ZimTreasury - Ministry of Finance & Econ Dev

Local Government Investment Conference 2017Keynote Address by Hon. P. A. ChinamasaMinister of Finance & Economic Develop...
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.

KEY NOTE ADDRESS BY THE HONOURABLE MINISTER OF FINANCE AND ECONOMIC DEVELOMENT: OLD AND NEW ZIMBABWE STOCK EXCHANGE (ZSE...
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.

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.

Address

Harare
P, BAG 7705, CAUSEWAY

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