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07/08/2017

Local Government Investment Conference 2017

Keynote Address by Hon. P. A. Chinamasa
Minister of Finance & Economic Development
Republic of Zimbabwe

Harare International Conference Centre
HARARE
7 – 9 August 2017

Salutations

1. A very good morning to you all.

Introduction

2. I wish to express my sincere appreciation to the Urban Councils Association of Zimbabwe hosting this important Local Government Investment Conference, 2017.

3. Let me also thank my colleague Minister, Cde. S. Kasukuwere for inviting me to give the Keynote Address this morning. I am extremely happy to be part of this important gathering.

4. I am always reminded of the Maslow’s Hierarchy of Needs Theory every time issues to do with housing, infrastructure development and public service delivery are discussed. These are basic needs that we hold dear to our hearts. Our Local Authorities are central to the delivery of these basic social services. It is unethical to deprive people of these physiological needs!

5. It is, therefore, befitting that the Urban Councils Association of Zimbabwe is hosting this event where I strongly believe that topical issues affecting the sector will be discussed, and more importantly how to attract investment into housing and infrastructural development for the benefit of Zimbabweans.

6. Investments in supporting infrastructure that includes electricity, water, sanitation, telecommunications and public transport is critical.

7. The importance of well-maintained infrastructure cannot be over-emphasized. Let us not leave our infrastructure to collapse and hope to resuscitate it. It is both costly and difficult to restore collapsed infrastructure!

8. I will spend the next few minutes talking about 3 issues:

• Issues facing our Local Authorities – largely drawing from the World Bank (June 2017) report;
• Measures to restore sustainability of Local Authorities; and
• Framework for housing development in Zimbabwe.

Issues facing Local Authorities

9. The main challenges facing Local Authorities include:

• Rising debt burden due to unsustainable cost structures;
• Limited capacity to collect revenues efficiently;
• Limited capacity to effectively manage finances;
• Employment costs, that are consuming the largest share of Local Authorities’ budgets;
• Low levels of spending on operations and maintenance – leading to a decline in service delivery; and
• Heavy reliance on the sale of assets including land as the main source of revenue.

10. The issues that I have highlighted make the Local Authorities’ financial position very weak. This is an unpleasant position that makes it difficult for you [Local Authorities] to attract investments, raise credit and even collect rates from the public.

11. This takes me to our expectations as Government so that Local Authorities:

• Are able to deliver quality service to the public;
• Become an attractive destination for investment capital; and
• Become sustainable.

Restoring sustainability of the Local Authorities

12. Local Authorities should never forget that their role is to provide reliable, affordable and quality service to our people and not enriching a few individuals! Government, therefore, expects Local Authorities to comply with the Directive by the Ministry of Local Government, Public Works and National Housing that I will restate:

• 30% of the budget – employment costs; and
• 70% of the budget – should go towards service delivery.

13. I am pleased that some Councils and Municipalities have started complying with the said Directive. I implore the non-compliant Authorities to follow suit.

14. Government will assist those Local Authorities whose finances are in order and currently being well-managed to invest in infrastructure development. We stand ready to give them Borrowing Powers duly signed by Treasury and; the Ministry of Local Government, Public Works and National Housing.

15. The Ministry of Local Government, Public Works and National Housing has already submitted to Treasury a list of Local Authorities who incurred losses due to the cancellation of outstanding bills. The matter is currently under consideration, and we remain very positive that we will find practical ways to assist the affected Authorities.

Framework for housing development

16. Government expects an orderly delivery of the services by the Local Authorities. We will not tolerate any “chaos or confusions” that are deliberately caused by the Officials who would want to benefit themselves or their associates.

17. I would want to reiterate the Government’s position on “zero tolerance to land barons”. This position should be upheld by all of us! All land in Zimbabwe is state land, and no one is allowed to embark on any development without proper authority.

18. We [Ministries of Local Government, Public Works and National Housing; Lands and Rural Settlement as well as Treasury] have agreed on a template for housing development to guide infrastructure development in both urban areas and rural business centres whose main pillars are that:

• The Ministry of Local Government, Public Works and National Housing will provide land for housing development in urban and municipality boundaries;

• Ministry of Lands and Rural Settlement will gazette some of the land in rural areas as part of Growth Points and Rural Service Centres; and

• All developments regardless of whether they are in urban or rural areas shall be granted freehold title.

19. We have also agreed that UDCORP will be appropriately capacitated so that it can service land in urban, growth points and rural service centres.

20. Infrastructure Development Bank of Zimbabwe (IDBZ) will be our lead financial advisor. We are considering issuing a Housing Infrastructure Bond in order to mobilise the required resources for the development of housing infrastructure including supporting onsite and offsite infrastructure.

Conclusion

21. Government will not tolerate unplanned developments. The template we have developed will ensure that there is adequate onsite and offsite infrastructure.

22. We are also encouraging investment in renewable energy particularly solar power systems for lighting and heating for new developments. Any excess power can be sold to the national grid.

23. Let me also reiterate the importance of qualified and skilled people in any organisation. I would, therefore, want to encourage you to revisit your human capital recruitment, development and retention programmes. You need skilled and qualified people!

24. I thank you for your kind attention, and enjoy the rest of this conference.

08/02/2016

KEY NOTE ADDRESS BY THE HONOURABLE MINISTER OF FINANCE AND ECONOMIC DEVELOMENT: OLD AND NEW ZIMBABWE STOCK EXCHANGE (ZSE) BOARD; 08 FEBRUARY 2016

Chairman of Stockbrokers Association of Zimbabwe, Mr B. Gasura;

Former Chairperson of the Zimbabwe Stock Exchange, Dr E. Gadzikwa;

Chairperson of the Zimbabwe Stock Exchange Limited, Mrs Caroline Sandura;

Board Members of the Zimbabwe Stock Exchange;

Zimbabwe Stock Exchange Limited Board Members here present;

Senior Officials from the Zimbabwe Stock Exchange here present;

Ladies and Gentlemen;

1. A very good morning to you all. It is my great pleasure and honour to welcome you all to this very important ZSE Board of Directors meeting.

2. The appointment of the Board of Directors commenced in 2010 after the gazetting of Statutory 100 of 2010 Securities (Registration, Licensing and Corporate Governance) Rules, 2010 which require registered Exchanges to appoint a Board.

3. Today we are gathered here to bid farewell to the members of the Interim Board who achieved remarkable milestones during their tenure.

4. Ladies and gentlemen, allow me to express the Ministry’s deep appreciation of the good work done by the ZSE Interim Board led by Dr E. Gadzikwa, who during their tenure, achieved the following:-

• Development of a comprehensive five year strategic plan in 2012 which provided a foundation for achievement of key strategic objectives mentioned below. The strategic plan entails review of the vision of the ZSE and the structure to support the envisaged transformation of ZSE into a world class Exchange;
• Launch of a new look data portal system, which competes well with other regional stock exchanges;
• Signing of the Memorandum of Understanding to the demutualisation for the ZSE, which gave birth to the current shareholding between the Government of Zimbabwe and incorporation of the ZSE Limited;
• Acquisition and subsequent relocation to the new premises;
• Historic launch of the Automated Trading System after years of using the “open cry system” thereby bringing in confidence in the capital markets; and
• The Board also presided over the revision of the ZSE Listing Requirements and provided direction to the development of new products during the feasibility stage. These products are yet to be launched include bond market and Zimbabwe Emerging Enterprising Market (ZEEM), an alternative market for small to medium entities.

5. It is envisaged that the appointment of the incoming ZSE Board of Directors by the shareholders, who are taking over from the interim Board, will provide further impetus to the Exchange’s ambition of rivalling other world class Exchanges by attracting the much needed portfolio foreign investment.

6. Ladies and Gentleman, allow me to welcome the following members of the ZSE Board (and ZSE Limited) and wish them a successful tenure:

1) Mrs Caroline Sandura-Chairman;
2) Mr Alban D Chirume-Chief Executive Officer;
3) Mr Bartholomew Mswaka;
4) Mr Benson Gasura;
5) Mr Daniel Muchemwa;
6) Mr Kholisani Moyo; and
7) Mr Markus de Klerk.

7. During the last two years, my Ministry implemented a number of Non-Bank Financial and Capital Markets Policy Reforms, aimed at:

• Restoration of financial sector stability;
• Mobilisation of domestic savings;
• Improvement of competitiveness through increased compliance by clients;
• Facilitating and advancing financial inclusion in order to help reduce poverty;
• Promoting new product development and customer protection; and
• Ensuring stability and soundness in other key sectors such as the insurance and pension industry.

8. Although there is improved stability and confidence in the Non-Bank Financial and Capital Markets Sector, the performance of Zimbabwe Stock Exchange (ZSE) has largely remained depressed owing to low economic activity.

9. The chronic liquidity constraints have forced the ZSE indices to close the year in the negative territory, with both the industrial and mining counters recording significant annual losses.

10. The under-performance of our local bourse is a key indicator of the slowdown in economic growth experienced in the last quarter of the year 2015. The decline in growth has largely been attributed to depressed global commodity prices, which impacted negatively on the revenues and performance of mining and agriculture, a decrease in consumer disposable income and savings emanating from the prevailing harsh economic environment and weakening of regional currencies.

11. However, the on-going efforts by Government to grow the economy and the re-engagement initiatives with the international financial institutions will provide the necessary impetus for the recovery of market activity at the ZSE in 2016.

Key Issues to be considered by the New ZSE Board

12. The incoming Board should consider the following:-
• Finalization of the demutualization exercise, which includes registration of the new entity and transfer of assets and liabilities from the existing entity to the new entity;
• New product development such as the Zimbabwe Emerging Enterprising Market (ZEEM) for Small to Medium enterprises intending to list in the country’s secondary bourse and revival of bond market aimed at bringing more long term capital to the local market to ease tight liquidity situation; and
• Reducing the trading costs at the Zimbabwe Stock Exchange.

13. Ladies and Gentleman, it is the wish of my Ministry to ensure that the new products alluded to above will come to fruition this year.

14. Given the enormous task to improve the performance of the ZSE and the economy at large, it necessary that there should be regular interaction between my Ministry and the ZSE Board.

Thank you.

06/01/2016

PRESS RELEASE

PENSION PAYMENT DATE FOR THE MONTH OF DECEMBER 2015

Further to my Press Release of the 24th of December 2015, I wish to further advise that pension benefits for former members of the Public Service for the month of December 2015 will be paid on the 8th of January 2016.

Treasury sincerely regrets all the inconveniences caused.

HON. P.A. CHINAMASA, MP
MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT
Harare
5 January 2016

24/12/2015

PRESS RELEASE
SALARY PAYMENT DATES FOR MEMBERS OF THE PUBLIC SERVICE

Treasury advises that the December 2015 Salary Payment Date for the Education Sector is being moved from 28 December 2015 to 29 December 2015.

Furthermore, Treasury advises that the December 2015 Salary Payment Date for the Rest of the Public Service is also being moved from 29 December 2015 to 5 January 2016.

Treasury sincerely regrets all the inconveniences caused.

HON. P.A. CHINAMASA, MP
MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT
Harare
24 December 2015

24/12/2015

STATEMENT ON THE FRAMEWORKS, PROCEDURES AND GUIDELINES FOR IMPLEMENTING THE INDIGENISATION AND ECONOMIC EMPOWERMENT ACT [CHAPTER 14:33] BY THE HON. P.A. CHINAMASAhttp://www.investzim.com/attachments/article/592/Indigenisation%20Framework.pdf

07/12/2015

SPEECH ON THE SIGNING CEREMONY BETWEEEN THE GOVERNMENT OF ZIMBABWE AND THE INTERNATIONAL FUND FOR AGRICULTURAL DEVELOPMENT (IFAD) BY HON. P. A. CHINAMASA (MP), MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT

1. Let me start by acknowledging the presence of:
• The Deputy Minister of Agriculture, Mechanisation and Irrigation Development, Hon. P. Zhanda,
• Mr Sana Jatta-IFAD Regional Director for East and Southern Africa;
• Senior Government Officials;
• Representatives of Development Partners here present;
• Representatives from the civil society;
• Representatives of the private sector;
• Various institutions here present;
• Distinguished guests;
• Ladies and Gentleman.

2. I welcome you all to the official signing ceremony of International Fund for Agriculture and Development (IFAD) and Government of Zimbabwe (GoZ) Rescheduling Agreement.

Background
3. IFAD began its activities in Zimbabwe in the 1980s through support to the agricultural sector and to date they have administered five loans and several grants towards agricultural development as follows:
• National Agricultural Research and Extension Project – 1983;
• Agricultural Credit and Export Promotion Project – 1990;
• Smallholder Dry Areas Resource Management Project (SDARMP)- 1995;
• South Eastern Dry Areas Project (SEDAP)- 1998; and
• Smallholder Irrigation Support Project (SISP)- 1999;

Arrears to IFAD
4. As of end July 2015, the arrears to IFAD amounted to SDR 16,319,004 (US$22,683,415). This adversely affected GoZ - IFAD cooperation as the governing laws of the Fund do not allow full engagement and allocation of new resources when a member is in arrears.

5. Accordingly, GoZ made a down payment of US$2.3 million to clear the arrears owed to IFAD to unlock new concessional financing as part of the reengagement process. This we believe has placed us in good standing with IFAD.

Resumption of Cooperation
6. IFAD, through a Mission to Zimbabwe in October 2015 agreed to a programme framework which is guided by our Economic blueprint, the Zimbabwe Agenda for Sustainable Socio-Economic Transformation (Zim ASSET), 10 Point Plan for Economic Growth and IFAD’s Strategic Framework.

Goals and Development Objectives
7. The goal of the agreed programme is to contribute to sustainable poverty eradication and improvement in food & nutrition security in semi-arid areas of Zimbabwe.

8. The development objective is to sustainably increase diversified production, productivity and household incomes in targeted irrigation schemes of semi-arid communal and old resettlement areas of Zimbabwe.

9. The total cost of the agreed programme is estimated at US$60 million over a period of five (5) years. This will be financed as follows:
• A loan from IFAD of US$30 million;
• A grant from IFAD Adaptation for Smallholder Agriculture Programme (ASP) of US$10 million;
• GoZ contribution in kind (through staff and tax exemptions for the programme) of US$4.9 million; and
• Co-financing by financial institutions of US$15.1 million.

10. Let me emphasize that farmers who will benefit from this programme will pay for the investment, operation and maintenance costs. The modalities of the repayment will be developed during the programme design stage.

Conclusion
11. The rescheduling agreement is in line with the strategy agreed in Lima on the side lines of the 2015 International Monetary Fund/ World Bank Annual Meetings. This will strengthen the reengagement efforts by Government to unlock concessional funding from IFAD.

12. In this regard, I am looking forward to the support from the private sector in making this programme a success.
`
13. I would like to thank you all for coming to witness this great occasion.

Hon. P. A. Chinamasa
Minister of Finance and Economic Development
07 December 2015

03/12/2015

PRESS RELEASE ON COOPERATION BETWEEN THE GOVERNMENT OF ZIMBABWE AND THE PEOPLE’S REPUBLIC OF CHINA

The Government of Zimbabwe is pleased with the continued cooperation between the people of the Republic of Zimbabwe and the People’s Republic of China, culminating in the historic visit by His Excellency, President Xi Jinping.

This follows a State visit by His Excellency, President Mugabe to China in August 2014 where the first series of mega deals were signed between the two Nations.

In a clear step to further cement the cooperation between the two States, financing arrangements for the coming year were signed between the two countries which will convert provisions of the Government’s economic blue print, ZimAsset into programmes of action as championed by His Excellency, President R. G. Mugabe.

The Export-Import Bank of China will provide concessionary funding for the engineering, procurement and construction (“EPC”) of the Hwange Power Station Expansion Project (“Hwange 7 & 8”), and the Tel–One Backbone Network and Broadband Access Project (“Tel-One Project”).

With respect to Hwange 7 & 8, the Export-Import Bank of China will in 2016, extend to Zimbabwe a preferential buyer credit loan in the amount of US$997 723 244.20 at a concessionary rate of 2% per annum over 20 years.

On completion of the project, this will add 600 Megawatts to the national grid which will significantly reduce the power deficit in the country, which currently has a suppressed demand of 2 200 Megawatts.

An amount of US$98 617 482.19, also at a concessionary rate of 2% per annum over 20 years, will be extended to finance Tel – One to undertake its Backbone Network and Broadband Access Project.

The loans will take effect in the first half of 2016.

In addition, the Government of the People’s Republic of China has awarded the Government of Zimbabwe a grant in the amount of RMB Yuan 400 000 000 for the construction of the Zimbabwe Parliament Building, the NatPharm Warehouse and other projects.

The Government of Zimbabwe signed the Memorandum of Understanding and arrangements with the Eport-Import Bank of China and the Government of the People’s Republic of China on 1 December 2015.

It also concluded an Avoidance of Double Taxation and Prevention of Fiscal Evasion Agreement between the Republic of Zimbabwe and the Government of the People’s Republic of China. The agreement will bring certainty on taxation of cross border income, thereby, enhancing investments in our respective countries. Furthermore, this will promote cooperation in tax administration between Zimbabwe and China.

The Government of Zimbabwe appreciates highly the further cooperation with the People’s Republic of China demonstrated by the conclusion of the above various financial arrangements.

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