, as the hon. Minister comes to respond on the Floor of the House, I want her to explain what measures the ministry has put in place to resolve this problem so that the people of Manyinga can also benefit from natural resources.

 

Mr Chairperson, Manyinga Constituency has a lot of natural resources. As the hon. Minister comes to respond on the Floor of the House, I want her to explain the measures the Ministry of Lands and Natural Resources has put in place for rural development with regards to land. What is happening in our rural constituencies is that the people there are not benefitting from the natural resources which are in their areas. They are just seeing their wealth being taken out of their constituencies without them benefiting from it. This does not only apply to the people of Manyinga but countrywide.

 

Mr Chairperson, with these few words, I support the budget. However, I appeal to the hon. Minister to consider the people in the rural constituencies where this wealth is coming from.

 

I thank you, Sir.

 

Mr Ng’onga (Kaputa): Mr Chairperson, I thank you for the opportunity to support the Budget Estimates for the Ministry of Lands and Natural Resources. From the outset, let me comment on a few points, as highlighted by the hon. Minister. My first point is on the Land Policy. This country has been waiting for this Land Policy for quite a long time. People are very anxious to see the Ministry of Lands and Natural Resources concluding this Land Policy programme. We have had our own studies as a Committee on Lands and Natural Resources and all our witnesses are very anxious to see that this land policy is concluded so that it can be able to direct the people on how land can be allocated and how it should be used in this country. So, it is a very important subject, and I am pretty sure that the hon. Minister will do everything possible in her power to ensure that this is brought to a conclusion.

 

Mr Chairperson, the other issue that I would want to talk about are our natural resources, especially the way our forests are being depleted in this country. If forests continue being depleted, there will be nothing to leave for our children’s children, who will come after us. The contribution of forest resources to our livelihood cannot be overemphasised. We all know that our dependence on forests is very heavy. However, there are certain distractions that we are seeing, especially in areas where people are now able to encroach such as water sources.

 

Sir, if you travel around the country, you will find that there are many areas where we do not have rainfall due to climate change, and the main factor is that people have destroyed the forest areas. I, therefore, urge the hon. Minister of Lands and Natural Resources to do something. Even now, it is not late to designate some of the areas as protected areas, especially in the rural areas in the Northern, the North-Western and Luapula provinces, where we still have a lot of rains. There are some forests that we can designate as protected areas. Our fathers had these protected areas, some of which our generation has now completely encroached and destroyed. So, if we have to leave some of these areas for our children’s children, then, we must still continue protecting them.

 

Mr Chairperson, I was in Chilubi at some point and I could see some of the protected areas which still look very nice. However, these areas are under threat because people are now looking at them as the only areas where they can live. Therefore, it is important that the Ministry of Lands and Natural Resources finds ways and resources to ensure that these areas are protected. That way, these forests can be left for our children who are still coming.

 

Mr Chairperson, others have talked about the revenue collection activity. This is very important because even when people visit the ministry, they find a lot of activities such as paying for title deeds and other different programmes. When you look at the budget allocation, you will see that the ministry has been allocated K173 million and it is projecting to collect over K500 million, which is one-fifth of what has been allocated. Going forward, I would urge the Ministry of Finance to make sure that more resources are allocated to the Ministry of Lands and Natural Resources so that even as it collects revenue for this country, it is able to do so because it is empowered. I support the budget for this Vote.

 

Mr Chairperson, I thank you.

 

Prof. Lungwangwa (Nalikwanda): Mr Chairperson, I also rise to support the budget for the Ministry of Lands and Natural Resources. In doing so, I want to focus on the forestry sector because of the major problems which are therein. I will zero-in on rosewood.

 

Mr Chairperson, the wanton destruction of our precious trees by foreigners is totally unacceptable. If you take rosewood, for example, the tree can take as long as a hundred years to grow into bigger sizes. In most cases, when foreigners come into the country, they pay as little as K20 to our people to cut trees. When you look closely at what is going on in our forests, foreigners who are in the logging business may end up filling a 20 tonne truck of rosewood for which they would only have paid K25,000 to the local people. When that truck comes into Lusaka, the business person is paid as high as K5,000 per tonne enabling him or her to earn a K100,000 for the 20 tonne truck of rosewood.

 

Sir, if the 20 tonne of rosewood is exported in a container, the exporter is paid around US$7,000 per tonne, enabling him or her to earn US$140,000. Now, this is money which, to a large extent, is earned by foreigners from the resources of our forests. That is the reason we have so many foreigners deep in our forests in this country. If you go deep in our forests, you will find the Rwandese, Burundians, Ugandans, Kenyans, South Africans and so on and so forth. Why? It is because the business is highly lucrative.

 

Mr Chairperson, imagine 10,000 Zambians, for example, engaged in rosewood business and earned on a 20 tonne US$140,000. That is US$1.4 billion which would be coming into the country. However, for foreigners who are engaged in this business, the money does not come into the country. It is banked in their countries. Clearly, we cannot continue to allow that.

 

Sir, the hon. Minister of Lands and Natural Resources is presiding over a very important ministry to our economic prosperity. I would request her to put a ceiling on the management of our timber so that more and more Zambians can engage in the timber industry and, working with the Ministry of Commerce, Trade and Industry, market should be found for Zambians to export timber so that the much-needed foreign exchange can come into the country instead of foreigners banking that foreign exchange from our precious timber in their countries. We should not allow that any more.

 

Mr Chairperson, these are the comments I thought I should make on this very important ministry.

 

I thank you, Sir.

 

Dr Musokotwane (Liuwa): Mr Chairperson, thank you for this opportunity to say something on the budget for the Ministry of Lands and Natural Resources. In the first instance, I also do support the budget and have two submissions to make.

 

Sir, the first one is on the issue of land administration. I know land is disappearing quite fast, but we also know that there is still plenty of land in Zambia. The issues of policies of this and that are relevant, and I do not deny that. However, I believe that a lot needs to be done to improve land administration because from the time a person applies for a piece of land, whether it is purchased from an individual or from the Government, it takes too long for title to be provided. This is something that, of course, works to our disadvantage, as a country, because there are people in this world who want to make investments. However, when it takes months and, in certain cases, even years to be able to acquire a title, there is no patience for that, especially that administration of land moves very fast in countries that are deemed to have less land such as Mauritius and the Caribbean, which are very small.

 

Mr Chairperson, if you look at the way we administer land in Zambia, the process has not changed much. I do not know whether things have changed now, but I believe that, to date, unless this has changed now, certificates of title are printed using a typewriter. Surely, why should that be the case in this day and age? There are times when one has to wait for days and weeks just to get a certificate of title. In this day and age of computers, one would expect that printing a certificate of title should be something that can be done within ten to fifteen seconds, not days.

 

Mr Chairperson, I think it is also important that the ministry now seriously considers the issue of decentralising. There is no reason everyone getting a title to land must come to Lusaka when, in fact, they can go to Mongu or Choma. With the current technology that is available, that should be done.

 

Mr Chairperson, I think that if the hon. Minister is going to make a difference, the most important thing is how land can be administered more efficiently and quickly. Perhaps, for me, the time for having lawyers to be Commissioners of Lands is long gone.

 

Mr Ngulube: Question!

 

Dr Musokotwane: We now need to have people who are familiar with technology. A lawyer, of course, can be employed, but what matters now is to have people who are familiar with technology and processes who can deliver these things much faster.

 

Interjections

 

Dr Musokotwane: No, lawyers cannot do it.

 

Mr Chairperson, the next issue is that of forests. I still cannot imagine why Zambia should be importing pine trees for power lines from South Africa and Zimbabwe, which are deserts. I believe that it is time to be aggressive. If those people are producing from 10,000 to 20,000 ha of land, there is no reason we should not have 500,000 or a million hectares of land under forest so that we should be the ones to be selling poles to them. We should be the ones selling paper to them. This paper I am holding is from the forests of the deserts of South Africa. We should be the ones selling to them. However, that requires that we create conditions for investments in forests.

 

Mr Chairperson, with these few comments, I support the Vote, once again.

 

I thank you, Sir.

 

Ms Katuta (Chienge): Mr Chairperson, thank you for giving the people of Chienge an opportunity to debate on this important Vote. I just want to talk about this important ministry and the allocation that has been given to it. In our language, we say, “ubukulu bwamfumu ni mpanga.” This means that you can only value the chiefdom or a chief by the size of the chiefdom. What am I saying? We need Zambia. We need this land.

 

Mr Chairperson, I have noticed in areas like the North-Western Province and other parts of the country where I have travelled this tendency of having long stretches of fenced-off land, which is in the hands of foreigners. Now, if we go to places like Saudi Arabia or European countries, we will not find foreigners owning land like that. So, my worry is, what are we doing to our future generations? By the time our great grandchildren grow up, they will not find land because it will all be in the hands of these foreigners who are here in the name of farming or other businesses.

 

Mr Chairperson, I am not being xenophobic. There is no harm in foreigners owning land in our country. However, can we not enact a law that will allow foreigners to have land only on lease and not to own it so that after a certain period of time, they should hand it back to our country?

 

Mr Chairperson, we are treading on very thin thread. When you look at what is happening, chiefs and headmen have resorted to giving out huge chunks of land. This is not a secret. What am I saying? Can we improve the system in the Government so that each region has its own office where land auditing can be done. We are not auditing land properly in our country because everything is being done centrally, hence even getting Title Deeds is taking long, leading to so many things.

 

Mr Chairperson, I would like to urge the Ministry of Lands and Natural Resources to revisit the issue of decentralising its offices so that there can be land auditing. Imagine you have land in Kasama, but have to wait for documents to come from Lusaka. People are seated in Lusaka and do not even know where your land is and all they depend on are just the land co-ordinates. They do not know who sits on that land. They do not know whether or not it has been occupied by someone else. They base their decisions on information given to them by some officer.

 

Mr Chairperson, we are losing land and we have to move in quickly to make sure that no foreigner owns land, but has it on lease terms. It is very important that every foreigner has land leased to them only so that, in future, our children can find land. As it is now, if you want to buy a piece of land, you find a 50x50 going at K150,000. Who can afford that? Our children will not be able to afford.

 

Mr Chairperson, a person of a certain nationality bought a huge chunk of land in Mkushi for K32,000. We are not talking about five but just three years ago. What are we doing to our country?

 

Mr Chairperson, I urge the Ministry of Lands and Natural Resources to move in quickly and start auditing how councils are dishing out or selling pieces of land to foreigners. Please, we are losing our nation. We will have Zambia by name only, but we will not have land to show for it as it will be owned by the rich who are coming from outside the country.

 

Mr Chairperson, with those few words, I support this Vote.

 

I thank you, Mr Chairperson.

 

Ms Kapata: Mr Chairperson, I will quickly attend to each of the concerns that have been raised. Hon. Jere, Member of Parliament for Livingstone talked about demand for land, people being deprived of land and investors displacing people, including their burial sites. First of all, I would like to tell the hon. Member that before we give land for investment of any kind in this country, we conduct a socio-economic survey which takes care of anybody that lives on that particular land where an investor would want to invest.

 

Mr Chairperson, the hon. Member also talked about forests and their benefits as well as the mukula tree. First of all, as a ministry, we do not allow the export of mukula logs. I do not even want to talk about mukula because its export is on a ban as far as I am concerned. Any logs of mukula that are found are confiscated by the Government and once they are confiscated, they are given to the Zambia Forestry and Forest Industries Corporation Limited (ZAFFICO) to be gotten rid of. It is a known fact that some of the proceeds that came from the sale of confiscated mukula logs have gone into the revamping of the Kawambwa Tea Plantation. Everybody knows that a Parliamentary Committee visited Kawambwa Tea and gave a report to this House. So, issues of mukula should not even be talked about in this House.

 

Mr Chairperson, the Land Development Fund is used to open up, especially, new districts. It helps with the servicing of new districts with water reticulation, electricity and the opening up of roads.

 

The hon. Member also talked about titling. The National Land Titling Programme is in the process right now. I launched the process, if I remember, about two weeks ago. We already have started to produce titles. However, I want to be factual on the number of Title Deeds that we have produced so far. I think I will get to it when I see it on my documents. I cannot locate it, right now, but we are going to produce about four million Title Deeds in the next fifteen years.

 

Mr Chairperson, I also want to respond to Hon. Dr Musokotwane who alluded to the fact that we have no capacity to produce Title Deeds. We have capacity to produce Title Deeds. We are no longer in the era of typewriters. Those are ancient days. We have a machine within the ministry, under the Survey Department, which is able to produce 150 Title Deeds per minute. So, if you calculate the minutes into twenty-four hours or working hours, how many Title Deeds will be produced? The only thing that we are remaining with, hon. Member for Liuwa, is the Electronic Signature (e-Signature) for the Commissioner. Once that is done, we will be able to produce as many Title Deeds as we can. We are just reviewing the law so that we can accommodate the e-Signature.

 

Mr Chairperson, I did not know that I was only given five minutes. So, for the rest of the hon. Members of Parliament who have raised concerns, they can engage me on a one-on-one basis. I will give them answers to what they have brought out.

 

Mr Chairperson, Hon. Lungwangwa talked about raw timber being allowed outside the country. We do not allow raw timber to be exported.

 

Sir, I would also like to mention that we are planting a lot of pine trees in the country, through ZAFFICO. At the moment, I think that we have almost depleted the pine trees that we had, but we have opened up the planting of these trees throughout the country in almost all the provinces. This is an ongoing programme where we are going to see to it that we plant Pine trees in most provinces so that we do not import poles for Zesco.

 

I thank you, Mr Chairperson.

 

Vote 85 ordered to stand part of the Estimates.

 

VOTE 15 – (The Ministry of Home Affairs – 224,223,468)

 

The Minister of Home Affairs (Mr Kampyongo): Mr Chairperson, I appreciate the opportunity given to me to present the Budget Policy Statement on the Estimates of Revenue and Expenditure for the period 1^st January, 2021 to 31^st December, 2021, for Vote 15, which is the Ministry of Home Affairs.

 

Mandate of the Ministry

 

Mr Chairperson, the mandate of the Ministry of Home Affairs is to promote quality internal security services in order to create a safe and peaceful environment for sustainable socio-economic development for all. This mandate is discharged through various departments and specialised agencies, namely:

 

1. Zambia Police Service;
2. Zambia Correctional Service;
3. Drug Enforcement Commission (DEC);
4. Department of Immigration;
5. Department of National Registration, Passports and Citizenship;
6. National Archives of Zambia;
7. House of the Registrar of Societies;
8. Office of the Commissioner for Refugees;
9. National Forensic Science Authority;
10. National Anti-Terrorism Centre;
11. The Police-Public Complaints Commission; and
12. The Parole Board.

 

Mr Chairperson, the mandate is carried out with the support from the Ministry of Home Affairs, Research Planning and Information Department, Human Resources and Administration Department, and the Department of Finance. However, it should be noted that apart from the Zambia Police Service, the Zambia Correctional Service, and the DEC, which have independent Votes, the rest are under Vote 15, which is the Ministry of Home Affairs.

 

Performance and Achievements

 

Mr Chairperson, considering the on-going Coronavirus Disease 2019 (COVID-19) pandemic, the performance of the ministry has generally been satisfactory. A major achievement for the ministry, among others, includes the unprecedented infrastructure development for the security wings. Currently, a total of 2,350 housing units have been completed across the country. The ministry is constructing two hologram modern correctional facilities in Mwembezhi. In addition, to enhance security in the country, the ministry is implementing a project called Safe City. The Safe City Project is part of the nationwide Information and Communication Technology (ICT) initiative to increase crime detection and prevention.

 

Mr Chairperson, to further highlight other achievements under the Department of National Registration Passport and Citizenship, the ministry has established birth and death registration and certification centres in Chipata, Mansa, Kasama, and Solwezi, bringing the total to eight provincial birth registration centres. Further, the successful hosting of the 5^th Conference of African Ministers responsible for civil registration and vital statistics is currently chaired by Zambia.

 

Mr Chairperson, following the 2016 Constitution Amendment, the ministry has since approved over 250 bestowals of citizenship applications out of the 589 and granted citizenship by registration to 553 established residents out of 954 applicants.

 

Sir, the Department of Immigration has continued to play a pivotal role in stimulating economic development and growth in the country. The Department of Immigration collected revenue amounting to K401,684,276.98, exceeding the annual target of K385 million for 2019.

 

Mr Chairperson, to ease the problems of refugees, the Office of the Commissioner for Refugees continued the rehabilitation of refugee camps and office accommodation. By 31^st October, 2020, 93,796 refugees and asylum seekers had been provided with assistance, protection and security. The commission further completed the construction of its headquarters in Lusaka.

 

Mr Chairperson, notwithstanding these achievements, the ministry faced a number of challenges, which include:

 

1. inadequate human resources;
2. inadequate and deteriorating infrastructure; and
3. lack of modern equipment for crime prevention, detection and investigation.

 

The Policy Focus for 2021

 

Mr Chairperson, the proposed 2021 expenditure allocation for the ministry is K224,223,468 compared to K244,189,361 ceiling for 2020. Out of the proposed allocation for programmes, K79,250,608 has been allocated for Migration Services, K71,197,057 has been allocated for Legal Identity, Civil Registration and Citizenship Services, K7,322,341 has been allocated for the National Archives Services, K1,154,558 has been allocated for Societies Regulations and Standards, K20,823,145 has been allocated for Internal Security Support Services, and K44,475,759 has been allocated for Management and Support Services.

 

Sir, the ministry will, among others, focus on finalising the migration policy, development of refugee policy and repealing and replacing of the Societies Act Cap 119 of 1958. In addition, the ministry will aim at effectively managing refugees, asylum seekers, and integration of former refugees into local communities.

 

Mr Chairperson, Legal Identity, Civil Registration and Citizenship Services will be another area of focus. The programme will focus on identity management, registration of vital events, and granting of citizenship to eligible persons. Identity management and civil registration will be enhanced through the implementation of the Integrated National Registration and Information System (INRIS), which will be a digital platform.

 

Sir, the ministry will ensure the provision of internal security support services through:

 

1. provision and regulation of forensic science and pathology services;
2. investigation of complaints against police action;
3. prevention and combating of terrorism and proliferation incidents; and
4. provision of parole services.

 

Mr Chairperson, it is my conviction that this statement will alleviate any concerns by the hon. Members. I now recommend Vote 15, Ministry of Home Affairs, for favourable consideration and approval by this august House.

 

Hon. Member: Question!

 

Mr Kampyongo: Those are the people who shall be arrested.

 

I thank you, Sir.

 

Mr Lihefu: Mr Chairperson, thank you very much for giving me an opportunity to add the voice of the people of Manyinga to the debate on Vote 15 – Ministry of Home Affairs. Before I highlight some of the challenges that the ministry has failed to address in our constituencies, especially in the newly created constituencies, I would like to state that I support the budget allocated to the ministry.

 

Sir, the Ministry of Home Affairs has not done enough in the North-Western Province, especially in Manyinga. When the President was delivering his speech on the Floor of this House, he mentioned of infrastructure being delivered countrywide. However, in the newly created districts, there is no infrastructure to accommodate our men and women in uniform, like we have seen in other constituencies.

 

Mr Chairperson, the people of the North-Western Province, particularly Manyinga, are demanding for their share because the North-Western Province is one of the regions contributing heavily to the National Treasury. So, when we see infrastructure only being constructed in other areas, we do not feel good. If the community in Manyinga had not helped the police officers to rehabilitate the infrastructure where they operate from, I do not know where they would have been operating from because it was damaged by heavy rains when I came into office. Therefore, I thank the people of Manyinga for coming together and putting this infrastructure back to use.

 

Sir, I am appealing to the hon. Minister of Home Affairs to also consider putting up infrastructure in the newly created districts, like we have seen in other districts. The ministry started a very good project of building a correctional facility in Manyinga, which would have catered for Kabompo, Mufumbwe and Manyinga. However, the construction of this infrastructure stalled at foundation level. Therefore, how can the ministry say that it has delivered infrastructure throughout the country? In other areas, some projects are just at foundation level. So, the hon. Minister should also consider putting up infrastructure in the newly created districts.

 

Mr Chairperson, let me say a bit on transport. Whenever I debate on this ministry, I plead with the hon. Minister to consider providing transport in the newly created districts. Manyinga is on Zambia’s border with another country, which is Angola, and we all know the state of a country that had a civil war. A lot of activities happen at the border area and I feel for our officers executing – (inaudible). For them to reach areas like Ndunga, which is at the border and is about 80 or 60 km away, they have to be helped with ox-carts to reach such areas. So, I am appealing to the hon. Minister to help our – (inaudible).

 

The Deputy Chairperson: We have lost the hon. Member and his time has even expired.

 

Mr Chikote (Luampa): Mr Chairperson, thank you very much for awarding me this opportunity to debate the Vote for the Ministry of Home Affairs. However, I have a very serious concern and I am finding it very difficult to support this Vote because of the ministry’s recent performance during the issuance of National Registration Cards (NRCs) to the citizens.

 

Sir, the hon. Minister clearly said that people need to have an identity and the identity for Zambians is the NRC. For one to be recognised as a true Zambian, one must have an identity card. It is also the right of every citizen, who is eighteen years and above, to obtain an NRC. However, to my surprise, the hon. Minister said that Phase II of the issuance of NRCs countrywide was successfully done, (inaudible) per cent, which is totally contrary to what we saw on the ground. Hon. Members of Parliament are part of the Government and they give accurate information of what happens on the ground.

 

Mr Chairperson, the essence of the Mobile Issuance of NRCs Exercise was so that people in places such as Luampa District, who stay in remote areas, enjoy the national cake without having the difficulty of travelling to the centres. However, I was shocked that most of the people in Luampa District were left out and they have been denied the chance to obtain an NRC. The people in Nyambi, Kunikila, Nakayemba and Mulwa did not benefit from the exercise and many people were left out. However, the hon. Minister stated that 85 per cent of the exercise was successfully done, yet everyone in the Western Province is not happy with the way it was done because many people were left out.

 

Sir, the hon. Minister promised us that even though the exercise had come to an end, people would still get NRCs from the centres. However, when people go to the centres to get NRCs, they are told that there is no stationary. The officers are saying that they have not been given the go-ahead to give NRCs. So, why should the people of Zambia, who are supposed to enjoy the national cake, be denied their right? So, this is a big challenge and I am appealing to the hon. Minister to instruct the officers at the centres to continue giving people NRCs because most of them do not have. We can even give the hon. Minister the list of areas and the number of people who have not benefitted from the exercise.

 

Mr Chairperson, the people in rural areas stay in far-flung areas. So, how are they expected to travel to the centres? What means are they supposed to use? Who is going to assist them? So, the hon. Minister should have considered all these issues. The people issuing NRCs should have gone to all the areas for everyone to benefit from this Government programme. However, the people in Luampa have been affected, especially those who stay in typical rural areas.

 

Mr Chairperson, this is why I am asking the Government why it has continued to pretend that nobody will be left behind when practically many people in the constituencies are being left behind by not benefitting from Government programmes. People are complaining and are not happy with this Government. The hon. Minister, must −

 

The Deputy Chairperson: Order!

 

The hon. Member’s time expired.

 

Mr Mbangweta (Nkeyema): Mr Chairperson, thank you very much for the opportunity to debate this Vote. This ministry has a number of departments and institutions, but the Department of National Registration is the worst out of the whole lot.

 

Mr Chairperson, for seven years, the Government has not put up an office in Nkeyema, yet it knows that Nkeyema exists. However, when the hon. Minister came to this House to issue a ministerial statement, he said that the issuance of National Registration Cards (NRCs) was being undertaken in all the districts, when he knows that it is not true.

 

Mr Chairperson, secondly, I am very surprised that the Patriotic Front (PF) appears to have a set of two rules. The people from the Western Province allowed their colleagues within the PF to do a good job in their area during Phase I of the NRCs issuance. However, when they went to other parts of the Western Province, they did a very shoddy job. The hon. Minister was on this Floor saying the programme would come to an end on Wednesday, yet the people had already been pulled out and demobilised. What was the meaning of that? The people in this department need to know that it is us who pay them. As far as I am concerned, and as a matter of fact, I still expect this programme to go back to Nkeyema and the whole of the Western Province. The Government cannot have a programme where there is chicanery when it applies to the citizens. That is unacceptable. Why carry out a project when it has already decided what it wants to do?

 

Mr Chairperson, obtaining an NRC is not a favour, it is a right. We cannot come here and be disfranchised when we are seated in the same House. Why would somebody ask people to go to the Boma when they know that there is nothing there? The people who were issuing NRCs lost eight days, which they spent just seated and doing nothing. They were expecting the politicians here to tell them to get Form 1 and stationery. It is not the job of the politicians. The bureaucrats should be able to do their jobs. This is what we were talking about yesterday when debating the Vote for the Public Service Management Division (PSMD). How can the Government say it is in charge of performance management when the officers who went to Nkeyema for the purpose of issuing NRCs left the people in six wards without being given NRCs? How does the Government expect the people to vote for it if the people do not have NRCs?

 

Mr Chairperson, this is why I am asking if the PF has a set of two rules among themselves. It should not behave like that. Leadership means you have to come to the table with clean hands. So, getting an NRC should not be a mystery. How come the voters’ registration exercise is being done and we are seeing the results?

 

Mr Chairperson, have you heard anyone complaining about the programme of issuing voters’ cards? It is out there. However, why was the issuance of NRCs a programme by night and a person was required to go to the District Commissioner (DC)? Why go to the DC, the same DCs who were suppressing information, yet the Government claims to have a performance management system? The officers have left so many people without NRCs but the Government claims it has a PSMD. What are these officers doing?

 

Mr Chairperson, this is why I am saying the civil servants must have capacity. They must refuse certain things which are wrong. The Government has to redo this exercise, whether it likes it or not. If the Government says it will not do it, the same people whom it has denied cards will still not vote for it. The issue of how people should vote or whether they should access this service should not be a problem that we should be preoccupied with. It is unacceptable. During the first phase of the exercise, there were no issues. The issues we were having were that even children as young as thirteen years old were being given NRCs. When the issues come to our place, −

 

Hon. Government Members: Question!

 

Mr Mbangweta: There is no question about it. We were seeing them.

 

Mr Chairperson, I think this department needs to pull up its socks. Within the Ministry of Home Affair, there are very good institutions such as the Zambia Correctional Service. Why is it that nobody complains about it? Yet, they are the people with bigger challenges, but they are doing their job professionally. That is what we expect from the people at the National Registration, Passport and Citizenships Office. How can they be giving hon. Ministers statements that –

 

The Deputy Chairperson: Order!

 

(Debate adjourned)

 

_______

 

HOUSE RESUMED

 

[MR SPEAKER in the Chair]

 

(Progress reported)

 

_______

 

The House adjourned at 1657 hours until 1430 hours on Thursday, 19^th November, 2020.