FULL TEXT- “Civil Penalties For Companies Abusing Forex Facility”: Parliament Told
4 November 2021

HON. R. MAKONI: My question is directed to the Minister of Finance and Economic Development. Most of the local authorities in Zimbabwe are charging their rates in RTGS yet they buy their fuel in US dollars. What plans does Government have so that councils can access fuel in RTGS?

*THE DEPUTY MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. CHIDUWA):  About two weeks ago, we all heard what was happening at the RBZ auction system whereby some oil companies were abusing the facility. The apex bank moved in and suspended all gas and oil companies because they could afford to access the foreign currency on their own. As a Ministry, we then designated NOIC to import fuel using their own duty in RTGS. That fuel which is being imported by NOIC is the one that is given to local authorities and Government departments for use in their day to day programmes. Right now, we are making sure that there are service stations that can sell fuel in RTGS to local authorities.

*HON. T. MLISWA:  So why did you not arrest them?

*THE DEPUTY MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. CHIDUWA):Thank you Hon. Mliswa for your question.  It is true we have several companies that we realise were getting forex but abusing it.  However, following the violations that took place, we have civil penalties in place.  The financial intelligence unit is carrying out audits.  The Minister of Energy and Power Development is here.  He might give us the statistics if he has them at hand, but the audits are being carried out by the Financial Intelligence Unit and the RBZ.  All those found guilty, some of them will be charged penalties while some will have their accounts closed.  Some were now involved in money laundering but the penalties that we have are just civil penalties and not criminal penalties.

*HON. T. MLISWA:  Madam Speaker, I was requesting that we do our work diligently.  I would like the Minister to bring a list of all the companies that were involved so that we know them.

THE HON. DEPUTY SPEAKER:  Hon. Mliswa, you are not connected?

HON. T. MLISWA:  I am connected through Hon. Mutsvangwa.  Madam Speaker, I am saying this is good news to this Parliament.  May the culprits, the list of all those who violated the regulations be brought to this august House so that we can know who they are and exercise our oversight.

*HON. CHIDUWA:  As Treasury, we set precedence when we published some names, but we once published some names of those companies.  If you check on the previous list that we released, you will see that those companies are listed there.  The list also includes those companies that sell fuel.  I do not think that there is anything wrong in us bringing the list to Parliament, but we stand to be guided by the Prosecutor-General’s Office.

HON. GONESE: Supplementary question Madam Speaker.  Thank you very much Hon. Deputy Minister of Finance and Economic Development. My supplementary question emanates from the fact that there is a disparity between the auction rate and the parallel market rate.  Are we not likely to see a scenario where people are going to buy fuel at those designated service stations in Zimbabwean dollars and then resell the fuel at a profit in United States dollar terms because we are not tackling the root cause of the problem which is the growing disparity between the two rates of exchange and the other trying to deal simply with the symptoms because arresting people does not seem to be solving the problem, Hon. Deputy Minister.

HON. CHIDUWA:  Thank you Hon. Gonese.  Our problem especially with regard to the disparity between the official rate and the parallel market rate, yes, inasmuch as we are saying arresting people is not a solution but I think it is largely a behavioural problem which also requires some of these enforcement measures.  Yes, we have got the economics to deal with.  Quite a number of people think flouting the exchange rate is a solution.  It may not necessarily be a solution as long as we have got people that have got behaviour that is not consistent with rational economic agents.

So with regards to the issue where you are saying it is likely to be abuse because of the disparity that is there between the exchange rates, we are going to be guided by the Ministry of Energy and Power Development.  All those service stations that are going to be given the right to sell fuel in RTGS are supposed to have a fuel management system.  The fuel management system is the one that we are going to use to ensure that we reduce cases of corruption and cases of abuse of the system.  So that is our fallback position.  The fuel management system which we hope is going to assist us in curbing abuse and corruption.  Thank you.

 (v)*HON. MAFUTA: My question is directed to the Acting Leader of the House.  What measures are in place pertaining to some mining companies that are refusing rentals in local currency in preference to United States Dollars?

*THE MINISTER OF INFORMATION, PUBLICITY AND BROADCASTING SERVICES (HON. SEN. MUTSVANGWA):  Thank you Madam Speaker. I also want to thank Hon. Mafuta for her question about mine workers who are paying rentals in United States Dollars whereas our country is using multi-currency.  So people should not be deterred from using local currency because our policy is that we are using multi-currency.  I thank you.

         HON. M. KHUMALO:  My question is directed to the Minister of Transport and Infrastructural Development.  It is in connection with the Emergency Roads Rehabilitation in the country.  We are approaching the rain season and the planned roads on that programme have not been attended to.  I think we have travelled throughout the country and a lot of roads are still not passable.  What is the Ministry going to do to attend to that problem because deliveries of grain and seed for planting will not take place in those areas where roads are bad?  Thank you.

THE MINISTER OF TRANSPORT AND INFRASTRUCTURAL DEVELOPMENT (HON. MHONA):  Thank you Hon. Madam Speaker Ma’am. Let me also thank Hon. Khumalo for that important question on Emergency Road Rehabilitation Programme.

Hon. Madam Speaker Ma’am, let me share with the august House that this programme is running for three years until February 2024.  What it means is that it is an ongoing programme. As we speak and maybe to allay the fears of Hon. Members and the citizenry, some roads are even constructed during the rain season and those roads are even stronger than the roads that we construct during the normal period.  So I want to allay the fears of Hon. Khumalo that yes, we are approaching the rain season and there is something that we are going to be doing during this time.

Also to say that the Ministry of Transport and Infrastructural Development superintends over a number of road authorities, inter alia the Department of Roads that falls under its purview.  We also have local authorities, rural district councils and DDF.  So at times, it is not in the public domain to say who owns this road but like I always say, at the end of the day, it comes to the Minister but there are road authorities mandated to look and manage their own roads.  In particular, if you then go especially to the rural constituencies, some are under DDF rural district councils.

What happened during the Emergency Road Rehabilitation Programme was to take roads but it is so sad Hon. Madam Speaker Ma’am that some of the local authorities, even after having received funding from ZINARA have not used that funding.  I will come before this august House with a report of whatever went through to a local authority, rural district council, DDF and how they utilised that money towards road rehabilitation.  You will find that in other areas, the money is seated, as we speak, in their accounts – which is quite sad.  The motive behind, you will be wondering why because we have not taken all the roads as the Ministry, we have earmarked certain roads and I am sure the august House can concur that tremendous work has been done on some of the roads.  We cannot rehabilitate all roads.

The assumption is that funding that was coming from ZINARA was supposed to go to the local authorities and rural district councils so that they take their day to day programmes of rehabilitating roads and of late, some were not doing that.  So I urge even to work closely with Parliament over the oversight role to say, those who were given funding, why are they not using that funding, which is something to me that is contrary to the public expectation. This is something that we are also going to be doing.  I want to thank Hon. Khumalo that yes, the noble idea by His Excellency, Hon. Mnangagwa to declare a State of Disaster was for us to then move with speed in trying to rehabilitate our roads.  This is the only initiative and reason why we are here so that we rehabilitate and promote passability on our roads.  I thank you.